1. Scott D. Deatherage
Gardere Wynne Sewell
sdeagherage@gardere.com/214-999-4979
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2.  Overview of Wetlands Regulation
 Mitigation and Wetlands Mitigation Permitting
Process
 Wetlands Mitigation Banking and Credits
 Planning for Wetlands Mitigation ahead of
Construction
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3.  Section 404 requires that a permit be obtained
prior to dredging or filling “waters of the US” which
includes “wetlands”
 The Army Corps of Engineers (ACE) administers
Section 404 wetlands dredge and fill permits
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4.  Navigable waters
◦ Navigable waters are those waters that are subject to the ebb and
flow of the tide and/or are presently used, or have been used in
the past, or may be susceptible for use to transport interstate or
foreign commerce.
 All Waters
◦ Ponds, lakes, rivers, and streams – defined by Ordinary High
Water Mark
◦ Stream can be ephemeral, intermittent, or perennial
◦ Wetlands – Area inundated or saturated by surface or ground
water at a frequency and duration sufficient to support, and under
normal circumstances do support, a prevalence of vegetation
typically adapted for life in saturated soil conditions
◦ Soils Vegetation and Hydrology
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5.  US Supreme Court SWANCC case
◦ Solid Waste Agency of Northern Cook County v. Army
Corps of Engineers, 531 U.S. 159 (2001)
◦ Cities filling gravel mines for landfill
◦ “Man-made” wetlands
◦ ACE “migratory bird rule” anywhere would land waters
of the US—Commerce Clause argument
◦ S. Ct—wanted to avoid constitutional question and
struck down migratory bird rule
◦ Wetlands have to be adjacent to “open waters”,
interpreting Clean Water Act definition of “waters of the
US”
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6.  Rapanos Case
◦ Rapanos v. US, 547 U.S. 715 (2006)
◦ Rapons filled 22 acres on their property for construction
of a mall
◦ 20 miles from any navigable water
◦ Convicted of two felonies; and millions of dollars in
penalties in civil case
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7.  Divided court:
◦ Justice Scalia wrote opinion, joined by three other
justices:
 “Waters of the United States" "includes only those relatively
permanent, standing or continuously flowing bodies of water
'forming geographic features' that are described in ordinary
parlance as 'streams[,] ... oceans, rivers, [and] lakes.'“
 A mere "hydrological connection" is not sufficient to qualify a
wetland as covered by the CWA; it must have a "continuous
surface connection" with a "water of the United States" that
makes it "difficult to determine where the 'water' ends and
the 'wetland' begins."
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8.  Justice Stevens in concurrence
◦ All waters with a "significant nexus" to "navigable waters"
are covered under the CWA
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9.  Largely focuses on
◦ wetland vegetation
◦ wetland soils
◦ wetland hydrology
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10.  Standard Department of the Army permit
applications must include (33 CFR 325.1(d)(7)):
◦ Statement describing how impacts to waters of the U.S.
are Avoided and Minimized
◦ Compensatory Mitigation Proposal or
 Statement describing why compensatory
mitigation should not be required
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11.  Section 401, Clean Water Act
 Endangered Species Act
 Coastal Zone Management Act
 National Environmental Policy Act (NEPA)
 Fish and Wildlife Coordination Act
 National Historic Preservation Act
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12.  Individual Department of the Army Permit
 Nationwide Permit
 General Permit
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13.  A Wetlands Permit must be obtained prior to
dredging or filling wetlands
 Otherwise enforcement action may be taken,
resulting in civil or criminal fines, and remedial and
mitigation activities
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14.  Regulation
◦ Compensatory Mitigation for Losses of Aquatic
Resources (33 CFR Parts 325 and 332)
 Regulatory Guidance Letters
◦ Monitoring Requirements (REGL 08-03)
◦ Financial Assurances (REGL 05-01)
 Local Guidance Documents
◦ Guidelines for Preparing a Compensatory Mitigation
Plan
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15.  All compensatory mitigation plans must comply
with the Mitigation Rule (33 CFR Parts 325 and
332).
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16.  Lost Type
 Priority Category
 Existing Condition
 Duration
 Dominant Impact
 Cumulative Impact
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17.  The national policy is the no net loss of wetlands
 Thus, more wetlands may need to be preserved or
created than are actually filled
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18.  Historically, the preservation and buffering of the
remaining aquatic resources on the impact site
could generate up to 75% of the mitigation credits
required to offset impacts associated with a
proposed project.
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19.  All Conceptual Mitigation Plans must include
information about the availability of mitigation
credits within the same watershed as the
proposed project. This information may be
obtained using the interactive map located on the
RIBITS website.
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20.  Once the permit applicant has calculated the
required wetland mitigation credits for the
proposed project, they should use the Regulatory
In-Lieu Fee and Bank Information Tracking
System (RIBITS) at
http://216.83.232.125:443/pls/htmldb/f?p=101to
obtain information about approved mitigation
banks within the same watershed as the proposed
project.
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21.  A mitigation bank is a wetland, stream, or other aquatic
resource area that has been restored, established,
enhanced, or (in certain circumstances) preserved for
the purpose of providing compensation for unavoidable
impacts to aquatic resources permitted under Section
404 or a similar state or local wetland regulation.
