CHAPTER 7.9. Conservation Bank and Mitigation Bank Applications and Fees [1797 - 1799.1]
( Chapter 7.9 added by Stats. 2012, Ch. 565, Sec. 14. )
The Legislature finds and declares as follows:
(a) Mitigation banks and conservation banks provide for the conservation of important habitats and habitat linkages, take advantage of economies of scale that are often not available to individualized mitigation projects, and simplify the state regulatory compliance process while achieving conservation goals.
(b) The department authorizes the establishment of private and public conservation and mitigation banks that can provide viable consolidated mitigation for adverse impacts caused by projects. Banks sell habitat or species credits to project proponents having mitigation
responsibilities that require compensation for impacts to wetlands, threatened or endangered species, and other sensitive resources. The state policy on conservation banks was established in 1995 by the Natural Resources Agency and the California Environmental Protection Agency.
(c) In 2011, the department and other state and federal agencies, including the United States Fish and Wildlife Service, the National Marine Fisheries Service, the United States Army Corps of Engineers, and the United States Environmental Protection Agency, renewed a memorandum of understanding for the purpose of jointly establishing a framework for developing and using combined or coordinated approaches to mitigation and conservation banking in the state. The memorandum of understanding includes provisions for the development and continuous improvement of standardized banking program documents and guidance. Existing standardized documents
identified in the memorandum of understanding include bank enabling instruments, conservation easements, long-term management plans, and bank proposal review checklists, among others.
(d) The department has properly excluded from being eligible as mitigation and conservation banks those lands that are not suitable to become banks, for reasons that include that the lands do not support significant biological resources or are not biologically viable, are subject to potentially inconsistent uses, encumbrances, or requirements, or would not meet requirements of permits or authorizations that require mitigation.
(e) Greater transparency is desired to ensure that mitigation requirements of regulatory programs, permits, and authorizations are fully met when employing conservation and mitigation banks, and that the monitoring of banks to ensure long-term
conservation of species and habitats is scientifically valid.
(f) The private and public mitigation and conservation banks and the private and public entities to which bank credits are sold should fully fund the administrative and regulatory costs of the department in providing banking program services, administration and oversight.
(g) The department has found that the establishment and use of conservation and mitigation banks may result in added ecological benefits and reduced administrative costs over the more traditional forms of smaller, single-purpose mitigation projects.
(h) It is the intent of the Legislature that banking and all other forms of mitigation for wildlife species comply with regulatory requirements, are based on the best available scientific information, can be implemented successfully, and have
adequate funding to achieve mitigation measures and be monitored for compliance and effectiveness. The Legislature recognizes that mitigation and conservation banking is important to the state because banks provide regulatory efficiencies, environmental benefits, and economic advantages. Properly developed and monitored banks have demonstrated their value and efficacy and are important tools in mitigating impacts to resources and in conserving a wide range of habitat lands.
(Added by Stats. 2012, Ch. 565, Sec. 14. (SB 1148) Effective January 1, 2013.)
For the purposes of this chapter, the following terms shall have the following meanings:
(a) “Bank” means a conservation bank, mitigation bank, or conservation and mitigation bank.
(b) “Bank enabling instrument” means a written agreement with the department regarding the establishment, use, operation, and maintenance of the bank.
(c) “Bank sponsor” means the person or entity responsible for establishing and operating a bank.
(d) “Conservation bank” means a publicly or privately owned and operated site that is to be
conserved and managed in accordance with a written agreement with the department that includes provisions for the issuance of credits, on which important habitat, including habitat for threatened, endangered, or other special status species, exists, has been, or will be created to do any of the following:
(1) Compensate for take or other adverse impacts of activities authorized pursuant to Chapter 1.5 (commencing with Section 2050) of Division 3.
(2) Reduce adverse impacts to fish or wildlife resources from activities, authorized pursuant to Chapter 6 (commencing with Section 1600) of Division 2, to less than substantial.
(3) Mitigate significant effects on the environment pursuant to the California Environmental Quality
Act (Division 13 (commencing with Section 21000) of the Public Resources Code) and Guidelines for Implementation of the California Environmental Quality Act (Chapter 3 (commencing with Section 15000) of Division 6 of Title 14 of the California Code of Regulations).
(4) Establish mitigation in advance of any impacts or effects.
(5) To the extent feasible and practicable, protect habitat connectivity for fish and wildlife resources for purposes of this section.
(e) “Conservation easement” means a perpetual conservation easement, as defined by Section 815.1 of the Civil Code, covering the real property that comprises the bank site.
(f) “Mitigation bank” means either of the following:
(1) A bank site or mitigation bank site as defined by Section 1777.2.
(2) Any publicly or privately owned and operated site, other than those defined by Section 1777.2, on which wetlands exist, have been, or will be created, and that is to be conserved and managed in accordance with a written agreement with the department for any of the purposes described in paragraphs (1) to (4), inclusive, of subdivision (d).
(g) “Person”
has the meaning set forth in subdivision (b) of Section 711.2.
(h) “Prospectus” means a written summary of the proposed bank containing a sufficient level of detail to support informed department review and comment.
