66915
Federal Register
/Vol. 65, No. 216/Tuesday, November 7, 2000/Notices
Water Act and the Guidelines set fortha goal of restoring and maintainingexisting aquatic resources. The Corpswill strive to avoid adverse impacts andoffset unavoidable adverse impacts toexisting aquatic resources, and forwetlands, will strive to achieve a goal of no overall net loss of values andfunctions.’’ Moreover, the MOA clarifiesthat mitigation ‘‘should be undertaken,when practicable, in areas adjacent orcontiguous to the discharge site,’’ andthat ‘‘if on-site compensatory mitigationis not practicable, off-site compensatorymitigation should be undertaken in thesame geographic area if practicable (i.e.,in close proximity and, to the extentpossible, the same watershed).’’ Asoutlined in the MOA, the agencies havealso agreed that ‘‘generally, in-kindcompensatory mitigation is preferable toout-of-kind.’’ The MOA further statesthat mitigation banking may be anacceptable form of compensatorymitigation. The agencies recognize thegeneral preference for restoration overother forms of mitigation, given theincreased chance for ecological success.D. Pursuant to these standards,project-specific mitigation forauthorized impacts has been used bypermittees to offset unavoidableimpacts. Project-specific mitigationgenerally consists of restoration,creation, or enhancement of aquaticresources that are similar to the aquaticresources of the impacted area, and isoften located on the project site oradjacent to the impact area. Permitteesproviding project specific mitigationhave a U.S. Army Corps of Engineers(Corps) approved mitigation plandetailing the site, source of hydrology,types of aquatic resource to be restored,success criteria, contingency measures,and an annual reporting requirement.The mitigation and monitoring plan becomes part of the Section 404authorization in the form of a specialcondition. The permittee is responsiblefor complying with all terms andconditions of the authorization andwould be in violation of theirauthorization if the mitigation did notcomply with the approved plan.E. In 1995, the agencies issued theBanking Guidance. Consistent with thatguidance, permittees may purchasemitigation credits from an approved bank. Mitigation banks will generally befunctioning in advance of projectimpacts and thereby reduce thetemporal losses of aquatic functions andvalues and reduce uncertainty over theecological success of the mitigation.Mitigation banking instruments arereviewed and approved by aninteragency Mitigation Banking ReviewTeam (MBRT). The MBRT ensures thatthe banking instrument appropriatelyaddresses the physical and legalcharacteristics of the bank and how the bank will be established and operated (
e.g.,
classes of wetlands and/or other aquaticresources proposed for inclusion in the bank, geographic service area wherecredits may be sold, wetland classes orother aquatic resource impacts suitablefor compensation, methods fordetermining credits and debits). The bank sponsor is responsible for theoperation and maintenance of the bankduring its operational life, as well as thelong-term management and ecologicalsuccess of the wetlands and/or otheraquatic resources, and must providefinancial assurances.F. The Banking Guidance describesin-lieu-fee mitigation as follows: ‘‘...in-lieu-fee, fee mitigation, or othersimilar arrangements, wherein funds arepaid to a natural resource managemententity for implementation of eitherspecific or general wetland or otheraquatic resource development project,are not considered to meet thedefinition of mitigation banking becausethey do not typically providecompensatory mitigation in advance of project impacts. Moreover, sucharrangements do not typically provide aclear timetable for the initiation of mitigation efforts. The Corps, inconsultation with the other agencies,may find circumstances where sucharrangements are appropriate so long asthey meet the requirements that wouldotherwise apply to an offsite,prospective mitigation effort andprovides adequate assurances of successand timely implementation. In suchcases, a formal agreement between thesponsor and the agencies, similar to a banking instrument, is necessary todefine the conditions under which itsuse is considered appropriate.’’
III. Use of In-Lieu-Fee Mitigation in theRegulatory Program
In light of the above considerationsand in order to ensure that decisionsregarding the use of in-lieu-feemitigation are made more consistentlywith existing provisions of agencyregulations and permit policies, thefollowing clarification is provided. It isorganized in a tiered manner to reflectand incorporate the agencies’ broadermitigation policies, and is based onrelative assurances of ecologicalsuccess.A.
Impacts Authorized Under Individual Permit:
In-lieu-feeagreements may be used to compensatefor impacts authorized by individualpermit if the in-lieu-fee arrangement isdeveloped (or revised, if an existingagreement), reviewed, and approvedusing the process established formitigation banks in the BankingGuidance. MBRTs should reviewapplications from such in-lieu-feesponsors to ensure that such agreementsare consistent with the BankingGuidance.B.
Impacts Authorized Under General Permit:
As a general matter, in-lieu-feemitigation should only be used tocompensate for impacts to waters of theU.S. authorized by a Section 404 generalpermit, as described below:
1.
Where ‘‘On-site’’ Mitigation Is Availableand Practicable:
As a general matter,compensatory mitigation that is completedon or adjacent to the site of the impacts it isdesigned to offset (
i.e.,
project-specificmitigation done by permittees consistentwith Corps approved mitigation plans) ispreferable to mitigation conducted off-site (
i.e.,
mitigation bank or in-lieu-fee mitigation).The agencies’ preference for on-sitemitigation, indicated in the 1990Memorandum of Agreement on mitigation between the EPA and the Department of theArmy, should not preclude the use of amitigation bank or in-lieu-fee mitigationwhen there is no practicable opportunity foron-site compensation, or when use of a bankor in-lieu-fee mitigation is environmentallypreferable to on-site compensation,consistent with the provisions in paragraph2 below.2.
Where ‘‘On-site’’ Mitigation Is Not Available or Practicable:
Except as noted below in a. or b., where on-site mitigation isnot available, practicable, or determined to be less environmentally desirable, use of amitigation bank is preferable to in-lieu-feemitigation where permitted impacts arewithin the service area of a mitigation bankapproved to sell mitigation credits, and thosecredits are available. Use of a mitigation bankis also preferable over in-lieu-fee mitigationwhere both the available in-lieu-feearrangement and the service area of anapproved mitigation bank are outside of thewatershed of the permitted project impacts,unless the mitigation bank is determined ona case by case basis to not be practicable andenvironmentally desirable.a.
Where Mitigation Bank Does Not Provide‘‘In-kind’’ Mitigation:
In those circumstanceswhere wetlands impacts proposed for generalpermit authorization are within the servicearea of an approved mitigation bank withavailable credits, but the impacted wetlandtype is not identified by the MitigationBanking Instrument for compensation withinsuch bank, then the authorized impact may be compensated through an in-lieu-feearrangement, subject to the considerationsdescribed in Section IV below, if the in-lieu-fee arrangement would provide in-kindrestoration as mitigation. b.
Where Mitigation Bank Does Not ProvideRestoration, Creation, or Enhancement Mitigation:
In those circumstances wherewetlands impacts proposed for generalpermit authorization are within the servicearea of an approved mitigation bank, but theonly available credits are throughpreservation, then the authorized impact may
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