12 • Wetlands: Their Use and Regulation 



Figure B.— 404 Permit Statistics, 1981 



Permits approved 

 without signifi 

 modification 



Permits modified 



substantially to reduce 



project impacts 



rmits denied 



Permits witfidrawn by applicant 



Total number of permit applications: 11,000/year 

 SOURCES: U.S. Army Corps of Engineers and Office of Tecfinology Assessment. 



Federal Economic Measures 



Since Federal outlays for wetland acquisi- 

 tions, easements, and leases total only a few mil- 

 lion dollars a year, economic measures can be 

 used to protect wetlands only on a highly selec- 

 tive basis. An estimated 10 million acres of 

 wetlands in the lower 48 States are protected 

 through Federal ownership, easements, and leases. 

 Federal wildlife refuges also protect about 29 million 

 acres of wetlands in Alaska. 



Full ownership or easements provide the Govern- 

 ment with the most effective mechanism for directly 

 controlling the use of wetlands. Full ownership is 

 probably most suited for situations where manage- 

 ment of a wetland as part of the system of national 

 refuges, parks, and forests is desired or where the 

 goal is to preserve the wetland in perpetuity, re- 

 gardless of the benefits of potential development ac- 

 tivities. Perpetual easements provide almost the 

 same level of control as full ownership, while the 

 wetlands remain in private hands. Recent Federal 

 costs of wedand purchases by FWS range from $600 

 to as much as $l,200/acre for some bottom lands. 

 Easements typically cost the Government about 

 $200/acre. Federal funding for wedand acquisition 

 and easements is provided through sale of Migra- 

 tory Bird Hunting and Conservation Stamps (duck 

 stamps) and through the Wedands Loan Act of 

 1961 and the Land and Water Conservation Act 

 of 1965. 



Leases can provide a high degree of Federal con- 

 trol for the period of the lease. Through the Depart- 

 ment of Agriculture (USDA) Water Bank Program, 

 authorized by the Water Bank Act of 1970, private 

 landowners or operators generally receive, through 

 lO-year leases, annucd payments of $5 to $10/acre 

 for most designated wetlands and up to $55/acre 

 for adjacent upland areas. 



Tax writeoffs are given to owners who donate 

 wedands to Government or conservation agencies. 



Federal Programs Encouraging 

 Wetland Conversions 



Tax deductions and credits for all types of 

 general development activities provide the most 

 significant Federal incentive for farmers to clear 

 and drain wetlands. They also shift a significant 

 portion of the conversion costs to the general tax- 

 payer. The dollar value of these tax incentives is 

 greater at higher income levels. They include: 



• first-year tax deductions of up to 25 percent 

 of gross farm income for draining expenses 

 (expenses in excess of this limit may be 

 deducted in subsequent years); 



• tax deductions for depreciation on all capital 

 investments necessary for draining or clear- 

 ing activities; 



• tax deductions for interest payments related 

 to draining and clearing activities; and 



• investment tax credits equal to 10 percent of 

 the installation cost of the drainage tile. 



Price supports and target prices for commod- 

 ities may have encouraged some wedand conver- 

 sion by setting guaranteed floor prices for some 

 crops grown on converted wedands, but few farm- 

 ers have been enrolled in these programs over the 

 past decade. Other USDA policies that may pro- 

 vide assistance for wedamd conversions take the 

 form of technical assistance and cost-sharing for 

 the construction of a wide variety of conservation 

 projects, loans from the Farmers Home Adminis- 

 tration to finance conversions, and Federal com- 

 pensation through crop insurance for crop losses 

 from flooding in wedand areas. These forms of as- 

 sistance are probably of limited significance in in- 

 fluencing a farmer's decision to convert wedands 

 to cropland. 



