Order Code IB97014
CRS Issue Brief for Congress
Received through the CRS Web
Wetland Issues
Updated June 2, 2005
Jeffrey A. Zinn and Claudia Copeland
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress

CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
What Is a Wetland?
How Fast Are Wetlands Disappearing, and How Many Acres Are Left?
The Clean Water Act Section 404 Program
The Permitting Process
Nationwide Permits
Judicial Proceedings Involving §404: SWANCC
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
Wetlands Activities in the 108th Congress
FOR ADDITIONAL READING

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Wetland Issues
SUMMARY
The 109th Congress, like earlier ones,
regulatory jurisdiction (H.R. 2658, the Federal
may consider various wetland policy topics,
Wetlands Jurisdiction Act).
especially since the Bush Administration
stated shortly after the 2004 election that
Wetland protection efforts engender
restoration of 3 million wetland acres would
intense controversy over issues of science and
be a priority. It had first announced this goal
policy. Controversial topics include the rate
on Earth Day in 2004; and this is the most
and pattern of loss, whether all wetlands
recent iteration of administration policies to
should be protected in a single fashion, the
protect wetlands. These policies continue to
ways in which federal laws currently protect
attract congressional interest.
them, and the fact that 75% of remaining U.S.
wetlands are located on private lands.
The 108th Congress was less active in
wetlands issues than recent Congresses, and
One reason for these controversies is that
no major bills were enacted. Earlier Con-
wetlands occur in a wide variety of physical
gresses had reauthorized and amended many
forms, and the numerous values they provide,
wetland programs and examined controversies
such as wildlife habitat and water purification,
over such topics as applying federal regula-
also vary widely. A second reason is that the
tions on private lands; documenting rates of
total wetland acreage in the lower 48 states is
wetlands loss; implementing farm bill provi-
estimated to have declined from more than
sions; and examining proposed changes to the
220 million acres three centuries ago to 105.5
federal permit program.
million acres in 1997. The remaining acreage
continues to be modified or disappear, al-
Congress has also been involved at the
though at a much slower rate, as restoration
program level, responding to legal decisions
efforts have greatly expanded. Some regions
and administrative actions by examining
reportedly are approaching the national policy
aspects of wetland protection efforts. Exam-
goal of no-net-loss. A third reason is that
ples include implementation of Corps of
wetlands are protected in different ways by
Engineers changes to the nationwide permit
multiple laws, including the permit program in
program (changes generally opposed by devel-
§404 of the Clean Water Act; programs for
opers); redefining key wetlands permit
agricultural wetlands; laws that protect spe-
regulatory terms in revised rules issued in
cific sites; and laws that protect wetlands
2002; and a 2001 Supreme Court ruling
which perform certain functions.
(called the SWANCC case) that narrowed
federal regulatory jurisdiction over certain
Many protection advocates view these
isolated wetlands. Hearings on many of these
laws as inadequate or uncoordinated. Others,
topics were held, and some legislation was
who advocate the rights of property owners
introduced, but none has been enacted. Legis-
and development interests, characterize them,
lation to reverse the SWANCC ruling also has
especially the §404 program, as too intrusive.
been introduced in the 109th Congress (H.R.
Numerous state and local wetland programs
1356, the Clean Water Authority Restoration
add to the complexity of the protection effort.
Act), as has a bill to narrow the government’s

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MOST RECENT DEVELOPMENTS
In the 109th Congress, legislation to reverse a controversial 2001 Supreme Court ruling
concerning isolated wetlands, the SWANCC case, has been introduced (H.R. 1356, the Clean
Water Authority Restoration Act), as has a bill intended to narrow the government’s
regulatory jurisdiction (H.R. 2658, the Federal Wetlands Jurisdiction Act). Almost two
dozen bills focusing on some aspect of wetland topics were introduced during the 108th
Congress, but no significant wetlands legislation was enacted. In addition, several wetland
topics attracted some congressional interest: implementation of provisions enacted in the
North American Wetlands Conservation Act (P.L. 107-304) and the 2002 farm bill (P.L. 107-
171); large-scale restoration efforts involving wetlands (the Everglades and coastal
Louisiana, for example); and appropriations for wetland programs.
