When building on top of bay mud layers or when dredging estuary bottoms, a variety of regulatory frameworks may arise. Normally in the United States, an Environmental Impact Report as well as a geotechnical investigation are conducted precedent to any major construction over bay mud.  Combined, these reports have developed much of the data base extant on bay mud characteristics, frequently yielding original field data from soil borings.  These data have demonstrated that in many locations the shallower bay muds contain concentrations of mercury, lead, chromium, petroleum hydrocarbons, PCBs, pesticides and other chemicals which exceed toxic limits: a geological record of human activities of the last century.  These data are particularly important to consider when dredging of bay muds is contemplated as part of a development project. Such dredging can have impacts to receiving lands as soil contamination, but also water column impacts from sediment disturbance.
In the case of dredging within the United States, a permit is almost always required from the United States Army Corps of Engineers, after submission of extensive data on the project limits,  chemical properties of the bay muds to be disturbed, a dredge disposal plan and often a complete Environmental Impact Statement pursuant to the National Environmental Policy Act.  Further review by the United States Coast Guard would normally be required.  Within individual state jurisdictions, such as California, an Environmental Impact Report must be filed for dredging of any significance; furthermore, agency reviews by the California Coastal Commission and the Regional Water Quality Control Board would normally be mandated. All of these regulatory bodies serve an important role in deciding whether an area may be dredged or not. However, the most important body is the California Environmental Quality Act (CEQA). This guiding legislation is the reason for Environmental Impact Reports, costly mitigation measures and arduous review processes. One of CEQA's main goals is to promote interagency cooperation in the review process of a project. This is one of the main reasons why it is the overseer of all projects in California.
For buildings proposed over bay mud layers, typically the municipality involved will, in addition to the usual engineering and design review issues common to all building projects (which are more complicated because of the site conditions), require an Environmental Impact Report [https://web.archive.org/web/20060906222150/http://ceres.ca.gov/topic/env_law/ceqa/guidelines/].  This process would include reviews by that city's building department, as well as applicable regional and state agencies such as those cited above for dredging projects, except that Coast Guard agencies would not typically be concerned. In developing in California, proposed development over bay mud layers would also have to go through a planning commission and a city council in order to be allowed. This process would respect the EIR, CEQA, and all the other bodies discussed above. In the case of San Francisco the project would have to get approved by the San Francisco Board of Supervisors.
In regards to San Francisco, some interesting negative externalities are being experienced due to the dredging of land by the Bay. The Millennium Towers, which were completed in 2008, are currently sinking. This has had a negative impact on the residents of this building. In response to this subsidence, San Francisco's city attorney has decided to file a lawsuit against the developer, because the developer failed to inform the residents of the accelerated speed that the building was sinking at. If this lawsuit results in success for San Francisco this could lead to policy changes being made in the future surrounding transparency between developers and potential buyers of the developed land.