February 2, 2010
As a service to our clients, Terra Technologies would like to summarize some recent developments regarding the process of mitigating for a project’s impacts to jurisdictional streams, wetlands and ponds under Section 404 and 401 of the Clean Water Act. These changes have been slowly taking place since the release of the U.S. Army Corps of Engineers and U.S. Environmental Protection Agency’s regulations in the 2008 Clean Water Act Section 404 Compensatory Mitigation Rule for Losses to Aquatic Resources but the local U.S. Army Corps of Engineers districts have now fully incorporated the regulations into their daily activities.
The most important change to our clients is the preference for mitigation banks as a method of mitigating a project’s impacts. In the past, the U.S. Army Corps of Engineers preferred on-site mitigation projects to all other forms of mitigation, but now the new hierarchy for permit applicants, in order of preference, is:
- Mitigation Banks
- In-lieu Fee Programs
- Permittee-Responsible On-Site Mitigation
- Permittee-Responsible Off-Site Mitigation
In making this decision, the U.S. Army Corps of Engineers and U.S. Environmental Protection Agency considered the findings of recent government reports which stated that there was insufficient monitoring and quality control of the many small permittee-responsible on-site and off-site mitigation areas and that larger mitigation parcels such as mitigation banks and in-lieu fee program project sites offer a greater likelihood of success. Additionally, mitigation banks and in-lieu fee program project sites have more substantial environmental benefits than the other mitigation options because of their larger size and because, in general, they are built before the impacts that they mitigate for have occurred.
Both mitigation banks and in-lieu fee programs are beneficial to permit applicants because the applicant can write a check and then walk away from the liability or hassle that occurs with permittee-responsible mitigation projects. In-lieu fee programs are similar to mitigation banks except that they are run by non-profit or governmental agencies and have a longer delay between when the impacts occur and when the mitigation project has to commence.
Another change that resulted from the 2008 mitigation rule is the greater detail required from permittee-responsible mitigation plans which had previously varied significantly in their organization depending on the preferences of the document’s preparer and the local U.S. Army Corps of Engineers district. Now each permittee-responsible project mitigation plan has to follow the same outline as the larger and more complex mitigation banks have to provide. The specific required mitigation plan sections include:
- Objectives
- Site Selection Criteria
- Site Legal Protection Instrument (Conservation Easement or Deed Restriction)
- Baseline information (Impact site & Mitigation site)
- Determination of Credits
- Mitigation Work Plan
- Maintenance Plan
- Performance Standards
- Monitoring Requirements
- Long-Term Management Plan
- Adaptive Management Plan
- Financial Assurances & Accounting Reports
- Other Information
In addition to the simple organizational changes to permittee-responsible mitigation plans, the U.S. Army Corps of Engineers is only allowing these mitigation sites in certain circumstances. Additionally,more documentation is now required to justify the location of the mitigation site and the permit applicant has to post some sort of financial assurances (bond, letter of credit, etc.) to make sure that the mitigation requirements can be satisfied even if the permittee is unable or unwilling to complete the mitigation project.
Taken as a whole, these changes have the following impacts on developers, municipalities and other Section 404 and 401 permit applicants:
- A higher likelihood of utilizing a mitigation bank (less hassle & risk to permittees)
- Permittee-responsible mitigation projects are a less attractive option than in the past because the financial assurances and greater consultant costs because of the more detailed mitigation plan will drive up costs
