[Congressional Record Volume 141, Number 22 (Friday, February 3, 1995)]
[Senate]
[Pages S2124-S2135]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. HATCH (for himself, Mr. Baucus and Mrs. Feinstein):
  S. 351. A bill to amend the Internal Revenue Code of 1986 to make 
permanent the credit for increasing research activities; to the 
Committee on Finance.


                    RESEARCH ACTIVITIES LEGISLATION

  Mr. HATCH. Mr. President, I am pleased today to join with my friends 
and colleagues, Senator Max Baucus, and Representatives Nancy Johnson 
and Robert Matsui in the House, in introducing legislation that would 
extend permanently the tax credit for increasing research activities. 
The Omnibus Budget Reconciliation Act of 1993 temporarily extended this 
tax credit until June 30, 1995, when it is set to expire.
  As the United States is shifting from an industrial based economy to 
an information and technology based economy, conducting research for 
tomorrow's products and methods is increasing in importance. In 1981, 
the Reagan administration and the Congress recognized this need, and 
the credit for increasing research and experimentation [R&E] activities 
was first enacted. Unfortunately, due to revenue concerns and 
uncertainty about its effectiveness, the credit was enacted with a 
sunset date of December 31, 1985. Since then, the credit has been 
extended four more times for periods varying from 6 months to 3 years.
  [[Page S2125]] Mr. President, this Nation is the world's undisputed 
leader in technological innovation. American know-how has given our 
Nation benefits undreamed of a few years ago. Research and development 
by U.S. companies has led the way in delivering these benefits, which 
enhance U.S. competitiveness as well as the quality of life for 
everyone. And, as the pace of change in our world quickens, the role of 
research has taken on increased importance.
  The R&E credit has played a key role in placing the United States 
ahead of its competition in developing and marketing new products. 
Recent studies indicate that the marginal effect of $1 of the R&D 
credit stimulates approximately $1 of additional private research and 
development [R&D] spending over the short run, and as much as $2 of 
extra R&D over the long run.
  Mr. President, the benefits of the R&D credit, though certainly very 
significant, have been limited by the fact that the credit has been 
temporary. In many fields, particularly pharmaceuticals and 
biotechnology, there are relatively long periods of development. The 
more uncertain the long-term future of the R&D credit is, the smaller 
the potential of the credit to stimulate increased research. This only 
makes sense, Mr. President. U.S. companies are managed by prudent 
business men and women. They evaluate their R&D investments by 
comparing the present value of the expected cash flows from the 
research over the life of the investment with the initial cash outlay. 
These
 estimates take into account the potential availability of tax credits. 
However, because of the uncertainty of a credit that has been allowed 
to expire 5 times in 14 years, many decision makers do not count on the 
R&E credit as being available in the long run. This, of course, means 
that fewer research projects will meet the threshold of viability and 
results in fewer dollars being spent on research in this country.

  It is important to note that while U.S. investment in research and 
development has generally grown since 1970, our international 
competitors have not stood still. In fact, United States nondefense 
R&D, as a percentage of gross domestic product [GDP], has been 
relatively flat since 1985, while Japan's and Germany's have grown.
  Unlike a few years ago, it is now not always necessary for U.S. firms 
to perform their research activities within the boundaries of the 
United States. As more nations have joined the United States as high-
technology manufacturing centers, with educated work forces, 
multinational companies have found that moving manufacturing functions 
overseas is sometimes necessary to stay competitive. The same is often 
true with basic research activities. In fact, some of our major trading 
partners now provide generous tax incentives for research and 
development conducted in those nations. In some cases, these incentives 
are more attractive than the R&E credit the United States provides, 
particularly when the temporary nature of our credit is considered. 
Therefore, Mr. President, we are at risk of having some of the R&D 
spending in the United States transferred overseas if we do not keep 
competitive.
  President Clinton, when campaigning for the presidency in 1992, 
recognized the importance of stimulating private R&D investment and 
called for a permanent R&E credit. I firmly hope that the President's 
fiscal year 1996 budget continues this commitment by providing for the 
permanent extension of the credit.
  Mr. President, my home State of Utah is home to a large number of 
innovative companies who invest a high percentage of their revenue in 
research and development activities. For example, between Salt Lake 
City and Provo lies the world's biggest stretch of software and 
computer engineering firms. This area, which was named ``Software 
Valley'' by Business Week, is second only to California's Silicon 
Valley as a thriving high technology commercial area.
  In addition, the Salt Lake City area is home to at least 145 
biomedical firms that employ nearly 8,000 workers. These companies were 
conceived in research and development and will not survive, much less 
grow, without continuously conducting R&D activities.
  In all, Mr. President, there are approximately 80,000 employees 
working in Utah's 1,400 plus and growing technology based companies. 
Research and development is the lifeblood of
 these firms, and hundreds of thousands more throughout the nation that 
are like them. A permanent and effective tax incentive to increase 
research is essential to the long-term health of these businesses.

  High-technology companies are leading us into the 21st century. 
Research and development must continue or this industry will shrivel up 
and die. We cannot allow that to happen.
  I am aware, Mr. President, that not every company that incurs R&D 
expenditures in the United States can take advantage of the R&E credit. 
For many companies, particularly in the defense and aerospace 
industries, declining research and development expenditures as a 
percentage of sales, which came about as a result of lower defense 
spending by the Federal Government, have put the credit out of reach. 
Thus, even a permanent credit, as currently structured, holds little or 
no incentive to increase research activities for these firms. Other 
companies find the current R&E credit less effective than it could be 
because of various problems inherent in the structure of the credit. In 
short, the credit, even if permanently extended, is not perfect. 
Congress should examine ways to improve it and to make it more 
effective in delivering incentives to increase R&D activity for all 
companies. I intend to explore various ideas to make the credit better. 
And, I invite my colleagues and interested parties to join me in this 
endeavor.
  In the meantime, however, it is important that this Congress send a 
strong signal that the current credit should not be allowed to expire. 
This bill today is intended to serve as a benchmark. I urge my 
colleagues to show their support for the concept of a permanent R&E 
credit by cosponsoring this legislation. By the time we have the 
opportunity to consider a tax bill, probably later this spring, we hope 
to be able to offer improvements to the credit that all companies will 
find effective in encouraging the kind of research activities that will 
keep this Nation a leader in the technological developments that will 
lead us into the next century.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 351

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

     SECTION 1. CREDIT FOR INCREASING RESEARCH ACTIVITIES MADE 
                   PERMANENT.

       (a) In General.--Section 41 of the Internal Revenue Code of 
     1986 (relating to credit for increasing research activities) 
     is amended by striking subsection (h).
       (b) Conforming Amendment.--Paragraph (1) of section 28(b) 
     of such Code is amended by striking subparagraph (D).
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending after June 30, 1995.

 Mr. President, it is with great pleasure that I join with my 
colleague from Utah, Senator Hatch, to introduce a bill critical to the 
ability of American businesses to effectively compete in the global 
marketplace. This bill will provide the economic incentive to encourage 
businesses to undertake the research necessary to develop the technical 
innovations required to increase the supply of quality jobs in the 
United States.
  The legislation that we introduce today, and the companion 
legislation Representatives Nancy Johnson and Robert Matsui are 
introducing in the House on this date, will make the R&D credit 
permanent for amounts paid for incurred after June 30, 1995.
  For the past several years, essentially because of budget 
constraints, Congress extended the R&D credit on an sporadic basis. 
Corporations have been unable to count on the credit as a certainty in 
financing the multi-year development projects necessary to the economic 
well being of the companies particularly in a highly competitive, 
global market place.
  The bill introduced today to permanently extend the R&D credit is 
only the beginning. Over the last few years, I have received the input 
of a variety of 
[[Page S2126]] business leaders and industry representatives concerning 
ways to facilitate additional investment in research and development. 
Included in this process were discussions with representatives of small 
and large businesses, new companies, and mature industries. As a 
result, I have concluded that additional modifications should be made 
to the R&D credit provisions to fulfill the objectives contemplated by 
Congress when it first enacted and subsequently modified the credit--
fostering leadership in new technology, promoting the emergence of new 
businesses, aiding the conversion of the defense industry, and 
promoting an environment in which our Nation's companies can 
successfully compete with their foreign counterparts.
  On March 26, 1993, I, together with our former colleague, Senator 
Danforth, introduced S. 666, The Research Development Enhancement Act 
of 1993. I believed at that time and continue to believe that S. 666 
effectively addressed a number issues which, had the legislation been 
enacted, would have facilitated additional investment in U.S.-based 
research and development.
  I look forward to working with my colleague, Senator Hatch, and with 
Members of Congress and the Administration to obtain a permanent 
extension of the R&D credit and to ultimately effect revisions to the 
credit to encourage American companies to invest additional funds in 
research and development.
                                 ______

      By Mr. PRESSLER:
  S. 352 A bill to amend the Federal Water Pollution Control Act to 
establish a comprehensive program for conserving and managing wetlands 
and waters of the United States, and for other purposes; to the 
Committee on Environment and Public Works.


