\"R.Deedee Kathman\" \<R.Deedee.Kathman@state.tn.us\>

06/26/2006 01:07 PM

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Group Ow-Docket@EPA

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Subject

EPA-HQ-OW-2006-0020; RIN 0710-AA55

Attached please find the comments for the following:

Department of Defense, Department of the Army, Corps of Engineers

33 CFR Parts 325 and 332

and Environmental Protection Agency

40 CFR Part 230

\"Compensatory Mitigation for Losses of Aquatic Resources; Proposed
Rule\"

Thank you.

Environmental Division

Ecology Section

James K. Polk Building

505 Deaderick Street

Nashville, TN 37243

615-253-2472

615-741-1098 fax

![](media/image1.png){width="0.7708333333333334in"
height="0.7930555555555555in"}

**STATE OF TENNESSEE**

**DEPARTMENT OF TRANSPORTATION**

**ENVIRONMENTAL DIVISION**

**SUITE 900 - JAMES K. POLK BUILDING**

**505 DEADERICK STREET**

**NASHVILLE, TENNESSEE 37243-0334**

26 June 2006

USEPA Docket Center

Attention Docket Number EPA-HQ-OW-2006-0020

1200 Pennsylvania Avenue, NW

Washington DC 20460

Subject: Docket Number EPA-HQ-OW-2006-0020

RIN Number 0710-AA55

Compensatory Mitigation for Losses of Aquatic Resources; Proposed Rule

Dear Sir or Madam:

Enclosed please find comments from the Tennessee Department of
Transportation (TDOT), Environmental Division, regarding the
above-referenced subject. The changes outlined in the Proposed Rule are
of particular concern to TDOT, as we feel that the current mitigation
practices in Tennessee for both wetland and stream mitigation are well
established and working to the benefit of the federal and regulatory
agencies, as well as the users.

During the course of the development and construction of our linear
transportation projects, the Department often encounters unique
situations involving both wetlands and streams. As a result, TDOT has
developed close working relationships with all of the federal and
regulatory agencies. These close working relationships have proven to
benefit TDOT, the regulatory agencies, and the citizens of Tennessee.

Tennessee has a well established wetland mitigation bank system and an
in-lieu fee program, both of which have high standards and strict
oversight. The wetland mitigation bank system and the in-lieu fee
program have been successfully integrated into our transportation
development process when mitigation for wetland or stream impacts proves
necessary. The proposed rules place an undue hardship on altering two
existing programs which have proven success in Tennessee.

Thank you for your consideration.

Sincerely,

Douglas J. Delaney, AICP

Director

cc: Ed Cole, Dennis Cook, John Hewitt, Harold Jackson, Deedee Kathman,
Mike Williams

**Department of Defense, Department of the Army, Corps of Engineers: 33
CFR Parts 325 and 332**

**Environmental Protection Agency: 40 CFR Part 230**

**Compensatory Mitigation for Loss of Aquatic Resources: Proposed Rule**

**Docket Number EPA-HQ-OW-2006-0020; RIN Number 0710-AA55**

***General Comments:***

• The proposed rule concentrates authority within the Corps district
engineer (DE) and has the potential to limit involvement by the state
resource agencies, thus limiting existing good working relationships
among these agencies and placing an extra burden on the DE. This also
fails to recognize the state regulatory agencies\' roles in the
existence of successful and more stringent programs, such as those in
Tennessee.

• Although assumed to be well-intentioned, the proposed rules are often
vague, inaccurate, and contradictory, and will require additional
workloads (e.g., draft mitigation plan/final mitigation plan,
development of watershed plans, detailed mitigation proposals),
additional paperwork (e.g., draft and final mitigation plans, ecological
performance standards, maintenance plans, management plans, etc.) and
long review and approval timeframes (e.g., 210 days for approval of the
prospectus, draft banking instrument, and final banking instrument).
There are no proposed scientifically-based standards or criteria; thus
decisions could vary among states and regions, and be based on the
personal judgment of one individual (the DE).

