Order Code RL33483
Wetlands: An Overview of Issues
Updated March 13, 2007
Jeffrey A. Zinn
Specialist in Natural Resources Policy
Resources, Science, and Industry Division
Claudia Copeland
Specialist in Resources and Environmental Policy
Resources, Science, and Industry Division

Wetlands: An Overview of Issues
Summary
The 110th Congress, like earlier ones, may consider numerous policy topics that
involve wetlands. The 109th Congress examined controversies such as applying
federal regulations on private lands, wetland loss rates, implementation of farm bill
provisions, and implications of court decisions affecting the jurisdictional boundaries
of the federal wetland permit program. It considered almost 100 bills with wetlands
provisions, but only enacted legislation reauthorizing the Partners for Fish and
Wildlife Program (P.L. 109-294) and the North American Wetlands Conservation
Act (P.L. 109-322). In the aftermath of Hurricanes Katrina and Rita, congressional
interest focused on the role that restored wetlands could play in protecting New
Orleans, and coastal Louisiana more generally, but no legislation was enacted,
beyond FY2006 appropriations and the offshore oil and gas revenue sharing bill (a
provision of P.L. 109-432) passed at the end of 2006. The Bush Administration
exhibited its interest in wetland protection when it stated shortly after the 2004
election that restoration of 3 million wetland acres would be a priority.
The 110th Congress, like past Congresses, is also likely to involve itself in
wetland topics at the program level, responding to legal decisions and administrative
actions. Examples include implementation of Corps of Engineers changes to the
nationwide permit program; redefining key wetlands permit regulatory terms in
revised rules issued in 2002; and Supreme Court rulings in 2001 (in the SWANCC
case) that narrowed federal regulatory jurisdiction over certain isolated wetlands, and
in June 2006 (in the Rapanos-Carabell decision) that left the jurisdictional reach of
the permit program to be determined on a case-by-case basis.
Wetland protection efforts continue to engender intense controversy over issues
of science and policy. Controversial topics include the rate and pattern of loss,
whether all wetlands should be protected in a single fashion, the ways in which
federal laws currently protect them, and the fact that 75% of remaining U.S. wetlands
are located on private lands.
One reason for these controversies is that wetlands occur in a wide variety of
physical forms, and the numerous values they provide, such as wildlife habitat, also
vary widely. In addition, the total wetland acreage in the lower 48 states is estimated
to have declined from more than 220 million acres three centuries ago to 107.7
million acres in 2004. The long-standing national policy goal of no net loss has been
reached, according to the Fish and Wildlife Service, as the rate of loss has been more
than offset by net gains through expanded restoration efforts authorized in multiple
laws. Many protection advocates say that net gains do not necessarily account for the
changes in quality of the remaining wetlands, and also view federal protection efforts
as inadequate or uncoordinated. Others, who advocate the rights of property owners
and development interests, characterize them as too intrusive. Numerous state and
local wetland programs add to the complexity of the protection effort.

Contents
Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Background and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
What Is a Wetland? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
How Fast Are Wetlands Disappearing, and How Many Acres Are Left? . . . 5
The Clean Water Act Section 404 Program . . . . . . . . . . . . . . . . . . . . . . . . . . 6
The Permitting Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Nationwide Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 404 Judicial Proceedings: SWANCC and Rapanos . . . . . . . . . 9
Should All Wetlands Be Treated Equally? . . . . . . . . . . . . . . . . . . . . . 12
Agriculture and Wetlands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Swampbuster . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Other Agricultural Wetlands Programs . . . . . . . . . . . . . . . . . . . . . . . . 13
Agricultural Wetlands and the Section 404 Program . . . . . . . . . . . . . . 15
Private Property Rights and Landowner Compensation . . . . . . . . . . . . . . . 15
Wetland Restoration and Mitigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
For Additional Reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Wetlands: An Overview of Issues
Recent Developments
On March 12, the Army Corps of Engineers issued a revised package of
nationwide permits that authorize various types of projects in wetlands and other
waters of the United States. Nationwide and other general permits issued by the
Corps authorize more than 70,000 such activities annually, allowing projects that will
have minimal adverse environmental impact to proceed with little delay or paperwork
and reducing regulatory burdens on the Corps and permit applicants. The suite of
nationwide permits was last issued in 2002.
The U.S. Fish and Wildlife Service released its most recent periodic survey of
changes in wetland acreage in March 2006. Covering 1998 to 2004, it concluded that
during this time period there was a small net gain in overall wetland acres for the first
time in this survey. Others caution, however, that much of this gain was in ponds,
rather than natural wetlands.

