Federal-Aid Highway Program and Wetlands Mitigation

Fred Bank, and Paul Garrett, Ecologists, Federal Highway Administration, Headquarters, (202) 366-5004

The Federal Perspective

The impetus for wetland protection, and eventually watershed protection, emerged largely from the 1972 amendments to the Federal Water Pollution Control Act (FWPCA), which added the Section 404 authority (33 U.S.C. 1344) to the Corps of Engineers regulatory program, Section 402 on controlling polluted discharges, and various other provisions. As a consequence, over the past 25 years America has made tremendous strides in reversing the trend of wetland loss and cleaning up its lakes, rivers and coastal waters. These changes implemented requirements to control pollutant discharges from point sources and eventually led to a national program to protect waters from pollutants introduced by stormwater runoff. The FWPCA was again amended in 1977 and given the common name of Clean Water Act (CWA), further defining the intent of wetland protection under the Act.

Activities requiring Section 404 permits are limited to discharges of dredged or fill materials into the waters of the United States. These discharges include return water from dredged material disposed of on the upland and generally any fill material (e.g., rock, sand, dirt) used to construct fast land for site development, roadways, erosion protection, etc. This requirement affects construction of roadway fills, approaches to bridges, culvert installations, and temporary construction facilities, including material sources, through the application of the regulatory program to all "waters of the United States", which include aquatic resources such as adjacent wetlands, streams, natural lakes, impoundments, and estuaries. Initial regulations implementing the 404 regulatory program were published in 1976 (33 CFR 320-330). Several changes have occurred in the regulatory program since then, many of which involve the implementation of the Nationwide Permits (NWPs).

Federal Policy Developments

Two major developments in Federal policy over the past 25 years have influenced wetland and water quality considerations during transportation development activities. One was an Executive Order on wetlands issued in 1977 and the other was the Clean Water Action Plan (CWAP) in 1998. Executive Order 11990, Protection of Wetlands, requires Federal agencies to avoid wetland habitats unless there is no practicable other alternative. This applies directly to all transportation construction activities. FHWA continues to manage wetlands impacts and losses from the Federal aid highway program in accordance with the Executive Order, including those involving isolated wetlands, such as prairie potholes, vernal pools, and sloughs. The CWAP provides a blueprint for restoring and protecting the nation's water resources and includes specific commitments for transportation-related activities to achieve this goal. "For example, the CWAP contains an overall commitment for Federal programs collectively to achieve an increase of 100,000 wetland acres by 2005. The Federal Highway Administration (FHWA) has a commitment in the Plan to achieve a 50% increase in wetland acreage through the Federal-aid Highway Program in 10 years."

FHWA established a goal of replacing wetlands at a ratio of 1.5 acres replaced to one acre of impacts as part of their contribution to the CWAP. FHWA also included these wetland management goals in their National Performance Plan, as well as goals to establish wetlands banks in all geographic regions.

The Federal resource agencies developed and published the Federal Guidance for Wetlands Banking on procedures for permitting, management and operation of wetlands banks in 1995. That same year, based on preliminary evaluation of several wetlands banks that had been successfully used by State DOTs, FHWA distributed agency guidance (memoranda) encouraging mitigation banking as a viable approach to compensatory mitigation for wetlands losses. These memoranda and the Federal Guidance resulted in a marked increase in the efforts to establish mitigation banks by State DOTs. General implementation of the Federal Guidance has been slow, and acceptance of wetlands mitigation banks by different regulatory jurisdictions around the country in highway programs has been varied. Some State DOTs have been able to establish and use banks successfully. Others have not been able to reach workable agreements with resource agencies that will allow them to use banks for compensatory mitigation. Some State DOTs have established banks, only to find that requirements on their use by regulatory agencies (the Corps) are so restrictive that the banks are not useful or economically feasible. "A more consistent approach to the use and application of mitigation banking to the Federal highway program by resource agencies is needed, and general interagency agreements might be helpful in removing local objections to the more widespread use of banking."

The legislative, regulatory, and policy developments over the past 25 years have led to ever increasing emphasis on recognizing the importance of wetlands and watersheds. Beginning in the mid-1980s and continuing to the present there has been transportation legislation, regulation and policy development to support and strengthen national goals for wetland and water quality protection and watershed-based water resource management.

"Transportation Legislation Affecting Wetlands, Water Quality, and Watersheds
The Intermodal Transportation Efficiency Act of 1991 (ISTEA) and the 1998 Transportation Equity Act for the 21st Century (TEA?21) included eligibility provisions for the cost of mitigating impacts to wetlands and other natural resources." Particularly, they provided for, and expanded, the ability to pay for wetlands banking as mitigation in advance of project impacts. The TEA?21 provided a new flexible eligibility to encourage environmental restoration to address water pollution or environmental degradation caused or contributed by transportation facilities. The environmental provisions of TEA?21 built and added onto the programs established under the ISTEA. While there are some new areas of emphasis, most of the environmental provisions of TEA?21 refined or clarified programs introduced with ISTEA.

Mitigation for water quality impacts has always been an eligible activity on newly proposed projects as part of the project development and the environmental review process established with the National Environmental Policy Act of 1969. TEA?21 expands upon this provision and places renewed emphasis on pollution abatement projects under the Surface Transportation Program. Past construction, operation, and maintenance of highways may have resulted in impacts to the natural environment that are clearly related to the construction and use of the highway. TEA?21 places emphasis on identifying eligibility for measures to correct pollution or environmentally degraded conditions. This provision applies specifically to impacts from previous Federal aid highway construction, and is not to be considered as replacing mitigation for impacts resulting from current Federal aid highway projects.