Shortly after his reelection, President Bush reiterated the policy initiative goal he first
announced on Earth Day 2004 — to create, improve, and protect at least 3 million wetland
acres as a priority of his second term. When the President initially announced this goal, he
urged Congress to pass his FY2005 budget request for wetland and other conservation
programs, and endorsed efforts to both provide better tracking of wetland programs and
enhance local collaboration on cooperative conservation activities. During the fall of 2004,
the Department of Agriculture announced new initiatives to restore additional wetlands in
agricultural areas. In acting on the FY2005 budget, Congress did not enact increases for the
two wetland conservation programs for which the President had sought additional funds.
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.
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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 encouraged destruction of wetland areas, such as selected provisions in the federal
tax code, public works legislation, and farm programs. 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
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 federal 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, mostly setting higher appropriations ceilings, without making significant shifts in
policy. President Bush endorsed wetland protection in signing the farm bill and the North
American Wetlands Conservation Act reauthorization in 2002. The Bush Administration has
issued guidance on mitigation policies and regulatory program jurisdiction; the latter has
raised controversy with some groups (see discussion below).
In 2002 the Bush Administration endorsed the concept of “no-net-loss” of wetlands —
a goal declared by President George H.W. Bush in 1988 and also embraced by President
Clinton to balance wetlands losses and gains in the short term and achieve net gains in the
long term. On Earth Day 2004, the President announced a new national goal, moving beyond
no-net-loss, of achieving an overall increase of wetlands (see [http://www.whitehouse.gov/
news/releases/2004/04/20040422-1.html].) The goal is to create, improve, and protect at
least 3 million wetland acres over the next five years in order to increase overall wetland
acres and quality. (By comparison, the Clinton Administration in 1998 announced policies
intended to achieve overall wetland increases of 200,000 acres per year by 2005.) To meet
the new goal, President Bush urged Congress to pass his FY2005 budget request for
conservation programs, and he focused on the FY2005 request for two wetlands programs,
the Wetlands Reserve Program (WRP) and the North American Wetlands Conservation Act
Grants Program (NAWCP). The FY2005 budget request, $349 million, was 10% more than
FY2004 levels for those two programs. (However, Congress disagreed, providing level
funding for the NAWCP and an 18% reduction for the WRP.) The President’s strategy also
calls for better tracking of wetland programs and enhanced local and private sector
collaboration.
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In April 2005 the Administration issued a report (Conserving America’s Wetlands:
Implementing the President’s Goal) saying that about 832,000 acres of wetlands have been
created, protected, or improved in the past year as part of the President’s program. Another
1.6 million acres is expected to be added by the end of FY2006, the report said.
Environmental groups criticized the report as presenting an incomplete picture, because it
fails to mention wetlands lost to agriculture and development.
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 as multiple values have been more
widely recognized, by improving coordination and consistency among
agencies and levels of governments, and strengthened programs; and
! Others, including landowners, farmers, and small businessmen, who counter
that protection efforts have gone too far, and that privately owned 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 issues 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; federal funding of wetland programs; and is protecting wetland by acres a good
proxy for protecting wetlands based on the functions they perform and the values they
provide. In addition, private property questions are raised because almost three-quarters of
the remaining wetlands are located on 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 (P.L. 99-198) and reproduced in the Emergency
Wetlands Resources Act of 1986 (P.L. 99-645), lists those three components but does not
include more specific criteria, such as what conditions must be present and for how long.
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 wetland. These regulated wetlands, under the §404 program
discussed below, are currently identified using technical criteria in a wetland delineation
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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. Both show that the annual loss rate
dropped from almost 500,000 acres annually nearly three decades ago to less than 100,000
annually. However, 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, and that there was an average annual gain of 26,000 acres between 1997 and
2002. NRCS cautioned against making precise claims of net increases because of statistical
uncertainties.

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
beyond these raw numbers. There is a large time lag from the announcement and
implementation of changes in policy to collection and release of data that measure how these
changes affect loss rates. Also, it is often very difficult to distinguish the role that policy
changes play from other factors, such as agricultural markets and development pressures.
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. Nevertheless, in
his Earth Day 2004 wetlands announcement (discussed above), President Bush said that as
the nation is nearing the goal of no-net-loss, it is appropriate to move towards policies to
increase wetlands acres and quality.
