Order Code IB97014
Issue Brief for Congress
Received through the CRS Web
Wetland Issues
Updated December 17, 2002
Jeffrey A. Zinn and Claudia Copeland
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress

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CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
What is a Wetland?
How Fast are Wetlands Disappearing, and How Many Acres are Left?
Section 404 Program
The Permitting Process
Nationwide Permits
Judicial Proceedings Involving §404
Treat All Wetlands Equally
Agriculture and Wetlands
Swampbuster
Other Agricultural Wetlands Programs
Agricultural Wetlands and the §404 Program
Private Property Rights and Landowner Compensation
Wetland Restoration and Mitigation
Recent Administration and Congressional Wetlands Activities
Clinton Administration Initiatives
Legislative Activity in the 106th Congress
107th Congress
FOR ADDITIONAL READING

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Wetland Issues
SUMMARY
Wetlands, in a wide variety of forms, are
a priority. However, the current Bush Admin-
found throughout the country. The various
istration has yet to announce any comprehen-
values of these areas, such as wildlife habitat,
sive wetlands policies or initiatives.
and water storage and purification have been
increasingly recognized in recent years, but
The 107th Congress enacted wetland
the remaining acreage continues to be modi-
legislation in the 2002 farm bill (Wetland
fied or disappear. When European settlers
Reserve Program and Farmed Wetland Option
first arrived, total wetland acreage was more
in the Conservation Reserve Program), and in
than 220 million acres in the lower 48 states,
the North American Wetlands Conservation
according to estimates by the U.S. Fish and
Act reauthorization. Although numerous
Wildlife Service. It estimates that by 1997
wetland bills were introduced, congressional
total wetland acreage had fallen to 105.5
activity was more limited than in earlier Con-
million acres. About three quarters of this
gresses.
acreage is privately-owned. Losses continue,

although at a much slower rate, while restora-
In recent years, wetlands issues have
tion efforts have greatly expanded in recent
involved controversy over: whether the rate of
years. Some regions reportedly are approach-
wetlands loss is acceptable; continuing efforts
ing the national policy goal of no-net-loss.
to reauthorize the Clean Water Act; and how
to implement farm bill provisions. In additi-
Several laws provide varying levels of
on, legal decision and administrative actions
protection under different circumstances: the
raise concerns about changes in wetlands
permit program authorized in §404 in the
programs. Recent examples of such actions
Clean Water Act; several federal programs for
were implementation of Corps of Engineers
agricultural wetlands; laws that protect spe-
changes to a nationwide permit (changes
cific sites, such as enactments that have estab-
generally opposed by the development com-
lished National Wildlife Refuge System units;
munity), and a federal decision that overturned
and laws that protect wetlands which perform
the 1993 “Tulloch” rule, which had expanded
certain functions, such as the major migratory
regulated actions to include excavation.
bird flyways. Although the rate of wetland
Revised rules issued in May 2002 which
loss has slowed, these laws and their imple-
redefine key wetlands permit regulatory terms
mentation are viewed by many protection
and a January 2001 Supreme Court decision
advocates as inadequate or uncoordinated.
affecting regulation of isolated wetlands have
Others, who advocate the rights of property
attracted attention from policymakers.
owners and development interests, by contrast,
characterize these efforts, especially the §404
The 108th Congress may address any of
permit program, as overzealous and too intru-
numerous wetland topics. What form these
sive. Numerous state and local wetland pro-
might take will not be known until President
grams add to the complexity of the protection
Bush submits his FY2004 budget proposals
effort.
and committee chairs in both Chambers with
jurisdiction over wetland topics announce
Both the Clinton and earlier Bush
their priorities.
Administrations had made wetland protection
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MOST RECENT DEVELOPMENTS
The 107th Congress enacted wetland provisions in the 2002 farm bill (P.L. 107-171) and
in the North American Wetlands Conservation Act reauthorization (P.L. 107-304). Other
recent events that have attracted congressional attention include court decisions that would
limit the reach of the Clean Water Act §404 program in various ways and rules issued in
May 2002 that redefine two key terms in the §404 program. The rule revisions and these
court decisions have been criticized by wetland protection advocates, and these issues could
receive renewed attention in the 108th Congress.
BACKGROUND AND ANALYSIS
Wetlands, with a variety of physical characteristics, are found throughout the country.
They are known in different regions as swamps, marshes, fens, potholes, playa lakes, or bogs.
Although these places can differ greatly, they all have distinctive plant and animal
assemblages because of the wetness of the soil. Some wetland areas may be continuously
inundated by water, while other areas may not be flooded at all. In coastal areas, flooding
may occur on a daily basis as tides rise and fall.
Functional values, both ecological and economic, at each wetland depend on its
location, size, and relationship to adjacent land and water areas. Many of these values have
been recognized only recently. Historically, many federal programs encouraged wetlands to
be drained or altered because they were seen as having little value as wetlands. Wetland
values can include:
! habitat for aquatic birds and other animals and plants, including numerous
threatened and endangered species; production of fish and shellfish;
! water storage, including mitigating the effects of floods and droughts;
! water purification;
! recreation;
! timber production;
! food production;
! education and research;
! and open space and aesthetic values.
Usually wetlands provide some composite of these values; no single wetland in most
instances provides all these values. The composite value typically declines when wetlands
are altered. In addition, the effects of alteration often extend well beyond the immediate area
because wetlands are usually part of a larger water system. For example, conversion of
wetlands to urban uses has increased flood damages; this value is receiving considerable
attention as natural disaster costs have mounted through the 1990s.
