Wetlands Legislation: Comparison of Two Bills

Claudia Copeland
Specialist in Environmental Policy
Environment and Natural Resources Policy Division

July 5, 1995

95-796 ENR

CONTENTS

SUMMARY
INTRODUCTION
PROVISIONS OF THE TWO BILLS
Compensation for Private Property Takings
Classification and Permit Procedures
Delineation
Permit Issuance Procedures, General Permits, and Exemptions
Mitigation
Administrative Appeals, Enforcement
State Regulatory Programs
Definitions
Alaska Lands and States with Substantial Conserved Wetlands
Navigational Dredging
CONCLUSION

SUMMARY

How best to protect the Nation's remaining wetlands and regulate activities taking place in wetlands has become one of the most contentious environmental policy issues, with much of the legislative attention having recently focused on section 404 of the Clean Water Act, the principal Federal regulatory program. Section 404 has increasingly become a source of conflict between those who view it as critically important to wetland protection and others who see it as excessively intruding on privately owned property and private land-use decisions.

Efforts to reform section 404 are underway in the 104th Congress. On May 16, 1995, the House passed H.R. 961, a Clean Water Act reauthorization bill that includes a rewrite of section 404. On May 25 Senator Bennett Johnston introduced S. 851, the Wetlands Regulatory Reform Act of 1995. This report summarizes and discusses the wetlands provisions of H.R. 961 and S. 851. (Other bills dealing with agriculture and the farm bill are not discussed.)

The bills are conceptually similarly: both would establish a new Federal wetlands regulatory program and revise section 404. Both include provisions to streamline the permitting process by clarifying Federal agency roles, expanding permit exemptions, and setting permit time limits. The U.S. Army Corps of Engineers would be the lead Federal agency, except for identifying wetlands on agricultural lands. Both include a new administrative appeals process and less stringent penalties for wetlands-related violations of the law.

The question of "what is a wetland" for purposes of determining the geographic reach of regulatory programs has been a key controversy. Both bills would specify in law the criteria to be used in identifying or delineating lands as wetlands. Both provide for the revised section 404 to separate wetlands into three categories according to ecological significance and functions and then to regulate them accordingly. Proposed activities in those classified as most ecologically valuable would undergo detailed analysis before a permit could be issued. Activities in areas classified as least valuable because they serve limited or marginal wetlands functions would be allowed without a Federal permit.

The major differences between the two bills are that H.R. 961 includes provisions requiring the Federal Government to compensate landowners if a section 404 action diminishes the fair market value of the property by 20 percent or more (as do provisions of House-passed H.R. 9), while S. 851 does not. The Senate bill does include certain administrative procedures, including consultation roles for EPA and the U.S. Fish and Wildlife Service, that are not found in the House bill. The most controversial provisions in the bills are the compensation requirements of H.R. 961, statutory wetlands classification and delineation criteria, restrictions on EPA's involvement in order to streamline regulation, and expanded permit exemptions. There also is opposition to a number of other provisions in the bills (those dealing with enforcement and procedural matters, for example), yet these are less controversial than compensation, classification and delineation, EPA's role, and exemptions.

INTRODUCTION

How best to protect the Nation's remaining wetlands and regulate activities taking place in wetlands has become one of the most contentious environmental policy issues, with much of the legislative attention having recently focused on section 404 of the Clean Water Act (CWA). It is the principal Federal program that provides regulatory protection for wetlands. 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 in order to carry out activities involving disposal of dredged or fill material into U.S. waters, including wetlands. Regulatory jurisdiction is shared by the U.S. Army Corps of Engineers, the permit-issuing agency, and the Environmental Protection Agency (EPA), which issues environmental guidance that governs the program. In recent years section 404 has become a source of conflict between those who view it as a critical tool in wetland protection and others who see it as intruding on privately owned property and private land-use decisions in order to protect places that often appear to provide few of the functions associated with wetlands.

In the 103rd Congress, a number of legislative proposals to modify section 404 addressed topics such as activities and areas subject to regulation, changes to the permit process, differential classification of wetlands, and enhanced role for States. Some also included more controversial provisions, such as providing financial compensation to landowners if a section 404 permit is denied. House and Senate committee leaders opposed some provisions of these bills, and no legislation was enacted.

