Proposed Rule: Aquatic Resources Losses Compensatory Mitigation

Tuesday,
March 28, 2006
Part II
Department of
Defense
Department of the Army, Corps of
Engineers
33 CFR Parts 325 and 332
Environmental
Protection Agency
40 CFR Part 230
Compensatory Mitigation for Losses of

Aquatic Resources; Proposed Rule
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15520 Federal Register / Vol. 71, No. 59 / Tuesday, March 28, 2006 / Proposed Rules
DEPARTMENT OF DEFENSE docket number, EPA–HQ–OW–2006– material, such as copyrighted material,

0020, and/or the RIN number, 0710– is not placed on the Internet and will be
Department of the Army, Corps of AA55, in the subject line of the message. publicly available only in hard copy
Engineers • Mail: USEPA Docket Center, form. Publicly available docket
Attention Docket Number EPA–HQ– materials are available either
33 CFR Parts 325 and 332 OW–2006–0020, 1200 Pennsylvania electronically in www.regulations.gov or
Ave., NW., Washington, DC 20460. in hard copy at the Water Docket, EPA/
ENVIRONMENTAL PROTECTION • Hand Delivery: USEPA Docket DC, EPA West, Room B102, 1301
AGENCY Center, Room B102, EPA West, Constitution Ave., NW., Washington,
Attention Docket Number EPA–HQ– DC. The Public Reading Room is open
40 CFR Part 230 OW–2006–0020, 1301 Constitution from 8:30 a.m. to 4:30 p.m., Monday
Ave., NW., Washington, DC 20460. Such through Friday, excluding legal
[EPA–HQ–OW–2006–0020] deliveries are only accepted during the holidays. The telephone number for the
RIN 0710–AA55 Docket’s normal hours of operation, and Public Reading Room is (202) 566–1744,
special arrangements should be made and the telephone number for the Water
Compensatory Mitigation for Losses of for deliveries of boxed information. Docket is (202) 566–2426.
Aquatic Resources Instructions: Direct your comments to Consideration will be given to all
docket number EPA–HQ–OW–2006– comments received within 60 days of
AGENCIES: U.S. Army Corps of
0020 and/or RIN 0710–AA55. All the date of publication of this notice.
Engineers, DoD; and Environmental
comments received will be included in
Protection Agency. FOR FURTHER INFORMATION CONTACT: Mr.
the public docket without change and
ACTION: Proposed rule. David Olson at 202–761–4922 or by e-
may be made available on-line at http://
mail at david.b.olson@usace.army.mil,
SUMMARY: The U.S. Army Corps of
www.regulations.gov, including any
or Mr. Palmer Hough at 202–566–8323
Engineers (the Corps) and the personal information provided, unless
or by e-mail at mitigationrule@epa.gov.
Environmental Protection Agency (EPA) the commenter indicates that the
Information can also be found at the
are proposing to revise regulations comment includes information claimed
to be Confidential Business Information EPA compensatory mitigation webpage
governing compensatory mitigation for at: http://www.epa.gov/
activities authorized by permits issued (CBI) or other information whose
disclosure is restricted by statute. Do wetlandsmitigation.
by the Department of the Army. The
not submit information that you SUPPLEMENTARY INFORMATION:
proposed regulations are intended to
consider to be CBI, or otherwise I. Background
establish performance standards and
protected, through www.regulations.gov
criteria for the use of permittee- Section 314 of the National Defense
or e-mail. The www.regulations.gov Web
responsible compensatory mitigation Authorization Act for Fiscal Year 2004
site is an anonymous access system,
and mitigation banks, and to improve (Pub. L. 108–136) requires the Secretary
which means we will not know your
the quality and success of compensatory of the Army, acting through the Chief of
identity or contact information unless
mitigation projects for activities Engineers, to issue regulations
you provide it in the body of your
authorized by Department of the Army ‘‘establishing performance standards
comment. If you send an e-mail directly
permits. The proposed regulations are and criteria for the use, consistent with
to EPA without going through
also intended to account for regional www.regulations.gov, your e-mail section 404 of the Federal Water
variations in aquatic resource types, address will be automatically captured Pollution Control Act (33 U.S.C. 1344),
functions, and values, and apply and included as part of the comment of on-site, off-site, and in-lieu fee
equivalent standards to each type of that is placed in the public docket and mitigation and mitigation banking as
compensatory mitigation to the made available on the Internet. If you compensation for lost wetlands
maximum extent practicable. The submit an electronic comment, we functions in permits issued by the
proposed rule includes a watershed recommend that you include your name Secretary of the Army under such
approach to improve the quality and and other contact information in the section.’’
success of compensatory mitigation body of your comment and with any The statute states that the regulation
projects in replacing losses of aquatic disk or CD–ROM you submit. If we should address wetlands compensatory
resource functions, services, and values cannot read your comment because of mitigation. However, we believe that
resulting from activities authorized by technical difficulties and cannot contact this regulation should apply to
Department of the Army permits. We are you for clarification, we may not be able compensatory mitigation for all types of
proposing to require in-lieu fee to consider your comment. Electronic aquatic resources that can be impacted
programs, after a five-year transition comments should avoid the use of any by activities authorized by Department
period, to meet the same standards as special characters, any form of of the Army permits, including streams
mitigation banks. encryption, and be free of any defects or and other open waters. We also believe
DATES: Submit comments on or before viruses. For additional information that this regulation should apply to
May 30, 2006. about EPA’s public docket visit the EPA compensatory mitigation required for
ADDRESSES: You may submit comments, Docket Center homepage at http:// activities in navigable waters of the
identified by docket number EPA–HQ– www.epa.gov/epahome/dockets.htm. United States that are subject to
OW–2006–0020 and/or RIN 0710– Docket: For access to the docket to regulatory jurisdiction under Sections 9
AA55, by any of the following methods: read background documents or and 10 of the Rivers and Harbors Act of
• Federal eRulemaking Portal comments received, go to 1899. We believe this approach does not
(recommended method of comment www.regulations.gov. All documents in conflict with the intent of the statute,
submission): http:// the docket are listed. Although listed in and will provide the regulated public
www.regulations.gov. Follow the on-line the index, some information is not with clear national standards and
instructions for submitting comments. publicly available, such as CBI or other requirements for all aquatic resource
• E-mail: ow- information whose disclosure is compensatory mitigation required by
docket@epamail.epa.gov. Include the restricted by statute. Certain other Department of the Army permits, while
Federal Register / Vol. 71, No. 59 / Tuesday, March 28, 2006 / Proposed Rules 15521
allowing district engineers flexibility to 66914); and the ‘‘Memorandum of are addressed through other regulations
address permit-specific situations. We Agreement Between the Environmental and authorities.
also believe this approach will enhance Protection Agency and the Department During the development of the
regulatory efficiency and improve of the Army Concerning the proposed rule, we considered the
protection of the aquatic environment. Determination of Mitigation Under the following compensatory mitigation
The statute states that the regulation Clean Water Act Section 404(b)(1) guidance documents and lessons
should be developed by the Department Guidelines’’ (issued on February 6, learned from their implementation:
of the Army, with the provision that the 1990). Regulatory Guidance Letter 02–02
standards and criteria developed be We also believe the proposed rule (issued on December 24, 2002); the
consistent with Section 404 of the Clean establishes, to an extent that is feasible ‘‘Federal Guidance for the
Water Act. We believe that the goals of and practical, equivalent standards for Establishment, Use, and Operation of
the Clean Water Act and the Defense all forms of compensatory mitigation, Mitigation Banks’’ (as published in the
Authorization Act will be more given the basic differences between the November 27, 1995, issue of the Federal
effectively met if this proposed rule is current mechanisms for providing Register, 60 FR 58605); the ‘‘Federal
issued jointly by the Corps and EPA. A compensatory mitigation (i.e., Guidance on the Use of In-Lieu Fee
jointly-issued proposed rule reflects the permittee-responsible mitigation, Arrangements for Compensatory
important roles played by both agencies mitigation banks, and in-lieu fee Mitigation Under Section 404 of the
in the Section 404 program, in which programs). In many cases, it is not Clean Water Act and Section 10 of the
the permit program is administered by practical to impose all the same Rivers and Harbors Act’’ (as published
the Corps, while the responsibility for requirements on permittee-responsible in the November 7, 2000, issue of the
developing the regulations providing mitigation projects as on mitigation Federal Register, 65 FR 66914); and the
the environmental criteria for permit banks, so some differences in the ‘‘Memorandum of Agreement Between
issuance is given to EPA. Since the requirements for these types of the Environmental Protection Agency
proposed rule is in part a clarification mitigation remain. However, we are and the Department of the Army
of EPA regulations concerning Section proposing to require in-lieu fee program Concerning the Determination of
404 mitigation, a joint rule helps to sponsors to modify their programs Mitigation Under the Clean Water Act
ensure maximum consistency in the within five years to comply with the Section 404(b)(1) Guidelines’’ (issued on
implementation of the section 404 same standards and requirements as February 6, 1990).
regulatory program. Furthermore, CWA mitigation banks, to provide greater In preparing the proposed rule, we
Section 501(a) authorizes EPA to assurances that compensatory considered the findings and
conduct any rulemaking necessary to mitigation projects undertaken by in- recommendations in the National
carry out EPA’s functions under the lieu fee programs will successfully Research Council’s report issued in
Clean Water Act. replace lost aquatic resource functions 2001 entitled ‘‘Compensating for
Joint issuance also provides basic and services. We are also seeking Wetland Losses Under the Clean Water
regulatory consistency. Environmental comment on alternative approaches that Act’’ (NRC Report). We also
criteria for the selection of disposal sites would retain in-lieu fee programs as a contemplated other studies and
for discharges of dredged or fill material separate category of mitigation with documents cited in the draft
are set by EPA regulations at 40 CFR somewhat different requirements. These Environmental Assessment/Regulatory
part 230, and referenced by Corps alternatives are explained in further Analysis that was prepared by the Corps
regulations at 33 CFR part 320. Since detail in Section VI of this preamble. for this proposed rule. The
the proposed rule is in part a By establishing, to the maximum Environmental Assessment/Regulatory
clarification of EPA’s regulations at 40 extent practicable, equivalent standards Analysis is available at the Corps
CFR part 230, EPA must add the for all forms of compensatory Headquarters Regulatory Home page at:
proposed rule text to its existing mitigation, we believe success rates of http://www.usace.army.mil/inet/
regulations in order to maintain compensatory mitigation projects will functions/cw/cecwo/reg/citizen.htm.
consistency between the two linked improve, and entrepreneurs and others Hard copies of this document can be
Parts of the CFR. Making the two will be encouraged to develop obtained by contacting Corps
agencies’ additions concurrent will mitigation banks. Improving the Headquarters at the phone number
avoid any confusion on the part of the processes applicable to the development provided in the FOR FURTHER
regulated community and the public. and approval of mitigation banks is INFORMATION CONTACT section, above.
Moreover, the history of a joint EPA/ expected to result in more mitigation The proposed rule incorporates many
Corps relationship on mitigation issues banking proposals, which would of the recommendations suggested in
is long. All national guidance on provide more compensatory mitigation the NRC Report to improve the
compensatory mitigation has been in advance of authorized impacts to ecological success and sustainability of
developed and issued jointly by the waters of the United States. wetland compensatory mitigation
Corps and EPA, including Regulatory The proposed rule does not apply to projects. Through the standards and
Guidance Letter 02–02 (issued on compensatory mitigation that may be requirements in this proposed rule, we
December 24, 2002); the ‘‘Federal required for impacts other than to intend to improve the quality and
Guidance for the Establishment, Use, aquatic resources resulting from success of aquatic resource restoration,
and Operation of Mitigation Banks’’ (as activities authorized by DA permits, establishment, enhancement, and
published in the November 27, 1995, such as impacts to historic properties. preservation activities used to provide
issue of the Federal Register, 60 FR Under appropriate circumstances, a DA compensatory mitigation for DA
58605); the ‘‘Federal Guidance on the permit may require compensatory permits, and to help maintain and
Use of In-Lieu Fee Arrangements for mitigation measures to ensure improve the aquatic environment within
Compensatory Mitigation Under Section compliance with the Endangered watersheds.
404 of the Clean Water Act and Section Species Act or the National Historic In the NRC Report, the committee
10 of the Rivers and Harbors Act’’ (as Preservation Act, or to address some concluded that a watershed approach
published in the November 7, 2000, other public interest requirement. Those would improve permit decision making,
issue of the Federal Register, 65 FR compensatory mitigation requirements and stated that wetland functions must
be understood from a watershed II. General Principles in the Proposed wetlands require narrow hydrologic
perspective to fulfill the objectives of Rule regimes because many tree species
the Clean Water Act. The committee For the purposes of the Corps cannot tolerate long periods of
noted that an automatic preference for Regulatory Program, compensatory inundation. Development activities may
in-kind and on-site compensatory mitigation is used to replace aquatic change local hydrology, resulting in
mitigation is inconsistent with a resource functions, services, and values new patterns of inundation and
watershed approach since there are that are lost to permitted impacts. saturation that cannot support forested
circumstances in which on-site or in- Compensatory mitigation for losses of wetlands. Therefore, it is important to
kind mitigation is neither practicable aquatic resources can help sustain or find a compensatory mitigation project
nor environmentally preferable. In improve watershed functioning, and site that will support the appropriate
addition, the committee suggested using support the objective of the Clean Water hydrology for the desired type of
an analytical process for assessing Act, which is to ‘‘restore and maintain wetland habitat. Second, even if the
wetland needs within a watershed and the chemical, physical, and biological desired habitat type can be restored or
the potential for compensatory integrity of the Nation’s waters’’ (33 established at that site, surrounding
mitigation projects to persist over time. U.S.C. 1251(a)). One intent of the development may result in an isolated
In the proposed rule, we revise proposed rule is to improve the quality or fragmented habitat that is less
compensatory mitigation policies and of compensatory mitigation for DA capable of supporting viable
procedures to conform with current permits, to satisfy the objective of the populations of species of import. Motile
principles of ecological restoration and Clean Water Act by improving the species require corridors to move
landscape ecology. The proposed rule performance of compensatory mitigation between different habitats in the
also aims to reduce regulatory burdens projects in replacing aquatic resource landscape, and if the surrounding area
on mitigation bank sponsors by making functions, services, and values. Another is occupied by roads and buildings, the
the mitigation bank approval process intent of the proposed rule is to improve ability of many species to move between
more efficient through changes in the regulatory efficiency, especially for the habitats and interact with each other is
review and approval process. review, approval, and implementation restricted. Therefore, compensatory
The proposed rule also complements of mitigation banks. Finally, the mitigation projects, especially those that
the Corps’ and EPA’s ongoing efforts to proposed rule fulfills the mandate to are intended to replace wetland habitat,
implement the National Wetlands ensure opportunities for federal agency need to be planned within larger
Mitigation Action Plan (NWMAP). In participation in mitigation banking. landscape contexts, such as watersheds.
response to the NRC report and other In addition to supporting the objective In its report on wetland compensatory
independent critiques of the of the Clean Water Act, the proposed mitigation, the NRC stated that
effectiveness of compensatory rule will support the ‘‘no overall net ‘‘[l]andscape position, hydrologic
mitigation for authorized losses of loss’’ goal for wetland acreage and variability, species richness, biological
wetlands and other aquatic resources functions, through appropriate site dynamics, and hydrologic regime are all
under Section 404 of the Clean Water selection for wetlands compensatory important factors that affect wetland
Act, the Corps, EPA, and the mitigation projects. Locating restoration.’’
Departments of Agriculture, Commerce, compensatory mitigation projects where For activities authorized by DA
Interior, and Transportation released the they will provide the desired habitat permits in coastal and urban areas,
NWMAP on December 26, 2002. The type and functions to appropriately compensatory mitigation required by
NWMAP includes 17 tasks designed to offset impacts will support the ‘‘no district engineers will be located in
improve the ecological performance and overall net loss’’ goal for wetland areas where it is appropriate and
results of compensatory mitigation. acreage and function. practicable to conduct aquatic resource
Thus far, eight of the tasks called for in The proposed rule does not alter restoration, establishment, and
the NWMAP have been completed and Corps regulations which address the enhancement activities. It is important
work continues on efforts to improve general mitigation requirements for DA that coastal and other urban areas do not
wetland impact and mitigation data permits. In particular, it does not alter become devoid of aquatic resources
collection and tracking. However, work the circumstances under which simply because it is more difficult to
on the remaining guidance documents compensatory mitigation is required. successfully restore or establish aquatic
called for in the NWMAP awaits Also, the proposed rule does not alter habitat in developing areas. In some
finalization of this proposed rule. Corps or EPA enforcement authorities cases, however, preservation may be the
The proposed rule is consistent with for the section 404 program, as specified most appropriate form of compensatory
Executive Order 13352, Facilitation of in sections 301(a), 308, 309, 404(n), and mitigation in coastal and urban areas. In
Cooperative Conservation. The 404(s) of the Clean Water Act. addition to providing important
proposed rule includes collaborative Site selection is a critical planning ecological functions, wetlands and other
approaches to decision-making for step for compensatory mitigation aquatic resources also perform
compensatory mitigation required by projects, and the watershed approach in important services, such as wildlife
DA permits consistent with the the proposed rule is intended to focus viewing and education, that can only be
definition of cooperative conservation on choosing appropriate locations for accomplished when people have
in the Order. The provisions of the rule compensatory mitigation activities. opportunities to interact with those
will ensure that determinations Restoring or establishing a specific aquatic resources. The functions and
regarding compensatory mitigation aquatic habitat type, such as a wetland, services that aquatic resources perform
requirements take into account the requires careful site selection for two in turn provide the basis for the values
interests of landowners and other primary reasons. First, development that society derives from them. These
legally recognized interests in land and activities may alter the interaction include use values, such as recreation,
other natural resources, and between hydrology, soils, and organisms and non-use values such as biodiversity
accommodate agency and local within a landscape, affecting the type of and stewardship for future generations.
participation in federal decision- habitat that can be supported by the Aquatic resource functions, services,
making. project site. For example, forested and values should be considered when
evaluating sites in developed areas as the draft mitigation banking instrument compensatory mitigation projects.
options for providing compensatory with an Interagency Review Team (IRT). Project sponsors may consult with the
mitigation. Mitigation projects for We are proposing to establish clearly Corps to see if such information has
impacts authorized by DA permits defined time frames for this review and been developed in the past in
should compensate for lost functions a dispute resolution process whereby association with other projects in the
and services. While values are also members of the IRT can expeditiously watershed. For smaller projects
considered as part of the public interest elevate issues associated with proposed requiring DA authorization, all of the
review, it is not always possible to fully mitigation banks for higher level review types of information listed above may
compensate for lost values, as these are where necessary. not be available, but that information
often dependent on proximity to should generally be available (or
III. Watershed Approach
population centers. Replacing aquatic developed) for larger projects.
resources at more remote locations may In the NRC Report, the committee The agencies request comment on
enhance some values (e.g., preservation recommended that the Corps adopt a whether the rule should specify
of species) while decreasing others (e.g., watershed-based approach to minimal information requirements for
recreational enjoyment). compensatory mitigation. The use of the watershed approach.
Within a watershed context, it may be committee stated that the ecological Commenters should bear in mind that
more appropriate to replace certain functions of a restored or established specifying minimum information
aquatic resource functions on-site, wetland are dependent on its design and requirements will likely limit the areas
whereas it may be more appropriate to its setting or context within a where a watershed approach can be
replace other functions off-site. For watershed. The committee also said that used, at least in the medium term, as
example, it may be environmentally the types and locations of wetlands in much of the above information is
preferable, to replace hydrologic and the landscape are important for currently not available for many areas.
water quality functions at the impact providing desired functions. This problem was recognized by the
site with a mitigation project that Ideally, the watershed approach is NRC, which recommended that in such
performs these functions, and to replace based on a formal watershed plan, situations watershed based decision-
habitat functions at an off-site location, developed by Federal, state, and/or local making should rely on the scientific
such as a mitigation bank or a environmental managers in consultation expertise of wetlands program staff (i.e.,
compensatory mitigation project site with affected stakeholders. Currently, Corps permit writers and other Federal
near a park or nature reserve. there are many areas where no agency review staff) and broad-based
Through the watershed approach in watershed plan exists. The Corps and stakeholder participation. As discussed
the proposed rule, we intend to improve EPA are committed to working with our below, the proposed rule includes a
environmental outcomes of counterparts at other levels of requirement that information on how a
compensatory mitigation required for government to develop watershed plans, prospective permittee plans to address
DA permits, including the effectiveness especially for areas facing significant avoidance, minimization, and
of compensatory mitigation in replacing development pressure. In the meantime, compensatory mitigation requirements
impacted aquatic resource functions. the watershed approach described in the be included in the permit application
The watershed approach uses a NRC Report does not require a formal and published by the Corps in the
landscape perspective that places watershed plan. Instead, the watershed public notice for the permit application.
primary emphasis on site selection, approach may be based on a structured This requirement is intended to promote
through consideration of landscape consideration of watershed needs and the kind of broad-based stakeholder
attributes that will help provide the how wetland types in specific locations involvement in watershed based
desired aquatic resource types and can fulfill those needs. mitigation decisions envisioned by the
ensure they are self-sustaining. The The use of a watershed approach is NRC Report.
watershed approach also considers how based on analysis of information A watershed approach to
other landscape elements (e.g., other regarding watershed conditions and compensatory mitigation involves a
natural resources and developments) needs. Where an applicable watershed regional or landscape perspective, and
interact with compensatory mitigation plan exists, such information will should involve consideration of Federal,
project sites and affect the functions generally already have been considered Tribal, state, community, and private
they are intended to provide. in the development of the plan. Where interests, including the requirements of
In the proposed rule, the district no such plan exists, project sponsors other programs and objectives, such as
engineer determines whether the may propose compensatory mitigation habitat conservation, storm water
compensatory mitigation option or based on the watershed approach using management, flood control, pollution
proposal submitted by the permit appropriate information from other prevention, and economic development
applicant is adequate to offset sources. Such information includes: when determining compensatory
unavoidable impacts, based on what is Current trends in habitat loss or mitigation requirements for DA permits.
practicable and what will appropriately conversion, cumulative impacts of past The agencies note that the term
compensate for the aquatic resource development activities, current ‘‘watershed approach’’ is now used by a
functions and services that will be development trends, the presence and variety of Federal, State, and local
impacted as a result of the permitted needs of sensitive species, site agencies, as well as by private parties,
activity. In pre-application consultation, conditions that favor or hinder the but a consensus definition of this term
the Corps may also provide information success of mitigation projects, chronic has not yet emerged. The watershed
on existing watershed plans or environmental problems such as approach presented in this proposed
watershed needs. flooding or poor water quality, and local rule is a framework being proposed for
The proposed rule also establishes watershed goals and priorities. Project use in determining compensatory
that the district engineer makes sponsors should make a reasonable mitigation requirements for DA permits.
decisions regarding the approval of effort, commensurate with the scope The watershed approach described in
mitigation banking instruments, after and scale of the project and impacts, to the proposed rule does not supersede or
coordinating a review of the prospectus obtain as much of this information as replace other uses of the term
for the proposed mitigation bank and possible as they design the ‘‘watershed approach’’ in natural
resource management programs proposed compensatory mitigation 33 CFR 325.1 Application for Permits
conducted by other government activities, as well as requirements for Since § 332.4(b)(1) of the proposed
agencies. We are soliciting comments on mitigation plans. rule requires applicants for standard
whether, and if so, how, the watershed Section 332.5 [230.95], Ecological section 404 permits to submit a
approach in the proposed rule differs performance standards, describes statement explaining how impacts to
from the watershed approaches used in principles for establishing ecological waters of the United States are to be
other natural resource management performance standards for avoided, minimized, and compensated,
programs, and how any such differences compensatory mitigation projects. we are also proposing to modify
may affect implementation of the § 325.1(d) by adding a new paragraph
watershed approach for determining Section 332.6 [230.96], Monitoring,
describes general requirements for (paragraph (d)(7)). This new paragraph
compensatory mitigation requirements would further clarify the information
for DA permits. monitoring compensatory mitigation
projects. required for a complete standard permit
The watershed approach in the application for activities that involve
proposed rule will be implemented by Section 332.7 [230.97], Management, discharges of dredged or fill material
district engineers with available describes general requirements for site into waters of the United States, so that
information to determine the types and protection, sustainability, adaptive we can describe the proposed
locations of compensatory mitigation management, and long-term avoidance, minimization, and
activities that would best serve the management of compensatory compensation in the public notice. The
watershed. Available information used mitigation projects. remaining paragraphs in this section
by district engineers includes current would be renumbered, but the text of
Section 332.8 [230.98], Mitigation
trends in habitat loss or conversion, those paragraphs would remain the
banks, provides requirements and
cumulative impacts of past development same.
standards that are applicable to
activities, current development trends,
mitigation banks. 40 CFR 230.12 Findings of Compliance
the presence and needs of sensitive
species, site conditions that favor or Section 332.9 [230.99], In-lieu fee or Non-Compliance With the
hinder the success of mitigation programs, establishes deadlines for Restrictions on Discharge
projects, chronic environmental existing in-lieu fee programs to modify Section 230.12(a)(2) specifies that
problems such as flooding or poor water their current agreements to comply with permits may only be issued if certain
quality, local watershed goals and the requirements of this rule. conditions are met that avoid, minimize,
priorities, assessments of watershed It is important to note that §§ 332.1 to and compensate for impacts to aquatic
conditions, best professional judgment, 332.7 apply to all new compensatory resources. The proposed change would
and site conditions, as well as other mitigation projects, including mitigation indicate that requirements for
relevant data. banks, while §§ 332.8 and 332.9 contain compensation for impacts can be found
The watershed approach in the special provisions for new mitigation in Subpart J as well as Subpart H.
proposed rule will help support the banks and existing in-lieu fee programs,
objective of Clean Water Act, and is 40 CFR Part 230 Subpart H—Actions
respectively. Existing mitigation banks To Minimize Adverse Effects
intended to result in more effective may continue operating under the terms
replacement of aquatic resource of their approved instruments, but any We propose to add a sentence to the
functions impacted by activities modifications to such instruments, introductory ‘‘Note’’ of Subpart H
authorized by DA permits. The level of including the addition of new sites for indicating that Subpart J also contains
detail used in the watershed approach umbrella instruments, would be subject requirements regarding compensating
for a specific activity is dependent on to the requirements in this rule. New in- for impacts to aquatic resources. At
the availability of information and on lieu-fee programs would not be § 230.75(d), we propose to add a similar
the scope and scale of that activity. approved once the rule goes into effect. reference to Subpart J following the
Existing in-lieu-fee programs may second sentence of the paragraph.
IV. Organization of the Proposed Rule Other than the inclusion of the
continue to operate under the terms of
The proposed compensatory citations described above noting the
their approved instrument for up to five
mitigation regulation in 33 CFR part 332 addition of Subpart J, we are not seeking
years after the effective date of the rule.
[40 CFR part 230], is organized into the comment on the existing text or
following sections: V. Discussion of Specific Sections of the provisions in Subparts B or H.
Section 332.1 [230.91], Purpose and Proposed Rule 33 CFR 332.1 and 40 CFR 230.91
general considerations, describes the
The proposed rule is presented in two Purpose and General Considerations
basic purpose of the proposed rule and
general principles concerning parallel sections: changes to Corps The proposed rule will not alter the
compensatory mitigation. regulation in 33 CFR and changes to circumstances under which the district
Section 332.2 [230.92], Definitions, EPA regulation in 40 CFR. The two engineers require compensatory
provides definitions of important terms sections are almost entirely the same, mitigation. In other words, the threshold
relating to compensatory mitigation and with minor exceptions. These include: for determining when compensatory
the Corps Regulatory Program. (1) Corps changes to permit application mitigation is required for a particular
Section 332.3 [230.93], General requirements at 33 CFR 325.1; (2) activity that needs a DA permit is
compensatory mitigation requirements, Conforming changes to EPA’s existing unchanged by the proposed rule. For
describes general compensatory mitigation regulations at 40 CFR part example, district engineers will
mitigation requirements for DA permits, 230, making appropriate citations for continue to use the criteria at 33 CFR
including permit conditions and the addition of new §§ 230.91 through 320.4(r) and 33 CFR 330.1(e)(3) to
financial assurances. This section also 230.99; and (3) References to the Rivers determine when compensatory
describes the watershed approach to and Harbors Act of 1899, in which the mitigation should be required. The
compensatory mitigation. EPA does not have a regulatory role, proposed rule will not increase
Section 332.4 [230.94], Planning and have been omitted from the text in part compensatory mitigation requirements,
documentation, describes the review of 230. but it focuses instead on where and how
compensatory mitigation will be ‘‘parcel of land contiguous to’’ to 33 CFR 332.3 and 40 CFR 230.93
provided. include lands near the impact site as General Compensatory Mitigation
The proposed rule also does not affect ‘‘on-site’’ lands. We are also proposing Requirements
regulatory jurisdiction under Section a corresponding change to the definition
404 of the Clean Water Act or Sections of ‘‘off-site’’ so that these definitions are This section of the proposed rule
9 and 10 of the Rivers and Harbors Act parallel to each other. establishes criteria for determining the
of 1899. However, areas not subject to We are also proposing definitions of location and type of compensatory
regulatory jurisdiction under these the terms ‘‘functions’’, ‘‘services’’, and mitigation and describes the watershed
statutes may be used as compensatory ‘‘values.’’ All three of these terms have approach to compensatory mitigation
mitigation, if the creation, restoration, been used by various documents in the for losses of aquatic resources. When
enhancement, or preservation of aquatic past to describe the attributes of aquatic project impacts are located in the
resources in those areas will resources that are being replaced service area of an approved mitigation
compensate for ecosystem functions lost through compensatory mitigation. The bank, and the mitigation bank has
at the impact site. agencies believe it is important to credits available for the type of resource
33 CFR 332.2 and 40 CFR 230.92 articulate the differences among these impacted, the project’s mitigation
Definitions terms and the appropriate role of each requirements may be met by the
within the Section 404 Program. purchase of an appropriate number of
The definitions provided in this credits from the mitigation bank. The
section of the draft rule are intended to We are proposing the following
definition of ‘‘functions.’’ Functions use of a watershed plan is the most
provide clarity to the regulated public, preferable option when evaluating
and promote consistency in the means the physical, chemical, and
biological processes that occur in permittee-responsible compensatory
implementation of this rule. The mitigation proposals and draft
definitions were adapted from several aquatic resources and other ecosystems.
The primary purpose of compensatory mitigation banking instruments. If a
sources, including the Federal guidance watershed plan is not available, the
documents listed in the ‘‘Background’’ mitigation is to replace lost aquatic
resource functions at the impact site. watershed approach described in
section in this preamble. § 332.3(c) should be used. If it is not
We are proposing a definition of the The agencies have a long standing
policy of achieving no overall net loss practicable to use a watershed approach,
term ‘‘adaptive management’’ as
for wetland acreage and functions. then the district engineer will consider
follows. Adaptive management means
Services means the benefits that human the practicability of on-site
the development of a management
populations receive from functions that compensatory mitigation, as well as the
strategy that anticipates the challenges
occur in aquatic resources and other compatibility of on-site mitigation with
associated with likely future impacts to
ecosystems. For example, providing the proposed project. The watershed
the aquatic resource functions of the
habitat for birds is a biological function approach will identify resource types
mitigation site. It acknowledges the risk
of some aquatic habitat types, which in and locations for compensatory
and uncertainty of compensatory
turn provides bird watching services to mitigation projects within the
mitigation projects and allows
humans. In general, compensatory watershed. It is important to understand
modification of those projects to
mitigation projects, in replacing lost that a watershed approach may include
optimize performance. The process will
functions at the impact site, should also on-site compensatory mitigation, off-site
provide guidance on the selection of
replace the lost services associated with compensatory mitigation (including
appropriate remedial measures that will
these functions. mitigation banks), or a combination of
ensure the continued adequate
Values means the utility or on-site and off-site mitigation. Also, the
provision of aquatic resource function
satisfaction that humans derive from identified compensatory mitigation
and involves analysis of monitoring
aquatic resource services. Values can be projects may be in-kind, out-of-kind, or
results to identify potential problems of
described in monetary terms or in a mixture of in-kind and out-of-kind
a compensatory project and
qualitative terms, although many of the compensatory mitigation.
identification of measures to rectify
those problems. values associated with aquatic resources The information used to conduct a
In the September 2003 report of the cannot be easily monetized. Values can watershed approach is listed in
National Environmental Policy Act be either use values (e.g., recreational § 332.3(c)(3). Where a watershed plan
(NEPA) Task Force, which is entitled enjoyment) or non-use values (e.g., exists, all or most of this information
‘‘Modernizing NEPA Implementation,’’ stewardship ethic). Values are will have been considered in the
the NEPA Task Force recommended that considered by the District Engineer as development of that plan. Where no
the NEPA workgroup consider part of the public interest review of a formal watershed plan exists, project
establishing a definition of adaptive proposed project. However, the values sponsors should make a reasonable
management that would be promulgated associated with compensatory effort, commensurate with the scope
in the NEPA regulations at 40 CFR part mitigation projects may not fully mirror and scale of the project, to obtain as
1508. If a definition of ‘‘adaptive those lost at the impact site. For much of this information as possible as
management’’ is promulgated by the example, replacing a resource in a more they design the compensatory
Council on Environmental Quality remote area may reduce use values mitigation projects. Project sponsors
(CEQ), we will evaluate our proposed (because the area is less accessible) may consult with the Corps to see if
definition of this term to determine if while enhancing non-use values such information has been developed in
any changes are necessary to conform (because people may value resources on the past in association with other
with CEQ’s final definition. If such stewardship grounds more when they projects in the watershed. For smaller
changes are necessary, we will propose are in more pristine areas). We are projects requiring DA authorization, all
those changes in a future Federal seeking comment on the definitions in of the types of information listed in this
Register notice. this proposed rule, including the paragraph may not be available, but that
In the proposed definitions of ‘‘on- proposed definitions of ‘‘on-site’’, ‘‘off- information should generally be
site,’’ we are proposing to add the site’’, ‘‘functions’’, ‘‘services’’ and available (or developed) for larger
phrase ‘‘or near’’ after the phrase ‘‘values.’’ projects.
