EPA and the US Army Corps of Engineers have issued rules relating to compensatory mitigation for wetlands destruction, effective June 19. The rule can be found at http://www.epa.gov/EPA-WATER/2008/April/Day-10/

While West Virginia does not have many wetlands in the traditional sense of swamps or bogs, the mitigation rules are extremely important for the coal mining industry, which often must compensate for destruction of streams caused by valley fills. Valley fills are deposits of excess overburden removed during surface mining, which must necessarily be placed in streams (often ephemeral or intermittent streams) near the surface mine. Compensatory mitigation is often required for the loss of those . One way to do that is to construct wetlands elsewhere, improve stream habitat, or purchase credits from someone who has already constructed or repaired wetlands. The rule explains how that can be done.

Some of the introductory text of the rule is set forth below.


SUMMARY: The U.S. Army Corps of Engineers (the Corps) and the
Environmental Protection Agency (EPA) are issuing regulations governing
compensatory mitigation for activities authorized by permits issued by
the Department of the Army. The regulations establish performance
standards and criteria for the use of permittee-responsible
compensatory mitigation, mitigation banks, and in-lieu programs to
improve the quality and success of compensatory mitigation projects for
activities authorized by Department of the Army permits.
This rule improves the planning, implementation and management of
compensatory mitigation projects by emphasizing a watershed approach in
selecting compensatory mitigation project locations, requiring
measurable, enforceable ecological performance standards and regular
monitoring for all types of compensation and specifying the components
of a complete compensatory mitigation plan, including assurances of
long-term protection of compensation sites, financial assurances, and
identification of the parties responsible for specific project tasks.
This rule applies equivalent standards to permittee-responsible
compensatory mitigation, mitigation banks and in-lieu fee mitigation to
the maximum extent practicable. Since a mitigation bank must have an
approved mitigation plan and other assurances in place before any of
its credits can be used to offset permitted impacts, this rule
establishes a preference for the use of mitigation bank credits, which
reduces some of the risks and uncertainties associated with
compensatory mitigation. This rule also significantly revises the
requirements for in-lieu fee programs to address concerns regarding
their past performance and equivalency with the standards for
mitigation banks and permittee-responsible compensatory mitigation.
DATES: The effective date is June 9, 2008.
ADDRESSES: Headquarters, U.S. Army Corps of Engineers, Operations and
Regulatory Community of Practice, 441 G Street, NW., Washington, DC
20314-1000. Headquarters, U.S. Environmental Protection Agency,
Wetlands Division, Mail code 4502T, 1200 Pennsylvania Ave, NW.,
Washington, DC 20460.
The Corps and EPA have established a docket for this action under
Docket ID No. EPA-HQ-OW-2006-0020. All documents in the docket are
listed on the http://www.regulations.gov web site. Although listed in
the index, some information is not publicly available, e.g., CBI or
other information whose disclosure is restricted by statute. Certain
other material, such as copyrighted material, is not placed on the
Internet and will be publicly available only in hard copy form.
Publicly available docket materials are available either electronically
through http://www.regulations.gov or in hard copy at the Water Docket,
EPA/DC, EPA West, Room 3334, 1301 Constitution Ave., NW., Washington,
DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday
through Friday, excluding legal holidays. The telephone number for the
Public Reading Room is (202) 566-1744, and the telephone number for the
Water Docket is (202) 566-2426.
FOR FURTHER INFORMATION CONTACT: Mr. David Olson at 202-761-4922 or by
e-mail at david.b.olson@usace.army.mil, or Mr. Palmer Hough at 202-566-
1374 or by e-mail at hough.palmer@epa.gov. Additional information can
also be found at the Corps Headquarters Regulatory Program webpage at:
http://www.usace.army.mil/cw/cecwo/reg/index.html or the EPA
compensatory mitigation webpage at: http://www.epa.gov/wetlandsmitigation.
SUPPLEMENTARY INFORMATION:
I. Background
II. General Comments and Responses
A. Overview
B. Most Frequently Raised Issues
1. Section 404(b)(1) Guidelines
2. Compensatory Mitigation Standards for Streams
3. Discretionary Language
4. Watershed Approach
5. In-Lieu Fee Programs
C. Other General Comments
III. In-Lieu Fee Programs
IV. Compliance With Section 314 of the NDAA
V. Organization of the Final Rule
VI. Discussion of Specific Sections of the Final Rule
VII. Administrative Requirements
I. Background
Compensatory mitigation involves actions taken to offset
unavoidable adverse impacts to wetlands, streams and other aquatic
resources authorized by Clean Water Act section 404 permits and other
Department of the Army (DA) permits. As such, compensatory mitigation
is a critical tool in helping the federal government to meet the
longstanding national goal of ``no net loss'' of wetland acreage and
function. For impacts authorized under section 404, compensatory
mitigation is not considered until after all appropriate and
practicable steps have been taken to first avoid and then minimize
adverse impacts to the aquatic ecosystem pursuant to 40 CFR part 230
(i.e., the CWA Section 404(b)(1) Guidelines).
Compensatory mitigation can be carried out through four methods:
the restoration of a previously-existing wetland or other aquatic site,
the enhancement of an existing aquatic site's functions, the
establishment (i.e., creation) of a new aquatic site, or the
preservation of an existing aquatic site. There are three mechanisms
for providing compensatory mitigation: permittee-responsible
