Compensatory Mitigation for Losses of Aquatic Resources [PDF 575 KB]

113 Pages·2016·0.64 MB·English

Thursday,
April 10, 2008
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; Final Rule
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19594 Federal Register/Vol. 73, No. 70/Thursday, April 10, 2008/Rules and Regulations
DEPARTMENT OF DEFENSE concerns regarding their past V. Organization of the Final Rule
performance and equivalency with the VI. Discussion of Specific Sections of the
Department of the Army, Corps of standards for mitigation banks and Final Rule
Engineers permittee-responsible compensatory VII. Administrative Requirements
mitigation. I. Background
33 CFR Parts 325 and 332
DATES: The effective date is June 9, Compensatory mitigation involves
2008. actions taken to offset unavoidable
ENVIRONMENTAL PROTECTION
adverse impacts to wetlands, streams
AGENCY ADDRESSES: Headquarters, U.S. Army
and other aquatic resources authorized
Corps of Engineers, Operations and
by Clean Water Act section 404 permits
40 CFR Part 230 Regulatory Community of Practice, 441
and other Department of the Army (DA)
G Street, NW., Washington, DC 20314–
[EPA–HQ–OW–2006–0020; FRL–8545–4] permits. As such, compensatory
1000. Headquarters, U.S. Environmental
mitigation is a critical tool in helping
RIN 0710–AA55 Protection Agency, Wetlands Division,
the federal government to meet the
Mail code 4502T, 1200 Pennsylvania
Compensatory Mitigation for Losses of Ave, NW., Washington, DC 20460. longstanding national goal of ‘‘no net
Aquatic Resources loss’’ of wetland acreage and function.
The Corps and EPA have established
For impacts authorized under section
AGENCIES: U.S. Army Corps of a docket for this action under Docket ID 404, compensatory mitigation is not
Engineers, DoD; and Environmental No. EPA–HQ–OW–2006–0020. All considered until after all appropriate
Protection Agency. documents in the docket are listed on and practicable steps have been taken to
the http://www.regulations.gov web site.
ACTION: Final rule. first avoid and then minimize adverse
Although listed in the index, some
impacts to the aquatic ecosystem
SUMMARY: The U.S. Army Corps of information is not publicly available, pursuant to 40 CFR part 230 (i.e., the
Engineers (the Corps) and the e.g., CBI or other information whose CWA Section 404(b)(1) Guidelines).
Environmental Protection Agency (EPA) disclosure is restricted by statute. Compensatory mitigation can be
are issuing regulations governing Certain other material, such as carried out through four methods: the
compensatory mitigation for activities copyrighted material, is not placed on restoration of a previously-existing
authorized by permits issued by the the Internet and will be publicly wetland or other aquatic site, the
Department of the Army. The available only in hard copy form. enhancement of an existing aquatic
regulations establish performance Publicly available docket materials are site’s functions, the establishment (i.e.,
standards and criteria for the use of available either electronically through creation) of a new aquatic site, or the
permittee-responsible compensatory http://www.regulations.gov or in hard preservation of an existing aquatic site.
mitigation, mitigation banks, and in-lieu copy at the Water Docket, EPA/DC, EPA There are three mechanisms for
programs to improve the quality and West, Room 3334, 1301 Constitution providing compensatory mitigation:
success of compensatory mitigation Ave., NW., Washington, DC. The Public permittee-responsible compensatory
projects for activities authorized by Reading Room is open from 8:30 a.m. to mitigation, mitigation banks and in-lieu
Department of the Army permits. 4:30 p.m., Monday through Friday, fee mitigation. Permittee-responsible
This rule improves the planning, excluding legal holidays. The telephone mitigation is the most traditional form
implementation and management of number for the Public Reading Room is of compensation and continues to
compensatory mitigation projects by (202) 566–1744, and the telephone represent the majority of compensation
emphasizing a watershed approach in number for the Water Docket is (202) acreage provided each year. As its name
selecting compensatory mitigation 566–2426. implies, the permittee retains
project locations, requiring measurable, FORFURTHERINFORMATIONCONTACT: Mr. responsibility for ensuring that required
enforceable ecological performance David Olson at 202–761–4922 or by e- compensation activities are completed
standards and regular monitoring for all mail at [email protected], and successful. Permittee-responsible
types of compensation and specifying or Mr. Palmer Hough at 202–566–1374 mitigation can be located at or adjacent
the components of a complete or by e-mail at [email protected]. to the impact site (i.e., on-site
compensatory mitigation plan, Additional information can also be compensatory mitigation) or at another
including assurances of long-term found at the Corps Headquarters location generally within the same
protection of compensation sites, Regulatory Program webpage at: http:// watershed as the impact site (i.e., off-
financial assurances, and identification www.usace.army.mil/cw/cecwo/reg/ site compensatory mitigation).
of the parties responsible for specific index.html or the EPA compensatory Mitigation banks and in-lieu fee
project tasks. mitigation webpage at: http:// mitigation both involve off-site
This rule applies equivalent standards www.epa.gov/wetlandsmitigation. compensation activities generally
to permittee-responsible compensatory SUPPLEMENTARYINFORMATION: conducted by a third party, a mitigation
mitigation, mitigation banks and in-lieu bank sponsor or in-lieu fee program
I. Background
fee mitigation to the maximum extent II. General Comments and Responses sponsor. When a permittee’s
practicable. Since a mitigation bank A. Overview compensatory mitigation requirements
must have an approved mitigation plan B. Most Frequently Raised Issues are satisfied by a mitigation bank or in-
and other assurances in place before any 1. Section 404(b)(1) Guidelines lieu fee program, responsibility for
of its credits can be used to offset 2. Compensatory Mitigation Standards for ensuring that required compensation is
permitted impacts, this rule establishes Streams completed and successful shifts from
3. Discretionary Language
a preference for the use of mitigation the permittee to the bank or in-lieu fee
S2 bank credits, which reduces some of the 4. Watershed Approach sponsor. Mitigation banks and in-lieu
E 5. In-Lieu Fee Programs
UL risks and uncertainties associated with fee programs both conduct consolidated
R C. Other General Comments
with compensatory mitigation. This rule also III. In-Lieu Fee Programs aquatic resource restoration,
C65 significantly revises the requirements IV. Compliance With Section 314 of the enhancement, establishment and
D1P for in-lieu fee programs to address NDAA preservation projects; however, under
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Federal Register/Vol. 73, No. 70/Thursday, April 10, 2008/Rules and Regulations 19595
current practice, there are several standards and criteria for the use, substantially identical e-mails and
important differences between in-lieu consistent with section 404 of the letters. Comments were provided by
fee programs and mitigation banks. Federal Water Pollution Control Act (33 regulated entities, the scientific
First, in-lieu fee programs are U.S.C. 1344, also known as the Clean community, non-governmental
generally administered by state Water Act), of on-site, off-site, and in- organizations, mitigation bankers, in-
governments, local governments, or lieu fee mitigation and mitigation lieu fee program sponsors, state and
non-profit non-governmental banking as compensation for lost local government agencies, and other
organizations while mitigation banks are wetlands functions in permits issued by members of the public.
