I
107TH CONGRESS
1ST SESSION
H. R. 1474
To amend the Federal Water Pollution Control Act relating to wetlands
mitigation banking, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
APRIL 4, 2001
Mr. JONES of North Carolina (for himself, Mr. CLEMENT, Mr. BAKER, Mr.
TAYLOR of Mississippi, Mr. BOEHLERT, Mr. SHOWS, Mr. TAUZIN, Mrs.
CUBIN, Mr. GUTKNECHT, Mr. BRADY of Texas, Mr. HERGER, Mr.
ENGLISH, Mr. OTTER, Mr. HANSEN, Mr. ARMEY, Mr. REHBERG, and
Mr. BARCIA) introduced the following bill; which was referred to the
Committee on Transportation and Infrastructure
A BILL
To amend the Federal Water Pollution Control Act relating
to wetlands mitigation banking, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives 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 Con-
trol Act (33 U.S.C. 1251(a)) is amended—
(1) by striking ‘‘and’’ at the end of paragraph
(6);
(2) by striking the period at the end of para-
graph (7) and inserting a semicolon; and
(3) by adding at the end the following:
‘‘(8) it is the national policy to conserve, create,
and restore wetlands so as to increase the quantity
and quality of the wetlands resource base of the con-
tiguous United States and to meet the interim goal
of no overall net loss for the remaining wetlands re-
source base of the contiguous United States while
taking into account the status and trends of the wet-
lands resource base in particular regions and area
and to achieve such goals through regulatory means
that take into account that 75 percent of the wet-
lands in the contiguous United States are privately
owned and that private property rights should not be
unreasonably infringed and through nonregulatory
opportunities involving all levels of government and
supported by private initiatives; and
‘‘(9) it is the national policy to foster wetlands
mitigation banking as a means to mitigate the un-
avoidable loss of wetlands and to do so by providing
a regulatory framework for the establishment, oper-
ation, and use of mitigation banks, making appro-
priate use of existing, successful programs for miti-
gation banking, and taking into account regional
variations in wetlands conditions, functions, and val-
ues.’’.
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 shall have
the meaning given such term in the Federal Guid-
ance.
‘‘(2) OTHER DEFINITIONS.—In this subsection,
the following definitions apply:
‘‘(A) 
CHARTER.—The 
term 
‘charter’
means a mitigation banking instrument, as de-
scribed in the Federal Guidance. A charter is
an agreement between an applicant for a char-
ter and the Secretary or a State (in the case of
a State administering a program under sub-
section (h)(2)(A)) that 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 (60 Fed. Reg. 58695 (No-
vember 28, 1995)).
‘‘(C) MAINTENANCE.—With respect to
wetlands, the term ‘maintenance’ means an ac-
tivity undertaken to ensure viability of a wet-
land or to ensure the accomplishment of a
project goal after a wetland restoration, en-
hancement, creation, or preservation project has
been completed, including hydrological manipu-
lation and control of desirable and undesirable
plant species.
‘‘(D) MITIGATION BANK.—The term ‘miti-
gation bank’ means a specified wetland resource
restoration, creation, or enhancement project or
projects (which may include the preservation of
appurtenant wetlands, uplands, or open water
resources to the extent that the wetlands, up-
lands, or open water resources increase the eco-
logical functioning of the mitigation bank) or,
in exceptional circumstances, a project or
projects consisting solely of preservation of wet-
lands that has been chartered by the Secretary
under this subsection for the purpose of pro-
viding mitigation credits to offset wetland losses
authorized by the terms of permits allowing ac-
tivities 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 wetlands resources.
‘‘(F) WETLAND
FUNCTION.—The term
‘wetland function’ means an environmental,
hydrological, or other role that the wetland
serves, including flood water storage, flood
water conveyance, ground water discharge or
recharge, erosion control, wave attenuation,
water quality protection, scenic and aesthetic
use, food chain support, fisheries, wetland plant
habitat, aquatic habitat, and habitat for wet-
land-dependent wildlife.
‘‘(3) CHARTER OF MITIGATION BANKS.—
‘‘(A) ISSUANCE.—The Secretary, in con-
sultation with the mitigation bank review team,
may issue a mitigation bank charter to a person
who, with respect to the project or projects that
are to be included in the scope of the mitigation
banking charter, meets the following criteria:
‘‘(i) Provides reasonable assurances of
success of the proposed restoration, en-
hancement, 
creation, 
or 
preservation
project.