We are seeking comment on the trends, sources of watershed and services to the watershed. In the
watershed approach proposed in this impairment, and current development watershed approach in the proposed
rule, as well as the proposed criteria trends, as well as the requirements of rule, district engineers will first
regarding the location of compensatory other regulatory and non-regulatory consider in-kind compensatory
mitigation projects. programs that affect the watershed, such mitigation, but if the watershed
The amount of required compensatory as storm water management or habitat approach determines that out-of-kind
mitigation is dependent upon the conservation programs. compensatory mitigation would result
functions (or area when functions Another site selection factor is the in greater benefits to the aquatic
cannot be readily assessed) lost as a compatibility of compensatory environment within the watershed, then
result of the impacts authorized by the mitigation projects with proposed or out-of-kind compensation may be
DA permit and the functions (or area) existing facilities or projects. For authorized.
provided by the compensatory example, it is not appropriate to locate The NRC Report stated that the
mitigation project. In some cases, compensatory mitigation projects preservation of wetlands is appropriate
replacing the functions provided by the designed to attract wildlife species that in a watershed approach to
impacted aquatic resource may be are known to be hazardous to aviation compensatory mitigation, because it
achieved by a compensatory mitigation near airports. The Federal Aviation helps support the objective of the Clean
project smaller in area than the impact Administration issued Advisory Water Act. Preservation of aquatic
site. In other cases, a larger Circular 150/5200–33, ‘‘Hazardous resources helps secure desired wetland
compensatory mitigation project may be Wildlife Attractants on or Near types in a watershed and maintain
needed to replace the functions Airports,’’ In addition, the wetland diversity in that watershed. The
provided by the impacted aquatic ‘‘Memorandum of Agreement Between preservation of aquatic resources
resource. the Federal Aviation Administration, through appropriate real estate and legal
To determine the amount of U.S. Air Force, U.S. Army, U.S. instruments helps provide long-term
compensatory mitigation required for a Environmental Protection Agency, and maintenance of the aquatic environment
specific activity, acres or similar units of U.S. Department of Agriculture to in watersheds.
measure are likely to be the principal Address Aircraft Wildlife Strikes, which Both wetland and non-wetland
units for determining credits and debits. became effective in July 2003, also riparian areas are also important for
However, in cases where functional addresses this particular issue. District maintaining the aquatic resource
assessment methods are available, engineers need to consider these types functions and services of watersheds.
appropriate, and practical to use, of issues when determining Riparian areas are important for stream
district engineers should use those compensatory mitigation requirements restoration activities, as well as the
functional assessment methods to for DA permits (see § 332.3(b) of the restoration of other open waters.
determine how much compensatory proposed rule). Riparian areas are important to streams
mitigation should be required. For If the district engineer determines that and other open waters, and help
activities authorized by general permits, all of the aquatic resource functions augment aquatic resource functions by
it may not be practical to conduct cannot be effectively replaced at a single moderating temperature changes,
functional assessments for each general site, then more than one site may be removing excess nutrients and
permit activity. For certain types of used to provide the desired aquatic pollutants, providing a source of
aquatic resources, such as streams, it resource functions. Therefore, to detritus for aquatic food webs,
may be more appropriate to quantify maintain aquatic resource functions in a providing aquatic habitat heterogeneity,
credits and debits by using linear feet. watershed, the district engineer may storing flood waters, stabilizing
The value of a credit or debit is require a combination of on-site and off- sediments, and providing habitat for a
dependent upon the amount of aquatic site compensatory mitigation. For variety of aquatic and terrestrial species.
resource functions provided per acre (or example, on-site compensation may be Restoration or establishment of non-
linear foot). required to provide water quality, water aquatic riparian areas normally would
In the proposed rule, site selection is storage, and flood protection functions be used in conjunction with aquatic
a primary consideration for and services, while off-site resource restoration, establishment,
compensatory mitigation projects. The compensation may be required for enhancement, and/or preservation
watershed approach provides an losses of habitat functions. In general, activities, as part of an overall
analytical approach similar to the the proposed rule requires off-site compensatory mitigation project to
approach recommended by the NRC compensatory mitigation to be located offset losses of aquatic resources. With
committee. A watershed approach to in the same watershed as the impact the watershed approach, we are looking
compensatory mitigation considers the site. at combinations of different habitats as
importance of landscape position and The proposed rule generally requires components of a functioning landscape,
resource type for the ecological wetland compensatory mitigation for instead of habitat units in isolation from
functions and sustainability of aquatic wetland losses, and stream one another.
resources within the watershed. A compensatory mitigation for stream The NRC Report also acknowledged
watershed approach also considers the losses. However, the proposed rule the importance of upland areas as part
services provided by aquatic resources, provides flexibility for district engineers of the watershed approach to
as well as the values derived from to require compensatory mitigation that compensatory mitigation. The proposed
aquatic resource functions and services. is best for the watershed. For example, rule also requires consideration of the
Such an approach considers how the out-of-kind compensatory mitigation establishment and maintenance of
types and locations of compensatory may involve the restoration or upland buffers around the restored,
mitigation projects will provide the establishment of an aquatic habitat type established, enhanced, or protected
desired aquatic resource functions, and that is now rare, because of aquatic habitats to ensure the
will continue to function over time in a disproportionate impacts to that habitat sustainability of those habitats. Buffers
changing landscape. It also considers type in the past. Restoring or may augment aquatic resource
the habitat requirements of important establishing rare habitat types may help functions, and help increase the overall
species, habitat loss or conversion restore valuable ecological functions ecological functions of the
compensatory mitigation project site. normally would require the responsible facilitate public participation in both
Under limited circumstances, the party to implement appropriate the permit application and NEPA
district engineer may grant remedial measures, unless the review process. The purpose of the new
compensatory mitigation credit for compensatory mitigation project is permit application requirements is to
upland areas within a compensatory expected to respond to the event in a inform the public of the sponsor’s
mitigation project, if those uplands similar manner as comparable types of compensatory mitigation plans, as of the
increase the overall ecological aquatic resources in the watershed. time the application is filed, and most
functioning of the compensatory After the monitoring period has ended, importantly, to solicit informed public
mitigation site or other aquatic the district engineer would normally not comment on those plans, in whatever
resources in the watershed or ecoregion. require remediation if he determines stage of development they may be. It is
For example, uplands may provide that the failure is due to a natural not necessary for the final compensatory
connections between aquatic habitats catastrophe that was beyond the control mitigation option to have been selected
that are essential for the preservation of of the responsible party to prevent or prior to submitting a DA permit
certain species, such as amphibians. mitigate. In such cases, the provisions of application.
When determining the amount of the conservation easement (or other Paragraph (c) of this section of the
compensatory mitigation credit legal mechanism for long-term proposed rule requires permittees or
provided by uplands, the district protection of the site) will remain in mitigation bank sponsors to submit draft
engineer must consider whether the effect so that the compensatory and final mitigation plans to district
uplands perform ecological functions mitigation project site will be allowed to engineers. In the proposed rule, there is
that are important to the watershed and continue to evolve through natural a requirement for the district engineer to
are under threat of loss or substantial ecosystem development processes. This approve the final mitigation plan prior
degradation. approach to addressing natural to issuing the DA permit or approving
The proposed rule requires that catastrophes acknowledges the dynamic the mitigation banking instrument.
mitigation providers secure sufficient nature of the environment. This section also lists the types of
financial assurances to assure We are seeking comment on the information to be provided in draft and
completion of the compensatory provisions in this section. final mitigation plans. Permittees
mitigation project consistent with an proposing to use a mitigation bank to
33 CFR 332.4 and 40 CFR 230.94
approved mitigation plan. Government provide required compensatory
Planning and Documentation
agencies may use other mechanisms to mitigation would be required to submit
provide reasonable assurances that In paragraph (b) of this section, we are only information concerning the
compensatory mitigation projects will proposing to require applicants for mitigation bank they plan to use, project
be completed, such as partnerships standard permits involving discharges baseline information, and credit
established in accordance with the of dredged or fill material into waters of determinations.
Economy Act. In cases where alternative the United States to submit a statement We are seeking comment on the
mechanisms are used to provide explaining how impacts to waters of the provisions in this section.
reasonable assurances that United States will be avoided,
compensatory mitigation projects will minimized, and compensated. 33 CFR 332.5 and 40 CFR 230.95
be completed, financial assurances may Information from that statement will be Ecological Performance Standards
not be necessary or appropriate. The provided in the public notice for the This section discusses, in general
district engineer will determine proposed permit. This requirement will terms, ecological performance standards
appropriate financial assurances on a necessitate changing the standard that will be used to assess whether
case-by-case basis. Financial assurances permit application form (ENG Form compensatory mitigation projects,
may take a number of forms including 4345), and compliance with the including mitigation banks, are
letters of credit, performance bonds, or requirements of the Paperwork achieving their objectives. Since
other sureties. In some circumstances in Reduction Act of 1995. Compliance ecological performance standards
the past, mitigation providers have with the Paperwork Reduction Act is usually vary by aquatic type and
allowed their financial assurance discussed in more detail in Section VII, geographic region, this section provides
arrangements to lapse before the Administrative Requirements, below. only general considerations for
mitigation project was completed The agencies recognize that establishing those standards.
leaving the Corps without the necessary government agencies sponsoring We are seeking comment on the
funds to ensure completion of the projects that require National provisions in this section.
mitigation project should the mitigation Environmental Policy Act (NEPA)
compliance generally try to coordinate 33 CFR 332.6 and 40 CFR 230.96
provider default. The proposed rule
their NEPA review with their DA permit Monitoring
does not specifically address this issue.
We are soliciting comment on whether review. This may mean submitting a This proposed rule provides general
to include a regulatory provision to permit application while the draft standards for monitoring compensatory
require that the providers of these Environmental Impact Statement (EIS), mitigation projects, including mitigation
financial assurances obtain permission including analysis of compensatory banks. Monitoring reports are used for
from, or alternatively, notify the district mitigation options, is still undergoing assessing how well the compensatory
engineer prior to canceling them or public review and comment. We believe mitigation project is satisfying its
allowing them to lapse. We are also that the requirements of paragraph (b) of objectives. We are proposing a
soliciting comment on the appropriate this section are fully consistent with minimum required monitoring period of
time frame (e.g., 120 days) for any such such efforts. In such cases, the five years, with flexibility for district
advance notification. information provided with the permit engineers to stop requiring monitoring
If failure of a compensatory mitigation application should provide a conceptual reports if compensatory mitigation
project is due to natural catastrophes, discussion of the proposed projects, such as those involving the
such as floods, droughts, diseases, or compensatory mitigation, and reference establishment of open water habitats,
pest infestations, that occur during the the more detailed description of options meet their performance standards in a
monitoring period, the district engineer in the draft EIS. This should further shorter period of time. Longer
monitoring periods may be required for should also consult with any other of those banks. We are seeking comment
compensatory mitigation activities, such Federal, Tribal, state, or local agency on all provisions of this section,
as the establishment of forested ‘‘where appropriate.’’ In general, such especially the timeframes and
wetlands, that develop slowly, or that consultation would be appropriate if the milestones for mitigation bank review
require remediation. other agency was involved earlier in the and approval.
We are seeking comment on the review of the compensatory mitigation The proposed rule contains explicit
provisions in this section. We are also requirements in the DA permit. requirements for the mitigation bank
requesting comment on examples of The proposed rule requires that the prospectus, and requires the district
specific types of compensatory permit conditions or mitigation banking engineer to notify the sponsor within 15
mitigation projects (e.g., specific habitat instrument identify the party days if the prospectus is incomplete.
types) where monitoring periods of less responsible for the ownership and long- The proposed rule also has
than five years may be appropriate. term management of the compensatory requirements for the content of
mitigation project. The permittee or mitigation banking instruments.
33 CFR 332.7 and 40 CFR 230.97 The district engineer is responsible
mitigation bank sponsor must provide
Management for the review and approval of
long-term financing as necessary to
This section of the proposed rule ensure that funds are available for the mitigation banks that are intended to be
establishes criteria and standards for the long-term management of the project used to provide compensatory
management of compensatory site once the monitoring period is over. mitigation for DA permits, after seeking
mitigation projects, including mitigation This can be accomplished in a number comment from the Interagency Review
banks. Some compensatory mitigation of ways, but in the past problems have Team (IRT) and the public. The role of
projects may require active management arisen when arrangements for the the IRT is to advise the district engineer
and maintenance, as well as adaptive capitalization of long-term management on the establishment and management
management. For some aquatic funds have not taken place in a timely of mitigation banks. Representatives of
resources, such as fringe wetlands in fashion. Although the rule text does not the U.S Environmental Protection
coastal areas, long-term management address this deficiency, we are soliciting Agency, National Marine Fisheries
may not be feasible or desirable because comments on the inclusion of a Service, and U.S. Fish and Wildlife
of the dynamic nature of the provision that would require that the Service hold ex officio positions on the
environment. arrangements for the adequate IRT. Beyond this, the district engineer
The various real estate or legal capitalization of long-term management determines the composition of the IRT.
instruments that can be used to protect funds be finalized prior to permit The IRT in the proposed rule replaces
compensatory mitigation project sites issuance. the Mitigation Bank Review Team
may differ from state to state, or among If the entity responsible for long-term (MBRT) in the 1995 mitigation banking
other government jurisdictions. management is a government agency or guidance.
Therefore, we are not proposing detailed public authority, and that entity is Each proposed mitigation bank will
requirements for real estate instruments willing to accept the stewardship be subject to a public notice and
used for long-term protection of responsibilities for the compensatory comment process, regardless of whether
compensatory mitigation project sites. mitigation project site, the district a DA permit is required to construct or
We believe those instruments are best engineer may accept the stewardship establish the mitigation bank. In the
addressed by district engineers on a commitment by the government agency proposed rule, we are specifying formal
case-by-case basis. or public authority in lieu of imposing procedures and timeframes for
For compensatory mitigation projects long-term financing requirements in the establishing mitigation banks, to
on public lands, other long-term DA permit or mitigation banking provide more predictability and
protection mechanisms may be more instrument. Such acceptance of efficiency to the mitigation bank review
appropriate, such as Federal facility stewardship responsibilities will and approval process.
management plans or integrated natural generally involve a formal transaction of In general, the timelines provided in
resources management plans. Therefore, some type (e.g., transfer of title, this section of the proposed rule should
this section of the proposed rule has designation as a protected area, etc). We result in a decision on the proposed
flexibility for district engineers to are aware of situations where mitigation bank within one year of
determine requirements for site government agencies have accepted receipt of a complete prospectus.
protection on a case-by-case basis. The stewardship responsibilities without However, there may be exceptional
agencies recognize that changes in adequately considering long-term circumstances associated with a
statute, regulation or agency needs or financial needs for the management of a particular proposed mitigation bank that
mission may sometimes necessitate site, and strongly encourage agencies to may result in a longer review period.
authorization of an incompatible use on plan for such needs before accepting The district engineer, in consultation
public lands originally set aside for stewardship responsibilities. Such with the IRT and using a watershed
compensatory mitigation. In such cases, planning may include requiring a approach to the extent practicable, will
the public agency authorizing the financial commitment from the original determine the service area of an
incompatible use would be responsible responsible party as a condition of approved mitigation bank. The service
for providing alternative compensatory accepting long-term stewardship area of a mitigation bank is to be
mitigation for any loss in functions responsibilities. described in the mitigation banking
resulting from the incompatible use. We are seeking comment on the instrument. The service area should be
Paragraph (c) of this section discusses provisions in this section. large enough to support an
remediation requirements if a economically viable mitigation bank,
compensatory mitigation project is not 33 CFR 332.8 and 40 CFR 230.98 but must not be larger than is
progressing towards meeting its Mitigation Banks appropriate to ensure that the aquatic
performance standards. In addition to The proposed rule establishes criteria resources provided by the mitigation
consulting with the responsible party to and standards for mitigation banks, bank will effectively compensate for
determine appropriate remediation including requirements and processes adverse environmental impacts across
requirements, the district engineer for the review, approval, and oversight the entire service area. In
§ 332.8(c)(5)(ii), we provide some would be used for major modifications AQUATIC RESOURCE TYPE], a total of
guidelines for service areas based on the to the mitigation banking instrument, [INSERT NUMBER] credits must be acquired
hydrologic unit codes designated by the such as expanding the mitigation bank from the [INSERT NAME OF MITIGATION
BANK]. Upon the mitigation bank sponsor’s
U.S. Geological Survey. The service by conducting more aquatic resource
acceptance of payment for those credits, that
areas suggested in the text of this restoration, establishment, compensatory mitigation requirement will be
section may not be appropriate for some enhancement, and/or preservation at the considered fulfilled, and your responsibility
mitigation banks, such as single-user bank site. Certain types of minor for providing that compensatory mitigation
mitigation banks sponsored by state modifications to instruments, such as will be transferred to the [INSERT NAME OF
departments of transportation. For these changes in credit release schedules, may MITIGATION BANK]. Proof of securing these
sponsors, it may be infeasible to have be accomplished through a streamlined compensatory mitigation credits must be
relatively small service areas for their modification process. provided to this office prior to initiating any
Umbrella mitigation banking work in waters of the United States on the
mitigation banks, such as those based on project site, unless the district engineer
8-digit hydrologic unit codes, because instruments, which have been used to waives this requirement. If you cannot obtain
they incur a relatively small amount of establish mitigation banks on multiple the required amount and type of credits from
debits per year. Also, having relatively sites, are provided for in the proposed [INSERT NAME OF MITIGATION BANK],
small service areas for some single user rule with additional sites treated as you must submit a revised compensatory
mitigation banks may discourage the modifications of the original mitigation mitigation proposal to this office, and receive
establishment of large mitigation banks banking instruments. In the proposed approval of the revised compensatory
that provide substantial amounts of rule, a mitigation banking instrument mitigation plan, prior to initiating any work
would have to be approved for the in waters of the United States.’’
habitat and other aquatic resource
functions and services. On the other initial mitigation bank site, and We are also seeking comment on the
hand, in areas with significant subsequent mitigation bank sites under following language for a mitigation
development, service areas even smaller the ‘‘umbrella’’ instrument would be banking instrument, whereby the
than an 8-digit hydrologic unit code added to that instrument as major mitigation bank would then accept
may be appropriate. modifications. responsibility for providing
We are proposing a dispute resolution The proposed rule also establishes compensatory mitigation for a DA
process to resolve agency concerns criteria for credit release from mitigation permit in cases where the permittee
about proposed mitigation banks. The banks. A limited proportion of projected secures credits from that mitigation
dispute resolution process involves credits may be released when the bank sponsor:
higher levels of review, up to the mitigation banking instrument and ‘‘For projects in the service area of this
respective agency headquarters. We are mitigation plan have been approved, the Mitigation Bank that require Department of
seeking comment on the milestones and bank site secured, and required the Army authorization pursuant to Section
timeframes in the proposed dispute financial assurances have been 404 of the Clean Water Act and/or Section 10
resolution process. It is intended as a established. The proposed rule also of the Rivers and Harbors Act of 1899, and
last resort for significant issues that requires a substantial proportion of if such authorizations require compensatory
cannot be resolved in a timely manner credits to be released only after mitigation, credits from this Mitigation Bank
within the IRT. The agencies anticipate performance standards are achieved. may be used to satisfy those compensatory
mitigation requirements, subject to Corps
that it will be used infrequently. Criteria for determining the credit approval on a case-by-case basis.
In cases where initial establishment of release schedule are provided in the text In accordance with the terms of this
the mitigation bank requires of the proposed rule. District engineers Instrument, the sponsor agrees that upon
authorization through a DA permit, it is must also approve credit releases. Corps approval of a proposal by the Permittee
important that the permit be fully Existing mitigation banks may to secure mitigation bank credits through a
consistent with the provisions of the continue operating under the terms of contract with this Mitigation Bank, a fully
mitigation banking instrument. Issuing their approved instruments. However, executed contract between the Sponsor and
the permit before all relevant provisions modifications to the instrument, the Permittee shall act to transfer to this
of the mitigation banking instrument Mitigation Bank all responsibility for the
including the addition of new sites for
compensatory mitigation required by the
have been substantively determined umbrella instruments, must be made in permittee’s DA permit.’’
may lead to inconsistencies between the accordance with the requirements of
permit and the instrument and/or may Part 332. We are also seeking comment We are also seeking comment on other
constrain the district engineer’s ability on the appropriate legal mechanism for possible mechanisms for transferring
to address substantive concerns that transferring the responsibility for legal responsibility for providing
arise through the IRT review process. providing compensatory mitigation from compensatory mitigation from the
Where issues potentially affecting the permittee to a mitigation bank. One permittee to a mitigation bank. One
permit conditions are still unresolved option would be through parallel potential mechanism may be co-
within the IRT, the district engineer provisions in DA permit special permitting, where the mitigation bank
should delay permit issuance until the conditions and mitigation banking sponsor would sign the DA permit and
final terms of the mitigation banking instruments. Therefore, we are seeking assume responsibility for providing
instrument have been determined. comment on the following language for compensatory mitigation credits, once
We are proposing to establish a a special condition for a DA permit to the permittee has secured those credits
process for modifying mitigation transfer responsibility for providing from the mitigation bank. The
banking instruments. For example, a compensatory mitigation in cases where compensatory mitigation provisions of
mitigation banking instrument may be credits are secured from a mitigation the permit (and those provisions only)
modified if the mitigation bank bank: would then be directly enforceable
develops aquatic resource functions that against the mitigation bank sponsor
are substantially greater than expected, ‘‘You have agreed to provide compensatory using normal Clean Water Act
mitigation for the permitted impacts by
to allow the sponsor to sell those extra purchasing credits at [INSERT NAME OF enforcement authorities. The agencies
credits after achieving all performance MITIGATION BANK]. As compensation for seek comment on these and other
standards specified in the bank’s impacting [INSERT NUMBER] acres [OR mechanisms for transferring legal
instrument. The full IRT review process OTHER UNIT OF MEASURE] of [INSERT responsibility for providing
compensatory mitigation from the that are third-party mitigation providers. mitigation is actually performed, or
permittee to the mitigation bank Second, in-lieu fee programs rely on satisfy the statutory directive to apply
sponsor. collected fees from permittees to initiate equivalent standards and criteria to each
In addition to the Corps, other Federal compensatory mitigation projects while type of mitigation to the maximum
agencies (as well as some state agencies) mitigation banks usually rely on private extent practicable. The agencies
have, in the past, signed mitigation investment for initial financing. Most recognize that the proposed
banking instruments to indicate their importantly, mitigation banks must requirements for permittee-responsible
agreement with the terms of those achieve certain milestones, including mitigation are not exactly the same as
instruments. Since district engineers are site selection, plan approval, and those for mitigation banks, though we
responsible for approving instruments financial assurances, before they can have tried to harmonize them to the
for mitigation banks, as well as for sell credits, and generally sell a majority extent practicable. But there are certain
approving the use of credits from those of their credits only after the mitigation requirements, such as formal review by
banks as compensatory mitigation for has been provided. In contrast, in-lieu an IRT, that are not practicable for
specific DA permits, we are seeking fee programs generally provide permittee-responsible projects,
comment on whether the provisions in mitigation only after collecting fees, and particularly smaller ones. However, for
§ 332.8(b)(3) relating to other IRT there is often a substantial time lag in-lieu fee programs, which as third-
members signing mitigation banking between permitted impacts and party mitigation providers sell credits to
instruments are appropriate. In implementation of compensatory permittees and take on responsibility for
particular, do, or should, the signatures mitigation projects. In-lieu fee programs providing required compensatory
of other agencies have any legal effect in are also not generally required to mitigation in the same way that
the implementation and enforcement of provide the same financial assurances as mitigation banks do, we have not found
the banking instrument? mitigation banks. For all of these strong grounds for concluding that
33 CFR 332.9 and 40 CFR 230.99 reasons, in some cases there may be meeting the same requirements as
In-Lieu Fee Programs greater uncertainty associated with in- mitigation banks is not appropriate and
lieu fee programs regarding the final practicable.
Since we are proposing to require in- Another concern with in-lieu fee
mitigation and its adequacy to
lieu fee programs after five years to programs is the sale price of credits.
compensate for lost functions and
comply with the same criteria, Because credits are often sold before the
services. On the other hand, some in-
requirements, and standards as details (or even the location) of a
lieu fee programs have been able to
mitigation banks, we believe there is a specific compensatory mitigation
protect high quality aquatic resources
need for a grandfathering provision for project have been determined, it may be
under threat of imminent impact, to
current in-lieu fee programs. We are difficult for the project sponsor to
employ a conservation strategy that is
seeking comments on this section, in determine a price that will fully fund
consistent with the watershed approach
particular the proposed time frames. the future compensatory mitigation
discussed in § 332.3(c) of the proposed
Section VI below explains our rationale project. Because the market pressure of
rule, and to partner with government
for phasing out in-lieu fee programs and needing to provide a sufficient return to
agencies and non-profit non-
discusses possible alternative investors is missing, in-lieu fee sponsors
governmental organizations to maximize
approaches. may underestimate the credit price, and
protection of those at-risk resources. In-
VI. In-Lieu Fee Programs/Arrangements perhaps undercut a mitigation bank
lieu fee programs may also be able to
doing business in the same service area.
Under the proposed rule, existing in- provide effective compensatory
Furthermore, it is difficult for the Corps
lieu fee programs would have to be mitigation in certain areas, such as
to determine what an adequate price
modified within five years to meet the coastal areas, where options for
might be in the absence of definitive
requirements for mitigation banks in 33 economically viable mitigation banks
information about the location and type
CFR 332.8 and 40 CFR 230.98 in order are limited.
of mitigation project to be provided.
to continue to provide compensatory The 2004 National Defense The agencies realize that phasing out
mitigation credits for DA permits. In Authorization Act directs that, ‘‘To the in-lieu fee programs entails some
other words, after five years, in-lieu fee maximum extent practicable, the challenges. In some areas, there are no
programs would cease to exist as a regulatory standards and criteria shall mitigation banks and in-lieu fee
separate mechanism for providing maximize available credits and programs provide the only option for
compensatory mitigation. As of the opportunities for mitigation * * * and third-party mitigation. However, the
effective date of the rule, new programs apply equivalent standards and criteria agencies are concerned that this may to
would have to meet the requirements in to each type of compensatory some extent reflect the less stringent
33 CFR 332.8 and 40 CFR 230.98 in mitigation.’’ The agencies carefully requirements under which in-lieu-fee
order to sell credits. Current in-lieu fee considered this directive in developing programs currently operate. The
programs with multiple sites could the proposed rule. Based on this agencies believe that if in-lieu fee
develop umbrella mitigation banking consideration, the agencies believe that programs are required to meet the same
instruments (see 33 CFR 332.8(g) and 40 the proposed requirements for requirements as banks, this will provide
CFR 230.98(g) of the proposed rule). mitigation banks are necessary and a level playing field that will allow
Under current practice, there are sufficient to ensure that third-party mitigation banks to compete in areas
several important differences between compensatory mitigation is actually where this may not be currently
in-lieu fee programs and mitigation completed, while also balancing the possible. We also recognize that in areas
banks. First, in-lieu fee programs are need to make mitigation banking with a ‘‘thin’’ market (e.g., areas where
generally administered by state economically viable and thus there is a low density of dredge and fill
governments, local governments, or ‘‘maximize available credits.’’ The projects requiring compensatory
non-profit non-governmental agencies are concerned that providing mitigation) it may not be economically
organizations while mitigation banks are less stringent oversight or up-front viable to obtain the level of up-front
usually (though not always) operated for requirements for in-lieu fee programs financing that is necessary to start a
profit by private entities, at least those may not ensure that compensatory mitigation bank. This concern can be at
least partially addressed through the for in-lieu fee programs might be CFR 332.4(b)(1) and 40 CFR 230.93(b)(1)
size of the mitigation bank’s service different from those for mitigation of the proposed rule, to submit a
area. Proposed § 332.8(5)(ii) provides banks. statement explaining how impacts
that the service area ‘‘should be large Another option would be to retain in- associated with the proposed activity
enough to support an economically lieu fee programs but provide a are to be avoided, minimized, and
viable mitigation bank, but must not be ‘‘preference’’ for in-place compensatory compensated for. This statement must
larger than is appropriate to ensure that mitigation (e.g., compensatory also include a description of any
the aquatic resources provided by the mitigation sites such as mitigation banks proposed compensatory mitigation, or
mitigation bank will effectively established in advance of permitted the intention to use an approved
compensate for adverse environmental impacts) over compensatory mitigation mitigation bank.
impacts across the entire service area.’’ that would be established after An agency may not conduct or
The agencies recognize that phasing permitted impacts are authorized (e.g., sponsor, and a person is not required to
out in-lieu fee programs would many in-lieu fee programs) because of respond to, a collection of information
represent a substantial departure from their greater certainty of successfully unless it displays a currently valid
current practice. We are aware that there providing compensatory mitigation Office of Management and Budget
are a number of successful in-lieu fee credits. Under this approach, if the (OMB) control number. For the Corps
programs that are providing effective permitted project was in the service area Regulatory Program under Section 10 of
compensatory mitigation. We therefore of both an established mitigation bank the Rivers and Harbors Act of 1899,
request comment on the challenges and an in-lieu fee project that had not section 404 of the Clean Water Act, and
associated with transforming these been constructed, the permittee would section 103 of the Marine Protection,
projects into mitigation banks over a first have to consider purchasing credits Research and Sanctuaries Act of 1972,
five-year period. We also request from the mitigation bank, and could the current OMB approval number for
comment on retaining in-lieu fee only use the in-lieu fee program if information collection requirements is
programs as a distinct regulatory entity. purchasing credits from the mitigation maintained by the Corps of Engineers
Under this approach, in-lieu fee bank was not practicable. (OMB approval number 0710–0003,
programs would have equally specific, Comments will be most helpful if they which expires on April 30, 2008). As a
but somewhat different, requirements provide specific information. Current result of the new information collection
from mitigation banks. Areas in which in-lieu fee program sponsors should requirement in the proposed rule, we
in-lieu fee programs might be different explain exactly what difficulties they are proposing to modify our standard
include: (1) The degree of up-front would experience in transitioning to a permit application form in accordance
planning required before credits could mitigation bank. Commenters who with the requirements of the Paperwork
be sold (e.g., in-lieu fee programs might support retaining in-lieu fee programs as Reduction Act.
not be required to identify and secure a a distinct regulatory entity should Title, Form, and OMB Number:
site and provide detailed site plans for explain exactly what requirements Application for a Department of Army
the compensatory mitigation project); would be different from those for Permit; Eng Form 4345; OMB Control
(2) the level of financial assurances that mitigation banks, and what would be Number 0710–0003.
would be required, although we note the basis for establishing these different Type of Request: Revision.
that under the proposed rule district requirements in light of the statutory Number of Respondents: 85,500.
engineers retain substantial discretion directive noted above. The agencies Responses Per Respondent: 1.
in determining appropriate financial believe that the detailed discussion of Annual Responses: 85,500.
assurances for banks, and may consider issues and options in this preamble Average Burden Per Response: 11
factors such as the type of sponsoring provides sufficient notice and hours.
entity (e.g., government, private, non- opportunity for informed public Annual Burden Hours: 374,000.
profit); (3) the types of projects for comment, such that we may choose to Needs and Uses: Information
which they could be used (e.g., in-lieu finalize a rule that retains a separate in- collected is used to evaluate, as required
fee programs might be limited to lieu fee option along the lines discussed by law, proposed construction or filing
providing compensatory mitigation only here without issuing a new proposed in waters of the United States that result
for nationwide permits and other rule. in impacts to the aquatic environment
general permits, or for projects below a VII. Administrative Requirements and nearby properties, and to determine
specified acreage cutoff, such as 1 acre); if issuance of a permit is in the public
(4) the required compensation ratios Plain Language interest. Respondents are private
(e.g., these could be higher for in-lieu In compliance with the principles in landowners, businesses, non-profit
fee programs than for mitigation banks); the President’s Memorandum of June 1, organizations, and government agencies.
(5) the credit release schedule (e.g., in- 1998, (63 FR 31855) regarding plain Affected Public: Individuals or
lieu fee programs might be permitted to language, this preamble is written using households; business or other for-profit;
sell more credits at an earlier point in plain language. The use of ‘‘we’’ in this not-for-profit institutions; farms; Federal
the planning process); (6) limiting the notice refers to the Corps and EPA. We government; State, local or tribal
establishment and use of in-lieu fee have also used the active voice, short government.
programs to specific types of aquatic sentences, and common everyday terms Frequency: On occasion.
resources (e.g., tidal wetlands) or except for necessary technical terms. Respondents Obligation: Mandatory.
specific geographic regions, such as OMB Desk Officer: Jim Laity.

