Most Recent Action    Action in 107th Congress    Background 

Wetlands Legislation (10-11-01)

Wetlands are complex ecosystems that are among some of the nation's most valuable resources.  They serve several ecological functions including improving water quality, controlling floods, diminishing droughts, and stabilizing shorelines.  Home to many rare and endangered species of plants and animals, they not only serve the interests of natural ecosystems, but also serve hazard management and economic and commercial interests, such as coastal drilling for oil and natural gas.  Prior to the mid-1970s, wetlands were regularly drained and filled in for development projects.  By the 1980s, the wetland area in the contiguous United States was about half of what it had been in the 1780s.  However, in the 1970s, wetlands were identified as a resource of ecological value, and concern about their loss has led to federal efforts to protect them on both public and private lands.

Most Recent Action
On October 3rd, the House Transportation and Infrastructure Subcommittee on Water Resources and Environment held a hearing on the wetlands permitting process.  Eight witnesses provided testimony concerning actions taken by the Army Corps of Engineers and the Environmental Protection Agency (EPA) to administer and enforce the Clean Water Act Section 404 permitting process.  The first panel consisted of farmers, landowners, and wetlands consultants who unanimously expressed that the wetlands permitting process is unfair and must be improved with more personal and agency accountability.  The federal agencies were accused of making wetlands jurisdiction determinations with little investigation and lack of pertinent information.  These initial "unfair" determinations have had significant effect on the lives and livelihoods of the witnesses, including expensive fines and lawyer fees, and interruption of business and farming activities.  Landowners on the second panel, however, felt that wetlands regulations need to be strengthened and better enforced to restrict development without respect to resources.  A representative of the Corps, Colonel Michael J. Walsh, stated that "the Army Corps of Engineers acts fairly and equitably in carrying out its responsibilities."  For more detail on this hearing, see the hearing summary at the bottom of this page.  (10/11/01)

The National Research Council (NRC), the operating arm of the National Academy of Sciences (NAS), recently released Compensating for Wetland Losses Under the Clean Water Act, a critical assessment of a government program designed to maintain the total amount of wetlands in the United States, known as wetland mitigation or wetland "banking."  Part of the Clean Water Act, the program allows developers to fill in wetlands in exchange for creating or restoring others nearby in order to achieve a "no net loss" goal.  The goal was set forth in the previous Bush administration and aims for no change in total size and function of wetlands.  However, the report concluded that the "no net loss" goal is not being met because of inadequate instructions, standards, and monitoring of the mitigation projects.

Section 404 of the Clean Water Act allows permits to be granted for developers to engage in "compensatory mitigation" by balancing any wetlands they destroy with wetland restoration or creation projects.  The act of filling in or otherwise damaging wetlands is otherwise prohibited by the Clean Water Act, and permits can only be issued by either the Army Corps of Engineers or state programs that are given authority by the Environmental Protection Agency (EPA).  However, the section emphasizes that permits are only to be granted when damage to wetlands is unavoidable.  The specified mission of the report was to evaluate how well and under what conditions the mitigation programs are contributing to the successful maintenance of the total quantity and quality of wetlands, and the act's overall objective of restoring and maintaining the quality of the nation's waters.

From research into permits and site visits, the committee found that many of the mitigation projects were never finished or even undertaken.  In the projects that had been completed, the committee noted that the sites had noticeable shortcomings compared to nearby natural wetlands.

The NRC committee working on the report made several conclusions:

The full text of NRC report is available at the National Academy Press website. (7/2/01)

Action in the 107th Congress
There is currently a bill in the 107th Congress which deals with the wetlands banking issue.  H.R. 1474, the American Wetlands Restoration Act, aims to amend the Federal Water Pollution Control Act of 1972 (better known as the Clean Water Act) by providing states with the ability to issue wetland mitigation permits according to the specifications of the "no net loss" goal.  The language of the bill specifies that programs need the approval of the EPA before beginning to issue permits.  Introduced by Rep. Walter Jones, Jr. (R-NC) and sponsored by 17 representatives, the bill was referred to the House Transportation and Infrastructure Subcommittee on Water Resources and the Environment on April 5, 2001, and has seen no further action.

There have been a series of bills addressing the wetlands banking issue in the past few Congresses.  Rep. Walter Jones (R-NC) has been the author of all of them, with the 105th and 106th version both having the bill number H.R. 1290.  In the 105th Congress, H.R. 1290 was titled the Wetlands Restoration and Improvement Act of 1997, and the 106th Congress version of gained its current title, the American Wetlands Restoration Act.