usually (though not always) operated for the Secretary of the Army under such
profit by private entities. Second, in-lieu section.’’ This provision also requires A. Overview
fee programs rely on fees collected from that those regulations, to the maximum
Most of the distinct commenters said
permittees to initiate compensatory extent practicable, ‘‘maximize available
that this rule is a necessary addition to
mitigation projects while mitigation credits and opportunities for mitigation,
regulations for implementing the Corps
banks usually rely on private provide flexibility for regional
Regulatory Program and some expressed
investment for initial financing. Most variations in wetland conditions,
appreciation that the rule incorporates
importantly, mitigation banks must functions and values, and apply
stakeholder feedback and lessons
achieve certain milestones, including equivalent standards and criteria to each
learned. Many commenters expressed
site selection, plan approval, and type of compensatory mitigation.’’
general support for the proposed rule
financial assurances, before they can In response to this directive, the U.S.
sell credits, and generally sell a majority Army Corps of Engineers and the U.S. because: (1) It will promote
of their credits only after the physical Environmental Protection Agency (the predictability and consistency in
development of compensation sites has agencies) published a proposed rule in compensatory mitigation; (2) it will
begun. In contrast, in-lieu fee programs Part II of the March 28, 2006, issue of further effective partnerships with
generally initiate compensatory the Federal Register (71 FR 15520), with private sector mitigation banks; (3) it
mitigation projects only after collecting a 60-day public comment period. As a responds to concerns raised by those
fees, and there has often been a result of several requests, the Corps and participating in the development of
substantial time lag between permitted EPA extended the comment period by Mitigation Action Plan products; (4)
impacts and implementation of an additional 30 days. The comment many provisions of the rule are
compensatory mitigation projects. period ended on June 30, 2006. consistent with the 2005 Millennium
Additionally, in-lieu fee programs have In the preamble to the March 2006 Ecosystem Assessment; (5) it brings
not generally been required to provide proposal, the agencies noted their greater technical clarity to the process of
the same financial assurances as decision, in light of their respective determining appropriate mitigation; (6)
mitigation banks. For all of these statutory roles in the section 404 it provides greater focus on
reasons, there is greater risk and program, to pursue this rulemaking as a accountability through measurable and
uncertainty associated with in-lieu fee joint effort between the Corps and EPA. enforceable ecological performance
programs regarding the implementation The preamble also discussed the Corps’s standards, monitoring, and
of the compensatory mitigation project decision to develop these standards for management; (7) it fosters incorporation
and its adequacy to compensate for lost all DA permits which could potentially of aquatic ecosystem science into
functions and services. require compensatory mitigation. Thus, compensatory mitigation plans; and (8)
As noted in the preamble for the in addition to Clean Water Act section it increases public participation in the
March 2006 proposal, the majority of 404 permits, these standards also apply compensatory mitigation process. Some
the existing guidance regarding to DA permits issued under sections 9 of these commenters also suggested
compensatory mitigation and the use of and 10 of the Rivers and Harbors Act of modifications to the proposed rule,
these three mechanisms for providing 1899. Finally, the preamble also which are discussed in more detail
compensation exists in a number of discussed why these standards should below.
national guidance documents released apply to compensatory mitigation for
Some commenters, including most of
by the Corps and EPA over the past impacts to streams and other open
the form letters, opposed the proposed
seventeen years (sometimes in waters in addition to wetlands.
rule or suggested extensive revisions to
association with other federal agencies As discussed in the preamble to the
increase the protection of aquatic
such as the U.S. Fish and Wildlife March 2006 proposal, in 2001 the
resources. The issues most frequently
Service and the National Marine National Research Council (NRC)
Fisheries Service). Since these guidance released a comprehensive evaluation of raised, considering both the individual
documents were developed at different the effectiveness of wetlands and form letters, were: (1) Interaction of
times, and in different regulatory compensatory mitigation required under the proposed rule with the existing
contexts, concerns have been raised section 404 of the Clean Water Act. This requirements of the Section 404 (b)(1)
regarding the consistent, predictable report noted concerns with some past Guidelines, (2) compensatory mitigation
and equitable interpretation and wetland compensatory mitigation and standards for streams, (3) the amount of
application of these guidance provided recommendations for the discretionary language in the proposed
documents. In November 2003, federal agencies, states, and other rule, (4) use of the watershed approach
Congress called for the development of parties to improve compensatory for identifying mitigation projects, and
regulatory standards and criteria for the mitigation. This report was an important (5) the proposed phase-out of in-lieu fee
use of compensatory mitigation in the resource in the development of today’s mitigation. These five major issues and
section 404 program. rule. our responses to them are discussed
Section 314 of the National Defense below in part II.B. Many other general
S2 Authorization Act (NDAA) for Fiscal II. General Comments and Responses issues were raised as well, and a
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with Secretary of the Army, acting through approximately 12,000 comments were II.C. Additional detail, and responses to
C65 the Chief of Engineers, to issue received, including about 850 distinct comments on specific rule provisions,
D1P regulations ‘‘establishing performance comments and 11,150 additional are provided in part VI.
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B. Most Frequently Raised Issues clarifies which provisions of the 1990 resources that can be impacted by
Memorandum of Agreement (MOA) activities authorized by DA permits,
1. Section 404(b)(1) Guidelines
between the Department of the Army including streams and other open
Many commenters stated that, and the Environmental Protection waters. We recognize that the scientific
consistent with existing regulations and Agency on the Determination of literature regarding the issue of stream
policy, the rule should emphasize Mitigation Under the Clean Water Act establishment and re-establishment is
impact avoidance and that Section 404(b)(1) Guidelines have been limited and that some past projects have
compensatory mitigation should not be superseded by this rule and which had limited success (Bernhardt and
considered until all efforts have been provisions remain in effect. Those that others 2007).1Accordingly, we have
made to first avoid and then minimize remain in effect include the provisions added a new paragraph at 33 CFR
impacts to streams and wetlands. Some related to impact avoidance and 332.3(e)(3) [40 CFR 230.93(e)(3)] that
commenters also asserted that the minimization, evaluation of the least specifically notes that there are some
proposal would expand the district environmentally damaging practicable aquatic resources types that are difficult
engineer’s existing level of discretion in alternatives, and circumstances where to replace and streams are included
determining that an applicant has taken the impacts of the proposed project are among these. It emphasizes the need to
all appropriate and practicable steps to so significant that discharges may not be avoid and minimize impacts to these
first avoid and then minimize impacts permitted regardless of the ‘difficult-to-replace’ resources and
to the aquatic ecosystem. Some further compensatory mitigation proposed. requires that any compensation be
asserted that the proposal could be Today’s rule is focused on the provided by in-kind preservation,
construed to allow permits to be issued compensation component of the rehabilitation, or enhancement to the
even if they cause or contribute to mitigation sequence. Its purpose is to extent practicable. This language is
significant degradation of aquatic develop a comprehensive set of intended to discourage stream
resources, an action prohibited by the standards for compensatory mitigation establishment and re-establishment
Section 404(b)(1) Guidelines (40 CFR pursuant to section 314 of the NDAA. projects while still requiring
230.10(c)). Fulfilling this directive necessitates a compensation for unavoidable stream
The agencies agree that impacts must detailed treatment of all critical aspects impacts in the form of stream corridor
be first avoided and then minimized, of compensatory mitigation. This does restoration (via rehabilitation),
and that compensatory mitigation not affect compliance with other parts of enhancement, and preservation projects,
should be used only for impacts that our regulations, including the 404(b)(1) where practicable. District engineers
cannot be avoided or minimized. The Guidelines. Additional discussion of will evaluate compensatory mitigation
agencies disagree that the rule will this issue can be found in part VI of the proposals for streams, and assess the
weaken or undermine the 404(b)(1) preamble. likelihood of success before deciding
Guidelines, which are codified in
2. Compensatory Mitigation Standards whether the proposed compensation
regulation and remain unchanged.
for Streams should be required.