coastal areas; and (7) the types of Paperwork Reduction Act Written comments and
permitted sponsoring entities (i.e., in- This proposed action will impose a recommendations on the proposed
lieu fee programs might be limited to new information collection burden information collection should be sent to
government agencies and/or non-profit under the provisions of the Paperwork Jim Laity at the Office of Management
land stewardship entities with proven Reduction Act (44 U.S.C. 3501 et seq.). and Budget, Desk Officer for USACE,
track records). Commenters may suggest Applicants for Clean Water Act section Room 10202, New Executive Office
other ways in which the requirements 404 permits will be required, under 33 Building, Washington, DC 20503.
Executive Order 12866 governments that administer in-lieu fee decreases in compliance costs, but most
Under Executive Order 12866 (58 FR programs to provide compensatory of the provisions in the rule are
51735, October 4, 1993), we must mitigation for impacts to wetlands and expected to result in no changes in
determine whether the regulatory action other aquatic resources can modify their compliance costs. To the extent that it
is ‘‘significant’’ and therefore subject to in-lieu fee programs to conform with the promotes mitigation banking, the rule
review by OMB and the requirements of requirements of this proposed rule. may lower compensatory mitigation
the Executive Order. The Executive Therefore, Executive Order 13132 does costs for small projects by making
not apply to this proposed rule. credits more widely available. Overall,
Order defines ‘‘significant regulatory
However, in the spirit of Executive we believe the proposed rule will result
action’’ as one that is likely to result in
Order 13132, we specifically request in no net change in compliance costs for
a rule that may:
comment from state and local officials permittees, including small entities that
(1) Have an annual effect on the
on the proposed rule. need to obtain DA permits. For a more
economy of $100 million or more or
detailed analysis of potential economic
adversely affect in a material way the Regulatory Flexibility Act, as Amended
impacts of this rule, please see the
economy, a sector of the economy, by the Small Business Regulatory
regulatory analysis in the
productivity, competition, jobs, the Enforcement Fairness Act of 1996, 5
Environmental Assessment prepared for
environment, public health or safety, or U.S.C. 601 et seq.
the proposed rule. We are interested in
State, local, or Tribal governments or The Regulatory Flexibility Act the potential impacts of the proposed
communities; generally requires an agency to prepare rule on small entities and welcome
(2) Create a serious inconsistency or a regulatory flexibility analysis of any comments on issues related to such
otherwise interfere with an action taken rule subject to notice-and-comment impacts.
or planned by another agency; rulemaking requirements under the
(3) Materially alter the budgetary Administrative Procedure Act or any Unfunded Mandates Reform Act
impact of entitlements, grants, user fees, other statute unless the agency certifies Title II of the Unfunded Mandates
or loan programs or the rights and that the rule will not have a significant Reform Act of 1995 (UMRA), Public
obligations of recipients thereof; or economic impact on a substantial Law 104–4, establishes requirements for
(4) Raise novel legal or policy issues number of small entities. Small entities Federal agencies to assess the effects of
arising out of legal mandates, the include small businesses, small their regulatory actions on State, local,
President’s priorities, or the principles organizations and small governmental and Tribal governments and the private
set forth in the Executive Order. jurisdictions. sector. Under Section 202 of the UMRA,
Pursuant to the terms of Executive For purposes of assessing the impacts the agencies generally must prepare a
Order 12866, we have determined that of this proposed rule on small entities, written statement, including a cost-
the proposed rule is a ‘‘significant a small entity is defined as: (1) A small benefit analysis, for proposed and final
regulatory action’’ and the draft was business based on Small Business rules with ‘‘Federal mandates’’ that may
submitted to OMB for review. Administration size standards; (2) a result in expenditures to State, local,
The regulatory analysis required by small governmental jurisdiction that is a and Tribal governments, in the
E.O. 12866 has been prepared for this government of a city, county, town, aggregate, or to the private sector, of
proposed rule. The regulatory analysis school district, or special district with a $100 million or more in any one year.
is available on the Internet at: http:// population of less than 50,000; or (3) a Before promulgating a rule for which a
www.usace.army.mil/inet/functions/cw/ small organization that is any not-for- written statement is needed, Section 205
cecwo/reg/citizen.htm. It is also profit enterprise which is independently of the UMRA generally requires the
available by contacting Headquarters, owned and operated and is not agencies to identify and consider a
U.S. Army Corps of Engineers, dominant in its field. reasonable number of regulatory
Operations and Regulatory Community The statutory basis for the proposed alternatives and adopt the least costly,
of Practice, 441 G Street, NW., rule is Section 314 of the National most cost-effective, or least burdensome
Washington, DC 20314–1000. Defense Authorization Act for Fiscal alternative that achieves the objectives
Year 2004 (Pub. L. 108–136), which is of the rule. The provisions of section
Executive Order 13132
discussed above. After considering the 205 do not apply when they are
Executive Order 13132, entitled economic impacts of the proposed rule inconsistent with applicable law.
‘‘Federalism’’ (64 FR 43255, August 10, on small entities, we certify that this Moreover, section 205 allows an agency
1999), requires the Corps to develop an action will not have a significant impact to adopt an alternative other than the
accountable process to ensure on a substantial number of small least costly, most cost-effective, or least
‘‘meaningful and timely input by State entities. Small entities subject to the burdensome alternative if the agency
and local officials in the development of proposed rule include those small publishes with the final rule an
regulatory policies that have Federalism entities that need to obtain DA permits explanation why that alternative was
implications.’’ The proposed rule does pursuant to Section 404 of the Clean not adopted. Before an agency
not have Federalism implications. We Water Act and Section 10 of the Rivers establishes any regulatory requirements
do not believe that the proposed rule and Harbors Act of 1899. that may significantly or uniquely affect
will have substantial direct effects on This rulemaking will not change small governments, including Tribal
the States, on the relationship between compensatory mitigation requirements, governments, it must have developed,
the Federal government and the States, or change the number of permitted under Section 203 of the UMRA, a small
or on the distribution of power and activities that require compensatory government agency plan. The plan must
responsibilities among the various mitigation. This rule further clarifies provide for notifying potentially
levels of government. The proposed rule mitigation requirements established by affected small governments, enabling
does not impose new substantive Corps and EPA, and is generally officials of affected small governments
requirements. In addition, the proposed consistent with current agency to have meaningful and timely input in
rule will not impose any additional practices. Some provisions of the rule the development of regulatory proposals
substantive obligations on State or local may result in increases in compliance with significant Federal
governments. State and local costs, other provisions may result in intergovernmental mandates, and
informing, educating, and advising between the Federal government and effect of excluding persons (including
small governments on compliance with the Indian tribes, or on the distribution populations) from participation in,
the regulatory requirements. of power and responsibilities between denying persons (including
We have determined that the the Federal government and Indian populations) the benefits of, or
proposed rule does not contain a tribes.’’ subjecting persons (including
Federal mandate that may result in The proposed rule does not have populations) to discrimination under
expenditures of $100 million or more tribal implications. It is generally such programs, policies, and activities
for State, local, and Tribal governments, consistent with current agency practice because of their race, color, or national
in the aggregate, or the private sector in and will not have substantial direct origin.
any one year. The proposed rule is effects on tribal governments, on the The proposed rule is not expected to
generally consistent with current agency relationship between the Federal negatively impact any community, and
practice and therefore does not contain government and the Indian tribes, or on therefore is not expected to cause any
a Federal mandate that may result in the distribution of power and disproportionately high and adverse
expenditures of $100 million or more responsibilities between the Federal impacts to minority or low-income
for State, local, and Tribal governments, government and Indian tribes. communities.
in the aggregate, or the private sector in Therefore, Executive Order 13175 does
any one year. Therefore, the proposed not apply to this proposed rule. Executive Order 13211
rule is not subject to the requirements However, in the spirit of Executive
The proposed rule is not a
of Sections 202 and 205 of the UMRA. Order 13175, we specifically request
‘‘significant energy action’’ as defined in
For the same reasons, we have comment from Tribal officials on the
Executive Order 13211, ‘‘Actions
determined that the proposed rule proposed rule.
contains no regulatory requirements that Concerning Regulations That
might significantly or uniquely affect Environmental Documentation Significantly Affect Energy Supply,
small governments. Therefore, the The Corps has prepared a draft Distribution, or Use’’ (66 FR 28355, May
proposed rule is not subject to the Environmental Assessment (EA) and 22, 2001) because it is not likely to have
requirements of Section 203 of UMRA. Finding of No Significant Impact a significant adverse effect on the
(FONSI) for the proposed rule. The draft supply, distribution, or use of energy.
Executive Order 13045 EA and FONSI are available at: http:// National Technology Transfer and
Executive Order 13045, ‘‘Protection of www.usace.army.mil/inet/functions/cw/ Advancement Act
Children from Environmental Health cecwo/reg/citizen.htm. It is also
Risks and Safety Risks’’ (62 FR 19885, available by contacting Headquarters, Section 12(d) of the National
April 23, 1997), applies to any rule that: U.S. Army Corps of Engineers, Technology Transfer and Advancement
(1) Is determined to be ‘‘economically Operations and Regulatory Community Act of 1995 (NTTAA), Public Law 104–
significant’’ as defined under Executive of Practice, 441 G Street, NW., 113, section 12(d), (15 U.S.C. 272 note),
Order 12866, and (2) concerns an Washington, DC 20314–1000. directs us to use voluntary consensus
environmental health or safety risk that standards in its regulatory activities
we have reason to believe may have a Congressional Review Act unless to do so would be inconsistent
disproportionate effect on children. If The Congressional Review Act, 5 with applicable law or otherwise
the regulatory action meets both criteria, U.S.C. 801 et seq., as added by the Small impractical. Voluntary consensus
we must evaluate the environmental Business Regulatory Enforcement standards are technical standards (e.g.,
health or safety effects of the proposed Fairness Act of 1996, generally provides materials specifications, test methods,
rule on children, and explain why the that before a rule may take effect, the sampling procedures, business
regulation is preferable to other agency promulgating the rule must practices) that are developed or adopted
potentially effective and reasonably submit a rule report, which includes a by voluntary consensus standards
feasible alternatives. copy of the rule, to each House of the bodies. The NTTAA directs us to
The proposed rule is not subject to Congress and to the Comptroller General provide Congress, through the Office of
this Executive Order because it is not of the United States. We will submit a Management and Budget (OMB),
economically significant as defined in report containing this rule and other explanations when the we decide not to
Executive Order 12866. In addition, it required information to the U.S. Senate, use available and applicable voluntary
does not concern an environmental or the U.S. House of Representatives, and consensus standards.
safety risk that we have reason to the Comptroller General of the United This action does not involve technical
believe may have a disproportionate States. A major rule cannot take effect standards. Therefore, the Corps and EPA
effect on children. until 60 days after it is published in the did not consider the use of any new
Federal Register. The proposed rule is voluntary consensus standards.
Executive Order 13175
not a ‘‘major rule’’ as defined by 5
Executive Order 13175, entitled U.S.C. 804(2). List of Subjects
‘‘Consultation and Coordination with 33 CFR Part 325
Indian Tribal Governments’’ (65 FR Executive Order 12898
67249, November 6, 2000), requires Executive Order 12898 requires that, Administrative practice and
agencies to develop an accountable to the greatest extent practicable and procedure, Intergovernmental relations,
process to ensure ‘‘meaningful and permitted by law, each Federal agency Environmental protection, Navigation,
Water pollution control, Waterways.
timely input by tribal officials in the must make achieving environmental

