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[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 2948 Introduced in Senate (IS)]

106th CONGRESS
  2d Session
                                S. 2948

To amend the Federal Water Pollution Control Act to establish a program 
        for wetland mitigation banking, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             July 27, 2000

  Mr. Inhofe introduced the following bill; which was read twice and 
       referred to the Committee on Environment and Public Works

_______________________________________________________________________

                                 A BILL

 
To amend the Federal Water Pollution Control Act to establish a program 
        for wetland mitigation banking, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``American Wetland Restoration Act''.

SEC. 2. DECLARATION OF POLICIES AND GOALS.

    Section 101(a) of the Federal Water Pollution Control Act (33 
U.S.C. 1251(a)) is amended--
            (1) in paragraph (6), by striking ``and'' at the end;
            (2) in paragraph (7), by striking the period at the end and 
        inserting a semicolon; and
            (3) by adding at the end the following:
            ``(8) it is the national policy to achieve the 
        conservation, creation, and restoration of wetland, through--
                    ``(A) regulatory means that take into account that 
                75 percent of the wetland in the contiguous United 
                States is privately owned and that private property 
                rights should not be unreasonably infringed; and
                    ``(B) nonregulatory opportunities involving all 
                levels of government and supported by private 
                initiatives;
            ``(9) the national policy described in paragraph (8) should 
        be achieved in order--
                    ``(A) to increase the quantity and quality of the 
                wetland resource base of the contiguous United States; 
                and
                    ``(B) to meet the interim goal of no overall net 
                loss for the remaining wetland resource base of the 
                contiguous United States;
        ``while taking into account the status and trends of the 
        wetland resource base in particular regions and areas; and
            ``(10) it is the national policy to foster wetland 
        mitigation banking as a means to mitigate the unavoidable loss 
        of wetland by--
                    ``(A) providing a regulatory framework for the 
                establishment, operation, and use of mitigation banks;
                    ``(B) making appropriate use of successful programs 
                for mitigation banking that are being carried out as of 
                the date of enactment of this paragraph; and
                    ``(C) taking into account regional variations in 
                wetland conditions, functions, and values.''.

SEC. 3. USE OF MITIGATION BANKS.

