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In 1972, in response to declining water quality throughout the country, Congress passed the Federal Water Pollution Control Act, usually called the Clean Water Act (CWA).
Compensatory Mitigation by Matthew LaCroix
Compensatory Mitigation for Losses of Aquatic Resources in the CWA Section 404 Program Matthew LaCroix U.S. Environmental Protection Agency Region 10 October 21, 2011 Juneau, Alaska
Putting Compensation in Perspective:Mitigation policies, frameworks and opportunities • What mitigation is • the mitigation sequence • When and why it is required – overview of 404 program • How it is conducted – the mitigation “Final Rule,” • Current status in Alaska – selected myths
Alaska District, Regulatory Division- Mitigation Statement• All proposed actions will avoid, minimize, and compensate, commensurate with scope and scale of the project, for permitted impacts to Alaska’s aquatic resources. The Regulatory Division shall implement measurable, enforceable ecological performance standards based on the best available science and watershed approach, focusing on results, with monitoring to assure success.
What is Mitigation?• The appropriate and practicable steps which are taken to minimize potential adverse impacts of an activity (discharge) on the aquatic ecosystem.
Why Mitigate? Why protect aquatic resources?• To achieve the objective of the Clean Water Act• To comply with the Section 404(b)(1) Guidelines• To ensure that the project is not contrary to the public interest• To achieve “No Net Loss”• Bottom Line: To maintain aquatic functional processes (local?)
Why protect aquatic resources?• It is an investment in our quality of life.• Clean water is critical to the social, economic and environmental health of our nation. We can’t live without it. Maintaining natural hydrologic cycles and processes protects the quantity and quality of water available for use.• Waters provide essential habitat for fish and wildlife.• Healthy aquatic habitats support economically important industries.
Why protect wetlands?• Wetlands are important for water storage. They retain snowmelt and runoff, recharge groundwater and stabilize stream flows and lake levels. This helps reduce flood events and flood damage.• Wetlands protect water quality. They filter sediment, nutrients, and toxic pollutants out of surface water. This helps keep pollutants out of our wells and surface waters.
Why protect waters of the U.S.?• Because sustainability is worth pursuing.• Because our children are worth it.
What is the Mechanism to protect aquatic resources?• Clean Water Act (CWA) 33 U.S.C. §1344: passed 1972 in response to loss of water quality and function (drinkable, fishable, swimmable).• The objective of the CWA is to “restore and maintain the chemical, physical, and biological integrity of the Nation’s waters.”• The CWA established permitting programs to regulate the discharge of pollutants to “waters of the U.S.” and generally prohibits the discharge of pollutants without a permit.• “Except as in compliance with this section and sections 1312, 1316, 1317, 1328, 1342 and 1344 of this title, the discharge of any pollutant by any person shall be unlawful.”
Clean Water Act (1972) 33 U.S.C. §1344• The “Nation’s waters,” or “waters of the United States” protected under the CWA include all waters that are, have been, or could be used in interstate or foreign commerce, including all tidal waters.• Other waters, including intrastate waters, are “waters of the U.S.” if their use, degradation, or destruction could affect interstate or foreign commerce. Wetlands are one category of “waters of the U.S.”
Clean Water Act (1972) 33 U.S.C. §1344• Section 404 of the CWA established a permitting program for the discharge of dredged or fill materials into waters of the U.S.• These are often referred to as “Section 404” or “Corps” permits.• The discharge of dredged material includes the redeposit of material from activities such as mechanized land clearing, ditching, channelization, or other excavation.
Section 404 – A Joint Program• The U.S. Army Corps of Engineers (Corps) and the U.S. EPA co-administer the Section 404 permitting program.• §101(d). The Administrator of the EPA shall administer the Act, except as otherwise expressly provided in the Act.• §404(a) Secretary of the Army, acting through the Chief of Engineers may issue permits. The Corps is the §404 permitting agency, unless a state has assumed the program.• The Final Mitigation Rule was issued jointly by the Corps and EPA.
U.S. Army Corps of Engineers• “The Secretary may issue permits” [Section 404(a)] – Administers day-to-day program, including individual permit decisions – Conducts or verifies jurisdictional determinations – Develops policy and guidance• Issues general permits [Section 404(e)]• Enforces Section 404 provisions [Section 404(s)]• The Corps has regulations that specify the procedures for the issuance of 404 permits (33 CFR Parts 320-330; November 13, 1986).