   THE COMPREHENSIVE WETLANDS CONSERVATION AND MANAGEMENT ACT OF 1995

  Mr. PRESSLER. Mr. President, today I am introducing legislation that 
addresses a major concern of land owners and businesses not only in 
South Dakota but throughout the United States. The concern is wetlands.
  Traveling throughout South Dakota and listening to the people, it is 
clear that wetlands are an issue on everyone's mind. More often than 
not, current wetlands policy is a burden on our farmers, ranchers, and 
business people. Problems with current wetlands policies have affected 
farmers and ranchers predominantly. However, current policies also are 
now affecting those who live in our cities and small towns. The bill I 
am introducing today would go far in establishing a policy that neither 
is burdensome nor imposes unwarranted costs and regulations.
  And what are these wetlands concerns? The right to own private 
property is one. Compensation to property owners when land is taken 
away or when use of the land is restricted is another. Government-
forced changes in farming and ranching operations are on everyone's 
mind. Current excessive penalties and fines could force young farmers 
and ranchers off the land. Obstacles to business expansion are another 
current concern.
  Mr. President, the list of concerns goes on. These concerns are not 
imagined. They are real. Problems are occurring throughout South 
Dakota. In just one county in South Dakota--Kingsbury--nearly 20 
percent of that county's farmland contains Government wildlife easement 
wetlands. However, Government officials have not notified farmers of 
those easements.
  Seven possible wetlands violations were reported in Kingsbury County 
last year. Yet four of the seven operators charged had no idea there 
were wetlands easements on their farms.
  In several cases, local officials quickly identified the problem, and 
notified the affected farmers. The farmers, unaware of any wetlands 
damage or violations, quickly repaired the disruption of their 
wetlands. Now these farmers are waiting for a ruling from Washington 
bureaucrats on what their penalty will be.
  The penalties will not be light. Farmers have told me they are being 
threatened with fines as high as $515,000. Fines as high as $65,000 
have already been levied.
  Mr. President, I do not know any farm or ranch family that can afford 
to lose that amount of money. Efforts must be taken to ensure that any 
fine or penalty is in line with violations. Many violations are 
incidental and quickly repaired. Penalties should fit the crime.
  Thousands of South Dakotans have written, called, or visited with me 
about the definition of wetlands and the rules and regulations designed 
to protect wetlands. Farmers, ranchers, business men and women, and 
individual South Dakotans have clearly identified one of the most 
important issues affecting their lives. They are concerned about the 
definition of wetlands and what guidelines should be adopted to protect 
them.
  The bill I am introducing today addresses these wetlands concerns. My 
bill would create much-needed guidelines for identifying and 
delineating wetlands and creating a balance between growth and the 
protection of private property. Simply put, this bill puts common sense 
into our wetlands policy.
  Current law is too broad, and it is causing to many problems 
throughout the country. Congress has never passed a comprehensive law 
defining wetlands. Without that definition, Federal agencies have been 
aggressively pursuing control over private property in the name of 
saving wetlands.
  What the Government should or should not be doing in this area needs 
to be defined clearly. My bill does that. It provides definitions that 
protect true wetlands areas and protects the rights of private property 
owners.
  My bill requires certain criteria to be met and verified before an 
area can be regulated as a wetland. Such an approach is more reliable 
in identifying true wetlands. It prevents field inspectors from 
mistakenly classifying dry, upland areas that are drained effectively 
as wetlands, and also eliminates a major source of confusion and abuse 
caused by current regulations.
  Mr. President, I ask that an explanation of the bill be printed in 
the Record at this point.
  Mr. President, I applaud my friend and colleague Senator Breaux for 
being the leader on this issue during previous Congresses. Only through 
the kind of common sense and balanced approach proposed in my bill can 
the Nation's agricultural, business, environmental, and individual 
interests be addressed properly. Action is needed. I urge my colleagues 
to take a close look at this bill and join me in supporting this bill.
  Mr. President, I ask unanimous consent that a copy of my bill and 
additional material be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                                 S. 352
       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 ``Comprehensive Wetlands 
     Conservation and Management Act of 1995''.

     SEC. 2. FINDINGS AND STATEMENT OF PURPOSE.

       (a) Findings.--Congress finds that--
       (1) wetlands play an integral role in maintaining high 
     quality of life through material contributions to the 
     national economy, food supply, water supply and quality, 
     flood control, and fish, wildlife, and plant resources, and 
     to the health, safety, recreation, and economic well-being of 
     citizens throughout the United States;
       (2) wetlands serve important ecological and natural 
     resource functions, such as providing essential nesting and 
     feeding habitat for waterfowl, other wildlife, and many rare 
     and endangered species, fisheries habitat, the enhancement of 
     water quality, and natural flood control;
       (3) much of the wetlands resource of the United States has 
     sustained significant loss or degradation, resulting in the 
     need for effective programs to limit the loss and degradation 
     of ecologically significant wetlands and to provide for long-
     term restoration and enhancement of the wetlands resource 
     base;
       (4) because 75 percent of the wetlands in the lower 48 
     States is privately owned and because the majority of the 
     population of the United States lives in or near wetlands, an 
     effective wetlands conservation and management program must 
     reflect a balanced approach that conserves and enhances 
     important wetlands functions and values while observing 
     private property rights, recognizing the need for essential 
     public infrastructure, such as highways, ports, airports, 
     sewer systems, and public water supply systems, and providing 
     the opportunity for sustained economic growth; and
       (5) the Federal permit program established under section 
     404 of the Federal Water Pollution Control Act (33 U.S.C. 
     1344) was not originally conceived as a wetlands regulatory 
     program and is insufficient to ensure 
     [[Page S2127]] that the wetlands resource base of the United 
     States will be conserved and managed in a fair and 
     environmentally sound manner.
       (b) Purpose.--The purpose of this Act is to establish a new 
     Federal regulatory program for activities in wetlands and 
     waters of the United States to--
       (1) assert Federal regulatory jurisdiction over a broad 
     category of specifically identified activities that result in 
     the loss or degradation of wetlands and waters of the United 
     States;
       (2) account for variations in wetlands functions or values 
     in determining the character and extent of regulation of 
     activities occurring in wetlands;
       (3) provide sufficient regulatory incentives for 
     conservation, restoration, or enhancement activities;
       (4) encourage conservation of resources on an ecosystem 
     basis to the fullest extent practicable; and
       (5) balance public and private interests in determining the 
     conditions under which activity in wetlands and waters of the 
     United States may occur.

     SEC. 3. WETLANDS CONSERVATION AND MANAGEMENT.

       Title IV of the Federal Water Pollution Control Act (33 
     U.S.C. 1341 et seq.) is amended by striking section 404 and 
     inserting the following new section:

     ``SEC. 404. PERMITS FOR ACTIVITIES IN WETLANDS OR WATERS OF 
                   THE UNITED STATES.