development of regulatory policies that justice part of its mission. Executive 33 CFR Part 332
have tribal implications.’’ The phrase Order 12898 provides that each Federal
‘‘policies that have tribal implications’’ agency conduct its programs, policies, Administrative practice and
is defined in the Executive Order to and activities that substantially affect procedure, Intergovernmental relations,
include regulations that have human health or the environment in a Navigation (water), Water pollution
‘‘substantial direct effects on one or manner that ensures that such programs, control, Water resources, Watersheds,
more Indian tribes, on the relationship policies, and activities do not have the Waterways.
40 CFR Part 230 authorized through the issuance of States. Practicable means available and
Environmental protection, Water Department of the Army (DA) permits capable of being done after taking into
pollution control. pursuant to Section 404 of the Clean consideration cost, existing technology,
Water Act (33 U.S.C. 1344) and/or and logistics in light of overall project
Corps of Engineers Sections 9 or 10 of the Rivers and purposes. Compensatory mitigation for
33 CFR Chapter II Harbors Act of 1899 (33 U.S.C. 401, unavoidable impacts may be required to
403). This part implements Section ensure that a section 404 activity
For the reasons stated in the 314(b) of the 2004 National Defense complies with the Section 404(b)(1)
preamble, the Corps proposes to amend Authorization Act (Pub. L. 108–136), Guidelines. Compensatory mitigation
33 CFR chapter II as set forth below: which directs that the standards and may also be required to ensure that an
criteria shall, to the maximum extent activity requiring authorization under
PART 325—PROCESSING OF practicable, maximize available credits Section 404 of the Clean Water Act and/
DEPARTMENT OF THE ARMY and opportunities for mitigation, or Sections 9 or 10 of the Rivers and
PERMITS provide for regional variations in Harbors Act of 1899 is not contrary to
1. The authority citation for part 325 wetland conditions, functions, and the public interest.
continues to read as follows: values, and apply equivalent standards (d) Accounting for regional variations.
and criteria to each type of Where appropriate, district engineers
Authority: 33 U.S.C. 401 et seq.; 33 U.S.C.
compensatory mitigation. This part is shall account for regional characteristics
1344; 33 U.S.C. 1413.
intended to further clarify mitigation of aquatic resource types, functions,
2. Amend § 325.1 by redesignating requirements established under U.S. services, and values when determining
paragraphs (d)(7), (d)(8), and (d)(9) as Army Corps of Engineers (Corps) and performance standards and monitoring
paragraphs (d)(8), (d)(9), and (d)(10), U.S. Environmental Protection Agency requirements for compensatory
respectively, and adding new paragraph regulations at 33 CFR part 320 and 40 mitigation projects.
(d)(7) as follows: CFR part 230, respectively.
(2) These rules have been jointly § 332.2 Definitions.
§ 325.1 Applications for permits.
developed by the Secretary of the Army, For the purposes of this part, the
* * * * * acting through the Chief of Engineers, following terms are defined:
(d) * * * and the Administrator of the
(7) For activities involving discharges Adaptive management means the
Environmental Protection Agency. From development of a management strategy
of dredged or fill material into waters of time to time guidance on interpreting
the United States, the application must that anticipates the challenges
and implementing these rules may be associated with likely future impacts to
include a statement describing how prepared jointly by EPA and the U.S.
impacts to waters of the United States the aquatic resource functions of the
Army Corps of Engineers at the national mitigation site. It acknowledges the risk
are to be avoided, minimized, and or regional level. No modifications to
compensated (see § 332.4(b)(1)). and uncertainty of compensatory
the basic application, meaning, or intent mitigation projects and allows
* * * * * of these rules will be made without modification of those projects to
further joint rulemaking by the optimize performance. The process will
PART 332—COMPENSATORY Secretary of the Army, acting through
MITIGATION FOR LOSSES OF provide guidance on the selection of
the Chief of Engineers and the
AQUATIC RESOURCES appropriate remedial measures that will
Administrator of the Environmental
ensure the continued adequate
3. Add part 332 to read as follows: Protection Agency pursuant to the
provision of aquatic resource function
Administrative Procedure Act (5 U.S.C.
and involves analysis of monitoring
PART 332—COMPENSATORY 551 et seq.).
(b) Applicability. This part does not results to identify potential problems of
MITIGATION FOR LOSSES OF a compensatory project and
AQUATIC RESOURCES alter the regulations at § 320.4(r) of this
title, which address the general identification of measures to rectify
Sec. mitigation requirements for DA permits. those problems.
332.1 Purpose and general considerations. In particular, it does not alter the Buffer means an upland and/or
332.2 Definitions. circumstances under which riparian area that protects and/or
332.3 General compensatory mitigation compensatory mitigation is required or enhances aquatic resource functions
requirements. associated with wetlands, rivers,
the definitions of ‘‘waters of the United
332.4 Planning and documentation. streams, lakes, marine, and estuarine
332.5 Ecological performance standards. States’’ or ‘‘navigable waters of the
United States,’’ which are provided at systems from disturbances associated
332.6 Monitoring.
parts 328 and 329 of this title, with adjacent land uses.
332.7 Management.
332.8 Mitigation banks. respectively. Use of resources as Compensatory mitigation means the
332.9 In-lieu fee programs. compensatory mitigation that are not restoration (re-establishment or
otherwise subject to regulation under rehabilitation), establishment (creation),
Authority: 33 U.S.C. 401 et seq.; 33 U.S.C.
1344; and Pub. L. 108–136. Section 404 of the Clean Water Act and/ enhancement, and/or in certain
or Sections 9 or 10 of the Rivers and circumstances preservation of aquatic
§ 332.1 Purpose and general Harbors Act of 1899 does not in and of resources for the purposes of
considerations. itself make them subject to such compensating for unavoidable adverse
impacts which remain after all
(a) Purpose. (1) The purpose of this regulation.

part is to establish standards and criteria (c) Sequencing. Pursuant to these appropriate and practicable avoidance
for the use of all types of compensatory requirements, the district engineer will and minimization has been achieved.
mitigation, including on-site and off-site issue a section 404 permit only upon a Compensatory mitigation project
permittee-responsible mitigation, determination that the permit applicant means a restoration, establishment,
mitigation banks, and in-lieu fee has taken all appropriate and enhancement, and/or preservation
mitigation to offset unavoidable impacts practicable steps to avoid and minimize activity implemented by the permittee
to waters of the United States adverse impacts to waters of the United as a requirement of a DA permit (i.e.,
permittee-responsible mitigation), or by governed by a mitigation banking returning natural/historic functions to a

a third party (e.g., a mitigation bank). instrument. former or degraded aquatic resource. For
Credit means a unit of measure (e.g., Mitigation banking instrument means the purpose of tracking net gains in
a functional or area measure) the legal document for the aquatic resource area, restoration is
representing the accrual or attainment of establishment, operation, and use of a divided into two categories: re-
aquatic functions at a compensatory mitigation bank. establishment and rehabilitation.
mitigation site. The measure of function Off-site means an area that is neither Riparian areas are lands adjacent to a
is based on the aquatic resources located on the same parcel of land as the waterbody. Riparian areas are
restored, established, enhanced, or impact site, nor on a parcel of land transitional between terrestrial and
preserved. contiguous to or near the parcel aquatic ecosystems, through which
DA means Department of the Army. containing the impact site. surface and subsurface hydrology
Days means calendar days. On-site means an area located on the connects waterbodies with their
Debit means a unit of measure (e.g., a same parcel of land as the impact site, adjacent uplands. Riparian areas are
functional or area measure) representing or on a parcel of land contiguous to or adjacent to streams, lakes, and
the loss of aquatic functions at an near the impact site. estuarine-marine shorelines and provide
impact or project site. The measure of Out-of-kind means a resource type a variety of ecological functions and
function is based on the aquatic that is structurally and/or functionally services and help improve or maintain
resources impacted by the authorized different than the impacted resource local water quality.
activity. type. Service area means the geographic
Enhancement means the Performance standards are observable area within which impacts can be
manipulation of the physical, chemical, or measurable attributes that are used to mitigated at a particular mitigation
or biological characteristics of an determine if a compensatory mitigation bank, as designated in its instrument.
aquatic resource to heighten, intensify, project meets its objectives. Services means the benefits that
or improve a specific aquatic resource Permittee-responsible mitigation human populations receive from
function(s). Enhancement results in the means an aquatic resource restoration, functions that occur in aquatic resources
gain of selected aquatic resource establishment, enhancement, and/or and other ecosystems.
function(s), but may also lead to a preservation activity undertaken by the Sponsor means any public or private
decline in other aquatic resource permittee (or an authorized agent or entity responsible for establishing and,
function(s). Enhancement does not contractor) to provide compensatory in most circumstances, operating a
result in a gain in aquatic resource area. mitigation for which the permittee mitigation bank.
Establishment (creation) means the retains full responsibility. Standard permit means a standard,
manipulation of the physical, chemical, Preservation means the removal of a individual permit issued under the
or biological characteristics present to threat to, or preventing the decline of, authority of Section 404 of the Clean
develop an aquatic resource that did not aquatic resources by an action in or near Water Act and/or Sections 9 or 10 of the
previously exist at an upland or those aquatic resources. This term Rivers and Harbors Act of 1899.
deepwater site. Establishment results in includes activities commonly associated Values means the utility or
a gain in aquatic resource area. with the protection and maintenance of satisfaction that humans derive from
Functional capacity means the degree aquatic resources through the aquatic resource services. Values can be
to which an area of aquatic resource implementation of appropriate legal and described in monetary terms or in
performs a specific function. physical mechanisms. Preservation does qualitative terms, although many of the
Functions means the physical, not result in a gain of aquatic resource values associated with aquatic resources
chemical, and biological processes that area or functions. cannot be easily monetized. Values can
occur in aquatic resources and other Re-establishment means the be either use values (e.g., recreational
ecosystems. manipulation of the physical, chemical, enjoyment) or non-use values (e.g.,
Impact means adverse effect. or biological characteristics of a site stewardship, biodiversity).
In-kind means a resource type that is with the goal of returning natural/ Watershed plan means a plan
structurally and/or functionally similar historic functions to a former aquatic developed by federal, tribal, state, and/
to the impacted resource type. resource. Re-establishment results in or local government agencies, in
Interagency Review Team (IRT) means rebuilding a former aquatic resource and consultation with relevant stakeholders.
an interagency group of Federal, Tribal, results in a gain in aquatic resource A watershed plan addresses ecological
State, and/or local regulatory and area. conditions in the watershed, multiple
resource agency representatives that Reference aquatic resources are stakeholder interests, and land uses.
reviews documentation for, and advises aquatic resources that represent the Watershed plans may also identify
the district engineer on, the range of variability exhibited by a priority sites for aquatic resource
establishment and management of a regional class of aquatic resources as a restoration and protection. Examples of
mitigation bank. result of natural processes and watershed plans include special area
Mitigation bank means a site, or suite anthropogenic disturbances. management plans, advance
of sites, where aquatic resources such as Rehabilitation means the identification programs, and watershed
wetlands or streams are restored, manipulation of the physical, chemical, management plans.
established, enhanced, and/or preserved or biological characteristics of a site
for the purpose of providing with the goal of repairing natural/ § 332.3 General compensatory mitigation
compensatory mitigation for authorized historic functions to a degraded aquatic requirements.