Federal laws that affect wetlands have changed since the mid 1980s as the values of
wetlands have been recognized in different ways in numerous national policies. Previously,
some laws, such as selected provisions in the federal tax code, public works legislation, and
farm programs, encouraged destruction of wetland areas. Federal laws now either encourage
wetland protection, or prohibit or do not support their destruction. These laws, however, do
not add up to a fully consistent or comprehensive national approach. The central federal
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regulatory program, §404 of the Clean Water Act, requires permits for the discharge of
dredged or fill materials into many but not all wetland areas; however, other activities that
may adversely affect wetlands do not require permits. An agricultural program,
swampbuster, is a disincentive program that indirectly protects wetlands by making farmers
who drain wetlands ineligible for federal farm program benefits; those who do not receive
these benefits have no reason to participate. Several acquisition and incentive programs
complete the current protection effort.
Although numerous wetland protection bills have been introduced in recent Congresses,
the only major new wetlands legislation to be enacted has been in the two most recent farm
bills, in 1996 and 2002. During this period, Congress also reauthorized several wetlands
programs without making significant shifts in policy. At the same time, the Clinton
Administration took a strong interest in the wetlands debate. In 1993, it announced new
federal policies based on five principles: (1) supporting no overall net loss of the Nation’s
remaining wetlands together with increasing the quality and quantity of wetlands as a
long-term goal; (2) making regulatory programs fair, flexible, and predictable; (3)
encouraging options to regulatory programs; (4) expanding partnerships to protect and restore
wetlands in an ecosystem/watershed context; and (5) basing wetland policies on the best
scientific information available. Subsequently, it sought increased funding for wetlands
protection efforts, and set a goal of a net gain of 100,000 acres annually starting in FY2005.
The Bush Administration has not made any strong pronouncements about wetlands, although
the President endorsed wetland protection in signing the farm bill and the North American
Wetlands Conservation Act reauthorization in 2002.
Congress has provided a forum in numerous hearings where conflicting interests in
wetland issues have been debated. The conflicts are between:
! Environmental interests and wetland protection advocates who have been
pressing for greater wetlands protection by improving coordination and
consistency among agencies and levels of governments, and strengthened
programs; and
! Others, including large landowners, farmers, small businessmen, and
individuals who own small parcels of land, who counter that protection
efforts have gone too far, and that wet areas that provide few wetland values
have been aggressively protected. They have been especially critical of the
U.S. Army Corps of Engineers (Corps) and the U.S. Environmental
Protection Agency (EPA) for administering the §404 program in an
overzealous and inflexible manner.
Wetland issues revolve around disparate scientific and programmatic questions, and
conflicting views of the role of government where private property is involved. Scientific
questions include how to define wetlands, the current rate and pattern of wetland declines
and losses, and the importance of these physical changes. Federal program questions
include; the administration of programs to protect, restore, or mitigate wetland resources
(especially the §404 program); relationships between agriculture and wetlands; whether all
wetlands should be treated the same in federal programs and which wetlands should be
subject to regulation; and federal funding of wetland programs. In addition, private property
questions are raised because almost three-quarters of the remaining wetlands are located on
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private lands, and some property owners believe they should be compensated when federal
programs limit how they can use their land, and thereby diminish its value.
What is a Wetland?
There is general agreement that scientists can determine the presence of a wetland by
a combination of soils, plants, and hydrology. The only definition of wetlands in law, in the
swampbuster provisions of farm legislation, lists those three components but does not
include more specific criteria, such as what conditions must be present, for how long, and
during what portion of the year. Controversies are exacerbated when many sites that have
those three components, including sites that have wetland characteristics only some portion
of the time, do not look like what many people visualize as wetlands.
Wetlands subject to federal regulation are a large subset of all places that the scientific
community would call a wetlands. These regulated wetlands, under the §404 program
discussed below, are currently identified using technical criteria in a wetland delineation
manual issued by the Corps in 1987. It was prepared jointly and is used by all federal
agencies to carry out their responsibilities under this program (the Corps, EPA, FWS, and
the National Marine Fisheries Service (NMFS)). The manual provides guidance and
field-level consistency among the agencies that have roles in wetland regulatory protection.
(A second and slightly different manual, agreed to by the Corps and the Natural Resources
Conservation Service, is used for delineating agricultural lands.) While the agencies try to
improve the objectivity and consistency of wetland identification and delineation, judgement
continues to play a role and can lead to site-specific controversies. Cases discussed below
(see Judicial Proceedings Involving §404) are efforts to exclude certain types of wetlands
or activities affecting them from the regulatory program.
How Fast are Wetlands Disappearing, and How Many Acres are
Left?
The U.S. Fish and Wildlife Service has estimated that when European settlers first
arrived, wetland acreage in the area that would become the 48 states was more than 220
million acres, or about 5% of the total land area. By 1997, total wetland acreage was
estimated to be 105.5 million acres, according to data it compiled in the National Wetlands
Inventory (NWI). Data compiled by the NRCS and the FWS in separate surveys and using
different methodologies has yielded different results. Although both show that the annual
loss rate dropping from almost 500,000 acres annually nearly three decades ago to less than
100,000 annually, the FWS survey estimated the average annual loss rate was 58,500 acres
between 1986 and 1997, while NRCS (using its Natural Resources Inventory (NRI) of
privately-owned lands) estimated that the average annual loss rate was 32,600 acres between
1992 and 1997.

This difference in loss statistics has led to disagreements over the actual rate of loss and
the effectiveness of current policies. The Clinton Administration announced in March 1998
that future assessments of wetlands loss would be based on data collected by the NRCS every
5 years in the NRI. It sought to end this “battle of the numbers” that was obscuring other
wetland protection issues. This battle was explored in a July 1998 General Accounting
Office report titled Wetlands Overview: Problems with Acreage Data Persist. Recent
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statements by the two agencies over whether a single statistically reliable report on wetlands
gains and losses can be completed indicate that the battle continues.