       ``(a) Definitions.--As used in this section:
       ``(1) Activity in wetlands or waters of the united 
     states.--The term `activity in wetlands or waters of the 
     United States' means--
       ``(A) the discharge of dredged or fill material into waters 
     of the United States, including wetlands at a specific 
     disposal site; or
       ``(B) the draining, channelization, or excavation of 
     wetlands.
       ``(2) Creation.--The term `creation', used with respect to 
     wetlands, means an activity that brings wetlands into 
     existence, at a site where the wetlands did not formerly 
     occur, for the purpose of compensation.
       ``(3) Director.--The term `Director', used without further 
     modification, means the Director of the United States Fish 
     and Wildlife Service.
       ``(4) Enhancement.--The term `enhancement', used with 
     respect to wetlands or waters of the United States, means an 
     activity that increases the value of a function in wetlands 
     or waters of the United States.
       ``(5) Fastlands.--The term `fastlands' means lands located 
     behind permitted manmade structures, such as lands located 
     behind a levee to permit utilization of the lands for 
     commercial, industrial, or residential purposes consistent 
     with each local land use planning requirement.
       ``(6) Growing season.--The term `growing season' means, for 
     each plant hardiness zone, the period between the average 
     date of last frost in spring and the average date of first 
     frost in autumn.
       ``(7) Incidentally created.--The term `incidentally 
     created', used with respect to wetlands, means lands that 
     otherwise meet the standards for delineation of wetlands 
     described in paragraphs (1) and (2) of subsection (g), if a 
     characteristic of the wetlands is the unintended result of a 
     human-induced alteration of hydrology.
       ``(8) Maintenance.--The term `maintenance' means an 
     activity undertaken to ensure continuation of wetlands or the 
     accomplishment of a project goal after a wetlands restoration 
     or wetlands creation project has been technically completed, 
     including water level manipulation and control of any 
     nonnative plant species.
       ``(9) Mitigation banking.--The term `mitigation banking' 
     means wetlands restoration, enhancement, preservation, or 
     creation for the purpose of providing compensation for 
     wetlands loss or degradation.
       ``(10) Normal farming, silviculture, aquaculture, or 
     ranching activity.--The term `normal farming, silviculture, 
     aquaculture, or ranching activity' means a normal ongoing 
     practice identified as a normal ongoing activity by the 
     Secretary of Agriculture (in consultation with the 
     Cooperative State Research, Education, and Extension Service 
     for each State, the land-grant university system, and the 
     agricultural colleges of the State), taking into account any 
     existing practice (as of the date of the identification) and 
     any other practice that may be identified in consultation 
     with the affected industry or community.
       ``(11) Prior converted cropland.--The term `prior converted 
     cropland' means lands that were both manipulated (by drainage 
     or other physical alteration to remove excess water from the 
     land) and cropped before December 23, 1985, to the extent 
     that the lands no longer exhibit significant wetlands 
     functions or values.
       ``(12) Restoration.--The term `restoration', used with 
     respect to wetlands, means an activity undertaken to return 
     wetlands from a disturbed or altered condition with lesser 
     wetlands acreage or fewer wetlands functions or values to a 
     previous condition with greater wetlands acreage or more 
     wetlands functions or values.
       ``(13) Secretary.--The term `Secretary', used without 
     further modification, means the Secretary of the Army.
       ``(14) Temporary.--The term `temporary', used with respect 
     to an impact, means the disturbance or alteration of wetlands 
     or waters of the United States caused by an activity under a 
     circumstance in which, not later than 3 years following the 
     commencement of the activity, the wetlands or waters--
       ``(A) are returned to the condition in existence prior to 
     the commencement of the activity; or
       ``(B) display a condition sufficient to ensure that without 
     further human action the wetlands or waters will return to 
     the condition in existence prior to the commencement of the 
     activity.
       ``(15) Wetlands.--The term `wetlands' means lands that meet 
     the standards for delineation of lands as wetlands set forth 
     in paragraphs (1) and (2) of subsection (g).
       ``(16) Wetlands functions.--The term `wetlands functions' 
     means the roles wetlands serve that are of value, including 
     flood water storage, flood water conveyance, ground water 
     discharge, erosion control, wave attenuation, water quality 
     protection, scenic and aesthetic use, food chain support, 
     fishery support, wetlands plant habitat support, aquatic 
     habitat support, and habitat for wetlands-dependent wildlife 
     support.
       ``(b) Authorized Activities.--
       ``(1) Permit requirement.--No person shall undertake an 
     activity in wetlands or waters of the United States unless 
     the activity is undertaken pursuant to a permit issued by the 
     Secretary, except as provided in paragraph (3).
       ``(2) Issuance of permits.--The Secretary may issue permits 
     authorizing activities in wetlands or waters of the United 
     States in accordance with the requirements of this section.
       ``(3) Activities not requiring permits.--An activity in 
     wetlands or waters of the United States may be undertaken 
     without a permit described in paragraph (2) from the 
     Secretary if the activity is authorized under paragraph (5) 
     or (6) of subsection (e), is exempt under subsection (f), or 
     is otherwise exempt under another provision of this section.
       ``(4) Application.--Any person seeking to undertake an 
     activity in wetlands or waters of the United States shall 
     submit an application to the Secretary identifying the site 
     of the activity. The applicant shall also provide such 
     additional information regarding the proposed activity as may 
     be necessary or appropriate for purposes of determining 
     whether and under what conditions the proposed activity may 
     be permitted to occur.
       ``(c) Wetlands Classification.--
       ``(1) Application.--In submitting an application under 
     subsection (b), any person seeking to undertake an activity 
     in wetlands for which a permit is required under subsection 
     (b) shall request that the Secretary determine, in accordance 
     with paragraph (3), the classification of the wetlands in 
     which the activity is proposed to occur. The applicant shall 
     also provide such information as may be necessary or 
     appropriate for determining the classification of wetlands.
       ``(2) Notice.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     not later than 90 days after the receipt of an application 
     described in paragraph (1) relating to an activity in 
     wetlands, the Secretary shall provide notice to the applicant 
     of the classification of the wetlands that are the subject of 
     the application and shall state in writing the basis for the 
     classification. The classification of the wetlands that are 
     the subject of the application shall be determined by the 
     Secretary in accordance with the requirements for 
     classification of wetlands under paragraphs (3), (4), and 
     (5).
       ``(B) Notice regarding advance classification.--In the case 
     of an application proposing an activity located in wetlands 
     that are the subject of an advance classification under 
     subsection (h), the Secretary shall provide notice to the 
     applicant of the classification within 30 days following the 
     receipt of the application, and shall provide an opportunity 
     for review of the classification under paragraphs (4) and 
     (5).
       ``(3) Classification.--On receipt of an application under 
     this subsection with respect to wetlands, the Secretary 
     shall, in accordance with the standards and procedures 
     established by regulation issued under subsection (i)--
       ``(A) classify as type A wetlands the wetlands that are of 
     critical significance to the long-term conservation of the 
     ecosystem of which the wetlands are a part if--
       ``(i) the wetlands serve critical wetlands functions and 
     values, including the provision of critical habitat for a 
     concentration of avian, aquatic, or wetlands-dependent 
     wildlife;
       ``(ii)(I) the wetlands consist of or are a portion of 10 or 
     more contiguous acres and have an inlet or outlet for relief 
     of water flow; or
       ``(II) the wetlands contain a prairie pothole feature, 
     playa lake, or vernal pool;
       ``(iii) there exists a scarcity within the watershed or 
     aquatic ecosystem of identified ecological functions served 
     by the wetlands such that the use of the wetlands for an 
     activity in wetlands or waters of the United States would 
     seriously jeopardize the availability of the identified 
     functions;
       ``(iv) there is no overriding public interest in the use of 
     the wetlands for purposes other than conservation; and
       ``(v) the nature and scope of the wetlands functions and 
     values of the wetlands are such that minimization and 
     compensation are not feasible means for conserving the 
     wetlands functions and values;
       ``(B) classify as type B wetlands the wetlands that provide 
     habitat for a significant population of avian, aquatic, or 
     wetlands-dependent wildlife, or provide other significant 
     wetlands functions and values, including significant 
     enhancement or protection of water 
     [[Page S2128]] quality in waters of the United States, or 
     significant natural flood control; and
       ``(C) classify as type C wetlands the wetlands that--
       ``(i) serve limited wetlands functions and values;
       ``(ii) serve marginal wetlands functions and values but 
     that exist in such abundance that regulation of activities in 
     the wetlands is not necessary for conserving important 
     wetlands functions and values;
       ``(iii) are prior converted cropland;
       ``(iv) are fastlands; or
       ``(v) are wetlands within industrial complexes or other 
     intensely developed areas that do not serve significant 
     wetlands functions and values as a result of the location of 
     the wetlands.
       ``(4) De novo determination.--Not later than 30 days after 
     receipt of notice of an advance classification by the 
     Secretary under paragraph (2)(B), an applicant may request 
     that the Secretary make a de novo determination of the 
     classification of wetlands that are the subject of the 
     notice. The de novo determination shall be made by the 
     Secretary in consultation with the Director. The Secretary 
     may sustain the advance classification made by the Director. 
     The Secretary may modify the classification if the Secretary 
     determines, on examination of all relevant information 
     submitted by the applicant or otherwise available to the 
     Secretary (including, if appropriate, an on-the-ground 
     examination) that--
       ``(A) the lands involved do not meet the standards for 
     delineating wetlands set forth in paragraph (1) or (2) of 
     subsection (g);
       ``(B) the weight of relevant information does not support 
     the determination of the advance classification with respect 
     to the specific wetlands involved;
       ``(C) the factual basis for the advance classification is 
     no longer valid; or
       ``(D) the limitations on uses of the specific wetlands 
     involved that would be imposed by the Secretary under this 
     section would effectively preclude reasonable economic use of 
     the wetlands.
       ``(5) Appeals.--In the event that the Secretary delegates 
     authority to determine the classification of wetlands under 
     paragraphs (3) and (4), the Secretary shall, by regulation, 
     provide for a right of appeal to the Secretary or the 
     designee of the Secretary of the classification of wetlands 
     under paragraph (3) or the de novo determination of an 
     advance classification in accordance with paragraph (4).
       ``(6) Maximum percent of lands classified as type a 
     wetlands.--No more than 20 percent of any county, parish, or 
     borough shall be classified as type A wetlands. For purposes 
     of this paragraph, a county, parish, or borough includes any 
     land in the county, parish, or borough that is owned by the 
     United States or by a State, including land in a unit of the 
     National Wildlife Refuge System, land in the National Park 
     System, and land subject to a conservation easement.
       ``(d) Compensation for Landowners.--
       ``(1) Election to seek compensation.--Any person (including 
     a State or political subdivision of a State) who owns an 
     interest in lands that have been classified as type A 
     wetlands by the Secretary under subsection (c)(3)(A) or by 
     the Director under subsection (h) may, not later than 2 years 
     after receipt of actual notice of the classification (or not 
     later than 2 years after a de novo determination of the 
     classification under subsection (c)(4)), notify the Secretary 
     and the Director that the person is electing to seek 
     compensation for the fair market value of the interest in 
     lands at the time of the classification, in accordance with 
     the requirements of this section. The fair market value may 
     include reasonable attorney's fees and shall be calculated 
     without regard to any diminution in value resulting from the 
     applicability of this section.
       ``(2) Negotiations.--Immediately on receipt by the 
     Secretary and the Director of notification of election to 
     seek compensation under paragraph (1), the Director shall 
     enter into good faith negotiations with the owner for 
     purposes of determining the value of the interest in lands 
     that have been classified as type A wetlands. Not later than 
     90 days after receipt of the notification of election by the 
     owner under paragraph (1), the Director shall make an offer 
     of reasonable compensation to the owner.
       ``(3) Action of owner.--
       ``(A) In general.--Not later than 6 years after the date 
     the Director makes an offer of compensation under paragraph 
     (2), the owner shall provide notice that the owner, in the 
     discretion of the owner--
       ``(i) accepts the offer of compensation;
       ``(ii) has filed a claim for determination of the value of 
     the compensation described in paragraph (1) with the United 
     States Court of Federal Claims; or
       ``(iii) advises the Director and the Secretary that the 
     owner elects to retain title to the wetlands and elects not 
     to receive compensation for the taking of land under this 
     subsection.
       ``(B) Failure to provide notice.--Failure to provide notice 
     in accordance with this paragraph shall be deemed an election 
     to retain title to the wetlands and not to receive 
     compensation under this subsection.
       ``(4) Effect of acceptance of offer or filing of claim.--On 
     acceptance of an offer of compensation, or the filing of a 
     claim for determination of the value of compensation, under 
     paragraph (3), the classification as type A wetlands of the 
     wetlands that are the subject of the offer or claim shall be 
     binding on the owner and any successor in interest, and the 
     title to the lands shall pass to the United States. The 
     classification of the lands as type A wetlands under this 
     paragraph shall constitute a taking by the United States of 
     the interests in the lands of the owner and shall be 
     compensable under this subsection.
       ``(5) Extent of taking.--A taking under this subsection 
     shall be deemed to be a taking of surface interests in lands 
     only, with the following exceptions:
       ``(A) Exploration or development not compatible with 
     conservation.--If the Secretary determines that the 
     exploration for or development of oil and gas or mineral 
     interests is not compatible with conservation of the surface 
     interests in lands that have been classified as type A 
     wetlands located above the oil and gas or mineral interests 
     (or located adjacent to the oil and gas or mineral interests 
     where the adjacent lands are necessary to provide reasonable 
     access to the interests), the Secretary may classify the oil 
     and gas or mineral interests as type A wetlands and notify 
     the owner of the interests that the owner may elect to 
     receive compensation for the interests under paragraph (1).
       ``(B) Failure to provide reasonable access.--The failure of 
     the Secretary to provide reasonable access to oil and gas or 
     mineral interests located beneath or adjacent to surface 
     interests of type A wetlands shall be deemed a taking of the 
     oil and gas or mineral interests. The Secretary shall 
     classify the oil and gas or mineral interests as type A 
     wetlands and notify the owner of the interests that the owner 
     may elect to receive compensation for the interests under 
     paragraph (1).
       ``(6) Jurisdiction.--The United States Court of Federal 
     Claims shall have jurisdiction--
       ``(A) to determine the value of interests taken and the 
     fair compensation required under this subsection and the 
     Constitution;
       ``(B) in the case of oil and gas or mineral interests, to 
     require the United States to provide reasonable access in, 
     across, or through lands that may be the subject of a taking 
     under this subsection solely for the purpose of undertaking 
     activity necessary to determine the value of the interests 
     taken; and
       ``(C) to provide other equitable remedies determined to be 
     appropriate.
       ``(7) Execution of judgment.--Any judgment rendered under 
     paragraph (6) may be executed, at the election of the owner. 
     Any owner seeking to execute such a judgment shall execute 
     the judgment not later than 2 years after the date the 
     judgment is rendered. The owner may, prior to the execution 
     of the judgment, enter into an agreement with the United 
     States for satisfaction of the judgment through a crediting 
     of a tax benefit, acquisition of an interest in oil and gas 
     or minerals, an exchange of interests in lands with the 
     United States, or other means of compensation.
       ``(8) Construction.--
       ``(A) Availability of other remedies.--The remedy for a 
     taking of an interest in lands under this subsection shall 
     not be construed to preempt, alter, or limit the availability 
     of other remedies for the taking of the interest in lands 
     under the Constitution or under State law, including the 
     taking of rights to the use of water allocated under State 
     law or the taking of the interest in lands by denial of a 
     permit under this section.
       ``(B) Taking by denial of a permit.--Any award of 
     compensation for the taking of an interest in lands by denial 
     of a permit under this section shall be based on the fair 
     market value of the interest in lands at the time of the 
     taking. The fair market value may include reasonable 
     attorney's fees and shall be calculated without regard to any 
     diminution in value resulting from the applicability of this 
     section.
       ``(9) Management.--Interests in lands acquired by the 
     United States under this subsection shall be managed by the 
     United States Fish and Wildlife Service as a part of the 
     National Wildlife Refuge System unless the Secretary of the 
     Interior, acting through the Director, makes a determination 
     otherwise, or unless otherwise provided by law.
       ``(10) Requirements governing use of water.--No action 
     taken under this subsection shall be construed to alter or 
     supersede requirements governing use of water applicable 
     under State law.
       ``(e) Requirements Applicable to Permitted Activity.--
       ``(1) Issuance or denial of permits.--Following the 
     provision of notice of wetlands classification pursuant to 
     subsection (c) if applicable, and after compliance with the 
     requirements of subsection (d) if applicable, the Secretary 
     may issue or deny a permit for authorization to undertake an 
     activity in wetlands or waters of the United States, in 
     accordance with the requirements of this subsection.
       ``(2) Type a wetlands.--
       ``(A) In general.--The Secretary shall deny a permit 
     authorizing an activity in type A wetlands unless the 
     Secretary determines that--
       ``(i) the activity can be undertaken with minimal 
     alteration or surface disturbance of the wetlands; or
       ``(ii) the proposed use of the land, taking into account 
     all proposed mitigation, will result in overall environmental 
     benefits, including the prevention of wetlands loss or 
     degradation.
     [[Page S2129]]   ``(B) Terms and conditions concerning 
     mitigation.--Any permit issued authorizing activities in type 
     A wetlands may contain such terms and conditions concerning 
     mitigation (including terms and conditions applicable under 
     paragraph (3) for type B wetlands) as the Secretary 
     determines to be appropriate to prevent the unacceptable loss 
     or degradation of type A wetlands.
       ``(3) Type b wetlands.--
       ``(A) Considerations.--The Secretary may issue a permit 
     authorizing an activity in type B wetlands subject to such 
     terms and conditions as the Secretary finds are necessary to 
     ensure that the watershed or aquatic ecosystem of which the 
     wetlands are a part does not suffer significant loss or 
     degradation of wetlands functions and values. In determining 
     whether specific terms and conditions are necessary to avoid 
     a significant loss or degradation of wetlands functions and 
     values, the Secretary shall consider the following:
       ``(i) The quality and quantity of ecologically significant 
     functions and values served by the areas to be affected.
       ``(ii) The opportunities to reduce impacts through cost-
     effective design to avoid or minimize use of wetlands.
       ``(iii) The costs of mitigation requirements and the 
     social, recreational, and economic benefits associated with 
     the proposed activity, including local, regional, or national 
     needs for improved or expanded infrastructure.
       ``(iv) The ability of the applicant for the permit to 
     mitigate wetlands loss or degradation as measured by wetlands 
     functions and values.
       ``(v) The environmental benefit, measured by wetlands 
     functions and values, that may occur through mitigation 
     efforts, including restoration, preservation, enhancement, or 
     creation of wetlands functions and values.
       ``(vi) The marginal impact of the proposed activity on the 
     watershed or aquatic ecosystem of which the wetlands are a 
     part.
       ``(B) Alternative site analyses and project purposes.--In 
     considering applications for permits with respect to 
     activities on type B wetlands, the Secretary may require 
     alternative site analyses for individual permit applications 
     involving the alteration or permanent surface disturbance of 
     10 or more contiguous acres of wetlands. In the case of such 
     an application, there shall be a rebuttable presumption that 
     the project purpose for the activities as defined by the 
     applicant shall be binding on the Secretary. In the case of 
     such an application, the definition of project purpose for 
     the activities sponsored by a public agency shall be binding 
     on the Secretary, subject to the authority of the Secretary 
     to impose mitigation requirements to minimize impacts on 
     wetlands functions and values, including cost-effective 
     redesign of the project to avoid wetlands.
       ``(C) Requirements for mitigation.--Except as otherwise 
     provided in this section, requirements for mitigation shall 
     be imposed if the Secretary finds that activities undertaken 
     under this section will result in the loss or degradation of 
     type B wetlands functions and values where the loss or 
     degradation is not an incidental or a temporary impact. When 
     determining the mitigation requirements in any specific case, 
     the Secretary shall take into consideration the 
     characteristics of the wetlands affected, the character of 
     the impact on ecological functions, whether any adverse 
     effects on wetlands are of a permanent or temporary nature, 
     and the cost-effectiveness of the mitigation and shall seek 
     to minimize the costs of the mitigation.
       ``(D) Regulations governing requirements for mitigation.--
     The Secretary shall issue regulations under subsection (i) 
     governing requirements for compensatory mitigation, for 
     activities occurring in type B wetlands, that allow for--
       ``(i) minimization of impacts through project design for 
     the activities, including avoidance of specific wetlands 
     impacts where economically practicable and consistent with 
     the project purpose, provisions for compensatory mitigation, 
     if any, and other terms and conditions necessary and 
     appropriate in the public interest;
       ``(ii) preservation or donation of type A wetlands or type 
     B wetlands (if title has not been acquired by the United 
     States and no compensation for the taking of the wetlands has 
     been provided) as mitigation for activities that result in 
     loss or degradation of wetlands;
       ``(iii) enhancement or restoration of lost or degraded 
     wetlands as compensation for wetlands lost or degraded 
     through permitted activity;
       ``(iv) compensation through contribution to a mitigation 
     banking program established for a State pursuant to 
     subparagraph (F);
       ``(v) offsite compensatory mitigation with respect to an 
     activity in a wetlands, if the mitigation contributes to the 
     restoration, enhancement, or creation of significant wetlands 
     functions and values on a watershed or ecosystem-wide basis 
     and is balanced with the effects that an activity proposed to 
     be carried out under a permit will have on the specific site 
     (except that offsite compensatory mitigation, if any, shall 
     be required only in the State in which the proposed activity 
     is to occur, and shall, to the extent practicable, be within 
     the watershed or aquatic ecosystem within which the proposed 
     activity is to occur, unless otherwise consistent with a 
     State wetlands management plan);
       ``(vi) contribution of in-kind value acceptable to the 
     Secretary and otherwise authorized by law;
       ``(vii) in areas subject to wetlands loss or degradation, 
     construction of coastal protection and enhancement projects;
       ``(viii) contribution of resources of more than 1 permit 
     recipient toward a single mitigation project; and
       ``(ix) other mitigation measures determined by the 
     Secretary to be appropriate, in the public interest, and 
     consistent with the requirements and purposes of this Act.
       ``(E) Compensatory mitigation.--Notwithstanding 
     subparagraph (C), the Secretary may determine not to impose 
     requirements for compensatory mitigation, with respect to an 
     activity in a wetlands, if the Secretary finds that--
       ``(i) the adverse impacts of an activity proposed to be 
     carried out under a permit are limited;
       ``(ii) the failure to impose compensatory mitigation 
     requirements is compatible with maintaining wetlands 
     functions and values and no practicable and reasonable means 
     of compensatory mitigation is available;
       ``(iii) there is an abundance of similar significant 
     wetlands functions and values in or near the area in which 
     the proposed activity is to occur that will continue to serve 
     the functions and values lost or degraded as a result of the 
     activity, taking into account the impacts of the activity and 
     the cumulative impacts of similar activity in the area;
       ``(iv) the temporary character of the impacts and the use 
     of minimization techniques make compensatory mitigation 
     unnecessary to protect significant wetlands functions and 
     values; or
       ``(v) a waiver from requirements for compensatory 
     mitigation is necessary to prevent special hardship.
       ``(F) Mitigation banking program.--
       ``(i) Establishment.--The Secretary, in consultation with 
     the Director, shall establish a mitigation banking program in 
     each State. The mitigation banking program shall be developed 
     in consultation with the Director and the Governor of the 
     State in which the wetlands covered by the mitigation banking 
     program is located. After approval of the program by the 
     Secretary, the Secretary may require contributions to the 
     program as a means for ensuring compensation for loss and 
     degradation of wetlands functions and values in the State in 
     accordance with the requirements of this paragraph.
       ``(ii) Primary objective.--The primary objective of the 
     programs shall be to provide for the restoration, 
     enhancement, or, where feasible, creation of ecologically 
     significant wetlands on an ecosystem basis.
       ``(iii) Functions and values.--Each program described in 
     clause (i) shall--