Issues surrounding wetlands can be contentious and are central to the delay in Clean Water Act reauthorization. Many of the grants included in the 1987 Clean Water Act reauthorization were phased out by 1990. Over the past eight years, Congress has appropriated funds towards accomplishing goals outlined in the CWA, however specific dollar amounts are no longer mandated and allocation is at the discretion of Congress. A summary of other Clean Water Act issues is available on the AGI website at

When first introducing the bill in 1997, Rep. Jones stated that this measure would provide practical rules and guidelines to foster the security of mitigation banking charters. Mitigation banking is a means for development on wetlands while keeping in line with the no-net-loss policy proposed during the National Wetlands Policy Forum in 1988 and instituted in 1989, at the beginning of President George Bush's term in office. This policy does not propose a halt to development on wetlands. Instead, it promotes the pursuit of compensation efforts, such as mitigation banking, to offset wetlands destroyed. Unlike other bills proposed during the 105th Congress (e.g. H.R. 2762), H.R. 1290 did not address the definition of wetlands, which landowners and developers often feel is too constrictive.

Mitigation banking is not exclusively a conservative issue. The concept of wetlands mitigation banking was endorsed by the Clinton administration's 1993 Wetlands Plan. Senators Kit Bond (R-MO) and John Breaux (D-LA) circulated a draft Wetlands Protection Act concerning mitigation banking and streamlining of its regulations, but did not introduce a bill.

The Clinton Administration took some action on behalf of wetlands.  On October 18th, 1997, Vice-President Al Gore announced the Clean Water Initiative that included the goal of having a net gain of 100,000 wetland acres per year starting in 2005.  The methods proposed to protect and ameliorate wetlands include improving federal restoration programs and expanding restoration incentives to landowners.

Potential Benefits of Wetlands Banking
In remarks on the House floor, Rep. Jones argued that codifying wetlands statutes within Section 404 will help mitigation banks overcome any reluctance to take on projects stemming from fears of legal uncertainty. The mitigation bank is an entity that creates or restores wetlands. After acquiring a permit to develop on wetlands, landowners pay the mitigation bank for creating the wetlands that compensate for the wetlands being destroyed. This is somewhat similar to the concept of emissions trading. In 1992, there were 40 mitigation banks in existence. Nearly all of them were directly sponsored by the users of the bank (developers) and did not offer credits on the open market.

The establishment of the American Wetlands Restoration Act may make the atmosphere of opening "commercial" or entrepreneurial banks more favorable. This bill would give farmers, landowners, and developers more options in the use of their land because mitigation banking could become a viable and economically feasible option. With prior establishment of mitigation banks, the wetlands created may already be functional before the project site is impacted. Through permitting requirements, more wetland acreage may be created than is actually being destroyed. The time needed to review permit applications may also be reduced. Finally, consolidation of "postage stamp"-sized remediation efforts may have a constructive effect on the environment. The act is supported by the National Wetlands Coalition, a group from the petroleum and mining industries, utilities, developers, and mitigation banks.

Potential Detriments of Wetlands Banking
Studies report that mitigation projects often fail to follow scientific (namely hydrologic) design, leading to a loss of effectiveness. Because it may take ten years for a site to become fully functional, mitigation credits might be withdrawn before true functionality is attained. Cases have been cited where mitigation credits were withdrawn before the bank (meaning wetlands) was functional. Development proceeded, and the mitigation bank failed. The result was a net loss of wetlands. Net loss within a particular area may result when the location of the mitigation bank is far removed and outside of the impacted site's watershed. Because the restoration of existing wetlands is sometimes acceptable towards mitigation bank credits, the withdrawal of those credits for development purposes would result in a net loss of acreage.

The joint policy of the EPA and the Corps of Engineers regards mitigation as the least environmentally desirable option when developing on wetlands. Their policy states that a permit applicant must take all proper and feasible steps to first avoid and then minimize adverse impact to wetlands. This is the established sequence that must be followed before a permit may be granted to allow for the third option--compensation. In FY97, only 0.2% of permit requests were denied. The compensation involves a developer paying the mitigation bank for wetlands "credits". The wetlands created by the mitigation banks "compensate" for those destroyed by the developer. The National Resources Defense Council (NRDC) believes that codifying the third option of this sequence (mitigation/compensation) without the first two in this succession (avoidance and minimization) may result in an undue favoring of the option with statutes over the more environmentally sound alternatives.

The ease of mitigation banking may result in it being a more economically desirable option than the environmentally preferred avoidance or minimization of impact. The bill also states a preference for using mitigation banking for projects of less than 35 acres, which would also favor mitigation over the established sequence of avoidance, minimization, and mitigation. A number of these issues are addressed in a non-binding memorandum of agreement between the EPA and the Army Corps of Engineers.

