Mitigation Banking Rule and Procedure Synopsis

Contents

• Legal Authority
• Mitigation Bank Operators
• Procedure
• Mitigation Bank Permitting Requirements
• Permit Application Requirements
• Mitigation Bank Permits
• Mitigation Bank Service Areas
• Mitigation Credits and Ledgers
• Credit Release
• Credit Use (debit, withdrawn)
• How to Use a Mitigation Bank for Permit Impacts or (PowerPoint Presentation)

Legal Authority

The Environmental Reorganization Act of 1993 (Section 373.4135, F.S.) directed the department and the water management districts (WMDs) to adopt rules governing mitigation banking throughout the state. The department’s mitigation banking rule went into effect on February 2, 1994. This rule, as modified from time to time, is the basis for permitting mitigation banks by the department, St. Johns River Water Management District, Southwest Florida Water Management District and South Florida Water Management District.

Mitigation Bank Operators

Both public and private entities are eligible to set up and operate a mitigation bank if they can show sufficient legal interest in the property to operate the bank and can meet the financial responsibility requirements of the rule. Special provisions apply to water management district and DEP operated banks.

Procedure

Mitigation banks are permitted by the department or one of the water management districts that have adopted rules, based on the location of the bank and activity-based considerations. Additionally, a mitigation bank requires federal authorization in the form of a Mitigation Bank Instrument (MBI) signed by several agencies, with the U.S. Army Corps of Engineers as lead. The mitigation bank applicant is strongly encouraged to have at least one pre-application meeting with an Interagency Review Team (IRT), consisting of all state and federal agencies that will be involved in processing the permit. The agencies that would generally make up the IRT are:

• U.S. Army Corps of Engineers, Jacksonville District (Corps)
• National Marine Fisheries Service (NMFS)
• U.S. Fish and Wildlife Service (FWS)
• U.S. Environmental Protection Agency (EPA)
• Florida Fish and Wildlife Conservation Commission (FWC)
• Florida Department of Environmental Protection (DEP) or
• St. Johns River Water Management District or
• South Florida Water Management District or
• Southwest Florida Water Management District

The applicant benefits from participation in the joint state/federal process by getting feedback and consensus from all agencies involved in permitting. For pre-application review, the applicant should provide, at minimum, the information on the federal prospectus checklist. This is the information that the IRT requires for initial review in order to provide technical and policy-level guidance regarding the feasibility of the proposed bank.

Mitigation Bank Permitting Requirements

Section 373.4136(1) establishes the following requirements for a mitigation bank:

• improve ecological conditions of the regional watershed
• provide viable and sustainable ecological and hydrological functions for the proposed mitigation service area
• be effectively managed in the long term
• not destroy areas with high ecological value
• achieve mitigation success
• be adjacent to lands that will not adversely affect the long-term viability of the mitigation bank due to unsuitable land uses or conditions

Permit Application Requirements

Chapter 62-342.450, F.A.C., specifies the information that must be included in a mitigation bank permit application to demonstrate that the above criteria are met. The following information is required:

1. A description of the location of the proposed mitigation bank, including:

• a map at regional scale showing the project area in relation to the regional watershed and proposed mitigation service area
• a vicinity map showing the project area in relation to adjacent lands and offsite areas of ecological or hydrologic significance that could affect the long-term viability or ecological value of the bank
• an aerial photograph identifying boundaries of the project area
• a highway map showing points of access to the mitigation bank for site inspection
• a legal description of the proposed mitigation bank

2. A description of the ecological significance of the proposed mitigation bank in relation to the regional watershed in which it is located.

3. A description and assessment of current site conditions, which shall include:

• soils map of the project area
• a topographic map of the project area and adjacent hydrologic contributing and receiving areas
• a hydrologic features map of the project area and adjacent hydrologic contributing and receiving areas
• current hydrologic conditions in the project area; a vegetation map of the project area including acreage of each vegetation type
• ecological benefits currently provided to the regional watershed by the project area
• adjacent lands, including existing land uses and conditions, projected land uses according to comprehensive plans adopted pursuant to Chapter 163, F.S., by local governments having jurisdiction, and any special designations or classifications associated with adjacent lands or waters
• a disclosure by the applicant of any material fact which would affect the use of the property

4. A mitigation plan describing the actions proposed to establish, construct, operate, manage and maintain the mitigation bank, which shall include:

• construction-level drawings detailing proposed topographic alterations and all structural components associated with proposed activities
• proposed construction activities, including a detailed schedule for implementation
• the proposed vegetation planting scheme and detailed schedule for implementation
• a proposed monitoring plan to demonstrate mitigation success
• measures to be implemented during and after construction to avoid adverse impacts related to proposed activities
• a detailed long-term management plan including all aspects of operation and maintenance, including water management practices, vegetation establishment, invasive and nuisance species control, fire management, and control of access.