    Section 404 of the Federal Water Pollution Control Act (33 U.S.C. 
1344) is amended by adding at the end the following:
    ``(u) Use of Mitigation Banks.--
            ``(1) Definitions contained in federal guidance.--Except as 
        otherwise provided in this subsection, a term used in this 
        subsection and defined in the Federal Guidance for the 
        Establishment, Use and Operation of Mitigation Banks, published 
        on November 28, 1995 (60 Fed. Reg. 58605), shall have the 
        meaning given the term in the Federal Guidance.
            ``(2) Other definitions.--In this subsection:
                    ``(A) Charter.--The term `charter' means a 
                mitigation banking instrument, as described in the 
                Federal Guidance, that--
                            ``(i) is established by an agreement 
                        between an applicant and the Secretary or a 
                        State (in the case of a State administering a 
                        program under subsection (h)(2)(A)); and
                            ``(ii) has been developed in consultation 
                        with the mitigation bank review team.
                    ``(B) Federal guidance.--The term `Federal 
                Guidance' means the Federal Guidance for the 
                Establishment, Use and Operation of Mitigation Banks, 
                published on November 28, 1995 (60 Fed. Reg. 58605).
                    ``(C) Maintenance.--The term `maintenance', with 
                respect to a wetland, means an activity carried out to 
                ensure--
                            ``(i) viability of the wetland; or
                            ``(ii) the accomplishment of a project goal 
                        after a wetland restoration, enhancement, 
                        creation, or preservation project (including 
                        hydrological manipulation and control of 
                        desirable and undesirable plant species) has 
                        been completed.
                    ``(D) Mitigation bank.--The term `mitigation bank' 
                means--
                            ``(i) 1 or more specified wetland resource 
                        restoration, enhancement, creation, or 
                        preservation projects (which may include the 
                        preservation of an appurtenant wetland, upland, 
                        or open water resource, to the extent that the 
                        wetland, upland, or open water resource 
                        increases the ecological functioning of the 
                        mitigation bank); or
                            ``(ii) in exceptional circumstances, 1 or 
                        more projects, consisting solely of 
                        preservation of wetland, that have been 
                        chartered by the Secretary under this 
                        subsection for the purpose of providing 
                        mitigation credits to offset wetland losses 
                        authorized under permits allowing activities in 
                        the waters of the United States.
                    ``(E) Service area.--The term `service area' means 
                the designated area, as described in the Federal 
                Guidance, in which a mitigation bank may provide 
compensatory mitigation for impacts to wetland resources.
                    ``(F) Wetland function.--
                            ``(i) In general.--The term `wetland 
                        function' means an environmental, hydrological, 
                        or other role that a wetland serves.
                            ``(ii) Inclusions.--The term `wetland 
                        function' includes--
                                    ``(I) flood water storage;
                                    ``(II) flood water conveyance;
                                    ``(III) ground water discharge or 
                                recharge;
                                    ``(IV) erosion control;
                                    ``(V) wave attenuation;
                                    ``(VI) water quality protection;
                                    ``(VII) scenic and aesthetic use;
                                    ``(VIII) food chain support;
                                    ``(IX) a fishery;
                                    ``(X) wetland plant habitat;
                                    ``(XI) aquatic habitat; and
                                    ``(XII) habitat for wetland-
                                dependent wildlife.
            ``(3) Charter of mitigation banks.--
                    ``(A) Issuance.--The Secretary, in consultation 
                with the mitigation bank review team, may issue a 
                charter to a person that, with respect to the wetland 
                project or projects that are to be included in the 
                scope of the charter, meets the following criteria:
                            ``(i) Assurances.--The person provides 
                        reasonable assurances of success of the 
                        proposed restoration, enhancement, creation, or 
                        preservation project.
                            ``(ii) Water source.--The person 
                        demonstrates an adequate source of water to 
                        support the wetland.
                            ``(iii) Legal control.--The person 
                        demonstrates adequate legal control to carry 
                        out the proposed project, such as a title, 
                        license, contract, or option (contingent on 
                        approval of the charter), over the real 
                        property (including necessary upland, as 
                        appropriate) comprising the proposed project.
                            ``(iv) Financial assurances.--
                                    ``(I) In general.--The person 
                                demonstrates adequate financial 
                                assurances to carry out the proposed 
                                project, including the design, 
                                operations, and maintenance plan and 
                                remedial measures.
                                    ``(II) Form.--A financial assurance 
                                referred to in subclause (I) may be in 
                                the form of--
                                            ``(aa) a performance bond;
                                            ``(bb) an irrevocable 
                                        trust;
                                            ``(cc) an escrow account;
                                            ``(dd) casualty insurance;
                                            ``(ee) a letter of credit;
                                            ``(ff) a legislatively-
                                        enacted dedicated fund for 
                                        government operated banks; or
                                            ``(gg) another instrument 
                                        approved by the Secretary.
                                    ``(III) Authority of secretary.--A 
                                financial assurance demonstrated by a 
                                person under subclause (I) shall 
                                entitle the Secretary to draw on the 
                                assurance in the event of--
                                            ``(aa) a substantial 
                                        failure to perform the work 
                                        provided in the charter; or
                                            ``(bb) in any case in which 
                                        mitigation credits based on 
                                        work referred to in item (aa) 
                                        have already been used or sold, 
                                        a substantial failure of the 
                                        mitigation bank to perform as 
                                        expected in the application.
                                    ``(IV) Timing.--A financial 
                                assurance described in subclause (I) 
                                shall be in place before the withdrawal 
