Mitigation of Impacts to Wetlands and Natural Habitat

DEPARTMENT OF TRANSPORTATION

Federal Highway Administration

23 CFR Part 777

[FHWA Docket No. FHWA-97-2514; 96-8]

RIN 2125-AD78

Mitigation of Impacts to Wetlands and Natural Habitat

AGENCY: Federal Highway Administration (FHWA), DOT.

ACTION: Supplemental notice of proposed rulemaking (SNPRM); request for

comments.

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SUMMARY: The FHWA is further supplementing its June 17, 1996, notice of

proposed rulemaking (NPRM), Mitigation of Impacts to Wetlands, and June

18, 1997, supplemental notice of proposed rulemaking (SNPRM) on the

same subject, as described in the supplementary information. This SNPRM

also updates the FHWA's wetlands regulation to conform with wetland and

natural habitat mitigation provisions contained in the recently enacted

Transportation Equity Act for the 21st Century (TEA-21).

DATES: Comments must be received on or before June 7, 1999.

ADDRESSES: All signed, written comments must refer to the docket number

appearing at the top of this document. Submit all comments to the

Docket clerk, U.S. DOT Dockets, Room PL-401, 400 Seventh Street, SW.,

Washington, DC 20590-0001. All comments received will be available for

examination at the above address between 10 a.m. and 5 p.m., e.t.,

Monday through Friday, except Federal holidays. Those desiring

notification of receipt of comments must include a self-addressed,

stamped envelope or postcard.

[[Page 16871]]

FOR FURTHER INFORMATION CONTACT: Mr. Paul Garrett, Office of Natural

Environment, HENE, (303) 969-5772, extension 332, or Mr. Brett Gainer,

Office of the Chief Counsel, HCC-31, (202) 366-1372, Federal Highway

Administration, 400 Seventh Street, SW., Washington, D.C. 20590. Office

hours are from 7:45 a.m. to 4:15 p.m., e.t., Monday through Friday,

except Federal holidays.

SUPPLEMENTARY INFORMATION:

Electronic Access

Internet users can access all comments received by the U.S. DOT

Dockets, Room PL-401, by using the universal source locator (URL):

http://dms.dot.gov. It is available 24 hours each day, 365 days a year.

Please follow the instructions online for more information and help.

An electronic copy of this document may be downloaded using a modem

and suitable communications software from the Government Printing

Office's Electronic Bulletin Board Service at (202)-512-1661. Internet

users may reach the Federal Register's home page at: http://

www.nara.gov/fedreg and the Government Printing Office's database at

http://www.access.gpo.gov/nara.

I. The Rulemaking Process

This rulemaking would amend the FHWA's regulation on wetlands

mitigation to conform with the provisions of the Intermodal Surface

Transportation Efficiency Act (ISTEA) (Pub. L. 102-240, 105 Stat.1914),

TEA-21, and state-of-the-art practices in wetland science, technology,

and management.

II. Public Participation

An NPRM on this subject was published in the Federal Register on

June 17, 1996 (61 FR 30553). The comment period was from June 17

through August 16, 1996. Subsequently, an SNPRM was published in the

Federal Register on June 18, 1997 (62 FR 33047). The comment period for

this SNPRM was from June 18 through August 18, 1997.

In its June 17, 1996, NPRM and June 18, 1997, SNPRM, the FHWA

proposed to amend 23 CFR part 777, Mitigation of Impacts to Privately

owned Wetlands, in order to update the current, out-dated regulations

in light of changes brought about by the ISTEA. Specifically, the June

17, 1996, NPRM proposed revision to the previous regulation (23 CFR

part 777) to conform to ISTEA, thereby providing more flexibility to

State Departments of Transportation (DOT) in determining eligibility of

mitigation alternatives for Federal participation. The NPRM proposed

broadening the scope of the regulation to encompass all wetland

mitigation projects eligible for Federal participation, not just those

involving privately owned wetlands. The June 18, 1997 SNPRM proposed to

clarify the scope of the FHWA's wetlands regulations by specifying that

they apply to all projects funded pursuant to the provisions of title

23, United States Code (Title 23). The rulemaking proposed also to make

a technical amendment to the text of the June 17, 1996 NPRM.

