By Robert J. Uram and Chase Ensign

On May 15, 2008, the Army Corps of Engineers issued a public notice describing and seeking public comment on five templates that seek to standardize the process of obtaining approvals of proposals for mitigation banks.  The templates, which are available for use now, should expedite the review and approval of mitigation bank proposals to offset impacts to waters of the United States under the Section 404 permitting program of the Clean Water Act and Section 10 of the Rivers and Harbors Act of 1899.  The templates are the products of many years of deliberation between the Corps, the Environmental Protection Agency, the Fish and Wildlife Service, the California Resources Agency, the National Marine Fisheries Service, the Natural Resources Conservation Service, and the California Department of Fish and Game.  The documents define the parameters of what credits are available for each mitigation bank and how the mitigation bank will operate.

Mitigation banks enable landowners to offset the unavoidable adverse effects of development projects to waters of the United States.  They were given elevated roles in the mitigation process  by a new federal rule that took effect on June 12, 2008.  70 Fed. Reg. 19594.  This rule reflects the Corps’ view that there are advantages to consolidating mitigation projects in rural and undeveloped areas (where mitigation appears to provide more sustainable ecological benefits).

Goal

The Corps and other agencies anticipate that the new approval process will provide greater transparency and predictability to the mitigation bank review process.  Previously, each of the involved agencies has employed varying standards in making mitigation determinations.  Through this coordinated effort, these agencies have now committed to combine and synchronize the review process.

The implementation of these templates will likely affect more than just the mitigation bank approval process.  For example, the Long Term Management Plan template, which is intended to ensure the long-term monitoring of mitigation banks, could have application to any project requiring agency approval and subsequent oversight.

Templates

Click here for these documents.

1. Standard Bank Enabling Instrument (BEI) template: Sets forth the terms of the agreement regarding the use, maintenance, and operation of the Bank Property.

2. Conservation Easement Deed (CE) template: Ensures that the Bank Property will be retained forever in its natural restored condition as set forth in the BEI, the Development Plan, and the Management Plan.

3. Long Term Management Plan template: Establishes goals, priorities, and tasks to ensure that the Bank Property will be managed and maintained in perpetuity.

4. Property Assessment on Warranty template: Provides a summary and explanation of each recorded or unrecorded lien or encumbrance on, or interest in, the Bank Property.

5. Mitigation Banking Checklists: Contains descriptions of requirements for submitting a Prospectus or a Draft Bank Enabling Instrument to initiate the development of a mitigation banking proposal in California.

Though not rules themselves, these documents will likely form the basis for agency decisions regarding mitigation banking proposals.  Mitigation banks, developers and other members of the regulated community should be careful to review and understand the standards contained in the templates as they will affect future agency actions.

Next Step

Although the templates are available for use now, the Corps has indicated that the agencies remain open to comments and suggested changes.  The agencies have also invited interested parties to attend a facilitated implementation meeting on July 18, 2008, to provide an opportunity to provide feedback.  The meeting will be in Sacramento at 10:00 a.m. in the Cafeteria Conference Rooms next to the offices of U. S. Fish & Wildlife Service (2800 Cottage Way).

For more information please contact Robert Uram and Chase Ensign.  Robert J. Uram is a partner in the Real Estate, Land Use and Environmental Practice Group in the firm’s San Francisco office.