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agencies with jurisdiction will require in the permit for the aquatic impact, the appropriate number of <br />advance credits necessary for mitigation. If necessary, the agencies will also define specific areas of <br />the advance mitigation site designed to address compensation for specific impacts to critical on-site <br />functions or habitat type that might be required (e.g. a created stream channel may be required to <br />mitigate for filling a stream). In some cases the agencies may require critical functions to be <br />mitigated on-site at the impact location while other functions may be appropriately mitigated at the <br />advance site ("decoupling"). Critical functions are those site specific functions the agencies have <br />determined must be maintained on-site. <br />The agency -approved use as compensatory mitigation of all advance credits must be documented in a <br />ledger managed by the advance mitigation permittee, and submitted to the appropriate regulatory <br />agencies for each ledger transaction. The transaction must document the use of credits and in some <br />cases specific areas on a map that will be deducted or shown as used if necessary to offset critical <br />habitat or function impacts (i.e. a stream creation area to offset stream loss). Any generated credits <br />will not be officially accepted or released by the agencies for compensatory use until the time an <br />applicant proposes the use of credits as mitigation for a specific impacting project, and the regulatory <br />agencies approve use of those credits as mitigation. However if a site has achieved performance <br />standards as outlined in the advance mitigation plan but the advance site has not been approved by <br />the regulatory agencies for use, , the opportunity for the permittee to use the advance mitigation site <br />will not expire. The functional lift achieved by the site will be considered by the agencies when <br />proposed for use by the permittee. <br />Pertinent Regulations <br />Federal <br />The Corps and the Environmental Protection Agency (EPA) published a rule on Compensatory <br />Mitigation for Losses of Aquatic Resources (Mitigation Rule) (33 CFR Parts 325 and 332, <br />40 CFR Part 230), dated April 10, 20082. The Mitigation Rule defines requirements of compensatory <br />mitigation for unavoidable impacts to the nation's aquatic resources resulting from authorized <br />activities. The Mitigation Rule is intended to enable the agencies to promote greater consistency, <br />predictability and ecological success of mitigation projects under the Clean Water Act and Rivers <br />and Harbors Act. <br />The Mitigation Rule defines three forms of compensatory mitigation: mitigation banks; in -lieu fee <br />programs; and permittee -responsible mitigation. The Federal hierarchy of preferred forms of <br />mitigation is <br />1. Mitigation banks <br />2. In -lieu fee programs <br />3. Permittee -responsible mitigation that is undertaken using a watershed approach, if <br />appropriate and practicable <br />4. On-site and in-kind <br />5. Off-site and/or out -of -kind. <br />When proposing advance mitigation in a service area where a mitigation bank or in -lieu fee program <br />has been approved, the applicant must demonstrate why the advance site is ecologically preferable to <br />2 The Mitigation Rule can be found online at: <br />http://water.epa.gov/lawsregs/guidance/wetlands/wetlandsmiti ag tion_index; efm. <br />3 <br />