Hurricanes Katrina and Rita caused widespread alteration and destruction of
wetlands along the central Gulf Coast in 2005. The net effect will likely be major
permanent losses, especially along the coast. These losses will be partially offset as
some destruction proves temporary and other new wetlands are created. The extent
of change and loss continues to be documented by federal agencies and others.1 The
109th Congress considered numerous legislative proposals that would have funded
wetland restoration projects and activities to help lessen the impact of future
hurricanes; many of these proposals may be reintroduced in the 110th Congress.
During the final days of the session, the 109th Congress did pass S. 3711 as part of
a broad tax relief bill (P.L. 109-432); it provides for sharing of revenues from
offshore oil and gas extraction with coastal states; one of the purposes that these
funds can be spent on is wetland restoration.
The 109th Congress considered many wetland bills, but only enacted legislation
reauthorizing the Partners for Fish and Wildlife Program (P.L. 109-294) and the
North American Wetlands Conservation Act (P.L. 109-322). Other topics that
attracted congressional attention included legislation to reverse a controversial 2001
Supreme Court ruling concerning isolated wetlands, the SWANCC case (S. 912, H.R.
1356, the Clean Water Authority Restoration Act); legislation to narrow the
government’s regulatory jurisdiction (H.R. 2658, the Federal Wetlands Jurisdiction
Act); other large-scale restoration efforts involving wetlands (the Everglades, for
example); and appropriations for wetland programs. Concerning the SWANCC case,
1 For additional information, see CRS Report RS22276, Coastal Louisiana Ecosystem
Restoration After Hurricanes Katrina and Rita
, by Jeffrey Zinn.

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critics say that guidance issued by the Environmental Protection Agency (EPA) in
2003 interpreting the case for field staff went beyond what the Supreme Court’s
decision required and left many streams and wetlands unprotected from development.
On May 18, 2006, the House adopted an amendment to H.R. 5386 to prohibit EPA
from spending funds to implement this controversial guidance. (The 109th Congress
did not take final action on this appropriations bill before adjourning sine die on
December 9; thus no further action occurred.)
Federal courts continue to play a key role in interpreting and clarifying the limits
of federal jurisdiction to regulate activities that affect wetlands, especially since the
SWANCC decision. On June 19, 2006, the Supreme Court issued a ruling in two
cases brought by landowners (Rapanos v. United States; Carabell v. U.S. Army Corps
of Engineers
) seeking to narrow the scope of the Clean Water Act (CWA) permit
program as it applies to development of wetlands. In a 5-4 decision, a plurality of the
Court (there was no majority opinion) held that the lower court had applied an
incorrect standard to determine whether the wetlands at issue are covered by the
CWA. Justice Kennedy joined this plurality to vacate the lower court decisions and
remand the cases for further consideration, but he took different positions on most
of the substantive issues raised by the cases, as did four dissenting justices, leading
to uncertainty about interpretation and implications of the ruling.
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 combination 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, including
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, Section 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, and some places
that scientists define as wetlands are exempt from this permit program because of
physical characteristics. 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
(60% of all farmers received no federal farm payments of any kind in 2003) have no
reason to observe the requirements of this program. Several land acquisition and
other incentive programs complete the current federal protection effort.
Although numerous wetland protection bills have been introduced in recent
Congresses, the most significant 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.2 The goal is to create, improve, and protect at least three 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
2 See [http://www.whitehouse.gov/news/releases/2004/04/20040422-1.html].