impacts to similar resources. Third- resource. Rehabilitation results in a gain (a) General considerations. The
party mitigation banks generally sell in aquatic resource function, but does fundamental objective of compensatory
compensatory mitigation credits to not result in a gain in aquatic resource mitigation is to offset environmental
permittees whose obligation to provide area. losses resulting from unavoidable
mitigation is then transferred to the Restoration means the manipulation impacts to waters of the United States
mitigation bank sponsor. The operation of the physical, chemical, or biological authorized by DA permits. The district
and use of a mitigation bank are characteristics of a site with the goal of engineer must determine the
compensatory mitigation to be required compensatory mitigation be provided. (e.g., water quality, flood control,
in a DA permit, based on what is In general, compensatory mitigation shoreline protection) that will likely
available, practicable, and capable of should be located within the same need to be addressed at or near the areas
compensating for the aquatic resource watershed as the impact site, and impacted by the permitted project.
functions that will be lost as a result of should be located where it is most likely (iii) A watershed approach to
the permitted activity. In making this to successfully replace lost functions, compensatory mitigation may involve
determination, the district engineer services, and values, taking into account planning efforts to inventory historic
must assess the likelihood for ecological such watershed scale features as aquatic and existing aquatic resources,
success and sustainability, the location habitat diversity, habitat connectivity, including identification of degraded
of the compensation site relative to the relationships to hydrologic sources aquatic resources, and planning efforts
impact site and their significance within (including the availability of water to identify immediate and long-term
the watershed, and the economic costs rights), and compatibility with adjacent aquatic resource needs within
of the compensatory mitigation. land uses. watersheds that can be met through
Compensatory mitigation requirements (c) Watershed approach to permittee-responsible mitigation
must be commensurate with the amount compensatory mitigation. (1) The projects or mitigation banks. Watershed
and type of impact that is associated district engineer must use a watershed planning efforts may identify and/or
with a particular DA permit. Permit approach to establish compensatory prioritize aquatic resources that are
applicants are responsible for proposing mitigation requirements in DA permits important for maintaining and restoring
an appropriate compensatory mitigation to the extent appropriate and ecological functions of the watershed.
option to offset unavoidable impacts. practicable. Where an applicable (3) Information Needs. The use of a
(b) Location and type of compensatory watershed plan is available, the watershed approach is based on analysis
mitigation. (1) Where project impacts watershed approach should be based on of information regarding watershed
are located within the service area of an the existing plan. Where no such plan conditions and needs. Such information
approved mitigation bank, and the is available, the watershed approach includes: Current trends in habitat loss
mitigation bank has credits available for should be based on information or conversion, cumulative impacts of
the type of resource impacted, the provided by the project sponsor or past development activities, current
project’s compensatory mitigation available from other sources. The development trends, the presence and
requirements may be met by the ultimate goal of a watershed approach is needs of sensitive species, site
purchase of an appropriate number of to maintain and improve the quality and conditions that favor or hinder the
credits from the mitigation bank. quantity of aquatic resources within success of mitigation projects, chronic
(2) Where practicable and watersheds through strategic selection environmental problems such as
appropriate, the district engineer will of compensatory mitigation sites. flooding or poor water quality, and local
require that the location and aquatic (2) Considerations. (i) A watershed watershed goals and priorities. This
resource type of permittee-responsible approach to compensatory mitigation information may be contained in an
compensatory mitigation necessary to considers the importance of landscape existing watershed plan or may be
offset anticipated impacts be consistent position and resource type of available from other sources. The level
with an established watershed plan or compensatory mitigation projects for the of information and analysis needed to
be determined using the principles of a ecological functions and sustainability support a watershed approach must be
watershed approach as outlined in of aquatic resources within the commensurate with the scope and scale
paragraph (c) of this section. The district watershed. Such an approach considers of the proposed project requiring a DA
engineer and the IRT should also use a how the types and locations of permit, as well as the functions lost as
watershed approach to the extent compensatory mitigation projects will a result of that project.
practicable in reviewing mitigation provide the desired aquatic resource (d) Site selection. The compensatory
banking instruments. functions, and will continue to function mitigation project site must be
(3) Where reliance on a watershed over time in a changing landscape. It ecologically suitable for providing the
plan or approach is not practicable, the also considers the habitat requirements desired aquatic resource functions. In
district engineer will consider of important species, habitat loss or determining the ecological suitability of
opportunities to offset anticipated conversion trends, sources of watershed the compensatory mitigation project
aquatic resource impacts by requiring impairment, and current development site, the district engineer must consider
on-site and in-kind compensatory trends, as well as the requirements of the following factors:
mitigation. The district engineer must other regulatory and non-regulatory (1) Hydrological conditions, soil
also consider the practicability of on- programs that affect the watershed, such characteristics, and other physical and
site compensatory mitigation and its as storm water management or habitat chemical characteristics;
compatibility with the proposed project. conservation programs. It includes the (2) Watershed-scale features, such as
(4) If, after considering opportunities protection and maintenance of aquatic habitat diversity, habitat
for on-site, in-kind compensatory terrestrial resources, such as non- connectivity, and other landscape scale
mitigation as provided in paragraph wetland riparian areas and uplands, functions;
(b)(3) of this section, the district when those resources contribute to or (3) The size and location of the
engineer determines that these improve the overall ecological compensatory mitigation site relative to
compensatory mitigation opportunities functioning of aquatic resources in the hydrologic sources (including the
are not practicable, are unlikely to watershed. availability of water rights) and other
compensate for the permitted activity, (ii) Locational factors (e.g., hydrology, ecological features;
or will be incompatible with the surrounding land use) are important to (4) Compatibility with adjacent land
proposed project, and an alternative, the success of compensatory mitigation uses and watershed management plans;
practicable off-site and/or out-of-kind for impacted habitat functions and (5) Reasonably foreseeable effects the
mitigation opportunity is identified that values and may lead to siting of such compensatory mitigation project will
has a greater likelihood of offsetting the mitigation away from the project area. have on ecologically important aquatic
permitted activity, the district engineer However, consideration should also be or terrestrial resources (e.g., shallow
shall require that this alternative given to functions, services, and values sub-tidal habitat, mature forests),
cultural sites, or habitat for Federally- or mitigation ratio greater than one-to-one authorized under other programs, such
State-listed threatened and endangered where necessary to account for the as Tribal, State, or local wetlands
species; and method of compensatory mitigation regulatory programs, the National
(6) Other relevant factors including, (e.g., preservation), differences between Pollutant Discharge Elimination System
but not limited to, development trends, the functions lost at the impact site and Permit Program, Corps civil works
anticipated land use changes, habitat the functions expected to be produced projects, and Superfund removal and
status and trends, local or regional goals by the compensatory mitigation project, remedial actions, consistent with the
for the restoration or protection of temporal losses of aquatic resource terms and requirements of these
particular habitat types or functions functions, and/or the difficulty of programs and subject to the following
(e.g., re-establishment of habitat restoring or establishing the desired considerations. The project must
corridors or habitat for species of aquatic resource type and functions. include appropriate compensatory
concern), water quality goals, floodplain The rationale for the required mitigation for unavoidable impacts to
management goals, and the relative replacement ratio must be documented aquatic resources authorized by the DA
potential for chemical contamination of in the administrative record for the permit, over and above what would be
the aquatic resources. permit action. required under other programs to
(e) Mitigation type. (1) In general, in- (g) Use of mitigation banks. Mitigation address other impacts. Under no
kind mitigation is preferable to out-of- banks may be used to compensate for circumstances may the same credits be
kind mitigation because it is most likely impacts to aquatic resources authorized used to provide mitigation for more than
to compensate for the functions, by general permits and individual one activity. However, where
services, and values lost at the impact permits, including after-the-fact permits. appropriate, compensatory mitigation
site. For example, restoration of (h) Preservation. (1) Preservation may projects, including mitigation banks,
wetlands is most likely to compensate be used to provide compensatory may be designed to holistically address
for unavoidable impacts to wetlands, mitigation for activities authorized by requirements under multiple programs
while restoration of streams is most DA permits where: and authorities for the same activity.
likely to compensate for unavoidable (i) The resources provide important Except for projects undertaken by
impacts to streams. Thus, except as physical, chemical, or biological Federal agencies, or where Federal
provided in paragraph (e)(2) of this functions for the watershed; funding is specifically authorized to
section, the district engineer should (ii) The resources contribute to the provide compensatory mitigation,
require that compensatory mitigation be ecological sustainability of the Federally-funded wetland conservation
of a similar type to the impacted aquatic watershed; projects undertaken for purposes other
resource. (iii) Preservation is determined by the than compensatory mitigation, such as
(2) If the district engineer determines district engineer to be appropriate and the Wetlands Reserve Program and the
through the decision framework in practicable; Partners for Wildlife Program activities,
paragraph (b) of this section that out-of- (iv) The resources are under threat of
cannot be used for the purpose of
kind compensatory mitigation will serve destruction or adverse modifications;
the aquatic resource needs of the generating compensatory mitigation
and
watershed, the district engineer may (v) The preserved site will be credits for activities authorized by DA
authorize the use of such out-of-kind permanently protected through an permits. However, compensatory
compensatory mitigation. Factors that appropriate real estate or other legal mitigation credits may be generated by
should be considered in making this instrument (e.g., easement, title transfer activities undertaken in conjunction
determination include historic loss of to state resource agency or land trust). with, but supplemental to, such
habitat types within the watershed, the (2) Where preservation is used to programs in order to maximize the
needs of sensitive species, appropriate provide compensatory mitigation, to the overall ecological benefits of the
mixes of habitat to maintain ecosystem extent appropriate and practicable the conservation project.
viability, the relative likelihood of preservation shall be done in (k) Permit conditions. The
success in establishing different habitat conjunction with aquatic resource compensatory mitigation requirements
types, needs for ecosystem services, and restoration, establishment, and/or for a DA permit, including the amount
local watershed goals and priorities. The enhancement activities. This and type of compensatory mitigation,
basis for authorization of out-of-kind requirement may be waived by the must be clearly stated in the special
compensatory mitigation must be district engineer where preservation has conditions of the individual permit or
documented in the administrative been identified as a high priority using general permit verification (see 33 CFR
record for the permit action. a watershed approach, as described in 325.4 and 330.6(a)). The special
(f) Amount of compensatory paragraph (c) of this section, but conditions must be enforceable and
mitigation. The district engineer must compensation ratios should be higher. describe the objectives of the
require an amount of compensatory (i) Buffers. District engineers may compensatory mitigation project. The
mitigation for unavoidable impacts to require that compensatory mitigation special conditions must also identify the
aquatic resources sufficient to replace project sites include, and may provide party responsible for providing the
lost aquatic resource functions. In cases compensatory mitigation credit for, the compensatory mitigation. The special
where functional assessment methods establishment and maintenance of conditions must incorporate, by
are available, appropriate, and practical riparian areas and/or upland buffers reference, compensatory mitigation
to use, district engineers should use around the restored, established, plans approved by the district engineer.
those functional assessment methods to enhanced, or preserved aquatic The performance standards and
determine how much compensatory resources where necessary to ensure the monitoring required for the
mitigation should be required. If a long-term viability of those resources. compensatory mitigation project must
functional assessment is not used, a (j) Relationship to other Federal, also be clearly stated in the special
minimum one-to-one acreage or linear Tribal, State, and local programs. conditions or the approved
foot replacement ratio should be used as Compensatory mitigation projects for compensatory mitigation plan. The
a surrogate for functional replacement. DA permits may also be used to special conditions must also describe
The district engineer must require a compensate for environmental impacts any required financial assurances or
long-term management provisions for determined by the district engineer, in compensatory mitigation, including any
the compensatory mitigation project. If consultation with the project sponsor, out-of-kind mitigation, or indicate an
a mitigation bank is used to provide the and must be based on the size and intention to use an approved mitigation
required compensatory mitigation, the complexity of the compensatory bank. The level of detail provided in the
special conditions must indicate which mitigation project, the degree of public notice must be commensurate
mitigation bank will be used, and completion of the project at the time of with the scope and scale of the project.
specify the required number and type of project approval, the likelihood of (2) For activities authorized by
credits the permittee is required to success, the past performance of the general permits, review of compensatory
purchase. project sponsor, and any other factors mitigation plans must be conducted in
(l) Party responsible for compensatory the district engineer deems appropriate. accordance with the terms and
mitigation. (1) The special conditions of Financial assurances may be in the form conditions of those general permits and
the DA permit must clearly indicate the of performance bonds, escrow accounts, applicable regulations.
party or parties responsible for the casualty insurance, letters of credit, (c) Mitigation plan. (1) The permittee
implementation, performance, and long- legislative appropriations for or mitigation bank sponsor must prepare
term management of the compensatory government sponsored projects, or other a draft mitigation plan and submit it to
mitigation project. appropriate instruments, subject to the the district engineer for review. After
(2) For mitigation banks, the approval of the district engineer. The addressing any comments provided by
mitigation banking instrument must rationale for determining the amount of the district engineer, the permittee or
clearly indicate the party or parties the required financial assurances must sponsor must prepare a final mitigation
responsible for the implementation, be documented in the administrative plan, which must be approved by the
performance, and long-term record for the DA permit. district engineer prior to issuing the DA
management of the compensatory (3) Financial assurances shall be permit or approving the mitigation
mitigation project. phased out once the compensatory banking instrument. The approved
(3) If a mitigation bank is approved by mitigation project has been determined mitigation plan must be incorporated
the district engineer to provide required by the district engineer to be successful into the DA permit or mitigation
compensatory mitigation for a DA in accordance with its performance banking instrument by reference. The
permit, the special conditions of that standards. The DA permit or mitigation
DA permit must indicate which mitigation plan must include the items
banking instrument must clearly specify described in paragraphs (c)(2) through
mitigation bank will be used to provide the conditions under which the
that compensatory mitigation. In such (c)(14) of this section, except that the
financial assurances are to be released to district engineer may waive specific
cases, the mitigation bank assumes the permittee, sponsor, and/or other
responsibility for providing the required items if he determines that they are not
financial assurance provider, including, applicable to a particular project.
compensatory mitigation after the as appropriate, linkage to achievement
permittee has secured those credits from Permittees who plan to fulfill their
of performance standards, adaptive compensatory mitigation obligations by
the sponsor. management, or compliance with
(m) Timing. Implementation of the purchasing credits from an approved
special conditions. mitigation bank need only include the
compensatory mitigation project shall (o) Compliance with applicable law.
be, to the maximum extent practicable, name of the mitigation bank and the
The compensatory mitigation project
in advance of or concurrent with the items described in paragraphs (c)(5) and
must comply with all applicable
activity causing the authorized impacts. (c)(6) of this section in their mitigation
Federal, state, and local laws. The DA
Where it is not practicable to complete plan. The level of detail of the
permit or mitigation banking instrument
the initial physical and biological mitigation plan should be
must not require participation by the
improvements required by the approved commensurate with the scale and scope
Corps or any other Federal agency in
mitigation plan by the first full growing of the project.
project management, including receipt
season following the impacts resulting (2) Objectives. A description of the
or management of financial assurances
from the permitted activity, the district aquatic resource type(s) and amount(s)
or long-term financing mechanisms,
engineer may require additional that will be provided, the method of
except as determined by the Corps or
compensatory mitigation to offset compensation (i.e., restoration,
other agency to be consistent with its
temporal losses of aquatic functions that establishment, enhancement, and/or
statutory authority, mission, and
will result from the permitted activity. preservation), and the manner in which
priorities.
(n) Financial assurances. (1) The the aquatic resource functions of the
district engineer shall require sufficient § 332.4 Planning and documentation. compensatory mitigation project will
financial assurances to ensure a high (a) Pre-application consultations. address the needs of the watershed,
level of confidence that the Potential applicants for standard ecoregion, or other geographic area of
compensatory mitigation project will be permits are encouraged to participate in interest.
successfully completed, in accordance pre-application meetings with the Corps (3) Site selection. A description of the
with applicable performance standards. and appropriate agencies to discuss factors considered during the site
In cases where an alternate mechanism potential compensatory mitigation selection process. This should include
is available to ensure a high level of requirements and information needs. consideration of watershed needs, on-
confidence that the compensatory (b) Public review and comment. (1) site alternatives where applicable, and
mitigation will be provided and For an activity that requires a standard the practicability of accomplishing
maintained (e.g., a formal, documented DA permit pursuant to Section 404 of ecologically self-sustaining aquatic
commitment from a government agency the Clean Water Act, the public notice resource restoration, establishment,
or public authority) the district engineer for the proposed activity must explain enhancement, and/or preservation at the
may determine that financial assurances how impacts associated with the compensatory mitigation project site.
are not necessary for that compensatory proposed activity are to be avoided, (4) Site protection instrument. A
mitigation project. minimized, and compensated for. This description of the legal arrangements
(2) The amount of the required explanation shall address the amount, and instrument, including site
financial assurances must be type, and location of any proposed ownership, that will be used to ensure
the long-term protection of the compensatory mitigation project is resources of similar type and landscape
compensatory mitigation project site. achieving its objectives. position. Performance standards based
(5) Baseline information. A (10) Monitoring requirements. A on measurements of hydrology should
description of the ecological description of parameters to be take into consideration the hydrologic
characteristics of the proposed monitored in order to determine if the variability exhibited by reference
compensatory mitigation project site compensatory mitigation project is on aquatic resources, especially wetlands.
and, in the case of an application for a track to meet performance standards Where practicable, performance
DA permit, the impact site. This may and if adaptive management is needed. standards should take into account the
include descriptions of historic and A schedule for monitoring and reporting expected stages of the aquatic resource
existing plant communities, historic and on monitoring results to the district development process, in order to allow
existing hydrology, soil conditions, and engineer must be included. early identification of potential
other site characteristics. A prospective (11) Long-term management plan. A problems and appropriate adaptive
permittee planning to purchase credits description of how the compensatory management.
from an approved mitigation bank only mitigation project will be managed after
performance standards have been § 332.6 Monitoring.
needs to provide baseline information
achieved to ensure the long-term (a) General. Monitoring the
about the impact site, not the mitigation
sustainability of the resource, including compensatory mitigation project site is
bank site.
the party responsible for long-term necessary to determine if the project is
(6) Determination of credits. A
management and long-term financing meeting its performance standards, and
description of the number of credits to
mechanisms. to determine if remediation is necessary
be provided, including a brief
(12) Adaptive management plan. A to ensure that the compensatory
explanation of the rationale for this mitigation project is accomplishing its
determination. For permittee- description of procedures to address
potential changes in site conditions or objectives. The district engineer must
responsible mitigation, this should require the submission of monitoring
include an explanation of how the other components of the compensatory
mitigation project, including the party reports to assess the development and
compensatory mitigation project condition of the compensatory
compensates for unavoidable impacts to or parties responsible for implementing
adaptive management measures. The mitigation project, unless he determines
aquatic resources resulting from the that monitoring is not practicable for
permitted activity. For mitigation banks, adaptive management plan will guide
decisions for revising compensatory that compensatory mitigation project.
it should include a description of The mitigation plan must address the
resource types for which the mitigation mitigation plans and conducting
remediation to provide aquatic resource monitoring requirements for the
bank may be used as compensatory compensatory mitigation project,
mitigation and the number of credits to functions.
(13) Financial assurances. A including the parameters to be
be provided for each resource type. This monitored, the length of the monitoring
description of financial assurances that
may include provisions for adjusting period, the party responsible for
will be provided and how they are
credits in the future, both downward (if conducting the monitoring, the
sufficient to ensure a high level of
performance standards are not met) or frequency for submitting monitoring
confidence that the compensatory
upward (if performance standards are reports to the district engineer, and the
mitigation project will be successfully
significantly exceeded). For permittees party responsible for submitting those
completed, in accordance with its
intending to purchase credits from an monitoring reports to the district
performance standards.
approved mitigation bank, it should (14) Other information. The district engineer.
include the number and type of credits engineer may require additional (b) Monitoring period. The mitigation
to be purchased and how these were information as necessary to determine plan must provide for a monitoring
determined. the appropriateness, feasibility, and period that is sufficient to demonstrate
(7) Mitigation work plan. Detailed practicability of the compensatory that the compensatory mitigation project
written specifications and work mitigation project. has met performance standards, but not
descriptions for the compensatory less than five years. A longer monitoring
mitigation project, including, but not § 332.5 Ecological performance standards. period must be required for aquatic
limited to, the geographic boundaries of The mitigation plan must contain resources with slow development rates
the project; construction methods, performance standards that will be used (e.g., forested wetlands, bogs).
timing, and sequence; source(s) of to assess whether the project is Following project implementation, the
water, including connections to existing achieving its objectives. Performance district engineer may waive the
waters and uplands; plant species to be standards should relate to the objectives remaining monitoring requirements
planted at the site; the use of natural of the compensatory mitigation project, upon a determination that the
regeneration or seed banks to provide so that the project can be objectively compensatory mitigation project has
the desired plant community at the site; evaluated to determine if it is achieved its performance standards.
plans to control invasive plant species; developing into the desired resource Conversely the district engineer may
the proposed grading plan, including type and providing the expected extend the original monitoring period
elevations and slopes of the substrate; functions. Performance standards upon a determination that performance
erosion control measures; and proposed should be based on attributes that are standards have not been met or the
stream geomorphology, if applicable. objective, verifiable, and can be compensatory mitigation project is not
(8) Maintenance plan. A description measured with a reasonable amount of on track to meet them. The district
and schedule of maintenance effort. Performance standards may be engineer may also revise monitoring
requirements to ensure the continued based on variables or measures of requirements when remediation is
viability of the resource once initial functional capacity described in required.
construction is completed. functional assessment methodologies, (c) Monitoring reports. (1) The district
(9) Performance standards. measurements of hydrology or other engineer must determine the
Ecologically-based standards that will aquatic resource characteristics, and/or information to be included in
be used to determine whether the comparisons to reference aquatic monitoring reports. This information
should be sufficient for the district management and maintenance. This financing mechanisms include
engineer to determine how the includes the provision of long-term endowments, trusts, contractual
compensatory mitigation project is financing mechanisms where necessary. arrangements with future responsible
progressing towards meeting its (c) Adaptive management. (1) If parties, and other appropriate financial
performance standards, and may monitoring or other information instruments. In cases where the long-
include plans, maps, and photographs indicates that the compensatory term management entity is a public
to illustrate site conditions. Monitoring mitigation project is not progressing authority or government agency, a
reports may also include the results of towards meeting its performance formal commitment to accept
functional assessments used to provide standards as anticipated, the responsible stewardship responsibilities for the
quantitative or qualitative measures of party must notify the district engineer. project is acceptable in lieu of specific
the functions provided by the The district engineer must require financial arrangements.
compensatory mitigation project site. remediation to correct the deficiencies
(2) Monitoring reports should be in the project to the extent appropriate § 332.8 Mitigation banks.
provided by the district engineer to and practicable. In determining (a) General considerations. (1) All
interested Federal, Tribal, State, and appropriate and practicable mitigation banks must have an approved
local resource agencies. The district remediation, the district engineer will instrument signed by the sponsor and
engineer and representatives of Federal, consider whether the compensatory the district engineer prior to being used
Tribal, State, and/or local resource mitigation project is providing to provide compensatory mitigation for
agencies may conduct regular (e.g., ecological benefits comparable to the DA permits. To the maximum extent
annual) on-site inspections, as original objectives of the compensatory practicable, mitigation banks must be
appropriate, to monitor performance of mitigation project. planned and designed to be self-
the mitigation site. Monitoring reports (2) The district engineer, in sustaining over time, but some active
must be made available to the public consultation with the responsible party management and maintenance may be
upon request. (and other Federal, Tribal, state, and required to ensure their long-term
local agencies, as appropriate), will viability and sustainability. Examples of
§ 332.7 Management. determine the appropriate remediation acceptable management activities
(a) Site protection. The aquatic requirements. The required remediation include maintaining fire dependent
habitats, riparian areas, buffers, and may include site modifications, design habitat communities in the absence of
uplands that comprise the overall changes, revisions to maintenance natural fire and controlling invasive
compensatory mitigation project should requirements, and revised monitoring exotic plant species.
be provided long-term protection, requirements. The remediation must be (2) Mitigation banks may be sited on
through appropriate real estate designed to ensure that the modified public or private lands. Siting on public
instruments such as conservation compensatory mitigation project land is only permitted when done in
easements held by, or transfer of title to, provides aquatic resource functions accordance with the mission and
entities such as Federal, Tribal, State, or comparable to those described in the policies of the land management agency
local resource agencies, non-profit mitigation plan objectives. and with its written approval. Credits
conservation organizations, or private (3) The performance standards must for mitigation banks on public land
land managers, or other acceptable be revised where necessary to assess the must be based solely on aquatic
means for government property, such as success of remediation efforts and/or the resource functions provided by the
Federal facility management plans or realization of comparable ecological mitigation bank, over and above those
integrated natural resources benefits that were considered in provided by public programs already
management plans. The real estate determining remediation requirements. planned or in place.
instrument for the long-term protection (d) Long-term management. (1) The (3) All mitigation banks must comply
of the compensatory mitigation site permit conditions or mitigation banking with the standards in this part, if they
should restrict or prohibit incompatible instrument must identify the party are to be used to provide compensatory
uses (e.g., clear cutting) that might responsible for the ownership and long- mitigation for activities authorized by
otherwise jeopardize the objectives of term management of the compensatory DA permits, regardless of whether they
the compensatory mitigation project. mitigation project, once performance are sited on public or private lands and
Where appropriate, multiple standards have been achieved. The whether the sponsor is a governmental
instruments recognizing compatible permit conditions or mitigation banking or private entity.
uses (e.g., fishing or grazing rights) may instrument may contain provisions (b) Interagency Review Team. (1) The
be used. allowing the permittee or sponsor to district engineer will establish an
(b) Sustainability. Compensatory transfer the long-term management Interagency Review Team (IRT) to
mitigation projects should be designed, responsibilities of the compensatory review documentation for the
to the maximum extent practicable, to mitigation project site to a land establishment and management of the
be self-sustaining once performance stewardship entity, such as a public mitigation bank. The district engineer or
standards have been achieved. This agency, non-governmental organization, his designated representative serves as
includes minimization of active or private land manager, after review Chair of the IRT. In cases where a
engineering features (e.g., pumps) and and approval by the district engineer. mitigation bank is proposed to satisfy
appropriate siting to ensure that natural The land stewardship entity need not be the requirements of another Federal,
hydrology and landscape context will identified in the original permit or Tribal, State, or local program, in