                                by the person of credits.
                            ``(v) Plan.--The person demonstrates an 
                        adequate design, operation, and maintenance 
                        plan to ensure continued viability of the 
                        proposed project after completion of 
                        construction of the project.
                            ``(vi) Legal protection.--
                                    ``(I) In general.--The person 
                                demonstrates adequate legal protection, 
                                such as easements, covenants running 
                                with the land, or other appropriate, 
                                legally binding undertakings, to ensure 
                                permanent protection of the wetland in 
                                the mitigation bank that is used as the 
                                basis for selling credits.
                                    ``(II) Timing.--Legal protection 
                                described in subclause (I) shall be in 
                                place at the time at which the credits 
                                are withdrawn.
                    ``(B) Application and procedure.--
                            ``(i) In general.--An applicant for a 
                        charter shall submit to the Secretary an 
                        application and supporting materials signed by 
                        a responsible official acting on behalf of the 
                        applicant as certification of the accuracy of 
                        the information contained in the application 
                        and materials.
                            ``(ii) Inclusions.--The application shall 
                        include, at a minimum, information concerning 
                        the criteria described in subparagraph (A).
                            ``(iii) Notice of completion status.--Not 
                        later than 30 days after the date on which an 
                        application under this subparagraph is filed, 
                        the Secretary shall--
                                    ``(I) advise the applicant as to 
                                whether the application is complete; 
                                and
                                    ``(II) if the application is 
                                incomplete, advise the applicant, in 
                                writing, of any additional materials 
                                that must be submitted to complete the 
                                application.
                            ``(iv) Comments on application.--
                                    ``(I) In general.--On receipt of a 
                                completed application, the Secretary 
                                shall submit, to the affected State and 
                                the heads of appropriate Federal 
                                agencies, a copy of the completed 
                                charter application.
                                    ``(II) Comment period.--
                                            ``(aa) In general.--Not 
                                        later than 60 days after the 
                                        date of receipt of a completed 
                                        application under subclause 
                                        (I), an affected State and the 
                                        heads of Federal agencies that 
                                        received the application may 
                                        file written comments 
                                        concerning the application.
                                            ``(bb) Record.--Written 
                                        comments filed under item (aa) 
                                        shall be part of the record.
                                            ``(cc) No comments.--If no 
                                        comments are filed before the 
                                        last day of the period 
                                        described in item (aa), the 
                                        Secretary may presume that the 
                                        affected State and Federal 
                                        agencies do not object to the 
                                        charter.
                    ``(C) Mitigation bank review team.--
                            ``(i) In general.--The mitigation bank 
                        review team shall be responsible for--
                                    ``(I) reviewing charter 
                                applications;
                                    ``(II) reaching consensus on the 
                                terms of each charter; and
                                    ``(III) coordinating, as necessary, 
                                to ensure effective implementation of 
                                the terms of each charter.
                            ``(ii) Chairperson.--The Secretary (or the 
                        State, in the case of a State administering a 
                        program under subsection (h)(2)(A)) shall--
                                    ``(I) serve as Chairperson of the 
                                mitigation bank review team; and
                                    ``(II) assume responsibility for 
                                making final decisions regarding the 
                                terms of the charter if consensus 
                                cannot be reached within the timeframes 
                                provided by this subsection.
                    ``(D) Coordination.--To the maximum extent 
                practicable, the Secretary shall coordinate the 
                processing of a charter application under this 
                subsection with the processing of applications from the 
                same applicant for other permits required under this 
                section to allow determinations with respect to the 
                permits to be made concurrently with the final decision 
                on the charter.
                    ``(E) Notice.--
                            ``(i) Publication.--The Secretary shall--
                                    ``(I) publish notice of each 
                                charter application in--
                                            ``(aa) the Federal 
                                        Register; and
                                            ``(bb) a newspaper of 
                                        general circulation in the 
                                        proposed service area in which 
                                        the mitigation bank is to 
                                        operate (including the county 
                                        in which the project is to be 
                                        located); and
                                    ``(II) make copies of the charter 
                                application and supporting materials 
                                available for public review at 
                                appropriate convenient locations in the 
                                service area.
                            ``(ii) Contents.--The notice published 
                        under clause (i)(I) shall--
                                    ``(I) contain a description of each 
                                project provided in the charter 
                                application;
                                    ``(II) contain an explanation of 
                                where supporting materials may be 
                                reviewed; and
                                    ``(III) provide a 30-day period 
                                (which may be extended once for an 
                                additional 30 days, on the request) 
                                during which comments on the compliance 
                                of the proposed application may be 
                                submitted in accordance with this 
                                subsection.
                            ``(iii) Permit requirements.--In any case 