The Surface Transportation Program (STP) provides flexible funding that may be used by States and localities for projects on any Federal aid highway, including the National Highway System, bridge projects on any road, transit capital projects, and public bus terminals and facilities. TEA?21 expanded the Surface Transportation eligibility which resulted in the following additional language to 23 U.S.C. 133(b):

Transportation Regulations on Wetland Mitigation

In 1980 the FHWA first issued 23 CFR Part 777, Mitigation of Impacts to Privately Owned Wetlands. This regulation was in response to Executive Order 11990 and gave project sponsors of Federally assisted highway project the flexibility to use Federal-aid funds to mitigate impacts to wetlands. The regulation has been revised (December 29, 2000, Federal Register, Effective date: March 30, 2001) to include legislative, regulatory and policy developments that have occurred since 1980. The new regulation broadens the scope of the regulation to encompass all wetland mitigation projects eligible for Federal participation, not just those involving privately owned wetlands. The regulation specifies that they apply to all projects funded pursuant to the provisions of title 23, United States Code (Title 23). The TEA?21 added funding eligibility for mitigation of impacts on natural habitats due to highway projects funded under title 23, U.S.C. The rule also includes a provision requiring that existing wetland and habitat mitigation banks be given preference for use in establishing compensatory mitigation if the highway project impacts occur within the bank's service area. The rule will also apply to projects under the Federal Lands Highway Program.

Policies on Wetland and Watershed Protection

In 1992 and 1994, the FHWA issued Environmental Policy Statements, which stressed the importance of incorporating environmental stewardship into all agency activities. This included an emphasis on wetland protection and enhancement and using a watershed approach in assessing impacts and developing mitigation strategies. Among the specific commitments made in the statement was a call for the protection and enhancement of all natural resources, including wetlands. In subsequent strategic plans and performance agreements, the FHWA established an agency policy of no?net?loss of wetlands impacted on a program-wide basis for Federal-aid highway projects. Then in 1996, the FHWA revised its no-net-loss policy upward to a net gain goal. The agency's 1996 performance plan and all subsequent plans indicated this change by establishing a performance measure for wetland acreage replacement of 1.5 acres of compensation for every acre impacted under the Federal-aid highway program. There have been numerous specific policy memorandums and other directives on wetland mitigation and other water quality and watershed topics issued over the years. Detailed policy information is available through FHWA's Environmental Guidebook.

Wetlands Losses and Costs of Mitigation in the Federally Funded Transportation Program

Data on annual wetlands losses due to federally funded highway construction are not available prior to 1996, however gathered data indicate since then that between 1100 and 2400 acres are converted or lost per year (less than 5 percent of the national total), with a compensatory mitigation ratio of about 2.7:1 on average, meaning that wetlands are being replaced at twice the rate of loss in the Federal-aid highway program. Our data collected over the last 5 years indicate that nationwide, the Federal-aid highway program has achieved a 170% gain in wetland acreage (2.7:1 gain/loss ratio). In terms of acres, the Federal-aid highway program produced a total net gain of 14,846 acres of wetlands nationwide 1996 through 2000.

Costs of wetland mitigation have increased several-fold during the last 25 years. Costs of mitigation were estimated in 1995 as approximately $16,000 per acre of mitigation nationwide, based on available data obtained from 1992-1994. These costs vary regionally. This results in an estimated cost from 1996-1999 for the entire federally funded highway program of approximately 50-80 million dollars per year for replacement of wetlands (in pre-1995 dollars). A GAO report to the Transportation Subcommittee on Highway Planning (August 94) quotes AASHTO-collected data from 1992 for wetlands costs from 37 states. The total costs reported over the previous 4 years were $79 million. The GAO report notes the data were incomplete and most states did not maintain complete cost data. This averages to approximately 27 million dollars per year over four years estimated for 50 states. New Jersey alone, however, reported spending an average of about 4 million per year on mitigation including their land costs. Almost certainly the 27 million/year is a low figure because it does not account for real estate costs. No error estimates are available for this data.

Future Developments

As the demand for wetlands mitigation increases, the costs of mitigation are expected to increase, even allowing for the increased efficiency of wetlands banking. Average mitigation costs for wetlands are expected to exceed $20,000 per acre of mitigation provided (including all forms of compensatory mitigation - creation, restoration, enhancement, and preservation) in the immediate future, and continue to increase as land values, performance demands, and technology costs increase. Also, FHWA expects demands for compensatory mitigation to increase, as regulatory agencies perceive continued threats and risks to existing wetlands and landscapes become more fragmented from development, resulting in decreases in functional values of existing wetlands. This, combined with increases in the Federal aid program under TEA?21, are expected to result in slightly greater impacts to wetlands due to the Federally funded highway program, with associated greater compensatory mitigation costs. FHWA expects to maintain current levels of compensatory mitigation, with a result that on a program wide basis, the Federal aid highway program will achieve a net gain in wetlands resources. The cost of compensatory mitigation in the Federal aid program is expected to exceed 100 million dollars per year by 2010, if funding levels and construction programs continue at their historical rates.

Today, there is a growing recognition that clean water strategies build on our past 25 years of water quality control efforts, but tailored to specific watershed conditions are the key to the future. Transportation entities will play a substantial wetland protection role.