These requirements are essential to
We recognize that the science of
meeting the overall objective of the Many commenters stated that
stream restoration is still evolving and
Clean Water Act to restore and maintain compensatory mitigation for stream
that more research is needed; however,
the chemical, physical and biological impacts should not be addressed in this
the lack of a fully-developed set of
integrity of the nation’s waters. We have rule. Some stated that there is no
tested hypotheses and techniques does
clarified that none of them have scientific evidence that streams can be
not mean that stream mitigation
changed by adding a new paragraph at established (i.e., stream creation) or that
(particularly via restoration,
33 CFR 332.1(c)(1) [40 CFR 230.91(c)(1)] other approaches taken in this rule such
enhancement and preservation) cannot
stating that nothing in these new rules as stream restoration can compensate for
be successfully performed or that it
affects the requirement that all DA stream losses. They suggested that the
should not be required where avoidance
permits subject to section 404 of the agencies should conduct further
of impacts is not practicable. As noted
Clean Water Act comply with applicable research on stream mitigation and
by Bernhardt and others (2005),2
provisions of the Section 404(b)(1) demonstrate its success before including
‘‘stream and river restoration can lead to
Guidelines. Thus, this rule does not standards for stream mitigation in the
species recovery, improved inland and
expand the district engineer’s existing rule. Some also noted that the statutory
coastal water quality, and new areas for
level of discretion in determining that language in the NDAA refers only to
wildlife habitat and recreational
an applicant has taken all appropriate wetlands.
activities.’’ There is a growing body of
and practicable steps to first avoid and On the other hand, other commenters
research that documents successful
then minimize impacts to the aquatic expressed support for applying the rule
outcomes for stream restoration projects,
ecosystem. Paragraph (c)(2) of this to streams and other open waters. These
examines stream restoration techniques
section has also been modified to clarify commenters believe that physical
and provides recommendations for
that individual section 404 permits will alteration of aquatic resources should be
effective stream and river restoration.
be issued only if compliance with all mitigated to the extent practicable to
applicable provisions of the 404(b)(1) support the objectives of the Clean
1Bernhardt, E.S., E.B. Sudduth, M.A. Palmer, J.D.
Guidelines has been achieved including Water Act and that because section 404
Allan, J.L. Meyer, G. Alexander, J. Follastad-Shah,
those which require the permit of the Clean Water Act authorizes B. Hassett, R. Jenkinson, R. Lave, J. Rumps, and L.
applicant to take all appropriate and discharges of dredged or fill material Pagano. 2007. Restoring rivers one reach at a time:
practicable steps to avoid and minimize into lakes, streams, and wetlands, Results from a survey of U.S. river restoration
practitioners. Restoration Ecology 15:482–493.
adverse impacts to the aquatic mitigation for those impacts should be
2Bernhardt, E.S., M.A. Palmer, J.D. Allan, G.
ecosystem. For general permits, required (and addressed in this rule) as Alexander, K. Barnas, S. Brooks, J. Carr, S. Clayton,
S2 compliance with the Section 404(b)(1) well. C. Dahm, J. Follstad-Shah, D. Galat, S. Gloss, P.
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UL Guidelines is clarified at 40 CFR 230.7. As noted in the preamble to the Goodwin, D. Hart, B. Hassett, R. Jenkinson, S. Katz,
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C65 with CFIRn a3d3d2.i1ti(of)n(2, )a [n4e0w C FpRar a2g3r0a.p9h1( af)t( 23)3] has Mrualerc shh o2u0l0d6 apprpolpyo tsoa lc, owmep beenlsieavtoer tyh is GO20.’MD05o. .nK Snoyennldlt,ho Lelf.s ,Pi Pzai.gnSag. n LUoa,.k SBe.. ,r PRivo. ewLra ervleles,, ta oJn.rLad.t iEMo.n eS yeuefdfro,d rTuts.tKh. ..
D1P been added to the final rule which mitigation for all types of aquatic Science 308: 636–637.
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Federal Register/Vol. 73, No. 70/Thursday, April 10, 2008/Rules and Regulations 19597
Successful outcomes for stream others (2006).17Somerville and Pruitt mitigation project is achieving its
restoration with respect to water quality, (2004)18reviewed existing stream objectives. Neither the proposal nor
habitat creation, species recovery and assessment and mitigation protocols and today’s rule prescribe the individual
recreation, have been documented by Roni and others (2002)19reviewed variables or metrics that should be used
Baron and others (2002);3Buijse and stream restoration techniques. Shields to evaluate each aquatic resource type
others (2002);4Muotka and Pekka and others (2003)20discussed the potentially restored, enhanced,
(2002);5Nakamura and Kunihiko unique challenges associated with established, or preserved in
(2006);6and Petersen (1999).7Criteria stream restoration research. compensatory mitigation projects. Given
and recommendations for ecologically Under this final rule, mitigation plans the extremely large variation among the
successful stream restoration have been for all wetland compensatory mitigation aquatic resource types found across the
addressed by Hassett and others (2005)8 projects must contain the following country, and the constant advances in
Kauffman and others (1997)9Lavendel twelve elements: Objectives; site the science of aquatic ecosystem
(2002)10Palmer and others (2005)11 selection criteria; site protection restoration, overly prescriptive
and Whalen and others (2002).12 instruments (e.g., conservation requirements would be impractical.
Assessment of the physical and easements); baseline information (for However, in recognition of the need to
biological effects of restoration activities impact and compensation sites); credit strengthen this provision and to ensure
has been performed by Reeves and determination methodology; mitigation that compensatory mitigation project
others (1997);13Slaney and others work plan; maintenance plan; ecological performance standards reflect the latest
(1994)14and Solazzi and others performance standards; monitoring advances in the science of stream and
(2000).15The applicability of specific requirements; long-term management wetland restoration, we have modified
tools to measure stream restoration plan; adaptive management plan; and the final rule at 33 CFR 332.5(b) [40 CFR
success has been investigated by Paller financial assurances (see 33 CFR 230.95(b)] to include a requirement that
and others (2000)16and Lester and 332.4(c) [40 CFR 230.94(c)]). Existing ecological performance standards be
literature regarding stream restoration, based on the best available science that
3Baron, J.S. et al. 2002. Meeting ecological and as well as our experience with past can be measured or assessed in a
societal needs for freshwater. Ecological stream mitigation projects supports our practicable manner.