                        in which a permit under this section is 
                        required to construct a mitigation bank, the 
                        notice and opportunity for public comment 
                        provided in accordance with the application for 
                        the permit shall satisfy the public notice and 
                        comment requirements of this paragraph.
                    ``(F) Decision deadline.--Not later than 90 days 
                after the date on which a completed charter application 
                is filed, the Secretary, in consultation with the 
                mitigation bank review team, shall decide whether to 
                issue a charter.
                    ``(G) Extension of deadline.--If additional time is 
                needed to file comments or provide for a hearing, 
                further review of comments, or a reply to adverse 
                comments, the Secretary may extend once, for 90 days, 
                the period of review described in subparagraph (F).
                    ``(H) Determination.--
                            ``(i) In general.--After a review of public 
                        comments and receipt of any reply from the 
                        applicant, the Secretary may, in accordance 
                        with subparagraph (A) and after appropriate 
                        coordination and consultation--
                                    ``(I) issue the charter;
                                    ``(II) deny the charter; or
                                    ``(III) issue the charter with 
                                modifications.
                            ``(ii) Basis.--A decision of the Secretary 
                        under clause (i) shall be based on the public 
                        record of the application for the charter.
                    ``(I) Amendments.--
                            ``(i) In general.--An additional project 
                        may be added to a charter by amendment.
                            ``(ii) Processing.--An application for an 
                        amendment to a charter shall be processed in 
                        the same manner as a charter application, 
                        except that the Secretary may treat any facts 
                        established in support of the original charter 
                        that are confirmed by the most recent report 
                        required under subparagraph (J) as established 
                        for the purpose of the amendment application 
                        process.
                    ``(J) Periodic reports.--
                            ``(i) In general.--A person holding a 
                        charter shall submit to the Secretary reports 
                        in accordance with the charter, on a periodic 
                        basis to be determined by the Secretary.
                            ``(ii) Inclusions.--A report submitted 
                        under clause (i) shall include--
                                    ``(I) information demonstrating the 
                                success of the proposed restoration, 
                                enhancement, creation, or preservation 
                                project;
                                    ``(II) a demonstration of continued 
                                compliance with financial assurance 
                                requirements;
                                    ``(III) a demonstration of a 
                                continued, adequate, long-term source 
                                of water to support the wetland that is 
                                the subject of the charter;
                                    ``(IV) a report on progress 
                                accomplishing the construction and 
                                design, operations, and maintenance 
                                plan provided in the charter;
                                    ``(V) a reconciliation of the 
                                number of credits sold during the 
                                period since the date of the last 
                                report under this subparagraph, the 
                                number of credits remaining, and any 
                                change in the number of credits 
                                available in accordance with this 
                                subsection; and
                                    ``(VI) information in satisfaction 
                                of any other reporting requirement of 
                                the charter.
                    ``(K) Responsibility for mitigation bank success.--
                Subject to the charter, a person holding the charter 
                shall be responsible for ensuring the success of the 
                restoration, enhancement, creation, and preservation 
                activities specified in the charter.
                    ``(L) Revocation.--A charter--
                            ``(i) shall be revoked by the Secretary 
                        for--
                                    ``(I) a criminal conviction of the 
                                person holding the charter for making 
                                material false statements in the 
                                charter application or any annual 
                                report; and
                                    ``(II) a substantial violation of 
                                law (other than a violation described 
                                in clause (I)) that demonstrates that 
                                the holder of the charter is unfit to 
                                operate the mitigation bank;
                            ``(ii) may be revoked by the Secretary 
                        for--
                                    ``(I) a substantial failure of the 
                                mitigation bank to perform as expected 
                                in the charter; or
                                    ``(II) a substantial failure to 
                                comply with the terms of the charter, 
                                including financial assurances or 
                                critical operating requirements; and
                            ``(iii) may be revoked under clause (i) or 
                        (ii) only after an opportunity for a public 
                        hearing.
                    ``(M) Standards and criteria for success.--The 
                Secretary, in consultation with the Administrator, 
                shall establish standards and criteria for the success 
                of mitigation banks under this subsection.
            ``(4) Credits and debits.--
                    ``(A) Number of credits.--
                            ``(i) In general.--The number of credits to 
                        which a chartered mitigation bank is entitled 
                        for wetland restoration, enhancement, creation, 
                        and preservation shall be based on the 
                        methodology contained in the charter, 
                        consistent with the approach identified in the 
                        Federal Guidance.
                            ``(ii) Limited credits.--A limited credit 
                        may be granted, consistent with the Federal 
                        Guidance, for the inclusion of upland, open 
                        water, or preserved wetland areas within a 
                        mitigation bank if the upland, open water, and 
                        preserved wetland areas within the mitigation 
                        bank increase the overall ecological 
                        functioning of the bank.
                    ``(B) Credits based solely on preservation.--
                            ``(i) In general.--The number of credits 
                        based solely on preservation should be based on 
                        the functions that would be lost or degraded if 
                        the wetland were not preserved (including the 
                        timing of the loss or degradation) in 
                        accordance with the Federal Guidance.
                            ``(ii) Determination.--In any case in which 
