[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1290 Introduced in House (IH)]







106th CONGRESS
  1st Session
                                H. R. 1290

 To amend the Federal Water Pollution Control Act relating to wetlands 
              mitigation banking, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 25, 1999

Mr. Jones of North Carolina (for himself, Mr. Clement, Mr. Saxton, Mr. 
   Taylor of Mississippi, Mr. Baker, Mr. Traficant, Mr. Barcia, Mr. 
    Tauzin, and Mr. Armey) 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 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) by striking ``and'' at the end of paragraph (6);
            (2) by striking the period at the end of paragraph (7) and 
        inserting a semicolon; and
            (3) by adding at the end the following:
            ``(8) it is the national policy to achieve, through 
        regulatory means that take into account that 75 percent of the 
        wetlands 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, the 
        conservation, creation, and restoration of wetlands so as to 
        increase the quantity and quality of the wetlands resource base 
        of the contiguous United States and to meet the interim goal of 
        no overall net loss for the remaining wetlands resource base of 
        the contiguous United States, while taking into account the 
        status and trends of the wetlands resource base in particular 
        regions and areas; and
            ``(9) it is the national policy to foster wetlands 
        mitigation banking as a means to mitigate the unavoidable loss 
        of wetlands and to do so by providing a regulatory framework 
        for the establishment, operation, and use of mitigation banks, 
        making appropriate use of existing, successful programs for 
        mitigation banking, and taking into account regional variations 
        in wetlands 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 shall have the meaning given such term in the 
        Federal Guidance.
            ``(2) Other definitions.--In this subsection, the following 
        definitions apply:
                    ``(A) Charter.--The term `charter' means a 
                mitigation banking instrument, as described in the 
                Federal Guidance. A charter is an agreement between an 
                applicant for a charter and the Secretary or a State 
                (in the case of a State administering a program under 
                subsection (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 (November 28, 1995)).
                    ``(C) Maintenance.--With respect to wetlands, the 
                term `maintenance' means an activity undertaken to 
                ensure viability of a wetland or to ensure the 
                accomplishment of a project goal after a wetland 
                restoration, enhancement, creation, or preservation 
                project has been completed, including hydrological 
                manipulation and control of desirable and undesirable 
                plant species.
                    ``(D) Mitigation bank.--The term `mitigation 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, uplands, or open water resources increase the 
                ecological functioning of the mitigation bank) or, in 
                exceptional circumstances, a project or projects 
                consisting solely of preservation of wetlands that has 
                been chartered by the Secretary under this subsection 
for the purpose of providing mitigation credits to offset wetland 
losses authorized by the terms of 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 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 
                wetland-dependent wildlife.
            ``(3) Charter of mitigation banks.--
                    ``(A) Issuance.--The Secretary, in consultation 
                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, 
                        enhancement, 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 measures. Such 
                        financial assurances may be in the form of 
                        performance bonds, irrevocable trusts, escrow 
                        accounts, casualty insurance, 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 perform 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 design, 
                        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 appropriate, 
                        legally binding undertakings, to ensure 
                        permanent protection of the wetlands in the 
                        mitigation bank that are used as the basis for 
                        selling credits. Such legal protections shall 
                        be in place at the time that the credits are 
                        withdrawn.
                    ``(B) Application and procedure.--An applicant for 
                a mitigation bank charter shall submit to the Secretary 
                an application and supporting materials signed by a 
                responsible official acting on behalf of the applicant 
                certifying the accuracy of the information contained in 
                the application and materials. The application shall 
                include, at a minimum, information on the criteria 
                contained in subparagraph (A). The Secretary shall 
                advise the applicant, not later than 30 days after the 
                date of filing, of whether the application is complete 
                and advise the applicant, in writing at that time, of 
                any additional materials that must be submitted in 
                order to complete the application. The Secretary shall 
                also transmit a copy of the complete charter 
                application to the affected State, and to the heads of 
                appropriate Federal agencies, each of which shall have 
                60 days, to run concurrently, to file written comments, 
                which shall be part of the record. If no comments are 
                filed before the last day of such 60-day period, the 
                Secretary may presume that the entities do not object 
                to the charter.
                    ``(C) Mitigation bank review team.--The mitigation 
                bank review team, as defined in the Federal Guidance, 
                shall be responsible for reviewing charter 
                applications, reaching consensus on the terms of the 
                charter, and coordinating, as necessary, to ensure 
                effective implementation of the terms of the charter. 
                The Secretary or the State (in the case of a State 
                administering a program under subsection (h)(2)(A)) 
                shall be the chair of the mitigation bank review team 
                and have the 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 extent possible, the 
                Secretary shall coordinate the processing of a 
                mitigation bank charter application under this 
                subsection with the processing of applications by such 
                applicant for other permits required under this 
                section, in order that determinations with respect to 
                such permits may be made concurrently with the final 
                decision on the bank charter.
                    ``(E) Notice.--
                            ``(i) Publication.--The Secretary shall 