       ``(I) provide a preference for large-scale projects for 
     conservation, enhancement, or restoration of wetlands, unless 
     the Secretary (or the Governor of a State that is 
     administering a State permit program under subsection (l)) 
     determines that a smaller project will contribute 
     substantially to the conservation, enhancement, or 
     restoration of ecologically significant wetlands functions 
     and values or that the restoration of indigenous wetlands 
     resources cannot be accomplished through large-scale 
     projects;
       ``(II) authorize mitigation banks sponsored by private 
     entities or public entities;
       ``(III) provide for the crediting to a State or privately 
     maintained mitigation bank of contributions in land or cash, 
     or in-kind contributions, so that persons unable to sponsor 
     specific mitigation projects can contribute to the mitigation 
     bank;
       ``(IV) have sufficient requirements to ensure completion, 
     maintenance, and supervision of wetlands projects for at 
     least a 25-year period, including requirements for bonds or 
     other evidence of financial responsibility;
       ``(V) authorize the imposition of bonding requirements on 
     private entities operating the banks;
       ``(VI) limit activities in or on wetlands that are part of 
     a mitigation bank to uses that are consistent with 
     maintaining or gaining significant wetlands functions and 
     values; and
       ``(VII) authorize a credit to be provided on an acre-for-
     acre or value-for-value basis for type A and B wetlands that 
     are permanently protected in national conservation units in 
     any State that has converted less than 10 percent of the 
     historic wetlands base of the State to other uses.

