[Federal Register Volume 60, Number 228 (Tuesday, November 28, 1995)]
[Notices]
[Pages 58605-58614]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-28907]



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DEPARTMENT OF DEFENSE

Department of the Army
Corps of Engineers

ENVIRONMENTAL PROTECTION AGENCY

DEPARTMENT OF AGRICULTURE

Natural Resources Conservation Service

DEPARTMENT OF THE INTERIOR

Fish and Wildlife Service

DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration


Federal Guidance for the Establishment, Use and Operation of 
Mitigation Banks

AGENCIES: Corps of Engineers, Department of the Army, DOD; 
Environmental Protection Agency; Natural Resources Conservation 
Service, Agriculture; Fish and Wildlife Service, Interior; and National 
Marine Fisheries Service, National Oceanic and Atmospheric 
Administration, Commerce.

ACTION: Notice.

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SUMMARY: The Army Corps of Engineers (Corps), Environmental Protection 
Agency (EPA), National Resources Conservation Service (NRCS), Fish and 
Wildlife Service (FWS) and National Marine Fisheries Service (NMFS) are 
issuing final policy guidance regarding the establishment, use and 
operation of mitigation banks for the purpose of providing compensation 
for adverse impacts to wetlands and other aquatic resources. The 
purpose of this guidance is to clarify the manner in which mitigation 
banks may be used to satisfy mitigation requirements of the Clean Water 
Act (CWA) Section 404 permit program and the wetland conservation 
provisions of the Food Security Act (FSA) (i.e., ``Swampbuster'' 
provisions). Recognizing the potential benefits mitigation banking 
offers for streamlining the permit evaluation process and providing 
more effective mitigation for authorized impacts to wetlands, the 
agencies encourage the establishment and appropriate use of mitigation 
banks in the Section 404 and ``Swampbuster'' programs.

DATES: The effective date of this Memorandum to the Field is December 
28, 1995.

FOR FURTHER INFORMATION CONTACT: Mr. Jack Chowning (Corps) at (202) 
761-

[[Page 58606]]
1781; Mr. Thomas Kelsch (EPA) at (202) 260-8795; Ms. Sandra Byrd (NRCS) 
at (202) 690-3501; Mr. Mark Miller (FWS) at (703) 358-2183; Ms. Susan-
Marie Stedman (NMFS) at (301) 713-2325.

SUPPLEMENTARY INFORMATION: Mitigating the environmental impacts of 
necessary development actions on the Nation's wetlands and other 
aquatic resources is a central premise of Federal wetlands programs. 
The CWA Section 404 permit program relies on the use of compensatory 
mitigation to offset unavoidable damage to wetlands and other aquatic 
resources through, for example, the restoration or creation of 
wetlands. Under the ``Swampbuster'' provisions of the FSA, farmers are 
required to provide mitigation to offset certain conversions of 
wetlands for agricultural purposes in order to maintain their program 
eligibility.
    Mitigation banking has been defined as wetland restoration, 
creation, enhancement, and in exceptional circumstances, preservation 
undertaken expressly for the purpose of compensating for unavoidable 
wetland losses in advance of development actions, when such 
compensation cannot be achieved at the development site or would not be 
as environmentally beneficial. It typically involves the consolidation 
of small, fragmented wetland mitigation projects into one large 
contiguous site. Units of restored, created, enhanced or preserved 
wetlands are expressed as ``credits'' which may subsequently be 
withdrawn to offset ``debits'' incurred at a project development site.
    Ideally, mitigation banks are constructed and functioning in 
advance of development impacts, and are seen as a way of reducing 
uncertainty in the CWA Section 404 permit program or the FSA 
``Swampbuster'' program by having established compensatory mitigation 
credit available to an applicant. By consolidating compensation 
requirements, banks can more effectively replace lost wetland functions 
within a watershed, as well as provide economies of scale relating to 
the planning, implementation, monitoring and management of mitigation 
projects.
    On August 23, 1993, the Clinton Administration released a 
comprehensive package of improvements to Federal wetlands programs 
which included support for the use of mitigation banks. At that same 
time, EPA and the Department of the Army issued interim guidance 
clarifying the role of mitigation banks in the Section 404 permit 
program and providing general guidelines for their establishment and 
use. In that document it was acknowledged that additional guidance 
would be developed, as necessary, following completion of the first 
phase of the Corps Institute for Water Resources national study on 
mitigation banking.
    The Corps, EPA, NRCS, FWS and NMFS provided notice [60 FR 12286; 
March 6, 1995] of a proposed guidance on the policy of the Federal 
government regarding the establishment, use and operation of mitigation 
banks. The proposed guidance was based, in part, on the experiences to 
date with mitigation banking, as well as other environmental, economic 
and institutional issues identified through the Corps national study. 
Over 130 comments were received on the proposed guidance. The final 
guidance is based on full and thorough consideration of the public 
comments received.
    A majority of the letters received supported the proposed guidance 
in general, but suggested modifications to one or more parts of the 
proposal. In response to these comments, several changes have been made 
to further clarify the provisions and make other modifications, as 
necessary, to ensure effective establishment and use of mitigation 
banks. One key issue on which the agencies received numerous comments 
focused on the timing of credit withdrawal. In order to provide 
additional clarification of the changes made to the final guidance in 
response to comments, the agencies wish to emphasize that it is our 
intent to ensure that decisions to allow credits to be withdrawn from a 
mitigation bank in advance of bank maturity be make on a case-by-case 
basis to best reflect the particular ecological and economic 
circumstances of each bank. The percentage of advance credits permitted 
for a particular bank may be higher or lower than the 15 percent 
example included in the proposed guidance. The final guidance is being 
revised to eliminate the reference to a specific percentage in order to 
provide needed flexibility. Copies of the comments and the agencies' 
response to significant comments are available for public review. 
Interested parties should contact the agency representatives for 
additional information.
    This guidance does not change the substantive requirements of the 
Section 404 permit program or the FSA ``Swampbuster'' program. Rather, 
it interprets and provides internal guidance and procedures to the 
agency field personnel for the establishment, use and operation of 
mitigation banks consistent with existing regulations and policies of 
each program. The policies set out in this document are not final 
agency action, but are intended solely as guidance. The guidance is not 
intended, not can it be relied upon, to create any rights enforceable 
by any party in litigation with the United States. The guidance does 
not establish or affect legal rights or obligations, establish a 
binding norm on any party and it is not finally determinative of the 
issues addressed. Any regulatory decisions made by the agencies in any 
particular matter addressed by this guidance will be made by applying 
the governing law and regulations to the relevant facts. The purpose of 
the document is to provide policy and technical guidance to encourage 
the effective use of mitigation banks as a means of compensating for 
the authorized loss of wetlands and other aquatic resources.
John H. Zirschky,
Acting Assistant Secretary (Civil Works), Department of the Army.
Robert Perciasepe,
Assistant Administrator for Water, Environmental Protection Agency.
James R. Lyons,
Assistant Secretary, Natural Resources and Environment, Department of 
Agriculture.
George T. Frampton, Jr.,
Assistant Secretary for Fish and Wildlife and Parks, Department of the 
Interior.
Douglas K. Hall,
Assistant Secretary for Oceans and Atmosphere, Department of Commerce.