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conservation programs, and in which he focused on two wetlands programs, the
Wetlands Reserve Program (WRP) and the North American Wetlands Conservation
Act Grants Program (NAWCP). The FY2005 budget request for these two programs,
$349 million, was 10% more than FY2004 levels. (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.
In April 2006, the Administration issued a report saying that about 832,000
acres of wetlands had been created, protected, or improved as of that date as part of
the President’s program, and another 1.6 million acres were expected to be added by
the end of FY2006.3 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. Broadly speaking, 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), asserting that they administer the Section
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 Clean Water Act Section 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 whether protecting wetlands
by acres is 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.
3 Office of the President, Council on Environmental Quality, Conserving America’s
Wetlands 2006: Two Years of Progress Implementing the President’s Goal
, April 2006, 47p.

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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 and are identified as wetlands by
experts, either may have wetland characteristics only some portion of the time, or
may 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
Section 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, Fish and Wildlife Service (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 wetlands on 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 “Section 404 Judicial
Proceedings: SWANCC and Rapanos”) are efforts to exclude wetlands in certain
physical settings or certain 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 periodically surveys national net trends in
wetland acreage using the National Wetlands Inventory (NWI). It 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
2004, total wetland acreage was estimated to be 107.7 million acres, according to
data it presented in its most recent survey.4 Data compiled by the NRCS and the
FWS in separate surveys and using different methodologies have identified similar
trends. Both show that the annual net loss rate dropped from almost 500,000 acres
annually nearly three decades ago to slight net annual gains in recent years. The
FWS survey estimated the average annual gain between 1998 and 2004 was 32,000
acres, primarily associated with the expansion of shallow ponds, while NRCS (using
its Natural Resources Inventory (NRI) of privately-owned lands) estimated that there
was an average annual gain of 26,000 acres between 1997 and 2002. NRCS
4 U.S. Fish and Wildlife Service, National Wetlands Inventory, Status and Trends of
Wetlands in the Coterminus United States, 1998 - 2004
, March 2006, 110 pp. This is the
most recent of several status and trend reports by the Inventory over the past 25 years,
which document wetlands trends at both a national and regional scale.

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cautioned against making precise claims of net increases because of statistical
uncertainties. Some environmentalists caution that the increases identified in the
latest FWS data are tied to a proliferation of small ponds rather than natural wetlands.
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 usually 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, development pressures, and land markets.
Further, these data only measure acres. They do not provide any insights into
changes in the quality of remaining wetlands as measured by the values they provide,
which is often determined by where a wetland is located in a watershed, surrounding
land uses, etc. 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 that will result in a net increase
of wetland acres and quality.
The Clean Water Act Section 404 Program
The principal federal program that provides regulatory protection for wetlands
is found in Section 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, Section 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 Section 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 Section 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 Section 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

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Section 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, meaning the
proposed activity is presumed to have a 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.5
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
fewer than a dozen times in the 30-plus 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 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. However, 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
5 U.S. Army, Corps of Engineers, “Regulatory Statistics, All Permit Decisions, FY2003.”
See [http://www.usace.army.mil/inet/functions/cw/cecwo/reg/2003webcharts.pdf].

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reverse the agencies’ action was introduced, but no further action occurred.6 That
legislation was re-introduced in the 108th Congress, and again in the 109th Congress
(H.R. 2719), but was not passed.
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. On March 12, 2007, the Corps issued a
package of nationwide permits, replacing those that have been in effect since 2002
and were due to expire March 18. The 2007 permits establish six new nationwide
permits to authorize emergency repairs of damaged levees, fills, or uplands; time-
sensitive repairs of pipelines; discharges into ditches and canals; commercial
shellfish aquaculture activities; coal re-mining sites; and underground coal mining
activities in waters of the United States. The permits also revise a number of existing
permits and general terms and conditions that apply to all nationwide permits.7
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. These critics contend that the adverse environmental impacts
of activities authorized by NWP 21 are far greater than the “minimal adverse effects”
limits prescribed by the Clean Water Act for all nationwide permits. 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.
The district court’s ruling was overturned on appeal. Another lawsuit challenging the
applicability of nationwide permits to mountaintop mining in Kentucky also has been
filed and is pending.8
6 For additional information, see CRS Report RL31411, Controversies over Redefining
“Fill Material” Under the Clean Water Act
, by Claudia Copeland.
7 U.S. Department of Defense, Department of the Army, Corps of Engineers, “Reissuance
of Nationwide Permits; Notice,” 72 Federal Register 11091-11198, Mar. 12, 2007.
8 For background, see CRS Report RS21421, Mountaintop Mining: Background on Current
Controversies
, by Claudia Copeland.