5. An assessment of anticipated changes in ecological value as a result of proposed mitigation actions which shall include:

• a description of anticipated site conditions in the mitigation bank after the mitigation plan is successfully implemented, including permit drawings of proposed vegetation and hydrologic conditions
• a comparison of current fish and wildlife habitat to expected habitat after the mitigation plan is successfully implemented, including permit drawings of proposed habitat types
• a description of the expected ecological benefits to the regional watershed

6. Evidence of sufficient legal or equitable interest in the property which is to become the mitigation bank. The applicant needs to show that they can preserve the property in perpetuity, either through a perpetual conservation easement, or by deeding the property fee simple to the DEP. This would include the following information:

• A survey of the property. The survey must be certified, by a land surveyor registered in the State of Florida, to meet the requirements of the department, and the minimum technical standards set forth by the Florida Board of Professional Land Surveyors in Chapter 21 HH-6, F.A.C., pursuant to Section 472.027, F.S.
• A map of the project site that depicts all encumbrances. All easements and encumbrances are explained in an accompanying title opinion. Any encumbrances that could have a negative effect on the mitigation bank project must be extinguished or subordinated to the easement.
• A certified appraisal of the market value of the property to determine the appropriate mount of title insurance
• A title commitment and owner's policy in an amount at least equal to the fair market value of the real property
• A legal description and environmental audit

7. Draft documentation of financial responsibility documentation and financial assurance mechanism for 1) the construction and implementation of the bank, and 2) the perpetual management and maintenance of the bank. See 62-342.700, F.A.C., for complete details.

8. Any additional information that may be necessary to evaluate whether the proposed mitigation bank meets the criteria listed in this chapter.

Each application should include the above information and any other information required for an application under the Environmental Resource Permit (ERP) rules, as modified from time to time.

Mitigation Bank Permits

The mitigation bank permit authorizes the implementation and operation of the mitigation banks and sets forth the rights and responsibilities of the banker and the department for the implementation, management, maintenance and operation of the mitigation bank. These permits are perpetual, unless it is not initiated in the first five years of the permit, in which case the permit expires. Mitigation banks may be phased provided each phase will independently meet the criteria of 373.4136 F.S and 62-342 F.A.C.
In accordance with Chapter 62-342.750(1), F.A.C., the mitigation bank permit shall include the following, at a minimum:

• A description of the Mitigation Service Area
• Requirements for the execution and recording of the conservation easement or conveyance of the fee interest as provided in Chapter 62-342.650, F.A.C.
• The financial responsibility mechanisms which must be employed by the banker, including the procedure for drawing on the financial mechanisms by the department, and provisions for adjustment of the financial responsibility mechanism
• A schedule for implementation of the mitigation bank, and any phases therein
• A credit evaluation to determine the potential number and type of mitigation credits available for use when the mitigation bank, or phase thereof, is deemed successful
• Criteria and schedule for mitigation credit release prior to success (credit release schedule)
• A ledger for tracking credit releases and uses (debits)
• The success criteria by which the mitigation bank will be evaluated
• The long-term management requirements for the mitigation bank

Mitigation Service Area

During the permitting of a mitigation bank, the permitting agency and IRT will determine the Mitigation Service Area (MSA), which is the geographic region within which the bank could reasonably be expected to offset impacts. The MSA boundary determination generally starts with the regional watershed in which the bank lies, but may be larger or smaller depending upon the ecological and hydrological location and value.

Mitigation Credits and Ledgers

During the permitting of a mitigation bank, the permitting agency and IRT will determine the potential number and type(s) of credits the bank may achieve upon success. A credit is defined as the ecological equivalent of one acre of successful creation/restoration, i.e., restoring one acre with no wetland function to optimal wetland function. This assessment is conducted using UMAM or, for permits issued prior to UMAM, by another functional assessment method, such as Wetland Rapid Assessment Method (WRAP).