U.S. EPA• “Guidelines developed by the Administrator” [Section 404(b)] – Develops and interprets policy, guidance and environmental criteria used in evaluating permit applications (404(b)(1) Guidelines)• Has authority to prohibit, deny, or restrict the use of any defined area as a disposal site [Section 404(c)] – Reviews and comments on individual permit applications – Evaluates compliance with the Guidelines, including the type and level of necessary mitigation
U.S. EPA, continued• Determines scope of geographic jurisdiction and applicability of exemptions [Section 404(f)]• Approves and oversees State and Tribal assumptions [Section 404(h-j)]• Can elevate specific cases [Section 404(q)] – "The Corps will fully consider EPAs comments when determining compliance with the National Environmental Policy Act, the 404(b)(1) Guidelines, and other relevant statutes, regulations, and policies. The Corps will also fully consider the EPAs views when determining whether to issue the permit, to issue the permit with conditions, and/or mitigation, or to deny the permit." (404(q) MOA)• Enforces Section 404 provisions [Section 404(n)]
Section 404(b)(1) Guidelines• (b) Specification for disposal sites “Subject to subsection (c) of this section, each such disposal site shall be specified for each such permit by the Secretary (1) through the application of guidelines developed by the Administrator, in conjunction with the Secretary, which guidelines shall be based upon criteria applicable to the territorial seas, the contiguous zone, and the ocean under section 1343(c) of this title,”
Section 404(b)(1) Guidelines• The Guidelines are regulations (40 CFR Part 230; December 24, 1980).• The Guidelines are substantive environmental criteria (patterned after the ocean discharge criteria).• Compliance with the Guidelines is required; demonstrating compliance is applicant’s responsibility.• The Guidelines prohibit issuance of a permit that would cause an avoidable or significant adverse impact to wetlands or other special aquatic sites.• The Guidelines contain four requirements for compliance.
Section 404(b)(1) Guidelines• Four requirements for compliance – (a) Evaluation of practicable alternatives – (b) Compliance with other standards – (c) Significant degradation – (d) Minimizing adverse impacts
Section 404(b)(1) Guidelines § 230.10 Restrictions on discharge• (d) Minimizing adverse impacts – “no discharge of dredged or fill material shall be permitted unless appropriate and practicable steps have been taken which will minimize potential adverse impacts of the discharge on the aquatic ecosystem. Subpart H identifies such possible steps.” – Subpart H (230.70-.77) identifies 40 categories of possible steps to avoid, minimize, and compensate for adverse impacts. The term “minimize” includes avoidance and compensation.
Section 404(b)(1) Guidelines § 230.70 - .77 Actions to minimize adverse effects• “Using planning and construction practices to institute habitat development and restoration to produce a new or modified environmental state of higher ecological value by displacement of some or all of the existing environmental characteristics. Habitat development and restoration techniques can be used to minimize adverse impacts and to compensate for destroyed habitat. Use techniques that have been demonstrated to be effective in circumstances similar to those under consideration whenever possible.” – Displacement: 2. to take the place of: supplant, supersede, to replace.
The Mitigation Sequence• Mitigation is a sequence of actions that must be followed to offset impacts to aquatic resources. The 1990 MOA between Corps and EPA formalized the three-part process known as the mitigation sequence.• Step 1. Avoid ; Step 2. Minimize; Step 3. Compensate• The entire sequence is obligatory and necessary to achieve compliance with the Guidelines.• Compensatory mitigation may not substitute for avoiding and minimizing impacts.