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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 toward encouraging more states to assume program responsibility.
Section 404 Judicial Proceedings: SWANCC and Rapanos. The
Section 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 Section 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 Section 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 more than five years after the ruling.
Environmentalists believe that the Court misinterpreted congressional intent on the
matter, while industry and landowner groups welcomed the ruling.9
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 the key question of the scope of CWA
jurisdiction in light of SWANCC and other court rulings came in a legal
memorandum issued jointly by EPA and the Corps on January 15, 2003.10 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 review by higher levels in the
agencies in such cases. Administration press releases say that the guidance
9 For additional information, see CRS Report RL30849, The Supreme Court Addresses
Corps of Engineers Jurisdiction Over ‘Isolated Waters’: The SWANCC Decision
, by Robert
Meltz and Claudia Copeland.
10 See [http://www.epa.gov/owow/wetlands/guidance/SWANCC/index.html].

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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 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.
In December 2003, EPA and the Corps announced that the Administration
would not pursue 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 Government
Accountability Office (GAO) report concluded 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
begun a comprehensive survey of its district office practices to help promote greater
consistency.11 Concerns over inconsistent or confusing regulation of wetlands have
also drawn congressional interest.12
In response to continuing controversies about the 2003 guidance, on May 18,
2006, the House adopted an amendment to a bill providing FY2007 appropriations
for EPA (H.R. 5386). The amendment (passed by a 222-198 vote) would have barred
EPA from spending funds to implement the 2003 policy guidance. Supporters of the
amendment said that the guidance goes beyond what the Supreme Court required in
SWANCC, has allowed many streams and wetlands to be unprotected from
development, and has been more confusing than helpful. Opponents of the
amendment predicted that it would make EPA’s and the Corps’ regulatory job more
difficult than it already is. The 109th Congress adjourned in December 2006 before
taking final action on this appropriations bill; thus no further action occurred on the
bill.
11 U.S. Government Accountability Office, Corps of Engineers Needs to Evaluate Its
District Office Practices in Determining Jurisdiction
, GAO-04-297, February 2004, 45 pp.
12 U.S. Congress, House of Representatives, Committee on Transportation and
Infrastructure, Subcommittee on Water Resources and Environment, Inconsistent Regulation
of Wetlands and Other Waters
, Hearing 108-58, 108th Cong., 2d sess., Mar. 30, 2004.