       ``(4) Action on applications.--
       ``(A) Timing.--In the case of any application for 
     authorization to undertake activities in wetlands or waters 
     of the United States that are not type C wetlands, final 
     action by the Secretary shall occur not later than 180 days 
     after the date the application is filed, unless--
       ``(i) the Secretary and the applicant agree that the final 
     action shall occur within a shorter or longer period of time;
       ``(ii) the Secretary determines that an additional, 
     specified period of time is necessary to permit the Secretary 
     to comply with other applicable Federal law; or
       ``(iii) the Secretary, not later than 15 days after the 
     date the application is received, notifies the applicant that 
     the application does not contain all information necessary to 
     allow the Secretary to consider the application and 
     identifies any necessary additional information, in which 
     case the provisions of subparagraph (B) shall apply.
       ``(B) Additional information.--On the receipt of a request 
     for additional information under subparagraph (A)(iii), the 
     applicant shall supply the additional information and shall 
     provide notice to the Secretary that 
     [[Page S2130]] the application contains all requested 
     additional information and is therefore complete. The 
     Secretary may--
       ``(i) not later than 30 days after the receipt of notice 
     from the applicant that the application is complete, 
     determine that the application does not contain all requested 
     additional information and, on the basis of the 
     determination, deny the application without prejudice with 
     respect to resubmission; or
       ``(ii) not later than 180 days after the receipt of notice 
     from the applicant that the application is complete, review 
     the application and take final action on the application.
       ``(C) Failure to act on application.--If the Secretary 
     fails to take final action on an application as provided in 
     subparagraph (B)(ii), on the 180th day described in the 
     subparagraph a permit shall be presumed to be granted 
     authorizing the activities proposed in the application under 
     such terms and conditions as are stated in the completed 
     application.
       ``(D) Appeals.--Not later than 60 days after the date of a 
     decision of the Secretary denying a permit requested in an 
     application under this paragraph, the applicant may appeal 
     the decision to the Secretary of Defense or the designee of 
     the Secretary of Defense. On such an appeal, the Secretary of 
     Defense or the designee shall uphold the decision of the 
     Secretary of the Army if the Secretary of the Army proves by 
     clear and convincing evidence that granting the permit 
     requested in the application would be inconsistent with this 
     section.
       ``(5) Type c wetlands.--
       ``(A) Permit not required.--Activities in wetlands that 
     have been classified as type C wetlands under subsection 
     (c)(3)(C) by the Secretary or under subsection (h) by the 
     Director may be undertaken without a permit referred to in 
     subsection (b).
       ``(B) Reporting requirements.--The Secretary may establish 
     requirements for reporting activities undertaken in type C 
     wetlands.
       ``(C) Alternative site analysis and mitigation not 
     required.--No requirements for alternative site analyses or 
     mitigation of environmental impacts shall apply for 
     activities undertaken in type C wetlands.
       ``(6) National, regional, or statewide general permits.--
       ``(A) In general.--The Secretary may, in accordance with a 
     regulation issued under subsection (i), issue general permits 
     on a national, regional, or statewide basis for any category 
     of activities in wetlands or waters of the United States for 
     which a permit would otherwise be required under subsection 
     (b), if the Secretary determines that the activities in the 
     category are similar in nature and that the activities, 
     whether performed separately or cumulatively, will not result 
     in a significant loss or degradation of ecologically 
     significant wetlands functions and values or of ecologically 
     significant waters of the United States. Permits issued under 
     this paragraph shall include procedures for expedited review 
     of eligibility for the permits (if the review is required) 
     and may include requirements for reporting and mitigation. 
     The Secretary may impose requirements for compensatory 
     mitigation for the permits if necessary to avoid or minimize 
     the significant loss or degradation of significant wetlands 
     functions and values where the loss or degradation is not an 
     incidental or a temporary impact.
       ``(B) Existing general permits.--General permits issued on 
     a national or regional basis for activities in the wetlands 
     or waters of the United States and in effect on the date of 
     enactment of the Comprehensive Wetlands Conservation and 
     Management Act of 1995 shall remain in effect until otherwise 
     modified by the Secretary.
       ``(f) Activities Not Requiring Permit.--
       ``(1) Activities.--Except as provided in paragraph (3), 
     activities in wetlands or waters of the United States shall 
     be exempt from the requirements of this section and shall not 
     be prohibited by or otherwise subject to regulation under 
     this section or section 301 or 402 (except to the extent the 
     sections relate to compliance with effluent standards or 
     prohibitions under section 307), if the activities--
       ``(A) result from normal farming, silviculture, 
     aquaculture, or ranching activities and practices, such as 
     plowing, seeding, cultivating, minor drainage, burning of 
     vegetation in connection with the activities and practices, 
     harvesting for the production of food, fiber, or forest 
     products, or upland soil and water conservation practices;
       ``(B) are for the purpose of maintenance, including 
     emergency reconstruction of recently damaged parts of 
     currently (as of the date of the maintenance) serviceable 
     structures, such as dikes, dams, levees, water control 
     structures, groins, riprap, breakwaters, causeways, and 
     bridge abutments or approaches, and transportation 
     structures;
       ``(C) are for the purpose of construction or maintenance of 
     farm, stock, or aquaculture ponds or irrigation canals and 
     ditches, or the maintenance of drainage ditches;
       ``(D) are for the purpose of construction of temporary 
     sedimentation basins on a construction site that does not 
     include placement of fill material into navigable waters;
       ``(E) are for the purpose of construction or maintenance of 
     farm roads or forest roads, or temporary roads for moving 
     mining equipment, if the roads are constructed and 
     maintained, in accordance with best management practices, to 
     ensure that flow and circulation patterns and chemical and 
     biological characteristics of the waters involved are not 
     impaired, that the reach of the waters is not reduced, and 
     that any adverse effect on the aquatic environment will be 
     otherwise minimized;
       ``(F) are undertaken on farmed wetlands, except that any 
     change in use of the wetlands for the purpose of undertaking 
     activities that are not exempt from regulation under this 
     subsection shall be subject to this section;
       ``(G) result from any activity with respect to which a 
     State has an approved program for which an application was 
     submitted under section 208(b)(4) that meets the requirements 
     of subparagraphs (B) and (C) of the section;
       ``(H) are consistent with a State or local land management 
     plan submitted to the Secretary and approved pursuant to 
     paragraph (2);
       ``(I) are undertaken in connection with a marsh management 
     and conservation program in a coastal parish in Louisiana if 
     the program has been approved by the Governor of the State or 
     the designee of the Governor;
       ``(J) are undertaken on lands or involve activities within 
     a coastal zone of a State that are excluded from regulation 
     under the State coastal zone management program approved 
     under the Coastal Zone Management Act of 1972 (16 U.S.C. 1451 
     et seq.);
       ``(K) are undertaken in incidentally created wetlands, 
     unless the incidentally created wetlands have exhibited 
     wetlands functions and values for more than 5 years (in which 
     case activities undertaken in the wetlands shall be subject 
     to the requirements of this section);
       ``(L) are part of expanding an ongoing farming operation 
     involving the water dependent, obligate crop, Vaccinium 
     macrocarpin, if--
       ``(i) the expansion does not occur in type A wetlands;
       ``(ii) the expansion does not result in the conversion of 
     more than 10 acres of wetlands or waters of the United States 
     per operator per year; and
       ``(iii) the converted wetlands or waters of the United 
     States (other than in locations where dikes and other 
     necessary facilities are placed) remain as wetlands or other 
     waters of the United States; or
       ``(M) result from aggregate or clay mining activities in 
     wetlands or waters of the United States conducted pursuant to 
     a State or Federal permit that requires the reclamation of 
     the wetlands or waters of the United States, if the 
     reclamation meets conditions for reclamation, including 
     conditions that--
       ``(i) the reclamation shall be completed within 5 years of 
     the commencement of activities in the wetlands or waters; and
       ``(ii) on completion of the reclamation, the wetlands or 
     waters shall support functions (including wetlands functions, 
     as appropriate) and values equivalent to the functions and 
     values supported by the wetlands or waters at the time of 
     commencement of the activities.
       ``(2) State and local land management plans.--
       ``(A) Development and submission of plan.--Any State or 
     political subdivision of a State acting pursuant to State 
     authorization may develop a land management plan with respect 
     to lands that include wetlands. A State or local government 
     agency, acting on behalf of the State or political 
     subdivision, may submit the plan to the Secretary for review 
     and approval. The Secretary shall, not later than 60 days 
     after receipt of the plan, notify a designated State or local 
     official in writing of approval or disapproval of the plan.
       ``(B) Approval.--The Secretary shall approve any plan 
     described in subparagraph (A) that is consistent with the 
     objectives of this section. No person shall be entitled to 
     judicial review of the decision of the Secretary to approve 
     or disapprove a land management plan under this paragraph.
       ``(C) Construction.--Nothing in this paragraph shall be 
     construed to alter, limit, or supersede the authority of a 
     State or political subdivision of a State to establish a land 
     management plan for purposes other than the objectives of 
     this subsection.
       ``(g) Standards for Delineating Wetlands.--
       ``(1) In general.--
       ``(A) Establishment of standards.--The Secretary shall 
     establish standards, by regulation issued under subsection 
     (i), that shall govern the delineation of lands as wetlands 
     for purposes of this section.
       ``(B) Consultation.--Before establishing standards as 
     described in subparagraph (A), the Secretary shall consult 
     with the heads of other departments and agencies of the 
     United States, including the Director, the Administrator of 
     the Environmental Protection Agency, and the Chief of the 
     Natural Resources Conservation Service of the Department of 
     Agriculture.
       ``(C) Standards binding on federal agencies.--The standards 
     established as described in subparagraph (A) shall bind all 
     Federal agencies in connection with the administration or 
     implementation of this section.
       ``(2) Delineation of wetlands.--
       ``(A) In general.--The standards established as described 
     in paragraph (1)(A) shall be issued in accordance with this 
     paragraph, and any decision of the Secretary, the Director, 
     or any other Federal officer or employee, made in connection 
     with the administration of the standards, shall be made in 
     accordance with this paragraph.
       ``(B) Requirements for delineation of wetlands.--For 
     purposes of this section, 
     [[Page S2131]] lands shall be delineated as wetlands only 
     if--
       ``(i) the lands are wetlands, as defined in section 502;
       ``(ii) the Secretary finds clear evidence of wetlands 
     hydrology, hydrophytic vegetation, and hydric soil during the 
     period in which the delineation (to be conducted during the 
     growing season unless otherwise requested by the applicant) 
     is made;
       ``(iii) the delineation does not result in the 
     classification of vegetation as hydrophytic if the vegetation 
     is equally adapted to dry or wet soil conditions or is more 
     typically adapted to dry soil conditions than to wet soil 
     conditions;
       ``(iv) the Secretary finds some obligate wetlands 
     vegetation present during the period of delineation (except 
     that if the vegetation is removed for the purpose of evading 
     a requirement of this section, this clause shall not apply);
       ``(v) the delineation does not result in the conclusion 
     that conditions of wetlands hydrology are present, unless the 
     Secretary finds water present at the surface of the lands for 
     at least 21 consecutive days during the growing season (or 
     period requested by the applicant) in which the delineation 
     is made and for 21 consecutive days during the growing 
     seasons in a majority of the years for which records are 
     available; and
       ``(vi) the lands were not temporarily or incidentally 
     created as a result of adjacent development activity.
       ``(C) Normal circumstances.--For the purpose of delineating 
     wetlands under this section, a normal circumstance shall be 
     determined on the basis of the factual circumstance in 
     existence on the date a classification is made under 
     subsection (h), or on the date of application under 
     subsection (b), whichever is applicable, if the circumstance 
     has not been altered by an activity prohibited under this 
     section.
       ``(h) United States Fish and Wildlife Service Wetlands 
     Advance Identification and Classification Project.--
       ``(1) In general.--The Director, after receiving the 
     concurrence of the Chief of the Natural Resources 
     Conservation Service, shall conduct a project to identify and 
     classify wetlands in the United States. The Director shall 
     complete the project not later than 10 years after the date 
     of enactment of the Comprehensive Wetlands Conservation and 
     Management Act of 1995.
       ``(2) Standards for classifying wetlands.--In conducting 
     the project, the Director shall identify and classify 
     wetlands in accordance with the standards for delineation of 
     wetlands established by the Secretary as described in 
     paragraphs (1) and (2) of subsection (g).
       ``(3) Notice and hearing.--Before completion of 
     identification and classification of wetlands under paragraph 
     (1), the Director shall provide notice and an opportunity for 
     a public hearing in each county, parish, or borough that 
     includes lands subject to identification and classification.
       ``(4) Publication.--Promptly after completion of 
     identification and classification of wetlands under paragraph 
     (1), the Director shall publish information concerning the 
     identification and classification in the Federal Register and 
     in publications of wide circulation and take other steps 
     reasonably necessary to ensure that information concerning 
     the identification and classification is made available to 
     the public.
       ``(5) Recording.--The Director shall, to the fullest extent 
     practicable, record any classification of lands as wetlands 
     under paragraph (1) on the property records in the county, 
     parish, or borough in which the wetlands are located.
       ``(6) Report to congress.--Not later than 2 years after the 
     date of enactment of the Comprehensive Wetlands Conservation 
     and Management Act of 1995, and annually thereafter, the 
     Secretary of the Interior shall prepare and submit to the 
     appropriate committees of Congress a report on implementation 
     of the project conducted under this subsection.
       ``(i) Administrative Provisions.--
       ``(1) Promulgation of final regulations.--Not later than 1 
     year after the date of enactment of the Comprehensive 
     Wetlands Conservation and Management Act of 1995, the 
     Secretary shall, after notice and opportunity for public 
     comment, issue 1 or more final regulations for the issuance 
     of permits under this section. The regulations shall--
       ``(A) establish standards and procedures for--
       ``(i) the classification and delineation of wetlands, and 
     procedures for administrative review of the classification or 
     delineation of wetlands;
       ``(ii) the review of State or local land management plans 
     and State programs for the regulation of wetlands and waters 
     of the United States;
       ``(iii) the issuance of general permits on a national, 
     regional, or statewide basis under this section;
       ``(iv) the issuance of individual permit applications under 
     this section;
       ``(v) enforcement of this section;
       ``(vi) administrative appeal of an action by the Secretary 
     denying an application for a permit referred to in subsection 
     (b), or issuing a permit referred to in subsection (b) 
     subject to 1 or more conditions; and
       ``(vii) any other related area that the Secretary 
     determines necessary or appropriate to implement the 
     requirements of this section; and
       ``(B) establish requirements governing the establishment of 
     a mitigation bank.
       ``(2) Judicial review of a final regulation.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     any judicial review of a final regulation issued pursuant to 
     paragraph (1), and any denial by the Secretary of a petition 
     for the issuance or repeal of a regulation under paragraph 
     (1), shall be conducted in accordance with sections 701 
     through 706 of title 5, United States Code.
       ``(B) Jurisdiction of court.--
       ``(i) Petitions for review.--A petition for review of the 
     action of the Secretary in issuing a regulation under 
     paragraph (1), or denying a petition for the issuance or 
     repeal of a regulation under paragraph (1), may be filed only 
     in the United States Court of Appeals for the District of 
     Columbia. The petition for review may only be filed--

