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Banks and Fees: the Status of Off-Site Wetland Mitigation in the United States

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Banks and Fees: the Status of Off-Site Wetland Mitigation in the United States In the United States The Status of Off-Site Wetland Mitigation Wetland The Status of Off-Site BANKS AND FEES BANKS AND FEES:The Status of Off-Site Wetland Mitigation In the United States ISBN#: 1 58576 C46 3 Cover Photography: Meadowlands Mitigation Bank, NJ, courtesy of Marsh Resources Inc. Wildlands Mitigation Bank in Placer County, CA, courtesy of Steve Morgan, CEO, Wildlands, Inc. Pennsylvania Wetland Replacement Project, Philadelphia, PA, courtesy of Shelby Reisinger, Pennsylvania Department of Environmental Protection. BANKS AND FEES The Status of Off-Site Wetland Mitigation In the United States By the Environmental Law Institute September 2002 Environmental Law Institute® Copyright© 2002 Banks and Fees: The Status of Off-site Wetland Mitigation in the United States Copyright © 2002 Environmental Law Institute®, Washington, D.C. All rights reserved. ISBN No. 1-58576-C46-3. ELI Project No. 020501. An electronic retrievable copy (PDF file) of portions of this report and a searchable database may be obtained for no cost from the Environmental Law Institute website <www.eli.org>, click on “Publications” then “2002 Research Reports” to locate the file. [Note: ELI Terms of Use will apply and are available on site.] (Environmental Law Institute®, The Environmental Forum®, and ELR® – The Environmental Law Reporter® are registered trademarks of the Environmental Law Institute.) ACKNOWLEDGMENTS This publication is a project of the Environmental Law Institute (ELI). Funding was provided by grants from the David and Lucille Packard Foundation and the U.S. Environmental Protection Agency. ELI staff contributing to the project included Jessica Wilkinson, Christina Kennedy, Kelly Mott, Margaret Filbey, Sarah King, and Jim McElfish. Wendy Sandoz provided editorial help and layout. ELI also gratefully acknowledges the help of Legal Intern, Charles Cortinovis, and the following research interns: Laura Berry, Stephanie Brannen, Rob Daniel, Philip Fryer, Joanna Radin, and Anand Rajandren. ELI is responsible for the views and research contained in this report, including any omissions or inaccuracies that may appear. The information contained in the report was obtained primarily through personal interviews and was verified in November and December 2001. The conclusions are solely those of ELI. We gratefully acknowledge the help of the following reviewers who provided us with valuable feedback on the final draft. In addition, Paul Garrett, Federal Highway Administration, Jack Chowning, U.S. Army Corps of Engi- neers, Paul Scodari, U.S. Army Corps of Engineers’ Institute for Water Resources, and Palmer Hough, U.S. Environ- mental Protection Agency, provided comments on select sections. Bill Ainslie, Ann Redmond, U.S. Environmental Protection Agency, Region 4 Wilson Miller, Inc. Robert Brumbaugh, Julie Sibbing, U.S. Army Corps of Engineers, National Wildlife Federation Institute for Water Resources Susan-Marie Stedman, Jeanne Christie, NOAA/National Marine Fisheries Service Association of State Wetland Managers Margaret N. Strand, Lauren C. Driscoll, Venable, Baetjer, Howard & Civiletti, LLP Washington State Department of Ecology Mark Sudol, Royal C. Gardner, U.S. Army Corps of Engineers, Los Angeles District Stetson University College of Law Marie Venner, Mark Matusiak, Venner Consulting U.S. Fish and Wildlife Service Joy Zedler, Ph.D., Lisa Morales, University of Wisconsin—Madison U.S. Environmental Protection Agency Keith F. Mulrooney, The Nature Conservancy TABLE OF CONTENTS I. INTRODUCTION...........................................7 IV. THE STATUS OF WETLAND MITIGATON 1. Background: compensatory mitigation..........7 BANKING .........................................................35 2. Wetland mitigation banking..........................7 1. General information.....................................35 3. In-lieu-fee mitigation.....................................8 2. Geographical distribution.............................36 4. ELI’s study of banks and fees..........................8 3. Changes in bank type, type of bank sponsors, 5. Study methodology .......................................9 and type of bank clients................................37 4. Bank siting....................................................40 II. THE REGULATORY CONTEXT FOR 5. Bank Approval..............................................44 WETLAND MITIGATION BANKING...........11 6. Wetland mitigation bank geographic 1. The Clean Water Act.....................................11 service areas..................................................46 2. 