Guidance on Mitigation• Regulations – 33 CFR 320.4(r), 404(b)(1) Guidelines, & 33 CFR 332 – Mitigation Final Rule• Regulatory Guidance Letters – 08-03 & 09-01• Executive Order 11990
Mitigation Final Rule: Improving Compensation• Previous mitigation efforts were often unsuccessful• “Site-by-site mitigation has had a cumulative unhelpful, to even detrimental, effect in maintaining wetland functions and values for the watershed.” NatureServe• “The Stone Age did not end because humans ran out of stones.” William McDonough• We can adapt and improve our practices• The Final Rule set new standards for where and how compensation is conducted. Did not change when required
Mitigation Final Rule: Overview• Authority: National Defense Authorization Act FY04• References: NRC, GAO reports, aspects of existig regulations and guidance• Goals: – Equivalent standards for all forms of mitigation – Improved performance of mitigation projects – Improved mitigation planning and site selection – Greater transparency and accountability
Mitigation Final Rule: Overview• Methods: Achieved by restoration, establishment, enhancement, and /or preservation of aquatic resources• 3 Forms of Compensatory Mitigation – Mitigation Bank – In-Lieu Fee – Permittee Responsible
Mitigation Bank• Sponsored by a commercial entity or a single user• One or more sites where compensatory mitigation projects are done in advance of permitted impacts• Permittees purchase credits from the bank• Bank sponsor assumes responsibility for providing the mitigation
In-Lieu Fee Program• Government or non-profit natural resource management entity• Sell credits in advance of conducting compensatory mitigation projects (temporal loss)• Credit fees often pooled to conduct larger, strategic projects• ILF program sponsor assumes responsibility for providing mitigation
Permittee-Responsible Mitigation• Compensatory mitigation activity undertaken by permittee or contractor• Methods of compensation are the same: restoration, establishment, enhancement, and/or preservation
Mitigation Final Rule: Most Frequently Raised Issues:• Section 404(b)(1) Guidelines• Compensatory mitigation standards for streams• Discretionary language• Watershed approach• In-lieu fee programs
1. Section 404(b)(1) Guidelines• Sequencing (avoid, minimize, compensate) remains• 1990 MOA between DA and EPA on Mitigation – Certain provisions remain in effect: • Impact avoidance and minimization • Evaluation of LEDPA • Significant degradation may not be authorized regardless of compensatory mitigation
2. Compensatory Mitigation Standards for Streams• Streams recognized as “difficult to replace”• Emphasis on preservation, rehabilitation, or enhancement• Discourage establishment and re-establishment• Additional elements for stream mitigation: planform geometry, channel form, riparian plantings, etc.• Ecological performance standards• Minimum 5 years monitoring
3. Discretionary Language• Strengthened (binding/more clearly articulated requirements): – Mitigation type – Mitigation amount – Financial assurances – Credit releases – Use of preservation – Ecological performance standards – Long-term site protection and management
4. Watershed Approach• Appropriate framework to consider both impacts and mitigation on watershed scale rather than project by project• Strategic site selection to improve or maintain watershed function• “Used to the extent appropriate and practicable” – Doesn’t require a formal watershed plan, use available watershed information – Commensurate with scope/scale of impacts• Allows preservation, riparian areas, buffers
5. In-Lieu Fee Programs• ILF programs retained as a separate and distinct mechanism, but with new requirements: – Limited to governmental or non-profit natural resource management entities – Compensation Planning Framework (i.e., watershed plan) – “Advance credits” limited – Program account – Same interagency/public review as mitigation banks – Same standards as other mitigation
Section 1 - Purpose and general considerations [§332.1 / §230.91]• Establish standards and criteria for the use of all types of compensatory mitigation, including permittee-responsible mitigation, mitigation banks, and in-lieu fee mitigation• Supersedes: – Federal Guidance for the Establishment, Use and Operation of Mitigation Banks, issued November 28, 1995 – Federal Guidance on the Use of In-Lieu Fee Arrangements issued October 31, 2000 – Regulatory Guidance Letter 02-02: Guidance on Compensatory Mitigation Projects for Aquatic Resource Impacts, issued December 24, 2002
Section 2 – Definitions [§332.2 / §230.92]• 43 terms (most been in use for 10 - 15 years)• New terms: – Adaptive management – Functions and Services – Advance credits, Fulfillment of advance credit sales of an in-lieu-fee program, and Release of credits – Temporal loss – Watershed approach and Watershed plan
Section 3 - General compensatory mitigation requirements [§332.3 / §230.93]• Type and Location of Compensatory Mitigation: – Flexible preference for the use of mitigation bank – “Hierarchy” of compensatory mitigation options: • Mitigation bank credits • In-lieu fee program credits • Permittee-responsible mitigation under a watershed approach • Permittee-responsible mitigation through on-site and in-kind mitigation • Permittee-responsible mitigation through off-site and/or out-of-kind mitigation
Mitigation Considerations I• Watershed approach• Site selection• Mitigation type including difficult to replace resources (e.g. bogs, fens, springs, streams, etc.)• Amount of compensatory mitigation• Preservation - 5 criteria must be met• Buffers