Numerous shifts in federal policies since 1985 (and changes in economic conditions as
well) strongly influence wetland loss patterns, but the composite effects remain unmeasured.
There is a large time lag from changes in policy to release of data that measure these changes.
Further, these data only measure acres, and do not provide any insights into changes in the
quality of remaining wetlands as measured by the values they provide.
Section 404 Program
The principal federal program that provides regulatory protection for wetlands is found
in §404 of the Clean Water Act (CWA). Its intent is to protect water and adjacent wetland
areas from adverse environmental effects due to discharges of dredged or fill material.
Established in 1972, §404 requires landowners or developers to obtain permits from the
Corps of Engineers to carry out activities involving disposal of dredged or fill materials into
waters of the United States, including wetlands.
The Corps has long had regulatory jurisdiction over dredging and filling, starting with
the River and Harbor Act of 1899. The Corps and EPA share responsibility for
administering the §404 program. Other federal agencies, including NRCS, FWS, and NMFS,
also have roles in this process. In the 1970s, legal decisions in key cases led the Corps to
revise this program to incorporate broad jurisdictional definitions in terms of both regulated
waters and adjacent wetlands. Section 404 was last significantly amended in 1977.
This judicial/regulatory/administrative evolution of the 404 program has generally
pleased those who view it as a critical tool in wetland protection, but dismayed others who
would prefer more limited Corps jurisdiction or who see the expanded regulatory program
as intruding on private land-use decisions and treating wetlands of widely varying value
similarly. Underlying this debate is the more general question of whether §404 is the best
approach to federal wetland protection.
Some wetland protection advocates have proposed that it be replaced or greatly altered.
First, they point out that it governs only the discharge of dredged or fill material, while not
regulating other acts that drain, flood, or otherwise reduce functional values. Second, because
of exemptions provided in 1977 amendments to §404, major categories of activities are not
required to obtain permits. These include normal, ongoing farming, ranching, and
silvicultural (forestry) activities. Further, permits generally are not required for activities
which drain wetlands (only for those that fill wetlands), which excludes a large number of
actions with potential to alter wetlands. Recently, controversy over this issue has centered
particularly on excavation activities and whether they are subject to regulation. Third, in the
view of protection advocates, the multiple values that wetlands can provide (e.g., fish and
wildlife habitat, flood control) are not effectively recognized through a statutory approach
based principally on water quality, despite the broad objectives of the Clean Water Act.
The Permitting Process. The Corps’ regulatory process involves both general
permits for actions by private landowners that are similar in nature and will likely have a
minor effect on wetlands and individual permits for more significant actions. According to
program data compiled by the Corps, the agency receives an average of 74,500 §404 permit
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requests annually. Of those, more than 84% are authorized under a general permit, and the
average length of time for action is 14 days. A general permit, which can apply regionally
or nationwide, is essentially a permit by rule for activities with minor impact; most do not
require pre-notification or prior approval. About 7% are required to go through the more
detailed evaluation for an individual permit, which may involve complex proposals or
sensitive environmental issues. The average time to complete review of these applications
is 107 days; only 0.3% of applications for individual permits are denied. In FY1999, Corps-
issued permits authorized a total of 21,556 acres of wetland impact (30% less than in
FY1998), while those permits required that 46,433 acres of wetlands be restored, created,
enhanced, or preserved as mitigation for the losses authorized.
Regulatory procedures on individual permits allow for interagency review and
comment, a coordination process that can generate delays and an uncertain outcome,
especially for environmentally controversial projects. EPA is the only federal agency having
veto power over a proposed Corps permit; EPA has used its veto authority 11 times in the
30 years since the program began. Critics have charged that implied threats of delay by the
FWS and others practically amount to the same thing. Reforms during the Reagan, earlier
Bush, and Clinton Administrations streamlined certain of these procedures, with the intent
of speeding up and clarifying the Corps’ full regulatory program, but concerns continue over
both process and program goals.
Controversy also surrounds revised regulations issued by EPA and the Corps on May
3, which redefine two key terms in the 404 program, “fill material” and “discharge of fill
material.” The agencies say that the revisions are intended to clarify certain confusion in
their joint administration of the program due to previous differences in how the two agencies
defined those terms, but environmental groups contend that the changes allow for less
restrictive and inadequate regulation of certain disposal activities, including disposal of coal
mining waste, which could be harmful to aquatic life in streams. The Senate Environment
and Public Works Committee held a hearing on June 6 to review these issues, and legislation
to reverse the agencies’ action was introduced in the 107th Congress (H.R. 4683), but no
further action occurred. (For additional information, see CRS Report RL31411,
Controversies over Redefining “Fill Material” Under the Clean Water Act.)
Nationwide Permits. Nationwide permits are a key means by which the Corps
minimizes the burden of its regulatory program. These general permits authorize activities
that are similar in nature and are judged to cause only minimal adverse effect on the
environment. General permits minimize the burden of the Corps’ regulatory program by
authorizing landowners to proceed without having to obtain individual permits in advance.
They are issued for 5-year periods and thereafter must be renewed by the Corps.
In December 1996 the Corps reissued the 37 existing nationwide permits and two new
permits. The Corps made changes to strengthen the environmental restrictions of nationwide
permit 26 (NWP 26), which has been particularly controversial because of concern that it
results in significant cumulative unmonitored wetlands losses. The changes to NWP 26
pleased wetland protection advocates but displeased development and commercial interests
who contended that permitting would now be more burdensome. At the same time, the Corps
announced it would replace NWP 26 in 2 years with more specific activity-based permits.