‘‘(ii) 
Demonstrates 
an 
adequate
source of water to support the wetland.
‘‘(iii) Demonstrates adequate legal
control, such as title, license, contract, or
option (contingent upon approval of the
charter), over the real property (including
necessary uplands, as appropriate) in the
proposed project to carry out the proposed
project.
‘‘(iv) Demonstrates adequate financial
assurances to carry out the proposed
project, including the design, operations,
and maintenance plan and remedial meas-
ures. Such financial assurances may be in
the form of performance bonds, irrevocable
trusts, escrow accounts, casualty insur-
ance, letters of credit, legislatively-enacted
dedicated funds for government operated
banks, or other approved instruments.
Such financial assurances shall entitle the
Secretary to draw upon the assurances in
the event of a substantial failure to per-
form the work provided in the mitigation
bank charter, or a substantial failure of
the mitigation bank to perform as expected
in the application, in any case in which
mitigation credits based on such work have
already been used or sold. Such financial
assurances shall be in place prior to the
withdrawal of credits.
‘‘(v) Demonstrates an adequate de-
sign, operations, and maintenance plan to
ensure continued viability of the proposed
project after completion of construction of
the project.
‘‘(vi) Demonstrates adequate legal
protection, such as easements, covenants
running with the land, or other appro-
priate, legally binding undertakings, to en-
sure permanent protection of the wetlands
in the mitigation bank that are used as the
basis for selling credits. Such legal protec-
tions shall be in place at the time that the
credits are withdrawn.
amendment. Amendment applications shall be
processed in the same manner as charter appli-
cations, but the Secretary may treat the facts
established in support of the charter and con-
firmed by the most recent report required under
subparagraph (J) as established for the purpose
of the amendment application process.
‘‘(J) PERIODIC
REPORTS.—Persons hold-
ing a mitigation bank charter shall report to
the Secretary in accordance with the charter
and on a periodic basis, as determined by the
Secretary. The report shall include—
‘‘(i) information demonstrating the
success of the proposed restoration, en-
hancement, 
creation, 
or 
preservation
project;
‘‘(ii) a demonstration of a continued
compliance with financial assurance re-
quirements;
‘‘(iii) a demonstration of a continued,
adequate, long-term source of water to
support the wetland;
‘‘(iv) a progress report in accom-
plishing the construction and design, oper-
ations, and maintenance plan provided in
the charter;
‘‘(v) a reconciliation of the number of
credits sold during the previous years, the
number of credits remaining, and any
change in the number of credits made in
accordance with the requirements of this
subsection; and
‘‘(vi) any other reporting requirement
defined in the charter.
‘‘(K) RESPONSIBILITY
FOR
BANK
SUC-
CESS.—Subject to the terms of the charter, a
person holding the charter shall be responsible
for ensuring the success of the restoration, cre-
ation, enhancement, and preservation activities.
‘‘(L) REVOCATION.—A mitigation banking
charter—
‘‘(i) 
shall 
be 
revoked 
by 
the
Secretary—
‘‘(I) for a criminal conviction for
making material false statements in
the charter application or annual re-
port; and
‘‘(II) for substantial violations of
law (other than violations described in
clause (I)) that demonstrate the
unfitness of the holder of the charter
to operate the mitigation bank; and
‘‘(ii) 
may 
be 
revoked 
by 
the
Secretary—
‘‘(I) for a substantial failure of
the bank to perform as expected in
the charter; and
‘‘(II) for a substantial failure to
comply with the terms of the charter,
including financial assurances or crit-
ical operating requirements.
The charter may be revoked only after an op-
portunity for a public hearing.
‘‘(M) STANDARDS AND CRITERIA FOR SUC-
CESS.—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.—The number
of credits to which a chartered mitigation bank
is entitled for wetlands restoration, enhance-
ment, and creation shall be based on the meth-
odology contained in the charter, consistent
with the approach identified in the Federal
Guidance. Limited credits may be granted, con-
sistent with the Federal Guidance, for the in-
clusion of uplands, open water, and preserved
wetlands areas within a bank if the uplands,
open water, and preserved wetlands areas with-
in the bank increase the overall ecological func-
tioning of the bank.