Recently, TEA-21 (Pub. L. 105-178, 112 Stat. 107) added funding

eligibility under the NHS and STP programs for mitigation of impacts on

natural habitats due to highway projects funded under title 23, U.S.C.

This rulemaking would also include a provision requiring that existing

wetland and habitat mitigation banks be given preference for use in

establishing compensatory mitigation if the highway project impacts

occur within the bank's service area (Sections 1106(b) and 1108(a) of

TEA-21; 23 U.S.C. 103(b)(6)(M) and 133(b)(11). In this SNPRM, the FHWA

would revise the current proposed regulation to conform to the

authority of TEA-21.

In addition to making changes to conform with TEA-21, this proposal

would broaden the scope of the current regulation to encompass all

mitigation projects for impacts to wetlands and natural habitats

eligible for Federal participation, not just those involving privately

owned wetlands. This SNPRM also applies to projects under the Federal

Lands Highway Program, as described in Sec. 777.1, Purpose.

With all this in mind, the FHWA has decided to issue this SNPRM,

which would further amend part 777. At each place where the term

``wetlands'' occurs in the regulatory text, this SNPRM proposes to add

either the words ``natural habitat'' or ``habitat.'' In addition,

Sec. 777.2, Definitions, would be amended to add a definition of the

term ``natural habitat.'' Where negative impacts are unavoidable, the

Department of Transportation's Fiscal Year 1999 and 2000 Performance

Plans establish an objective to minimize the adverse impacts of

projects on wetlands and to achieve a net gain of wetlands in the

Federal-aid and Federal Lands Highway Programs. Thus, a new definition

for ``net gain of wetlands'' would be added to Sec. 777.2.

Section 777.9, Mitigation of Impacts, would be amended by adding a

preference for existing wetlands banks or natural habitat banks to the

provision authorizing the expenditure of Federal-aid highway funds for

wetlands and natural habitat mitigation banking and related measures.

Finally, the title of part 777 would be changed to read,

``Mitigation of Impacts to Wetlands and Natural Habitat.'' The FHWA

invites comments on this new proposal.

Rulemaking Analyses and Notices

All comments received before the close of business on the comment

closing date indicated above will be considered and will be available

for examination in the docket at the above address. Comments received

after the comment closing date will be filed in the docket and will be

considered to the extent practicable, but the FHWA may issue a final

rule at any time after the close of the comment period. In addition to

late comments, the FHWA will also continue to file in the docket

relevant information that becomes available after the comment closing

date, and interested persons should continue to examine the docket for

new material.

Executive Order 12866 (Regulatory Planning and Review and DOT

Regulatory Policies and Procedures)

The FHWA has considered the impact of this document and has

determined that it is neither a significant rulemaking action within

the meaning of Executive Order 12866 nor a significant rulemaking under

the regulatory policies and procedures of the Department of

Transportation. This rulemaking would supplement the FHWA's NPRM

proposing to amend its regulations regarding mitigation of impacts to

privately owned wetlands, which have become outdated because of

provisions in Sections 1006 and 1007 of the ISTEA authorizing greater

flexibility for Federal participation in mitigating impacts to

wetlands. These amendments have been codified at 23 U.S.C. 103 and 133.

The recently enacted TEA-21 added the term ``natural habitat'' to the

eligibility provisions of 23 U.S.C. 103 and 133, and added a preference

for the use of established mitigation banks for wetland mitigation

activities. This SNPRM would amend the NPRM to address these new

provisions.

This SNPRM would not cause any significant changes to the amount of

funding available to the States under the STP or NHS programs or add to

the process by which States receive funding. The provisions of this

proposed rulemaking would not require the additional expenditure of

Federal-aid or State highway funds. Instead, this SNPRM would merely

clarify the scope of the FHWA's wetlands regulations by specifying that

they apply to all projects

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funded pursuant to title 23, U.S.C. Thus, it is anticipated that the

economic impact of this rulemaking would be minimal. In addition, it

would not create a serious inconsistency with any other agency's action

or materially alter the budgetary impact of any entitlements, grants,

user fees, or loan programs; nor will amendment of this regulation

raise any novel legal or policy issues. Therefore, a full regulatory

evaluation is not required.