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Fulfilling that pledge, the Corps issued final replacement permits for NWP 26 in March
2000; these permits took effect June 7, 2000. In contrast to NWP 26, which authorized
activities in certain categories of waters, the replacement permits authorize projects for five
specific types of activities, with terms and conditions to ensure that the activities result in
minimal adverse effects on the aquatic environment, individually and cumulatively. The
major change that the Corps believed will strengthen protection of aquatic resources is a
maximum acreage limit under the new NWPs of one-half acre, reduced from the previous
maximum of three acres. The Corps also issued additional general conditions applicable to
all nationwide permits to further ensure protection of aquatic resources, such as limitations
on discharges of fill material into 100-year floodplains. Developers said the replacement
permits are too restrictive of the regulated public and would require more landowners to seek
individual permits, which is more costly and time-consuming for the regulated public. The
Corps acknowledges that more individual permits will be required and that costs for
landowners and the Corps itself will increase as a result of the permit changes, but the Corps
believes that these impacts will be less severe than developer groups contend and will be
outweighed by the additional resource protection that the permits will provide. (For more
information, see CRS Report 97-223, Nationwide Permits for Wetlands Projects: Regulatory
Developments and Current Issues.)
A key developer group, the National Association of Home Builders, challenged the
replacement NWPs in a lawsuit filed the same day the permits package was published in the
Federal Register. The lawsuit challenges a number of details in the permits and more
generally contends that the new permits are contrary to the intent of Congress that the Corps
provide a streamlined process in its nationwide permitting program. Other lawsuits
challenging the permits have been brought by the National Stone Association and the
National Federation of Independent Business. These cases are still pending.
Nationwide permits are issued for periods of no longer than 5 years. Thus, in August
2001, the Corps proposed to re-issue all 43 nationwide permits (including those issued in
March 2000), most of which were last re-issued in 1996. EPA and environmental groups
object to some revisions that the Corps proposes in order to add flexibility, including
relaxation of certain permit conditions, fearing that they would result in a net loss of wetland
acres. Industry groups favored flexibility in the proposal, but say that some requirements for
case-by-case review could nullify the positive aspects. The Corps received more than 2,100
public comments and modified some aspects of the proposal when it issued final permits
January 15, 2002. The re-issued permits became effective March 18. Reactions to the final
permits were mixed, much like the August 2001 proposal: environmental advocates contend
that, even with modifications, the re-issued permits are not adequately protective of water
quality, while developer groups argue that the overall program continues to focus on arbitrary
regulatory thresholds that result in undue burden on developers and the Corps.
Section 404 authorizes states to assume many of the permitting responsibilities. Two
states, Michigan (in 1984) and New Jersey (in 1992), have done this. Others have cited the
complex process of assumption, the anticipated cost of running a program, and the continued
involvement of federal agencies because of statutory limits on waters that states could
regulate as reasons for not joining these two states. Efforts (both administrative and
legislative) continue towards encouraging more states to assume program responsibility.
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Judicial Proceedings Involving §404. The §404 program has been the focus of
a number of lawsuits recently. The status of aspects of the Corps’ regulatory program was
made uncertain by a federal court ruling in January 1997. The U.S. District Court for the
District of Columbia overturned regulations issued by the Corps and EPA in 1993 that had
extended the scope of regulation to include certain landclearing and excavation activities.
Those regulations were issued as part of the settlement of a lawsuit brought by environmental
groups over the agencies’ failure to regulate discharges associated with excavation (North
Carolina Wildlife Federation et al. v. Tulloch). At issue was whether "fallback” from
dredging activities constituted pollution, under the CWA. The court ruled that incidental
fallback is not pollution and, thus, the agencies had exceeded their authority under the Clean
Water Act. In January 2001, the Clinton Administration issued a regulation to close what
the government viewed as a “loophole” resulting from the Tulloch case, which it estimated
to have resulted in conversion of 20,000 acres of wetlands. The regulation sought to clarify
circumstances in which mechanized landclearing or excavation activity in waters of the U.S.
will result in discharges which are subject to CWA regulation. After reviewing this new rule,
the Bush Administration announced in April 2001 that it would allow the regulation to take
effect without modification. Regulated industries are displeased with the new rule, and two
groups filed lawsuits challenging it.
In December 1997, the U.S. 4th Circuit Court of Appeals ruled in favor of a Maryland
developer, finding that the Corps had exceeded its authority in claiming jurisdiction over
isolated wetlands. The court in U.S. v. Wilson said that the Corps exceeded its authority in
trying to regulate wetlands whose degradation or destruction could have an impact on
interstate commerce. Rather, a “case-by-case” determination is necessary to decide whether
an activity has an effect on a wetland and whether the effect is substantial. Environmentalists
said that the ruling, if interpreted broadly, would make it harder for the federal government
to justify regulating interstate wetlands. However, the ruling only affected Corps districts
covered by the 4th Circuit (Virginia, West Virginia, Maryland, and the Carolinas). The
government decided not to seek Supreme Court review. In May 1998, the Corps issued
guidance outlining how to address isolated wetlands in the 5 states affected by the ruling. The
Corps will continue to assert jurisdiction over isolated wetlands, but only where it can show
a substantial connection between the wetland and interstate commerce.