       ``(I) not later than 90 days after the date of issuance or 
     denial; or
       ``(II) if the petition for review is based solely on 
     grounds arising after the date of issuance or denial, not 
     later than 90 days after the date the grounds arise.

       ``(ii) Prohibition on review during enforcement 
     proceedings.--Action by the Secretary with respect to which 
     review could have been obtained under this paragraph shall 
     not be subject to judicial review in civil or criminal 
     proceedings for enforcement.
       ``(3) Interim regulations.--
       ``(A) Promulgation of interim regulations.--Not later than 
     90 days after the date of enactment of the Comprehensive 
     Wetlands Conservation and Management Act of 1995, the 
     Secretary shall issue interim regulations consistent with 
     paragraph (1). The interim regulations shall become effective 
     on the date of issuance. Notice of the interim regulations 
     shall be published in the Federal Register. Except as 
     provided in subparagraph (B), the interim regulations shall 
     apply until the issuance of final regulations under paragraph 
     (1).
       ``(B) Waiver of interim regulations.--The Secretary shall 
     provide a procedure for waiving a provision of an interim 
     regulation--
       ``(i) in a case in which the applicant demonstrates special 
     hardship, inequity, or unfair distribution of burdens; or
       ``(ii) in a case in which the Secretary determines that a 
     waiver under this subparagraph would advance the purposes of 
     this section.
       ``(4) Authority to carry out regulations.--Except as 
     otherwise expressly provided in this section, the Secretary 
     shall be responsible for carrying out this section. The 
     Secretary or any other Federal officer or employee in whom 
     any function under this section is vested or to whom any such 
     function is delegated may perform any and all acts (including 
     appropriate enforcement activity), and may prescribe, issue, 
     amend, or rescind any regulation or order the officer or 
     employee may find necessary or appropriate to prescribe, 
     issue, amend, or rescind under this section, subject to the 
     requirements of this section.
       ``(j) Violations.--
       ``(1) Enforcement by secretary.--Whenever the Secretary 
     finds, on the basis of reliable and substantial information 
     and after reasonable inquiry, that a person is or may be in 
     violation of this section or a condition or limitation set 
     forth in a permit issued by the Secretary under subsection 
     (b), the Secretary shall--
       ``(A) issue an order requiring the person to comply with 
     this section or with the condition or limitation in the 
     permit; or
       ``(B) bring a civil action in accordance with paragraph 
     (3).
       ``(2) Orders issued by secretary.--
       ``(A) Copy of order sent to states.--A copy of each order 
     issued under paragraph (1) shall be sent immediately by the 
     Secretary to the Governor of the State in which the violation 
     occurred and the Governor of any other affected State.
       ``(B) Service.--Except as provided in subparagraph (C), any 
     order issued under paragraph (1) shall--
       ``(i) be issued by personal service to the appropriate 
     person or corporate officer;
       ``(ii) state with reasonable specificity the nature of the 
     asserted violation; and
       ``(iii) specify a period for compliance, not to exceed 30 
     days, that the Secretary determines is reasonable (taking 
     into account the seriousness of the asserted violation and 
     any good faith efforts to comply with applicable 
     requirements).
       ``(C) Time limit on order and estoppel.--
       ``(i) In general.--Not later than 150 days after the date 
     of service under subparagraph (B), the Secretary shall--

       ``(I) take such action as is necessary for the prosecution 
     of a civil action in accordance with paragraph (3); or
       ``(II) rescind the order issued under paragraph (1) and be 
     estopped from any further enforcement proceeding for the same 
     asserted violation.

       ``(ii) Disputed orders.--If a person receiving service 
     under subparagraph (B) disputes the finding described in 
     paragraph (1) and notifies the Secretary in writing not later 
     than 90 days after the service, the Secretary shall, not 
     later than 60 days after receiving the notification of the 
     dispute--

       ``(I) take such action as is necessary for the prosecution 
     of a civil action in accordance with paragraph (3); or
       ``(II) rescind the order and be estopped from any further 
     enforcement proceeding for the same asserted violation.
     [[Page S2132]]   ``(3) Civil actions.--The Secretary may 
     commence a civil action for appropriate relief, including a 
     permanent or temporary injunction, for any violation for 
     which the Secretary may issue an order under paragraph (1). 
     An action commenced under this paragraph may be brought in 
     the district court of the United States for the district in 
     which the defendant is located or resides or is doing 
     business, and the court shall have jurisdiction to restrain 
     the violation and to require compliance. Notice of the 
     commencement of the action shall be given immediately to the 
     Governor of any affected State.
       ``(4) Penalties.--
       ``(A) In general.--Any person who violates this section or 
     a condition or limitation in a permit issued by the Secretary 
     under subsection (b), or who violates an order issued by the 
     Secretary under paragraph (1), shall be subject to a civil 
     penalty not to exceed $25,000 per day for each violation 
     involved, commencing on the day following expiration of the 
     period allowed for compliance.
       ``(B) Determination of amount.--The amount of the penalty 
     imposed per day shall be in proportion to the scale or scope 
     of the project that results in the violation. In determining 
     the amount of a civil penalty under this paragraph, the 
     Secretary or the court, as appropriate, shall consider the 
     seriousness of the violation, the economic benefit (if any) 
     resulting from the violation, any history of a previous 
     violation, any good-faith effort to comply with applicable 
     requirements, the economic impact of the penalty on the 
     violator, and any other matter that justice may require.
       ``(k) State Authority To Control Discharges.--Nothing in 
     this section shall affect or impair the right of a State or 
     interstate agency to control activity, including activity of 
     a Federal agency, in waters of the United States within the 
     jurisdiction of the State or interstate agency. Each Federal 
     agency shall comply with a State or interstate requirement, 
     whether substantive or procedural, to the same extent that a 
     person is subject to the requirement. This section shall not 
     affect or impair the authority of the Secretary to maintain 
     navigation.
       ``(l) State Regulation of Wetlands and Waters.--
       ``(1) Application for state regulation.--The Governor of a 
     State desiring to administer an individual and general permit 
     program for an activity in wetlands or waters of the United 
     States within the jurisdiction of the State shall submit to 
     the Secretary--
       ``(A) a description of the program proposed to be 
     established and administered under State law; and
       ``(B) a statement from the chief legal officer of the State 
     that the State law provides adequate authority to carry out 
     the described program.
       ``(2) Determination by secretary.--Not later than 1 year 
     after the date of receipt by the Secretary of a program 
     description and statement under paragraph (1), the Secretary 
     shall determine whether the State has the authority to--
       ``(A) issue permits that--
       ``(i) apply, and ensure compliance with, each applicable 
     requirement of this section; and
       ``(ii) can be terminated or modified for cause, including--

       ``(I) a violation of any condition or limitation in the 
     permit;
       ``(II) evidence that the permit was obtained by 
     misrepresentation or failure to disclose fully all relevant 
     facts; or
       ``(III) a change in any condition that requires either a 
     temporary or permanent reduction or elimination of the 
     permitted activity;