Every mitigation bank permit contains a ledger that specifies three things:

• The total number and type of potential credits awarded to the bank
• An up-to-date accounting of the credits that are available for sale or use
• An accounting of the number and type of credits used for each impact permit

The agency that issued the mitigation bank permit is responsible for maintaining the ledger. A ledger reflects both incremental releases of credit (type and number) and use of those credits.

Credit Release

Mitigation credits are made available to the mitigation banker for sale or use through a "release" modification by the agency that issued the mitigation bank permit. Mitigation credits can be released only after the site is preserved and financial assurances are in effect. The initial release of credits generally occurs when the property is conveyed or a conservation easement is recorded.

Credits are then released incrementally, as specified by the credit release schedule in the permit, based on implementation and performance criteria. However, no credits for freshwater wetland creation areas can be released until they have met the final success criteria in the permit (62-342.470(3), F.A.C.).

To get credits released, the permittee submits a written minor modification request for credit release to the department, along with supporting documentation and a minor modification fee. The department reviews the documentation and conducts a site visit with the IRT to confirm that performance criteria have been met, and will issue the release as a modification to the permit or deny the release if the criteria are not met.

Credit Use (debit, withdrawal)

Mitigation credits that have been released to the banker are then available to be withdrawn from the mitigation credit ledger and used, as specified within an impact permit or consent order, as mitigation to offset impacts. Mitigation credits are withdrawn from the ledger through a minor modification of the mitigation bank permit. No fee is required for this minor modification. Because the withdrawals must be accomplished through a permit modification, only the mitigation banker can authorize the use of credits from their bank.

If at any time the banker is not in material compliance with the terms of the mitigation bank permit, no mitigation credits may be withdrawn. Mitigation credits shall again be available for withdrawal when the banker comes back into compliance.

How to Use a Mitigation Bank for Impact Permits

To use mitigation credits to offset wetland impacts (IMPACT), the impact permit applicant (PERMITTEE), the impact permitting agency (REVIEWER), the banker (BANKER) and the bank ledger-holding agency (AGENCY) must communicate to ascertain whether sufficient numbers and types of mitigation are available and applicable for the impact applicant's use. The details of this process are as follows:

1. REVIEWER works with the PERMITTEE to minimize the project impacts.
2. If REVIEWER determines that mitigation is necessary to offset unavoidable impacts, the PERMITTEE may propose to use mitigation credits from a permitted mitigation bank.
3. REVIEWER determines whether a particular mitigation bank has the type of mitigation that is appropriate to offset the proposed IMPACT. In some cases, a combination of on-site mitigation and participation in a mitigation bank may be appropriate to offset adverse impacts of a project.
4. PERMITTEE and REVIEWER determined if IMPACT falls within the mitigation service area of one or more banks or falls into one of the exceptions stipulated in Ch. 373.4136, F.S.:
   • Projects with adverse impacts partially located within the Mitigation Service Area
   • Linear projects, such as roadways, transmission lines, pipelines, etc.
   • Projects with total adverse impacts of less than one acre in size
5. REVIEWER will determine the number of credits required to offset the impact using the Uniform Mitigation Assessment Method (UMAM) for banks assessed by UMAM or the functional assessment used to evaluate the bank’s credit potential or the Applicant’s Handbook/Basis of Review X.3, where one credit is considered to be equivalent to the ecological value gained by the successful creation of one acre of wetland. REVIEWER may check with the AGENCY ledger regarding credits, but should still require the following.
6. PERMITTEE obtains a contract or other legal obligation from the BANKER to guarantee that the appropriate number and type of credits are available and reserved for the project, and provides this document to the REVIEWER as reasonable assurance of mitigation credit.
7. The impact permit should have a specific condition which states that the mitigation to offset the permitted impacts is in the form of mitigation credits from the specified mitigation bank, such as: To offset impacts to XX acres of X-condition, X-type wetlands, the permittee shall purchase X-number of X-type credits from X-bank. By X-date or prior to any construction or impacts authorized by this permit, the permittee shall provide the department/district with documentation that X-number of X-type credits have been deducted from the credit ledger of the X-bank. IMPACT permit is issued.
8. PERMITTEE closes contract with BANKER.
9. BANKER submits ledger debit request to AGENCY along with pertinent portions of impact permit: permit #, issue date, permittee, number and type of credits, and REVIEWER contact information.
10. AGENCY issues ledger debit modification and copies the REVIEWER or compliance person at the impact permitting agency, including the impact permit number.

For additional information, please contact a member of the SLERC Mitigation Banking section.