However, efforts to reform and extensively modify section 404 are being viewed more favorably in the 104th Congress. On May 16, 1995, the House passed H.R. 961, a comprehensive CWA reauthorization bill.(l) Wetlands provisions in title VIII of that bill incorporate language based on a proposal that Representative James A. Hayes has introduced as H.R. 1330 in several recent Congresses. The changes contained in title VIII are among the most controversial provisions of H.R.961 and were opposed by environment alists and the Administration. Efforts to amend this title in committee and during House debate were largely unsuccessful.

On May 25 Senator Bennett Johnston introduced S. 851, the Wetlands Regulatory Reform Act of 1995, based on legislation that he introduced at the end of the 103rd Congress (S. 2506). S. 851 was referred to the Environment and Public Works Committee; no further action on it has occurred, but a Senate Environment subcommittee hearing is scheduled for July 19. This report summarizes and discusses title VIII of H.R. 961 and S. 851, the most comprehensive section 404 reform bill introduced in the Senate in the 104th Congress. The bills are conceptually similar in many respects. However, they are organized differently, making side-by-side comparison difficult. The major differences between the two are that H.R. 961 includes provisions requiring landowner compensation, while S. 851 does not. The Senate bill does include certain administrative procedures, including consultation roles for EPA and the U.S. Fish and Wildlife Service, that are not found in the House bill. The most controversial provisions in the bills are compensation requirements of H.R. 961, statutory wetlands classification and delineation criteria, restrictions on EPA's involvement in order to streamline regulation, and expanded permit exemptions. There also is opposition to a number of other provisions in the bills (those dealing with enforcement and procedural matters, for example), yet these are less controversial than compensation, classification and delineation, limiting EPA's role, and new exemptions.

PROVISIONS OF THE TWO BILLS

Compensation for Private Property Takings

The CWA's section 404 wetland permit program has been a flashpoint to many of those concerned over Federal regulatory actions considered to infringe on property rights and diminish the value of private property holdings. Much of the concern stems from the fact that an estimated 75 percent of wetlands in the United States are located on private property. The Fifth Amendment of the U.S. Constitution requires that landowners be compensated when government "takes" property, but the CWA currently does not address the taking issue. Court decisions have consistently articulated that a strict set of conditions must be met before compensation is required. However, impacts of Federal regulatory programs (CWA and others) on private lands have led to growing interest in broadening these conditions and specifying compensation requirements in Federal law.

H.R. 961 addresses this issue directly with new requirements that the Federal Government compensate individuals if a Federal agency action under section 404 diminishes the fair market value of any portion of the property by 20 percent or more. The Federal Government would be required to compensate the owner for an amount equivalent to the diminution in value. If the diminution is more than 50 percent, the Federal Government is to buy the affected portion of the property. These provisions are substantially similar to that in legislation passed by the House concerning private property owner compensation more generally (division B of H.R. 9). The bill sets some limitations (no compensation will be made for uses which are a nuisance, or for agency actions whose primary purpose is to prevent a hazard to public health or safety). It also establishes procedures for the property owner to seek compensation, for negotiations, and for arbitration, if necessary. Compensation would be paid from the annual appropriatio n to the agency in question. If insufficient funds are available to satisfy a compensation judgment, the agency is to seek funds in the next year's appropriation.

S. 851 does not contain compensation provisions. The Senate is, however, considering legislation similar to H.R. 9 (S. 605) that would allow compensation for a broad array of Federal actions.

Precise estimates of the cost to Government of wetlands compensation do not exist. During debate on H.R. 961, opponents of the provision asserted that compensation costs could range from $10 billion to $45 billion and that fiscal impacts of that size could serve to inhibit regulators from properly implementing the law. However, the Congressional Budget Office (CBO), in its analysis of H.R. 961, was unable to develop a cost estimate. CBO said, "The ultimate cost of this provision would depend on future actions taken by the agency, affected property owners, and on the outcome of future arbitration and court proceedings"(2)

Both bills include language directing that, in carrying out section 404, all Federal agencies shall seek to "minimize the adverse effects of the regulatory program under this section on the use and value of privately owned property." Likewise, the bills direct that section 404 be implemented in a manner so as to "balance the objective of conserving functioning wetlands with the objective of ensuring continued economic growth, providing essential infrastructure, maintaining strong State and local tax bases, and protecting against the diminishment of the use of value of privately owned property."