The Clean Water Act 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
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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 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. 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
the Corps, it evaluates more than 85,000 permit requests annually. Of those, more than 90%
are authorized under a general permit, which can apply regionally or nationwide, and is
essentially a permit by rule for activities with minor impact. Most do not require
pre-notification or prior approval. About 9% are required to go through the more detailed
evaluation for a standard individual permit, which may involve complex proposals or
sensitive environmental issues and can take 180 days or longer for a decision. Less than 0.3%
of permits are denied; most other individual permits are modified or conditioned before
issuance. About 5% of applications are withdrawn prior to a permit decision. In FY2003
(the most recent year for which data are available), Corps-issued permits authorized activities
having a total of 21,330 acres of wetland impact, while those permits required that 43,379
acres of wetlands be restored, created, or enhanced as mitigation for the authorized losses.
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
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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 surrounded revised regulations issued by EPA and the Corps in May
2002, which redefine two key terms in the 404 program, “fill material” and “discharge of fill
material.” The agencies said that the revisions were 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 contended 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 in June 2002 to review these issues, and
legislation to reverse the agencies’ action was introduced, but no further action occurred.
(For additional information, see CRS Report RL31411, Controversies over Redefining “Fill
Material” Under the Clean Water Act
.) That legislation was re-introduced in the 108th
Congress, and has again been introduced in the 109th Congress (H.R. 2719).
Nationwide Permits. Nationwide permits are a key means by which the Corps
minimizes the burden of its regulatory program. A nationwide permit is a form of general
permit which authorizes a category of activities throughout the nation and is valid only if the
conditions applicable to the permit are met. 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.
The current program has few strong supporters, for differing reasons. Developers say
that it is too complex and burdened with arbitrary restrictions. Environmentalists say that
it does not adequately protect aquatic resources. At issue is whether the program has become
so complex and expansive that it cannot either protect aquatic resources or provide for a fair
regulatory system, which are its dual objectives.
Nationwide permits are issued for periods of no longer than five years and thereafter
must be reissued by the Corps. The most recent reissuance, in January 2002, included some
changes, including relaxation of certain permit conditions, intended by the Corps to add
flexibility. Reactions to the permits were mixed: environmental advocates contend that the
re-issued permits are not adequately protective of water quality and will result in a net loss
of wetland acres, 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.
(For more information, see CRS Report 97-223, Nationwide Permits for Wetlands Projects:
Regulatory Developments and Current Issues
.) In December 2003, a federal district court
dismissed a lawsuit brought by developers that had challenged the validity of activity-based
nationwide permits. That ruling was appealed, and a decision is anticipated later in 2005.
Citizen groups have filed lawsuits seeking to halt the Corps’ use of one of its
nationwide permits, NWP 21, to authorize a type of coal mining practice called mountaintop
mining. In 2004, a federal district court in West Virginia ruled that NWP 21 violates the
CWA by authorizing activities that have more than minimal adverse environmental effects.
An appeal of that decision is pending, but another lawsuit seeking to extend the district
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court’s ruling to mountaintop mining in Kentucky also has been filed. (For background, see
CRS Report RS21421, Mountaintop Mining: Background on Current Controversies, by
Claudia Copeland.)
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 continue towards encouraging
more states to assume program responsibility.
Judicial Proceedings Involving §404: SWANCC. The §404 program has been
the focus of numerous lawsuits, most of which have sought to narrow the geographic scope
of the regulatory program. In that context, an issue of long-standing controversy is whether
isolated waters are properly within the jurisdiction of §404. Isolated waters (those that lack
a permanent surface outlet to downstream waters) 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. In January 2001, the
Supreme Court ruled on the question of whether the CWA provides the Corps and EPA with
authority over isolated waters and wetlands. The Court’s 5-4 ruling in Solid Waste Agency
of Northern Cook County (SWANCC) v. U.S. Army Corps of Engineers
(531 U.S. 159) held
that the denial of a §404 permit for disposal 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 remains unclear, even four
years after the ruling. Environmentalists believe that the Court misinterpreted congressional
intent on the matter, while industry and landowner groups welcomed the ruling. (For
additional information, see CRS Report RL30849, The Supreme Court Addresses Corps of
Engineers Jurisdiction Over ‘Isolated Waters’: The SWANCC Decision
.)

Policy implications of how much the decision restricts federal regulation depend on how
broadly or narrowly the opinion is applied, and since the 2001 Court decision, other federal
courts have issued a number of rulings that have reached varying conclusions. Some federal
courts have interpreted SWANCC narrowly, thus limiting its effect on current permit rules,
while a few read the decision more broadly. However, in April 2004, the Court declined to
review three cases that support a narrow interpretation of SWANCC. Environmentalists were
pleased that the Court rejected the petitions, but attorneys for industry and developers say
that the courts will remain the primary battleground for CWA jurisdiction questions, so long
as neither the Administration nor Congress takes steps to define jurisdiction.
