Compensatory Mitigation Rule:

Corps/EPA Notice of Proposed Rulemaking

Regulatory BranchU.S. Army Corps of Engineers

Office of Wetlands, Oceans and WatershedsU.S. Environmental Protection Agency

October 2006

Overview• Status of

compensation• Rule drivers and

timeline• Rule outline• Key changes in

practice• Next steps

Type of Compensation

• Permittee-responsible mitigation (PRM)

• Third-party mitigation– Mitigation Banks– In-lieu fee (ILF)

PRM60%

Banks33%

ILF7%

(USACOE, 2006)

Rule Drivers and Timeline

• 2001 NRC report on compensation• 2002 Initiation of Mitigation Action Plan• Defense Authorization Act for 2004• Timeline:

– 1/05 – 12/05– Corps/EPA coordination– 12/5/05-3/10/06 – OMB review – 3/28/06 – Federal Register publication– 6/30/06 – Comment period closed

Supporting Materials

• Primary sources used in drafting:– 2002 Mitigation RGL– 2000 ILF Guidance– 1995 Banking Guidance– 1990 Army/EPA Mitigation MOA– 2001 NRC Report, others– 2003/2004 MAP work-productions and

stakeholder input

Rule Outline

1. Purpose and general considerations

2. Definitions3. General

requirements4. Planning and

documentation

5. Ecological performance standards

6. Monitoring7. Management8. Mitigation banks9. In-lieu fee

mitigation

Changes: 3rd Party Compensation

• Grandfathers existing banks– Instrument modification will trigger

compliance with new requirements• In-lieu Fee mitigation

– Suspension of new authorizations– Existing ILFs: 5-yr transition period

• Preamble solicits comment on:– Impacts of and alternatives to ILF phase-

out

Changes: Public Notice• Individual permits -

– “…the public notice for the proposed activity must explain how impacts associated with the proposed activity are to be avoided, minimized, and compensated for.” §332.4/230.94

• Mitigation banks –– All proposed banks to receive public

notice and comment

Changes: Contents of Mitigation Plans

1. Project objectives2. Site selection factors3. Site protection

instrument4. Baseline information

(at impact site and compensation site)

5. Credit determination methodology

6. Work plan

7. Maintenance plan8. Performance

standards9. Monitoring

requirements10.Long-term

management plan11.Adaptive

management plan12.Financial assurances

Additionally for Banks…• Prospectus and draft and final

instruments must include:1. Service area2. Credit release schedule3. Accounting procedures4. Transfer of liability for site success 5. Default and closure provisions

• Rule includes timelines for bank review and dispute resolution

Next Steps

• Process/post public comments– ~12,100 total comment letters– ~900 unique comment letters

• Analyze public comments– Draft comment response

• Implementation– MBRT/IRT Academy

Questions

• Compensatory Mitigation Website:– http://www.epa.gov/wetlandsmitigation/

• Federal Docket– http://www.regulations.gov

• Contacts:– Corps HQ: David Olson

David.B.Olson@HQ02.USACE.ARMY.MIL– EPA HQ: Palmer Hough Hough.palmer@epa.gov