Classification and Permit Procedures

Both S. 851 and H.R. 961 provide for the revised section 404 to separate wetlands into three categories according to ecological significance and function, ranging from type A (the most ecologically valuable) to type C (the least valuable), and then regulate them accordingly. Current section 404 does not classify wetlands. The current program presumes that all jurisdictional wetlands (those which are subject to section 404), except for some isolated wetlands, receive similar treatment in the permit process. Some differential regulation does occur as a practical matter, however, through the use of general permits (discussed below).

The bills detail procedures for permit issuance, following determination that an area is a wetland and following resolution of compensation, if applicable (compensation is only provided in H.R. 961, as noted above). In the case of type A wetlands (defined in both bills as wetlands of critical significance to the long-term conservation of the aquatic environment of which they are a part), permits could be issued following a sequential analysis. Under H.R. 961 the sequential analysis would seek to avoid adverse impact on wetlands, minimize adverse impacts, and compensate for loss of wetland functions. Under S. 851 the analysis would consider avoidance, minimization, and replacement on a one-to-one basis of any loss of wetland functions that cannot be avoided or minimized. Both bills list similar criteria for classifying type A wetlands; H.R. 961 alone includes a criterion that "there is unlikely to be an overriding public interest in the use of such wetlands for purposes other than conservation."

Type B wetlands (defined as those which provide habitat for a significant population of wetland-dependent wildlife or provide other significant wetlands functions) would not be subject to the same sequential analysis as type A wetlands, but instead would be subject to a less strenuous public interest review that balances reasonably foreseeable benefits and detriments. The bills detail factors to be considered for a type B wetland permit. Under H.R. 961, these include quality and quantity of wetlands functions affected, costs of mitigation and benefits of the proposed activity, the environmental benefit of mitigation, and whether the impact on wetlands is temporary or permanent. Under S. 851 they include economic growth, water quality, energy and mineral needs, need for habitat for wetland-dependent wildlife, food production, infrastructure needs, and considerations of private property ownership.

Type C wetlands are defined as those which serve limited wetlands functions or marginal functions but which exist in such abundance that regulation is deemed not necessary. S. 851 includes in type C a wetland that is located behind a "legally constructed manmade structure or natural formation, such as a levee." (H.R. 961 defines these areas as fastlands and also includes them as type C wetland areas.) Under both bills, Federal permits would not be required for activities in type C wetlands.

Opponents of these provisions contend that applying a classification system would compound and over-simplify complex scientific questions. A rigid classification system, they say, would not adequately take into consideration the variation in size and the diversity of functions of wetlands. Nor would such a system adequately account for the natural changes which occur in wetlands over time. Using a classification system to exclude certain wetland areas from regulation, opponents say, is unscientific and wo uld greatly erode wetland protection. Proponents, however, say that the Federal wetlands regulatory program should reflect the fact that some wetlands provide greater functions than others and should be treated accordingly.

Delineation

The question of "what is a wetland" for purposes of determining the geographic reach of regulatory programs has been a key controversy. The CWA currently does not define the term "wetland" or specify delineation criteria, but Federal agencies have accomplished this administratively through an interagency manual which uses these criteria: hydrology, hydrophytic vegetation, and hydric soils. Controversies surrounding the development and use of this Federal manual in recent years are largely responsible for pressure to modify current wetlands regulatory programs.