Memorandum to the Field

Subject: Federal Guidance for the Establishment, Use and Operation of 
Mitigation Banks

I. Introduction

A. Purpose and Scope of Guidance

    This document provides policy guidance for the establishment, use 
and operation of mitigation banks for the purpose of providing 
compensatory mitigation for authorized adverse impacts to wetlands and 
other aquatic resources. This guidance is provided expressly to assist 
Federal personnel, bank sponsors, and others in meeting the 
requirements of Section 404 of the Clean Water Act (CWA), Section 10 of 
the Rivers and Harbors Act, the wetland conservation provisions of the 
Food Security Act (FS) (i.e., ``Swampbuster''), and other applicable 
Federal statutes and regulations. The policies and procedures discussed 
herein are consistent with current requirements of the Section 10/404 
regulatory program and ``Swampbuster'' provisions and are intended only 
to clarify the applicability of existing requirements to mitigation 
banking.

[[Page 58607]]

    The policies and procedures discussed herein are applicable to the 
establishment, use and operation of public mitigation banks, as well as 
privately-sponsored mitigation banks, including third party banks (e.g. 
entrepreneurial banks).

B. Background

    For purposes of this guidance, mitigation banking means the 
restoration, creation, enhancement and, in exceptional circumstances, 
preservation of wetlands and/or other aquatic resources expressly for 
the purpose of providing compensatory mitigation in advance of 
authorized impacts to similar resources.
    The objective of a mitigation bank is to provide for the 
replacement of the chemical, physical and biological functions of 
wetlands and other aquatic resources which are lost as a result of 
authorized impacts. Using appropriate methods, the newly established 
functions are quantified as mitigation ``credits'' which are available 
for use by the bank sponsor or by other parties to compensate for 
adverse impacts (i.e., ``debits''). Consistent with mitigation policies 
established under the Council on Environmental Quality Implementing 
Regulations (CEQ regulations) (40 CFR Part 1508.20), and the Section 
404(b)(1) Guidelines (Guidelines) (40 CFR Part 230), the use of credits 
may only be authorized for purposes of complying with Section 10/404 
when adverse impacts are unavoidable. In addition, for both the Section 
10/404 and ``Swampbuster'' programs, credits may only be authorized 
when on-site compensation is either not practicable or use of a 
mitigation bank is environmentally preferable to on-site compensation. 
Prospective bank sponsors should not construe or anticipate 
participation in the establishment of a mitigation bank as ultimate 
authorization for specific projects, as excepting such projects from 
any applicable requirements, or as preauthorizing the use of credits 
from that bank for any particular project.
    Mitigation banks provide greater flexibility to applicants needing 
to comply with mitigation requirements and can have several advantages 
over individual mitigation projects, some of which are listed below:
    1. It may be more advantageous for maintaining the integrity of the 
aquatic ecosystem to consolidate compensatory mitigation into a single 
large parcel or contiguous parcels when ecologically appropriate;
    2. Establishment of a mitigation bank can bring together financial 
resources, planning and scientific expertise not practicable to many 
project-specific compensatory mitigation proposals. This consolidation 
of resources can increase the potential for the establishment and long-
term management of successful mitigation that maximizes opportunities 
for contributing to biodiversity and/or watershed function;
    3. Use of mitigation banks may reduce permit processing times and 
provide more cost-effective compensatory mitigation opportunities for 
projects that qualify;
    4. Compensatory mitigation is typically implemented and functioning 
in advance of project impacts, thereby reducing temporal losses of 
aquatic functions and uncertainty over whether the mitigation will be 
successful in offsetting project impacts;
    5. Consolidation of compensatory mitigation within a mitigation 
bank increases the efficiency of limited agency resources in the review 
and compliance monitoring of mitigation projects, and thus improves the 
reliability of efforts to restore, create or enhance wetlands for 
mitigation purposes.
    6. The existence of mitigation banks can contribute towards 
attainment of the goal for no overall net loss of the Nation's wetlands 
by providing opportunities to compensate for authorized impacts when 
mitigation might not otherwise be appropriate or practicable.

II. Policy Considerations

    The following policy considerations provide general guidance for 
the establishment, use and operation of mitigation banks. It is the 
agencies' intent that this guidance be applied to mitigation bank 
proposals submitted for approval on or after the effective date of this 
guidance and to those in early stages of planning or development. It is 
not intended that this policy be retroactive for mitigation banks that 
have already received agency approval. While it is recognized that 
individual mitigation banking proposals may vary, it is the intent of 
this guidance that the fundamental precepts be applicable to future 
mitigation banks.
    For the purposes of Section 10/104, and consistent with the CEQ 
regulations, the Guidelines, and the Memorandum of Agreement Between 
the Environmental Protection Agency (EPA) and the Department of the 
Army Concerning the Determination of Mitigation under the Clean Water 
Act Section 404(b)(1) Guidelines, mitigation means sequentially 
avoiding impacts, minimizing impacts, and compensating for remaining 
unavoidable impacts. Compensatory mitigation, under Section 10/404, is 
the restoration, creation, enhancement, or in exceptional 
circumstances, preservation of wetlands and/or other aquatic resources 
for the purpose of compensating for unavoidable adverse impacts. A site 
where wetlands and/or other aquatic resources are restored, created, 
enhanced, or in exceptional circumstances, preserved expressly for the 
purpose of providing compensatory mitigation in advance of authorized 
impacts to similar resources is a mitigation bank.

