FUND-11 (6/23/05 version)
Potential Regulatory Sources Of NPS Funding

A few of the key existing regulatory sources of potential NPS funding are:

Supplemental Environmental Projects (SEPs)

SEPs are environmentally beneficial projects that a defendant/respondent agrees to undertake in settlement of an enforcement action, but which the defendant/respondent is not otherwise legally required (not required by any federal, state, or local law or regulation) to perform. There are four basic categories of SEPs, based on addressing public health, pollution prevention, pollution reduction and/or environmental restoration and protection. The purpose of SEPs is to encourage and obtain environmental and public health protection and improvements that may not otherwise have occurred.

Specifically, SEPs can be used by Ohio EPA in enforcement settlements in lieu of a portion of the penalties assessed for non-compliance with permits or water quality regulations. Funds/resources for SEP implementation are provided by the entity in non-compliance and are designated for a specific water quality improvement project approved by Ohio EPA. A dollar value for the SEP is included in the compliance orders and if the entity fails to implement the SEP, a penalty equivalent to the SEP value is due Ohio EPA.

Since January 1, 2002, the Ohio EPA, Division of Surface Water has required $7.5 M in enforcement related SEPs. Tracking of the type of SEP project began recently and is therefore not comprehensive. However, at least $3.8M is dedicated to solving NPS problems. For example, $75,000 was provided to purchase a conservation easement in White Oak Creek, a watershed with a state endorsed watershed action plan. Another recent example of SEP implementation to address NPS, is a two-stage ditch project on Powderlick Run funded by Day Lay Egg Farm.

Mitigation Clearinghouse (MCH)

The mitigation clearinghouse is one tool that Ohio EPA will use to better integrate the 401 Certification and Isolated Wetland Permit Programs with the TMDL and comprehensive watershed action planning processes.

The purpose of the MCH is to promote the exchange of information between applicants that are seeking projects for mitigation of unavoidable environmental impacts that may be a part of a 401 Water Quality Certification or Isolated Wetland Permit and individuals that may have property or projects that are available. The MCH may also be beneficial for parties seeking to locate potential supplemental environmental projects through enforcement actions, Water Resource Restoration Sponsor Program projects, and actions to be taken consistent with needs identified in a Total Maximum Daily Load for a watershed.

The MCH will be a web-based operation with four main components: directions for use, a link to input functions, a link to removal functions, and a link to a clickable map of 8-digit HUCs, so that the user can access information for specific areas of the state. The MCH input data form is intended for people or organizations offering property that may be considered for mitigation projects by applicants for Section 401 Water Quality Certifications and Isolated Wetland Permits. Applicants may review the database to see if any potential mitigation sites are located near their proposed impacts to surface waters. Therefore, the MCH should facilitate the effort to locate wetland, stream and lake mitigation sites close to proposed surface water impacts.

The resources available for NPS Implementation will be dependent on use of the mitigation clearinghouse by those seeking projects for mitigation.

ODOT Stream Mitigation Debit Program

In late 2000, the US Army Corps of Engineers (USACOE) and Ohio EPA began requiring compensatory mitigation for all unavoidable adverse impacts that result in lowering of stream quality. The Ohio Department of Transportation (ODOT) often has to impact streams during highway construction projects (for bridge crossings, culverting, riparian vegetation removal, etc.).

Ohio EPA requires stream mitigation for these type of impacts when a 401 Water Quality Certification is necessary. The specific mitigation requirements are outlined as conditions of granting the 401 certification. The preferred approach is to mitigate at or close (within one mile) to the project impact site. However, when this is not possible and mitigation must occur more than 1 mile from the impact, the mitigation ratio requirement is higher. Stream mitigation sites must be maintained in perpetuity.

At the time compensatory mitigation requirements began, ODOT did not have legal authority to use state transportation funds for anything other than wetland mitigation. While pursuing a change in legal authority (now in place) ODOT and Ohio EPA authored and signed a Memorandum of Understanding (MOU) establishing the ODOT Stream Mitigation Debit Program. Stream mitigation needs (or debits) were tracked until such time as the necessary legislative authority to acquire stream mitigation, through conservation easement or fee simple acquisition, was obtained by ODOT.

In 2003, ODOT had accrued 86,619 lineal feet of stream impacts requiring offsite mitigation at a 1.5 to 1 ratio (=117,738 lineal feet or 22.3 miles). Currently, the remaining stream debt is 34,270 lineal feet, much of which is associated with one project where mitigation purchases were identified but there have been no willing sellers.

A recent example of ODOT stream mitigation implementation with significant impacts to stream integrity is the St. Johns Dam removal project.

Although, the above-referenced program is winding down, ODOT, OEPA and the USACOE are discussing a formal process to meet future ODOT stream mitigation needs. Once established details will be added to the Ohio NPS Plan.

Water Quality Trading

The above-mentioned programs are already in place. A relatively new concept known as water quality trading is being promoted nationally, and is under consideration in several Ohio watersheds, including the Great Miami River. By the end of 2006, Ohio EPA anticipates having rules in place for water quality trading projects.