I
105TH CONGRESS
1ST SESSION
H. R. 1290
To promote the restoration, conservation, and enhancement of wetlands
through the establishment of a responsible wetlands mitigation banking
program.
IN THE HOUSE OF REPRESENTATIVES
APRIL 10, 1997
Mr. JONES introduced the following bill; which was referred to the Committee
on Transportation and Infrastructure
A BILL
To promote the restoration, conservation, and enhancement
of wetlands through the establishment of a responsible
wetlands mitigation banking program.
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 ‘‘Wetlands Restoration
and Improvement Act of 1997’’.
SEC. 2. FINDINGS AND DECLARATION OF POLICIES AND
GOALS.
(a) FINDINGS.—Congress finds that—
(1) half of the Nation’s wetlands have been de-
stroyed through a failure to understand and appre-
ciate the important environmental, hydrological, and
social functions which wetlands serve, including—
(A) essential nesting and feeding habitat
for waterfowl and other wildlife, including many
rare and endangered species;
(B) fish and shellfish habitat;
(C) water storage, including natural flood
and drought control and aquifer recharge;
(D) the enhancement of water quality;
(E) the provision of recreational, edu-
cational, and research opportunities; and
(F) opportunities for aesthetic apprecia-
tion;
(2) much of the Nation’s valuable wetlands
have been significantly degraded, thus necessitating
that activities that destroy wetlands adhere to a
strict mitigation policy that involves sequentially
avoiding impacts, minimizing impacts, and com-
pensating for unavoidable impacts;
(3) where impacts are unavoidable, wetlands
mitigation banking restores, enhances, and in excep-
tional cases, preserves and creates ecologically sig-
nificant wetlands and provides for long-term restora-
tion and enhancement of these vital resources;
(4) wetlands mitigation banking is not only con-
sistent with the important Federal goal of no net
loss of wetlands resources but, when conducted with-
in the parameters of a thoughtfully designed regu-
latory program, contains the procedural safeguards
necessary to greatly increase the overall number and
quality of wetland resources;
(5) wetlands mitigation banks can be particu-
larly effective in restoring, enhancing, creating, and
preserving the valuable environmental functions of
wetlands;
(6) mitigation banks often provide greater flexi-
bility, reliability, and effectiveness in meeting mitiga-
tion requirements than on-site mitigation can and
often have significant environmental advantages over
haphazardly placed individual mitigation projects,
such as—
(A) maintaining the integrity of a larger
aquatic ecosystem by consolidating compen-
satory mitigation into a single large parcel;
(B) bringing together financial resources,
planning, and scientific expertise not practicable
to bring to many project-specific compensatory
mitigation proposals;
(C) reducing permit processing times and
providing 
more 
cost-effective 
compensatory
mitigation opportunities for projects that qual-
ify;
(D) improving regulatory oversight by fo-
cusing regulatory agency resources more effec-
tively; and
(E) contributing toward attainment of the
goal of no net loss of the Nation’s wetlands by
preserving existing wetlands when appropriate
and providing opportunities to compensate for
authorized impacts;
(7) wetlands mitigation banking shows consid-
erable promise for preventing and reversing the con-
tinuing net loss of wetlands while accommodating
desirable economic and community growth and, if
implemented on a widespread basis, may result in
further progress toward restoring past losses of criti-
cal wetlands;
(8) the absence of Federal enabling legislation
impedes the widespread and effective use of wetlands
mitigation banking, while encouraging needless regu-
latory delay, financial uncertainty, and unproductive
litigation; and
(9) the adoption of Federal enabling legislation
providing for binding Federal standards governing
wetlands mitigation banking will foster economic
growth and environmental protection by providing
the public, the regulated community, State and local
governments, and potential investors reasonable as-
surance about the technical capabilities, financial
soundness and integrity, and overall performance of
large-scale wetlands mitigation banks and about the
environmental acceptability of desirable projects re-
lying on such banks to mitigate their unavoidable
adverse effects on wetlands.
(b) DECLARATION OF POLICIES AND GOALS.—Sec-
tion 101(a) of the Federal Water Pollution Control 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 achieve, through
regulatory and nonregulatory opportunities involving
all levels of government and supported by private
initiatives, the conservation and restoration of wet-
lands to increase the quantity and quality of the
wetlands resource base of the United States and the
policy of no overall net loss for the remaining wet-
lands resource base of the United States; and
‘‘(9) it is the national policy to foster wetlands
mitigation banking as a means to mitigate the loss
of wetlands and to do so by providing a stable, prac-
tical, and workable regulatory framework for the use
of mitigation banking, making appropriate use of ex-
isting, successful State programs for mitigation
banking, and taking into account regional variations
in wetlands conditions.’’.
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.—In this subsection, the fol-
lowing definitions apply:
‘‘(A) CREATION.—The term ‘creation’, as
used with respect to wetlands, means an activ-
ity that brings a wetland resource into existence
at a site where wetlands did not exist imme-
diately prior to the activity.
‘‘(I) RESTORATION.—The term ‘restora-
tion’ means an activity undertaken to return
wetlands, former wetlands, or other aquatic re-
sources from a disturbed or altered condition
with lesser wetland acreage or fewer wetland
functions to a previous condition with greater
wetland acreage or wetland functions.