A. Authorities

    This guidance is established in accordance with the following 
statutes, regulations, and policies. It is intended to clarify 
provisions within these existing authorities and does to establish any 
new requirements.
    1. Clean Water Act Section 404 (33 U.S.C. 1344).
    2. Rivers and Harbors Act of 1899 Section 10 (33 U.S.C. 403 et 
seq.)
    3. Environmental Protection Agency, Section 404(b)(1) Guidelines 
(40 CFR Part 230). Guidelines for Specification of Disposal Sites for 
Dredged or Fill Material.
    4. Department of the Army, Section 404 Permit Regulations (33 CFR 
Parts 320-330). Policies for evaluating permit applications to 
discharge dredged or fill material.
    5. Memorandum of Agreement between the Environmental Protection 
Agency and the Department of the Army Concerning the Determination of 
Mitigation under the Clean Water Act Section 404(b)(1) Guidelines 
(February 6, 1990).
    6. Title XII Food Security Act of 1985 as amended by the Food, 
Agriculture, Conservation and Trade Act of 1990 (16 U.S.C. 3801 et 
seq.).
    7. National Environmental Policy Act (42 U.S.C. 4321 et seq.), 
including the Council on Environmental Quality's implementing 
regulations (40 CFR Parts 1500-1508).
    8. Fish and Wildlife Coordination Act (16 U.S.C. 661 et seq.).
    9. Fish and Wildlife Service Mitigation Policy (46 FR pages 7644-
7663, 1981).
    10. Magnuson Fishery Conservation and Management Act (16 U.S.C. 
1801 et seq.).
    11. National Marine Fisheries Service Habitat Conservation Policy 
(48 FR pages 53142-53147, 1983).
    The policies set out in this document are not final agency action, 
but are intended solely as guidance. The guidance is not intended, nor 
can it be relied upon, to create any rights 

[[Page 58608]]
enforceable by any party in litigation with the United States. This 
guidance does not establish or affect legal rights or obligations, 
establish a binding norm on any party and it is not finally 
determinative of the issues addressed. Any regulatory decisions made by 
the agencies in any particular matter addressed by this guidance will 
be made by applying the governing law and regulations to the relevant 
facts.

B. Planning Considerations

1. Goal Setting
    The overall goal of a mitigation bank is to provide economically 
efficient and flexible mitigation opportunities, while fully 
compensating for wetland and other aquatic resource losses in a manner 
that contributes to the long-term ecological functioning of the 
watershed within which the bank is to be located. The goal will include 
the need to replace essential aquatic functions which are anticipated 
to be lost through authorized activities within the bank's service 
area. In some cases, banks may also be used to address other resource 
objectives that have been identified in a watershed management plan or 
other resource assessment. It is desirable to set the particular 
objectives for a mitigation bank (i.e., the type and character of 
wetlands and/or aquatic resources to be established) in advance of site 
selection. The goal and objectives should be driven by the anticipated 
mitigation need; the site selected should support achieving the goal 
and objectives.
2. Site Selection
    The agencies will give careful consideration to the ecological 
suitability of a site for achieving the goal and objectives of a bank, 
i.e., that it posses the physical, chemical and biological 
characteristics to support establishment of the desired aquatic 
resources and functions. Size and location of the site relative to 
other ecological features, hydrologic sources (including the 
availability of water rights), and compatibility with adjacent land 
uses and watershed management plans are important factors for 
consideration. It also is important that ecologically significant 
aquatic or upland resources (e.g., shallow sub-tidal habitat, mature 
forests), cultural sites, or habitat for Federally or State-listed 
threatened and endangered species are not compromised in the process of 
establishing a bank. Other significant factors for consideration 
include, but are not limited to, development trends (i.e., anticipated 
land use changes), habitat status and trends, local or regional goals 
for the restoration or protection of particular habitat types or 
functions (e.g., re-establishment of habitat corridors or habitat for 
species of concern), water quality and floodplain management goals, and 
the relative potential for chemical contamination of the wetlands and/
or other aquatic resources.
    Banks may be sited on public or private lands. Cooperative 
arrangements between public and private entities to use public lands 
for mitigation banks may be acceptable. In some circumstances, it may 
be appropriate to site banks on Federal, state, tribal or locally-owned 
resource management areas (e.g., wildlife management areas, national or 
state forests, public parks, recreation areas). The siting of banks on 
such lands may be acceptable if the internal policies of the public 
agency allow use of its land for such purposes, and the public agency 
grants approval. Mitigation credits generated by banks of this nature 
should be based solely on those values in the bank that are 
supplemental to the public program(s) already planned or in place, that 
is, baseline values represented by existing or already planned public 
programs, including preservation value, should not be counted toward 
bank credits.
    Similarly, Federally-funded wetland conservation projects 
undertaken via separate authority and for other purposes, such as the 
Wetlands Reserve Program, Farmer's Home Administration fee title 
transfers or conservation easements, and Partners for Wildlife Program, 
cannot be used for the purpose of generating credits within a 
mitigation bank. However, mitigation credit may be given for activities 
undertaken in conjunction with, but supplemental to, such programs in 
order to maximize the overall ecological benefit of the conservation 
project.
3. Technical Feasibility
    Mitigation banks should be planned and designed to be self-
sustaining over time to the extent possible. The techniques for 
establishing wetlands and/or other aquatic resources must be carefully 
selected, since this science is constantly evolving. The restoration of 
historic or substantially-degraded wetlands and/or other aquatic 
resources (e.g., prior-converted cropland, farmed wetlands) utilizing 
proven techniques increases the likelihood of success and typically 
does not result in the loss of other valuable resources. Thus, 
restoration should be the first option considered when siting a bank. 
Because of the difficulty in establishing the correct hydrologic 
conditions associated with many creation projects and the tradeoff in 
wetland functions involved with certain enhancement activities, these 
methods should only be considered where there are adequate assurances 
to ensure success and that the project will result in an overall 
environmental benefit.
    In general, banks which involve complex hydraulic engineering 
features and/or questionable water sources (e.g., pumped) are most 
costly to develop, operate and maintain, and have a higher risk of 
failure than banks designed to function with little or no human 
intervention. The former situations should only be considered where 
there are adequate assurances to ensure success. This guidance 
recognizes that in some circumstances wetlands must be actively managed 
to ensure their viability and sustainability. Furthermore, long-term 
maintenance requirements may be necessary and appropriate in some cases 
(e.g., to maintain fire-dependent plant communities in the absence of 
natural fire; to control invasive exotic plant species).
    Proposed mitigation techniques should be well-understood and 
reliable. When uncertainties surrounding the technical feasibility of a 
proposed mitigation technique exist, appropriate arrangements (e.g., 
financial assurances, contingency plans, additional monitoring 
requirements) should be in place to increase the likelihood of success. 
Such arrangements may be phased-out or reduced once the attainment of 
prescribed performance standards is demonstrated.
4. Role of Preservation
    Credit may be given when existing wetlands and/or other aquatic 
resources are preserved in conjunction with restoration, creation or 
enhancement activities, and when it is demonstrated that the 
preservation will augment the functions of the restored, created or 
enhanced aquatic resource. Such augmentation may be reflected in the 
total number of credits available from the bank.
    In addition, the preservation of existing wetlands and/or other 
aquatic resources in perpetuity may be authorized as the sole basis for 
generating credits in mitigation banks only in exceptional 
circumstances, consistent with existing regulations, policies and 
guidance. Under such circumstances, preservation may be accomplished 
through the implementation of appropriate legal mechanisms (e.g., 
transfer of deed, deed restrictions, conservation easement) to protect 
wetlands and/or other aquatic resources, accompanied by 