Under both bills, the revised section 404 would direct the Corps to establish standards governing the delineation of lands as wetlands, based on clear evidence of wetlands hydrology, hydrophytic vegetation, and hydric soils. In addition, both bills specify that wetlands delineations are to be done during the growing season and that the hydrology criterion must require that water is present at the surface of the soil for 21 consecutive days in the growing season. This hydrology criterion is more restrictive than the criterion under current administrative practice, and critics argue that it will result in the loss of regulatory protection for many areas now classified as jurisdictional wetlands. S. 851 specifically requires that obligate species of vegetation be present (those that are restricted to wetlands). The House bill excludes from 404 jurisdiction lands that are temporarily or incidentally created as a result of adjacent development activity. Opponents have criticized the delineation criteria in these bills for ignoring sound science. Policy decisions enacted in law should focus on regulating activities in wetlands, they say, not on scientific questions of what is a wetland. Proponents, however, say that it is Congress' responsibility to establish geographic limits of Federal regulatory jurisdiction and that doing so will remove uncertainties that have frustrated landowners.

Federal agencies currently use an interagency manual developed in 1987 to identify and delineate wetlands for this Federal program. The National Academy of Sciences (NAS) recently completed a study requested by Congress on the scientific validity of various wetlands definitions, the basis for applying those decisions through delineation manuals, and regional variation among the Nation's wetlands. The report recommends a framework and principles upon which a new delineation manual can be prepared. S. 851 p rovides for continued use of the 1987 manual while new regulations are issued and directs the Secretary of the Army to take into account the NAS report when preparing the regulations; no such language is included in H.R. 961.

Wetlands programs have been a source of controversy and confusion for some farmers in part because activities occurring in wetlands on agricultural lands are governed by two Federal statutes (the CWA and the farm bill) with jurisdictions and agency roles that sometimes overlap. Section 404 is a regulatory program, while the wetlands program in the farm bill is not: known as swampbuster, it is designed to remove Federal farm program incentives that encourage farmers to convert wetlands to agricultural prod uctions. These programs have in the past used different delineation manuals, so that different boundary determinations could result. Both bills provide that delineation of wetlands on agricultural lands and associated nonagricultural land is to be done by the Secretary of Agriculture. In January 1994 four Federal agencies signed a memorandum designating USDA as the lead agency for delineating wetlands on agricultural lands; thus these legislative provisions endorse current Administration policy but would extend it by including rangelands and land used for livestock production.

S. 851 and H.R. 961 also specifically exclude from 404 regulation any agricultural lands which are exempt from the requirements of subtitle C of title XII of the 1985 farm bill. (This exclusion refers to authority of the Secretary of Agriculture to exempt from swampbuster actions which the Secretary determines will have a minimal effect, individually and cumulatively, on the functional hydrologic and biologic integrity of the wetlands.(3)

The bills contain similar provisions allowing a landowner to request a determination of jurisdiction from the Secretary of the Army for a piece of property to determine whether it contains waters of the United States and if so, whether any portion is a wetland and what classifications apply. S. 851 (but not H.R. 961) allows for certifications to be done by non-Federal persons using criteria to be established by the Secretary.

H.R. 961 directs that all wetlands regulated under section 404 are to be identified and classified within 10 years in a project to be conducted by the Secretary of Agriculture (for agricultural and associated nonagricultural lands) and the Secretary of the Army. (The FWS has been conducting a national wetlands inventory for several years for the purpose of identifying wetlands, but not for regulatory purposes.) Any classification of wetlands is to be recorded on local property records. S. 851 does not require a national classification project, but it does provide that copies of wetland delineations be filed as part of local property records and that copies be provided to landowners.

Currently States are authorized by CWA section 401 to determine whether activities permitted by the Federal Government are in accordance with water quality standards and to certify consistency of the activity with State standards. Disputes have arisen over the States' exercise of section 401 authority, particularly the extent to which State actions may be inconsistent with other provisions of law and agency responsibilities. Both bills include language concerning 401 certification. The House bill would bar EPA from imposing any requirement in a 401 certification that is inconsistent with section 404. S. 851 says that 401 certification shall only be required for a project that will impact more than five acres of waters of the United States and that no certification is required for activities under a general permit (discussed below).