Applications 12: 1247–1260. decision to require mitigation plans for As stream scientists have noted, the
4Buijse, A.D. et al. 2002. Restoration strategies for
river floodplains along the large lowland rivers in stream compensatory mitigation projects proportion of stream restoration projects
Europe. Freshwater Biology 47: 889–907. to contain the same twelve fundamental that have been monitored for
5Muotka, T. and P. Laasonen. 2002. Ecosystem elements. Some commenters noted that performance is low (Bernhardt and
recovery in restored headwater streams: The role of aspects of the mitigation work plan will others 2005).21Today’s rule, however,
enhanced leaf retention. Journal of Applied Ecology
39: 145–156. differ between stream and wetland requires monitoring of mitigation
6Nakamura, K. and K. Amano. 2006. River and mitigation projects. Today’s rule projects for a minimum of five years
wetland restoration: Lessons from Japan. Bioscience highlights some of these potential with longer monitoring periods required
56(5): 419–129. differences by noting additional for aquatic resources with slow
7Petersen, M.M. 1999. A natural approach to
watershed planning, restoration and management. elements that may be necessary for development rates. This monitoring
Water Science and Technology 39(12): 347–352. stream mitigation project work plans. requirement will provide new data on
8Hassett, B. et al. 2005. Restoring watersheds These elements include planform stream restoration performance that will
project by project: Trends in Chesapeake Bay geometry, channel form, watershed size, serve to increase knowledge and
tributary restoration. Frontiers in Ecology and the
Environment 3(5): 259–267. design discharge, and riparian area improve stream mitigation over time.
9Kauffman, J. Boone, R.L. Beschta, N.O., and D. plantings and can be found at 33 CFR (See 33 CFR 332.6 [40 CFR 230.96]).
Lytjen. 1997. An ecological perspective of riparian 332.4(c)(7) [40 CFR 230.94(c)(7)]. Also, in response to public comment,
and stream restoration in the western United States. Another important modification was we removed a provision from 33 CFR
Fisheries 22(5): 12–24.
10Lavendel, B. 2002. The business of ecological made to the section of the rule 332.6(a) [40 CFR 230.96(a)] that would
restoration. Ecological Restoration 20: 173–178. describing ecological performance have allowed the district engineer to
11Palmer, M.A. et al. 2005. Standards for standards. Like the proposal, today’s waive all monitoring requirements if
ecologically successful river restoration. Journal of rule requires that every mitigation plan they were determined not to be
Applied Ecology 42: 207–217. include objective and verifiable practicable.
12Whalen, P.J., L.A. Toth, J.W. Koebel, and P.K. While section 314 of the NDAA refers
Strayer. 2002. Kissimmee River Restoration: A case ecological performance standards to
study. Water Science and Technology 45(11): 55– assess whether the compensatory only to the development of
62. compensatory mitigation standards for
13Reeves, G.H., D.B. Hohler, B.E. Hansen, F.H. wetlands, we believe that in order to
17Lester, R., W. Wright, and M. Jones-Lennon.
Everest, J.R. Sedell, T.L. Hickman, and D. Shively. 2006. Determining Target Loads of Large and Small improve the performance and results of
1997. Fish habitat restoration in the Pacific
Northwest: Fish Creek of Oregon. Pages 335–359 in Wood for Stream Rehabilitation in High-Rainfall all types of compensatory mitigation
J.E. Williams, C.A. Wood, and M.P. Dombeck, Agricultural Regions of Victoria, Australia. this rule should include compensatory
editors. Watershed Restoration: Principles and Ecological Engineering 28: 71–78. mitigation standards for all types of
Practices. American Fisheries Society, Bethesda, 18Somerville, D.E. and B.A. Pruitt. 2004. Physical
Maryland. stream assessment: A review of selected protocols aquatic resources that can be impacted
14Slaney, P.A., B.O. Rublee, C.J. Perrin, and H. for use in the Clean Water Act Section 404 Program. by activities authorized by DA permits,
Goldberg. 1994. Debris structure placements and Prepared for the U.S. Environmental Protection including streams and other open
whole-river fertilization for salmonoids in a large Agency, Office of Wetlands, Oceans, and waters. Section 404(b) of the Clean
regulated stream in British Columbia. Bulletin of Watersheds, Wetlands Division (Order No. 3W–
Marine Science 55: 1160–1180. 0503–NATX). Washington, DC, 213 pp. Water Act authorizes EPA to develop
15Solazzi, M.F., T.E. Nickelson, S.L. Johnson, and 19Roni, P. et al. 2002. A review of stream
J.D. Rodgers. 2000. Effects of increasing winter restoration techniques and a hierarchical strategy 21Bernhardt, E.S., M.A. Palmer, J.D. Allan, G.
rearing habitat on abundance of salmonoids in two for prioritizing restoration in Pacific Northwest Alexander, K. Barnas, S. Brooks, J. Carr, S. Clayton,
S2 coastal Oregon streams. Canadian Journal of watersheds. North American Journal of Fisheries C. Dahm, J. Follstad-Shah, D. Galat, S. Gloss, P.
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UL Fisheries and Aquatic Sciences. 57: 906–914 Management 22: 1–20. Goodwin, D. Hart, B. Hassett, R. Jenkinson, S. Katz,
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C65 with Je.vC1a.6 lSuPeaaitlgelle erre., s2Mt0o.0rHa0t..,i oUMns. eJs. uMocf .cf eRissehsi cochof emar trm,i pJu.aMnrii.ta yDn ed saatnrtea, a atmon d. Krens2it0goShraht tiaieonlndd s rM,e Fs.eT. aD. rMochuo:go lArae sl.,o 2Cn0.gM0 a3.n. CdSo twroepianemdr i Jcnro.g,r Srroicdaoodtrt. S. GO20.’MD05o. .nK Snoyennldlt,ho Lelf.s ,Pi Pzai.gnSag. n LUoa,.k SBe.. ,r PRivo. ewLra ervleles,, ta oJn.rLad.t iEMo.n eS yeuefdfro,d rTuts.tKh. ..
D1P Ecological Engineering 15: 171–187. Ecological Engineering 20: 441–454. Science 308: 636–637.