[[Page 58609]]
implementation of appropriate changes in land use or other physical 
changes as necessary (e.g., installation of restrictive fencing).
    Determining whether preservation is appropriate as the sole basis 
for generating credits at a mitigation bank requires careful judgment 
regarding a number of factors. Consideration must be given to whether 
wetlands and/or other aquatic resources proposed for preservation (1) 
perform physical or biological functions, the preservation of which is 
important to the region in which the aquatic resources are located, and 
(2) are under demonstrable threat of loss or substantial degradation 
due to human activities that might not otherwise be expected to be 
restricted. The existence of a demonstrable threat will be based on 
clear evidence of destructive land use changes which are consistent 
with local and regional land use trends and are not the consequence of 
actions under the control of the bank sponsor. Wetlands and other 
aquatic resources restored under the Conservation Reserve Program or 
similar programs requiring only temporary conservation easements may be 
eligible for banking credit upon termination of the original easement 
if the wetlands are provided permanent protection and it would 
otherwise be expected that the resources would be converted upon 
termination of the easement. The number of mitigation credits available 
from a bank that is based solely on preservation should be based on the 
functions that would otherwise be lost or degraded if the aquatic 
resources were not preserved, and the timing of such loss or 
degradation. As such, compensation for aquatic resource impacts will 
typically require a greater number of acres from a preservation bank 
than from a bank which is based on restoration, creation or 
enhancement.
5. Inclusion of Upland Areas
    Credit may be given for the inclusion of upland areas occurring 
within a bank only to the degree that such features increase the 
overall ecological functioning of the bank. If such features are 
included as part of a bank, it is important that they receive the same 
protected status as the rest of the bank and be subject to the same 
operational procedures and requirements. The presence of upland areas 
may increase the per-unit value of the aquatic habitat in the bank. 
Alternatively, limited credit may be given to upland areas protected 
within the bank to reflect the functions inherently provided by such 
areas (e.g., nutrient and sediment filtration of stormwater runoff, 
wildlife habitat diversity) which directly enhance or maintain the 
integrity of the aquatic ecosystem and that might otherwise be subject 
to threat of loss or degradation. An appropriate functional assessment 
methodology should be used to determine the manner and extent to which 
such features augment the functions of restored, created or enhanced 
wetlands and/or other aquatic resources.
6. Mitigation Banking and Watershed Planning
    Mitigation banks should be planned and developed to address the 
specific resource needs of a particular watershed. Furthermore, 
decisions regarding the location, type of wetlands and/or other aquatic 
resources to be established, and proposed uses of a mitigation bank are 
most appropriately made within the context of a comprehensive watershed 
plan. Such watershed planning efforts often identify categories of 
activities having minimal adverse effects on the aquatic ecosystem and 
that, therefore, could be authorized under a general permit. In order 
to reduce the potential cumulative effects of such activities, it may 
be appropriate to offset these types of impacts through the use of a 
mitigation bank established in conjunction with a watershed plan.

C. Establishment of Mitigation Banks

1. Prospectus
    Prospective bank sponsors should first submit a prospectus to the 
Army Corps of Engineers (Corps) or Natural Resources Conservation 
Service (NRCS)\1\ to initiate the planning and review process by the 
appropriate agencies. Prior to submitting a prospectus, bank sponsors 
are encouraged to discuss their proposal with the appropriate agencies 
(e.g., pre-application coordination).

    \1\ The Corps will typically serve as the lead agency for the 
establishment of mitigation banks. Bank sponsors proposing 
establishment of mitigation banks solely for the purpose of 
complying with the ``Swampbuster'' provisions of FSA should submit 
their prospectus to the NRCS.
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    It is the intent of the agencies to provide practical comments to 
the bank sponsors regarding the general need for and technical 
feasibility of proposed banks. Therefore, bank sponsors are encouraged 
to include in the prospectus sufficient information concerning the 
objectives for the bank and how it will be established and operated to 
allow the agencies to provide such feedback. Formal agency involvement 
and review is initiated with submittal of a prospectus.
2. Mitigation Banking Instruments
    Information provided in the prospectus will serve as the basis for 
establishing the mitigation banking instrument. All mitigation banks 
need to have a banking instrument as documentation of agency 
concurrence on the objectives and administration of the bank. The 
banking instrument should describe in detail the physical and legal 
characteristics of the bank, and how the bank will be established and 
operated. For regional banking programs sponsored by a single entity 
(e.g., a state transportation agency), it may be appropriate to 
establish an ``umbrella'' instrument for the establishment and 
operation of multiple bank sites. In such circumstances, the need for 
supplemental site-specific information (e.g., individual site plans) 
should be addressed in the banking instrument. The banking instrument 
will be signed by the bank sponsor and the concurring regulatory and 
resource agencies represented on the Mitigation Bank Review Team 
(section II.C.2). The following information should be addressed, as 
appropriate, within the banking instrument:
    a. Bank goals and objectives;
    b. Ownership of bank lands;
    c. Bank size and classes of wetlands and/or other aquatic resources 
proposed for inclusion in the bank, including a site plan and 
specifications;
    d. Description of baseline conditions at the bank site;
    e. Geographic service area;
    f. Wetland classes or other aquatic resource impacts suitable for 
compensation;
    g. Methods for determining credits and debits;
    h. accounting procedures;
    i. Performance standards for determining credit availability and 
bank success;
    j. Reporting protocols and monitoring plan;
    k. Contingency and remedial actions and responsibilities;
    l. Financial assurances;
    m. Compensation ratios;
    n. Provisions for long-term management and maintenance.
    The terms and conditions of the banking instrument may be amended, 
in accordance with the procedures used to establish the instrument and 
subject to agreement by the signatories.
    In cases where initial establishment of the mitigation bank 
involves a discharge into waters of the United States requiring Section 
10/404 authorization, the banking instrument will be made part of a 
Department of the Army permit for that discharge. Submittal of an 