Permit Issuance Procedures, General Permits, and Exemptions

A key goal of both bills is to streamline the wetlands permitting process, and they do so by clarifying Federal agency roles, expanding exemptions, and establishing permit time-limits. Under both bills the Army Corps would have sole responsibility to administer the Act's wetlands programs. EPA's role of providing environmental guidelines and its current authority to veto a proposed 404 permit would be eliminated. The opportunity for other Federal agencies such as the Fish and Wildlife Service (FWS) to review and comment on permit applications also would be removed. Under S. 851, however, the Secretary is directed to consult with EPA before issuing a permit concerning whether there would be unacceptable adverse impact from the proposed activity. Opponents of these provisions contend that EPA and FWS currently provide expertise that is unique to the missions of those agencies. Particularly in complex cases, the substantive contributions that they provide to permit decisions would be lost, opponents say, if all responsibility were given to the Corps.

Under both bills final decisions on permit applications are to be made in 90 days. If not made within that time, the permit is deemed approved. S. 851 allows for extended time if the permit application involves a species that is listed or proposed for listing under the Endangered Species Act or if the head of another Federal agency requests a time extension.

As under current law, the Corps could issue general permits for activities that are similar in nature and that will not, separately and cumulatively, result in significant loss of ecologically valuable wetlands. Statutory authority for these permits was added to the CWA to eliminate individual review and allow certain activities to proceed with little delay or paperwork. A general permit is essentially a permit by rule. So far, the Corps has issued 36 general permits that are applicable nationally.(4)

Both bills include authority for programmatic general permits, as well as State, regional, or nationwide general permits; the Corps has considered but not yet issued programmatic general permits establishing a category of activity for which the issuance of a State permit would be deemed to satisfy section 404. Programmatic general permits would be the equivalent of authorizing State permit issuance for a defined category of discharges of fill and would function as a substitute for full State authorization to administer the section 404 program in its entirety. S. 851 also authorizes general permits for discharges associated with agricultural activities that are subject to swampbuster (i.e., provisions of the Food Security Act of 1985 that withhold Federal farm program benefits from persons who convert wetlands to agricultural production.) The latter provision codifies one of the existing nationwide general permits.

Current law exempts certain specified routine activities, such as normal farming and ranching activities and routine farm maintenance practices, from permit requirements. Under both bills the revised section 404 would exempt a lengthy list of other activities, such as those undertaken on farmed wetlands, incidentally created wetlands, lands covered by a State coastal zone management program, or which are for the purpose of preventing an airport hazard; aggregate or clay mining activities conducted pursuant to a State or Federal permit which requires reclamation of affected wetlands; or the placement of a piling or structural member for a pile-supported structure for specified purposes. The House bill also would exempt activities resulting from the conduct of recreational hunting or shooting, as well as activities in uplands which are incidental to construction activity or for sand and gravel excavation. The Senate bill has separate exemptions for a project disturbing less than one-half acre of a type B wetland, construction of an ice pad or ice road or for snow storage, construction of a mine tailings impoundment at a treatment facility, or construction of a log transfer facility. Opponents of the bills contend that many of these exceptions reflect efforts to relieve certain areas of the country or certain economic interests from regulation, rather than provide necessary exemptions from wetlands permitting.

Individual and general permits currently are issued for no longer than five years. The House bill eliminates time restrictions on all permits. The Senate bill retains 5-year time limits for general permits but not individual permits.

Mitigation

Under both bills the Corps would issue regulations governing mitigation for activities occurring in wetlands, allowing for minimization of impacts, enhancement or restoration of degraded wetlands as compensation, offsite compensatory mitigation, and other measures including contribution to a wetlands mitigation bank. Mitigation is not explicitly addressed in current law. It has been developed, as outlined in a 1989 Memorandum of Agreement between the Corps and EPA, as a set of procedures to offset unavoid able adverse effects of a proposed activity by restoring or enhancing comparable values at another site. Some protection advocates view mitigation as further justification for wetlands destruction, while others counter that mitigation can give regulatory programs additional flexibility. Using mitigation is relatively recent, and the record of its success is mixed.

Under H.R. 961, the Corps may require mitigation to prevent the unacceptable loss or degradation of type A wetlands or, in the case of type B wetlands, if the proposed activity will result in the loss or degradation of wetlands functions which are not temporary or incidental. The Senate bill includes a more general provision giving the Secretary discretion to determine what mitigation is appropriate for each permitted activity. Under both bills the Corps also is directed to issue regulations for the establishment, use, and oversight of mitigation banks.(5)

Administrative Appeals, Enforcement

Under both bills section 404 would include a new administrative appeals process. Section 404 currently provides no process for administratively appealing permit or other decisions, which has led some permit applicants to pursue costly and time-consuming litigation. It has also led to criticism that only the wealthy can afford to appeal an adverse regulatory decision.