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the substantive environmental criteria for comment on alternatives to the lead to inappropriate compensatory
used by the Corps in making section 404 proposed phase-out. The new mitigation decisions and the cumulative
permit decisions including those requirements for in-lieu fee programs loss of wetland functions. Others were
associated with all forms of reflect many of the comments received.) more concerned about the analytical
compensatory mitigation. Also, section These specific modifications and burden on permit applicants of
501(a) of the Clean Water Act provides additions are discussed in more detail developing watershed plans or
EPA with broad authority to conduct in part VI of the preamble. justifying mitigation projects in terms of
any rulemaking necessary to carry out With these modifications, we believe wider watershed considerations. Still
its functions under the Clean Water Act. that today’s rule achieves a proper others thought the concept was too
While many stream restoration and balance of binding requirements and ambiguous to be included in a
rehabilitation activities have been discretion. The rule will help improve regulation.
conducted across the country, we the quality and success of compensatory The agencies continue to believe that
recognize that not all of them have been mitigation, while providing flexibility the watershed approach provides the
successful. Much of the literature necessary to ensure that compensatory appropriate framework for making
suggests that this is due to a lack of the mitigation requirements for a particular compensatory mitigation decisions, but
kinds of comprehensive standards for DA permit appropriately offset have made a number of changes to
project planning, implementation and authorized impacts. Some discretionary address specific comments. The primary
management included in this rule. language is necessary for this rule objective of the watershed approach
Accordingly, we determined that because resource types, project impacts, included in today’s rule is to maintain
including stream mitigation in this rule and compensatory mitigation practices and improve the quantity and quality of
would improve current standards and vary widely across both projects and wetlands and other aquatic resources in
practices for compensatory mitigation of regions of the country. District engineers watersheds through strategic selection
streams. Today’s rule, with the addition need to take such variations into of compensatory mitigation project sites.
of the above referenced modifications, account, including variations in state The watershed approach accomplishes
includes the necessary provisions to and local requirements that affect the this objective by expanding the
appropriately treat stream mitigation. implementation and long-term informational and analytic basis of
Additional discussion of this issue can management of compensatory mitigation project site selection
be found in part VI of the preamble. mitigation projects. For example, laws decisions and ensuring that both
and regulations governing real estate authorized impacts and mitigation are
3. Discretionary Language
instrument and financial assurances considered on a watershed scale rather
Many commenters expressed concern vary from state to state. In addition, than only project by project. This
that the proposal leaves too much practices for restoring, establishing, and requires a degree of flexibility so that
discretion to district engineers. Some enhancing aquatic resources vary by district engineers can authorize
commenters objected to use of ‘‘may’’, resource type and by region. For these mitigation projects that most effectively
‘‘should’’, and ‘‘can’’ in some rule reasons, discretionary language is used address the case-specific circumstances
provisions, and/or to use of the qualifier where appropriate to promote both and needs of the watershed, while
‘‘appropriate and practicable’’ for some regulatory efficiency and project remaining practicable for the permittee.
requirements. Commenters were success, and to ensure that required In response to the concern about
concerned that such discretion might mitigation is practicable. additional burden on permittees, the
lead to authorization of inappropriate agencies recognize that the level of data
4. Watershed Approach
compensatory mitigation projects, and analysis appropriate for
inadequate enforcement and oversight, Many comments addressed the implementing the watershed approach
or excessive litigation. watershed approach included in the must be commensurate with the scale of
In contrast, other commenters proposal. A majority of commenters the project, and that there will be
suggested even greater flexibility, to expressed support for the use of a situations, particularly for projects with
allow cost-effective compensatory watershed approach to compensatory small impacts, where it would not be
mitigation based on case-specific mitigation. They noted that use of a cost-effective to utilize a watershed
circumstances. watershed approach would improve the approach. For this reason, the
In response to these comments, we sustainability of compensatory regulations at §332.3(c)(1)
have carefully evaluated all of the mitigation projects and ensure that they [§230.93(c)(1)], state that the watershed
discretionary language in the proposed are better integrated with the needs of approach is to be used to the extent
rule, and replaced it with binding and/ the watershed. However, some appropriate and practicable, and the
or more clearly articulated requirements commenters believed that additional regulations at §332.3(c)(3)(iii)
where appropriate. Such modifications specificity in the requirements relating [§230.93(c)(3)(iii)] state that the level of
were made to a number of key to the use of a watershed approach was information and analysis must be
provisions in the rule including those needed. For example, commenters commensurate with the scope and scale
related to mitigation type, the amount of requested clarification regarding use of of the authorized impacts and functions
mitigation necessary to offset permitted the watershed approach in the absence lost.
losses, financial assurances, credit of a watershed plan, parameters needed We recognize that there are many
releases, the use of preservation, to implement a watershed approach, different types of watershed plans that
ecological performance standards, and and the definition of the terms have been developed for purposes other
long-term site protection and ‘‘watershed,’’ ‘‘watershed plan’’ and than aquatic resource restoration,
management. Also, a number of ‘‘watershed approach.’’ establishment, enhancement, and/or
requirements for in-lieu fee programs Other commenters opposed the preservation activities and that such
S2 have been added to the rule, as part of watershed approach described in the plans may be of limited use in making
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with originally proposed. (Note that the concerned about use of the watershed example, some watershed plans are
C65 preamble to the proposed rule included approach in the absence of a detailed conceived to guide development
D1P an extensive discussion of and request watershed plan, arguing that this could activities or the placement of storm
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water infrastructure. Therefore, we have compensatory mitigation (see fee programs suggested by commenters
modified §332.3(c)(1) [§230.93(c)(1)] to §332.3(c)(2)(iii) [§230.93(c)(2)(iii)]). included: Limiting the number of
state that the district engineer will We have revised §332.3(c)(3) credits that in-lieu fee programs can sell
determine whether a given watershed [§230.93(c)(3)] to clarify that district before they have secured sites, limiting
plan is appropriate for use in the engineers will use available information the types of organizations that can be in-
watershed approach for compensatory for the watershed approach. That lieu fee sponsors, and establishing
mitigation. available information will address financial accounting standards to
We further recognize that in many watershed conditions and needs and improve their accountability for credit
areas, watershed plans appropriate for include potential and/or priority sites fulfillment. A number of commenters
use in planning compensatory for compensatory mitigation projects. acknowledged that even with significant
mitigation activities have not been We have also indicated potential improvements to in-lieu fee mitigation,
developed. Therefore, consistent with sources of appropriate information, such mitigation banks would be more likely
the 2001 NRC Report, the watershed as wetland maps, soil surveys, aerial to minimize project uncertainties and
approach described in this final rule photographs, local ecological reports, temporal losses of aquatic resource
does not require a formal watershed etc. Public input on the watershed functions. They suggested that the final
plan. Although it would always be approach and our response to this input rule should therefore stipulate that
preferable to have an appropriate including the above mentioned where the service areas of an in-lieu fee
watershed plan, we believe that modifications are discussed in more program and a mitigation bank overlap,
implementing a watershed approach to detail in part VI of the preamble. the mitigation bank should be the
the degree practicable, even without a preferred credit provider.