[[Page 58610]]
individual permit application should be accompanied by a sufficiently-
detailed prospectus to allow for concurrent processing of each. 
Preparation of a banking instrument, however, should not alter the 
normal permit evaluation process timeframes. A bank sponsor may proceed 
with activities for the construction of a bank subsequent to receiving 
the Department of the Army authorization. It should be noted, however, 
that a bank sponsor who proceeds in the absence of a banking instrument 
does so at his/her own risk.
    In cases where the mitigation bank is established pursuant to the 
FSA, the banking instrument will be included in the plan developed or 
approved by NRCS and the Fish and Wildlife Service (FWS).
3. Agency Roles and Coordination
    Collectively, the signatory agencies to the banking instrument will 
comprise the Mitigation Bank Review Team (MBRT). Representatives from 
the Corps, EPA, FWS, National Marine Fisheries Service (NMFS) and NRCS, 
as appropriate given the projected use for the bank, should typically 
comprise the MBRT. In addition, it is appropriate for representatives 
from state, tribal and local regulatory and resource agencies to 
participate where an agency has authorities and/or mandates directly 
affecting or affected by the establishment, use or operation of a bank. 
No agency is required to sign a banking instrument; however, in signing 
a banking instrument, an agency agrees to the terms of that instrument.
    The Corps will serve as Chair of the MBRT, except in cases where 
the bank is proposed solely for the purpose of complying with the FSA, 
in which case NRCS will be the MBRT Chair. In addition, where a bank is 
proposed to satisfy the requirements of another Federal, state, tribal 
or local program, it may be appropriate for the administering agency to 
serve as co-Chair of the MBRT.
    The primary role of the MBRT is to facilitate the establishment of 
mitigation banks through the development of mitigation banking 
instruments. Because of the different authorities and responsibilities 
of each agency represented on the MBRT, there is a benefit in achieving 
agreement on the banking instrument. For this reason, the MBRT will 
strive to obtain consensus on its actions. The Chair of the MBRT will 
have the responsibility for making final decisions regarding the terms 
and conditions of the banking instrument where consensus cannot 
otherwise be reached within a reasonable timeframe (e.g., 90 days from 
the date of submittal of a complete prospectus). The MBRT will review 
and seek consensus on the banking instrument and final plans for the 
restoration, creation, enhancement, and/or preservation of wetlands and 
other aquatic resources.
    Consistent with its authorities under Section 10/404, the Corps is 
responsible for authorizing use of a particular mitigation bank on a 
project-specific basis and determining the number and availability of 
credits required to compensate for proposed impacts in accordance with 
the terms of the banking instrument. Decisions rendered by the Corps 
must fully consider review agency comments submitted as part of the 
permit evaluation process. Similarly, the NRCS, in consultation with 
the FWS, will make the final decision pertaining to the withdrawal of 
credits from banks as appropriate mitigation pursuant to FSA.
4. Role of the Bank Sponsor
    The bank sponsor is responsible for the preparation of the banking 
instrument in consultation with the MBRT. The bank sponsor should, 
therefore, have sufficient opportunity to discuss the content of the 
banking instrument with the MBRT. The bank sponsor is also responsible 
for the overall operation and management of the bank in accordance with 
the terms of the banking instrument, including the preparation and 
distribution of monitoring reports and accounting statements/ledger, as 
necessary.
5. Public Review and Comment
    The public should be notified of and have an opportunity to comment 
on all bank proposals. For banks which require authorization under an 
individual Section 10/404 permit or a state, tribal or local program 
that involves a similar public notice and comment process, this 
condition will typically be satisfied through such standard procedures. 
For other proposals, the Corps or NRCS, upon receipt of a complete 
banking prospectus, should provide notification of the availability of 
the prospectus for a minimum 21-day public comment period. Notification 
procedures will be similar to those used by the Corps in the standard 
permit review process. Copies of all public comments received will be 
distributed to the other members of the MBRT and the bank sponsor for 
full consideration in the development of the final banking instrument.
6. Dispute Resolution Procedure
    The MBRT will work to reach consensus on its actions in accordance 
with this guidance. It is anticipated that all issues will be resolved 
by the MBRT in this manner.
a. Development of the Banking Instrument
    During the development of the banking instrument, if any agency 
representative considers that a particular decision raises concern 
regarding the application of existing policy or procedures, an agency 
may request, through written notification, that the issue be reviewed 
by the Corps District Engineer, or NRCS State Conservationist, as 
appropriate. Said notification will describe the issue in sufficient 
detail and provide recommendations for resolution. Within 20 days, the 
District Engineer or State Conservationist (as appropriate) will 
consult with the notifying agency(ies) and will resolve the issue. The 
resolution will be forwarded to the other MBRT member agencies. The 
bank sponsor may also request the District Engineer or State 
Conservationist review actions taken to develop the banking instrument 
if the sponsor believes that inadequate progress has been made on the 
instrument by the MBRT.
b. Application of the Banking Instrument
    As previously stated, the Corps and NRCS are responsible for making 
final decisions on a project-specific basis regarding the use of a 
mitigation bank for purposes of Section 10/404 and FSA, respectively. 
In the event an agency on the MBRT is concerned that a proposed use may 
be inconsistent with the terms of the banking instrument, that agency 
may raise the issue to the attention of the Corps or NRCS through the 
permit evaluaiton process. In order to facilitate timely and effective 
consideration of agency comments, the Corps or NRCS, as appropriate, 
will advise the MBRT agencies of a proposed use of a bank. The Corps 
will fully consider comments provided by the review agencies regarding 
mitigation as part of the permit evaluation process. The NCRS will 
consult with FWA is making its decisions pertaining to mitigation.
    If, in the view of an agency on the MBRT, an issued permit or 
series of permits reflects a pattern of concern regarding the 
application of the terms of the banking instrument, that agency may 
initiate review of the concern by the full MBRT through written 
notification to the MBRT Chair. The MBRT Chair will convene a meeting 
of the MBRT, or initiate another appropriate forum for communication, 
typically within 20 days of receipt of notification, to resolve 
concerns. Any such effort to address concerns 

[[Page 58611]]
regarding the application of a banking instrument will not delay any 
decision pending before the authorizing agency (e.g., Corps or NRCS).