The government’s current view on this key question came in EPA-Corps guidance
issued on January 15, 2003 (see [http://www.epa.gov/epahome/headline2_011003.htm]). It
provides a legal interpretation essentially based on a narrow reading of the Court’s decision,
thus allowing federal regulation of some isolated waters to continue (in cases where factors
other than the presence of migratory birds may exist, thus allowing for assertion of federal
jurisdiction), but it calls for more Headquarters review in such cases. Administration press
releases say that the guidance demonstrates the government’s commitment to “no-net-loss”
wetlands policy. However, it was apparent that the issues remained under discussion,
because at the same time, the Administration issued an advance notice of proposed
rulemaking (ANPRM) seeking comment on how to define waters that are under jurisdiction
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of the regulatory program. The ANPRM did not actually propose rule changes, but it
indicated possible ways that Clean Water Act rules might be modified to further limit federal
jurisdiction, building on SWANCC and some subsequent legal decisions. The government
received more than 133,000 comments on the ANPRM, most of them negative, according
to EPA and the Corps. Environmentalists and many states opposed changing any rules,
saying that the law and previous court rulings call for the broadest possible interpretation of
the Clean Water Act (and narrow interpretation of SWANCC), but developers sought changes
to clarify interpretation of the SWANCC ruling.
On December 16, 2003, EPA and the Corps announced that the Administration will not
pursue development of rule changes concerning federal regulatory jurisdiction over isolated
wetlands. The EPA Administrator said that the Administration wanted to avoid a
contentious and lengthy rulemaking debate over the issue. Environmentalists and state
representatives expressed relief at the announcement. Interest groups on all sides have been
critical of confusion in implementing the 2003 guidance, which constitutes the main tool for
interpreting the reach of the SWANCC decision. Environmentalists remain concerned about
diminished protection resulting from the guidance, while developers said that without a new
rule, confusing and contradictory interpretations of wetland rules likely will continue. In that
vein, a GAO report concludes that Corps districts differ in how they interpret and apply
federal rules when determining which waters and wetlands are subject to federal jurisdiction,
documenting enough differences that the Corps has decided to conduct a comprehensive
survey of its district office practices to help promote greater consistency (GAO, Corps of
Engineers Needs to Evaluate Its District Office Practices in Determining Jurisdiction
, GAO-
04-297, February 2004).
While it likely will take some time to assess how regulatory protection of wetlands will
be affected as a result of the SWANCC decision and subsequent developments, the remaining
responsibility to protect affected wetlands falls on states and localities. Whether states will
act to fill in the gap left by removal of some federal jurisdiction is likely to be constrained
by budgetary and political pressures, but a few states (Wisconsin and Ohio, for example)
have passed new laws or amended regulations to do so. In comments on the ANPRM, many
states said that they do not have authority or financial resources to protect their wetlands, in
the absence of federal involvement.
Legislation to reverse the SWANCC decision has been introduced in the 109th Congress
(H.R. 1356, the Clean Water Authority Restoration Act of 2005); identical legislation was
introduced in the 108th Congress (H.R. 962, S. 473). It would provide a broad statutory
definition of “waters of the United States;” clarify that the CWA is intended to protect U.S.
waters from pollution, not just maintain their navigability; and include a set of findings to
assert constitutional authority over waters and wetlands. Other legislation to restrict
regulatory jurisdiction also has been introduced in the 109th Congress (H.R. 2658, the Federal
Wetlands Jurisdiction Act of 2005). It would narrow the statutory definition of “navigable
waters” and define certain isolated wetlands and other areas as not being subject to federal
regulatory jurisdiction. It also would give the Corps sole authority to determine §404
jurisdiction, for permitting purposes. Similar legislation also was introduced in the 108th
Congress (H.R. 4843).
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
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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.
Agriculture and Wetlands
National surveys almost two decades ago indicated that agricultural activities had been
responsible for about 80% 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 Program are the two largest
efforts, but others such as the Conservation Reserve’s Farmed Wetlands Option and
Conservation Reserve Enhancement Program are also being used to protect wetlands. The
most recent wetland loss survey conducted by NRCS (comparing data from 1997 and 2002)
indicates that there is a small annual increase, for the first time since these data have been
collected, of 26,000 acres. However, the agency warns that statistical uncertainties preclude
concluding with certainty that gain is actually occurring.
