EPA, Corps Propose Standards For Wetlands Mitigation

EPA and the U.S. Army Corps of Engineers have proposed standards that seek to improve wetland conservation and restoration and increasing the use of wetland mitigation banks.

The proposed revisions to regulations governing compensatory mitigation for authorized impacts to wetlands, streams, and other waters of the United States under Section 404 of the Clean Water Act were announced on March 27. According to agency officials, the proposed revisions are designed to improve the effectiveness of compensatory mitigation at replacing lost aquatic resource functions and area, expand public participation in compensatory mitigation decision-making, and increase the efficiency and predictability of the process of proposing compensatory mitigation and approving new mitigation banks.

"We are accelerating the pace of wetlands restoration and conservation," said Benjamin H. Grumbles, EPA assistant administrator for water. "(This) action -- which emphasizes the best available science, promotes innovation, and focuses on results -- will help our nation meet the President's ambitious wetlands goal, while promoting flexibility and accountability."

Environmental groups, however, complain that the agencies are too eager to promote mitigation banking as an ideal approach.

The proposed rule regards permits sought by landowners/developers that would cause harm to wetlands. When the wetlands will be impacted, compensatory mitigation is required to replace the loss of wetland, stream, and/or other aquatic resource functions and area. Compensatory mitigation is typically accomplished through the following three mechanisms:

1. Permittee-Responsible Mitigation: A permit applicant may implement compensatory measures at the impact site (i.e., on-site mitigation) or at another location usually within the same watershed as the permitted impact (i.e., off-site mitigation). The permittee retains responsibility for the implementation and success of the mitigation.

2. Mitigation Banks: A permit applicant may purchase credits from a mitigation bank. A mitigation bank is a wetland, stream or other aquatic resource area that has been restored, created, enhanced, or, in certain circumstances, preserved. This resource area is then set aside to compensate for future conversions of aquatic resources for development activities. The value of a bank is determined by quantifying the aquatic resource functions restored or created in terms of "credits." Permittees, upon approval of regulatory agencies, can acquire these credits to meet their requirements for compensatory mitigation.

3. In-Lieu Fee Mitigation: A permit applicant may make a payment to an in-lieu fee program. In-lieu fee programs are generally administered by public agencies or non- profit organizations who have established an agreement with regulatory agencies to use in-lieu fee payments collected from permit applicants to conduct wetland, stream or other aquatic resource restoration, creation, enhancement or preservation activities. Mitigation banks and in-lieu fee mitigation are forms of "third-party" compensation because a third party, the bank or in-lieu fee sponsor, assumes responsibility from the permittee for the implementation and success of the compensatory mitigation.

The proposed standards encourage the expansion of mitigation banking because it is a reliable and verifiable method of wetland replacement, agency officials said. Mitigation banks are a "performance-based" form of wetland replacement because, unlike traditional forms of wetland replacement, the tradable wetland restoration credits generated by banks are tied to demonstrated achievement of project goals. In its 2001 critique of wetland replacement practices, the National Academies' National Research Council (NRC) highlighted advantages of third-party compensation such as mitigation banks, the agency stated.

The revisions are being proposed due to the 2004 National Defense Authorization Act, which calls for the development of regulations, consistent with Section 404 of the Clean Water Act, establishing equivalent standards and criteria for all forms of compensatory mitigation. Comments on the proposal are due by May 30.

More information on the proposed revisions can be found at http://www.epa.gov/wetlandsmitigation.

Additional information on the NRC report -- Compensating for Wetland Losses Under the Clean Water Act -- can be accessed at http://www.nap.edu/books/0309074320/html.

This article originally appeared in the 03/01/2006 issue of Environmental Protection.

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