                        publish notice of the charter application in 
                        the Federal Register and in 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 shall 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 shall describe 
                        the project or projects provided in the charter 
                        application, explain where supporting materials 
                        may be reviewed, and provide 30 days for the 
                        submission of comments on the compliance of the 
                        proposed application in accordance with this 
                        subsection. Upon request, the time for comment 
                        may be extended once for 30 days.
                            ``(iii) Permit requirements.--In any case 
                        in which a permit is required under this 
                        section to construct a mitigation bank, the 
                        notice and opportunity for public comment 
                        provided in accordance with the application for 
                        the permit may satisfy the requirements of this 
                        paragraph for public notice and comment.
                    ``(F) Decision deadline.--The Secretary, in 
                consultation with the mitigation bank review team, 
                shall decide whether to issue a mitigation banking 
                charter not later than 90 days after the date of filing 
                of a completed charter application.
                    ``(G) Extension of deadline.--If additional time is 
                needed to file comments, to provide for a hearing, to 
                provide for further review of comments, or to provide 
                for a reply to adverse comments, the Secretary may 
                extend the time for review once for 90 days.
                    ``(H) Determination.--After a review of public 
                comments and any reply by the applicant, the Secretary 
                may, in accordance with subparagraph (A) and after 
                appropriate coordination and consultation, issue the 
                charter, deny the charter, or issue the charter with 
                modifications. The Secretary's decision shall be based 
                on the entire public record.
                    ``(I) Amendments.--Additional projects may be added 
                to a mitigation bank charter by amendment. Amendment 
                applications shall be processed in the same manner as 
                charter applications, but the Secretary may treat the 
                facts established in support of the charter and 
                confirmed by the most recent report required under 
                subparagraph (J) as established for the purpose of the 
                amendment application process.
                    ``(J) Periodic reports.--Persons holding 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, enhancement, 
                        creation, or preservation project;
                            ``(ii) a demonstration of a continued 
                        compliance with financial assurance 
                        requirements;
                            ``(iii) a demonstration of a continued, 
                        adequate, long-term source of water to support 
                        the wetland;
                            ``(iv) a progress report in accomplishing 
                        the construction and design, operations, 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 success.--Subject to 
                the terms of the charter, a person holding the charter 
                shall be responsible for ensuring the success of the 
                restoration, creation, 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 report; 
                                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 
                                critical operating requirements.
                The charter may be revoked 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.--The number of credits to 
                which a chartered mitigation bank is entitled for 
                wetlands restoration, enhancement, and creation shall 
                be based on the methodology contained in the charter, 
                consistent with the approach identified in the Federal 
                Guidance. Limited credits may be granted, consistent 
                with the Federal Guidance, for the inclusion of 
                uplands, open water, and preserved wetlands areas 
                within a bank if the uplands, open water, and preserved 
                wetlands areas within the bank increase the overall 
                ecological functioning of the bank.
                    ``(B) Credits based solely on preservation.--The 
                number of credits that are based solely on preservation 
                should be based on the functions that would otherwise 
                be lost or degraded if the wetlands were not preserved, 
                and the timing of such loss or degradation, pursuant to 
                the Federal Guidance. In any case in which the 
                Secretary determines that preservation 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 
                        important 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 expected 
                        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 accordance 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 
                entitled under the charter. As specifically approved 
                under the charter, and consistent with the Federal 
                Guidance, limited credits may be sold before 
                restoration, enhancement, or creation 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 
                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 the proposed 
                service area or mitigation bank is located in more than 
                1 State, the Secretary is authorized to resolve any 
                interstate disagreement.
            ``(6) Mitigation.--
                    ``(A) In general.--A mitigation bank approved under 
                this subsection may, in accordance 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.--Consistent with the 
                Federal Guidance, in-kind compensation 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 criteria.--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 applicable to a 
                mitigation bank under this subsection. Such standards 
                and criteria shall include a definition of in lieu fees 
                and specific measures to ensure that such fees are used 
                only under appropriate circumstances with adequate 
                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 receive 
        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 subsection may be 
        construed to require a person operating a mitigation bank in 
        existence on the date of enactment of this subsection to submit 
        an application for a charter under this subsection to the 
        Secretary for approval.
            ``(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 or regulation if the 
        banking program is approved by the Administrator as a part of 
        the State's approved program under such subsection.''.
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