CRS-11
While the issue of how regulatory protection of wetlands is affected by the
SWANCC decision and subsequent developments continues to evolve, 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.
Federal courts continue to have a key role in interpreting and clarifying the
SWANCC decision. On February 21, 2006, the Supreme Court heard arguments in
two cases brought by landowners (Rapanos v. United States; Carabell v. U.S. Army
Corps of Engineers
) seeking to narrow the scope of the CWA permit program as it
applies to development of wetlands. The issue in both cases had to do with the reach
of the CWA to cover “waters” that were not navigable waters, in the traditional
sense, but were connected somehow to navigable waters or “adjacent” to those
waters. (The act requires a federal permit to discharge dredged or fill materials into
“navigable waters.”) Many legal and other observers hoped that the Court’s ruling
in these cases would bring greater clarity about the scope of federal regulatory
jurisdiction.
The Court’s ruling was issued on June 19 (Rapanos et ux., et al., v. United
States, 126 S.Ct. 2208 (2006), 547 U.S. ___). In a 5-4 decision, a plurality of the
Court, led by Justice Scalia, held that the lower court had applied an incorrect
standard to determine whether the wetlands at issue are covered by the CWA. Justice
Kennedy joined this plurality to vacate the lower court decisions and remand the
cases for further consideration, but he took different positions on most of the
substantive issues raised by the cases, as did four other dissenting justices.13 Early
judgments by legal observers suggest that the implications of the ruling (both short-
term and long-term) are far from clear. Because the several opinions written by the
justices did not draw a clear line regarding what wetlands and other waters are
subject to federal jurisdiction, one likely result is more case-by-case determinations
and continuing litigation. There also could be renewed pressure on the Corps and
EPA to clarify the issues through an administrative rulemaking. The Senate
Environment and Public Works Committee held a hearing on issues raised by the
Court’s ruling on August 1, 2006. Members and a number of witnesses urged EPA
and the Corps to issue new guidance to clarify the scope of the ruling. Federal
officials testifying before the committee said that they hope to do so, but they did not
indicate when new guidance would be released.

Legislation to reverse the SWANCC decision was introduced in the 109th
Congress (S. 912, 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
13 For additional information, see CRS Report RL33263, The Wetlands Coverage of the
Clean Water Act Is Revisited by the Supreme Court: Rapanos and Carabell,
by Robert
Meltz and Claudia Copeland.

CRS-12
their navigability; and include a set of findings to assert constitutional authority over
waters and wetlands. Other legislation to restrict regulatory jurisdiction was
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). For now, it is unclear whether the more recent decision
in the Rapanos and Carabell cases will accelerate congressional interest in these or
other proposals to address uncertainties about federal jurisdiction over wetlands and
other waters, but neither bill received further attention during the 109th Congress.
Should All Wetlands Be Treated Equally? Under the Section 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 multiple tiers (typically three) — 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 Section
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? (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 of a wetland 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 that state from the Section 404 program until 1% of its wetlands have been
lost. Some types of wetlands are already treated differently. For example, playas and

CRS-13
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
Program’s Farmed Wetlands Option and Conservation Reserve Enhancement
Program are also being used to protect wetlands. The most recent wetland loss
survey conducted by the Natural Resources Conservation Service (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.14 However,
the agency warns that statistical uncertainties preclude concluding with certainty that
gain is actually occurring.
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
has estimated 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 to 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 just a single amendment that has not affected 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
14 Natural Resources Conservation Service, National Resources Inventory; 2002 Annual NRI
(Wetlands)
. At [http://www.nrcs.usda.gov/technical/land/nri02/nri02wetlands.html].

CRS-14
and raised the enrollment cap to 2,275,000 acres, with 250,000 acres to be enrolled
annually. In addition, in June 2004, NRCS 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 FY2005, 9,226 projects had enrolled 1.744 million acres, and
easements have been perfected on 1.37 million of those acres. A majority of the
easements are in three states: Louisiana, Mississippi, and Arkansas. Most of the land
is enrolled under permanent easements, while only about 10% is enrolled under 10-
year restoration agreements, according to data supplied by NRCS in support of its
FY2007 budget request. Prior to the 2002 farm bill, farmer interest had exceeded
available funding, which may help to 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 (CRP) to a 1-million-acre
program available nationwide. Only wetland areas that are smaller than 10 acres and
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 Section404 permit program so that
it does not apply to many small wetlands that are isolated from navigable waterways.
Through September 2006, more than 166,000 acres had been enrolled in this
program through more than 10,000 contracts, with about 70,000 of those acres in
Iowa.
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 Administration estimated that implementation of this initiative will cost $200
million. Participants 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.

Several other large agriculture 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, 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 other programs to better
manage water resources.15
15 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 CRS Report RL33556, Soil and Water
(continued...)