Under the bills, landowners and permit applicants may seek review of wetlands classifications or permit denials or requirements. Persons other than landowners or applicants could appeal only a determination that a proposed activity is not exempt under the provisions in the law. Any person who participated in the public comment process could participate in an appeal. H.R. 961 includes language not found in S. 851 that also would allow a landowner to appeal a determination than an activity does not qualify under a general permit. The administrative appeals language in the two bills is similar, except that, under the House bill, appeals are to be filed within 30 days, while, under the Senate bill, appeals are to be filed within 120 days.

Under current law, violations of section 404 are subject to the same civil, criminal and administrative penalty sanctions as are violations of other provisions of the CWA. H.R. 961 and S. 851 include similar language that would provide new, less stringent penalties for violations of these provisions and specify in the case of civil penalties that the amount of the penalty should be proportional to the scope of the project. Authorized enforcement actions include issuance of a compliance order by the Secretary of the Army, a civil action and penalties, and criminal penalties.

There are some differences between the bills' enforcement provisions, however. H.R. 961 requires that a criminal violation has been committed "knowingly and willfully" before criminal penalties can be assessed, while S. 851 uses slightly different language, requiring that a criminal violation is both "knowing and intentional." S. 851 further requires that the violation has "resulted in actual and substantial environmental harm" before a criminal penalty can be assessed. S. 851 also modifies the penalty amounts for civil penalties to reduce the maximum daily penalty from $25,000 to $1,000 if the violator is an individual. H.R. 961 deletes the authority for administrative penalties for violations of section 404; this authority is retained under S. 851. Both bills explicitly amend the Federal enforcement provisions of the CWA, section 309, to delete authority to use that section in connection with section 404 violations, relying instead on the revised section 404 enforcement authority.

State Regulatory Programs

Like current law, both bills would allow qualified States to obtain authority to administer wetlands regulatory programs for individual or general permits. So far, only Michigan and New Jersey have chosen to do so. Others have cited the potential for continued Federal involvement, lack of Federal funding, and programs costs as current disincentives to seeking delegation.

The revised State program language is similar in both bills and is largely the same as current law, but eliminates language limiting State permits to five years in length. Under H.R. 961 a State's request to be delegated permitting authority would be reviewed only by the Corps; under current law, this is EPA's responsibility. The Senate bill assigns the delegation decision to the Corps but allows EPA and FWS to comment on a State's application to operate a delegated permit program and also to comment on individual permits that a State proposes to issue.

Under the House bill, States which operate delegated 404 programs would not be required to pay compensation to landowners, under the compensation provisions in that bill. Because the compensation provisions are potentially very costly to government, the inclusion of this provision in H.R. 961 is intended to remove compensation costs as a possible concern that might inhibit States from seeking authority to administer the regulatory program.

S. 851 has additional language requiring the State program to provide opportunity for public hearings and to bar issuance of any permit which would impair navigation and anchorage. The Senate bill also would exclude from State regulatory jurisdiction waters used or capable of being used for interstate commerce, thus retaining the Corps' jurisdiction over such waters. Current law authorizes EPA to review permits which delegated States propose to issue; H.R. 961 deletes this permit-by-permit review and replaces it with a review every five years by the Secretary of the Army to determine adequacy of the State's program. S. 851 also requires a program review every five years but retains permit-by-permit review, as well. Neither bill authorizes grant funding to assist delegated States, although other CWA grant funds could be used to operate State programs.

Definitions

Both bills add a large number of definitions to the CWA which are not found in current law, including "wetlands," "incidentally created wetlands," "agricultural lands," "normal farming, silviculture, aquaculture, or ranching activity," and "mitigation banking." The definitions in the two bills are generally similar. However, S. 851 defines the terms "waters of the United States," while H.R. 961 does not, and the House bill defines several terms not defined in S. 851, including "fair market value," "farmed wetlands," and "vernal pools."