The NRDC has voiced concerns about this bill to the EPA, some of which the NRC study brought up also. The group states that over 100,000 acres of American wetlands are being destroyed each year despite policy measures being in place to protect wetlands. They believe that the bill lacks oversight of the ecological success of the created wetlands, allows for the compensatory wetlands to be far removed for those destroyed, permits credits to be sold before wetlands are created, exempts existing mitigation banks from new compliance safeguards, lessens agency oversight, and is vulnerable to abuse due to loose definitions of terms.

Effect on Geoscientists
If Rep. Jones' prediction is correct, having a codified statute will increase the growth of mitigation banking. Therefore, environmental consulting firms contracted by mitigation banks could see an increase of work in this field. Some mitigation banks are operated by state departments of transportation, port authorities, and federal agencies, so there may also be a concentration of work in those offices. Because there is a call for more science to be utilized in mitigation bank planning, grant money may be designated for efficacy studies if the need is emphasized.

Resources and Related Links
CRS report "Wetland Mitigation Banking: Status and Prospects" on the CNIE website

Hearing on the Wetlands Permitting Process: Is it Working Fairly?
House Transportation and Infrastructure Subcommittee on Water Resources and Environment
October 3, 2001

Hearing Summary
Rep. John J. Duncan (R-TN), chairman of the Subcommittee on Water Resources and the Environment, opened the hearing with a short explanation of the wetlands permitting process and an introduction to the problems that have resulted from it.  He stated that the Army Corps of Engineers and the Environmental Protection Agency (EPA) "have lost a sense of fairness and rationality in carrying out the wetlands program."  Duncan proceeded to summarize his understanding of the situation.  He explained that initial determinations of wetlands jurisdiction are often made by government agents without enough pertinent information.  Further, if a citizen questions the initial determination, he or she can can be labeled a "willful, chronic, or flagrant violator," subject to fines and costly, time-consuming litigation.  Duncan also mentioned that many potential witnesses were so frightened and intimidated by the agencies that they refused to testify at the hearing for fear of further action against them.

The strong sentiments of Rep. Duncan were echoed by the testimony of the first panel.  Five witnesses sat on this panel including: Dr. John B. Simpson, a landowner in Idaho; Charles R. Johnson, a cranberry farmer from Massachusetts; John L. Conner, Jr., a farmer from Arkansas; Donna S. Lovell, owner of Wetlands West, Inc.; and Dr. Robert J. Pierce of the Wetland Training Institute.  Each of these landowners, farmers, and wetlands consultants told the story of their personal experiences with the wetlands permitting process and federal agencies involved.  The overwhelming tone of the first panel was that of frustration, confusion, and helplessness.  The witnesses felt that they were victims of unjust persecution and harassment by the agencies.  When asked what can be done to better the process, Pierce urged clearer time limits, an official definition of what navigable waters are, and a more effective appeals process.  Rep. Marion Berry (D-AR) brought up the notion of a Landowners Bill of Rights to amend the Clean Water Act.  The panelists unanimously agreed that such legislation is needed in order to stop government agencies from taking control away from landowners.

The second and third panels were combined into one due to time constraints.  Two landowners, Doris Wilson and John J. Chaconas, and a representative from the Corps, Colonel Michael J. Walsh, gave testimony opposing that of the first panel.  Wilson's house was flooded because a developer destroyed nearby wetlands armed with a permit issued by the Corps.  Chaconas's newly purchased land was flooded and surrounding property was damaged due to the previous owner's destruction of wetlands on the property.  Wilson and Chaconas agreed that wetlands regulations need to be strengthened and better enforced to restrict development without respect to resources.  Colonel Walsh testified that "the Army Corps of Engineers acts fairly and equitably in carrying out its responsibilities under Section 404 of the Clean Water Act."  Rep. Berry urged the colonel to recognize the problems with the system.  Walsh replied by saying that the Corps recognizes that there are some problems, and that coming to the hearing is an example of how the Corps is working to improve.

Full text of written testimony can be found at the House Committee on Transportation and Infrastructure website under Hearings/Testimony.


Sources: Thomas, National Academy Press, National Academy of Sciences, EPA website, and hearing transcripts.

Please send any comments or requests for information to the AGI Government Affairs Program.

Contributed by Fall 2001 AGI/AAPG Intern Catherine Macris, AGI Government Affairs Intern Joy Roth, and Summer 2001 AGI/AIPG Geoscience Policy Intern Caetie Ofiesh.

Last updated October 11, 2001


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