       ``(B)(i) issue permits that apply, and ensure compliance 
     with, all applicable requirements of section 308; or
       ``(ii) inspect, monitor, enter, and require reports to at 
     least the same extent as required under section 308;
       ``(C) ensure that the public, and any other State in which 
     the wetlands or waters of the United States may be affected 
     by the issuance of a permit under this subsection, receive 
     notice of each application for a permit under this subsection 
     and provide an opportunity for a public hearing before a 
     ruling on the application;
       ``(D) ensure that the Secretary receives notice of each 
     application for a permit under this subsection and, prior to 
     any action by the State, ensure that both the applicant for 
     the permit and the State receive from the Secretary 
     information with respect to any advance classification under 
     subsection (h) applicable to wetlands or waters of the United 
     States that are the subject of the application;
       ``(E) ensure that each State (other than the State seeking 
     to issue permits under this subsection) in which the wetlands 
     or waters of the United States may be affected by the 
     issuance of a permit under this subsection may submit a 
     written recommendation to the permitting State with respect 
     to any permit application and, if any part of the written 
     recommendation is not accepted by the permitting State, 
     ensure that the permitting State will notify the affected 
     State (and the Secretary) in writing of the failure by the 
     permitting State to accept the recommendation together with 
     the reason for the failure by the permitting State to accept 
     the recommendation of the affected State; and
       ``(F) abate a violation of the permit or the permit 
     program, through a civil or criminal penalty or other means 
     of enforcement.
       ``(3) Approval or modification of program.--
       ``(A) Approval of program.--If, with respect to a proposed 
     State program for which a description and statement were 
     submitted under paragraph (1), the Secretary determines that 
     the State has the authority set forth in paragraph (2), the 
     Secretary shall approve the program, notify the State, and 
     suspend the issuance of permits under subsection (b) for each 
     activity with respect to which a permit may be issued 
     pursuant to the State program.
       ``(B) Modification of program.--If, with respect to a 
     proposed State program for which a description and statement 
     were submitted under paragraph (1), the Secretary determines 
     that the State does not have the authority set forth in 
     paragraph (2), the Secretary shall notify the State and 
     provide a description of any revision or modification 
     necessary so that the State may resubmit the program for 
     another determination by the Secretary under this subsection.
       ``(4) Failure of secretary to make determination.--If, with 
     respect to a proposed State program for which a description 
     and statement were submitted under paragraph (1), the 
     Secretary fails to make a determination within 1 year after 
     the date of receipt of the description and statement, the 
     proposed program shall be deemed to be approved pursuant to 
     paragraph (3)(A) on the day that is 1 year after that date, 
     the Secretary shall notify the State of the approval, and the 
     Secretary shall suspend the issuance of permits under 
     subsection (b) for each activity with respect to which a 
     permit may be issued pursuant to the State program.
       ``(5) Transfer of applications.--After approval of a State 
     permit program under this subsection, the Secretary shall 
     transfer to the State for appropriate action any application 
     for a permit pending before the Secretary for an activity 
     with respect to which a permit may be issued pursuant to the 
     State program.
       ``(6) Suspension of enforcement.--If the Secretary is 
     notified that a State with a permit program approved under 
     this subsection intends to administer and enforce the terms 
     and conditions of a general permit issued by the Secretary 
     under subsection (e)(6), the Secretary shall, with respect to 
     each activity in the State to which the general permit 
     applies, suspend the administration and enforcement of the 
     general permit.
       ``(7) Corrective action.--If the Secretary determines after 
     a public hearing that a State administering a program 
     approved under this subsection is not administering the 
     program in accordance with this section, the Secretary shall 
     notify the State and, if appropriate corrective action is not 
     taken within a reasonable time (not to exceed 90 days after 
     the date of the receipt of the notification), the Secretary 
     shall--
       ``(A) withdraw approval of the program until the Secretary 
     determines appropriate corrective action has been taken; and
       ``(B) resume the program for the issuance of permits under 
     subsections (b) and (e)(6) for all activities with respect to 
     which the State was issuing permits, until such time as the 
     Secretary makes the determination described in paragraph (2) 
     and approves the State program again.
       ``(8) Regulation by an interstate agency.--For purposes of 
     this subsection:
       ``(A) Governor.--The term `Governor' includes the head of 
     an interstate agency.
       ``(B) State.--The term `State' includes an interstate 
     agency.
       ``(C) State law.--The term `State law' includes an 
     interstate compact.
       ``(m) Copies Available to Public.--A copy of each permit 
     application submitted, and each permit issued, under this 
     section shall be available to the public. Each permit 
     application or portion of a permit application shall also be 
     available on request for the purpose of reproduction.
       ``(n) Compliance With Permit Satisfies Requirements.--
     Compliance with a permit issued pursuant to this section, 
     including carrying out an activity pursuant to a general 
     permit issued under this section, shall be deemed, for 
     purposes of sections 309 and 505, to be compliance with 
     sections 301, 307, and 403.
       ``(o) Effective Date for Permit Provisions.--After the 90th 
     day after the date of enactment of the Comprehensive Wetlands 
     Conservation and Management Act of 1995, no permit for an 
     activity in wetlands or waters of the United States may be 
     issued except in accordance with this section. Any permit for 
     an activity in wetlands or waters of the United States issued 
     prior to the 90th day shall be deemed to be a permit under 
     this section and shall continue in force and effect for the 
     term of the permit unless revoked, modified, or suspended in 
     accordance with this section. An application for a permit 
     pending under this section on the 90th day shall be deemed to 
     be an application for a permit under this section.
       ``(p) Limit on Fees.--Any fee charged in connection with--
       ``(1) the delineation or classification of wetlands;
       ``(2) an application for a permit authorizing an activity 
     in wetlands or waters of the United States; or
       ``(3) any other action taken in compliance with the 
     requirements of this section (other than a penalty for a 
     violation under subsection (j));
     shall not exceed the amount of the fee in effect on January 
     1, 1990.''.
     [[Page S2133]] SEC. 4. DEFINITIONS.

       Section 502 of the Federal Water Pollution Control Act (33 
     U.S.C. 1362) is amended by adding at the end the following 
     new paragraph:
       ``(21) Wetlands.--The term `wetlands' means lands, such as 
     swamps, marshes, bogs, and similar areas, that have a 
     predominance of hydric soils and that are inundated by 
     surface water at a frequency and duration sufficient to 
     support, and that under normal circumstances support, a 
     prevalence of vegetation typically adapted for life in 
     saturated soil conditions.''.

     SEC. 5. TECHNICAL AND CONFORMING AMENDMENTS.

       (a) Section 119(c)(2)(E) of the Federal Water Pollution 
     Control Act (33 U.S.C. 1269(c)(2)(E)) is amended by striking 
     ``wetland'' and inserting ``wetlands''.
       (b) Section 208(b)(4)(B)(iii) of the Act (33 U.S.C. 
     1288(b)(4)(B)(iii)) is amended by striking ``the guidelines 
     established under section 404(b)(1), and'' and inserting 
     ``section 404, and with the guidelines established under''.
       (c) Section 309 of the Act (33 U.S.C. 1319) is amended--
       (1) in subsection (a)--
       (A) in the first sentence of paragraph (1), by striking 
     ``or 404''; and
       (B) in paragraph (3), by striking ``or in a permit issued 
     under section 404 of this Act by a State'';
       (2) in the first sentence of subsection (d), by striking 
     ``or in a permit issued under section 404 of this Act by a 
     State,,''; and
       (3) in subsection (g)--
       (A) by striking paragraph (1) and inserting the following 
     new paragraph:
       ``(1) Violations.--If the Administrator finds, on the basis 
     of any information available, that a person has violated 
     section 301, 302, 306, 307, 308, 318, or 405, or has violated 
     any permit condition or limitation implementing any of the 
     sections in a permit issued under section 402 by the 
     Administrator or by a State, the Administrator may, after 
     consultation with the State in which the violation occurred, 
     assess a class I civil penalty or a class II civil penalty 
     under this subsection.'';
       (B) in the third sentence of paragraph (2)(B), by striking 
     ``and the Secretary'';
       (C) in paragraph (6)(A)(iii), by striking ``, the 
     Secretary,'';
       (D) by striking ``or Secretary, as the case may be,'' and 
     ``or the Secretary, as the case may be,'' each place they 
     appear; and
       (E) by striking ``or Secretary'', ``or the Secretary'', and 
     ``or Secretary's'' each place they appear.

     SEC. 6. EFFECTIVE DATE.

       The amendments made by this Act shall become effective 90 
     days after the date of enactment of this Act.
                                                                    ____

   The Comprehensive Wetlands Conservation and Management Act of 1995

       The protection of America's wetlands is a crucial public 
     issue that deserves significant national priority. The 
     Pressler bill is designed to conserve true wetlands and 
     balances wetlands protection with protection of private 
     property rights. More important the bill contains provisions 
     that would require fair and just compensation to the owners 
     for the loss of or use of land classified as wetlands.
       The Pressler bill would:
       Assure that functionally important wetlands are protected.
       Classify wetlands by value and function. Certain wetlands 
     would be classified as wetlands with critical significance to 
     the long-term conservation of the ecosystem of which they are 
     a part. Others would be classified as providing habitat for 
     significant wildlife populations, protection water quality or 
     significant natural flood control, and others as marginal 
     wetlands.
       Provide safeguards so that large amounts of land with 
     little or no true wetland characteristics will be classified 
     as wetland.
       Require compensation be provided to landowners for the loss 
     of economic use of private lands.
       Clarify and reinforce current law that provides an 
     exemption from individual permit requirements for normal 
     farming and ranching activities on farmed wetlands.
       Exempt from regulation all prior converted agricultural 
     land since this land no longer exhibits any wetland 
     characteristics.
       Establish three criteria in designating wetlands. Criteria 
     to be met and verified would be presence of water, hydric 
     soils and hydro-phytic vegetation.
       Under the Pressler bill, prairie potholes would receive 
     same treatment as all wetlands and not be kept under stricter 
     rules and regulations.
       Exclude man-made or artificial wetlands such as farm ponds 
     and irrigation ditches.
                                                                    ____

                           No Harm, No Foul?

                            (By Rick Mooney)

       A few words to the wise wetland owner: If you're ever 
     charged with violating Swampbuster rules, don't count on good 
     intentions or the adage about no harm, no foul to bail you 
     out.
       Just ask Brian Odden, a grain and beef producer from Lake 
     Preston, S.D. In November 1993, after an extremely wet 
     summer, Odden plowed up 25 acres of rented ground that was 
     overrun with weeds. ``I had corn on it the year before,'' he 
     says. ``But [in 1993] we never got in the field because it 
     was so wet. I was afraid the weed board would be after me.''
       The field was bordered on the north by a 14-acre slough 
     that Odden's landlord had placed under perpetual easement 
     with the U.S. Fish and Wildlife Service (FWS). After Odden 
     finished plowing the field, he laid a single diagonal plow 
     furrow across it, following a natural drainage pathway.
       ``I was just trying to put things back the way I found 
     them,'' he says.
       The following April Odden was notified by the Soil 
     Conservation Service (SCS) that his plow furrow violated 
     Swampbuster rules for converting a wetland. At the same time 
     FWS notified Odden that he had violated easement provisions 
     for ``burning, draining or filling'' a wetland.
       In an attempt to rectify the situation, Odden immediately 
     filled in the plow furrow. He claims local SCS officials told 
     him that would qualify him for a minimal-effect postapproval 
     ruling. Filling the furrow also seems to have appeased FWS, 
     which notified Odden in a May 9 letter that they were 
     ``closing the file on the matter.'' In the same letter, FWS 
     thanked Odden for his ``timely restoration.''
       But at a field hearing two months later, state SCS 
     officials ruled that Odden's furrow had led to substantial 
     water loss in the wetland. To qualify for minimal effect, 
     Odden was told, he would have to file an appeal with national 
     SCS in Washington, D.C. He did that on July 25 and was still 
     waiting for the outcome in December.
       Big Brother watching. State SCS spokesmen claim the agency 
     is simply following the letter of the law. But Don Parrish, 
     policy analyst with the American Farm Bureau Federation, says 
     Odden's case appears to be one more example of federal 
     overreach on wetlands regulation. ``Everyone talks about 
     local solutions to local problems,'' he says. ``But here you 
     have a case where the locals had it all resolved and yet the 
     feds get involved.''
       Even more unsettling to Odden is uncertainty about what 
     he'll face if his appeal to Washington is turned down. Under 
     the strictest interpretation of the law, he stands to forfeit 
     all federal farm program benefits, including crop insurance 
     and disaster payments, that he received during the year of 
     the violation and the following year. An outstanding loan 
     with FmHA could be called and an additional fine based on the 
     size of the wetland he allegedly converted could also be 
     levied.
       Three others who are part of a family farm corporation with 
     Odden, and the corporation itself, could each pay equal fines 
     and penalties. ``Early on, we were told that total fines and 
     penalties could be as high as $515,000,'' says Odden. ``It 
     would finish us. With the kind of years we've been having, 
     there's no way we could climb out of a hole like that.''
                                 ______