support long-term sustainability. Where mitigation banking instrument, as long addition to compensatory mitigation
active long-term management and as the future transfer of long-term requirements of DA permits, the district
maintenance are necessary to ensure management responsibility is approved engineer may designate an appropriate
long-term sustainability (e.g., prescribed by the district engineer. official of the responsible agency as co-
burning, invasive species control, (2) Provisions necessary for long-term Chair of the IRT.
maintenance of water control structures, financing must be included in the (2) In addition to the Corps,
easement enforcement), the responsible original permit or mitigation banking representatives from the U.S.
party must provide for such instrument. Appropriate long-term Environmental Protection Agency, U.S.
Fish and Wildlife Service, NOAA (2) Prospectus. The prospectus must and IRT members may also provide
Fisheries, the Natural Resources provide a summary of the information comments to the sponsor at this time,
Conservation Service, and other Federal that will be included in the mitigation and copies of any such comments will
agencies, as appropriate, may plan, at a sufficient level of detail to also be distributed to all IRT members.
participate in the IRT. The IRT may also support informed public and IRT If the construction of a mitigation bank
include representatives from Tribal, comment. In particular, it must describe requires DA authorization through the
State, and local regulatory and resource the objectives of the proposed standard permit process, the public
agencies, where such agencies have mitigation bank, how the mitigation notice requirement may be satisfied
authorities and/or mandates directly bank will be established and operated, through the public notice provisions of
affecting, or affected by, the the proposed service area, and the the standard permit processing
establishment, operation, or use of the general need for, and technical procedures, provided all of the relevant
mitigation bank. The district engineer feasibility of, the proposed mitigation information is provided.
will seek to include all public agencies bank. The prospectus must discuss the (5) Draft mitigation banking
with a substantive interest in the ecological suitability of the site to instrument. After considering comments
establishment of the mitigation bank on achieve the objectives of the proposed from the district engineer, the IRT, and
the IRT, but retains final authority over mitigation bank. This includes the the public, if the sponsor chooses to
its composition. physical, chemical, and biological proceed with establishment of the
(3) The primary role of the IRT is to characteristics of the site and how that mitigation bank, he must prepare a draft
facilitate the establishment of mitigation site will support the planned types of mitigation banking instrument and
banks through the development of aquatic resources and functions. It submit it to the district engineer. The
mitigation banking instruments. The should also discuss the proposed draft mitigation banking instrument
IRT will review the prospectus, ownership arrangements and long-term should be based on the prospectus and
mitigation plan, and mitigation banking management of the mitigation bank. The must describe in detail the physical and
instrument and provide comments to review process begins when the sponsor legal characteristics of the mitigation
the district engineer. Members of the submits a complete prospectus to the bank and how it will be established and
IRT may also sign the mitigation district engineer. The district engineer operated. The draft mitigation banking
banking instrument, if they so choose. will notify the sponsor within 15 days instrument must include the following
By signing the mitigation banking whether or not a submitted prospectus information:
is complete. (i) Mitigation plan, including all
instrument, the IRT members indicate
(3) Preliminary review of prospectus. applicable items listed in § 332.4(c)(2)
their agreement with the terms of the
Prior to submitting a prospectus, the through (14);
instrument. The IRT will also advise the (ii) Geographic service area of the
sponsor may elect to submit a draft
district engineer in assessing monitoring mitigation bank. The service area is the
prospectus to the district engineer for
reports, recommending remedial watershed or other geographic area
comment and consultation. The district
measures, approving credit release, and within which a mitigation bank is
engineer will provide copies of the draft
approving modifications to a mitigation authorized to provide compensation for
prospectus to the IRT, and provide
banking instrument. unavoidable impacts authorized by DA
comments back to the sponsor within 30
(4) The district engineer will give full days. Any comments from IRT members permits. The service area should be
consideration to the comments and will also be forwarded to the sponsor. large enough to support an
advice of the IRT. However, the district This preliminary review is optional but economically viable mitigation bank,
engineer alone retains final authority for is strongly recommended. It is intended but must not be larger than is
approval of the mitigation banking to identify potential issues early so that appropriate to ensure that the aquatic
instrument. However, in cases where the sponsor may attempt to address resources provided by the mitigation
the mitigation bank is also intended to those issues prior to the start of the bank will effectively compensate for
satisfy the requirements of another formal review process. adverse environmental impacts across
agency, that agency must also approve (4) Public review and comment. the entire service area. The district
the mitigation banking instrument Within 30 days of receipt of a complete engineer must consider relevant
before it can be used to satisfy such prospectus, the district engineer will environmental and economic factors
requirements. provide public notice of the proposed when approving the service area. The
(c) Review process. (1) The sponsor is mitigation bank, in accordance with the district engineer may also consider
responsible for preparing all public notice procedures at 33 CFR locally-developed standards and
documentation associated with 325.3. The public notice must include a criteria. In urban areas, a U.S.
establishment of the mitigation bank, summary of the prospectus and indicate Geological Survey 8-digit hydrologic
including the prospectus, mitigation that the full prospectus is available to unit code (HUC) watershed or a smaller
plan, and mitigation banking the public for review upon request. The watershed may be an appropriate
instrument. The prospectus provides an comment period for public notice will service area. In rural areas, several
overview of the mitigation bank project generally be 30 days, unless the district contiguous 8-digit HUCs or a 6-digit
and serves as the basis for public and engineer determines that a longer or HUC watershed may be an appropriate
initial IRT comment. The mitigation shorter comment period is appropriate. service area for the mitigation bank. The
plan, as described in § 332.4(c), The district engineer will notify the basis for determining the service area
provides detailed plans and sponsor if the comment period is must be documented in writing and
specifications for the mitigation bank. extended beyond 30 days, including an referenced in the mitigation banking
The mitigation banking instrument explanation of why the longer comment instrument;
provides the authorization for the period is necessary. Copies of all (iii) Credit release schedule. Credit
mitigation bank to provide credits to be comments received in response to the release must be tied to achievement of
used as compensatory mitigation for DA public notice must be distributed to the specific milestones. If the mitigation
permits. The mitigation banking other IRT members and to the sponsor bank does not achieve appropriate
instrument must also incorporate the within 15 days of the close of the public milestones (e.g., performance standards)
mitigation plan by reference. comment period. The district engineer as anticipated, the district engineer may
modify the credit release schedule, the dispute resolution process, the and authorities. If an IRT member other
including reducing the number of district engineer will notify the sponsor than the one filing the original objection
available credits or suspending credit of his final decision, and if the has a new objection based on the district
sales altogether; mitigation banking instrument is engineer’s response, he may use the first
(iv) Accounting procedures; approved, arrange for it to be signed by step in this procedure (paragraph (d)(1)
(v) A provision stating that legal the appropriate parties. The final of this section) to provide that objection
responsibility for providing the mitigation banking instrument must to the district engineer.
compensatory mitigation lies with the contain the types of information items (4) If the issue has not been forwarded
sponsor; listed in paragraphs (c)(5)(i) through to the objecting agency’s Headquarters,
(vi) Default and closure provisions; (vii) of this section. then the district engineer may proceed
and (d) Dispute resolution process. (1) with final action on the mitigation
(vii) Any other information deemed Within 15 days of receipt of the district banking instrument. If the issue has
necessary by the district engineer. engineer’s notification of intent to been forwarded to the objecting agency’s
(6) IRT review. Upon receiving a draft approve a mitigation banking Headquarters, the district engineer must
mitigation banking instrument, the instrument, the Regional Administrator hold in abeyance the final action on the
district engineer must provide copies of of the U.S. EPA, the Regional Director mitigation banking instrument, pending
the draft instrument to the IRT members of the U.S. Fish and Wildlife Service, Headquarters level review described
for a 30-day comment period. Following the Regional Director of the National
the comment period, the district below.
Marine Fisheries Service, and/or other (5) Within 20 days from the date of
engineer will discuss any comments senior officials of agencies represented
with the appropriate agencies and with the letter requesting Headquarters level
on the IRT may notify the district review, the Assistant Administrator,
the sponsor. The district engineer will engineer and other IRT members by
seek to resolve any issues using a Office of Water, the Assistant Secretary
letter if they object to the approval of for Fish and Wildlife and Parks, or the
consensus-based approach. Within 90 the proposed final mitigation banking
days of receipt of the complete draft Undersecretary for Oceans and
instrument. This letter must include an Atmosphere must either notify the
mitigation banking instrument, the explanation of the basis for the objection
district engineer must notify the sponsor Assistant Secretary of the Army (Civil
and, where feasible, offer Works) (ASA(CW)) that further review
of the status of the IRT review. recommendations for resolving the
Specifically, the district engineer must will not be requested, or request that the
objections. If the district engineer does ASA(CW) review the draft mitigation
indicate to the sponsor if the draft not receive any objections within this
mitigation banking instrument is banking instrument.
time period, he may proceed to final
generally acceptable and what changes, (6) Within 30 days of receipt of the
action on the mitigation banking
if any, are needed. If there are letter from the objecting agency’s
instrument.
significant unresolved concerns that (2) The district engineer must respond Headquarters request for ASA(CW)’s
may lead to a formal objection from one to the objection within 30 days of review of the draft mitigation banking
or more IRT members to the final receipt of the letter. The district instrument, the ASA(CW), through the
mitigation banking instrument, the engineer’s response may indicate an Director of Civil Works, must review the
district engineer will indicate the nature intent to disapprove the mitigation draft mitigation banking instrument and
of those concerns. banking instrument as a result of the advise the district engineer on how to
(7) Final mitigation banking objection, an intent to approve the proceed with final action on that
instrument. If the sponsor still wishes to mitigation banking instrument despite instrument. The ASA(CW) must
proceed with establishment of the the objection, or may provide a immediately notify the Assistant
mitigation bank, he must submit a final modified mitigation banking instrument Administrator, Office of Water, the
mitigation banking instrument to the that attempts to address the objection. Assistant Secretary for Fish and Wildlife
district engineer for approval. The final The district engineer’s response must be and Parks, and/or the Undersecretary for
mitigation banking instrument should provided to all IRT members. Oceans and Atmosphere of the final
address any comments provided as a (3) Within 15 days of receipt of the decision.
result of the IRT review process. The district engineer’s response, if the (7) In cases where the dispute
final mitigation banking instrument Regional Administrator or Regional resolution procedure is used, the district
must be provided directly by the Director is not satisfied with the engineer must notify the sponsor of his
sponsor to all members of the IRT. response he may forward the issue to final decision within 150 days of receipt
Within 15 days of receipt of the final the Assistant Administrator, Office of of the final mitigation banking
mitigation banking instrument, the Water of the U.S. EPA, the Assistant instrument.
district engineer will notify the IRT Secretary for Fish and Wildlife and (e) Extension of deadlines. (1) The
members whether or not he intends to Parks of the U.S. FWS, or the deadlines in paragraphs (c) and (d) of
approve the mitigation banking Undersecretary for Oceans and this section may be extended by the
instrument. If no IRT member objects, Atmosphere of NOAA, as appropriate, district engineer at his sole discretion in
by initiating the dispute resolution for review and must notify the district cases where:
process in paragraph (d) of this section engineer by faxed letter (with copies to (i) Compliance with other applicable
within 30 days of receipt of the final all IRT members) that the issue has been laws, such as Endangered Species Act
mitigation banking instrument, the forwarded for Headquarters review. This Section 7 consultation, is required;
district engineer will notify the sponsor step is available only to the IRT (ii) Timely submittal of information
of his final decision and, if the members representing these three necessary for the review of the proposed
mitigation banking instrument is Federal agencies, however other IRT mitigation bank is not accomplished by
approved, arrange for it to be signed by members who do not agree with the the sponsor; or
the appropriate parties. If any IRT district engineer’s final decision do not (iii) Information that is essential to the
member initiates the dispute resolution have to sign the mitigation banking district engineer’s response cannot be
process, the district engineer will notify instrument or recognize the mitigation reasonably obtained within the
the sponsor. Following conclusion of bank for purposes of their own programs specified time frame.
(2) In such cases, the district engineer involves activities requiring DA between pre- and post-mitigation bank
must promptly notify the sponsor in authorization, the permit should not be site conditions. If an existing resource is
writing of the extension and the reason issued until all relevant provisions of being enhanced, the number of credits
for it. Such extensions shall be for the the mitigation banking instrument have should reflect only the enhancements
minimum time necessary to resolve the been substantively determined. This is produced by construction of the
issue necessitating the extension. to ensure that the DA permit accurately mitigation bank. This may be reflected
(f) Modification of mitigation banking reflects all relevant provisions of the in a discounted number of credits
instruments. (1) In general, modification final mitigation banking instrument. relative to the total acres or linear feet
of an approved mitigation banking (i) Project implementation. encompassed by the mitigation bank.
instrument must follow the procedures Authorization to sell credits to satisfy (4) Credit value. Once a credit is
in paragraph (c) of this section, unless compensatory mitigation requirements debited, its value cannot change.
the district engineer determines that the in DA permits is contingent on (5) Credits provided by preservation.
streamlined review process described in compliance with all of the terms of the These credits should be specified as
paragraph (f)(2) of this section is mitigation banking instrument. This acres or linear feet of preservation of a
warranted. The streamlined review includes constructing a mitigation bank particular resource types. In
process may be used for changes in accordance with the mitigation plan determining the compensatory
reflecting adaptive management of the as approved by the district engineer and mitigation requirements for DA permits
mitigation bank, changes in credit incorporated by reference in the using the mitigation bank, the district
release schedules, and changes that the mitigation banking instrument. If the engineer should apply a higher
district engineer determines are non- aquatic resource restoration, mitigation ratio if the requirements are
significant. establishment, enhancement, and/or to be met through the use of
(2) If the district engineer determines preservation activities cannot be preservation credits. In determining this
that the streamlined review process is implemented in accordance with the higher ratio, the district engineer must
warranted, he must notify the IRT approved mitigation plan, the district consider the relative importance of both
members and the sponsor of this engineer must consult with the sponsor the impacted and the preserved aquatic
determination and provide them with and the IRT to consider modifications to resources in sustaining watershed
copies of the proposed modification. the mitigation banking instrument, functions as described in § 332.3(c).
IRT members and the sponsor have 30 including adaptive management, (6) Credits provided by riparian areas,
days to notify the district engineer if revisions to the credit release schedule, buffers, and uplands. These credits
they have concerns with the proposed and alternatives for providing should be specified as acres or linear
modification. If IRT members or the compensatory mitigation to satisfy any feet of riparian area, buffer, and uplands
sponsor notify the district engineer of credits that have already been sold. respectively. Non-aquatic resources can
such concerns, the district engineer (j) Credit withdrawal from mitigation only be used as compensatory
shall attempt to resolve those concerns. banks. The mitigation banking mitigation for impacts to aquatic
Within 60 days of providing the instrument may allow for initial resources authorized by DA permits
proposed modification to the IRT, the debiting of a percentage of the total when those resources are essential to
district engineer must notify the IRT credits projected at mitigation bank maintaining the ecological viability of
members of his intent to approve or maturity provided the following adjoining aquatic resources. In
disapprove the proposed modification. conditions are satisfied: the mitigation determining the compensatory
If no IRT member objects, by initiating banking instrument and mitigation plan mitigation requirements for DA permits
the dispute resolution process in have been approved, the mitigation using the mitigation bank, the district
paragraph (d) of this section, within 15 bank site has been secured, appropriate engineer may authorize the use of
days of receipt of this notification, the financial assurances have been riparian area, buffer and/or upland
district engineer will notify the sponsor established, and any other requirements credits if he determines that these areas
of his final decision and, if the determined to be necessary by the are essential to sustaining watershed
modification is approved, arrange for it district engineer have been fulfilled. functions as described in § 332.3(c) and
to be signed by the appropriate parties. The mitigation banking instrument must are the most appropriate compensation
If any IRT member initiates the dispute provide a schedule for additional credit for the authorized impacts.
resolution process, the district engineer releases as appropriate milestones are (7) Credit release schedule. The terms
will so notify the sponsor. Following achieved (see paragraph (k)(7) of this of the credit release schedule must be
conclusion of the dispute resolution section). specified in the mitigation banking
process, the district engineer will notify (k) Determining credits. (1) Units of instrument. The credit release schedule
the sponsor of his final decision, and if measure. For mitigation banks, the may provide for release of a limited
the modification is approved, arrange principal units for credits and debits are portion of projected credits once the
for it to be signed by the appropriate acres or linear feet or functional mitigation banking instrument,
parties. assessment units of particular resource including the mitigation plan, has been
(g) Umbrella mitigation banking types. Functional assessment units may approved, the site secured, and
instruments. A single mitigation be linked to acres or linear feet. appropriate financial assurances
banking instrument may provide for (2) Functional assessment. Where established. Release of the remaining
future authorization of additional practicable, an appropriate functional credits must be tied to performance
mitigation bank sites. As additional sites assessment method (e.g., based milestones (e.g., construction,
are selected, they must be included in hydrogeomorphic approach to wetlands planting, establishment of specified
the mitigation banking instrument as functional assessment) must be used to plant and animal communities). The
modifications, using the procedures in assess and describe the aquatic resource credit release schedule should reserve a
paragraph (c) of this section. types that will be restored, established, significant share of the total credits for
(h) Coordination of mitigation enhanced and/or preserved by the release only after full achievement of
banking instrument and DA permit mitigation bank. ecological performance standards. When
issuance. In cases where initial (3) Credit production. The number of determining the credit release schedule,
establishment of the mitigation bank credits must reflect the difference factors to be considered may include,
but are not limited to: The method of management and/or direct the use of of an approved mitigation bank
providing compensatory mitigation financial assurances for remediation. consistent with the terms of its
credits (e.g., restoration), the likelihood (l) Reporting. (1) Ledger account. The instrument (e.g., the permitted activity
of success, the nature and amount of mitigation banking instrument must is located within the approved service
work needed to generate the mitigation contain a provision requiring the area, credits are available for an
bank credits, the aquatic resource sponsor to establish and maintain a appropriate resource type) will
type(s) and function(s) to be provided ledger to account for all credit generally satisfy the requirement to use
by the mitigation bank, and the initial transactions for the mitigation bank. a watershed approach to determine
capital costs needed to establish the Each time an approved credit compensatory mitigation requirements
mitigation bank. Once released, credits transaction occurs, the sponsor must where feasible and considering
may only be used to satisfy notify the district engineer. The sponsor opportunities for on-site, in-kind
compensatory mitigation requirements must compile an annual ledger report mitigation, as described in § 332.3(b).
in a DA permit if they have been showing the beginning and ending (n) IRT concerns with use of credits.
specifically approved by the district balance of available credits of each If, in the view of a member of the IRT,
engineer as part of the permit review resource type, all additions and an issued permit or series of issued
process. subtractions of credits, and any other permits raises concerns about how
(8) Release of credits. Credit releases changes in credit availability (e.g., credits from a particular mitigation bank
must be approved by the district additional credits released, credit sales are being used to satisfy compensatory
engineer. The sponsor must submit suspended). The ledger report must be mitigation requirements (including
documentation to the district engineer submitted to the district engineer, who concerns about whether credit use is
demonstrating that the appropriate will distribute copies to the IRT consistent with the terms of the
milestones for a release of credits have members. The ledger report is part of mitigation banking instrument), the IRT
been achieved and requesting the the administrative record for the member may notify the district engineer
release. The district engineer will mitigation bank. The district engineer in writing of the concern and request an
provide copies of this documentation to will make the ledger report available to IRT consultation. The district engineer
the IRT members for review. IRT the public upon request. shall promptly consult with the IRT to
members must provide any comments to (2) Monitoring reports. The sponsor is address the concern. Final resolution of
the district engineer within 15 days of responsible for monitoring the the concern is at the discretion of the
receiving this documentation. However, mitigation bank site in accordance with district engineer, consistent with
if the district engineer determines that the approved monitoring requirements applicable statutes, regulations, and
a site visit is necessary, IRT members to determine the level of success and policies regarding compensatory
must provide any comments to the identify problems requiring remedial mitigation requirements for DA permits.
district engineer within 30 days of action. Monitoring must be conducted (o) Long-term management. The legal
receipt of this documentation. After full in accordance with the requirements in mechanisms and the party responsible
consideration of any comments § 332.6, and at time intervals for the long-term management of the
received, the district engineer will appropriate for the particular project mitigation bank and the protection of
determine whether the milestones have type and until such time that the district the site must be documented in the
been achieved and the credits can be engineer, in consultation with the IRT, mitigation banking instrument. The
released. has determined that the performance sponsor must make adequate provisions
(9) Adjustments to credit totals and standards have been attained. The for the operation, maintenance, and
release schedules. (i) If, after achieving mitigation banking instrument must long-term management of the mitigation
all performance standards as specified include requirements for periodic bank site. The mitigation banking
in the mitigation banking instrument, monitoring reports to be submitted to instrument may contain provisions for
the sponsor finds that the mitigation the district engineer, who will provide the sponsor to transfer long-term
bank has developed aquatic resource copies to other IRT members. management responsibilities to a land
functions substantially in excess of (m) Use of credits. All activities stewardship entity, such as a public
those upon which the original credit authorized by DA permits are eligible, at agency, non-governmental organization,
totals and release schedule were based, the discretion of the district engineer, to or private land manager. Where needed,
he may request that the mitigation use a mitigation bank to compensate for the acquisition and protection of water
banking instrument be amended in unavoidable impacts to aquatic rights must be secured by the sponsor
accordance with the procedures in resources, such as streams and and documented in the mitigation
paragraph (f) of this section. This wetlands. The district engineer will banking instrument.
request must include detailed determine the number and type(s) of (p) Grandfathering of existing
documentation of the aquatic resource credits required to compensate for the mitigation banking instruments. All
functions provided by the mitigation authorized impacts. Permit applicants mitigation banking instruments
bank site, an explanation of how those may propose to use a particular approved after [date 90 days after
aquatic resource functions substantially mitigation bank to provide the required publication of final rule] must meet the
exceed the functions upon which the compensatory mitigation. The banker requirements of this part. Mitigation
original credit totals were based, an must provide the permit applicant with banks approved prior to [date 90 days
explanation of the basis for calculating a statement of credit availability. The after publication of final rule] may
the additional credits, and any other district engineer must review the permit continue to operate under the terms of
information deemed necessary by the applicant’s compensatory mitigation their existing instruments. However,
district engineer. proposal, and notify the applicant of his any modification to such a mitigation
(ii) If the district engineer determines determination regarding the banking instrument after [date 90 days
that the mitigation bank is not meeting acceptability of using that mitigation after publication of final rule], including
performance standards, he may reduce bank. In making this determination, the authorization of additional sites under
the number of available credits or district engineer must fully consider an umbrella mitigation banking
suspend credit sales. The district agency and public comments submitted instrument, must be consistent with the
engineer may also require adaptive as part of the permit review process. Use terms of this part.
§ 332.9 In-lieu fee programs. Dated: March 13, 2006. criteria for the use of all types of
(a) Suspension of future John Paul Woodley, Jr., compensatory mitigation, including on-
Assistant Secretary of the Army (Civil Works), site and off-site permittee-responsible
authorizations. As of [date 90 days after
Department of the Army. mitigation, mitigation banks, and in-lieu
publication of final rule] district
fee mitigation to offset unavoidable
engineers will not authorize new in-lieu Environmental Protection Agency impacts to waters of the United States
fee programs to provide compensatory 40 CFR Chapter I authorized through the issuance of
mitigation for DA permits. permits by the U.S. Army Corps of
For the reasons stated in the
(b) Transition period for existing in- preamble, the Environmental Protection Engineers (Corps) pursuant to Section
lieu fee programs. (1) In-lieu fee 404 of the Clean Water Act (33 U.S.C.
Agency proposes to amend 40 CFR part
programs with an approved instrument 1344). This subpart implements Section
230 as set forth below:
in effect as of [date 90 days after 314(b) of the 2004 National Defense
publication of final rule] may continue PART 230—SECTION 404(b)(1) Authorization Act (Pub. L. 108–136),
to sell credits consistent with the terms GUIDELINES FOR SPECIFICATION OF which directs that the standards and
of that instrument until [date 5 years DISPOSAL SITES FOR DREDGED OR criteria shall, to the maximum extent
and 90 days after publication of final FILL MATERIAL practicable, maximize available credits
rule]. Credits that have already been and opportunities for mitigation,
1. The authority citation for part 230 provide for regional variations in
sold by the in-lieu fee program on or continues to read as follows: wetland conditions, functions, and
before this date (or the date resulting
Authority: Secs. 404(b) and 501(a) of the values, and apply equivalent standards
from an extended deadline, as provided and criteria to each type of
Clean Water Act of 1977 (33 U.S.C. 1344(b)
in paragraph (b)(2) of this section) and 1361(a)). compensatory mitigation. This subpart
continue to be subject to the terms and is intended to further clarify mitigation
conditions of the instrument for that in- § 230.12 [Amended] requirements established under Corps
lieu fee program. 2. In § 230.12(a)(2) revise the and EPA regulations at 33 CFR part 320
(2) In-lieu fee programs that wish to reference ‘‘subpart H’’ to read ‘‘subparts and this part, respectively.
continue operating beyond this date H and J’’. (2) These rules have been jointly
must reconstitute themselves as a developed by the Secretary of the Army,
Subpart H—[Amended] acting through the Chief of Engineers,
mitigation bank, consistent with the
requirements of this part. If an in-lieu 3. In subpart H the Note following the and the Administrator of the
fee program has submitted a prospectus subpart heading is amended by adding Environmental Protection Agency. From
a sentence to the end to read as follows: time to time guidance on interpreting
satisfying the requirements of
and implementing these rules may be
§ 332.8(c)(2) by [date 4 years and 90 Note: * * * Additional criteria for prepared jointly by EPA and the U.S.
days after publication of final rule] and compensation measures are provided in
Army Corps of Engineers at the national
is making a good faith effort to complete Subpart J.
or regional level. No modifications to
the process of obtaining an approved 4. In § 230.75 add a new sentence the basic application, meaning, or intent
mitigation banking instrument that after the second sentence in paragraph of these rules will be made without
satisfies the requirements of this part, (d) to read as follows: further joint rulemaking by the
the district engineer may extend the Secretary of the Army, acting through
§ 230.75 Actions affecting plant and
deadline for final approval of this the Chief of Engineers and the
animal populations
instrument beyond [date 5 years and 90 Administrator of the Environmental
days after publication of final rule] as * * * * * Protection Agency pursuant to the
(d) * * * Additional criteria for Administrative Procedure Act (5 U.S.C.
necessary.
compensation measures are provided in 551 et seq.).
(3) If the district engineer determines Subpart J. * * * (b) Applicability. This subpart does
that the substantive requirements of this * * * * * not alter the circumstances under which
part pertaining to mitigation banks are 5. Add Subpart J to part 230 to read compensatory mitigation is required or
already satisfied by the existing in-lieu as follows: the definition of ‘‘waters of the United
fee program instrument, any changes States,’’ which is provided at § 230.3(s).
Subpart J—Compensatory Mitigation for
necessary to reconstitute the in-lieu fee Use of resources as compensatory
Losses of Aquatic Resources
program as a mitigation bank may be mitigation that are not otherwise subject
Sec.
accomplished using the streamlined to regulation under Section 404 of the
230.91 Purpose and general considerations.
review process in § 332.8(f)(2), 230.92 Definitions. Clean Water Act does not in and of itself
otherwise a new mitigation banking 230.93 General compensatory mitigation make them subject to such regulation.
instrument must be developed using the requirements. (c) Sequencing. Pursuant to these
procedure in § 332.8(c). 230.94 Planning and documentation. requirements, the district engineer will
230.95 Ecological performance standards. issue a section 404 permit only upon a
(4) Any in-lieu fee program that has 230.96 Monitoring. determination that the permit applicant
not reconstituted itself as a mitigation 230.97 Management. has taken all appropriate and
bank by the applicable deadline in 230.98 Mitigation banks. practicable steps to avoid and minimize
paragraphs (b)(1) or (b)(2) of this section 230.99 In-lieu fee programs.
adverse impacts to waters of the United