Regulatory Flexibility Act

In compliance with the Regulatory Flexibility Act (5 U.S.C. 601-

612), the FHWA has evaluated the effects of this SNPRM on small

entities and has determined it would not have a significant economic

impact on a substantial number of small entities. Supplementing the

FHWA's June 17, 1996, NPRM and June 18, 1997, SNPRM in this manner

would not affect the amount of funding available to the States through

the STP or NHS programs, or the procedures used to select the States

eligible to receive these funds. Furthermore, States are not included

in the definition of ``small entity'' set forth in 5 U.S.C. 601. For

these reasons, and for those set forth in the analysis of E.O. 12866,

the FHWA hereby certifies that this action will not have a significant

economic impact on a substantial number of small entities.

Unfunded Mandates Reform Act of 1995

This proposed rule would not impose a Federal mandate resulting in

the expenditure by State, local, and tribal governments, in the

aggregate, or by the private sector, of $100 million or more in any one

year (2 U.S.C. 1532).

Executive Order 12612 (Federalism Assessment)

This action has been analyzed in accordance with the principles and

criteria contained in Executive Order 12612, and it has been determined

that this action does not raise sufficient federalism implications to

warrant the preparation of a federalism assessment. This SNPRM would

not preempt any State law or State regulation. No additional costs or

burdens would be imposed on the States as a result of this action, and

the States' ability to discharge traditional State governmental

functions would not be affected by this rulemaking.

Executive Order 12372

Catalog of Domestic Assistance Program Number 20.205, Highway

Planning and Construction. The regulations implementing Executive Order

12372 regarding intergovernmental consultation on Federal programs and

activities apply to this program.

Paperwork Reduction Act

This action does not create a collection of information requirement

for the purposes of the Paperwork Reduction Act of 1995, 44 U.S.C.

3501-3520.

National Environmental Policy Act

The FHWA has analyzed this rulemaking for the purposes of the

National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4347).

This SNPRM would not, in and of itself, constitute a major Federal

action significantly affecting the quality of the human environment.

Instead, it would clarify the scope of the June 17, 1996, NPRM, which

was intended to increase the flexibility available to States when

deciding how to mitigate impacts to wetlands resulting from projects

funded pursuant to the provisions of title 23, U.S.C. The passage of

TEA-21, with its addition of the term ``natural habitat'' to the

wetlands mitigation banking provisions of title 23, U.S.C., made this

SNPRM necessary. Such impacts to wetlands and natural habitat and

appropriate mitigation measures would be evaluated pursuant to NEPA on

a project-by-project basis by the States and the FHWA. Accordingly,

promulgation of this SNPRM would not require the preparation of an

environmental impact statement.

Regulatory Identification Number

A regulation identification number (RIN) is assigned to each

regulatory action listed in the Unified Agenda of Federal Regulations.

The Regulatory Information Service Center publishes the Unified Agenda

in April and October of each year. The RIN contained in the heading of

this document can be used to cross reference this action with the

Unified Agenda.

List of Subjects in 23 CFR Part 777

Flood plains, Grant programs--transportation, Highways and roads,

Natural habitat, Wetlands.

Issued on: March 31, 1999.

Kenneth R. Wykle,

Federal Highway Administrator.

In consideration of the foregoing, the FHWA proposes to revise 23

CFR part 777, as set forth below:

1. Part 777 is revised to read as follows:

PART 777--MITIGATION OF IMPACTS TO WETLANDS AND NATURAL HABITAT

Sec.

777.1 Purpose.

777.2 Definitions.

777.3 Background.

777.5 Federal participation.

777.7 Evaluation of impacts.

777.9 Mitigation of impacts.

777.11 Other considerations.

Authority: 42 U.S.C. 4321 et seq.; 49 U.S.C. 303; 23 U.S.C.

101(a), 103, 109(h), 133(b)(1), 133(b)(11), 133(d)(2), 138, 315;

E.O. 11990; DOT Order 5660.1A; 49 CFR 1.48(b).

Sec. 777.1 Purpose.

To provide policy and procedures for the evaluation and mitigation

of adverse environmental impacts to wetlands and natural habitat

resulting from Federal-aid projects funded pursuant to provisions of

title 23, U.S.C. These policies and procedures shall be applied by the

Federal Highway Administration (FHWA) to projects under the Federal

Lands Highway Program to the extent such application is deemed

appropriate by the FHWA.