      By Mr. SIMON:
  S. 353. A bill to clarify the circumstances under which a senior 
circuit court judge may cast a vote in a case heard en banc; to the 
Committee on the Judiciary.


                   senior circuit judges legislation

 Mr. SIMON. Mr. President, I introduce a bill that is neither 
controversial nor monumental, but highly important to the operation of 
our U.S. circuit courts of appeal.
  Under our current law, there is a real question as to whether a 
circuit judge who hears an en banc case, but then takes senior status 
prior to the decision of that case, is eligible to participate in that 
decision. This situation creates the potential for significant 
confusion within an en banc court: If judges who participated, and cast 
initial votes, in an en banc case were to become suddenly ineligible to 
decide the case by virtue of taking senior status, the initial 
determination as to how a case should be decided would possibly have to 
be revisited. Moreover, though unlikely, the current situation also 
creates the potential for manipulation of the system by circuit judges 
unhappy with an en banc decision: Conceivably a judge could hold up the 
release of a particular en banc opinion in order to render a judge who 
heard the case as an active judge ineligible to participate in the 
case's decision, and thereby to force a change in the outcome of the 
case.
  The bill I introduce today would simply clarify that circuit judges 
who hear an en banc case as active judges may participate in the 
ultimate decision of the case even if they take senior status between 
the time the case is argued and the time it is decided. I believe this 
technical change to be consistent with what Congress would have done 
had it been aware of this problem when it enacted the law governing 
circuit judges, and hope that my colleagues will facilitate its 
passage.
  Finally, let me say that I am indebted to Chief Judge Richard Posner 
of the seventh circuit for bringing this problem to my attention. Judge 
Posner is a stellar member of the Federal judiciary, and I am very 
appreciative of his 
[[Page S2134]] concerns about the technical management of our Federal 
courts.
                                 ______

      By Mr. BREAUX (for himself, Mr. Johnston, Mr. Simon, and Mr. 
        Bumpers):
  S. 354. A bill to amend the Internal Revenue Code of 1986 to provide 
tax incentives to encourage the preservation of low-income housing; to 
the Committee on Finance.


                THE LOW-INCOME HOUSING PRESERVATION ACT

 Mr. BREAUX. Mr. President, I am introducing a bill today that 
charts a promising new way to enlist the private sector's help in 
preserving and improving the country's stock of affordable housing. I 
urge my colleagues to join me in cosponsoring this bill, entitled the 
``Low-Income Housing Preservation Act.''
  All of us are aware from our trips home that there is a serious 
shortage of affordable housing in this country. All one has to do is 
look at the number of homeless in towns throughout the country to know 
this, but the statistics tell the story as well. A 1992 Harvard study 
estimated that there were 4.1 million units of HUD or privately owned, 
publicly assisted units, while there are 13.8 million households 
eligible to receive HUD-funded housing assistance if the assistance 
were available.
  Clearly we need a new approach, one that does a better job of 
leveraging private resources, and bringing the discipline of the 
marketplace to bear, while recognizing that the resources that the 
Federal Government can expend are severely limited. The bill I am 
introducing today does this by encouraging the investment of private 
capital to improve the condition of the Nation's stock of existing 
rental housing for low-income tenants. By relying largely on the 
private sector, rather than HUD, for the necessary funding it reduces 
the necessary level of Government involvement to a minimum. It is very 
cost-effective, because of the way the bill's tax proposals have been 
drafted. At the same time, it will save the Government a great deal of 
money that otherwise would have to be expended to fund existing or new 
HUD-grant programs to achieve the same end.
  This is the problem. Much of the rental housing that is currently 
occupied by low-income tenants is not public housing, but privately 
owned apartment houses. HUD assistance reduces the amount of monthly 
rent paid by eligible tenants. This stock of affordable housing is in 
crisis. Many of these projects are 10 to 25 years old, or more. Their 
continued physical and financial stability is threatened, as the 
projects age and private investors have no incentive to invest 
additional capital to rehabilitate them.
  While the needs of these projects have been widely recognized for 
some time by both the Federal Government and the private sector, little 
has been done to address the problem. If these projects disappear 
because the private owners are no longer able to maintain the units, 
the already short supply of affordable housing will be further reduced. 
It is therefore vital to preserve and improve this important source of 
housing for low-income tenants. This is especially so in light of the 
considerable interest in Congress this year in making major changes in 
the way HUD operates. These proposals would place greater reliance on 
private-sector alternatives to public housing, while at the same time 
reducing the size and number of HUD's traditional programs to assist 
privately owned housing.
  The private sector cannot continue to provide the low-income housing 
needed unless Congress corrects some of the current disincentives in 
the tax laws that discourage the preservation of this inventory of 
affordable housing. The value of these projects has been severely 
depressed by the 1986 changes to the tax laws. As a result, the current 
owners have no way to raise additional capital to rehabilitate the 
structures, as has become inevitably necessary with time. Because the 
projects' market values are so depressed, the current owners cannot 
receive enough cash upon sale to pay the capital gains taxes they would 
owe. Nor is there interest among new investors under current conditions 
in purchasing the projects and investing needed capital in them. As a 
result, these aging projects are locked into a long, slow, downward 
spiral. It is essential that something be done before more of these 
projects go into bankruptcy or fall altogether out of the Nation's 
stock of affordable housing.
  I believe that the bill I am introducing provides a solution to the 
problem that will work and that is very cost-effective. Except for some 
technical refinements to tighten the bill's provisions, the bill is the 
same as the legislation I introduced last year as S. 1986.
  In the first place, the bill targets the projects which are most at 
risk. These are projects assisted by HUD under the old section 
221(d)(3) below market rate interest rate program or the section 236 
program, or projects insured under the section 221(d)(3) market rate or 
section 221(d)(4) programs, and assisted under section 8. In all cases, 
the projects must be at least 10 years old and at least a majority of 
the units in the projects must be occupied by tenants whose income was 
no more than 80 percent of the area median income when they first 
became tenants.
  According to HUD, there are almost 1 million units in the affordable 
housing projects that meet the bill's criteria. These projects are 
located in every State in the country.
  The bill offers special tax benefits to new investors who agree to 
buy these affordable housing projects, invest the
 necessary capital to fix them up, and maintain them for low-income 
tenants. It will be the responsibility of HUD in each case to determine 
how much new capital must be invested in the project to make it 
financially and physically sound, but in no event may the capital 
improvements equal less than 10 percent of the adjusted basis of the 
rental property. In exchange, the bill reduces from 27\1/2\ years to 15 
years the depreciation schedule for eligible projects purchased after 
the bill's effective date. It also provides that any investor in the 
project may claim annually up to $50,000 of losses from such projects 
without regard to the passive loss rules. Any project will lose its 
special tax benefits if it ceases to serve low-income tenants.

  The Low-Income Housing Preservation Act specifically provides that 
any project claiming benefits under its provisions could not also 
benefit from the low-income housing tax credit, which provides tax 
credits and limited passive loss relief to those investing in low-
income housing. As a practical matter, the tax credit has not been 
widely used to preserve the existing projects targeted by the bill I am 
introducing today. Under the low-income housing tax credit, the amount 
of tax credits available to each State is limited by law and I 
understand that State and local authorities have chosen as a general 
matter to use their credits on the construction of new projects rather 
than the preservation of existing projects. This bill will compliment 
the low-income housing tax credit by providing a deduction specifically 
for those investing in existing projects.
  Mr. President, it is clearly in the public interest to help ensure 
the continued existence of these projects. The tenants will benefit as 
the existing owners are replaced with new owners with new capital, and 
a new willingness to preserve and improve the projects. The local 
community and the local economy will benefit from the work done in the 
neighborhood improving the projects, from the general improvement in 
the appearance of the neighborhood, and by the lower crime rates that 
go along with refurbished buildings. The taxpayer benefits because the 
number of projects that go into bankruptcy and end up in HUD's 
portfolio will be reduced, and because HUD will find it earlier to 
dispose of projects already in its portfolio. Over the longer run, the 
taxpayers will save the cost of directly funding the needed capital 
improvements to the existing projects, or the cost of constructing new 
units that must be built when the existing projects are lost from lack 
of financial support.
  I hope my colleagues will support this important legislation.
                                 ______

      By Mr. ABRAHAM:
  S. 355. A bill to provide that the Secretary and the Clerk of the 
House of Representatives shall include an estimate of Federal 
retirement benefits for each Member of Congress in their semiannual 
reports, and for other purposes; to the Committee on Rules and 
Administration.
    [[Page S2135]] the congressional pension disclosure act of 1995

 Mr. ABRAHAM. Mr. President, I introduce S. 355 which would 
require the Secretary of the Senate and the Clerk of the House of 
Representatives to make publicly available information relating to the 
pensions of Members of Congress. Under this legislation, these officers 
would be required in the course of their semiannual reports to the 
Congress to clearly set forth information relating to the following:
  First, the individual pension contributions of Members;
  Second, an estimate of annuities which they would receive based on 
the earliest possible date they would be eligible to receive annuity 
payments by reason of retirement; and
  Third, any other information necessary to enable the public to 
accurately compute the Federal retirement benefits of each Member based 
on various assumptions of years of service and age of separation from 
service by reason of retirement.
  The purpose of this legislation is simply to afford citizens their 
rightful opportunity of learning how public funds are being utilized. 
The taxpayers are not only entitled to know the various forms of 
compensation being paid to their elected officials, they are also 
entitled to make decisions about the reasonableness of such 
compensation.
  My bill, S. 355, would make this information conveniently available 
to the public. The public does not begrudge Members of Congress 
reasonable pensions. Before that assessment can intelligently be made, 
however, the public needs to have better access to information than 
they currently have.


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