D. Criteria for Use of a Mitigation Bank

1. Project Applicability
    All activities regulated under Section 10/404 may be eligible to 
use a mitigation bank as compensation for unavoidable impacts to 
wetlands and/or other aquatic resources. Mitigation banks established 
for FSA purposes may be debited only in accordance with the mitigation 
and replacement provisions of 7 CFR Part 12.
    Credits from mitigation banks may also be used to compensate for 
environmental impacts authorized under other programs (e.g., state or 
local wetland regulatory programs, NPDES program, Corps civil works 
projects, Superfund removal and remedial actions). In no case may the 
same credits be used to compensate for more than one activity; however, 
the same credits may be used to compensate for an activity which 
requires authorization udner more than one program.
2. Relationship to Mitigation Requirements
    Under the existing requirements of Section 10/404, all appropriate 
and practicable steps must be undertaken by the applicant to first 
avoid and then minimize adverse impacts to aquatic resources, prior to 
authorization to use a particular mitigation bank. Remaining 
unavoidable impacts must be compensated to the extent appropriate and 
practicable. For both the Section 10/404 and ``Swampbuster'' programs, 
requirements for compensatory mitigation may be satisfied through the 
use of mitigation banks when either on-site compensation is not 
practicable or use of the mitigation bank is environmentally preferable 
to on-site compensation.
    It is important to emphasize that applicants should not expect that 
establishment of, or purchasing credits from, a mitigation bank will 
necessarily lead to a determination of compliance with applicable 
mitigation requirements (i.e., Section 404(b)(1) Guidelines or FSA 
Manual), or as excepting projects from any applicable requirements.
3. Geographic Limits of Applicability
    The service area of a mitigation bank is the area (e.g., watershed, 
county) wherein a bank can reasonably be expected to provide 
appropriate compensation for impacts to wetlands and/or other aquatic 
resources. This area should be designated in the banking instrument. 
Designation of the service area should be based on consideration of 
hydrologic and biotic criteria, and be stipulated in the banking 
instrument. Use of a mitigation bank to compensate for impacts beyond 
the designated service area may be authorized, on a case-by-case basis, 
where it is determined to be practicable and environmentally desirable.
    The geographic extent of a service area should, to the extent 
environmentally desirable, be guided by the cataloging unit of the 
``Hydrologic Unit map of the United States'' (USGS, 1980) and the 
ecoregion of the ``Ecoregions of the United States'' (James M. Omernik, 
EPA, 1986) or section of the ``Descriptions of the Ecoregions of the 
United States'' (Robert G. Bailey, USDA, 1980). It may be appropriate 
to use other classification systems developed at the state or regional 
level for the purpose of specifying bank service areas, when such 
systems compare favorably in their objectives and level of detail. In 
the interest of the integrating banks with other resource management 
objectives, bank service areas may encompass larger watershed areas if 
the designation of such areas is supported by local or regional 
management plans (e.g., Special Area Management Plans, Advance 
Identification), State Wetland Conservation Plans or other Federally 
sponsored or recognized resource management plans. Furthermore, 
designation of a more inclusive service area may be appropriate for 
mitigation banks whose primary purpose is to compensate for linear 
projects that typically involve numerous small impacts in several 
different watersheds.
4. Use of a Mitigation Bank vs. On-Site Mitigation
    The agencies' preference for on-site mitigation, indicated in the 
1990 Memorandum of Agreement on mitigation between the EPA and the 
Department of the Army, should not preclude the use of a mitigation 
bank when there is no practicable opportunity for on-site compensation, 
or when use of a bank is environmentally preferable to on-site 
compensation. On-site mitigation may be preferable where there is a 
practicable opportunity to compensate for important local functions 
including local flood control functions, habitat for a species or 
population with a very limited geographic range or narrow environmental 
requirements, or where local water quality concerns dominate.
    In choosing between on-site mitigation and use of a mitigation 
bank, careful consideration should be given to the likelihood for 
successfully establishing the desired habitat type, the compatibility 
of the mitigation project with adjacent land uses, and the 
practicability of long-term monitoring and maintenance to determine 
whether the effort will be ecologically sustainable, as well as the 
relative cost of mitigation alternatives. In general, use of a 
mitigation bank to compensate for minor aquatic resource impacts (e.g., 
numerous, small impacts associated with linear projects; impacts 
authorized under nationwide permits) is preferable to on-site 
mitigation. With respect to larger aquatic resource impacts, use of a 
bank may be appropriate if it is capable of replacing essential 
physical and/or biological functions of the aquatic resources which are 
expected to be lost or degraded. Finally, there may be circumstances 
warranting a combination of on-site and off-site mitigation to 
compensate for losses.
5. In-kind vs. Out-of-kind Mitigation Determinations
    In the interest of achieving functional replacement, in-kind 
compensation of aquatic resource impacts should generally be required. 
Out-of-kind compensation may be acceptable if it is determined to be 
practicable and environmentally preferable to in-kind compensation 
(e.g., of greater ecological value to a particular region). However, 
non-tidal wetlands should typically not be used to compensate for the 
loss or degradation of tidal wetlands. Decisions regarding out-of-kind 
mitigation are typically made on a case-by-case basis during the permit 
evaluation process. The banking instrument may identify circumstances 
in which it is environmentally desirable to allow out-of-kind 
compensation within the context of a particular mitigation bank (e.g., 
for banks restoring a complex of associated wetland types). Mitigation 
banks developed as part of an area-wide management plan to address a 
specific resource objective (e.g., restoration of a particularly 
vulnerable or valuable wetland habitat type) may be such an example.
6. Timing of Credit Withdrawal
    The number of credits available for withdrawal (i.e., debiting) 
should generally be commensurate with the level of aquatic functions 
attained at a bank at the time of debiting. The level of function may 
be determined through the application of performance standards tailored 
to the specific restoration, creation or enhancement activity at the 
bank site or through the use of an appropriate functional assessment 
methodology.

[[Page 58612]]

