BACKGROUND

After careful consideration, EEP has formulated an interim policy to maintain fiscal stability in an initiative crucial to responsible economic development in the state. EEP has taken steps to ensure the viability of its In-Lieu Fee (ILF) Program, in which economic developers, municipalities, school districts, military bases and others may elect to pay a fee to EEP to satisfy compulsory state and federal clean-water requirements. Other options to satisfy necessary permitting requirements include applicants providing mitigation on- or off-site, or engaging a private mitigation-banking firm to provide the mitigation.

In the fall of 2007, the Environmental Management Commission and the Rules Review Commission both approved a two-tiered fee schedule for EEP, based on cost variances that occur for EEP projects because of geographic location. However, public comments on the fees triggered an automatic threshold that requires further action by the legislature in 2008.

POLICY CHANGES IN THE ILF PROGRAM

On Oct. 29, 2007, EEP adopted an interim policy regarding acceptance into the ILF Program. The policy states that:

• Minor modifications to existing program acceptances will go forward, as will requests for renewal of acceptance under certain conditions.
• All new requests will be reviewed in the context of existing assets available to provide mitigation in a watershed; the size of the requests; or anticipated project costs.
• Applications will not be accepted in areas of the state where anticipated project costs are projected to be above the existing fee schedule.
  

Interim Policy On Requests To Accept Stream and Wetland Mitigation Requirements, Effective 10/29/07

WHY FEE ADJUSTMENTS ARE NEEDED

EEP attempts to control costs in a variety of ways, such as sponsoring stream- and wetland-construction training workshops to expand the available pool of contractors and promote competition in contract bidding; and working with regulatory agencies to find new means and types of mitigation that can reduce costs.

However, program costs have increased. Factors include rising land costs; new regulatory requirements for mitigation; and increased project costs by private-sector contractors working with EEP. The fees that EEP charges for mitigation services continue to lag behind program costs. Using program data on costs and past trends, EEP petitioned the state through a public-hearing process in 2006 for fee adjustments, ultimately approved by the EMC and RRC.

ANTICIPATED EFFECTS OF THE POLICY

• Many ILF applications submitted to EEP will be accepted into the program.
• Applicants not accepted remain responsible for satisfying permit conditions, and may purchase credits from a mitigation bank, or provide mitigation independently through cooperation with appropriate regulatory agencies.
  

Cataloging Unit Summary Where EEP Is Processing Requests

Revised Fees And Hydrologic Unit Map Of Proposed Fee Adjustments

North Carolina River Basins And Cataloging Units Map

FURTHER INFORMATION

• EEP facilitates responsible economic development across North Carolina by offsetting unavoidable damage to the environment. EEP manages the restoration and enhancement of streams and wetlands statewide in ILF program, through which the state contracts with private-sector companies to perform the needed offsets.
• EEP uses strict technical guidelines to govern acceptance into the ILF Program. Since 1997, the state has received nearly 850 payments from the private sector and local governments to perform mitigation that has helped to improve the state’s water quality.