CRS-15
Agricultural Wetlands and the Section 404 Program.
The Section
404 program, described above, 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 Section 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, also discussed above, apparently will exempt certain
isolated wetlands from Corps jurisdiction; NRCS 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 Section 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 despite a
decade of negotiation, although they signed a very general partnership agreement on
July 7, 2005. Some of the wetlands that fall outside Section 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 other new initiatives,
described above.
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
argument 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 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. Instead,
the court ruled that the property retained some economic use after the state’s action.
(Palazzolo v. Rhode Island, 533 U.S. 606, 2002).
Congress has explored these wetlands property rights issues on several
occasions. An example is an October 2001 hearing by the House Transportation and
15 (...continued)
Conservation: An Overview, both by Jeffrey A. Zinn.

CRS-16
Infrastructure Committee, Subcommittee on Water Resources and the Environment.16
Recent Congresses have considered, but did not enact, property rights protection
proposals. The Bush Administration has not stated an official position on these types
of proposals.17
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.18 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.19 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). The current rate of loss is more than
15,000 acres per year, a decline from higher rates in earlier years.20 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 also 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.21 By 2006, 138 projects have been approved. Of this total, the
16 U.S. Congress, House of Representatives, Committee on Transportation and
Infrastructure, Subcommittee on Water Resources and Environment, The Wetland
Permitting Process: Is It Working Fairly?
Hearing 107-50, 107th Cong., 1st sess., Oct. 3,
2001.
17 For more information, see CRS Report RL30423, Wetlands Regulation and the Law of
Property Rights “Takings”
, by Robert Meltz.
18 National Academy of Sciences, National Research Council, Compensating for Wetland
Losses under the Clean Water Act
(Washington, DC: 2001), 267 pp.
19 U.S. Government Accountability Office, Wetlands Protection: Assessments Needed to
Determine the Effectiveness of In-Lieu-Fee Mitigation
, GAO-01-325, 75 pp.
20 Loss rates have been calculated by U.S. Geological Survey’s Nation Wetlands Research
Center, which has published a number of reports describing past and predicted loss rates.
21 For information on this program, see CRS Report RS22467, Coastal Wetlands Planning,
Protection, and Restoration Act (CWPPRA): Effects of Hurricanes Katrina and Rita on

(continued...)

CRS-17
completed projects have reestablished more than 32,000 acres, protected more than
38,000 acres, and enhanced (specific wetland functions have been intensified or
improved) more than 320,000 acres. The remaining projects, when constructed, will
establish or protect an additional 33,000 acres and enhance almost 195,000 acres.
The completed projects have cost about $625 million and the remaining projects have
a total estimated cost of more than $913 million.22
In the wake of hurricanes Katrina and Rita, multiple legislative proposals have
been introduced to fund additional restoration projects already planned by the U.S.
Army Corps of Engineers and to explore other opportunities that would restore and
stabilize additional wetlands. More specifically, before the hurricanes, Congress was
considering legislation that would have provided about $2 billion to the restoration
effort. Since the hurricanes, more expansive options costing up to $14 billion that
were proposed in the 1998 report Coast 2050 are also being considered.23 S. 3711,
the Gulf of Mexico Energy Security Act, was passed during the final days of the 109th
Congress.24 This legislation provides additional revenues to states adjacent to
offshore oil and gas production activities. One of the purposes for which these
revenues can be spent is wetland restoration, and the availability of these funds may
affect the amount and scale of wetland restoration activity in the central Gulf Coast.