‘‘(J) SERVICE AREA.—As used with respect
to a mitigation bank, the term ‘service area’
means a designated watershed or hydrologic
unit within a State, or a designated watershed
crossing State lines, wherein the bank can rea-
sonably be expected to provide appropriate com-
pensation for impacts to wetlands resources.
‘‘(K) WETLAND
FUNCTION.—The term
‘wetland function’ means an environmental or
hydrological role that the wetland serves, in-
cluding flood water storage, flood water convey-
ance, ground water discharge or recharge, ero-
sion control, wave attenuation, water quality
protection, scenic and aesthetic use, food chain
support, fisheries, wetland plant habitat, aquat-
ic habitat, and habitat for wetland-dependent
wildlife.
‘‘(2) CHARTER OF MITIGATION BANKS.—
‘‘(A) ISSUANCE.—The Secretary shall issue
a mitigation bank charter to a person whose ap-
plication satisfies the criteria set forth in this
subsection.
‘‘(B) APPLICATION.—An applicant for a
mitigation bank charter shall submit an appli-
cation and supporting materials signed by a re-
sponsible official acting on behalf of the appli-
cant certifying the accuracy of the information
contained in the application and materials. The
application shall show, at a minimum, the fol-
lowing:
‘‘(i) The proposed restoration, en-
hancement, 
creation, 
or 
preservation
project or projects which are proposed to
be included in the scope of the mitigation
banking charter.
‘‘(ii) The proposed service area for
each proposed restoration, enhancement,
creation, or preservation project. The geo-
graphic designation of the service area
should be based upon the cataloging unit
of the ‘Hydrologic Unit Map of the United
States’ (United States Geological Survey
1980). If the watershed crosses State lines,
the Secretary is strongly encouraged to re-
solve any interstate disagreement.
‘‘(iii) Reliable assurances of an ade-
quate source of water to support the wet-
land.
‘‘(iv) Adequate legal control over the
real property (including necessary uplands)
in the proposed project to carry out the
proposed work.
‘‘(v) Adequate financial assurances to
carry out the proposed project, including
the operation and maintenance plan. Such
financial assurances shall be in the form of
irrevocable letters of credit, performance
bonds, surety bonds, trust funds, corporate
guarantees by guarantors which meet fi-
nancial criteria set by regulations issued by
the Secretary, or a combination of such in-
struments and other financial undertak-
ings. Such financial assurances shall enti-
tle the Secretary to draw upon them in the
event of a substantial failure to perform
the work provided in the mitigation bank
charter where mitigation credits based on
such work have already been used or sold.
‘‘(vi) An adequate operations and
maintenance plan to assure continued via-
bility of the proposed project after comple-
tion of construction of the project.
‘‘(vii) Adequate legal protection, in-
cluding easements, covenants running with
land, or other appropriate, legally binding
undertakings, to assure permanent protec-
tion of the wetlands in the mitigation bank
that are used as the basis for selling cred-
its. Such legal protections shall be in place
at the time that the credits are withdrawn.
‘‘(C) ANNUAL REPORTS.—Persons holding
a mitigation bank charter shall report annually
to the Secretary. The report shall include—
‘‘(i) an independent audit of the fi-
nancial assurances on which the charter is
based and a demonstration of continued
compliance with financial assurance re-
quirements;
‘‘(ii) a demonstration of a continued
adequate long-term source of water to sup-
port the wetland;
‘‘(iii) a progress report in accomplish-
ing the construction and operation and
maintenance plan provided in the charter;
and
‘‘(iv) a reconciliation of the number of
credits sold during the previous years, the
number of credits remaining, and any
credits added in accordance with the re-
quirements of this subsection and imple-
menting regulations.
‘‘(D) DECISION
DEADLINE.—The Sec-
retary, in consultation with the Environmental
Protection Agency, and Federal and State au-
thorities, as appropriate, shall decide whether to
issue a mitigation banking charter within 180
days of the filing of a completed charter appli-
cation. Prior to the issuance of implementing
regulations, the Secretary shall do so on the
basis of best professional judgment concerning
compliance of the charter application with the
requirements of this subsection.
‘‘(E) PROCEDURE WITH RESPECT TO AP-
PLICANT
AND
OTHER
AGENCIES.—The Sec-
retary shall advise the applicant within 30 days
of filing whether the application is complete and
advise the applicant in writing at that time of
any additional materials which must be submit-
ted in order to complete the application. The
Secretary shall also transmit a copy of the com-
plete charter application to the affected State,
and to the Fish and Wildlife Service, the Envi-
ronmental Protection Agency, the National Re-
sources Conservation Service, and the National
Marine Fisheries Service, each of which shall
have 90 days, to run concurrently, in which to
file written comments, which shall be part of
the record. If no comments are filed within 90
days, these entities shall be presumed not to ob-
ject to the charter.
‘‘(F) NOTICE.—
‘‘(i) PUBLICATION.—The Secretary
shall publish notice of the charter applica-
tion in the Federal Register and in a news-
paper of general circulation in the pro-
posed service area in which the mitigation
bank is to operate (including the county in
which the project is to be located), and
shall make copies of the charter application
and supporting materials available for pub-
lic review at appropriate convenient loca-
tions in the service area.