Mitigation Considerations II• Relationship to other federal, state, tribal, and local programs• Permit conditions• Party responsible for compensatory mitigation• Timing (temporal loss)• Financial assurances
Section 4 - Planning and documentation [§332.4 / §230.94]• Pre-application consultations• Public review and comment - Public notices for standard permit applications must now include information explaining how impacts associated with the proposed activity are to be avoided, minimized, as well as the amount, type and location of any proposed compensatory mitigation, including any out-of-kind compensation or an indication of the intention to use an approved mitigation bank or in-lieu-fee program
Mitigation Work Plan• Mitigation plan - identifies 13 items which must be included in the permittee’s final mitigation plan, or as permit conditions, and must be approved by the DE before a permit is issued
Requirements for Permittee-Responsible Mitigation• Site selection based on a watershed approach, or on-site / in-kind mitigation, or off-site / out-of-kind• Provide draft mitigation plan including, where necessary: – Objective(s) – Site selection information – Site protection instrument to be used – Baseline information (impact site and mitigation project site) – How the project will mitigate for lost functions and values – Work plan (specifications and work descriptions) – Maintenance plan (ensuring continued viability) – Performance standards (ecologically-based) – Monitoring requirements – Long-term management plan (post-monitoring management) – Adaptive management plan (address unforeseen changes) – Financial assurances (ensure high level of confidence of successful completion)• Level of information must be commensurate with the scope and scale of the impacts
Section 5 - Ecological performance standards [§332.5 / §230.95]• Mitigation plans must contain performance standards that will be used to assess whether the project is achieving its objectives. – “Ecological performance standards must be based on the best available science that can be measured or assessed in a practicable manner.”
Section 6 – Monitoring [§332.6 / §230.96]• General requirement: Monitoring reports must be submitted to assess the development and condition of the compensation project• Monitoring period: Monitoring periods must not be less than five years• Monitoring reports: Must be provided to interested agencies and the public upon request• RGL 08-03 issued to provide guidance on monitoring
Section 7 – Management [§332.7 / §230.97]• Site protection - must be provided long-term protection through real estate instruments or other available mechanisms, as appropriate (Some flexibility in appropriate site protection mechanisms is afforded to government property)• Sustainability• Adaptive management• Long-term management with plan and funding
Section 8 - Mitigation banks and in-lieu fee programs [§332.8 / §230.98]• First seven sections of the rule are applicable to all compensatory mitigation projects• Section 8 includes provisions that are unique to mitigation banks and in-lieu fee programs
Requirements for Mitigation Banks and In-Lieu Fee Programs– Prospectus– Public notice and comment process– IRT review with dispute resolution process– Approved instrument required– Approved mitigation plans with credit release schedules– Ledgers for all credit transactions– DE approval required to release credits– Suspension and/or termination of instrument if poor performance
Additional Requirements for In-Lieu Fee Mitigation• Only non-profits or governments• Compensation planning framework required to identify, plan, and implement ILF projects, support watershed approach, and justify advance credits• Limited number of advance credits that can be sold before ILF projects are established and meeting performance standards• ILF funds collected for compensation may only be used for compensation projects minus small percentage for overhead• Credit costs must include all costs to implement projects, including financial assurances and long-term management• ILF projects as modifications of ILF program instrument (public review process)• Individual ledgers to track credit production by each in-lieu fee project• Transfer liability to ILF up front, enforce against ILF
Determining Compensation Ratios Impacted Wetland or Preservation Restoration or NOTE: Other Waters of the U.S. Enhancement Each project is different, the LOW 1.5:1 1:1 impacts are MODERATE 2:1 1:1 different, and the requirements HIGH 3:1 2:1 may be different•Impacts to ponds, lakes, rivers, and streams should be mitigated for in theHIGH category due to inherent high level of functions and services•Most ratios will be greater than 1:1 because of risk of failure associatedwith many forms of compensation, temporal loss, and preservation andenhancement results in net loss•If using a Mitigation Bank, rules and ratios specific to the bank will beused•If using an ILF, ratios will depend how ILF spends the funds, i.e. TheConservation Fund sets up conservation easements, which is preservation,and therefore the ratio starts at 1.5:1
The Mitigation Sequence Compensation• §332.3(f)(1) Amount of compensatory mitigation• “the amount of required compensatory mitigation must be, to the extent practicable, sufficient to replace lost aquatic resource functions.”• “where appropriate functional or condition assessment methods or other suitable metrics are available, these methods should be used where practicable to determine how much compensatory mitigation is required.”• “If a functional or condition assessment or other suitable metric is not used, a minimum one-to-one acreage or linear foot compensation ratio must be used.”