compensatory mitigation, mitigation banks and in-lieu fee mitigation.
Permittee-responsible mitigation is the most traditional form of
compensation and continues to represent the majority of compensation
acreage provided each year. As its name implies, the permittee retains
responsibility for ensuring that required compensation activities are
completed and successful. Permittee-responsible mitigation can be
located at or adjacent to the impact site (i.e., on-site compensatory
mitigation) or at another location generally within the same watershed
as the impact site (i.e., off-site compensatory mitigation).
Mitigation banks and in-lieu fee mitigation both involve off-site
compensation activities generally conducted by a third party, a
mitigation bank sponsor or in-lieu fee program sponsor. When a
permittee's compensatory mitigation requirements are satisfied by a
mitigation bank or in-lieu fee program, responsibility for ensuring
that required compensation is completed and successful shifts from the
permittee to the bank or in-lieu fee sponsor. Mitigation banks and in-
lieu fee programs both conduct consolidated aquatic resource restoration,
enhancement, establishment and preservation projects; however, under
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current practice, there are several important differences between in-
lieu fee programs and mitigation banks.
First, in-lieu fee programs are generally administered by state
governments, local governments, or non-profit non-governmental
organizations while mitigation banks are usually (though not always)
operated for profit by private entities. Second, in-lieu fee programs
rely on fees collected from permittees to initiate compensatory
mitigation projects while mitigation banks usually rely on private
investment for initial financing. Most importantly, mitigation banks
must achieve certain milestones, including site selection, plan
approval, and financial assurances, before they can sell credits, and
generally sell a majority of their credits only after the physical
development of compensation sites has begun. In contrast, in-lieu fee
programs generally initiate compensatory mitigation projects only after
collecting fees, and there has often been a substantial time lag
between permitted impacts and implementation of compensatory mitigation
projects. Additionally, in-lieu fee programs have not generally been
required to provide the same financial assurances as mitigation banks.
For all of these reasons, there is greater risk and uncertainty
associated with in-lieu fee programs regarding the implementation of
the compensatory mitigation project and its adequacy to compensate for
lost functions and services.
As noted in the preamble for the March 2006 proposal, the majority
of the existing guidance regarding compensatory mitigation and the use
of these three mechanisms for providing compensation exists in a number
of national guidance documents released by the Corps and EPA over the
past seventeen years (sometimes in association with other federal
agencies such as the U.S. Fish and Wildlife Service and the National
Marine Fisheries Service). Since these guidance documents were
developed at different times, and in different regulatory contexts,
concerns have been raised regarding the consistent, predictable and
equitable interpretation and application of these guidance documents.
In November 2003, Congress called for the development of regulatory
standards and criteria for the use of compensatory mitigation in the
section 404 program.
Section 314 of the National Defense Authorization Act (NDAA) for
Fiscal Year 2004 (section 314) requires the Secretary of the Army,
acting through the Chief of Engineers, to issue regulations
``establishing performance standards and criteria for the use,
consistent with section 404 of the Federal Water Pollution Control Act
(33 U.S.C. 1344, also known as the Clean Water Act), of on-site, off-
site, and in-lieu fee mitigation and mitigation banking as compensation
for lost wetlands functions in permits issued by the Secretary of the
Army under such section.'' This provision also requires that those
regulations, to the maximum extent practicable, ``maximize available
credits and opportunities for mitigation, provide flexibility for
regional variations in wetland conditions, functions and values, and
apply equivalent standards and criteria to each type of compensatory
mitigation.''
In response to this directive, the U.S. Army Corps of Engineers and
the U.S. Environmental Protection Agency (the agencies) published a
proposed rule in Part II of the March 28, 2006, issue of the Federal
Register (71 FR 15520), with a 60-day public comment period. As a
result of several requests, the Corps and EPA extended the comment
period by an additional 30 days. The comment period ended on June 30, 2006.
In the preamble to the March 2006 proposal, the agencies noted
their decision, in light of their respective statutory roles in the
section 404 program, to pursue this rulemaking as a joint effort
between the Corps and EPA. The preamble also discussed the Corps's
decision to develop these standards for all DA permits which could
potentially require compensatory mitigation. Thus, in addition to Clean
Water Act section 404 permits, these standards also apply to DA permits
issued under sections 9 and 10 of the Rivers and Harbors Act of 1899.
Finally, the preamble also discussed why these standards should apply
to compensatory mitigation for impacts to streams and other open waters
in addition to wetlands.
As discussed in the preamble to the March 2006 proposal, in 2001
the National Research Council (NRC) released a comprehensive evaluation
of the effectiveness of wetlands compensatory mitigation required under
section 404 of the Clean Water Act. This report noted concerns with
some past wetland compensatory mitigation and provided recommendations
for the federal agencies, states, and other parties to improve
compensatory mitigation. This report was an important resource in the
development of today's rule.