‘‘(B) CREDITS BASED SOLELY ON PRESER-
VATION.—The number of credits that are based
solely on preservation should be based on the
functions that would otherwise be lost or de-
graded if the wetlands were not preserved, and
the timing of such loss or degradation, pursu-
ant to the Federal Guidance. In any case in
which the Secretary determines that preserva-
tion of wetlands is appropriate as the sole basis
for providing mitigation credits, the Secretary
shall make a determination that the wetlands—
‘‘(i) perform physical or biological
functions, the preservation of which is im-
portant to the region in which the wetlands
are located; and
‘‘(ii) are under a demonstrable threat
of loss or substantial degradation due to
activities that might not otherwise be ex-
pected to be restricted and that are not the
consequence of actions under the control of
the bank sponsor.
‘‘(C) OFFERING
CREDITS
FOR
SALE.—
Upon receipt of its charter, a mitigation bank
may offer mitigation credits for sale in accord-
ance with the charter. The number of credits
that a mitigation bank may offer for sale shall
not exceed the number to which the bank is en-
titled under the charter. As specifically ap-
proved under the charter, and consistent with
the Federal Guidance, limited credits may be
sold before restoration, enhancement, or cre-
ation activities have begun if adequate financial
and legal assurances described in paragraph
(3)(A) are in place to carry out the proposed
project, the likelihood of success of the bank is
high, and a construction schedule has been ap-
proved.
‘‘(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 Sec-
retary may provide additional guidance, con-
sistent with the Federal Guidance, on the size
and use of the service area, including policies
regarding linear utility facilities.
‘‘(B) INTERSTATE
AGREEMENTS.—If the
proposed service area or mitigation bank is lo-
cated in more than 1 State, the Secretary is au-
thorized to resolve any interstate disagreement.
‘‘(6) MITIGATION.—
‘‘(A) IN GENERAL.—A mitigation bank ap-
proved under this subsection may, in accord-
ance with this section, provide compensatory
mitigation for activities requiring authorization
under this section or provide required injunctive
relief in an enforcement action by the Secretary
or the Administrator.
‘‘(B) IN-KIND
AND
OUT-OF-KIND.—Con-
sistent with the Federal Guidance, in-kind com-
pensation of wetlands impacts should generally
be required. Out-of-kind compensation may be
acceptable if it is determined to be practicable
and environmentally desirable on a case-by-case
basis.
‘‘(C) EQUIVALENT STANDARDS AND CRI-
TERIA.—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
issue regulations establishing standards and cri-
teria applicable to the use of on-site mitigation,
in lieu fees, and other off-site mitigation as
compensatory mitigation that are similar to the
standards and criteria applicable to a mitiga-
tion bank under this subsection. Such standards
and criteria shall include, consistent with this
subsection, a definition of in lieu fees and spe-
cific measures addressing selection of wetland
mitigation projects, timing for initiation and
completion of wetland mitigation projects, and
other terms to ensure that such fees are used
only under appropriate circumstances with ade-
quate controls.
‘‘(7) REPORT TO CONGRESS.—Not later than 2
years after the date of enactment of this subsection,
the Secretary shall transmit to Congress a written
report on the effectiveness of wetlands mitigation
banking and other forms of compensatory mitigation
in meeting the policy and goals identified in section
101(a)(8). The report shall first be issued in draft
form and, in a 60-day period, the Secretary shall re-
ceive comments from the public about the accuracy
of the information contained in the draft report. The
final report shall be revised after consideration of
the public comments and submitted to Congress not
later than 90 days after the last day of the comment
period.
‘‘(8) EXISTING BANKS.—Nothing in this sub-
section may be construed to require a person oper-
ating a mitigation bank in existence on the date of
enactment of this subsection to submit an applica-
tion for a charter under this subsection to the Sec-
retary for approval.
‘‘(9) MITIGATION BANKING APPROVED UNDER
STATE PROGRAMS.—A State that operates a pro-
gram under subsection (h)(2)(A) may administer a
wetland mitigation banking program in accordance
with procedures established by State law or regula-
tion if the banking program is approved by the Ad-
ministrator as a part of the State’s approved pro-
gram under such subsection.’’.
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