A BILL TO BE ENTITLED
AN ACT to encourage the provision of mitigation services by the private sector.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 143‑214.11 reads as rewritten:
"§ 143‑214.11.  Division of Mitigation Services: compensatory mitigation.
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(b)	Compensatory Mitigation Requirements. – All compensatory mitigation required by permits or authorizations issued by the Department or by the United States Army Corps of Engineers shall be consistent with rules adopted by the Commission for wetland and stream mitigation and for protection and maintenance of riparian buffers and shall advance the functional improvement goals identified in any applicable basinwide restoration plan prepared by the Department as required by G.S. 143‑214.10.
(b1)	No Eminent Domain Power. – Nothing in this section shall allow the Division of Mitigation Services to acquire land by condemnation under the provisions of Chapter 40A of the General Statutes.
(c)	Compensatory Mitigation Emphasis on Replacing Ecological Function Within Same River Basin. – The emphasis of compensatory mitigation is on replacing functions within the same river basin unless it is demonstrated that restoration of other areas would be more beneficial to the overall purposes of the Division of Mitigation Services.
(d)	Compensatory Mitigation Options Available to Permit Applicants. – Permit applicants shall satisfy compensatory mitigation requirements by participating in a private compensatory mitigation bank that has been approved by the United States Army Corps of Engineers, provided that the Department or the United States Army Corps of Engineers, as applicable, approves the use of such bank for the required compensatory mitigation. If the Department or the United States Army Corps of Engineers, as applicable, determines that it is not practicable for an applicant to satisfy compensatory mitigation requirements through a private compensatory mitigation bank, the applicant may also satisfy compensatory mitigation requirements through any of the following actions, if those actions meet or exceed the requirements of the Department or of the United States Army Corps of Engineers, as applicable:
(1)	Payment of a fee established by the Commission into the Ecosystem Restoration Fund established in G.S. 143‑214.12.

(4)	Permittee‑responsible mitigation.

	

(e)	Payment Schedule. – The Commission shall establish a schedule of compensatory mitigation fees for mitigation credits purchased by permit applicants from the Division of Mitigation Services. The schedule shall be based on the actual cost for the Division of Mitigation Services to generate the credits. Compensatory mitigation payments shall be made by applicants to the Ecosystem Restoration Fund established in G.S. 143‑214.12. Compensatory mitigation payments for wetlands shall be calculated on a per acre basis. Compensatory mitigation payments for streams shall be calculated on a per linear foot basis.
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(j)	The regulatory requirements for the establishment, operation, and monitoring of a compensatory mitigation bank or full delivery project shall vest at the time of the execution of the mitigation banking instrument or the award of a full delivery contract.
(k)	All compensatory mitigation banks operating within the State shall register with the Division of Mitigation Services. Registration shall include the following information:
(1)	The bank name and cataloging unit number.
(2)	Types and amounts of approved credits and sponsor contact information for each mitigation bank, as documented by approved mitigation banking instruments.
(3)	Electronic files representing the property boundaries and approved service areas of the mitigation bank in a format prescribed by the Department.
(4)	Any other information requested by the Department.
The Department shall provide public access to the information required by this subsection on its Web site."
SECTION 2.  Part 1 of Article 21 of Chapter 143 of the General Statutes is amended by adding a new section to read:
"§ 143‑214.16.  Limit Division of Mitigation Services fee in lieu of mitigation acceptance in certain river basins.
The Department of Environmental Quality, Division of Mitigation Services, shall develop a program to increase the State's ability to utilize private mitigation banks to satisfy compensatory mitigation requirements of the State. The program shall include all of the following components:
(1)	Thirty‑six months after the effective date of this act, the Division of Mitigation Services shall cease acceptance of fees from governmental and nongovernmental entities in lieu of mitigation for stream, wetland, riparian buffer, and nutrient impacts permitted to occur in the Neuse and Cape Fear River Basins.
(2)	The Department, with the concurrence of the Environmental Management Commission, may cease acceptance of fees in lieu of mitigation within additional river basins after June 30, 2020, provided the public is notified at least 24 months in advance of the cessation of service.
(3)	In the event of unforeseen, unique, or exigent circumstances and upon the request of the Secretary of Commerce or the Secretary of Transportation, the Department may direct the Division of Mitigation Services to accept fees in lieu of mitigation to support permits for projects owned or sponsored by the Departments of Commerce or Transportation."
SECTION 3.  No later than October 1, 2017, the Commission shall adopt temporary rules that (i) implement G.S. 143‑214.16, as enacted by Section 2 of this act, and (ii) set a revised schedule of mitigation fees consistent with G.S. 143‑214.11(e), as amended by Section 1 of this act. The temporary rules shall remain in effect until permanent rules that replace the temporary rules become effective.
SECTION 4.  Section 3 of this act is effective when it becomes law. The remainder of this act becomes effective October 1, 2017.