• This approach does not account for state in-lieu fee programs for
streams which are currently functioning as intended, and provides no
substantiation of why existing in-lieu fee programs are not working.
There is no reason to discontinue these programs if they have been shown
to be working well and are successful in restoring water quality and
habitat. Having one not-for-profit state program, as Tennessee does,
allows consistency and high standards to be established across the
state. The Tennessee Stream Mitigation Program, with a high level of
oversight by the Stream Mitigation Review Team (SMRT), is well
established and provides high quality, consistent mitigation for all
situations. Penalizing programs such as Tennessee\'s that are
established and working as intended because other states\' in-lieu fee
programs are not effective makes no sense. Standards can be established
which would ensure that all in-lieu fee programs adhere to similar
strict guidelines, as set by federal and state regulatory agencies and
checked by established oversight committees.

• These proposed rule changes appear to be promoting private companies
to establish banks, which means that the ultimate goal of these
companies will be profit, whereas the Tennessee Stream Mitigation
Program is a not-for-profit entity, enabling it to do more work for the
actual cost, with the ultimate goal of stream restoration, not the
amount of possible profit. This means that more watercourses will
benefit, the citizens of the state will pay less money for the same
amount of mitigation, and only one oversight review board is necessary
to ensure quality and consistency. It is important to be concerned about
the *quality* of the banking system, not the *quantity* of the banks and
how much money is being borne by citizens for the profit of a few
individuals.

• TDOT is particularly concerned about the necessity to perform on-site
mitigation for every project that requires mitigation, regardless of the
quantity or quality of the lost/damaged resource. In many projects,
stream loss may be as little as 10 feet, or wetland loss less than 0.1
acre. It would be very difficult to find a stream mitigation site in the
watershed where someone is willing to mitigate for that length of stream
and the small amount of money generated for this mitigation. Being
unable to find such mitigation would essentially shut down many
projects. Currently, however, this money is placed into the in-lieu fee
program, which can then apply it to a larger project which has
meaningful results. The wetland mitigation

1

banking sites across Tennessee are able to accommodate all of our needs,
and protect/establish/ enhance more wetlands through their 2:1 or 4:1
ratio requirements. There are many counties where finding potential
on-site wetland areas would be impossible (due to factors such as
geography, geology, soils, development, landowner unwillingness, etc.).
Our current system, with strict guidelines and oversight by the
Mitigation Banking Review Team (MBRT), provides a well-established,
working program which benefits everyone.

• Watershed plans for much of Tennessee do not exist, and for those
areas that have them, they were not developed with mitigation in mind,
potentially meaning that there are no watershed plans which would be
applicable to the proposed rules.

• Besides ecological considerations for avoidance, minimization, and
mitigation, TDOT also has to consider archaeological, cultural, and
historical resources, as well as effects of noise and air pollution and
hazardous materials. How will other factors be considered in determining
a roadway corridor, and how will all of these factors be prioritized?

• How will streams be classified, what parameters will be used to
classify streams, and who will make the decision about their
classification, which will be used for mitigation purposes? For example,
factors could include size of stream, location, surrounding land use,
state- or federally-listed species present, perennial, intermittent,
water quality (chemical or biological), those on the 303(d) list,
classified use determination, etc.

***Specific Comments***

• §332.2: \"*On-site means on the same parcel of land*...\" There is no
clear definition of \"parcel\". Is \"parcel\" defined by ownership,
plant communities, hydrological regime, etc.?

• §332.3(d)(6): The site selection requirements cite a list of factors,
including the last one (6) \"other relevant factors...\". This is very
broad and left open to interpretation by the district engineer reviewing
the submittal. Thus there is no consistent, specific criteria on which
to base an application, which could potentially be considered
incomplete, extending the review and approval time considerably.

• §332.3(f): Currently, hydrogeomorphic classification and assessment
methods exist for only three types of wetlands found in Tennessee, while
other methods have been informally modified for use in assessing
Tennessee wetlands. Will a preferred assessment method be specified?
Will the district engineer perform these assessments, as it currently
reads in §332.3(f)?