    The success of a mitigation bank with regard to its capacity to 
establish a healthy and fully functional aquatic system relates 
directly to both the ecological and financial stability of the bank. 
Since financial considerations are particularly critical in early 
stages of bank development, it is generally appropriate, in cases where 
there is adequate financial assurance and where the likelihood of the 
success of the bank is high, to allow limited debiting of a percentage 
of the total credits projected for the bank at maturity. Such 
determinations should take into consideration the initial capital costs 
needed to establish the bank, and the likelihood of its success. 
However, it is the intent of this policy to ensure that those actions 
necessary for the long-term viability of a mitigation bank be 
accomplished prior to any debiting of the bank. In this regard, the 
following minimum requirements should be satisfied prior to debiting: 
(1) banking instrument and mitigation plans have been approved; (2) 
bank site has been secured; and (3) appropriate financial assurances 
have been established. In addition, initial physical and biological 
improvements should be completed no later than the first full growing 
season following initial debiting of a bank. The temporal loss of 
functions associated with the debiting of projected credits may justify 
the need for requiring higher compensation ratios in such cases. For 
mitigation banks which propose multiple-phased construction, similar 
conditions should be established for each phase.
    Credits attributed to the preservation of existing aquatic 
resources may become available for debiting immediately upon 
implementation of appropriate legal protection accompanied by 
appropriate changes in land use or other physical changes, as 
necessary.
7. Crediting/Debiting/Accounting Procedures
    Credits and debits are the terms used to designate the units of 
trade (i.e., currency) in mitigation banking. Credits represent the 
accrual or attainment of aquatic functions at a bank; debits represent 
the loss of aquatic functions at an impact or project site. Credits are 
debited from a bank when they are used to offset aquatic resource 
impacts (e.g. for the purpose of satisfying Section 10/404 permit or 
FSA requirements).
    An appropriate functional assessment methodology (e.g., Habitat 
Evaluation Procedures, hydrogeomorphic approach to wetlands functional 
assessment, other regional assessment methodology) acceptable to all 
signatories should be used to assess wetland and/or other aquatic 
resource restoration, creation and enhancement activities within a 
mitigation bank, and to quantify the amount of available credits. The 
range of functions to be assessed will depend upon the assessment 
methodology identified in the banking instrument. The same methodology 
should be used to assess both credits and debits. If an appropriate 
functional assessment methodology is impractical to employ, acreage may 
be used as a surrogate for measuring function. Regardless of the method 
employed, the number of credits should reflect the difference between 
site conditions under the with-and without-bank scenarios.
    The bank sponsor should be responsible for assessing the 
development of the bank and submitting appropriate documentation of 
such assessments to the authorizing agency(ies), who will distribute 
the documents to the other members of the MBRT for review. Members of 
the MBRT are encouraged to conduct regular (e.g., annual) on-site 
inspections, as appropriate, to monitor bank performance. 
Alternatively, functional assessments may be conducted by a team 
representing involved resources and regularly agencies and other 
appropriate parties. The number of available credits in a mitigation 
bank may need to be adjusted to reflect actual conditions.
    The banking instrument should require that bank sponsors establish 
and maintain an accounting system (i.e., ledger) which documents the 
activity of all mitigation bank accounts. Each time an approved debit/
credit transaction occurs at a given bank, the bank sponsor should 
submit a statement to the authorizing agency(ies). The bank sponsor 
should also generate an annual ledger report for all mitigation bank 
accounts to be submitted to the MBRT Chair for distribution to each 
member of the MBRT.
    Credits may be sold to third parties. The cost of mitigation 
credits to a third party is determined by the bank sponsor.
Party Responsible for Bank Success
    The bank sponsor is responsible for assuring the success of the 
debited restoration, creation, enhancement and preservation activities 
at the mitigation bank, and it is therefore extremely important that an 
enforceable mechanism be adopted establishing the responsibility of the 
bank sponsor to develop and operate the bank properly. Where 
authorization under Section 10/404 and/or FSA is necessary to establish 
the bank, the Department of the Army permit or NRCS plan should be 
conditioned to ensure that provisions of the banking instrument are 
enforceable by the appropriate agency(ies). In circumstances where 
establishment of a bank does not require such authorization, the 
details of the bank sponsor's responsibilities should be delineated by 
the relevant authorizing agency (e.g., the Corps in the case of Section 
10/404 permits) in any permit in which the permittee's mitigation 
obligations are met through use of the bank. In addition, the bank 
sponsor should sign such permits for the limited purpose of meeting 
those mitigation responsibilities, thus confirming that those 
responsibilities are enforceable against the bank sponsor if necessary.

E. Long-Term Management, Monitoring and Remediation

1. Bank Operational Life
    The operational life of a bank refers to the period during which 
the terms and conditions of the banking instrument are in effect. With 
the exception of arrangements for the long-term management and 
protection in perpetuity of the wetlands and/or other aquatic 
resources, the operational life of a mitigation bank terminates at the 
point when (1) Compensatory mitigation credits have been exhausted or 
banking activity is voluntarily terminated with written notice by the 
bank sponsor provided to the Corps or NRCS and other members of the 
MBRT, and (2) it has been determined that the debited bank is 
functionally mature and/or self-sustaining to the degree specified in 
the banking instrument.
2. Long-term Management and Protection
    The wetlands and/or other aquatic resources in a mitigation bank 
should be protected in perpetuity with appropriate real estate 
arrangements (e.g., conservation easements, transfer of title to 
Federal or State resource agency or non-profit conservation 
organization). Such arrangements should effectively restrict harmful 
activities (i.e., incompatible uses \2\) that might otherwise 
jeopardize the purpose of the bank. In exceptional circumstances, real 
estate arrangements may be approved which dictate finite protection for 
a bank (e.g., for coastal protection projects which prolong the 
ecological viability of 

[[Page 58613]]
the aquatic system). However, in no case should finite protection 
extend for a lesser time than the duration of project impacts for which 
the bank is being used to provide compensation.

    \2\ For example, certain silvicultural practices (e.g. clear 
cutting and/or harvests on short-term rotations) may be incompatible 
with the objectives of a mitigation bank. In contrast, silvicultural 
practices such as long-term rotations, selective cutting, 
maintenance of vegetation diversity, and undisturbed buffers are 
more likely to be considered a compatible use.
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    The bank sponsor is responsible for securing adequate funds for the 
operation and maintenance of the bank during its operational life, as 
well as for the long-term management of the wetlands and/or other 
aquatic resources, as necessary. The banking instrument should identify 
the entity responsible for the ownership and long-term management of 
the wetlands and/or other aquatic resources. Where needed, the 
acquisition and protection of water rights should be secured by the 
bank sponsor and documented in the banking instrument.
3. Monitoring Requirements
    The bank sponsor is responsible for monitoring the mitigation bank 
in accordance with monitoring provisions identified in the banking 
instrument to determine the level of success and identify problems 
requiring remedial action. Monitoring provisions should be set forth in 
the banking instrument and based on scientifically sound performance 
standards prescribed for the bank. monitoring should be conducted at 
time intervals appropriate for the particular project type and until 
such time that the authorizing agency(ies), in consultation with the 
MBRT, are confident that success is being achieved (i.e., performance 
standards are attained). The period for monitoring will typically be 
five years; however, it may be necessary to extend this period for 
projects requiring more time to reach a stable condition (e.g., 
forested wetlands) or where remedial activities were undertaken. Annual 
monitoring reports should be submitted to the authorizing agency(ies), 
who is responsible for distribution to the other members of the MBRT, 
in accordance with the terms specified in the banking instrument.
4. Remedial Action
    The banking instrument should stipulate the general procedures for 
identifying and implementing remedial measures at a bank, or any 
portion thereof. Remedial measures should be based on information 
contained in the monitoring reports (i.e., the attainment of prescribed 
performance standards), as well as agency site inspections. The need 
for remediation will be determined by the authorizing agency(ies) in 
consultation with the MBRT and bank sponsor.
5. Financial Assurances
    The bank sponsor is responsible for securing sufficient funds or 
other financial assurances to cover contingency actions in the event of 
bank default or failure. Accordingly, banks posing a greater risk of 
failure and where credits have been debited, should have comparatively 
higher financial sureties in place, than those where the likelihood of 
success is more certain. In addition, the bank sponsor is responsible 
for securing adequate funding to monitor and maintain the bank 
throughout its operational life, as well as beyond the operational life 
if not self-sustaining. Total funding requirements should reflect 
realistic cost estimates for monitoring, long-term maintenance, 
contingency and remedial actions.
    Financial assurances may be in the form of performance bonds, 
irrevocable trusts, escrow accounts, casualty insurance, letters of 
credit, legislatively-enacted dedicated funds for government operate 
banks or other approved instruments. Such assurances may be phased-out 
or reduced, once it has been demonstrated that the bank is functionally 
mature and/or self-sustaining (in accordance with performance 
standards).