U.S. v. Wilson is one recent example of long-standing controversy and litigation over
whether isolated waters are properly within the jurisdiction of §404. Isolated waters that are
wetlands which are not physically adjacent to navigable surface waters often appear to
provide few of the values for which wetlands are protected, even if they meet the technical
definition of a wetland. On January 9, 2001, the Supreme Court ruled on the question of
whether the CWA provides the Corps and EPA with authority over isolated waters. The
Court’s 5-4 ruling in Solid Waste Agency of Northern Cook County (SWANCC) v. U.S. Army
Corps of Engineers (No. 99-1178) held that the Corps’ denial of a §404 permit for a disposal
site on isolated wetlands solely on the basis that migratory birds use the site exceeds the
authority provided in the Act. The full extent of retraction of the regulatory program
resulting from this decision is unclear for now. Environmentalists believe that the Court
misinterpreted congressional intent on the matter, while industry and landowner groups
welcomed the ruling. Policy implications of how much the decision restricts federal
regulation depend on how broadly or narrowly the opinion is applied. The government’s
initial view on this key question was answered in a January 19, 2001, memorandum issued
jointly by EPA and the Corps in which the agencies provided a legal interpretation based on
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a narrow reading of the Court’s decision, thus allowing federal regulation of some isolated
waters to continue. However, the issues remain under discussion within the Administration
and elsewhere. While it likely will take some time to assess how regulatory protection of
wetlands will be affected as a result of the decision, the remaining responsibility to protect
affected wetlands falls on states and local governments. Whether states will act to fill in the
gap left by removal of some federal jurisdiction is unclear, but a few states (Wisconsin and
Ohio, for example) have passed new laws to do so. (For additional information, see CRS
Report RL30849, The Supreme Court Addresses Corps of Engineers Jurisdiction Over
‘Isolated Waters’: The SWANCC Decision.) Legislation to overturn the SWANCC decision
by providing a broad definition of “waters of the United States” was introduced in the 107th
Congress (S. 2780, H.R. 5194), but no further action occurred on these bills.
Treat All Wetlands Equally. Under the §404 program, there is a perception that all
jurisdictional wetlands are treated equally, regardless of size, functions, or values. This has
led critics to focus on situations where a wetland has little apparent value, but the
landowner’s proposal is not approved or the landowner is penalized for altering a wetland
without a federal permit. Critics believe that one possible solution may be to have a tiered
approach for regulating wetlands. Several legislative proposals introduced in recent
Congresses would establish three tiers — from highly valuable wetlands that should receive
the greatest protection to the least valuable wetlands where alterations might usually be
allowed. Some states (New York, for example) use such an approach for state-regulated
wetlands. The Corps and EPA issued guidance to field staff emphasizing the flexibility that
currently exists in the 404 program to apply less vigorous permit review to small projects
with minor environmental impacts.
Three questions arise: (1)What are the implications of implementing a classification
program, (2) How clearly can a line separating each wetland category be defined, and (3) Are
there regions where wetlands should be treated differently? Regarding classification, even
most wetland protection advocates acknowledge that there are some situations where a
wetland designation with total protection is not appropriate. But they fear that classification
for different degrees of protection could be a first step toward a major erosion in overall
wetland protection. Also, these advocates would probably like to see almost all wetlands
presumed to be in the highest protection category unless experts can prove an area should
receive a lesser level of protection, while critics who view protection efforts as excessive,
would seek the reverse.
Locating the boundary line can be controversial when the line encompasses areas that
do not meet the image held by many. Controversy would likely grow if a tiered approach
required that lines segment wetland areas. On the other hand, a consistent application of an
agreed-on definition may lead to fewer disputes and result in more timely decisions.
Some states have far more wetlands than others. Different treatment has been proposed
for Alaska because about one third of the state is designated as wetlands, yet a very small
portion has been converted. Legislative proposals have been made to exempt it from the
§404 program until 1% of its wetlands have been lost. Some types of wetlands are already
treated differently. For example, playas and prairie potholes have somewhat different
definitions under swampbuster (discussed below), and the effect is to increase the number
of acres that are considered as wetlands. This differential treatment contributes to questions
about federal regulatory consistency on private property.
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Agriculture and Wetlands
National surveys almost two decades ago indicated that agricultural activities had been
responsible for about 80 percent of wetland loss in the preceding decades, making this topic
a focus for policymakers. Congress responded by creating programs in farm legislation
starting in 1985 that use disincentives and incentives to encourage landowners to protect and
restore wetlands. Swampbuster and the Wetlands Reserve are the two largest efforts, but
other programs such as the Conservation Reserve’s Farmed Wetlands Option and
Conservation Reserve Enhancement Programs are also being used to protect wetlands.
Recent wetland loss surveys conducted by NRCS and by FWS indicate that agriculture is
now responsible for between 25% and 30% of conversions, and that the total number of acres
lost also has plunged.
Swampbuster. Swampbuster, enacted in 1985, uses disincentives rather than
regulations to protect wetlands on agricultural lands. It remains controversial with farmers
concerned about redefining an appropriate federal role in wetland protection on agricultural
lands, and with wetland protection advocates concerned about inadequate enforcement.
Since 1995, the NRCS has made wetland determinations only in response to requests because
of uncertainty over whether changes in regulation or law would modify boundaries that have
already been delineated. NRCS estimates that more than 2.6 million wetland determinations
have been made and that more than 4 million may eventually be required.

Swampbuster was amended in the Federal Agricultural Improvement and Reform Act
of 1996 (P.L. 104-127) to grant producers greater flexibility. Changes include:
! expanding the definition of agricultural land used in the MOA to include
pasturelands, rangelands, and tree farms, and exempting swampbuster
penalties when wetlands are voluntarily restored;
! providing that prior converted wetlands will not be considered “abandoned”
if it remains in agricultural use, giving the Secretary discretion to determine
which program benefits swampbusters are ineligible for, and granting
good-faith exemptions;
! encouraging mitigation and establishing a mitigation banking pilot program;
and repealing required consultation with the U.S. Fish and Wildlife Service.
An interim final rule was issued on September 6, 1996; a final rule has not been issued.
The 2002 farm bill (P.L. 107-171) made one amendment to swampbuster that should
not affect either the acres that are protected or the characteristics of the protection effort.
