Water Bank Act — Federal Payments for Wetlands Conservation

Millions of acres of wetlands in the northern prairie states — the "duck factory" of North America — have been drained and converted to agriculture since European settlement. These shallow marshes, potholes, and seasonal wetlands are the nesting and breeding habitat for the majority of migratory waterfowl in the United States, and their loss has driven long-term declines in duck and goose populations. The Water Bank Act of 1970 (16 U.S.C. §§ 1301–1311) is one of Congress's oldest tools for paying private landowners to preserve and restore these wetlands, offering annual cash payments in exchange for conservation agreements that keep wetlands wet. Though it has been largely superseded in scale by the modern Wetlands Reserve Easement program within the Farm Bill, the Water Bank Act remains on the books and continues to provide the legal framework for federal wetland conservation agreements with private landowners in key migratory waterfowl breeding areas.

Current Law (2026)

Legal Authority

• 16 U.S.C. § 1301 — Congressional declaration of policy: Congress declares that it is in the national interest to preserve, restore, and improve the wetlands of the nation, recognizing that such areas give significant public benefits including wildlife habitat, water quality protection, flood control, and groundwater recharge; Congress directs the Secretary of Agriculture to carry out a program of annual agreements with landowners and operators to accomplish this purpose
• 16 U.S.C. § 1302 — Conservation agreements; "wetlands" defined: the Secretary of Agriculture may make agreements with landowners and operators in important migratory waterfowl nesting and breeding areas; "wetlands" means the shallow lakes, ponds, marshes, wet meadows, bogs, and similar areas that regularly support aquatic vegetation; agreements may cover wetlands and associated adjacent lands needed to protect them; the Secretary determines which areas qualify as important for migratory waterfowl
• 16 U.S.C. § 1303 — Terms and conditions: conservation agreements are for 10-year terms; may be renewed for successive 10-year periods; the Secretary may terminate an agreement by mutual consent; while an agreement is in effect the landowner agrees not to drain, burn, fill, or otherwise destroy the wetland character of the enrolled area; grazing and haying may be restricted or regulated
• 16 U.S.C. § 1304 — Annual payments: the Secretary must pay the landowner an annual payment for each acre enrolled; payment rates must reflect the fair market value of the agricultural opportunity forgone; payments are made from the Commodity Credit Corporation or from annual appropriations
• 16 U.S.C. § 1307 — Advisory board: the Secretary may establish an advisory board with representatives from the Fish and Wildlife Service, state fish and wildlife agencies, conservation organizations, and agricultural interests to advise on program administration and eligible area designations
• 16 U.S.C. § 1311 — Authorization of appropriations: authorizes appropriations necessary to carry out the Act; actual program levels are set by annual appropriations and the Farm Bill reauthorization cycle

Implementing Regulations

NRCS regulations implementing the Water Bank Act and the related Emergency Wetlands Reserve Program live at 7 CFR Parts 633 and 623.

Water Bank Program (7 CFR Part 633):

• § 633.1 — Purpose: establishes the operational rules for the Water Bank Program — how 10-year conservation agreements are formed, what landowners must do, and how NRCS administers payment
• § 633.2 — Definitions: "Adjacent land" means farm ground next to covered wetlands that provides a buffer or transition zone; "agreement" means the written 10-year contract between NRCS and the landowner; "conservation plan" specifies the conservation measures the participant must implement
• § 633.4 — Program requirements: NRCS makes 10-year agreements with landowners who voluntarily protect wetlands and adjacent buffer lands; participants must follow a conservation plan that maintains the wetland's hydrology, prevents drainage or filling, and restricts disruptive uses like haying or burning; NRCS works with local Conservation Districts in administering the program
• § 633.5 — Application: landowners apply at the local NRCS field office; NRCS verifies that the land is a real, workable wetland eligible for the program before any commitment is made
• § 633.10 — Modifications: NRCS can approve changes to an agreement or its conservation plan after consulting with the local Conservation District; modifications cannot undermine the wetland conservation objectives
• § 633.12 — Termination: the State Conservationist can end an agreement by mutual consent or when participants can no longer fulfill its obligations; early termination by the landowner alone is not available — the conservation obligation runs for the full 10-year term
• § 633.13 — Violations: if a participant breaks the agreement, NRCS gives reasonable notice and typically 30 days to correct the problem; if uncorrected, NRCS can require repayment of all program payments received
• § 633.15 — Payment protection: program payments are made without regard to state liens on land or crops, ensuring payments reach the conservation participant rather than being intercepted by creditors