F. Other Considerations

1. In-lieu-fee Mitigation Arrangements
    For purposes of this guidance, in-lieu-fee, fee mitigation, or 
other similar arrangements, wherein funds are paid to a natural 
resource management entity for implementation of either specific or 
general wetland or other aquatic resource development projects, are not 
considered to meet the definition of mitigation banking because they do 
not typically provide compensatory mitigation in advance of project 
impacts. Moreover, such arrangements do not typically provide a clear 
timetable for the initiation of mitigation efforts. The Corps, in 
consultation with the other agencies, may find there are circumstances 
where such arrangements are appropriate so long as they meet the 
requirements that would otherwise apply to an offsite, prospective 
mitigation effort and provides adequate assurances of success and 
timely implementation. In such cases, a formal agreement between the 
sponsor and the agencies, similar to a banking instrument, is necessary 
to define the conditions under which its use is considered appropriate.
2. Special Considerations for ``Swampbuster''
    Current FSA legislation limits the extent to which mitigation 
banking can be used for FSA purposes. Therefore, if a mitigation bank 
is to be used for FSA purposes, it must meet the requirements of FSA.

III. Definitions

    For the purposes of this guidance document the following terms are 
defined:
    A. Authorizing agency. Any Federal, state, tribal or local agency 
that has authorized a particular use of a mitigation bank as 
compensation for an authorized activity; the authorizing agency will 
typically have the enforcement authority to ensure that the terms and 
conditions of the banking instrument are satisfied.
    B. Bank sponsor. Any public or private entity responsible for 
establishing and, in most circumstances, operating a mitigation bank.
    C. Compensatory mitigation. For purposes of Section 10/404, 
compensatory mitigation is the restoration, creation, enhancement, or 
in exceptional circumstances, preservation of wetlands and/or other 
aquatic resources for the purpose of compensating for unavoidable 
adverse impacts which remain after all appropriate and practicable 
avoidance and minimization has been achieved.
    D. Consensus. The term consensus, as defined herein, is a process 
by which a group synthesizes its concerns and ideas to form a common 
collaborative agreement acceptable to all members. While the primary 
goal of consensus is to reach agreement on an issue by all parties, 
unanimity may not always be possible.
    E. Creation. The establishment of a wetland or other aquatic 
resource where one did not formerly exist.
    F. Credit. A unit of measure representing the accrual or attainment 
of aquatic functions at a mitigation bank; the measure of function is 
typically indexed to the number of wetland acres restored, created, 
enhanced or preserved.
    G. Debit. A unit of measure representing the loss of aquatic 
functions at an impact or project site.
    H. Enhancement. Activities conducted in existing wetlands or other 
aquatic resources which increase one or more aquatic functions.
    I. Mitigation. For purposes of Section 10/404 and consistent with 
the Council on Environmental Quality regulations, the Section 404(b)(1) 
Guidelines and the Memorandum of Agreement Between 

[[Page 58614]]
the Environmental Protection Agency and the Department of the Army 
Concerning the Determination of Mitigation under the Clean Water Act 
Section 404(b)(1) Guidelines, mitigation means sequentially avoiding 
impacts, minimizing impacts, and compensating for remaining unavoidable 
impacts.
    J. Mitigation bank. A mitigation bank is a site where wetlands and/
or other aquatic resources are restored, created, enhanced, or in 
exceptional circumstances, preserved expressly for the purpose of 
providing compensatory mitigation in advance of authorized impacts to 
similar resources. For purposes of Section 10/404, use of a mitigation 
bank may only be authorized when impacts are unavoidable.
    K. Mitigation Bank Review Team (MBRT). An interagency group of 
Federal, state, tribal and/or local regulatory and resource agency 
representatives which are signatory to a banking instrument and oversee 
the establishment, use and operation of a mitigation bank.
    L. Practicable. Available and capable of being done after taking 
into consideration cost, existing technology, and logistics in light of 
overall project purposes.
    M. Preservation. The protection of ecologically important wetlands 
or other aquatic resources in perpetuity through the implementation of 
appropriate legal and physical mechanisms. Preservation may include 
protection of upland areas adjacent to wetlands as necessary to ensure 
protection and/or enhancement of the aquatic ecosystem.
    N. Restoration. Re-establishment of wetland and/or other aquatic 
resource characteristics and function(s) at a site where they have 
ceased to exist, or exist in a substantially degraded state.
    O. Service area. The service area of a mitigation bank is the 
designated area (e.g., watershed, county) wherein a bank can reasonably 
be expected to provide appropriate compensation for impacts to wetlands 
and/or other aquatic resources.
John H. Zirschky,

Acting Assistant Secretary (Civil Works), Department of the Army.

Robert Perciasepe,

Assistant Administrator for Water, Environmental Protection Agency.

Thomas R. Hebert,

Acting Undersecretary for Natural Resources and Environment, 
Department of Agriculture.

Robert P. Davison,

Acting Assistant Secretary for Fish and Wildlife and Parks, 
Department of the Interior.

Douglas K. Hall,

Assistant Secretary for Oceans and Atmosphere, Department of 
Commerce.
[FR Doc. 95-28907 Filed 11-27-95; 8:45 am]
BILLING CODE 3710-92-M