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A FAIR, FLEXIBLE, AND EFFECnVE APPROACH 17 



development actions. The Administration supports the use of mitigation banking in 

 appropriate circumstances as a means of compensating for authorized wetland impacts. 



The Administration is proposing the following actions to ensure that mitigation of 

 environmental impacts within the Section 404 program is effective, predictable, and 

 consistent with a watershed management perspective: 



<• Issue Mldgtttion Planning Guidance. The Corps, in coordination with EPA, FWS, 

 SCS, and the National Marine Fisheries Service (NMFS), will issue guidance to their field 

 staff to clarify the requirements for developing compensatory mitigation conditions in 

 Section 404 permits. This guidance is intended to increase the success of mitigation 

 projects in offsetting impacts to wetlands and other waters resulting from permitted 

 activities. This guidance will assist permit applicants by providing greater consistency 

 and certainty with regard to how Section 404 mitigation requirements are applied. 



• Endorse the Use of Mitigation Banking Under the Section 404 Regulatory Program. 



While a number of technical and pnxredural questions regarding the establishment and 

 long term management of mitigation banks remain, conceptually mitigation banking, with 

 appropriate environment safeguards, offers numerous advantages. Banking provides for 

 greater certainty of successful compensatory mitigation in the permit process by requiring 

 mitigation to be established before permits are issued. Banks are often ecologically 

 advantageous because they consolidate fragmented wetland mitigation projects into one 

 large contiguous parcel that can more effeaively replace the lost wetland functions within 

 the watershed. Mitigation banks also provide a framework for financial resources, 

 planning and technical expertise to be brought together in a fashion often not possible 

 with smaller mitigation projects. 



Recognizing the advantages offered by mitigation banking to compensate for wetlands 

 losses, Congress should endorse the appropriate use of banking as a compensatory 

 mitigation option under the Section 404 regulatory program, within enviroimientally sound 

 limits. Congress should also explicitly allow use of the State Revolving Fund by States 

 to capitalize mitigation banks. 



• Issue Mitigation Banking Guidance. EPA and the Corps, in coordination with FWS, 

 NMFS, and SCS have issued guidance to their field staff to clarify the manner in which 

 wetlands mitigation banking is appropriately used within the Section 404 regulatory 

 program. This guidance provides interim d|rection pending the results of additional 

 studies, but will encourage, wdtbin environmentally sound limits, the use of mitigation 

 banks for compensatory mitigation under Section 404. 



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• Develop Improved Analytical Tools. The agencies will expedite current efforts being 

 coordinated by the Corps Waterways Experiment Station to develop an improved wetland 

 functional assessment tool, the Hydrogeomorphic Qassification System, to assist in 

 conducting impact analysis and determining appropriate and effective mitigation measures. 



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