Many federal agencies have been active in wetland improvement efforts in
recent years. In particular, the Fish and Wildlife Service (FWS) has been promoting
the success of its Partners for Fish and Wildlife program, which Congress recently
reauthorized through FY2011 in P.L. 109-294. According to the program website,
visited on July 14, 2005, 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) through FY2002. The website appears to include only data on
FY2006 accomplishments.25
Other programs also restore and protect domestic and international wetlands.
One of these derives from the North American Wetlands Conservation Act,
reauthorized through FY2012 in P.L. 109-322 with an appropriations ceiling of $75
million annually. The act provides grants for wetland conservation projects in
21 (...continued)
Implementation, by Jeffrey Zinn.
22 Louisiana Coastal Wetlands Conservation and Restoration Task Force, Coastal Wetlands
Planning, Protection, and Restoration Act (CWPPRA): A Response to Louisiana’s Wetland
Loss
, 2006, 16 pp.
23 For a more detailed discussion of the effects of the hurricanes on planning for wetland
restoration, see CRS Report RS22276, Coastal Louisiana Ecosystem Restoration After
Hurricanes Katrina and Rita
, by Jeffrey Zinn.
24 S. 3711 was attached to a broad tax relief measure that was enacted in December 2006
(H.R. 6111, P.L. 109-432). For additional information, see CRS Report RL33493, Outer
Continental Shelf: Debate over Oil and Gas Leasing and Revenue Sharing
, by Marc
Humphries.
25 See [http://www.ecos.fws.gov/partners], visited June 12, 2006.

CRS-18
Canada, Mexico, and the United States. According to the FWS FY2007 budget
notes, the United States. and its partners have protected more than 18.5 million acres
and restored, created, or enhanced an additional 5.9 million acres through almost
1,500 projects. 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 also has become an important cornerstone of the Section 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 Section 404 permit.
Some wetland protection advocates are critical of mitigation, which they view
as justifying destruction of wetlands. They believe that the Section 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. The guidance was 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.26
In March 2006, the Corps and EPA released a draft mitigation rule to replace the
1990 MOA with clearer requirements on what will be considered a successful project
to compensate for wetlands lost to development or agriculture. The agencies identify
the three purposes of these revisions as: improving the effectiveness of mitigation in
replacing lost wetland functions and areas; expanding public participation in
26 U.S. Environmental Protection Agency and U.S. Army Corps of Engineers, “National
Wetlands Mitigation Action Plan, Dec. 24, 2002.” See [http://www.epa.gov/owow/wetlands/
pdf/map1226withsign.pdf].

CRS-19
decision-making; and increasing the efficiency and predictability of both the
mitigation process and the approval of mitigation banks. The rule was developed in
response to a provision in the 2003 defense authorization bill (P.L. 107-314) that
directed the Corps to establish mitigation project performance standards by 2005.
Environmental activists fear that the rule will be even less protective than current
policy. The comment period ended on June 30, 2006.27
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. In its recent study of mitigation, the
Environmental Law Institute determined that as of 2005, there were 330 active banks,
75 sold out banks, and 169 banks seeking approval to operate.28 Provisions in
several laws, such as the 1996 farm bill and the 1998 Transportation Equity Act
(TEA-21), endorse the mitigation banking concept.29 In November 2003, Congress
enacted wetlands mitigation provisions as part of the FY2004 Department of Defense
authorization act (P.L. 108-136).
For Additional Reading
Kusler, Jon and Teresa Opheim. Our National Wetland Heritage: A Protection
Guide. Environmental Law Institute. [Washington] 1996. 149 pp.
National Academy of Sciences, National Research Council. Compensating for
Wetland Losses Under the Clean Water Act. [Washington] 2001. 267 pp.
Strand, Margaret N. Wetlands Deskbook. Environmental Law Institute.
[Washington] 1993. 883 pp.
U.S. Department of Agriculture, Economic Research Service. Wetlands and
Agriculture: Private Interests and Public Benefits, by Ralph Heimlich et al.
[Washington] 2001, 123 pp. 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 1998-2004. [Washington] 2006.
54 pp.
27 Information on compensatory mitigation can be found at [http://www.epa.gov/
wetlandsmitigation].
28 For more information on mitigation generally, and mitigation banks specifically, see
Environmental Law Institute, 2005 Status Report on Compensatory Mitigation in the United
States
, April 2006, 105 pp.
29 For more information on the early history of banking, see CRS Report 97-849, Wetland
Mitigation Banking: Status and Prospects
, by Jeffrey A. Zinn.

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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 pp.
—— Waters and Wetlands: Corps of Engineers Needs to Evaluate District Office
Practices in Determining Jurisdiction. (GAO-04-297) [Washington] February
2004. 45 pp.