Alaska Mitigation Banks• Natzuhini Bay: sponsored by Sealaska Corporation – HUC 1901 (Southeast Alaska)• Su-Knik Bank: sponsored by Mat-Su Borough & Sustainable Environments – HUC 19020505 (lower Susitna River watershed)• Harmony Ranch: Private sponsor – (Municipality of Anchorage)• Anchorage Heritage Land Bank: Sponsored by MOA – (Municipality of Anchorage)• Pioneer Reserve: Private sponsor – (Upper Little Susitna watershed)
Alaska In-Lieu Fee Program Sponsors• Southeast Alaska Land Trust (certified instrument) – Southeast Alaska• Great Land Trust (certified instrument) – Municipality of Anchorage, Mat-Su Borough• The Conservation Fund (PN prospectus) – Statewide with 5 service areas• Salcha-Delta Soil & Water Conservation District (draft prospectus) – Central Tanana River watershed• Interior Alaska Land Trust (draft prospectus) – Fairbanks North Star Borough• Southeast Alaska Watershed Coalition (draft prospectus) – Southeast Alaska
Special Considerations in Alaska• Alaska is all wetlands - no opportunities to avoid wetland impacts• Alaska is totally pristine – no opportunities for restoration• Compensation is not necessary - Alaska has so many wetlands that loss does not cause impact• Compensation is not practicable – its too costly & we cannot create peat or permafrost wetlands• They’re only hatchery pinks/forested, permafrost wetlands – not important/ valuable
Special Considerations in Alaska Bottom Line:• Alaska is a place where natural systems and processes are still able to support cultures and communities.• Whether this will remain true in the future is up to us.
Questions? • Matthew LaCroix • 907-271-1480• firstname.lastname@example.org
What About “No Net Loss?”• “No Net Loss” of wetlands is a programmatic and National policy goal, i.e. it incorporates more than just the Section 404 permitting program.• The “No Net Loss” goal will not be achieved with every permitting action, even when compensation is required.• Preservation always results in a net loss of wetland acreage and function.
Section 404(b)(1) Guidelines Searching for the LEDPA• What about cost?• The purpose of consideration of cost is not to compare the cost of the applicant’s proposed project against the costs of alternatives but to determine whether or not the costs of an alternative are so prohibitively high (beyond industry standard) that the alternative cannot reasonably be considered practicable.• “The consideration of cost is not an economic analysis. The intent of the Guidelines is to consider whether an alternative is reasonable in terms of the overall scope and cost of the proposed project, or conversely, whether an alternative is unreasonably expensive. The mere fact that an alternative may cost somewhat more does not necessarily mean it is unreasonably expensive and therefore not practicable.” (45 FR 85339)
When is Mitigation Required?• Always! You must always avoid and minimize• If 404, to ensure project is compliant with the 404(b)(1) Guidelines• To ensure that the project is not contrary to the public interest• For impacts to wetlands, streams, or other open waters• When there is a specifically identifiable resource loss of importance to the human or aquatic environment – i.e. rare wetlands or wetlands in an area where there is already a high degree of development
Mitigation Ratio Considerations• Assess likelihood for ecological success and sustainability• Location of impact site in relation to compensation site• Costs, logistics, technical feasibility• What is “environmentally preferable”• Projects may be sited on public and private lands