Maryland projects stall without compensation options

Maryland’s ILF program had federal approval but it expired on June 9, 2013 so it can no longer be used to satisfy wetland mitigation requirements for federal permits in Maryland. Maryland has only one approved wetland mitigation bank in the state; compare that to Virginia’s 153 active wetland and stream banks. The lack of banks (due to huge regulatory barriers) and ILF program that lacks federal approval, combined with the significant and costly challenges posed by finding suitable off-site mitigation areas and the fact that not all sites have suitable on-site mitigation opportunities, results in applicants with stalled permit applications because they don’t have a viable compensation option. In fact, MDE noted in a 2011 article that Maryland’s “…success [in no net loss of wetland acreage] is in large part due to MDE’s ‘in-lieu fee’ (ILF) programs…”²

The 2008 Corps/EPA Mitigation Rule lists the preference hierarchy for compensation:

1) Wetland bank credits;

2) ILF credits;

3) Permittee-responsible mitigation;

4) On-site permittee responsible mitigation; and

5) Off-site permittee-responsible mitigation.

Currently, the State ILF program can be used to compensate for impacts to isolated wetlands not regulated by the Corps or for projects where the Corps has waived its mitigation requirement and is typically only acceptable for projects with impacts to less than 5,000 square feet of wetlands and 2,000 linear feet of streams.³

Maryland on the Move

The most critical issue at this point is getting the ILF program approved for all impacts to Waters of the U.S. If the Maryland Department of the Environment (MDE), the Corps, and other members of the Interagency Review Team (IRT) can work together to expeditiously sculpt and approve an effective program it will be a major step in the right direction. The next task should be addressing the barriers to mitigation banking in Maryland. Nationwide, banks and in-lieu-fee programs have halved the time to procure a permit.⁴ Obtaining permits in Maryland is unnecessarily delayed by the lack of banks and no Federally-approved in lieu fee program.

Huge regulatory barriers in Maryland have left the state with a lone banking option, and it’s located in Dorchester County and has a limited service area. In contrast, Virginia has 153 wetland and stream banks selling credits across the state, with 24 more pending approval and 45 already sold out.

Why the stark difference? Maryland – at this point – lacks a viable mitigation market. Corps and MDE staff’s interest and support for improvements could improve the banking climate. Essential considerations for success include:

•

It will be difficult for Maryland to support a viable mitigation banking program unless all regulatory agencies work together, and with the private sector, to do so.

Save time with banks and ILF programs

The Corps and the EPA commented in the 2008 Mitigation Rule’s preamble, “Securing credits from third-party mitigation providers can help shorten permit processing times, because there is no need to review and approve site-specific mitigation plans for permittee-responsible mitigation. In cases where appropriate third-party mitigation credits are not available, the review and approval of permittee-responsible mitigation projects should be more timely, because this rule establishes clear guidelines and requirements for those compensatory mitigation projects.”⁵

How much longer?

Corps staff stated in the June 10 meeting that MDE provided a draft Prospectus for a new State ILF program to the Corps in 2012 and it generated a considerable number of agency comments. MDE submitted its revised Prospectus on August 5, 2015 and is working concurrently on a draft banking instrument in order to be prepared for the next step in the process. Now the Corps will review for it completeness as well as adherence to the 2008 Mitigation Rule. When deemed complete, the Prospectus will be put out on a 30-day Public Notice and be reviewed by the IRT, which is chaired by the Corps and comprised of the U.S. Environmental Protection Agency, the U.S. Fish and Wildlife Service, NOAA Fisheries, and the Natural Resources Conservation Service.

According to MDE representatives, Maryland is on the move. Regardless of the comments it receives from the Corps, the other IRT members, and the public – MDE is committed to developing a Prospectus that not only reconfigures its ILF program, but also gains federal approval. Furthermore, within weeks of accomplishing that goal, MDE anticipates submitting a Draft Wetland Mitigation Banking Instrument to the Corps and IRT. Once the Draft Instrument is reviewed and approved, MDE can then prepare and submit the Final Wetland Mitigation Banking Instrument for IRT and Corps’ review and approval. Until that time, many applicants with Federally-required wetland mitigation will continue to have difficulty obtaining a Corps’ wetland permit. MDE staff estimate that it will take approximately two years to get the ILF program approved; however, the 2008 Rule shortened the approval process to 225 days⁶ (see Corps Q & A for 2008 Rule). Ideally, MDE and the Corps could make it a priority to approve at least an interim program in 3 to 4 months.

Encouraging Progress

You can contact your Maryland legislative representatives and your U.S. Congress members to encourage MDE and the Corps to cut the red tape and get the ILF approved first. And most critically - file supporting comments with the Corps prior to October 9, 2015.

WSSI continues to monitor the ILF program process and will report on any new developments in Field Notes. For more information, please contact Mike Klebasko, Ken Wallis, Dan Lucey, or Mike Rolband.

 

¹Birnie, Katherine (Ecosystem Investment Partners). May 8, 2015. “State of the Market: National Market Analysis and Overview.” Presentation at 2015 National Mitigation & Ecosystem Banking Conference. Orlando, Florida.

²Neff, Kelly. 2011. “MDE works to meet federal requirements for wetland compensation,” eMDE, Volume IV, Number 9. Accessed on July 14, 2015 Click here for the link

³ i.e., projects that qualify for authorization under Maryland’s State Programmatic General Permit, Category A

⁴Birnie, Katherine (Ecosystem Investment Partners). May 8, 2015. “State of the Market: National Market Analysis and Overview.” Presentation at 2015 National Mitigation & Ecosystem Banking Conference. Orlando, Florida.

⁵Compensatory Mitigation for Losses of Aquatic Resources; Final Rule. Federal Register, Vol. 73, No. 70, Page 19603. April 10, 2008

⁶for a program without substantial concerns (endangered species, tribal concerns, or historic properties), or up to 330 days for a site that requires dispute resolution