Emergency Wetlands Reserve Program (7 CFR Part 623):

The EWRP is a separate but related program authorizing NRCS to purchase permanent wetland conservation easements on land damaged by natural disasters — converting disaster-affected agricultural land into protected wetlands rather than restoring it to crop production:

• § 623.1 — Purpose: NRCS may offer to purchase permanent easements on eligible agricultural land damaged by flooding or other natural disasters, restoring its wetland functions rather than subsidizing return to farming
• § 623.10 — Application: landowners apply at the local NRCS field office during announced sign-up periods following a declared disaster; application must be on NRCS-approved forms
• § 623.11 — Landowner obligations: participants who accept an EWRP easement must follow both the recorded easement and the Wetland Reserve Plan of Operations (WRPO) for the easement's entire life — in perpetuity for permanent easements; the land is committed to wetland function forever
• § 623.12 — Cost-share payments: NRCS shares the cost of restoring the land to wetland condition; the State Conservationist sets cost-share rates based on what restoration work is needed — filling drainage tiles, restoring hydrology, establishing native vegetation
• § 623.13 — Wetland Reserve Plan of Operations: after accepting a landowner into the program, NRCS and the landowner — with Fish and Wildlife Service assistance — develop the WRPO specifying exactly what restoration work will be done and how the wetland will be managed
• § 623.16 — Monitoring: NRCS may inspect the easement area whenever needed to ensure restoration work is maintained and easement terms are honored; perpetual easements carry perpetual monitoring obligations
• § 623.17 — Violations and remedies: if a landowner violates the easement, it remains legally in effect regardless of the violation; NRCS can require restoration of damaged areas and, in severe cases, seek court enforcement of the perpetual easement

The EWRP was particularly active following major Mississippi River and Missouri River floods in the 1990s and 2000s. By purchasing perpetual easements on flood-prone agricultural land and converting it to wetland, the program simultaneously reduces future flood damage claims, restores waterfowl habitat, and improves downstream water quality. The underlying legal theory is that the government pays landowners to accept a permanent land-use restriction that prevents the cycle of disaster damage, disaster payment, and recovery to the same vulnerable land use.

The Northern Prairie Duck Factory

The Water Bank Act was designed specifically for the northern prairie pothole region — one of the most productive waterfowl breeding areas on the continent. Millions of small, shallow basins scattered across North Dakota, South Dakota, Minnesota, and adjacent Canadian provinces fill with snowmelt and spring rains each year, creating the isolated nesting habitat that mallards, pintails, teal, canvasbacks, and dozens of other species require. Agricultural tile drainage has eliminated an estimated 50% of these wetlands since the 1800s, with significant impacts on waterfowl population levels.

The Water Bank program provided farmers in this region with an economic alternative to drainage: annual cash payments for keeping wetlands in their natural condition. The payments were calibrated to reflect the corn or soybean income the farmer was forgoing by not draining the wetland. For wetlands that were too small or shallow to be economically important for drainage, the program provided additional farm income while delivering significant wildlife benefits.

Relationship to Modern Farm Bill Wetland Programs

The Water Bank Act's approach — annual payments for 10-year conservation agreements — was an early model that influenced subsequent wetland conservation programs. The modern Wetlands Reserve Easement (WRE) program, now part of the Agricultural Conservation Easement Program (ACEP) in the Farm Bill, operates on a permanent or 30-year easement model rather than the 10-year renewable agreement model of the Water Bank Act. WRE purchases the conservation value of the land permanently, rather than paying annual rent for temporary protection.

The Water Bank Act has been funded at relatively modest levels since the Farm Bill programs grew in scale. However, it remains authorized and provides a complementary tool for situations where permanent easements are not feasible or where temporary agreements are the preferred conservation approach.

How It Affects You

If you are a farmer or landowner in the northern prairie region: The Water Bank program (and the related Farm Bill wetland programs) can provide annual income for wetland areas on your property that might otherwise have limited agricultural value. Enrollment requires a 10-year commitment to maintaining the wetland, but payments continue throughout the agreement period. Contact your local NRCS office to determine which wetland areas on your property might be eligible and what current payment rates are.

If you are a waterfowl hunter or wildlife observer: The Migratory Bird Conservation Fund and Duck Stamp program and the Water Bank Act together are part of the reason that duck populations in the northern prairies remain viable despite the conversion of the majority of native prairie wetlands to agriculture. The interaction between federal payments, landowner willingness, and commodity prices determines how much wetland habitat is preserved in any given year — making waterfowl populations sensitive to farm policy as much as to weather.

