HSB 80 (LSB 1245DP (5) 88)

SENATE/HOUSE FILE _____

BY  (PROPOSED DEPARTMENT OF NATURAL RESOURCES BILL)

A BILL FOR

An Act relating to fee programs for permittee participation in lieu of required compensatory mitigation of stream and wetland impacts and making appropriations.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  PURPOSE.  The general assembly finds and declares that because the federal Water Pollution Control Act of 1972, Pub. L. No. 92-500, as amended by the Water Quality Act of 1987, Pub. L. No. 100-4, as published in 33 U.S.C. §1251 – 1387, as amended, provides for a permit system to regulate the discharge of dredge and fill materials to the waters subject to the jurisdiction of that Act, and because the terms of such federal permits may provide for the mitigation of impacts to aquatic resources by permitted entities, it is in the interest of the people of Iowa to enact provisions authorizing the establishment of programs for the payment of a fee in lieu of other compensatory mitigation actions required by the United States army corps of engineers.
    Sec. 2.  NEW SECTION.  456B.16  Definitions.
   As used in this subchapter, unless the context otherwise requires:
   1.  “Compensatory mitigation” means the restoration, establishment, enhancement, or preservation of aquatic resources for the purpose of offsetting unavoidable adverse impacts that remain after all appropriate and practicable avoidance and minimization have been achieved.
   2.  “Federal Water Pollution Control Act” means the federal Water Pollution Control Act of 1972, Pub. L. No. 92-500, as amended by the Water Quality Act of 1987, Pub. L. No. 100-4, as published in 33 U.S.C. §1251 – 1387, as amended.
   3.  “Geographic service area” means the geographic area within which impacts can be mitigated at a specific mitigation bank or an in-lieu fee program, as designated in the mitigation bank or in-lieu fee program instrument.
   4.  “In-lieu fee program” means a program involving the restoration, establishment, enhancement, or preservation of aquatic resources through funds paid to a governmental or nonprofit natural resources management entity to satisfy compensatory mitigation requirements for permits issued by the United States army corps of engineers.
   5.  “Mitigation bank” means a site, or suite of sites, where resources such as wetlands, streams, and riparian areas are restored, established, enhanced, or preserved for the purpose of providing compensatory mitigation for impacts authorized by permits issued by the United States army corps of engineers.
   6.  “Mitigation credit” means a unit of measure such as a functional or areal measure or other suitable metric representing the accrual or attainment of aquatic functions at a compensatory mitigation site. The measure of aquatic functions is based on the resources restored, established, enhanced, or preserved. 
    Sec. 3.  NEW SECTION.  456B.17  Authorization.
   1.  The department may establish in-lieu fee programs providing for the payment of a fee to compensate for impacts to aquatic resources by permittees under section 404 of the federal Water Pollution Control Act whose activities have been determined by the United States army corps of engineers to require mitigation.
   2.  Any in-lieu fee program established by the department shall:
   a.  Provide a mitigation alternative that will effectively replace aquatic life functions and values lost through permitted impacts.
   b.  Provide permittees with an additional method to compensate for adverse impacts to aquatic resources.
   c.  Achieve ecological success on a watershed basis by directing funds to protected natural resource types and functions that are appropriate to the geographic service area, and by integrating projects with other conservation activities whenever possible.
   d.  Provide for the sale of mitigation credits to be purchased by permittees in lieu of other forms of compensatory mitigation.
   e.  Using the proceeds from the sale of mitigation credits, provide funding for the restoration, establishment, enhancement, and preservation of aquatic resources within the state.
   3.  The department may enter into agreements with entities for the administration of all or part of an in-lieu fee program, the establishment of appropriate compensation for such administration, and such further terms and conditions as necessary to fulfill the purposes of the program and the requirements of state and federal law.
   4.  If the department establishes an in-lieu fee program, it shall enter into agreements with the army corps of engineers as required for the establishment of an in-lieu fee program. 
   5.  If a mitigation bank authorized by the army corps of engineers exists in a given geographic service area, the program shall only accept payment of fees in lieu of mitigation for projects in that geographic service area if the mitigation bank is unavailable to provide the needed credits. Payment of fees in lieu of mitigation made prior to the authorization of a mitigation bank in a geographic service area shall be expended as soon as practicable by the department.
   6.  Utilization of an in-lieu fee program shall not be based upon market price of available mitigation bank credits and a program shall review the market price of mitigation banks by geographic service areas to establish costs for the program by geographic service area.
    Sec. 4.  NEW SECTION.  456B.18  Compensatory mitigation fund established.
   1.  A compensatory mitigation fund is created in the state treasury. Moneys received from payments of fees in lieu of mitigation shall be deposited into the fund. Notwithstanding section 8.33, any unexpended balances in the compensatory mitigation fund and in any accounts within the compensatory mitigation fund at the end of each fiscal year shall be retained in the fund and any respective accounts within the fund. Notwithstanding section 12C.7, subsection 2, interest or earnings on investments or time deposits of the moneys in the compensatory mitigation fund or in any accounts within the compensatory mitigation fund shall be credited to the fund or accounts within the fund.
   2.  Moneys in the fund are appropriated to the department for the restoration, establishment, enhancement, and preservation of aquatic resources within the state to offset impacts to aquatic resources by permittees who are required to provide compensatory mitigation pursuant to section 404 of the federal Water Pollution Control Act. In establishing the amount of the in-lieu fee to be charged, the department shall include an amount for the expenses of administering the program. The administrative costs shall be a percentage of the fee.
    Sec. 5.  NEW SECTION.  456B.19  Rules.
   The department shall adopt rules pursuant to chapter 17A as necessary to carry out the purposes of this subchapter.
    Sec. 6.  CODE EDITOR DIRECTIVE.  The Code editor is directed to divide chapter 456B into subchapters.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   The United States army corps of engineers may require that a permittee under the federal Water Pollution Control Act section 404 permitting program provide mitigation of impacts to the streams and wetlands that arise from the permitted project. Federal rules authorize states to establish fee programs in lieu of requiring on-site mitigation.
   This bill authorizes the department of natural resources to establish in-lieu fee programs to provide for the payment of a fee by a permit holder in lieu of performing mitigation. The bill allows the department to enter into agreements with entities for the administration of all or part of an in-lieu fee program. Any in-lieu fee program must be approved by the army corps of engineers. Fees collected from an in-lieu fee program shall be deposited into a compensatory mitigation fund created in the state treasury. The moneys in the fund are appropriated to the department for the restoration, establishment, enhancement, and preservation of aquatic resources within the state to offset impacts to aquatic resources by entities permitted under section 404 of the federal Water Pollution Control Act. The departments shall adopt rules to carry out the purpose of the bill.