must cease selling credits as of that date. States. Practicable means available and
However, any such in-lieu fee program Subpart J—Compensatory Mitigation
for Losses of Aquatic Resources capable of being done after taking into
is still responsible for providing all consideration cost, existing technology,
credits already sold, consistent with the § 230.91 Purpose and general and logistics in light of overall project
terms of its instrument. considerations. purposes. Compensatory mitigation for
(a) Purpose. (1) The purpose of this unavoidable impacts may be required to
subpart is to establish standards and ensure that a section 404 activity
complies with this part of the Section the loss of aquatic functions at an or on a parcel of land contiguous to or
404(b)(1) Guidelines. impact or project site. The measure of near the impact site.
(d) Accounting for regional variations. function is based on the aquatic Out-of-kind means a resource type
Where appropriate, district engineers resources impacted by the authorized that is structurally and/or functionally
shall account for regional characteristics activity. different than the impacted resource
of aquatic resource types, functions, Enhancement means the type.
services, and values when determining manipulation of the physical, chemical, Performance standards are observable
performance standards and monitoring or biological characteristics of an or measurable attributes that are used to
requirements for compensatory aquatic resource to heighten, intensify, determine if a compensatory mitigation
mitigation projects. or improve a specific aquatic resource project meets its objectives.
function(s). Enhancement results in the Permittee-responsible mitigation
§ 230.92 Definitions. means an aquatic resource restoration,
gain of selected aquatic resource
For the purposes of this subpart, the function(s), but may also lead to a establishment, enhancement, and/or
following terms are defined: decline in other aquatic resource preservation activity undertaken by the
Adaptive management means the function(s). Enhancement does not permittee (or an authorized agent or
development of a management strategy result in a gain in aquatic resource area. contractor) to provide compensatory
that anticipates the challenges Establishment (creation) means the mitigation for which the permittee
associated with likely future impacts to manipulation of the physical, chemical, retains full responsibility.
the aquatic resource functions of the or biological characteristics present to Preservation means the removal of a
mitigation site. It acknowledges the risk develop an aquatic resource that did not threat to, or preventing the decline of,
and uncertainty of compensatory previously exist at an upland or aquatic resources by an action in or near
mitigation projects and allows deepwater site. Establishment results in those aquatic resources. This term
modification of those projects to a gain in aquatic resource area. includes activities commonly associated
optimize performance. The process will with the protection and maintenance of
Functional capacity means the degree
provide guidance on the selection of aquatic resources through the
to which an area of aquatic resource
appropriate remedial measures that will implementation of appropriate legal and
performs a specific function.
ensure the continued adequate physical mechanisms. Preservation does
Functions means the physical,
provision of aquatic resource function not result in a gain of aquatic resource
chemical, and biological processes that
and involves analysis of monitoring area or functions.
occur in aquatic resources and other Re-establishment means the
results to identify potential problems of
ecosystems. manipulation of the physical, chemical,
a compensatory project and
Impact means adverse effect. or biological characteristics of a site
identification of measures to rectify
In-kind means a resource type that is with the goal of returning natural/
those problems.
Buffer means an upland and/or structurally and/or functionally similar historic functions to a former aquatic
riparian area that protects and/or to the impacted resource type. resource. Re-establishment results in
enhances aquatic resource functions Interagency Review Team (IRT) means rebuilding a former aquatic resource and
associated with wetlands, rivers, an interagency group of Federal, Tribal, results in a gain in aquatic resource
streams, lakes, marine, and estuarine State, and/or local regulatory and area.
systems from disturbances associated resource agency representatives that Reference aquatic resources are
with adjacent land uses. reviews documentation for, and advises aquatic resources that represent the
Compensatory mitigation means the the district engineer on, the range of variability exhibited by a
restoration (re-establishment or establishment and management of a regional class of aquatic resources as a
rehabilitation), establishment (creation), mitigation bank. result of natural processes and
enhancement, and/or in certain Mitigation bank means a site, or suite anthropogenic disturbances.
circumstances preservation of aquatic of sites, where aquatic resources such as Rehabilitation means the
resources for the purposes of wetlands or streams are restored, manipulation of the physical, chemical,
compensating for unavoidable adverse established, enhanced, and/or preserved or biological characteristics of a site
impacts which remain after all for the purpose of providing with the goal of repairing natural/
appropriate and practicable avoidance compensatory mitigation for authorized historic functions to a degraded aquatic
and minimization has been achieved. impacts to similar resources. Third- resource. Rehabilitation results in a gain
Compensatory mitigation project party mitigation banks generally sell in aquatic resource function, but does
means a restoration, establishment, compensatory mitigation credits to not result in a gain in aquatic resource
enhancement, and/or preservation permittees whose obligation to provide area.
activity implemented by the permittee mitigation is then transferred to the Restoration means the manipulation
as a requirement of a DA permit (i.e., mitigation bank sponsor. The operation of the physical, chemical, or biological
permittee-responsible mitigation), or by and use of a mitigation bank are characteristics of a site with the goal of
a third party (e.g., a mitigation bank). governed by a mitigation banking returning natural/historic functions to a
Credit means a unit of measure (e.g., instrument. former or degraded aquatic resource. For
a functional or area measure) Mitigation banking instrument means the purpose of tracking net gains in
representing the accrual or attainment of the legal document for the aquatic resource area, restoration is
aquatic functions at a compensatory establishment, operation, and use of a divided into two categories: re-
mitigation site. The measure of function mitigation bank. establishment and rehabilitation.
is based on the aquatic resources Off-site means an area that is neither Riparian areas are lands adjacent to a
restored, established, enhanced, or located on the same parcel of land as the waterbody. Riparian areas are
preserved. impact site, nor on a parcel of land transitional between terrestrial and
DA means Department of the Army. contiguous to or near the parcel aquatic ecosystems, through which
Days means calendar days. containing the impact site. surface and subsurface hydrology
Debit means a unit of measure (e.g., a On-site means an area located on the connects waterbodies with their
functional or area measure) representing same parcel of land as the impact site, adjacent uplands. Riparian areas are
adjacent to streams, lakes, and must be commensurate with the amount (c) Watershed approach to
estuarine-marine shorelines and provide and type of impact that is associated compensatory mitigation. (1) The
a variety of ecological functions and with a particular DA permit. Permit district engineer must use a watershed
services and help improve or maintain applicants are responsible for proposing approach to establish compensatory
local water quality. an appropriate compensatory mitigation mitigation requirements in DA permits
Service area means the geographic option to offset unavoidable impacts. to the extent appropriate and
area within which impacts can be (b) Location and type of compensatory practicable. Where an applicable
mitigated at a particular mitigation mitigation. (1) Where project impacts watershed plan is available, the
bank, as designated in its instrument. are located within the service area of an watershed approach should be based on
Services means the benefits that approved mitigation bank, and the the existing plan. Where no such plan
human populations receive from mitigation bank has credits available for is available, the watershed approach
functions that occur in aquatic resources the type of resource impacted, the should be based on information
and other ecosystems. project’s compensatory mitigation provided by the project sponsor or
Sponsor means any public or private requirements may be met by the available from other sources. The
entity responsible for establishing and, purchase of an appropriate number of ultimate goal of a watershed approach is
in most circumstances, operating a credits from the mitigation bank. to maintain and improve the quality and
mitigation bank. (2) Where practicable and quantity of aquatic resources within
Standard permit means a standard, appropriate, the district engineer will watersheds through strategic selection
individual permit issued under the require that the location and aquatic of compensatory mitigation sites.
authority of Section 404 of the Clean resource type of permittee-responsible (2) Considerations. (i) A watershed
Water Act. compensatory mitigation necessary to approach to compensatory mitigation
Values means the utility or considers the importance of landscape
offset anticipated impacts be consistent
satisfaction that humans derive from position and resource type of
with an established watershed plan or
aquatic resource services. Values can be compensatory mitigation projects for the
be determined using the principles of a
described in monetary terms or in ecological functions and sustainability
watershed approach as outlined in
qualitative terms, although many of the of aquatic resources within the
paragraph (c) of this section. The district
values associated with aquatic resources watershed. Such an approach considers
engineer and the IRT should also use a
cannot be easily monetized. Values can how the types and locations of
watershed approach to the extent
be either use values (e.g., recreational compensatory mitigation projects will
practicable in reviewing mitigation
enjoyment) or non-use values (e.g., provide the desired aquatic resource
banking instruments.
stewardship, biodiversity). functions, and will continue to function
Watershed plan means a plan (3) Where reliance on a watershed
over time in a changing landscape. It
developed by federal, tribal, state, and/ plan or approach is not practicable, the
also considers the habitat requirements
or local government agencies, in district engineer will consider of important species, habitat loss or
consultation with relevant stakeholders. opportunities to offset anticipated conversion trends, sources of watershed
A watershed plan addresses ecological aquatic resource impacts by requiring impairment, and current development
conditions in the watershed, multiple on-site and in-kind compensatory trends, as well as the requirements of
stakeholder interests, and land uses. mitigation. The district engineer must other regulatory and non-regulatory
Watershed plans may also identify also consider the practicability of on- programs that affect the watershed, such
priority sites for aquatic resource site compensatory mitigation and its as storm water management or habitat
restoration and protection. Examples of compatibility with the proposed project. conservation programs. It includes the
watershed plans include special area (4) If, after considering opportunities protection and maintenance of
management plans, advance for on-site, in-kind compensatory terrestrial resources, such as non-
identification programs, and watershed mitigation as provided in paragraph wetland riparian areas and uplands,
management plans. (b)(3) of this section, the district when those resources contribute to or
engineer determines that these improve the overall ecological
§ 230.93 General compensatory mitigation compensatory mitigation opportunities functioning of aquatic resources in the
requirements. are not practicable, are unlikely to watershed.
(a) General considerations. The compensate for the permitted activity, (ii) Locational factors (e.g., hydrology,
fundamental objective of compensatory or will be incompatible with the surrounding land use) are important to
mitigation is to offset environmental proposed project, and an alternative, the success of compensatory mitigation
losses resulting from unavoidable practicable off-site and/or out-of-kind for impacted habitat functions and
impacts to waters of the United States mitigation opportunity is identified that values and may lead to siting of such
authorized by DA permits. The district has a greater likelihood of offsetting the mitigation away from the project area.
engineer must determine the permitted activity, the district engineer However, consideration should also be
compensatory mitigation to be required shall require that this alternative given to functions, services, and values
in a DA permit, based on what is compensatory mitigation be provided. (e.g., water quality, flood control,
available, practicable, and capable of In general, compensatory mitigation shoreline protection) that will likely
compensating for the aquatic resource should be located within the same need to be addressed at or near the areas
functions that will be lost as a result of watershed as the impact site, and impacted by the permitted project.
the permitted activity. In making this should be located where it is most likely (iii) A watershed approach to
determination, the district engineer to successfully replace lost functions, compensatory mitigation may involve
must assess the likelihood for ecological services, and values, taking into account planning efforts to inventory historic
success and sustainability, the location such watershed scale features as aquatic and existing aquatic resources,
of the compensation site relative to the habitat diversity, habitat connectivity, including identification of degraded
impact site and their significance within relationships to hydrologic sources aquatic resources, and planning efforts
the watershed, and the economic costs (including the availability of water to identify immediate and long-term
of the compensatory mitigation. rights), and compatibility with adjacent aquatic resource needs within
Compensatory mitigation requirements land uses. watersheds that can be met through
permittee-responsible mitigation potential for chemical contamination of in the administrative record for the
projects or mitigation banks. Watershed the aquatic resources. permit action.
planning efforts may identify and/or (e) Mitigation type. (1) In general, in- (g) Use of mitigation banks. Mitigation
prioritize aquatic resources that are kind mitigation is preferable to out-of- banks may be used to compensate for
important for maintaining and restoring kind mitigation because it is most likely impacts to aquatic resources authorized
ecological functions of the watershed. to compensate for the functions, by general permits and individual
(3) Information Needs. The use of a services, and values lost at the impact permits, including after-the-fact permits.
watershed approach is based on analysis site. For example, restoration of Mitigation banks may also be used to
of information regarding watershed wetlands is most likely to compensate satisfy requirements arising out of an
conditions and needs. Such information for unavoidable impacts to wetlands, enforcement action, such as
includes: Current trends in habitat loss while restoration of streams is most supplemental environmental projects.
or conversion, cumulative impacts of likely to compensate for unavoidable (h) Preservation. (1) Preservation may
past development activities, current impacts to streams. Thus, except as be used to provide compensatory
development trends, the presence and provided in paragraph (e)(2) of this mitigation for activities authorized by
needs of sensitive species, site section, the district engineer should DA permits where:
conditions that favor or hinder the require that compensatory mitigation be (i) The resources provide important
success of mitigation projects, chronic of a similar type to the impacted aquatic physical, chemical, or biological
environmental problems such as resource. functions for the watershed;
flooding or poor water quality, and local (2) If the district engineer determines (ii) The resources contribute to the
watershed goals and priorities. This through the decision framework in ecological sustainability of the
information may be contained in an paragraph (b) of this section that out-of- watershed;
existing watershed plan or may be kind compensatory mitigation will serve (iii) Preservation is determined by the
available from other sources. The level the aquatic resource needs of the district engineer to be appropriate and
of information and analysis needed to watershed, the district engineer may practicable;
support a watershed approach must be authorize the use of such out-of-kind (iv) The resources are under threat of
commensurate with the scope and scale compensatory mitigation. Factors that destruction or adverse modifications;
of the proposed project requiring a DA should be considered in making this and
permit, as well as the functions lost as determination include historic loss of (v) The preserved site will be
a result of that project. habitat types within the watershed, the permanently protected through an
(d) Site selection. The compensatory needs of sensitive species, appropriate appropriate real estate or other legal
mitigation project site must be mixes of habitat to maintain ecosystem instrument (e.g., easement, title transfer
ecologically suitable for providing the viability, the relative likelihood of to state resource agency or land trust).
desired aquatic resource functions. In success in establishing different habitat (2) Where preservation is used to
determining the ecological suitability of types, needs for ecosystem services, and provide compensatory mitigation, to the
the compensatory mitigation project local watershed goals and priorities. The extent appropriate and practicable the
site, the district engineer must consider basis for authorization of out-of-kind preservation shall be done in
the following factors: compensatory mitigation must be conjunction with aquatic resource
(1) Hydrological conditions, soil documented in the administrative restoration, establishment, and/or
characteristics, and other physical and record for the permit action. enhancement activities. This
chemical characteristics; (f) Amount of compensatory requirement may be waived by the
(2) Watershed-scale features, such as mitigation. The district engineer must district engineer where preservation has
aquatic habitat diversity, habitat require an amount of compensatory been identified as a high priority using
connectivity, and other landscape scale mitigation for unavoidable impacts to a watershed approach, as described in
functions; aquatic resources sufficient to replace paragraph (c) of this section, but
(3) The size and location of the lost aquatic resource functions. In cases compensation ratios should be higher.
compensatory mitigation site relative to where functional assessment methods (i) Buffers. District engineers may
hydrologic sources (including the are available, appropriate, and practical require that compensatory mitigation
availability of water rights) and other to use, district engineers should use project sites include, and may provide
ecological features; those functional assessment methods to compensatory mitigation credit for, the
(4) Compatibility with adjacent land determine how much compensatory establishment and maintenance of
uses and watershed management plans; mitigation should be required. If a riparian areas and/or upland buffers
(5) Reasonably foreseeable effects the functional assessment is not used, a around the restored, established,
compensatory mitigation project will minimum one-to-one acreage or linear enhanced, or preserved aquatic
have on ecologically important aquatic foot replacement ratio should be used as resources where necessary to ensure the
or terrestrial resources (e.g., shallow a surrogate for functional replacement. long-term viability of those resources.
sub-tidal habitat, mature forests), The district engineer must require a (j) Relationship to other Federal,
cultural sites, or habitat for Federally-or mitigation ratio greater than one-to-one Tribal, State, and local programs.
State-listed threatened and endangered where necessary to account for the Compensatory mitigation projects for
species; and method of compensatory mitigation DA permits may also be used to
(6) Other relevant factors including, (e.g., preservation), differences between compensate for environmental impacts
but not limited to, development trends, the functions lost at the impact site and authorized under other programs, such
anticipated land use changes, habitat the functions expected to be produced as Tribal, State, or local wetlands
status and trends, local or regional goals by the compensatory mitigation project, regulatory programs, the National
for the restoration or protection of temporal losses of aquatic resource Pollutant Discharge Elimination System
particular habitat types or functions functions, and/or the difficulty of Permit Program, Corps civil works
(e.g., re-establishment of habitat restoring or establishing the desired projects, and Superfund removal and
corridors or habitat for species of aquatic resource type and functions. remedial actions, consistent with the
concern), water quality goals, floodplain The rationale for the required terms and requirements of these
management goals, and the relative replacement ratio must be documented programs and subject to the following
considerations. The project must (l) Party responsible for compensatory the district engineer deems appropriate.
include appropriate compensatory mitigation. (1) The special conditions of Financial assurances may be in the form
mitigation for unavoidable impacts to the DA permit must clearly indicate the of performance bonds, escrow accounts,
aquatic resources authorized by the DA party or parties responsible for the casualty insurance, letters of credit,
permit, over and above what would be implementation, performance, and long- legislative appropriations for
required under other programs to term management of the compensatory government sponsored projects, or other
address other impacts. Under no mitigation project. appropriate instruments, subject to the
circumstances may the same credits be (2) For mitigation banks, the approval of the district engineer. The
used to provide mitigation for more than mitigation banking instrument must rationale for determining the amount of
one activity. However, where clearly indicate the party or parties the required financial assurances must
appropriate, compensatory mitigation responsible for the implementation, be documented in the administrative
projects, including mitigation banks, performance, and long-term record for the DA permit.
may be designed to holistically address management of the compensatory (3) Financial assurances shall be
requirements under multiple programs mitigation project. phased out once the compensatory
and authorities for the same activity. (3) If a mitigation bank is approved by mitigation project has been determined
Except for projects undertaken by the district engineer to provide required by the district engineer to be successful
Federal agencies, or where Federal compensatory mitigation for a DA in accordance with its performance
funding is specifically authorized to permit, the special conditions of that standards. The DA permit or mitigation
provide compensatory mitigation, DA permit must indicate which banking instrument must clearly specify
Federally-funded wetland conservation mitigation bank will be used to provide the conditions under which the
projects undertaken for purposes other that compensatory mitigation. In such financial assurances are to be released to
than compensatory mitigation, such as cases, the mitigation bank assumes the permittee, sponsor, and/or other
the Wetlands Reserve Program and the responsibility for providing the required financial assurance provider, including,
Partners for Wildlife Program activities, compensatory mitigation after the as appropriate, linkage to achievement
cannot be used for the purpose of permittee has secured those credits from of performance standards, adaptive
generating compensatory mitigation the sponsor. management, or compliance with
(m) Timing. Implementation of the special conditions.
credits for activities authorized by DA
compensatory mitigation project shall (o) Compliance with applicable law.
permits. However, compensatory
be, to the maximum extent practicable, The compensatory mitigation project
mitigation credits may be generated by
in advance of or concurrent with the must comply with all applicable
activities undertaken in conjunction
activity causing the authorized impacts. Federal, state, and local laws. The DA
with, but supplemental to, such
Where it is not practicable to complete permit or mitigation banking instrument
programs in order to maximize the
the initial physical and biological must not require participation by the
overall ecological benefits of the
improvements required by the approved Corps or any other Federal agency in
conservation project. mitigation plan by the first full growing project management, including receipt
(k) Permit conditions. The season following the impacts resulting or management of financial assurances
compensatory mitigation requirements from the permitted activity, the district or long-term financing mechanisms,
for a DA permit, including the amount engineer may require additional except as determined by the Corps or
and type of compensatory mitigation, compensatory mitigation to offset other agency to be consistent with its
must be clearly stated in the special temporal losses of aquatic functions that statutory authority, mission, and
conditions of the individual permit or will result from the permitted activity. priorities.
general permit verification (see 33 CFR (n) Financial assurances. (1) The
325.4 and 330.6(a)). The special district engineer shall require sufficient § 230.94 Planning and documentation.
conditions must be enforceable and financial assurances to ensure a high (a) Pre-application consultations.
describe the objectives of the level of confidence that the Potential applicants for standard
compensatory mitigation project. The compensatory mitigation project will be permits are encouraged to participate in
special conditions must also identify the successfully completed, in accordance pre-application meetings with the Corps
party responsible for providing the with applicable performance standards. and appropriate agencies to discuss
compensatory mitigation. The special In cases where an alternate mechanism potential compensatory mitigation
conditions must incorporate, by is available to ensure a high level of requirements and information needs.
reference, compensatory mitigation confidence that the compensatory (b) Public review and comment. (1)
plans approved by the district engineer. mitigation will be provided and For an activity that requires a standard
The performance standards and maintained (e.g., a formal, documented DA permit pursuant to Section 404 of
monitoring required for the commitment from a government agency the Clean Water Act, the public notice
compensatory mitigation project must or public authority) the district engineer for the proposed activity must explain
also be clearly stated in the special may determine that financial assurances how impacts associated with the
conditions or the approved are not necessary for that compensatory proposed activity are to be avoided,
compensatory mitigation plan. The mitigation project. minimized, and compensated for. This
special conditions must also describe (2) The amount of the required explanation shall address the amount,
any required financial assurances or financial assurances must be type, and location of any proposed
long-term management provisions for determined by the district engineer, in compensatory mitigation, including any
the compensatory mitigation project. If consultation with the project sponsor, out-of-kind mitigation, or indicate an
a mitigation bank is used to provide the and must be based on the size and intention to use an approved mitigation
required compensatory mitigation, the complexity of the compensatory bank. The level of detail provided in the
special conditions must indicate which mitigation project, the degree of public notice must be commensurate
mitigation bank will be used, and completion of the project at the time of with the scope and scale of the project.
specify the required number and type of project approval, the likelihood of (2) For activities authorized by
credits the permittee is required to success, the past performance of the general permits, review of compensatory
purchase. project sponsor, and any other factors mitigation plans must be conducted in
accordance with the terms and existing hydrology, soil conditions, and (11) Long-term management plan. A
conditions of those general permits and other site characteristics. A prospective description of how the compensatory
applicable regulations. permittee planning to purchase credits mitigation project will be managed after
(c) Mitigation plan. (1) The permittee from an approved mitigation bank only performance standards have been
or mitigation bank sponsor must prepare needs to provide baseline information achieved to ensure the long-term
a draft mitigation plan and submit it to about the impact site, not the mitigation sustainability of the resource, including
the district engineer for review. After bank site. the party responsible for long-term
addressing any comments provided by (6) Determination of credits. A management and long-term financing
the district engineer, the permittee or description of the number of credits to mechanisms.
sponsor must prepare a final mitigation be provided, including a brief (12) Adaptive management plan. A
plan, which must be approved by the explanation of the rationale for this description of procedures to address
district engineer prior to issuing the DA determination. For permittee- potential changes in site conditions or
permit or approving the mitigation responsible mitigation, this should other components of the compensatory
banking instrument. The approved include an explanation of how the mitigation project, including the party
mitigation plan must be incorporated compensatory mitigation project or parties responsible for implementing
into the DA permit or mitigation compensates for unavoidable impacts to adaptive management measures. The
banking instrument by reference. The aquatic resources resulting from the adaptive management plan will guide
mitigation plan must include the items permitted activity. For mitigation banks, decisions for revising compensatory
described in paragraphs (c)(2) through it should include a description of mitigation plans and conducting
(c)(14) of this section, except that the resource types for which the mitigation remediation to provide aquatic resource
district engineer may waive specific bank may be used as compensatory functions.
items if he determines that they are not mitigation and the number of credits to (13) Financial assurances. A
applicable to a particular project. be provided for each resource type. This description of financial assurances that
Permittees who plan to fulfill their may include provisions for adjusting will be provided and how they are
compensatory mitigation obligations by credits in the future, both downward (if sufficient to ensure a high level of
purchasing credits from an approved performance standards are not met) or confidence that the compensatory
mitigation bank need only include the upward (if performance standards are mitigation project will be successfully
name of the mitigation bank and the significantly exceeded). For permittees completed, in accordance with its
items described in paragraphs (c)(5) and intending to purchase credits from an performance standards.
(c)(6) of this section in their mitigation approved mitigation bank, it should (14) Other information. The district
plan. The level of detail of the include the number and type of credits engineer may require additional
mitigation plan should be to be purchased and how these were information as necessary to determine
commensurate with the scale and scope determined. the appropriateness, feasibility, and
of the project. (7) Mitigation work plan. Detailed practicability of the compensatory
(2) Objectives. A description of the written specifications and work mitigation project.
aquatic resource type(s) and amount(s) descriptions for the compensatory
that will be provided, the method of mitigation project, including, but not § 230.95 Ecological performance
standards.
compensation (i.e., restoration, limited to, the geographic boundaries of
establishment, enhancement, and/or the project; construction methods, The mitigation plan must contain
preservation), and the manner in which timing, and sequence; source(s) of performance standards that will be used
the aquatic resource functions of the water, including connections to existing to assess whether the project is
compensatory mitigation project will waters and uplands; plant species to be achieving its objectives. Performance
address the needs of the watershed, planted at the site; the use of natural standards should relate to the objectives
ecoregion, or other geographic area of regeneration or seed banks to provide of the compensatory mitigation project,
interest. the desired plant community at the site; so that the project can be objectively
(3) Site selection. A description of the plans to control invasive plant species; evaluated to determine if it is
factors considered during the site the proposed grading plan, including developing into the desired resource
selection process. This should include elevations and slopes of the substrate; type and providing the expected
consideration of watershed needs, on- erosion control measures; and proposed functions. Performance standards
site alternatives where applicable, and stream geomorphology, if applicable. should be based on attributes that are
the practicability of accomplishing (8) Maintenance plan. A description objective, verifiable, and can be
ecologically self-sustaining aquatic and schedule of maintenance measured with a reasonable amount of
resource restoration, establishment, requirements to ensure the continued effort. Performance standards may be
enhancement, and/or preservation at the viability of the resource once initial based on variables or measures of
compensatory mitigation project site. construction is completed. functional capacity described in
(4) Site protection instrument. A (9) Performance standards. functional assessment methodologies,
description of the legal arrangements Ecologically-based standards that will measurements of hydrology or other
and instrument, including site be used to determine whether the aquatic resource characteristics, and/or
ownership, that will be used to ensure compensatory mitigation project is comparisons to reference aquatic
the long-term protection of the achieving its objectives. resources of similar type and landscape
compensatory mitigation project site. (10) Monitoring requirements. A position. Performance standards based
(5) Baseline information. A description of parameters to be on measurements of hydrology should