\"*If a functional assessment is not used, a minimum one-to-one acreage
or linear footage replacement ration should be used as a surrogate for
functional replacement. The district engineer must require a mitigation
ratio greater than one-to-one where necessary to account for ...
differences between the functions lost and the functions to be produced
by the compensatory mitigation site*\". If a functional assessment
method is not used or available, what method(s) will be used to
determine the difference(s) in functions of the impact site versus
functions of the mitigation site? Who will be responsible for
determining these methods? How will ratios be determined for both
wetlands and streams? Any functional assessment methods and mitigation
ratios should be determined with input or consensus for the regulated
community, not just regulators and federal commenting agencies.

• §332.3(b)(4): This indicates that as an alternative, off-site and/or
out-of-kind mitigation may be permitted but that mitigation should be
located in the same watershed as the impact site. TDOT would suggest
including the option of mitigating outside of the affected watershed if
required, including use of mitigation banks for effects that occur
outside of their established service area. It is especially important
that mitigation for transportation projects be flexible, as we encounter
numerous situations which do not fall into a particular pattern or
category.

2

• §332.4(a) & (c): Paragraph (a) encourages applicants to participate in
pre-application meetings with the Corps and appropriate agencies while
paragraph (b) requires submittal of a draft mitigation plant to the
District engineer for review. It appears that activities in both
paragraphs will require additional resources, including personnel, from
the Corps and from other agencies\--have provisions been made within the
Corps and other regulatory agencies to address the additional workload?

• §332.9: As a state DOT, we work to develop projects throughout the
state of Tennessee, which consists of 54 watersheds (8-digit HUC) within
10 major river basins. Use of the in-lieu fee program to mitigate for
stream effects allows us to mitigate for small as well as rather lengthy
effects, some of which are not apparent until late in project
development. The proposed modification of in-lieu fee programs to meet
the requirements for mitigation banks would necessitate establishment of
an inordinate number of stream mitigation banks to ensure that
mitigation is available prior to issuance of permits while meeting the
service area requirements. We strongly recommend the continuation of the
use and establishment of in-lieu fee arrangements, with appropriate
mitigation costs/ratios and mitigation project site monitoring to ensure
that these arrangements adhere to the same standards as mitigation banks
(the \"level playing field\"). Dedicated in-lieu fee professionals can
accomplish projects of more significant scope and ecological importance
than the typical project sponsor can with project-specific on- or
off-site mitigation.

• §332.8(b)(4): \"*The district engineer will give full consideration to
the comments and advice of the IRT. However, the district engineer alone
retains final authority for approval of the mitigation banking
instrument.*\" A strong oversight team (such as the proposed Interagency
Review Team) composed of all regulatory agencies within a state should
have the final say about any matters concerning the mitigation banks.
Tennessee\'s MBRT and SMRT are comprised of both state and regulatory
agency personnel, who together have a better understanding of the needs
of the applicant and the state, thus providing a consensus which will
benefit everyone. One individual cannot provide all of the expertise
needed to make informed decisions.

• §332.8(k)(7): \"*The credit release schedule should reserve a
significant share of the total credits for release only after full
achievement of ecological performance standards*.\" We recommend that
\"significant\" be defined as no more than 50% of the total anticipated
bank credits. TDOT has assisted in the establishment of several wetland
mitigation banks through the purchase of 50% of total eventual credits
(referred to as pre-credits). Without the financial support made
possible by the purchase and use of pre-credits prior to the bank
achieving full functional status, many of these mitigation banks would
not have been established. We would suggest that the current practice
provides more incentive and actually promotes banking initiatives.
Additional monitoring could help ensure that the banks were functioning
as planned.

• §332.8 (k)(4) & (m): Use of credits. Nothing in the proposed
rulemaking mentions mitigation bank credits that are withdrawn from a
site and then not used, being able to be reinstated to the mitigation
bank. This is particularly important if mitigation credits are withdrawn
during the permit application, then the project roadway alignment
changes, and mitigation is not needed.