 A mitigation bank may be created when a government
agency, corporation, nonprofit organization, or other
entity undertakes these activities under a formal
agreement with a regulatory agency.
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22.  Mitigation banks have four distinct components:
◦ The bank site: the physical acreage restored,
established, enhanced, or preserved;
◦ The bank instrument: the formal agreement between
the bank owners and regulators establishing liability,
performance standards, management and monitoring
requirements, and the terms of bank credit approval;
◦ The Interagency Review Team (IRT): the interagency
team that provides regulatory review, approval, and
oversight of the bank; and
◦ The service area: the geographic area in which
permitted impacts can be compensated for at a given
bank.
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23.  A bank's instrument identifies the number of
credits available for sale and requires the use of
ecological assessment techniques to certify that
those credits provide the required ecological
functions.
 Although most mitigation banks are designed to
compensate only for impacts to various wetland
types, some banks have been developed to
compensate specifically for impacts to streams
(i.e., stream mitigation banks).
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24.  In general, a mitigation bank sells compensatory
mitigation credits to permittee’s whose obligation
to provide compensatory mitigation is then
transferred to the mitigation bank sponsor.
 The operation and use of a mitigation bank are
governed by a mitigation banking instrument.
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25.  Regulations, effective June 9, 2008, seek to promote
one standard for mitigation. “Preference” for mitigation
banking.
 New web-based posting mechanism for available
credits- Regional Internet Bank Information Tracking
System (“RIBITS”). This standardization has spurred
investment interest with development of equity investors
dedicated to investment in mitigation projects or
conservation lands.
 There are now over 500 mitigation banks in 42 states.
 Over 70% of mitigation banks are sponsored by private
entrepreneurial companies.
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26.  Net Improvement = Moderate (2.0) Enhance
hydrology within an existing wetland system and re-
establish natural hardwood canopy. T
 Upland Buffer = Minimum width necessary for the
adjacent land use (0.5) and only protects 80% of the
restoration area (0.5*0.8 = 0.4)
 Credit Schedule = Concurrent
 Temporal Loss = Over 20 years
 Kind = In-Kind, Bottomland hardwood will be impacted
on the project site and Headwater Forest will be restored
at the mitigation site.
 Location = 8-Digit HUC.
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27.  The mitigation bank site must be protected using a
conservation easement or a Memorandum of
Agreement between the Corps and an appropriate
Federal, State, or Local Government Agency.
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28.  Financial Assurance in the form of performance
bonds, escrow accounts, casualty insurance,
letters of credit, legislative appropriations for
government sponsored projects, or other
appropriate instruments, must be in place prior to
beginning work.
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29.  For mitigation banks, the instrument must
contain a provision requiring the sponsor to
establish and maintain a ledger to account for all
credit transactions. Each time an approved
credit transaction occurs, the sponsor must
notify the district engineer (33 CFR 332.8(p)).
 The bank sponsor will ultimately be required to
enter all new transactions in RIBITS.
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30.  Parties implementing a mitigtion plan that includes
the purchase of Mitigation Credits must purchase
the credits from a Mitigation Bank within the same
watershed
 Credits cannot be purchased and applied from
another watershed
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31.  What exactly are the “credits”?
 How are they sold and assigned?
 How do you get credit from the Army Corps of
Engineers?
 Due diligence on mitigation bank and sponsor-
owner/operator?
 Different types of wetland mitigation credits?
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32.  Prices for Mitigation Credits will vary from
watershed to watershed depending on availability
of banks and credits and demand for those credits
 Different types of Mitigation Credits may vary in
prices, e.g., stream credits
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33.  Amount and type of credits and price per credit and total
price
 Deposit rather than full payment up front to reserve
credits
◦ Until the permit is issued, credits should not be fully
paid and acquired
 Ensure you are contracting with the right party, who has
ownership and ability to sell credits
 Ensure credits available and not encumbered with liens
or other restrictions
 Agreement seller will maintain credit bank and particular
credits so credits remain valid
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34.  Representations by seller
◦ Ownership of credits
◦ Specific type of credits being purchase and available
◦ Bank is fully developed and approved under Clean
Water Act and by Army Corps of Engineers
 Extensions of right to obtain credits, if permit is not
issued in a set period of time
◦ Possible additional deposit to allow for additional time
 Deposits to be credited to purchase price
 Return of deposit if credits are not purchased
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35.  Have qualified biological consultant conduct
wetlands mitigation survey early in construction
and development process
 Identify wetlands
 Consult with ACE as appropriate regarding
wetlands determinations
 Developing Plan Early for Mitigation and Role of
Wetlands Mitigation Credits
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36.  Apply for any needed wetlands permits
 Seek Nationwide or General Permit if necessary
as process is streamlined and less time
consuming
 Early identification and planning to deal with
wetlands will reduce costs and delay in
construction and avoid potential enforcement
actions and potential fines and penalties
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37. Scott D. Deatherage
Partner
Gardere Wynne Sewell
Dallas, Texas 75201
214-999-4979
sdeatherage@gardere.com
Energy and environmental lawyer with experience
in compliance auditing, environmental corporate
governance, enforcement actions and litigation,
permitting, environmental and climate change
disclosures under SEC and voluntary programs.
Areas of experience include air emissions,
wastewater, welands, solid and hazardous waste,
contaminated soil and groundwater, and health
and safety.
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