5. In-Lieu Fee Programs
watershed plan, can improve Other commenters supported the
compensatory mitigation site selection Many commenters, including many phase-out of in-lieu fee programs as
and project implementation. For state officials, opposed the proposed proposed. These commenters pointed
example, the use of appropriately sited phase-out of in-lieu programs. These out shortfalls associated with current
mitigation banks can support a commenters indicated that in certain administration of in-lieu fee programs
watershed approach without using areas (especially rural and coastal noting, for example, that prices for in-
watershed plans. In the absence of an regions, the West, and Alaska) there are lieu fee credits are often too low and fail
appropriate watershed plan, the few mitigation banks and little potential to cover all of the costs necessary to
watershed approach should be based on for their development, and that deliver the promised mitigation,
a structured consideration of watershed permittee-responsible compensatory including expenses for program
needs and how wetlands and other mitigation is often impractical. In-lieu administration, long-term maintenance
types of aquatic resources in specific fee programs are therefore the best (or of projects, and corrective action. This
locations will address those needs. To only) option for compensatory may result in undercutting of mitigation
implement this approach, district mitigation in these areas. Some bank credit prices, since banks, as
engineers will utilize the considerations commenters also argued that in-lieu fee commercial ventures, must charge
specified in §332.3(c)(2) [§230.93(c)(2)] programs provide important benefits prices based on the full cost of
and available information on watershed that other types of mitigation do not, producing compensation credits or go
conditions and needs, as described in such as a more thorough consideration out of business. Furthermore, in-lieu fee
§332.3(c)(3) [§230.93(c)(3)]. of the needs of a watershed and the programs often require fees from
In response to public input, we have most appropriate locations and multiple permitted projects before they
revised the definition of ‘‘watershed mitigation types to sustain and enhance can initiate compensation projects,
plan’’ to clarify the kinds of plans its long-term health. Some commenters resulting in substantial delays between
appropriate for use in making representing in-lieu fee programs stated permitted impacts and compensation.
compensation decisions. We have also that if they were held to all of the same Several commenters further stated that
added definitions for the terms standards as mitigation banks, it was not fair for in-lieu fee programs
‘‘watershed’’ and ‘‘watershed approach’’ particularly the requirement to secure to be allowed to continue to operate
at §332.2 [§230.92]. The appropriate project sites before selling any credits, with lower or looser standards than
watershed scale to use for the watershed they would have to cease operation and mitigation banks and permittee-
approach will vary by geographic these benefits would be lost. responsible mitigation. Commenters
region, as well as by the particular Many of these commenters also also noted that because credit release
aquatic resources under consideration. acknowledged problems in the current schedules for mitigation banks are tied
Since using a watershed approach is not administration and performance of in- to performance, they have a financial
appropriate in areas without watershed lieu fee mitigation, but stated that these incentive to produce timely, successful
boundaries, such as marine waters, we problems were due to existing mitigation that is lacking for in-lieu fee
have also added a provision requirements and policies (or the lack programs.
(§332.3(c)(2)(v) [§230.93(c)(2)(v)]) to thereof) rather than the in-lieu fee After carefully considering all
clarify that other types of spatial scales concept itself. They suggested that comments received, the agencies have
may be more appropriate in those areas. instead of phasing out in-lieu fee decided to retain in-lieu fee programs in
To enhance the use of the watershed programs, the final rule should include today’s rule as a separate and distinct
approach, we have added a sentence to standards that address these problems mechanism for providing compensatory
§332.3(c)(2)(iv) [§230.93(c)(2)(iv)] and ensure that in-lieu fee programs do mitigation for DA permits. We believe
stating that the identification and in fact deliver mitigation that they can fulfill an important role in
prioritization of resource needs should compensates for the impacts associated providing effective mitigation in
be as specific as possible. We have also with the credits they sell. Commenters circumstances where mitigation banks
S2 added a provision, stating that a noted that the NDAA does not require and permittee-responsible mitigation are
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with compensatory mitigation, off-site as those for mitigation banks but rather have included a number of new
C65 compensatory mitigation, or a ‘‘equivalent’’ to the maximum extent requirements for in-lieu fee programs to
D1P combination of on-site and off-site practicable. Some standards for in-lieu improve accountability and
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performance, based to a large extent on §332.8(o)(5)(ii) [§230.98(o)(5)(ii)] were discharges of dredge and fill material,
existing practice at the most successful included to improve the estimation of not to promote ‘‘active management’’ of
currently-operating in-lieu programs. in-lieu fee project costs and the wetlands. To the extent that active
Specifically, we have added a establishment of adequate fee schedules. management may provide an alternative
requirement for a compensation Today’s rule ensures that the review, to permitted discharges, permit
planning framework at §332.8(c) approval, and oversight of in-lieu fee applicants should consider such
[§230.98(c)] which details how the in- programs is subject to the same level of approaches as part of the avoidance and
lieu fee program will select and secure interagency and public review as minimization mitigation sequencing.
project sites and implement mitigation mitigation banks (see §332.8(d) Also, both permitted projects and
projects in a watershed context. The [§230.98(d)]). Similarly, today’s rule compensatory mitigation projects may
framework is essentially a watershed requires in-lieu fee projects to develop require on-going active management to
plan designed to support resource mitigation plans that meet the same protect resources, and conditions for
restoration, and must include an standards as those applicable to such management may be incorporated
analysis of historic aquatic resource mitigation banks and permittee- into DA permits where appropriate.
losses and current conditions, a responsible projects (see §332.8(j) Finally, management of existing
description of the general amounts, [§230.98(j)]). wetlands may itself involve discharges
types and locations of aquatic resources Properly organized in-lieu fee requiring DA permits, and in this case
the program will seek to provide and a programs which comply with the new permit conditions will address issues
prioritization strategy for selecting and requirements established by today’s rule related to the management and
implementing compensatory mitigation should actively support a watershed protection of affected resources, in
activities. This type of advanced approach to compensatory mitigation, accordance with applicable regulations,
planning will ensure that in-lieu fee and will help advance goals for including this rule. We disagree that the
programs are guided by a thorough protecting and restoring aquatic rule does not adequately address marine
understanding of the needs, resources within watersheds, especially habitats and species. While the specific
opportunities, and challenges of the in areas where there are no mitigation projects needed to mitigate impacts to
areas in which they operate, which will banks. marine resources may be different, the
allow them to select and design more We recognize that even with these procedural and analytical framework
successful projects and better estimate improvements to in-lieu fee programs, established in the final rule applies
full project costs. there will likely be less temporal loss of equally well to freshwater and marine
The final rule also requires that the resources associated with mitigation resources.
in-lieu fee program instrument establish provided by banks than with mitigation Several commenters said that the
a cap on the number of credits that the provided by in-lieu fee programs. We proposed rule did not address concerns
program can sell before securing a have therefore established a hierarchy in raised in recent reports on
compensatory mitigation project site §332.3(b) [§230.93(b)] for selecting the compensatory mitigation in the Corps
and conducting aquatic resource type and location of compensatory Regulatory Program that were issued by
restoration, establishment, mitigation with an explicit preference the Government Accountability Office
enhancement, and/or preservation at for mitigation bank credits over advance (GAO). Some commenters said that the
that site. These are defined as ‘‘advance credits from in-lieu fee programs when proposed rule incorporates some of
credits’’ (see §332.2 [§230.92]) and the appropriate bank credits are available GAO’s recommendations, but expressed
rules for their establishment and use are for use. Public input regarding in-lieu skepticism that the Corps has the
provided at §332.8(n) [§230.98(n)]. The fee mitigation as well as all of these resources to implement those provisions
rule also limits sponsorship of in-lieu specific modifications and additions are of this rule. These commenters asserted
fee programs specifically to discussed in more detail in parts III and that the Corps needs to make
governmental or non-profit natural VI of the preamble. compensatory mitigation compliance a
resource management entities (see high priority to ensure effective
C. Other General Comments
definition of ‘‘in-lieu fee program’’ at replacement of wetland acreage and
§332.2 [§230.92]). District engineers Some commenters stated that the function lost as a result of permitted
and Interagency Review Team (IRT) proposed rule should be revised to activities.