Sec. 777.2 Definitions.

In addition to those contained in 23 U.S.C. 101(a), the following

definitions shall apply as used in this regulation:

Biogeochemical transformations. Those changes in chemical compounds

and substances which naturally occur in ecosystems. Examples are the

carbon, nitrogen, and phosphorus cycles in nature, in which these

elements are incorporated from inorganic substances into organic matter

and recycled on a continuing basis.

Compensatory mitigation. Activities such as restoration,

enhancement, creation, and under exceptional circumstances,

preservation, of wetlands, wetland buffer areas, and natural habitats,

carried out to replace or compensate for the loss of wetlands or

natural habitat area or functional capacity resulting from Federal-aid

projects funded pursuant to provisions of title 23, U.S.C. Compensatory

mitigation usually occurs in advance of or concurrent with the impacts

to be mitigated, but may occur after such impacts in special

circumstances.

Ecologically desirable. A state or condition desired or wanted as

the result of a mitigation agreement that provides additional wetland

or natural habitat area or functional capacity.

Natural habitat. A complex of natural, primarily native or

indigenous vegetation, not subject to cultivation or current artificial

landscaping, a primary purpose of which is to provide habitat for

wildlife, either terrestrial or aquatic.

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For purposes of this regulation, habitat has the same meaning as

natural habitat.

Net gain of wetlands. When project impacts are unavoidable, a

wetland resource conservation and management principle under which,

over the long term, losses of wetlands area of functional capacity due

to highway projects are offset by gains at a ratio greater than 1:1,

through restoration, enhancement, preservation, or creation of wetlands

or associated areas critical to the protection or conservation of

wetlands functions. This definition specifically excludes natural

habitat, as defined in this section, other than wetlands.

On-site, in-kind mitigation. Compensatory mitigation which replaces

wetlands or natural habitat area or functions lost as a result of a

highway project with the same or like wetland or habitat type and

functions adjacent or contiguous to the site of the impacts.

Service area of a mitigation bank. The service area of a wetland or

natural habitat mitigation bank shall be consistent with that in the

Federal Guidance for the Establishment, Use and Operation of Mitigation

Banks,\1\ i.e., the designated area (e.g., watershed, county) wherein a

bank can be expected to provide appropriate compensation for impacts to

wetlands and/or other aquatic or natural habitat resources.

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\1\ This document is available from FHWA Headquarters, Resource

Centers, and individual State Division Offices for inspection and

copying as prescribed at 49 CFR Part 7.

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Wetland or habitat enhancement. Increasing the capacity of an

altered or degraded site to perform specific functions by modifying the

site conditions in or around the wetland or natural habitat. Examples

include, but are not limited to, alteration of hydrologic regime,

vegetation management, erosion control, fencing, pest control, and

fertilization.

Wetland or habitat establishment period. An agreed-upon period of

time required to establish wetland functional capacity in a

compensatory mitigation project sufficient to compensate wetlands or

habitat losses due to impacts of Federal-aid highway projects. The

establishment period may vary depending on the specific wetland or

habitat type being developed.

Wetland or habitat functional capacity. The ability of a wetland or

natural habitat to perform natural functions, such as provide wildlife

habitat, support biodiversity, store surface water, or perform

biogeochemical transformations, as determined by scientific functional

assessment. Natural functions of wetlands include, but are not limited

to, those listed by the U.S. Army Corps of Engineers at 33 CFR

320.4(b)(2)(I) through (viii).

Wetland or habitat restoration. Reestablishment of wetlands or

natural habitats on a site where they formerly existed but essentially

have been eliminated.

Wetland or wetlands. The terms wetland and wetlands have the same

meaning as the definition issued by the U.S. Army Corps of Engineers

(33 CFR 328.3(b)) and the U.S. Environmental Protection Agency (40 CFR

230.3).

Wetlands and habitat banking and related measures. Efforts, or

contributions to efforts, to restore, create, enhance, or, in

exceptional circumstances, preserve wetlands, natural habitats, or

functional capacity of these areas , usually undertaken in advance and

outside the area of direct impacts of proposed Federal-aid highway

projects and intended expressly to compensate for unavoidable wetlands

or habitat losses caused by such projects, when compensation could not

be achieved or would not be as environmentally beneficial if located at

individual project impact sites.

