N.J. Admin. Code § 7:7A-11.25

Current through Register Vol. 56, No. 24, December 18, 2024

Section 7:7A-11.25 - Mitigation banks

(a) A mitigation bank requires approval by the Department prior to the sale of any mitigation credits. "Approval" for the purposes of this section means approval in accordance with N.J.A.C. 7:7A-11.26.

(b) If the establishment of a mitigation bank involves regulated activities as described at N.J.A.C. 7:7A-2.2 or 2.3, the bank operator shall obtain all necessary approvals from the Department prior to undertaking the regulated activities.

(c) Once the Department has approved a mitigation bank, the bank operator shall carry out all requirements of the banking instrument approving the bank, regardless of whether or when credits are sold. Construction of the wetland creation, enhancement, and restoration components of an approved mitigation bank shall be initiated no later than one year after the date of the first credit transaction.

(d) The Department shall determine how many mitigation credits each mitigation bank operator may receive or sell, based on the increase in values and functions created as a result of the proposed mitigation bank, as well as how the increase in functions and values will interact with the regional wetland and aquatic resources. The Department shall evaluate each mitigation bank to determine its functions and values considering the following:

1. The functions and values provided by the bank site at the time the mitigation bank proposal is submitted, such as existing soil, vegetation, water quality functions, flood storage capacity, soil erosion and sediment control functions, and wildlife habitat functions;

2. Whether the proposed mitigation activities will result in an increase in functions and values over the existing value of the mitigation bank site;

3. The likelihood of long-term success of the proposed mitigation activities in creating functions and values similar to an undisturbed wetland and/or State open water;

4. The amount of wetlands, transition area, and/or State open waters on the proposed bank site;

5. The potential for the completed mitigation site to be a valuable component of the ecosystem;

6. The size and scope of the bank;

7. The types of resource losses that have occurred in the area;

8. The similarity or dissimilarity of the bank to other existing aquatic and wetland resources in the area;

9. Available scientific literature regarding credit ratios; and

10. The Department's and other government agencies' experience with mitigation and mitigation banks.

(e) The Department shall include in the banking instrument approving a mitigation bank a schedule, as set forth at (e)1 through 8 below, under which a bank operator may sell credits. The Department shall adjust the amount of credits that can be released under (e)2 through 8 below to reflect the degree of progress the bank has shown toward meeting the goals and performance standards in the approved mitigation proposal:

1. Ten percent of the credits shall be released upon completion of both of the following:

i. Signing of the banking instrument approving the bank; and

ii. Compliance with all pre-release credit sale conditions in the banking instrument approving the bank, including securing all construction permits, posting adequate and effective financial assurance in accordance with N.J.A.C. 7:7A-11.17, and filing of the conservation restriction;

2. Up to 10 percent of the credits shall be released upon successful establishment of the approved hydrologic regime, such that this regime will persist over time under normal hydrologic conditions;

3. Up to 10 percent of the credits shall be released upon completion of planting as required in the banking instrument approving the bank;

4. Up to 10 percent of the credits shall be released when monitoring indicates that the performance standards in the banking instrument approving the bank have been met for an entire one-year period;

5. Up to 10 percent of the credits shall be released when monitoring indicates that the performance standards in the banking instrument approving the bank have been met for a two-year period;

6. Up to 15 percent of the credits shall be released when monitoring indicates that the performance standards in the banking instrument approving the bank have been met for three consecutive years; and

7. Up to 15 percent of the credits shall be released when monitoring indicates that the performance standards in the banking instrument approving the bank have been met for four consecutive years; and

8. The remaining credits shall be released when monitoring in accordance with the banking instrument approving the bank indicates that the performance standards in the banking instrument have been met for five consecutive years.

(f) Preservation credits may be released in their entirety when the conditions set forth at (e)1 above have been met.

(g) The mitigation bank operator shall execute and record a conservation restriction on the mitigation bank site prior to the sale of any credits. The conservation restriction shall meet the requirements of N.J.A.C. 7:7A-12.

(h) The mitigation bank operator shall monitor the bank during and after construction until such time that the last credit is sold, the final inspection is conducted, or the bank is transferred to a charitable conservancy, whichever occurs last, in order to ensure its success. The bank operator shall submit progress reports to the Department at least annually during and after construction, and more frequently if required by the banking instrument approving the bank.

(i) If the mitigation bank falls more than one year behind the schedule for completion specified in the banking instrument approving the bank, the Department may amend the banking instrument approving the bank, and may require corrective action to ensure the successful completion of the bank. The Department may reduce the number of credits that may be sold based on the approved corrective action, in order to reflect the change in values and functions that will result from the changes to the bank.

(j) Upon completion of the monitoring period and all other requirements in the banking instrument approving the bank, the Department shall determine the mitigation bank is successful, provided the mitigation bank operator:

1. Demonstrates that the bank is successful, as set forth within the banking instrument and the permit;

2. Transfers the mitigation bank site in fee simple to a government agency or Department-approved charitable conservancy;

3. Provides the government agency or charitable conservancy to which the mitigation bank site is transferred with a maintenance fund. The maintenance fund shall support maintenance activities such as trash removal, maintenance of natural features, monitoring the site to ensure proper upkeep, maintenance of water control structures, fences or safety features, and any other activities necessary to ensure the site complies with this chapter and all applicable laws. The amount of the maintenance fund shall be determined between the bank operator and the agency or conservancy to which the mitigation bank site is transferred; and

4. Ensures that the transfer, and the conservation restriction required under (g) above, are recorded with the county or other appropriate agency.

(k) If the Department determines that the mitigation bank operator is in default of any provision of the mitigation banking instrument, the Department shall determine whether the amount of mitigation completed at the bank site is commensurate with the number of credits already sold. If the Department determines that the amount of mitigation completed is less than the number of credits already sold, the Department may assert its rights to the financial assurance provided under N.J.A.C. 7:7A-11.17(k) and (l).

N.J. Admin. Code § 7:7A-11.25

Amended and recodified from 7:7A-15.23 by 49 N.J.R. 3849(a), effective 12/18/2017