members should carefully evaluate the incorporate principles of ecological One GAO report was issued in May
capabilities and demonstrated restoration and landscape ecology. 2001, and was entitled ‘‘Wetlands
performance of these natural resource Other commenters said that the Protection: Assessments Needed to
management entities prior to approving proposed rule fails to recognize the Determine Effectiveness of In-Lieu Fee
them as in-lieu fee program sponsors in dynamic nature of wetlands and Mitigation.’’ Another GAO report,
order to minimize the risks associated provides disincentives for active ‘‘Wetlands Protection: Corps of
with allowing advance credit sales. management of wetland resources in Engineers Does Not Have an Effective
We have added a provision at ways that would benefit society. A few Oversight Approach to Ensure That
§332.8(i) [§230.98(i)] requiring in-lieu commenters remarked that the proposed Compensatory Mitigation Is Occurring’’
fee programs to establish a program rule does not adequately address was issued in September 2005. We have
account, including criteria for the compensatory mitigation for marine incorporated many of the
management of this account. Funds habitats or aquatic species. recommendations of these GAO reports
collected from permittees, including We have revised the final rule to into this rule, by requiring the use of
interest on these funds, may only be better incorporate principles of enforceable permit conditions,
used for the selection, design, ecological restoration and landscape performance standards, and third-party
acquisition, implementation, and ecology, for example, at §332.3(d) agreements. In addition, this rule states
S2 management of in-lieu fee projects, with [§230.93(d)], which specifies detailed that it supersedes certain agency
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with administrative costs. determining ecological suitability for specifically the 1995 mitigation banking
C65 Provisions at §332.8(d)(6)(iv)(B)–(C) mitigation project sites. Section 404 guidance, the 2000 in-lieu fee guidance,
D1P [§230.98(d)(6)(iv)(B)–(C)] and directs the Corps to issue permits for and Regulatory Guidance Letter (RGL)
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02–02. That RGL provides guidance on district engineer in accordance with the recommendations and suggested that
compensatory mitigation projects for procedures in this final rule (see §332.8 the agencies establish a preference for
aquatic resources impacted by activities [§230.98]). Any other compensatory on-site and in-kind mitigation in the
authorized by DA permits. This rule mitigation arrangements are considered final rule. They said that a preference
also clarifies the requirements for to be permittee-responsible mitigation for on-site and in-kind compensation
compensatory mitigation, as where the permittee retains would better support a ‘‘no net loss’’
recommended by GAO. We agree that responsibility for providing the required goal for aquatic resources.
taking actions to determine compensatory mitigation, and this will We disagree that the rule should
compensatory mitigation compliance be reflected in the terms of the DA establish a preference for on-site
should be a high priority, and have permit. Permittee-responsible mitigation compensatory mitigation, because the
provided general principles for also includes any ad hoc payments failure rate for such projects is quite
establishing ecological performance made to governmental or non- high. On-site compensatory mitigation
standards and criteria. Corps districts governmental organizations that are not activities, especially wetland restoration
and EPA regional offices will continue in accordance with the terms of an or establishment, are particularly
to work with other federal and state approved in-lieu fee program sensitive to land use changes. Land use
resource agencies to develop and refine instrument. When a governmental or changes often alter local hydrology.
specific performance standards and non-governmental organization accepts Establishing appropriate hydrology
criteria to evaluate and ensure success an ad hoc payment from a permittee, patterns (i.e., duration and frequency) to
of compensatory mitigation projects in that organization is in essence acting as support the desired aquatic habitat type
their geographic areas of responsibility. a contractor to provide the is a key factor in successfully restoring
These performance standards and compensatory mitigation for that or establishing those habitats. In many
criteria will take into account regional permittee, and the permittee retains
cases, there are circumstances in which
variations in aquatic resource responsibility for any long-term
on-site mitigation is neither practicable
characteristics, functions, and services. protection and/or management of the
nor environmentally preferable. Under
A number of commenters discussed compensatory mitigation project.
the watershed approach, it may be
ad hoc mitigation, which has been We also recognize the importance of
desirable to require some on-site
defined in various reports as cash record-keeping for compensatory
mitigation measures to address water
donations made by a permittee to satisfy mitigation projects, and have
quality and quantify functions, and to
their mitigation requirements. The established procedures for using permit
require off-site mitigation to compensate
majority of commenters stated that ad conditions, instruments, and ledgers to
for habitat functions.
hoc mitigation should not be approved track the implementation and success of
We do agree that, in general, in-kind
unless it meets the requirements those projects. The Corps will also track
mitigation is preferable to out-of-kind
specified in the rule. One commenter permitted impacts and compensatory
mitigation because it is more likely to
said that ad hoc mitigation is often mitigation through databases, such as
compensate for the functions and
unsuccessful because there is no the OMBIL Regulatory Module (ORM–
services lost at the impact site. The rule
evaluation process and no oversight for 2), which is the primary automated
states that the compensatory mitigation
the compensatory mitigation that is to information system for the Corps
should be of a similar type (e.g.,
be completed, and there is no way to Regulatory Program, and the Regional
Cowardin and/or hydrogeomorphic
track the compensatory mitigation that Internet Bank Information Tracking
class) to the affected aquatic resource,
was to occur. One commenter proposed System (RIBITS). All 38 Corps districts
unless the district engineer determines
that ad hoc mitigation should be are now using ORM–2, which will help
using the watershed approach described
allowed on a one-time basis where a standardize data collection in the Corps
in the rule (see §332.3(c) [§230.93(c)])
compensatory mitigation opportunity Regulatory Program. It will also be used
that out-of-kind compensatory
and need arise concurrently, but are not to collect data to assess the performance
of such a scale as to justify going of the Regulatory Program. RIBITS is an mitigation will better serve the aquatic
through the review process in §332.8 automated information system with an resource needs of the watershed. The
[§230.98]. Two of these commenters interactive Web site. It is currently term ‘‘in-kind’’ in §332.2 [§230.92] is
discussed ad hoc mitigation designed to track the status of mitigation defined to include similarity in
arrangements and stated that the Corps banks and to provide up-to-date structural and functional type; therefore,
needs to improve record-keeping for ad information to mitigation bank sponsors the focus of the in-kind preference is on
hoc mitigation activities. and customers. We are also considering classes of aquatic resources (e.g.,
The May 2001 GAO report defines ad modifying RIBITS to track the status of forested wetlands, perennial streams).