Wetlands or habitat mitigation credit. A unit of wetlands or

habitat mitigation, defined either by:

(1) Area or

(2) A measure of functional capacity through application of

scientific functional assessment.

Sec. 777.3 Background.

(a) Executive Order 11990, Protection of Wetlands, and DOT Order

5660.1A, Preservation of the Nation's Wetlands, emphasize the important

functions and values inherent in the Nation's wetlands.

(b) Federal agencies are directed to avoid new construction in

wetlands unless the head of the agency determines that:

(1) There is no practicable alternative to such construction, and

(2) The proposed action includes all practicable measures to

minimize harm to wetlands which may result from such use.

(c) Sections 103 and 133 of title 23, U.S.C., identify additional

approaches for mitigation and management of impacts to wetlands and

natural habitats which result from projects funded pursuant to title

23, U.S.C., as eligible for participation with Federal-aid highway

funds.

Sec. 777.5 Federal participation.

(a) Those measures which the FHWA and a State DOT find appropriate

and necessary to mitigate adverse environmental impacts to wetlands and

natural habitats are eligible for Federal participation where the

impacts are the result of projects funded pursuant to title 23, U.S.C.

The justification for the cost of proposed mitigation measures should

be considered in the same context as any other public expenditure; that

is, the proposed mitigation represents a reasonable public expenditure

when weighed against other social, economic, and environmental values,

and the benefit realized is commensurate with the proposed expenditure.

Mitigation measures shall give like consideration to traffic needs,

safety, durability, and economy of maintenance of the highway.

(b) It is FHWA policy to permit, consistent with the limits set

forth in this part, the expenditure of title 23, U.S.C., funds for

activities required for the planning, design, construction, and

establishment of wetlands and natural habitat mitigation projects, and

acquisition of land or interests therein.

Sec. 777.7 Evaluation of impacts.

(a) The reasonableness of the public expenditure should be directly

related to:

(1) The importance of the impacted wetlands and natural habitats,

and

(2) The extent of highway impacts on the wetlands and natural

habitats, as determined through an appropriate, interdisciplinary,

impact assessment.

(b) Evaluation of the importance of the impacted wetlands and

natural habitats should consider:

(1) The wetlands' and natural habitat functional capacity;

(2) Input from the appropriate resource management agencies through

interagency coordination;

(3) The relative importance of these functions to the total wetland

or natural habitat resource of the area; and

(4) Other factors such as uniqueness, esthetics, or cultural

values.

(c) A determination of the highway impact should focus on both the

short-and long-term effects of the project on wetland or natural

habitat functional capacity, consistent with 40 CFR 1502.16.

Sec. 777.9 Mitigation of impacts.

(a) Actions eligible for Federal funding. There are a number of

actions that can be taken to minimize the impact of highway projects on

wetlands or natural habitats. The following actions qualify for

Federal-aid highway funding:

(1) Where practicable, avoidance or minimization of impacts to

wetlands or

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natural habitats through realignment and special design or construction

features. In accordance with the Environmental Protection Agency's

Clean Water Act Section 404(b)(1) guidelines (40 CFR part 230 et seq.),

avoidance and then minimization must be given first consideration in

mitigating wetlands impacts. These guidelines apply only to impacts to

wetlands regulated under Section 404 of the Clean Water Act.

(2) After practicable avoidance and minimization measures have been

exhausted, other ecologically desirable compensatory mitigation

alternatives, either inside or outside of the right-of-way. These may

include such measures as on-site mitigation, when that alternative is

determined to be ecologically desirable and practicable; improvement of

existing degraded or historic wetlands or natural habitats through

restoration or enhancement on or off site; creation of new wetlands

from non-wetland areas off-site; and under exceptional circumstances,

preservation of existing wetlands or natural habitats on or off site.

Restoration of wetlands is generally preferable to enhancement or

creation of new wetlands from non-wetland areas.

(3) Improvements to existing wetlands or natural habitats. Such

activities may include, but are not limited to, construction or

modification of water level control structures or ditches,

establishment of natural vegetation, recontouring of the site,

installation or removal of irrigation or water distribution systems,

pest control, installation of fencing, site monitoring, and other

measures to protect, enhance, or restore the wetland or natural habitat

character of the site.