Other Agricultural Wetlands Programs. Under the Wetland Reserve Program
(WRP), enacted in 1990, landowners receive payments for placing easements on farmed
wetlands. All easements were permanent until provisions in the 1996 farm bill, requiring
temporary easements and multi-year agreements as well, were implemented. This law made
the WRP an entitlement, extended its authorization through 2002, and capped enrollment at
975,000 acres. The FY2001 Agriculture Appropriations legislation (P.L. 106-387) raised the
enrollment cap to 1,075,000 acres. The 2002 farm bill reauthorized the program through
FY2007. It increased the enrollment cap to 2,275,000 acres through FY2007, with 250,000
acres to be enrolled annually. The Natural Resources Conservation Service issued
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regulations implementing these provisions for FY2002 on June 7, 2002, and subsequently
released approximately $275 million to 42 states to enroll land in FY2002.

Data released in March 2001 show almost 1,050,000 acres are in the program. Almost
35% of the enrollment is in three states, Louisiana, Mississippi, and Arkansas. Most of the
land is enrolled under permanent easements, while only about 5% is enrolled under 10-year
restoration agreements. Farmer interest has exceeded available funding, which may be one
of the reasons why Congress raised the enrollment ceiling.
The farm bill also expanded the 500,000 acre Farmable Wetlands Pilot Program within
the Conservation Reserve Program. This program had been enacted in the FY2001
Agriculture Appropriations to enroll farmed wetlands smaller than 5 acres in six North
Central states. It now becomes a national program of 1 million acres, with no state being
able to enroll more than 100,000 acres. Only wetland areas that are smaller than 10 acres and
are not adjacent to larger streams and rivers are eligible.
Several other conservation programs, including the Environmental Quality Incentives
Program and the Wildlife Habitat Incentive Program, were also amended in ways that may
have incidental protection benefits for wetlands, both because of much higher funding levels
and because of program changes. Finally, some new programs could help protect wetlands,
including the Conservation Security Program, which would provide payments to install and
maintain practices on working agricultural lands, a Surface and Groundwater Conservation
Program (funded through the Environmental Quality Incentive Program), a new program to
retire wetlands that are part of a cranberry operation; and several programs to better manage
water resources. Some of these programs will be implemented in FY2002, and the remainder
in FY2003. (For more information on these provisions, see CRS Report RL31486, Resource
Conservation Title of the 2002 Farm Bill: A Comparison of New Law with Bills Passed by
the House and Senate, and Prior Law; and for the current status of implementation, see the
2002 farm bill implementation section of CRS Issue Brief IB96030, Soil and Water
Conservation Issues.)
Agricultural Wetlands and the §404 Program. The §404 program applies to
qualified wetlands in all locations, including agricultural lands. But the Corps and EPA
exempt “prior converted lands” (wetlands modified for agricultural purposes before 1985)
from §404 permit requirements under a memorandum of agreement (MOA), and since 1977
the Clean Water Act has exempted “normal farming activities.” Another MOA signed in
January 1994 by the NRCS, the Corps, EPA, and FWS gives NRCS the responsibility for
making wetland determinations for the §404 program on agricultural lands. These
determinations are made under §404 rules and procedures. The January 2001 Supreme Court
SWANCC decision, discussed above, apparently will exempt certain isolated wetlands from
Corps jurisdiction; NRCS has estimated that about 8 million acres might be exempted by this
decision. Most recently, on December 16, 2002, the Supreme Court affirmed a lower court
decision, without comment, that deep ripping to prepare wetland soils for planting was more
than a “normal farming activity” and therefore subject to §404 requirements.
While these exemptions and the MOA have displeased some protection advocates, they
have probably dampened some of the criticisms from farming interests over federal
regulation of private lands, and the Supreme Court decision may cause that criticism to rise.
The Corps and NRCS have been unsuccessful in revising the MOA since 1996. There has
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been no official comment on how additional changes in the 2002 farm bill will affect
interagency cooperation. Some of the wetlands that fall outside §404 requirements as a result
of the SWANCC decision can now be protected if landowners decide to enroll them into the
revised farmable wetlands program.
Private Property Rights and Landowner Compensation
An estimated 74% of all remaining wetlands in the coterminous states are on private
lands. Questions of federal regulation of private property stem from the belief that land
owners should be compensated when a “taking” occurs and alternative uses are prohibited
or restrictions on use are imposed to protect wetland values. The U.S. Constitution provides
that property owners shall be compensated if private property is “taken” by government
action. The courts generally have found that compensation is not required unless all
reasonable uses are precluded. Many individuals or companies purchase land with the
expectation that they can alter it. If that ability is denied, they contend, then the land is
greatly reduced in value. Many argue that a taking should be recognized when a site is
designated as a wetland. In June 2002, the Supreme Court held that a Rhode Island man who
had acquired property after the state enacted wetlands regulation affecting the parcel is not
automatically prevented from bringing an action to recover compensation from the state, but
ruled that the state’s action had not taken all economic value of the property into account
(Palazzolo v. Rhode Island, U.S. No. 99-2047).
The previous three Congresses have explored these issues in numerous hearings; an
example is the October 2001 hearing by the House Transportation and Infrastructure
Committee, subcommittee on water resources and development. The record of this hearing
is titled The Wetland Permitting Process: Is it working Fairly? (H. Rept. 107-50) Each of
these Congresses considered, but did not enact, property rights protection proposals, in part
because the Clinton Administration had strongly hinted that it would have vetoed such
legislation. (For more information, see CRS Report RL30423, Wetlands Regulation and the
Law of Property Rights “Takings.”)