The Senate bill's definition of "waters of the United States" states that the term includes wetlands but excludes a number of specified areas such as prior converted croplands and isolated waters that are less than one-half acre in size. The bill then distinguishes permit procedures which apply for activities in waters which are wetlands and waters which are non-wetlands. If a person applies for a permit for an activity in waters of the United States which are wetlands and the activity is not exempt from regulation, then detailed wetland classification and permit issuance procedures (including any mitigation requirements) would follow. If the application involves waters that are not wetlands and the activity is not exempt, the Secretary of the Army may issue a permit if the activity is deemed to be in the public interest, and permit issuance would be governed by a public interest review and procedures like permits for type B wetlands. H.R. 961, while containing no similar definition of "wat ers of the United States," outlines a similar process for issuing permits in waters of the United States which are non-wetlands.

Alaska Lands and States with Substantial Conserved Wetlands

Both bills include language intended to address special wetlands considerations in Alaska. It is argued that Alaska should be treated differently than other States, because the State contains such a large percentage of wetlands (an estimated 45 percent of all lands in the State) that it is virtually impossible to build anything at lower altitudes without impacting wetlands. Alaska historically has a very low rate of wetlands loss compared with others, while climate conditions make mitigation impractical in many parts of the State. These special circumstances have led to proposals (administrative and legislative) for several years to establish special wetlands standards or rules for Alaska; at issue has been how to balance those special needs and flexibility in Alaska with overall goals for wetlands protection.

S. 851 includes specific provisions concerning wetlands permitting in Alaska. It provides that, in issuing permits on economic base land in the State, the Secretary of the Army is to balance section 404 with the need to allow beneficial and economic use of the land, give substantial weight to the social and economic needs of Alaska Natives, and to consider regional differences. Economic base land is defined as land conveyed to, selected by, or owned by an Alaska Native Corporation or land conveyed to, selected by, or owned by the State under the Alaska Statehood Act. Further, the Senate bill directs that, irrespective of other requirements concerning general permits, a general permit shall be issued for critical infrastructure facilities on land owned by Alaska Native villages. This latter provision is similar to Clinton Administration proposals to streamline permit processing for such facilities.

H.R. 961 includes a provision that is generally similar concerning permit applications by the owner of economic base lands in a State with substantial conserved wetlands. The House bill provides that any permit requirements to minimize adverse impacts on wetlands be reduced in the case of economic base lands, which are defined as in the Senate bill.

H.R. 961 further states that, in the case of permits issued in States with substantial conserved wetlands (not limited to Alaska), the permit may not require mitigation to compensate or avoid adverse impacts. The Senate bill contains a similar restriction on mitigation but also says that permits in such States may include requirements to avoid adverse impacts. (This provision, similar to a 1991 Bush Administration proposal, was opposed by many as a weakening of section 404. That proposal, which was not fi nalized, was limited to Alaska lands and also was opposed by some who argued that allowing special rules for Alaska would result in pressure from other States.) Finally, in the list of activities which H.R. 961 would exempt from permit requirements, it includes activities undertaken in a State with substantial conserved wetlands areas and which are for purposes of providing infrastructure, constructing and maintaining log transfer facilities, constructing tailings impoundments for mining, or constructing ice pads and ice roads. It also exempts forestry activities undertaken on economic base lands.

With provisions of both bills referring to "States with substantial conserved wetlands," both include definitions of that term. Under S. 851, the term means a State that contains at least 15 acres of wetland located in a part of the Federal conservation system (e.g., National Park System, National Wildlife Refuge System) for each acre of wetland filled, drained or otherwise converted within the State. Under H.R. 961, the term means a State that contains at least 10 acres of wetlands for each acre of wetlands filled, drained or otherwise converted within the State, or which the Secretary of the Army determines has sufficient wetlands within units of the Federal conservation system to provide adequate wetlands conservation in the State.