(4) Wetlands mitigation banking and related measures. With respect

to participation in a natural habitat or wetland mitigation effort

related to a project funded under this title that has an impact that

occurs within the service area of a mitigation bank, preference shall

be given, to the maximum extent practicable, to the use of the

mitigation bank if the bank contains sufficient available credits to

offset the impact and the bank is approved in accordance with the

Federal Guidance for the Establishment, Use and Operation of Mitigation

Banks \2\ or other applicable Federal law (including regulations).

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\2\ See footnote 1.

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(b) Participation in wetlands or natural habitat mitigation banks.

If the development or acquisition of mitigation credits in wetland or

natural habitat mitigation banks, either on or off-site, is determined

to be the most ecologically desirable and practicable alternative for

compensatory mitigation, banking alternatives eligible for

participation with Federal-aid funds include such measures as the

following:

(1) Multi-user wetlands or natural habitat banks established on

publicly owned or controlled lands;

(2) Single purpose publicly owned banks, established by and for the

use of a State DOT with Federal-aid participation; or multipurpose

publicly owned banks, established with public, non-Federal-aid funds,

in which credits may be purchased by highway agencies using Federal-aid

funds on a per-credit basis; or

(3) Other forms of mitigation banks in which mitigation credits are

purchased by State DOTs to mitigate wetlands or habitat impacts due to

projects funded under title 23, U.S.C., including privately owned banks

or those established with private funds to mitigate wetland or natural

habitat losses which have been approved and/or permitted by the

appropriate regulatory agency.

(c) Contributions to statewide and regional efforts to conserve,

restore, enhance and create wetlands or natural habitats. Federal-aid

funds may participate in the development of statewide and regional

wetlands conservation plans, including any efforts and plans authorized

pursuant to the Water Resources Development Act of 1990 (Pub. L. 101-

640). Contributions to these efforts may occur in advance of project

construction only if such efforts are consistent with all applicable

requirements of Federal law and regulations and State transportation

planning processes.

Sec. 777.11 Other considerations.

(a) The development of measures proposed to mitigate impacts to

wetlands or natural habitats should include consultation with

appropriate State and Federal agencies.

(b) Federal-aid funds may not participate in the replacement of

wetlands or natural habitats absent sufficient assurances that the area

will be maintained in the intended state as a wetland or natural

habitat.

(c) The acquisition of proprietary interests in replacement

wetlands or natural habitats as a mitigation measure may be in fee

simple or by easement, as appropriate. The acquisition of ``mitigation

credits'' in wetland or natural habitat mitigation banks should be

accomplished through a legally recognized instrument, such as permanent

easement or deed restriction, which provides for protection and

permanent continuation of the wetland or natural habitat nature of the

mitigation.

(d) A State DOT may acquire privately owned lands in cooperation

with another public agency or third party. Such an arrangement may

accomplish greater benefits than would otherwise be accomplished by the

individual agency acting alone.

(e) A State DOT may transfer the title to, or enter into an

agreement with, an appropriate public natural resource management

agency to manage lands acquired outside the right of way without

requiring a credit to Federal funds. Any such transfer of title or

agreement shall require the continued use of the lands for the purpose

for which they were acquired. In the event the purpose is no longer

served, the lands and interests therein shall immediately revert to the

State DOT for proper disposition.

(f) The reasonable costs of acquiring lands or interests therein to

provide replacement lands with equivalent wetlands or natural habitat

area or functional capacity associated with these areas are eligible

for Federal participation.

(g) The objective in mitigating impacts to wetlands in the Federal-

aid highway program is to implement the policy of a net gain of

wetlands on a program wide basis, when project impacts are unavoidable.

(h) Certain activities to ensure the viability of compensatory

mitigation wetlands or natural habitats during the period of

establishment are eligible for Federal-aid participation. These

include, but are not limited to, such activities as repair or

adjustment of water control structures, pest control, irrigation,

fencing modifications, replacement of plantings, and mitigation site

monitoring. The establishment period should be specifically determined

by the mitigation agreement among the mitigation planners prior to

beginning any compensatory mitigation activities.

[FR Doc. 99-8444 Filed 4-6-99; 8:45 am]

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