Wetland Restoration and Mitigation
Federal wetland policies during the past decade have increasingly emphasized
restoration of wetland areas. Much of this restoration occurs as part of efforts to mitigate the
loss of wetlands at other sites. The mitigation concept has broad appeal, but implementation
has left a conflicting record. A recent examination of this record, presented in a June 2001
report from the National Research Council, found it to be wanting. Likewise, a GAO report
issued in May, 2002, criticized the ability of the Corps to track the impact of in-lieu-fee
projects under its current mitigation program. Whether it is possible to restore or create
wetlands with ecological and other functions equivalent to or better than those of natural
wetlands that have been lost over time is a subject that both scientists and policymakers
debate. Results so far seem to vary, depending on the type of wetland and the level of
commitment to maintenance. Congress has repeatedly endorsed mitigation in recent years.
Much of the attention on wetland restoration has focused on Louisiana; it is estimated
that 80% of the total loss of coastal wetlands in the United States has taken place in this state
(coastal wetlands are about 5% of all wetlands in the United States). In response to these
losses, Congress authorized a task force, led by the Corps, to prepare a list of coastal wetland
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restoration projects in the state, and provided funding to plan and carry out restoration
projects in this and other coastal states under the Coastal Wetlands Planning, Protection and
Restoration Act of 1990, also known as the Breaux Act. According to the FWS, almost $37
million in grants was spent by states to restore almost in 6,000 acres and purchase almost
40,000 acres between FY2000 and FY2002. Restoration projects are also taking place in
other places. In early June 2002, for example, 16,500 acres of salt ponds in San Francisco
Bay were purchased by the state of California and the U.S. Fish and Wildlife Service from
Cargill Inc and will be restored..
Many federal agencies have been active in wetland improvement efforts in recent years.
In particular, the FWS has been promoting the success of its Partners for Wildlife program.
Through FY2001, the program has entered into about 27,000 agreements with landowners
to protect or restore about 575,000 acres of wetlands and more than 2,000 miles of riparian
and in-stream habitat (and upland habitat also).
Other programs also restore and protect domestic and international wetlands. The North
American Wetlands Conservation Act, reauthorized through FY2007 in P.L. 107-304 with
an appropriations ceiling that will increase from $55 million in FY2003 to $75 million in
FY2007. The FWS has combined funding for this program with several other laws to create
the North American Wetlands Conservation Fund. The fund provides federal matching
grants for wetland conservation projects to help implement the North American Waterfowl
Management Plan. Projects are located in Canada, Mexico, and the United States.
According to the Department of the Interior, The U.S. and its partners had invested $1.7
billion by the end of FY2001 to improve more than 5 million acres of wetlands.
Under the Convention on Wetlands of International Importance, more commonly known
as the Ramsar Convention, the United States is one of 134 nations that have agreed to slow
the rate of wetlands loss by designating important sites. These nations have designated
1,229 sites since the convention was adopted in 1971. The United States has designated 19
wetlands, encompassing 3 million acres.
Mitigation has also become an important cornerstone of the §404 program in recent
years. A 1990 MOA signed by the agencies with regulatory responsibilities outlines a
sequence of three steps leading to mitigation: first, activities in wetlands should be avoided
when possible; second, when they can not be avoided, impacts should be minimized; and
third, where minimum impacts are still unacceptable, mitigation is appropriate. It directs that
mitigated wetland acreage be replaced on a one-for-one functional basis. Therefore,
mitigation may be required as a condition of a §404 permit.
Some wetland protection advocates are critical of mitigation, which they view as
justifying destruction of wetlands. They believe that the 404 permit program should be an
inducement to avoid damaging wetland areas. These critics also contend that adverse
impacts on wetland values are often not fully mitigated and that mitigation measures, even
if well-designed, are not adequately monitored or maintained. Supporters of current efforts
counter that they generally work as envisioned, but there is little data to support this view.
For example, in May 2001, the General Accounting Office issued a report finding that the
Corps has not been able to track the impact of its program that allows in-lieu-fee mitigation
projects in exchange for issuing permits that allow wetlands development. (Wetlands
Protection: Assessments Needed to Determine the Effectiveness of In-Lieu-Fee Mitigation,
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GAO-01-325) Questions about implementation of the 1990 MOA and controversies over
the feasibility of compensating for wetland losses further complicate the wetland protection
debate. The GAO report was followed by a June report from the National Research Council
that said that mitigation projects called for in permits affecting wetlands were not meeting
the federal government’s “no net loss” policy goal for wetlands function (Compensating for
Wetlands Losses under the Clean Water Act, National Research Council, June 2001). In
response, in November 2001, the Corps issued new guidance to strengthen the standards on
compensating for wetlands lost to development, but the guidance has been criticized by
environmental groups and some Members of Congress for weakening rather than
strengthening mitigation requirements and for the Corps’ failure to consult with other federal
agencies.
The concept of “mitigation banks,” in which wetlands are created, restored, or enhanced
in advance to serve as “credits” that may be used or acquired by permit applicants when they
are required to mitigate impacts of their activities, is widely endorsed. Numerous public and
private banks have been established, but many believe that it is too early to assess their
success. Detailed federal guidance for establishment, use, and operation of mitigation banks
was finalized by the Corps, EPA, FWS, NRCS, and NMFS in the Federal Register on
November 28, 1995. Provisions in several laws, such as the 1996 farm bill and the 1998
Transportation Equity Act (TEA-21), endorse the mitigation banking concept. (For more
information on the early history of banking, see CRS Report 97-849, Wetland Mitigation
Banking: Status and Prospects.)
Recent Administration and Congressional Wetlands Activities
Although recent congressional activities center on reauthorizing omnibus farm
legislation, discussed above, they also include continued funding for Clinton Administration
proposals from prior years in the Clean Water Action Plan and the Lands Legacy Initiative.
Most of the Initiative proposals were addressed in FY2002 and FY2003 appropriations as
components of the Conservation Spending Category.

