Environmental Review Toolkit
Water, Wetlands, and Wildlife

Information for FHWA field offices on National Wetlands Mitigation Action Plan and Regulatory Guidance Letter 02-2

On December 24, 2002 the Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (Corps) released the National Wetlands Mitigation Action Plan (Action Plan). Concurrently, the Corps published Regulatory Guidance Letter (RGL) 02-2, "Guidance on Compensatory Mitigation Projects for Aquatic Resources Under the Corps Regulatory Program Pursuant to Section 404 of the Clean Water Act and Section 10 of the Rivers and Harbors Act of 1899," which supersedes RGL 01-1 of the same title. The Action Plan and RGL are attached.

Wetlands Mitigation Action Plan

The Action Plan, in which the Department of Transportation is a signatory agency, establishes and affirms the Administration's commitment to the goal of "no net loss" of the nation's wetlands. It represents a 3-year program based on improved mitigation site selection, more effective performance monitoring, and development of interagency mitigation databases which accurately reflect the performance of compensatory mitigation sites. The Action Plan has a near term objective of increasing the functions and values of the nation's wetlands and other aquatic resources. The Action Plan focuses on achieving the objective through combined effects of numerous government programs, including the Section 404 regulatory program and various non-regulatory and private initiatives. The Action Plan also emphasizes a watershed approach to mitigation based on replacement of impacted or lost aquatic functions and values. It establishes deadlines for the Corps and EPA to jointly develop mitigation performance standards and technical guidance (2003, 2005) and a national interagency database and mitigation report card (2005).

The Action Plan commits the agencies to develop additional guidance regarding decisions on mitigation alternatives, such as on-site versus off-site, and in-kind versus out-of-kind by the end of 2003 and the use of vegetated buffers and preservation as mitigation by 2004. The Action Plan also requires that FHWA, in cooperation with the Corps and EPA, develop additional guidance clarifying implementation of the TEA-21 preference for mitigation banking in 2003. Until such guidance is available, the HEPN memoranda titled Wetlands Banking, dated August 13, 2001; Use of Private Wetland Mitigation Banks, dated July 5, 1995, and other memoranda on the FHWA Wetlands website, in concert with 23 CFR 777, Mitigation of Natural Habitats and Wetlands, articulate FHWA policy and requirements for Federal-aid participation in the use of wetland banks and other compensatory mitigation approaches.

The FHWA currently has a wetland accounting database that the Office of Natural Environment, distributed to all field offices in 2001. The database can be used to track the status of permits and associated impacts and mitigation activities and has the capability of tracking impacts and mitigation by area (acres, hectares) and by functional capacity (functional capacity units). Although not currently a requirement, increased use of the database to document wetlands mitigation measures and successes will assist FHWA in meeting future performance measures by providing additional documentation of program mitigation activities, possibly including function and value replacement.

The State DOTs currently report wetland mitigation to FHWA on an acreage basis as part of FHWA's annual performance plan. Since this performance measure was implemented in 1996, FWHA has consistently reported compensatory mitigation ratios well above our Clean Water Action Plan performance goal of 1.5 acres of mitigation for every acre of wetland impacted. Each year since 1996, the program wide average mitigation ratio has been greater than 2:1. The long-term average has been about 2.5:1. For additional information on the database and our wetland mitigation performance reporting, contact Paul Garrett at paul.garrett@fhwa.dot.gov, or (720) 963-3071.

Corps RGL 02-2: Guidance on Compensatory Mitigation Projects

The new RGL supersedes RGL 01-1, issued on October 31, 2001. Many of the important points remain the same. In response to RGL 01-1, FHWA published guidance November 8, 2001, which is available on the FWHA wetlands website. The new RGL re-emphasizes the regulatory program preference for on-site, in-kind, compensatory mitigation where practicable. Additional, interagency guidance will be developed by EPA and the Corps on the appropriate use of off-site, out-of-kind, compensatory mitigation, building on the existing 1990 Corps-EPA MOU on mitigation and the Section 404 (b)(1) guidelines.

Included in the new RGL as Appendix B is The Operational Guidelines for Creating or Restoring Self-Sustaining Wetlands, developed in the National Research Council Report: Compensating for Wetland Losses Under the Clean Water Act, June 2001. These guidelines should be carefully considered in selecting compensatory mitigation alternatives and developing site plans. Additional technical and engineering guidance are found in NCHRP Report 379, Guidelines for the Development of Wetland Replacement Areas, and in the Corps of Engineers Wetlands Engineering Handbook, found at http://www.wes.army.mil/el/wetlands/wlpubs.html.