1995 federal banking guidance .....................13 7. Mitigation methods in use............................48 3. Corps Regulatory Guidance Letter and federal 8. Wetland types available for crediting............49 response to the National Research Council....14 9. Debiting activities (bank use).......................55 4. Food Security Act..........................................15 10. The price of mitigation..................................56 5. Mitigation banking under the Federal 11. Wetland valuation and crediting....................57 Highway Administration .............................15 12. Mitigation replacement ratios.......................61 13. Credit release...............................................63 III. BANK ORGANIZATION AND 14. Financial assurances for bank establishment, PLANNING CONSIDERATIONS...................17 oversight, and long-term management...........66 1. Determining appropriate mitigation.............17 15. Performance standards in practice..................69 2. In-kind vs. out-of-kind mitigation.................18 16. Design standards..........................................79 3. Mitigation methods.......................................18 17. Bank operation and oversight........................80 4. Establishment of mitigation banks: 18. Remedial actions and enforcement................86 enabling instruments and oversight...............19 19. The role of the public.....................................88 5. Bank basics....................................................21 20. Impediments to banking................................89 6. Defining and determining wetland currency..23 21. Stream mitigation banking............................89 7. Bank siting considerations............................26 8. Bank operation..............................................28 V. UMBRELLA INSTRUMENTS 9. Financial assurances.......................................29 AND MULTI-SITE BANKS...............................91 10. Performance standards..................................29 1. Umbrella instrument basics..........................91 11. Enforcement measures and remedial action...30 2. General information: numbers, acres, 12. Long-term management, monitoring, and sites.......................................................91 protection, and remediation..........................30 3. Bank siting....................................................91 13. Compensatory mitigation and 4. Agreement type/sponsor type ........................92 the watershed approach................................31 5. Why adopt an umbrella approach?................92 14. The state regulatory context for wetland mitigation banking........................................32 VI. ORGANIZATION OF IN-LIEU-FEE IX. THE FUTURE OF WETLAND MITIGATION MITIGATION PROGRAMS.............................95 BANKING AND IN-LIEU-FEE......................115 1. Background................................................95 1. The effect of the SWANCC decision 2. In-lieu-fee basics........................................96 on wetland mitigation banking....................115 . 3. In-lieu-fee agreements...................................97 2. Recent proposed banking legislation: 4. Types of in-lieu-fee programs.........................97 American Wetland Restoration Act..............117 5. The state regulatory context for in-lieu-fee 3. The future of in-lieu-fee mitigation.............117 mitigation..................................................97 X. CONCLUSIONS.............................................119 VII.THE STATUS OF IN-LIEU-FEE MITIGATION........................................................99 APPENDICES.........................................................127 1. Number of programs.....................................99 A. Acronyms.................................................127 2. Tracking in-lieu-fee activity..........................100 B. Definitions...............................................128 3. Status of programs.......................................101 C. List of wetland mitigation banks, in-lieu-fee 4. Impact limits ..............................................102 mitigation programs, and umbrella banks 5. Accountability..........................................102 by state........................................................133 6. Site selection...............................................105 D. Bibliography of authorizing instruments.....145 7. Stream impacts............................................107 E. Wetland mitigation banking and in-lieu-fee 8. Fee assessment.............................................107 mitigation laws, regulations, and 9. In-lieu-fee mitigation replacement ratios.....108 guidelines.................................................165 10. In-lieu-fee program service areas.................109 F. Wetland mitigation banks—data ................170 11. Timing of in-lieu-fee mitigation..................110 G. Umbrella mitigation banks—data...............182 12. Use of in-lieu-fee
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