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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 1996 farm bill (P.L. 104-127) and the 2002 farm bill
(P.L. 107-171). Amendments in 1996 granted producers greater flexibility by making
changes such as: exempting swampbuster penalties when wetlands are voluntarily restored;
providing that prior converted wetlands are not be considered “abandoned” if they remain
in agricultural use; and granting good-faith exemptions. They also encourage mitigation,
establish a mitigation banking pilot program, and repeal required consultation with the U.S.
Fish and Wildlife Service. The 2002 farm bill made a single amendment 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. The 2002 farm
bill reauthorized the program through FY2007 and raised the enrollment cap to 2,275,000
acres, with 250,000 acres to be enrolled annually. In addition, in June 2004, it announced
a new enhancement program on the lower Missouri River in Nebraska to enroll almost
19,000 acres at a cost of $26 million, working with several public and private partners.

Through FY2004, 8,391 projects had enrolled 1.627 million acres. 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. Prior to the 2002 farm bill, farmer interest had exceeded available
funding, which may explain why Congress raised the enrollment ceiling in that legislation.
The 2002 farm bill also expanded the 500,000-acre Farmable Wetlands Pilot Program
within the Conservation Reserve Program to a 1 million acres program available nationwide.
Only wetland areas that are smaller than 10 acres that are not adjacent to larger streams and
rivers are eligible. This program may become more important to overall protection efforts
in the wake of the SWANCC decision, discussed above, which limited the reach of the §404
permit program so that it does not apply to many small wetlands that are isolated from
navigable waterways. Through January, 2005, more than 122,800 acres had been enrolled.
On August 4, 2004, the Administration announced a new Wetland Restoration Initiative
to allow enrollment of up to 250,000 acres of large wetland complexes and playa lakes
located outside the 100-year floodplain in the CRP after October 1, 2004. The estimated cost
of this initiative is $200 million. Participants will receive incentive payments to help pay for
restoring the hydrology of the site, as well as rental payments and cost sharing assistance to
install eligible conservation practices.

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Several other large conservation programs, including the Environmental Quality
Incentives Program, the Farmland Protection Program, and the Wildlife Habitat Incentive
Program, were also amended in the 2002 farm bill 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 less directly 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. (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 status of implementation, see
the 2002 farm bill implementation subsection 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.” 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 in agricultural
locations might be exempted by this decision. In December 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 criticism from farming interests over federal regulation
of private lands. On the other hand, how NRCS responds to the SWANCC decision on
isolated wetlands could cause that criticism to rise. The Corps and NRCS have been
unsuccessful in revising the MOA since 1996. There has 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
or under the new initiatives.
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 2002, the Supreme Court held that a Rhode Island man who had
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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, 533 U.S. 606).
Congress has explored these issues; an example is the October 2001 hearing by the
House Transportation and Infrastructure Committee, Subcommittee on Water Resources and
the Environment. The record of this hearing is titled The Wetland Permitting Process: Is It
Working Fairly?
(Hearing 107-50). Recent Congresses have considered, but did not enact,
property rights protection proposals, and the Bush Administration has not stated an official
position on these types of proposals. (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. Examination of this record, presented in a June 2001 report
from the National Research Council, found it to be wanting. The NRC report 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 Wetland
Losses under the Clean Water Act
). Likewise, a 2001 GAO report criticized the ability of
the Corps to track the impact of projects under its current mitigation program that allows in-
lieu-fee mitigation projects in exchange for issuing permits allowing wetlands development
(Wetlands Protection: Assessments Needed to Determine the Effectiveness of In-Lieu-Fee
Mitigation
, GAO-01-325). Both scientists and policymakers debate 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. Results so far seem to vary,
depending on the type of wetland and the level of commitment to monitoring and
maintenance. Congress has repeatedly endorsed mitigation in recent years.
Much of the attention to wetland restoration has focused on Louisiana, where an
estimated 80% of the total loss of U.S. coastal wetlands has occurred (coastal wetlands are
about 5% of all U.S. wetlands). In response to these losses, Congress authorized a task force,
led by the Corps, to prepare a list of coastal wetland 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, more than $139 million will be spent in 25 states
and one territory by the end of FY2004 to restore or protect more than 167,000 acres, and
according to the Corps, almost $220 million had been spent by the Corps in coastal Louisiana
through July 2003, mostly under the Breaux Act.