                        the Secretary determines that preservation of 
                        wetland is appropriate as the sole basis for 
                        providing mitigation credits, the Secretary 
                        shall make a determination that the wetland--
                                    ``(I) performs physical or 
                                biological functions, the preservation 
                                of which is important to the region in 
                                which the wetland is located; and
                                    ``(II) is under a demonstrable 
                                threat of loss or substantial 
                                degradation due to activities that 
                                might not otherwise be expected to be 
                                restricted and that are not the 
                                consequence of actions under the 
                                control of the holder of the charter 
                                for the mitigation bank.
                    ``(C) Offering of credits for sale.--
                            ``(i) In general.--On receipt of a charter, 
                        a mitigation bank may offer mitigation credits 
                        for sale in accordance with the charter.
                            ``(ii) Number.--The number of credits that 
                        a mitigation bank may offer for sale shall not 
                        exceed the number to which the mitigation bank 
                        is entitled under the charter.
                            ``(iii) Limited credits.--As specifically 
                        approved under the charter, and consistent with 
                        the Federal Guidance, limited credits may be 
                        sold before restoration, enhancement, creation, 
                        or preservation activities have been initiated 
                        if--
                                    ``(I) adequate financial and legal 
                                assurances described in paragraph 
                                (3)(A) are in place to carry out the 
                                proposed project;
                                    ``(II) the likelihood of success of 
                                the mitigation bank is high; and
                                    ``(III) a construction schedule has 
                                been approved.
                    ``(D) Debits.--To the maximum extent practicable, 
                the Secretary shall use the same methodology to 
                quantify debits as is used to quantify credits at a 
                mitigation bank.
                    ``(E) No regulation of credit price.--The Secretary 
                may not regulate the price charged for the sale of 
                mitigation credits.
            ``(5) Service areas.--
                    ``(A) Additional guidance.--The Secretary may 
                provide additional guidance, consistent with the 
                Federal Guidance, on the size and use of the service 
                area (including policies regarding linear utility 
                facilities).
                    ``(B) Interstate agreements.--If a proposed service 
                area or mitigation bank is located in more than 1 
                State, the Secretary may resolve any interstate 
                disagreement.
            ``(6) Mitigation.--
                    ``(A) In general.--A mitigation bank approved under 
                this subsection may, in accordance with this section--
                            ``(i) provide compensatory mitigation for 
                        activities requiring authorization under this 
                        section; or
                            ``(ii) be used in satisfaction of any 
                        injunctive relief ordered by the Secretary, the 
                        Administrator, or a court.
                    ``(B) In-kind and out-of-kind.--
                            ``(i) In general.--Consistent with the 
                        Federal Guidance, the Secretary should 
                        generally require in-kind compensation of 
                        wetland impacts.
                            ``(ii) Limited acceptance of out-of-kind 
                        compensation.--Out-of-kind compensation of 
                        wetland impacts may be acceptable if the 
                        Secretary determines, on a case-by-case basis, 
                        that the out-of-kind compensation is 
                        practicable and environmentally desirable.
                    ``(C) Equivalent standards and criteria.--
                            ``(i) In general.--Not later than 1 year 
                        after the date of enactment of this subsection, 
                        the Secretary and the Administrator, in 
                        consultation with the heads of appropriate 
                        Federal agencies, shall establish standards and 
                        criteria applicable to the use of on-site 
                        mitigation, in-lieu fees, and other off-site 
                        mitigation as compensatory mitigation that are 
                        similar to those standards and criteria 
                        applicable to a mitigation bank under this 
                        subsection.
                            ``(ii) Specific inclusions.--The standards 
                        and criteria established under clause (i) shall 
                        include--
                                    ``(I) a definition of in-lieu fees; 
                                and
                                    ``(II) specific measures to ensure 
                                that in-lieu fees are used only under 
                                appropriate circumstances with adequate 
                                controls.
            ``(7) Report to congress.--
                    ``(A) In general.--Not later than 2 years after the 
                date of enactment of this subsection, the Secretary 
                shall submit to Congress a report on the effectiveness 
                of wetland mitigation banking and other forms of 
                compensatory mitigation in meeting the policy and goals 
                identified in paragraphs (8) through (10) of section 
                101(a)(8).
                    ``(B) Form.--
                            ``(i) Draft report.--The report under 
                        subparagraph (A) shall first be issued in draft 
                        form.
                            ``(ii) Public comment period.--During the 
                        60-day period beginning on the date on which 
                        the draft report is issued under clause (i), 
                        the Secretary shall receive comments from the 
                        public concerning the accuracy of the 
                        information contained in the draft report.
                            ``(iii) Final report.--Not later than 90 
                        days after the last day of the comment period 
                        described in clause (ii), the Secretary shall--
                                    ``(I) make any necessary revisions 
                                to the draft report, taking into 
                                consideration any public comments 
                                received under clause (ii); and
                                    ``(II) submit to Congress the final 
                                report.
            ``(8) Existing banks.--Nothing in this subsection requires 
        a person operating a mitigation bank in existence on the date 
        of enactment of this subsection to submit to the Secretary for 
        that mitigation bank an application for a charter under this 
        subsection.
            ``(9) Mitigation banking approved under state programs.--A 
        State that operates a program under subsection (h)(2)(A) may 
        administer a wetland mitigation banking program in accordance 
        with procedures established by State law (including 
        regulations) if the banking program is approved by the 
        Administrator as part of the approved program of the State 
        under that subsection.''.
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