Washington, D.C. – (RealEstateRama) — A recently released Presidential Memorandum (link is external) speaks to how federal agencies should, in their environmental reviews and permitting, address impacts on natural resources caused by construction and development – a process called “mitigation.” The new policy broadens the federal government’s 26-year-old “no net loss” wetlands policy by expanding that concept to any natural resource and encouraging agencies to replace those resources even before construction begins.
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Specifically, President Obama has directed the U.S. Army Corps of Engineers (Corps), the U.S. Environmental Protection Agency (EPA) and other federal agencies “to encourage advance compensation, including mitigation bank-based approaches, in order to provide resource gains before harmful [environmental] impacts occur” and to promote “private investment” and “public-private partnerships” to achieve restoration and conservation goals.
The directives appear to encourage financial-incentive-based tools that would, for example, generate “credits” that developers could use to offset adverse impacts of proposed construction projects. This calls into question how agencies will evaluate a construction project’s potential impacts and set expectations for how those impacts should be addressed – and to what extent. In implementing mitigation policies and programs, the Memorandum also states “agencies should take action to increase public transparency … set measurable performance standards … and clearly identify the party responsible for all aspects of required mitigation measures.”
The Memorandum creates no new legal authority. Rather it directs federal agencies to implement new regulatory guidance and rules under existing statutes requiring mitigation.
EPA/Corps Mitigation Rule and Retrospective Review
EPA and the Corps, through a joint rulemaking, finalized mitigation requirements (link is external) back in 2008, applicable to compensatory mitigation, including the use of mitigation banks to offset impacts to WOTUS (i.e., aquatic resources) authorized pursuant to CWA Section 404 discharge permits. The rules, codified at 40 C.F.R. §§ 230.91 – 230.98, could serve as a model for future rules/guidelines that may be promulgated by other federal agencies (e.g., U.S. Fish and Wildlife Service, Bureau of Land Management) and federal trustees pursuant to President Obama’s Memorandum.
More recently, in November 2015, EPA and the Corps released a report summarizing the progress made in implementing their 2008 mitigation rule (link is external), including analysis of trends in aquatic resource impacts and compensation from 2010 through 2014 and trends in mitigation banking and in-lieu-fee programs from the mid-1990’s through 2014. The full report and a four-page overview are on the Corps’ website – click here (link is external). The review found that permittees have increasingly relied on mitigation banks and in-lieu fees for compensation since 2008, and that permit processing time decreases when these forms of compensation are used.
For more information, please contact Leah Pilconis, senior environmental advisor to AGC, at (link sends e-mail).