Navigational Dredging

H.R. 961 directs the Corps to issue regulations under section 404 for specification of sites for disposal of dredged or fill material from navigational dredging. It further includes separate provisions (title X) to streamline regulatory requirements applicable to navigational dredging under the Marine Protection, Research and Sanctuaries Act (the Ocean Dumping Act). Currently the Corps issues permits for ocean dumping of dredged material, while EPA issues permits for ocean dumping of other material and designates sites for ocean dumping. Corps permits for dredged material are to be based on the same criteria utilized by EPA under other provisions of the Ocean Dumping Act, and to the extent possible, EPA-recommended dumping sites are used. EPA is authorized to impose permit conditions or even deny a permit, if necessary to prevent environmental problems.

H.R. 961 modifies these provisions by designating the Corps as the lead Federal agency for issuing ocean dumping permits for dredged and non-dredged material, designating dumping sites, and establishing permit criteria. The Corps would carry out this authority in consultation with EPA, but EPA's prior concurrence on transportation or disposal of dredged material would not be required. Other substantive criteria of the Ocean Dumping Act, including consultation with States, development of site management plans, and general permit conditions, are not altered.

CONCLUSION

Until quite recently, proponents and opponents of section 404 reform were effectively stalemated. Both the Bush and Clinton Administrations have advocated policies aimed at ensuring "no net loss" of the Nation's remaining wetlands, but neither Administration succeeded in resolving the many scientific and policy issues in the debate. During each of the last two Congresses approximately 100 bills with wetlands provisions were introduced, but no consensus existed on what problem needed to be fixed or how to fix it (environmentalists and developers/landowners differed on whether the problem was too little regulation or too much). Now, however, the political changes in Congress resulting from the 1994 elections have altered dynamics of the debate in favor of those who seek reform and greatly increased the opportunities, if not the likelihood, for legislative activity. The House has already done so by passing H.R. 961. Prospects in the Senate are less clear, since Senate committee action on the Clean Water Act has not begun.

The proponents of section 404 reform are supported by many concerning the need to streamline wetlands permitting, clarify Federal agency roles, improve enforcement, and encourage greater State responsibility. The Clinton Administration believes that it is accomplishing many such improvements through policy initiatives and administrative changes underway since mid-1993. The Administration and many environmentalists argue that procedural changes can address significant problems but need not include what they view as more drastic and controversial elements of the current legislation. The most controversial, according to that view, are compensation to landowners, wetlands classification and delineation criteria, removing EPA's involvement, and expanding permit exemptions. Together these provisions would weaken wetlands protection, they say.

Proponents contend that procedural changes alone are insufficient to address the wide range of current problems with Federal wetlands regulation. Broad and clear legislative measures are required to define Federal jurisdiction and to properly recognize private property rights which, in their view, have been abused by Federal regulators.

Momentum to modify section 404 is strong. At issue is whether legislative policymakers and the Administration can reach consensus on the many issues now raised by the debate over section 404.

Endnotes

l. For information on H.R. 961 as a whole, see "Clean Water: Summary of H.R. 961, As Passed," CRS Report 95-427 ENR, May 30, 1995.

2. U.S. House of Representatives. Committee on Transportation and Infrastructure. Clean Water Amendments of 1995, report on H.R. 961. 104th Congress, 1st session, Report l 04- l 12 p . 205.

3. Legislation addressing relationships between agriculture and wetlands also have been introduced in the 104th Congress (including H.R. 67, H.R. 198, H.R. 932/S. 399, H.R.1220, and S.275). Proposals in these bills are likely to be considered in the context of the farm bill reauthorization process.

4. Nationwide general permits generally cover minor activities, specialized activities, and activities governed by other authorities. For example, general permits have been issued for aids to navigation; structures such as docks or piers in artificial canals; minor discharges of less than 25 cubic yards of fill which cause the loss of less than one-tenth of an acre of wetlands; and small hydropower projects regulated by the Federal Energy Regulatory Commission.

5. The term "mitigation bank' usually refers to a wetland creation, restoration, or enhancement project undertaken not only to compensate for wetlands impacts from a particular project, but also to act as a bank with credits to compensate for future wetlands impacts. They are controversial over questions of whether they adequately compensate for loss of wetlands values at distant sites and institutional problems, such as who pays for mitigation credits. They are supported by others who see them as a low-cost, high-value means of mitigating wetlands damage.