description of the ecological monitored in order to determine if the take into consideration the hydrologic
characteristics of the proposed compensatory mitigation project is on variability exhibited by reference
compensatory mitigation project site track to meet performance standards aquatic resources, especially wetlands.
and, in the case of an application for a and if adaptive management is needed. Where practicable, performance
DA permit, the impact site. This may A schedule for monitoring and reporting standards should take into account the
include descriptions of historic and on monitoring results to the district expected stages of the aquatic resource
existing plant communities, historic and engineer must be included. development process, in order to allow
early identification of potential the functions provided by the The district engineer must require
problems and appropriate adaptive compensatory mitigation project site. remediation to correct the deficiencies
management. (2) Monitoring reports should be in the project to the extent appropriate
provided by the district engineer to and practicable. In determining
§ 230.96 Monitoring. interested Federal, Tribal, State, and appropriate and practicable
(a) General. Monitoring the local resource agencies. The district remediation, the district engineer will
compensatory mitigation project site is engineer and representatives of Federal, consider whether the compensatory
necessary to determine if the project is Tribal, State, and/or local resource mitigation project is providing
meeting its performance standards, and agencies may conduct regular (e.g., ecological benefits comparable to the
to determine if remediation is necessary annual) on-site inspections, as original objectives of the compensatory
to ensure that the compensatory appropriate, to monitor performance of mitigation project.
mitigation project is accomplishing its the mitigation site. Monitoring reports (2) The district engineer, in
objectives. The district engineer must must be made available to the public consultation with the responsible party
require the submission of monitoring upon request. (and other Federal, Tribal, state, and
reports to assess the development and
§ 230.97 Management. local agencies, as appropriate), will
condition of the compensatory
determine the appropriate remediation
mitigation project, unless he determines (a) Site protection. The aquatic
habitats, riparian areas, buffers, and requirements. The required remediation
that monitoring is not practicable for
uplands that comprise the overall may include site modifications, design
that compensatory mitigation project.
compensatory mitigation project should changes, revisions to maintenance
The mitigation plan must address the
be provided long-term protection, requirements, and revised monitoring
monitoring requirements for the
through appropriate real estate requirements. The remediation must be
compensatory mitigation project,
instruments such as conservation designed to ensure that the modified
including the parameters to be
easements held by, or transfer of title to, compensatory mitigation project
monitored, the length of the monitoring
period, the party responsible for entities such as Federal, Tribal, State, or provides aquatic resource functions
conducting the monitoring, the local resource agencies, non-profit comparable to those described in the
frequency for submitting monitoring conservation organizations, or private mitigation plan objectives.
reports to the district engineer, and the land managers, or other acceptable (3) The performance standards must
party responsible for submitting those means for government property, such as be revised where necessary to assess the
monitoring reports to the district Federal facility management plans or success of remediation efforts and/or the
engineer. integrated natural resources realization of comparable ecological
(b) Monitoring period. The mitigation management plans. The real estate benefits that were considered in
plan must provide for a monitoring instrument for the long-term protection determining remediation requirements.
period that is sufficient to demonstrate of the compensatory mitigation site (d) Long-term management. (1) The
that the compensatory mitigation project should restrict or prohibit incompatible permit conditions or mitigation banking
has met performance standards, but not uses (e.g., clear cutting) that might instrument must identify the party
less than five years. A longer monitoring otherwise jeopardize the objectives of responsible for the ownership and long-
period must be required for aquatic the compensatory mitigation project. term management of the compensatory
resources with slow development rates Where appropriate, multiple mitigation project, once performance
(e.g., forested wetlands, bogs). instruments recognizing compatible standards have been achieved. The
Following project implementation, the uses (e.g., fishing or grazing rights) may permit conditions or mitigation banking
district engineer may waive the be used. instrument may contain provisions
remaining monitoring requirements (b) Sustainability. Compensatory allowing the permittee or sponsor to
upon a determination that the mitigation projects should be designed, transfer the long-term management
compensatory mitigation project has to the maximum extent practicable, to responsibilities of the compensatory
achieved its performance standards. be self-sustaining once performance mitigation project site to a land
Conversely the district engineer may standards have been achieved. This stewardship entity, such as a public
extend the original monitoring period includes minimization of active agency, non-governmental organization,
upon a determination that performance engineering features (e.g., pumps) and or private land manager, after review
standards have not been met or the appropriate siting to ensure that natural and approval by the district engineer.
compensatory mitigation project is not hydrology and landscape context will The land stewardship entity need not be
on track to meet them. The district support long-term sustainability. Where identified in the original permit or
engineer may also revise monitoring active long-term management and mitigation banking instrument, as long
requirements when remediation is maintenance are necessary to ensure as the future transfer of long-term
required. long-term sustainability (e.g., prescribed management responsibility is approved
(c) Monitoring reports. (1) The district burning, invasive species control, by the district engineer.
engineer must determine the maintenance of water control structures, (2) Provisions necessary for long-term
information to be included in easement enforcement), the responsible financing must be included in the
monitoring reports. This information party must provide for such original permit or mitigation banking
should be sufficient for the district management and maintenance. This instrument. Appropriate long-term
engineer to determine how the includes the provision of long-term financing mechanisms include
compensatory mitigation project is financing mechanisms where necessary. endowments, trusts, contractual
progressing towards meeting its (c) Adaptive management. (1) If arrangements with future responsible
performance standards, and may monitoring or other information parties, and other appropriate financial
include plans, maps, and photographs indicates that the compensatory instruments. In cases where the long-
to illustrate site conditions. Monitoring mitigation project is not progressing term management entity is a public
reports may also include the results of towards meeting its performance authority or government agency, a
functional assessments used to provide standards as anticipated, the responsible formal commitment to accept
quantitative or qualitative measures of party must notify the district engineer. stewardship responsibilities for the
project is acceptable in lieu of specific affecting, or affected by, the general need for, and technical
financial arrangements. establishment, operation, or use of the feasibility of, the proposed mitigation
mitigation bank. The district engineer bank. The prospectus must discuss the
§ 230.98 Mitigation banks. will seek to include all public agencies ecological suitability of the site to
(a) General considerations. (1) All with a substantive interest in the achieve the objectives of the proposed
mitigation banks must have an approved establishment of the mitigation bank on mitigation bank. This includes the
instrument signed by the sponsor and the IRT, but retains final authority over physical, chemical, and biological
the district engineer prior to being used its composition. characteristics of the site and how that
to provide compensatory mitigation for (3) The primary role of the IRT is to site will support the planned types of
DA permits. To the maximum extent facilitate the establishment of mitigation aquatic resources and functions. It
practicable, mitigation banks must be banks through the development of should also discuss the proposed
planned and designed to be self- mitigation banking instruments. The ownership arrangements and long-term
sustaining over time, but some active IRT will review the prospectus, management of the mitigation bank. The
management and maintenance may be mitigation plan, and mitigation banking review process begins when the sponsor
required to ensure their long-term instrument and provide comments to submits a complete prospectus to the
viability and sustainability. Examples of the district engineer. Members of the district engineer. The district engineer
acceptable management activities IRT may also sign the mitigation will notify the sponsor within 15 days
include maintaining fire dependent banking instrument, if they so choose. whether or not a submitted prospectus
habitat communities in the absence of By signing the mitigation banking is complete.
natural fire and controlling invasive instrument, the IRT members indicate (3) Preliminary review of prospectus.
exotic plant species. their agreement with the terms of the Prior to submitting a prospectus, the
(2) Mitigation banks may be sited on instrument. The IRT will also advise the sponsor may elect to submit a draft
public or private lands. Siting on public district engineer in assessing monitoring prospectus to the district engineer for
land is only permitted when done in reports, recommending remedial comment and consultation. The district
accordance with the mission and measures, approving credit release, and engineer will provide copies of the draft
policies of the land management agency approving modifications to a mitigation prospectus to the IRT, and provide
and with its written approval. Credits banking instrument. comments back to the sponsor within 30
for mitigation banks on public land (4) The district engineer will give full days. Any comments from IRT members
must be based solely on aquatic consideration to the comments and will also be forwarded to the sponsor.
resource functions provided by the advice of the IRT. However, the district This preliminary review is optional but
mitigation bank, over and above those engineer alone retains final authority for is strongly recommended. It is intended
provided by public programs already approval of the mitigation banking to identify potential issues early so that
planned or in place. instrument. However, in cases where the sponsor may attempt to address
(3) All mitigation banks must comply the mitigation bank is also intended to those issues prior to the start of the
with the standards in this part, if they satisfy the requirements of another formal review process.
are to be used to provide compensatory agency, that agency must also approve (4) Public review and comment.
mitigation for activities authorized by the mitigation banking instrument Within 30 days of receipt of a complete
DA permits, regardless of whether they before it can be used to satisfy such prospectus, the district engineer will
are sited on public or private lands and requirements. provide public notice of the proposed
whether the sponsor is a governmental (c) Review process. (1) The sponsor is mitigation bank, in accordance with the
or private entity. responsible for preparing all public notice procedures at 33 CFR
(b) Interagency Review Team. (1) The documentation associated with 325.3. The public notice must include a
district engineer will establish an establishment of the mitigation bank, summary of the prospectus and indicate
Interagency Review Team (IRT) to including the prospectus, mitigation that the full prospectus is available to
review documentation for the plan, and mitigation banking the public for review upon request. The
establishment and management of the instrument. The prospectus provides an comment period for public notice will
mitigation bank. The district engineer or overview of the mitigation bank project generally be 30 days, unless the district
his designated representative serves as and serves as the basis for public and engineer determines that a longer or
Chair of the IRT. In cases where a initial IRT comment. The mitigation shorter comment period is appropriate.
mitigation bank is proposed to satisfy plan, as described in § 230.94(c), The district engineer will notify the
the requirements of another Federal, provides detailed plans and sponsor if the comment period is
Tribal, State, or local program, in specifications for the mitigation bank. extended beyond 30 days, including an
addition to compensatory mitigation The mitigation banking instrument explanation of why the longer comment
requirements of DA permits, the district provides the authorization for the period is necessary. Copies of all
engineer may designate an appropriate mitigation bank to provide credits to be comments received in response to the
official of the responsible agency as co- used as compensatory mitigation for DA public notice must be distributed to the
Chair of the IRT. permits. The mitigation banking other IRT members and to the sponsor
(2) In addition to the Corps, instrument must also incorporate the within 15 days of the close of the public
representatives from the U.S. mitigation plan by reference. comment period. The district engineer
Environmental Protection Agency, U.S. (2) Prospectus. The prospectus must and IRT members may also provide
Fish and Wildlife Service, NOAA provide a summary of the information comments to the sponsor at this time,
Fisheries, the Natural Resources that will be included in the mitigation and copies of any such comments will
Conservation Service, and other Federal plan, at a sufficient level of detail to also be distributed to all IRT members.
agencies, as appropriate, may support informed public and IRT If the construction of a mitigation bank
participate in the IRT. The IRT may also comment. In particular, it must describe requires DA authorization through the
include representatives from Tribal, the objectives of the proposed standard permit process, the public
State, and local regulatory and resource mitigation bank, how the mitigation notice requirement may be satisfied
agencies, where such agencies have bank will be established and operated, through the public notice provisions of
authorities and/or mandates directly the proposed service area, and the the standard permit processing
procedures, provided all of the relevant (vi) Default and closure provisions; listed in paragraphs (c)(5)(i) through
information is provided. and (vii) of this section.
(5) Draft mitigation banking (vii) Any other information deemed (d) Dispute resolution process. (1)
instrument. After considering comments necessary by the district engineer. Within 15 days of receipt of the district
from the district engineer, the IRT, and (6) IRT review. Upon receiving a draft engineer’s notification of intent to
the public, if the sponsor chooses to mitigation banking instrument, the approve a mitigation banking
proceed with establishment of the district engineer must provide copies of instrument, the Regional Administrator
mitigation bank, he must prepare a draft the draft instrument to the IRT members of the U.S. EPA, the Regional Director
mitigation banking instrument and for a 30 day comment period. Following of the U.S. Fish and Wildlife Service,
submit it to the district engineer. The the comment period, the district the Regional Director of the National
draft mitigation banking instrument engineer will discuss any comments Marine Fisheries Service, and/or other
should be based on the prospectus and with the appropriate agencies and with senior officials of agencies represented
must describe in detail the physical and the sponsor. The district engineer will on the IRT may notify the district
legal characteristics of the mitigation seek to resolve any issues using a engineer and other IRT members by
bank and how it will be established and consensus-based approach. Within 90 letter if they object to the approval of
operated. The draft mitigation banking days of receipt of the complete draft the proposed final mitigation banking
instrument must include the following mitigation banking instrument, the instrument. This letter must include an
information: district engineer must notify the sponsor explanation of the basis for the objection
(i) Mitigation plan, including all of the status of the IRT review. and, where feasible, offer
applicable items listed in § 230.94(c)(2) Specifically, the district engineer must recommendations for resolving the
through (14); indicate to the sponsor if the draft objections. If the district engineer does
(ii) Geographic service area of the mitigation banking instrument is not receive any objections within this
mitigation bank. The service area is the generally acceptable and what changes, time period, he may proceed to final
watershed or other geographic area if any, are needed. If there are action on the mitigation banking
within which a mitigation bank is significant unresolved concerns that instrument.
authorized to provide compensation for may lead to a formal objection from one (2) The district engineer must respond
unavoidable impacts authorized by DA or more IRT members to the final to the objection within 30 days of
permits. The service area should be mitigation banking instrument, the receipt of the letter. The district
large enough to support an district engineer will indicate the nature engineer’s response may indicate an
economically viable mitigation bank, of those concerns. intent to disapprove the mitigation
but must not be larger than is (7) Final mitigation banking banking instrument as a result of the
appropriate to ensure that the aquatic instrument. If the sponsor still wishes to objection, an intent to approve the
resources provided by the mitigation proceed with establishment of the mitigation banking instrument despite
bank will effectively compensate for mitigation bank, he must submit a final the objection, or may provide a
adverse environmental impacts across mitigation banking instrument to the modified mitigation banking instrument
the entire service area. The district district engineer for approval. The final that attempts to address the objection.
engineer must consider relevant mitigation banking instrument should The district engineer’s response must be
environmental and economic factors address any comments provided as a provided to all IRT members.
when approving the service area. The result of the IRT review process. The (3) Within 15 days of receipt of the
district engineer may also consider final mitigation banking instrument district engineer’s response, if the
locally-developed standards and must be provided directly by the Regional Administrator or Regional
criteria. In urban areas, a U.S. sponsor to all members of the IRT. Director is not satisfied with the
Geological Survey 8-digit hydrologic Within 15 days of receipt of the final response he may forward the issue to
unit code (HUC) watershed or a smaller mitigation banking instrument, the the Assistant Administrator, Office of
watershed may be an appropriate district engineer will notify the IRT Water of the U.S. EPA, the Assistant
service area. In rural areas, several members whether or not he intends to Secretary for Fish and Wildlife and
contiguous 8-digit HUCs or a 6-digit approve the mitigation banking Parks of the U.S. FWS, or the
HUC watershed may be an appropriate instrument. If no IRT member objects, Undersecretary for Oceans and
service area for the mitigation bank. The by initiating the dispute resolution Atmosphere of NOAA, as appropriate,
basis for determining the service area process in paragraph (d) of this section for review and must notify the district
must be documented in writing and within 30 days of receipt of the final engineer by faxed letter (with copies to
referenced in the mitigation banking mitigation banking instrument, the all IRT members) that the issue has been
instrument; district engineer will notify the sponsor forwarded for Headquarters review. This
(iii) Credit release schedule. Credit of his final decision and, if the step is available only to the IRT
release must be tied to achievement of mitigation banking instrument is members representing these three
specific milestones. If the mitigation approved, arrange for it to be signed by Federal agencies, however other IRT
bank does not achieve appropriate the appropriate parties. If any IRT members who do not agree with the
milestones (e.g., performance standards) member initiates the dispute resolution district engineer’s final decision do not
as anticipated, the district engineer may process, the district engineer will notify have to sign the mitigation banking
modify the credit release schedule, the sponsor. Following conclusion of instrument or recognize the mitigation
including reducing the number of
the dispute resolution process, the bank for purposes of their own programs
available credits or suspending credit district engineer will notify the sponsor and authorities. If an IRT member other
sales altogether; of his final decision, and if the than the one filing the original objection
(iv) Accounting procedures; mitigation banking instrument is has a new objection based on the district
(v) A provision stating that legal approved, arrange for it to be signed by engineer’s response, he may use the first
responsibility for providing the the appropriate parties. The final step in this procedure (paragraph (d)(1)
compensatory mitigation lies with the mitigation banking instrument must of this section) to provide that objection
sponsor; contain the types of information items to the district engineer.
(4) If the issue has not been forwarded of an approved mitigation banking (i) Project implementation.
to the objecting agency’s Headquarters, instrument must follow the procedures Authorization to sell credits to satisfy
then the district engineer may proceed in paragraph (c) of this section, unless compensatory mitigation requirements
with final action on the mitigation the district engineer determines that the in DA permits is contingent on
banking instrument. If the issue has streamlined review process described in compliance with all of the terms of the
been forwarded to the objecting agency’s paragraph (f)(2) of this section is mitigation banking instrument. This
Headquarters, the district engineer must warranted. The streamlined review includes constructing a mitigation bank
hold in abeyance the final action on the process may be used for changes in accordance with the mitigation plan
mitigation banking instrument, pending reflecting adaptive management of the as approved by the district engineer and
Headquarters level review described mitigation bank, changes in credit incorporated by reference in the
below. release schedules, and changes that the mitigation banking instrument. If the
(5) Within 20 days from the date of district engineer determines are non- aquatic resource restoration,
the letter requesting Headquarters level significant. establishment, enhancement, and/or
review, the Assistant Administrator, (2) If the district engineer determines preservation activities cannot be
Office of Water, the Assistant Secretary that the streamlined review process is implemented in accordance with the
for Fish and Wildlife and Parks, or the warranted, he must notify the IRT approved mitigation plan, the district
Undersecretary for Oceans and members and the sponsor of this engineer must consult with the sponsor
Atmosphere must either notify the determination and provide them with and the IRT to consider modifications to
Assistant Secretary of the Army (Civil copies of the proposed modification. the mitigation banking instrument,
Works) (ASA(CW)) that further review IRT members and the sponsor have 30 including adaptive management,
will not be requested, or request that the days to notify the district engineer if revisions to the credit release schedule,
ASA(CW) review the draft mitigation they have concerns with the proposed and alternatives for providing
banking instrument. modification. If IRT members or the compensatory mitigation to satisfy any
(6) Within 30 days of receipt of the sponsor notify the district engineer of credits that have already been sold.
letter from the objecting agency’s such concerns, the district engineer (j) Credit withdrawal from mitigation
Headquarters request for ASA(CW)’s shall attempt to resolve those concerns. banks. The mitigation banking
review of the draft mitigation banking Within 60 days of providing the instrument may allow for initial
instrument, the ASA(CW), through the proposed modification to the IRT, the debiting of a percentage of the total
Director of Civil Works, must review the district engineer must notify the IRT credits projected at mitigation bank
draft mitigation banking instrument and members of his intent to approve or maturity provided the following
advise the district engineer on how to disapprove the proposed modification. conditions are satisfied: the mitigation
proceed with final action on that If no IRT member objects, by initiating banking instrument and mitigation plan
instrument. The ASA(CW) must the dispute resolution process in have been approved, the mitigation
immediately notify the Assistant paragraph (d) of this section, within 15 bank site has been secured, appropriate
Administrator, Office of Water, the days of receipt of this notification, the
financial assurances have been
Assistant Secretary for Fish and Wildlife district engineer will notify the sponsor
established, and any other requirements
and Parks, and/or the Undersecretary for of his final decision and, if the
determined to be necessary by the
Oceans and Atmosphere of the final modification is approved, arrange for it
district engineer have been fulfilled.
decision. to be signed by the appropriate parties.
The mitigation banking instrument must
(7) In cases where the dispute If any IRT member initiates the dispute
provide a schedule for additional credit
resolution procedure is used, the district resolution process, the district engineer
releases as appropriate milestones are
engineer must notify the sponsor of his will so notify the sponsor. Following
achieved (see paragraph (k)(7) of this
final decision within 150 days of receipt conclusion of the dispute resolution
section).
of the final mitigation banking process, the district engineer will notify
the sponsor of his final decision, and if (k) Determining credits. (1) Units of
instrument. measure. For mitigation banks, the
(e) Extension of deadlines. (1) The the modification is approved, arrange
for it to be signed by the appropriate principal units for credits and debits are
deadlines in paragraphs (c) and (d) of
parties. acres or linear feet or functional
this section may be extended by the
(g) Umbrella mitigation banking assessment units of particular resource
district engineer at his sole discretion in
instruments. A single mitigation types. Functional assessment units may
cases where:
(i) Compliance with other applicable banking instrument may provide for be linked to acres or linear feet.
laws, such as Endangered Species Act future authorization of additional (2) Functional assessment. Where
Section 7 consultation, is required; mitigation bank sites. As additional sites practicable, an appropriate functional
(ii) Timely submittal of information are selected, they must be included in assessment method (e.g.,
necessary for the review of the proposed the mitigation banking instrument as hydrogeomorphic approach to wetlands
mitigation bank is not accomplished by modifications, using the procedures in functional assessment) must be used to
the sponsor; or paragraph (c) of this section. assess and describe the aquatic resource
(iii) Information that is essential to the (h) Coordination of mitigation types that will be restored, established,
district engineer’s response cannot be banking instrument and DA permit enhanced and/or preserved by the
reasonably obtained within the issuance. In cases where initial mitigation bank.
specified time frame. establishment of the mitigation bank (3) Credit production. The number of
(2) In such cases, the district engineer involves activities requiring DA credits must reflect the difference
must promptly notify the sponsor in authorization, the permit should not be between pre- and post-mitigation bank
writing of the extension and the reason issued until all relevant provisions of site conditions. If an existing resource is
for it. Such extensions shall be for the the mitigation banking instrument have being enhanced, the number of credits
minimum time necessary to resolve the been substantively determined. This is should reflect only the enhancements
issue necessitating the extension. to ensure that the DA permit accurately produced by construction of the
(f) Modification of mitigation banking reflects all relevant provisions of the mitigation bank. This may be reflected
instruments. (1) In general, modification final mitigation banking instrument. in a discounted number of credits
relative to the total acres or linear feet type(s) and function(s) to be provided ledger to account for all credit
encompassed by the mitigation bank. by the mitigation bank, and the initial transactions for the mitigation bank.
(4) Credit value. Once a credit is capital costs needed to establish the Each time an approved credit
debited, its value cannot change. mitigation bank. Once released, credits transaction occurs, the sponsor must
(5) Credits provided by preservation. may only be used to satisfy notify the district engineer. The sponsor
These credits should be specified as compensatory mitigation requirements must compile an annual ledger report
acres or linear feet of preservation of a in a DA permit if they have been showing the beginning and ending
particular resource types. In specifically approved by the district balance of available credits of each
determining the compensatory engineer as part of the permit review resource type, all additions and
mitigation requirements for DA permits process. subtractions of credits, and any other
using the mitigation bank, the district (8) Release of credits. Credit releases changes in credit availability (e.g.,
engineer should apply a higher must be approved by the district additional credits released, credit sales
mitigation ratio if the requirements are engineer. The sponsor must submit suspended). The ledger report must be
to be met through the use of documentation to the district engineer submitted to the district engineer, who
preservation credits. In determining this demonstrating that the appropriate will distribute copies to the IRT
higher ratio, the district engineer must milestones for a release of credits have members. The ledger report is part of
consider the relative importance of both been achieved and requesting the the administrative record for the
the impacted and the preserved aquatic release. The district engineer will mitigation bank. The district engineer
resources in sustaining watershed provide copies of this documentation to will make the ledger report available to
functions as described in § 230.93(c). the IRT members for review. IRT the public upon request.
(6) Credits provided by riparian areas, members must provide any comments to (2) Monitoring reports. The sponsor is
buffers, and uplands. These credits the district engineer within 15 days of responsible for monitoring the
should be specified as acres or linear receiving this documentation. However, mitigation bank site in accordance with
feet of riparian area, buffer, and uplands if the district engineer determines that the approved monitoring requirements
respectively. Non-aquatic resources can a site visit is necessary, IRT members to determine the level of success and
only be used as compensatory must provide any comments to the identify problems requiring remedial
mitigation for impacts to aquatic district engineer within 30 days of action. Monitoring must be conducted
resources authorized by DA permits receipt of this documentation. After full in accordance with the requirements in
when those resources are essential to consideration of any comments § 230.96, and at time intervals
maintaining the ecological viability of received, the district engineer will appropriate for the particular project
adjoining aquatic resources. In determine whether the milestones have type and until such time that the district
determining the compensatory been achieved and the credits can be engineer, in consultation with the IRT,
mitigation requirements for DA permits released. has determined that the performance
using the mitigation bank, the district (9) Adjustments to credit totals and standards have been attained. The
engineer may authorize the use of release schedules. (i) If, after achieving mitigation banking instrument must
riparian area, buffer and/or upland all performance standards as specified include requirements for periodic
credits if he determines that these areas in the mitigation banking instrument, monitoring reports to be submitted to
are essential to sustaining watershed the sponsor finds that the mitigation the district engineer, who will provide
functions as described in § 230.93(c) bank has developed aquatic resource copies to other IRT members.
and are the most appropriate functions substantially in excess of (m) Use of credits. All activities
compensation for the authorized those upon which the original credit authorized by DA permits are eligible, at
impacts. totals and release schedule were based, the discretion of the district engineer, to
(7) Credit release schedule. The terms he may request that the mitigation use a mitigation bank to compensate for
of the credit release schedule must be banking instrument be amended in unavoidable impacts to aquatic
specified in the mitigation banking accordance with the procedures in resources, such as streams and
instrument. The credit release schedule paragraph (f) of this section. This wetlands. The district engineer will
may provide for release of a limited request must include detailed determine the number and type(s) of
portion of projected credits once the documentation of the aquatic resource credits required to compensate for the
mitigation banking instrument, functions provided by the mitigation authorized impacts. Permit applicants
including the mitigation plan, has been bank site, an explanation of how those may propose to use a particular
approved, the site secured, and aquatic resource functions substantially mitigation bank to provide the required
appropriate financial assurances exceed the functions upon which the compensatory mitigation. The banker
established. Release of the remaining original credit totals were based, an must provide the permit applicant with
credits must be tied to performance explanation of the basis for calculating a statement of credit availability. The
based milestones (e.g., construction, the additional credits, and any other district engineer must review the permit
planting, establishment of specified information deemed necessary by the applicant’s compensatory mitigation
plant and animal communities). The district engineer. proposal, and notify the applicant of his
credit release schedule should reserve a (ii) If the district engineer determines determination regarding the
significant share of the total credits for that the mitigation bank is not meeting acceptability of using that mitigation
release only after full achievement of performance standards, he may reduce bank. In making this determination, the
ecological performance standards. When the number of available credits or district engineer must fully consider
determining the credit release schedule, suspend credit sales. The district agency and public comments submitted
factors to be considered may include, engineer may also require adaptive as part of the permit review process. Use
but are not limited to: the method of management and/or direct the use of of an approved mitigation bank
providing compensatory mitigation financial assurances for remediation. consistent with the terms of its
credits (e.g., restoration), the likelihood (l) Reporting. (1) Ledger account. The instrument (e.g., the permitted activity
of success, the nature and amount of mitigation banking instrument must is located within the approved service
work needed to generate the mitigation contain a provision requiring the area, credits are available for an
bank credits, the aquatic resource sponsor to establish and maintain a appropriate resource type) will
generally satisfy the requirement to use and documented in the mitigation must reconstitute themselves as a
a watershed approach to determine banking instrument. mitigation bank, consistent with the
compensatory mitigation requirements (p) Grandfathering of existing requirements of this subpart. If an in-
where feasible and considering mitigation banking instruments. All lieu fee program has submitted a
opportunities for on-site, in-kind mitigation banking instruments prospectus satisfying the requirements
mitigation, as described in § 332.3(b). approved after [date 90 days after of § 230.98(c)(2) by [date 4 years and 90
(n) IRT concerns with use of credits. publication of final rule] must meet the days after publication of final rule] and
If, in the view of a member of the IRT, requirements of this part. Mitigation is making a good faith effort to complete
an issued permit or series of issued banks approved prior to [date 90 days the process of obtaining an approved
permits raises concerns about how after publication of final rule] may mitigation banking instrument that
credits from a particular mitigation bank continue to operate under the terms of satisfies the requirements of this
are being used to satisfy compensatory their existing instruments. However, subpart, the district engineer may
mitigation requirements (including any modification to such a mitigation extend the deadline for final approval of
concerns about whether credit use is banking instrument after [date 90 days this instrument beyond [date 5 years
consistent with the terms of the after publication of final rule], including and 90 days after publication of final
mitigation banking instrument), the IRT authorization of additional sites under rule] as necessary.
member may notify the district engineer an umbrella mitigation banking (3) If the district engineer determines
in writing of the concern and request an instrument, must be consistent with the that the substantive requirements of this
IRT consultation. The district engineer terms of this part. subpart pertaining to mitigation banks
shall promptly consult with the IRT to are already satisfied by the existing in-
§ 230.99 In-lieu fee programs.
address the concern. Final resolution of lieu fee program instrument, any
(a) Suspension of future changes necessary to reconstitute the in-
the concern is at the discretion of the authorizations. As of [date 90 days after
district engineer, consistent with lieu fee program as a mitigation bank
publication of final rule] district may be accomplished using the
applicable statutes, regulations, and engineers will not authorize new in-lieu
policies regarding compensatory streamlined review process in
fee programs to provide compensatory § 230.98(f)(2), otherwise a new
mitigation requirements for DA permits. mitigation for DA permits. mitigation banking instrument must be
(o) Long-term management. The legal (b) Transition period for existing in- developed using the procedure in
mechanisms and the party responsible lieu fee programs. (1) In-lieu fee § 230.98(c).
for the long-term management of the programs with an approved instrument (4) Any in-lieu fee program that has
mitigation bank and the protection of in effect as of [date 90 days after not reconstituted itself as a mitigation
the site must be documented in the publication of final rule] may continue bank by the applicable deadline in
mitigation banking instrument. The to sell credits consistent with the terms paragraphs (b)(1) or (b)(2) of this section
sponsor must make adequate provisions of that instrument until [date 5 years must cease selling credits as of that date.
for the operation, maintenance, and and 90 days after publication of final However, any such in-lieu fee program
long-term management of the mitigation rule]. Credits that have already been is still responsible for providing all
bank site. The mitigation banking sold by the in-lieu fee program on or credits already sold, consistent with the
instrument may contain provisions for before this date (or the date resulting terms of its instrument.
the sponsor to transfer long-term from an extended deadline, as provided
management responsibilities to a land in paragraph (b)(2) of this section) Dated: March 23, 2006.
stewardship entity, such as a public continue to be subject to the terms and Stephen L. Johnson,
agency, non-governmental organization, conditions of the instrument for that in- Administrator, U.S. Environmental Protection
or private land manager. Where needed, lieu fee program. Agency.
the acquisition and protection of water (2) In-lieu fee programs that wish to [FR Doc. 06–2969 Filed 3–27–06; 8:45 am]
rights must be secured by the sponsor continue operating beyond this date BILLING CODE 3710–92–P

Proposed Rule: Aquatic Resources Losses Compensatory Mitigation

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Proposed Rule: Aquatic Resources Losses Compensatory Mitigation

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Tuesday,

March 28, 2006

Compensatory Mitigation for Losses of

DEPARTMENT OF DEFENSE docket number, EPA–HQ–OW–2006– material, such as copyrighted material,

specific geographic regions, such as OMB Desk Officer: Jim Laity.

timely input by tribal officials in the must make achieving environmental

(a) Purpose. (1) The purpose of this regulation.

permittee-responsible mitigation), or by governed by a mitigation banking returning natural/historic functions to a

compensatory mitigation for authorized historic functions to a degraded aquatic requirements.

adverse impacts to waters of the United

(5) Baseline information. A description of parameters to be on measurements of hydrology should

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