There are some changes and new areas of emphasis that are outlined and discussed below:

  • The use of a watershed approach is emphasized. Corps field offices are encouraged to consider the resource needs of watersheds where impacts occur, and those in neighboring watersheds, in making mitigation decisions. Such an approach considers the ecosystem context of watersheds, impacts, and mitigation. This is consistent with 23 CFR 777 and FHWA policy regarding mitigation. A mix of habitats (open water, marsh, uplands) in mitigation projects is considered more desirable than a single habitat or wetland type. The RGL re-emphasizes the flexibility in compensatory mitigation, although we expect that Corps field offices will place new emphasis on on-site, in-kind compensation.

  • The use of functional assessment to determine wetlands impacts is re-emphasized. The trend toward the use of such methods as the HGM approach will increase, and development of new HGM models will be necessary to meet the need for functional replacement in mitigation. Area will continue to be used as a surrogate for measurement of functions where functional models are not available to support assessment.

  • The FHWA policy and regulations require that Federal-aid participation in mitigation be based on the actual impacts of the highway project. The RGL continues to place substantial importance of the inclusion of buffer areas for compensatory mitigation sites. The inclusion of buffer areas in mitigation should be based on increased functions of wetland sites, either existing or created/enhanced mitigation, and should receive commensurate credit. There are no well-documented methods of ascribing wetland functional credits to buffer areas; however, it remains that to be fully functional, most wetlands require the immediate presence of other supporting, non-wetland habitat types. The presence of these buffers can increase the value and functional capacity of wetlands by several-fold. Therefore, we believe buffer areas can be part of a reasonable wetland mitigation solution, but demands for buffer areas as permit conditions that may far exceed what should be needed to enhance the wetland value of the mitigation site should be discussed with Headquarters prior to acceptance for Federal-aid participation. Where practicable and feasible, impacts to wetland buffer areas should be avoided and minimized to maintain maximum functional capacity of existing wetlands and other aquatic resources.

  • Mitigation of stream impacts is emphasized. This is consistent with FHWA efforts to restore impacted stream resources and provide new training in restoration approaches. The RGL also indicates that mitigation credit can be given for inclusion of riparian areas within a mitigation project, depending on the contribution to aquatic functions in the watershed. Accordingly, costs related to including these areas should be considered eligible for participation, in so far as they contribute to compensating for impacts due to a Federal-aid project.

  • The RGL states that preservation of existing wetlands is only to be given credit when accomplished in conjunction with creation, enhancement, or restoration. Often preservation of existing wetlands can be accomplished in conjunction with other approaches, and can affect significant gains in wetlands functions and values.

  • Divisions and State DOTs should be careful in developing mitigation agreements to ensure that the regulatory office will allow appropriate debiting of the mitigation to meet compensation needs. Mitigation agreements involving consolidated mitigation, such as banks, should clearly state the circumstances under which credits can be used from the bank. Banks and other consolidated mitigation should only be developed when there is a substantiated need for the credits and there is clear agreement by the regulatory agencies that the mitigation credits can be used for anticipated impacts.

  • The RGL requires the following for approval of mitigation after construction: 1) Corps' approval of the mitigation plan 2) a secured project mitigation site 3) appropriate financial assurances, and 4) legally protected, adequate water rights where necessary.

  • Compensatory mitigation plans should have the following elements:

    • Baseline information
    • Goals and objectives
    • Financial assurances
    • Site selection criteria
    • Work Plan
    • Performance standards
    • Contingency plans
    • Monitoring and long term management program
  • Federal-aid participation in long-term management costs remains an issue. FHWA policy has been that long-term management costs beyond a necessary site establishment period (1-3 years in most cases and up to 20 years in extreme cases) were not generally eligible for participation. Participation in such costs should be considered on a case-by-case basis, with input from Headquarters until further policy can be clarified.

  • In general, financial assurances have not been necessary for Federal-aid highway projects, due to the ongoing nature of the program. We do not anticipate that such assurances, in the form of performance bonds or other similar measures, will be necessary in the future. Should financial assurances become an issue within a Corps jurisdiction, elevation to Headquarters should be initiated.

Questions and feedback should be directed to Mike Ruth (Mike.Ruth@dot.gov, 202-366-9509).

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