Clinton Administration Initiatives. In 1998, the Clinton Administration released
a Clean Water Action Plan which included proposals to restore and protect wetlands. It
called for achieving a net gain of 100,000 acres of wetlands annually by the year 2005 by:
tightening permit rules under §404; raising enrolling levels for the Wetlands Reserve
Program, and other federal and non-federal land protection programs; and increasing the
wetland acres restored and enhanced by the Corps of Engineers. The action plan was not
accompanied by implementing legislative proposals, and in Congress, it was considered
mainly through the appropriations process. (For further information, see CRS Report 98-150,
The Clean Water Action Plan: Background and Early Implementation.) The Bush
Administration has not undertaken steps specific to the Clean Water Action Plan activities,
and it did not identify specific portions of the FY2002 or FY2003 budget request for
activities under the Plan. Many of the Plan’s activities continue, however, but without the
focus given during the Clinton Administration.
The Clinton Administration also proposed a Lands Legacy Initiative with its FY2000
and FY2001 budget submissions. This initiative centered on providing more funding for
natural resource programs, especially land acquisition programs under the Land and Water
Conservation Fund and the North American Wetlands Conservation Fund. In FY2001,
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congressional appropriators renamed the Initiative the Conservation Spending Category and
provided more than the Administration had requested. Appropriators continued to use the
category in FY2002 and FY2003. (For further information, see CRS Report RS20471, The
Conservation Spending Category: Funding for Natural Resource Protection.)
Legislative Activity in the 106th Congress. The most significant wetlands
legislative activity in the 106th Congress involved increasing appropriations. Although about
40 bills with wetland provisions were introduced, only a few that were not controversial saw
any legislative action. Some regulatory issues were addressed in the FY2000 and FY2001
Energy and Water Development Appropriations bills (P.L. 106-60 and P.L. 106-377). The
FY2000 law included language providing that $5 million in additional funds for the Corps’
regulatory program to establish an administrative process for appeals of jurisdictional
determinations by the Corps. It also directed the Corps to study the workload impacts and
costs of compliance of the proposed replacement nationwide permits (see “Nationwide
Permits,” above). The FY2001 law required the Corps to report to Congress on changed
costs and increased workload caused by of the final replacement permits, to prepare a
biannual report on the performance of the Corps’ regulatory program, and to provide
information to the public on permit applications and processing.
107th Congress. The 107th Congress has enacted omnibus farm bill legislation and
reauthorized the North American Wetlands Conservation Act (see discussion above). Also,
the House Transportation and Infrastructure Water Resources and Environment
Subcommittee held two hearings. The first, on September 20, 2001, considered H.R. 1474,
a bill to promote restoration, conservation, and enhancement of wetlands by specifically
authorizing a wetlands mitigation banking program to be administered by the Corps. The
second, on October 4, 2001 was an oversight hearing on enforcement of wetlands regulatory
programs where witnesses presented allegations of improper treatment by federal regulators
and enforcement officials.
The House Government Reform Subcommittee on Energy Policy, Natural Resources
and Regulatory Affairs held a hearing on the government’s response to the SWANCC
Supreme Court decision in September 2002 and has continued to press the government to
clarify its interpretation of the Court case. Committee Members and public witnesses
indicated that a lack of guidance has led to inconsistent regulatory decisions by Corps
officials in individual regions of the country. At the hearing, Corps and EPA officials
testified that efforts are underway to develop guidance and perhaps to conduct an
administrative rulemaking concerning jurisdictional issues, but they did not commit to
specific content or a timetable for doing so.
Congress completed action on only two of the regular appropriations bills before the
107th Congress adjourned, and bills to fund the government’s wetlands-related activities were
not enacted before adjournment. As a result, a continuing resolution (P.L. 107-294) provides
funding through January 11, 2003, for the many other agencies for which no appropriations
bills was enacted. Action on the FY2003 appropriations is expected to be completed early
in the 108th Congress.
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FOR ADDITIONAL READING
Kusler, Jon and Teresa Opheim. Our National Wetland Heritage: A Protection Guide.
Environmental Law Institute. [Washington] 1996. 149 p.
National Academy of Sciences, National Research Council. Compensating for Wetland
Losses Under the Clean Water Act. [Washington] 2001.
Strand, Margaret N. Wetlands Deskbook. Environmental Law Institute. [Washington]
1993. 883 p.
U.S. Department of Agriculture, Economic Research Service. Wetlands and Agriculture:
Private Interests and Public Benefits, by Ralph Heimlich, et al. [Washington] 2001,
123p. Agricultural Economic Report No. 765.
U.S. Department of the Interior. U.S. Fish and Wildlife Service. Status and Trends of
Wetlands in the Coterminous United States 1986 to 1997. [Washington] 2000. 82p.
U.S. General Accounting Office. Wetlands Protection: Assessments Needed to Determine
the Effectiveness of In-Lieu-Fee Mitigation. [Washington] May 2001. 75 p.
CRS Reports
CRS Report 97-223. Nationwide Permits for Wetlands Projects: Regulatory Developments
and Current Issues, by Claudia Copeland.
CRS Report RL31486. Resource Conservation Title of the 2002 Farm Bill: A Comparison
of New Law with Bills Passed by the House and Senate, and Prior Law, by Jeffrey Zinn.

CRS Report 97-849. Wetland Mitigation Banking: Status and Prospects, by Jeffrey Zinn.
CRS Report RL30423. Wetlands Regulation and the Law of Property Rights “Takings”, by
Robert Meltz.
CRS Report RL30849. The Supreme Court Addresses Corps of Engineers Jurisdiction over
“Isolated Waters”: The SWANCC Decision, by Robert Meltz and Claudia Copeland.
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