hoc mitigation as involving ‘‘mitigation in-lieu fee programs. Use of RIBITS is However, all compensatory mitigation
payments from developers to third currently limited to several districts, but projects should provide a high level of
parties that are neither mitigation banks we are planning to make RIBITS the functional capacity, even when
nor considered by the Corps to be in- standard tool for tracking sale and compensating for degraded or low-
lieu fee organizations.’’ For the purposes production of compensatory mitigation quality resources. Replacement ratios
of this rule, ad hoc mitigation is credits by third parties. may be used to adjust for the relative
considered to be a form of permittee- Several commenters expressed quality of impact sites and mitigation
responsible mitigation. For a mitigation appreciation that the agencies projects, where appropriate. With this
bank or in-lieu fee program to be used incorporated many of the rule, we are moving towards greater
to provide compensatory mitigation for recommendations made in the 2001 reliance on functional and condition
DA permits, and to have the NRC Report. A few commenters assessments to quantify credits and
responsibility for providing the required acknowledged that the proposed rule debits, instead of surrogates such as
S2 compensatory mitigation transfer from prioritized the location and types of acres and linear feet. We believe that
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with sponsor or in-lieu fee sponsor, there accordance with the NRC’s methods will help improve the quality
C65 must be a mitigation banking or in-lieu recommendations. However, they said of aquatic resources in the United
D1P fee program instrument approved by the that they disagree with the NRC’s States.
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For example, in a case where a project activities that control or modify mitigation will be provided. The
proponent is proposing to fill a waterbodies. threshold for determining when
degraded three acre wetland that Many commenters stated that the compensatory mitigation is required for
provides one unit of wetland function proposed rule is inconsistent with DA permits is generally addressed
per acre (as determined by a rigorous existing national regulations, and one through 33 CFR 320.4(r) and specifically
functional assessment method), the loss commenter said that the proposed rule for the nationwide permits at 33 CFR
of that wetland may in some cases be is inconsistent with regulations at 33 330.1(e)(3).
offset by a compensatory mitigation CFR 320.4(r), as well as the ‘‘Mitigation’’ A number of commenters stated that
project that provides fewer acres of general condition for the nationwide the proposed rule gives preference to
high-functioning wetlands (as permits and other compensatory certain groups. One commenter said that
determined by the same functional mitigation guidance documents that the proposed rule promotes the interests
assessment method). Conversely, where apply to the Corps Regulatory Program. of non-profit organizations, government
the impact is to a high-value resource, This commenter also stated that the agencies, and academics, instead of
more than one-to-one replacement on an 404(b)(1) Guidelines provide no restoration practitioners and
acreage basis may be necessary just to authority for requiring compensatory entrepreneurs. One commenter
achieve functional equivalence between mitigation for unavoidable adverse remarked that wetland mitigation and
the impact and mitigation sites. Note impacts after all appropriate and market-based approaches have the
that replacement ratios may also be practicable minimization has been potential to expand land conservation
greater than one-to-one for other required. practices through private investments
reasons, such as to address uncertainty The agencies disagree with these and to provide additional economic
of success or temporal losses. comments. The Corps general mitigation incentives to help retain working farms
One commenter said that the Corps policy at 33 CFR 320.4(r) describes and forests. Another commenter said
should be the principal agency types of mitigation, including avoiding, that a market-driven approach will help
administering the 404 wetlands minimizing, rectifying, reducing, or small developers and allow for
regulatory program. The commenter compensating for resource losses. Since increased entrepreneurship in
stated that the involvement of multiple that provision was last promulgated in compensatory mitigation. One
agencies in wetlands regulation only 1986, there have been policy changes commenter said that the proposed rule
hinders the overall efforts of the Corps that have resulted in the Corps requiring would damage the economic viability of
Regulatory Program. This commenter compensatory mitigation for more wetland mitigation banking and
also stated that the Corps should build activities, not just those that result in encourage losses of wetlands in
a stronger, more predictable significant resource losses. For example, floodplains, which would exacerbate
compensatory mitigation program to when the nationwide permit regulations property damage caused by flooding.
both enhance environmental protection were revised in 1991, a provision was Under this rule, any entity, whether a
and provide a measure of certainty to added (33 CFR 330.1(e)(3)) which stated non-profit group, government agency or
both regulatory staff and permit that compensatory mitigation could be commercial entrepreneur, has the
applicants. required by a district engineer to ensure opportunity to develop and implement
While we agree that the section 404 that an NWP activity results in minimal compensatory mitigation projects. We
regulatory program should be as adverse environmental effects. The final believe we have complied with the
streamlined and efficient as possible, we rule issued today also specifically states statute requiring the promulgation of
do not agree that the involvement of that it does not alter the regulations of this rule, by maximizing available
other agencies necessarily hinders that 33 CFR 320.4(r), and that it supersedes credits while raising requirements and
efficiency. Today’s rule will foster certain guidance documents on standards to help ensure ecological
greater efficiency and predictability in compensatory mitigation. What is performance. When evaluating
the interagency process by providing generally understood to be compensatory mitigation options,
clear deadlines for action on all types of compensatory mitigation today (i.e., the district engineers will consider what
compensatory mitigation, particularly restoration, establishment, would be environmentally preferable to
banking and in-lieu fee program enhancement, and/or preservation of offset the authorized impacts. In many
instruments. We note that the aquatic resources) is in the 404(b)(1) instances, the environmentally
participation of other agencies in the Guidelines as an action to minimize preferable compensatory mitigation will
section 404 permit process is required adverse effects on populations of plants be in the form of mitigation banks or in-
by various laws, regulations, and and animals (see 40 CFR 230.75(d)). lieu fee programs because they usually
legally-binding agreements. For Compensatory mitigation may also be involve consolidating compensatory
example, section 404(b) of the Clean required to satisfy other legal mitigation projects and resources, and
Water Act specifically authorizes EPA to requirements, as a result of the public providing financial planning and
develop guidelines for the identification interest review process, or to scientific expertise. They may also
of disposal sites for dredged or fill compensate for other resource losses. As reduce temporal losses of functions and
material (the 404(b)(1) Guidelines), indicated in the preamble to this rule, reduce uncertainty over project success.
which provide substantive today’s rule does not affect the We have added a provision that in-lieu
environmental criteria for avoidance, determination as to when compensatory fee sponsors must be governmental or
minimization and compensatory mitigation is required, only the non-profit organizations. We believe
mitigation. The EPA is authorized by requirements for conducting such this is appropriate in light of the fact
section 501(a) of the Clean Water Act to mitigation once the district engineer that only in-lieu fee programs are
conduct any rulemaking necessary to determines that it is necessary. As stated allowed to sell advance credits, before a
carry out their functions under that act. in the preamble to the March 28, 2006, site has been secured or a specific
S2 As another example, the Fish and proposed rule (71 FR 15524–15525), this mitigation project reviewed and
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with statutes require consultation with the determining when compensatory We disagree that the rule will
C65 U.S. Fish and Wildlife Service and the mitigation is required; instead it focuses adversely affect the economic viability
D1P National Marine Fisheries Service for on where and how compensatory of mitigation banks and encourage
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