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 FY2002, the program had entered into almost 29,000 agreements with landowners
to protect or restore about 640,000 acres of wetlands and more than 4,700 miles of riparian
and in-stream habitat (and more than 1 million acres of upland habitat also).
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Other programs also restore and protect domestic and international wetlands. One of
these derives from 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 act provides grants for wetland conservation
projects in Canada, Mexico, and the United States. According to the FWS FY2005 budget
notes, the United States. and its partners have protected almost 7.5 million acres and restored,
created, or enhanced an additional 5.4 million acres of wetlands. The FWS has combined
funding for this program with several other laws into what it calls the North American
Wetlands Conservation Fund.
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 little data exist to support this view.
Questions about implementation of the 1990 MOA and controversies over the feasibility of
compensating for wetland losses further complicate the wetland protection debate. In
response to criticism in the NRC and GAO reports (discussed above), 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. In December 2002, the Corps
and EPA released an action plan including 17 items that both agencies believe will improve
the effectiveness of wetlands restoration efforts (see [http://www.epa.gov/owow/wetlands
/guidance/index.html#mitigation]).
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. The U.S. Army Corps of Engineers estimated that about 230 banks had been
established by January1, 2000 through some form of agreement (although construction had
not started at all those sites), and if state -approved banks are included, the total grew to 370
to 400 banks. Provisions in several laws, such as the 1996 farm bill and the 1998
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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
.) In November 2003, Congress enacted wetlands mitigation
provisions as part of the FY2004 Department of Defense authorization act, P.L. 108-136,
discussed below.
Wetlands Activities in the 108th Congress
The Administration’s response to the SWANCC Supreme Court decision and subsequent
related federal court rulings that have not resolved issues raised by that decision were at the
center of congressional interest in the 108th Congress. A House Government Reform
subcommittee held a hearing in September 2002 where 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 (Serial No. 107-230). At the hearing,
Corps and EPA officials testified that efforts were underway to develop guidance, which was
released in January 2003.
Legislation responding to the SWANCC decision was introduced, as discussed above.
The Administration’s efforts to implement the ruling were discussed at a June 2003 hearing
of a Senate Environment and Public Works subcommittee (S.Hrg. 108-352). Some Members
and witnesses expressed frustration over government agencies’ inaction on clarifying
wetlands protection rules, but agency witnesses said Congress has responsibility to clarify
jurisdictional issues in the law. Many of the same frustrations were revisited at a March 30,
2004 hearing by a subcommittee of the House Committee on Transportation and
Infrastructure (Hearing 108-58) which focused on concerns over inconsistent regulatory
jurisdiction determinations and issues raised in the 2004 GAO report (GAO-04-297,
discussed above).
In P.L. 108-136, the Department of Defense FY2004 authorization act, signed in
November 2003, Congress included a provision for DOD to make payments to wetland
mitigation banks in instances where military construction projects would or could result in
the destruction of or impacts to wetlands. Participation in such banking programs would be
in lieu of mitigating wetland impact through the creation of a wetland on federal property.
Proponents said the provision provides flexibility when military projects are constructed and
will likely result in a net increase of wetlands from mitigation, but environmentalists who
cite the failure of many mitigation projects were critical of the provision. The measure also
requires the Army Corps to draft rules creating performance standards and criteria for
wetlands mitigation methods.
Broader legislation in the 108th Congress contained wetland provisions. One example,
the House-passed H.R. 2557, which would guide the water resources development activities
of the Corps, contained provisions on mitigation banking in Section 2010; cooperative
agreements to construct and restore wetlands in Section 2031; and restoration of southern
Louisiana wetlands in Section 5058. In another example, Senate-passed transportation
legislation (S. 1072) contained several provisions on wetlands mitigation in conjunction with
transportation construction projects. (For information on the transportation bill, see CRS
Report RL32057, Highway and Transit Program Reauthorization: Environmental Protection
Issues and Legislation
.) Neither of these bills was enacted.
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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 Accountability Office. Wetlands Protection: Assessments Needed to Determine
the Effectiveness of In-Lieu-Fee Mitigation. (GAO-01-325) [Washington] May 2001.
75 p.
—— Waters and Wetlands: Corps of Engineers Needs to Evaluate District Office Practices
in Determining Jurisdiction. (GAO-04-297) [Washington] February 2004. 45 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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