If you work in wetland mitigation, conservation easements, or NRCS programs: The Water Bank Act remains active legal authority for short-term wetland conservation agreements. Understanding its relationship to ACEP/WRE is important for advising landowners on the full menu of federal wetland conservation tools. See also Conservation Easement Tax Deduction for the tax benefits available to landowners who donate permanent conservation easements, and Federal Wetlands Acquisition and Inventory for the broader federal wetlands framework and choosing the right instrument for the specific parcel and conservation objective.

If you are a state wildlife agency or conservation organization: The Water Bank Act's requirement that agreements be targeted to "important migratory waterfowl nesting and breeding areas" — a designation made by the Secretary — is a lever for directing federal conservation investment. Advocating for priority area designations that match your conservation priorities can help align federal resources with state and organizational objectives.

State Variations

The Water Bank Act is a federal program administered by USDA/NRCS and does not preempt state wetland protection laws. States with their own wetland conservation payment programs — Minnesota, North Dakota, and Iowa have state-level programs — can work alongside the federal program to create complementary protection. State water law continues to govern drainage rights on agricultural land, meaning that federal conservation agreements operate against a backdrop of state legal frameworks that may make drainage easier or harder to implement.

Pending Legislation

The Water Bank Act's funding and programmatic interaction with the Farm Bill is reviewed in each Farm Bill reauthorization cycle. No major standalone amendments to the Water Bank Act are pending as of 2026. The broader debate about wetland conservation funding — balancing annual rental payments under older models against permanent easements and restoration investments — continues in Farm Bill negotiations and in discussions about adapting wetland programs to climate change, which is altering precipitation patterns and wetland hydrology in the northern prairie region.

Recent Developments

Climate variability has complicated the simple model underlying the Water Bank Act: wetlands that were reliably wet in the 1970s are now subject to multi-year drought cycles, raising questions about whether annual payments for "keeping wetlands wet" still deliver conservation value in drought years when the wetland may be dry regardless of landowner actions. NRCS and conservation partners have responded by integrating climate projections into enrollment targeting and by pairing Water Bank agreements with wetland restoration investments that can improve hydrology resilience. The interaction between federal conservation payments and the market price for corn and soybeans continues to drive enrollment: high commodity prices reduce participation as farmers weigh forgone crop income against program payments.

• Sackett v. EPA and wetlands conservation (2023-2025): The Supreme Court's Sackett v. EPA (2023) decision dramatically narrowed the Clean Water Act's jurisdiction over wetlands, holding that federal protection applies only to wetlands with a "continuous surface connection" to traditional navigable waters. This ruling reduced the geographic overlap between Clean Water Act-regulated wetlands and Water Bank Act-eligible wetlands, potentially reducing the program's ability to leverage CWA protections alongside voluntary payment agreements. EPA's post-Sackett rulemaking (finalized 2023, amended 2024) codified the narrower jurisdictional scope.
• 2025 Farm Bill delay and conservation program continuity: The Water Bank Act has been administered alongside USDA's Wetlands Reserve Easement (WRE) program under successive Farm Bills. The absence of a new Farm Bill (the 2018 Farm Bill has been extended on a year-to-year basis) has frozen conservation program baseline spending, preventing new enrollment expansions and leaving NRCS with limited flexibility to increase Water Bank payment rates that have not kept pace with commodity price inflation since 2018.
• Trump "energy dominance" and wetlands conversion: Executive Order 14154 (Unleashing American Energy, January 2025) directed agencies to expedite energy infrastructure and agricultural use of federal and private lands, including streamlining wetlands fill permits under CWA Section 404. The order directed the Army Corps of Engineers to reduce permitting timelines for agricultural drainage projects, which can include conversion of wetlands to cropland. Conservation groups argue that accelerated drainage permitting undermines Water Bank conservation investments by allowing adjacent landowners to drain wetlands that program participants are paid to maintain.
• Waterfowl population and program effectiveness: U.S. Fish and Wildlife Service breeding duck surveys (2024) showed continental duck populations at approximately 34 million — below the long-term average of 43 million — driven by Prairie Pothole drought conditions and wetland loss. Water Bank Act enrollments in the Prairie Pothole Region (North Dakota, South Dakota, Minnesota) provide critical nesting habitat; Ducks Unlimited and other waterfowl conservation groups have lobbied for Water Bank rate increases to compete with corn and soybean returns. Program enrollment in the Prairie Pothole Region has declined 15% since 2018 as commodity prices have made row crop production more attractive than conservation payments.