(Amended by Stats. 2015, Ch. 625, Sec. 1. (AB 498) Effective January 1, 2016.)
(a) (1) Any person interested in establishing any bank with the department may elect to submit an optional draft prospectus for review by the department. Any draft prospectus shall be accompanied by a draft prospectus review fee of one thousand five hundred dollars ($1,500) to fund the reasonable cost of the department’s review services. The draft prospectus review, while optional, is intended to identify potential issues early so that the potential bank sponsor may attempt to address those issues prior to initiating the formal review process. The draft prospectus is a brief proposal submitted when scoping the concept of a bank, contemplating pursuing a bank idea, or for those new to the banking process.
(2) No later than 30 calendar days after
the department receives a draft prospectus and review fee, the department shall make an initial evaluation of the proposed concept and notify the person who submitted the draft prospectus of potential issues identified by the department.
(b) (1) Any person seeking to establish a bank with the department shall submit a bank prospectus to the department together with a prospectus review fee of ten thousand dollars ($10,000) to fund the reasonable cost of the department’s review services. If a draft prospectus and the review fee have been submitted pursuant to subdivision (a), then the review fee for the bank prospectus shall be eight thousand five hundred dollars ($8,500) so as not to exceed a total fee of ten thousand dollars ($10,000).
(2) The bank prospectus shall contain at least all of the following information:
(A) The proposed bank name.
(B) Contact information, including, but not limited to, the bank sponsor, property owner, and any consultants.
(C) A general location map, address, and the size of the proposed bank in acres.
(D) A 7.5-minute United States Geological Survey map showing proposed boundaries of the bank.
(E) Color aerial photographs that reflect current conditions on the site of the proposed bank and surrounding properties.
(F) Description of how the bank will be established and operated, including, but not limited to, proposed ownership arrangements, long-term management strategy, and any phases.
(G) Qualifications of bank sponsor.
(H) Preliminary natural resources surveys that document biotic and abiotic baseline conditions, including past, current, and adjacent land uses, vegetation types, species information, topography, hydrology, and soil types.
(I) Map of proposed bank service areas.
(J) Map depicting other conserved lands in the vicinity of the proposed bank.
(K) Description of bank objectives that includes how the proposed bank would contribute to connectivity and ecosystem function.
(L) A current preliminary report covering the site of the proposed bank that identifies the owner of the fee simple title and shows
all liens, easements, and other encumbrances and depicts all relevant property lines, easements, dedications, and other features.
(M) A declaration of whether or not the proposed bank site has been or is being used as mitigation, is designated or dedicated for park or open space use, or designated for purposes that may be inconsistent with habitat preservation.
(N) Details of any public funding received for acquisition or restoration of, or other purposes related to, the proposed bank site.
(c) No later than 30 calendar days after the department receives a bank prospectus and the prospectus review fee, the department shall determine whether or not the prospectus is complete and provide written notice of its determination to the person who submitted the prospectus. If a prospectus is not complete, it may be made
complete and resubmitted.
(d) If the department determines that the prospectus is complete, then within 90 calendar days of that determination, the department shall determine whether or not the prospectus is acceptable and notify the person who submitted the prospectus of the determination. The department may request clarifying information during the prospectus review process.
(e) (1) If the department determines that a bank prospectus is acceptable then a bank agreement package may be submitted in accordance with Section 1798.5.
(2) If the department determines that a bank prospectus is not acceptable the department shall state the reasons for the determination. The prospectus may be resubmitted in accordance with subdivision (a) or (b) if further consideration is desired. Any resubmittal must
be accompanied by payment of a new review fee.
(f) The department may adopt and amend guidelines and criteria for the purposes of this section pursuant to subdivision (b) of Section 1799.1.
(Amended by Stats. 2023, Ch. 132, Sec. 24. (AB 1760) Effective January 1, 2024.)
(a) (1) If the department determines that a bank prospectus is acceptable pursuant to Section 1798, the person seeking to establish the bank may submit a bank agreement package to the department. Pursuant to subdivision (c) of Section 1799.1, the department may adopt and amend guidelines and criteria for the bank agreement package, including, but not limited to, recommended standard forms for bank enabling instruments or long-term management plan and conservation easements.
(2) The bank agreement package shall be consistent with the prospectus and contain at least all of the following information:
(A) The draft bank enabling instrument and all exhibits.
(B) Drafts of the interim management plan, long-term management plan, bank closure plan, and, if applicable, a development or construction plan for the bank.
(C) A draft conservation easement, or if potential state ownership is contemplated by the department, a draft grant deed.
(D) A map and written description of the proposed bank service area.
(E) A proposed credit ledger and credit release schedule for the bank.
(F) A property analysis record or other comparable economic analysis of the funding necessary to support bank maintenance activities, such as monitoring and reporting, in perpetuity.
(G) Estimates of financial
assurances and proposed forms of security. Proposed forms of security may be either cash or a letter of credit.
(H) A phase I environmental site assessment of the site of the proposed bank dated not more than six months prior to the date the bank agreement package is submitted to the department. This assessment shall be performed in accordance with the American Society of Testing and Materials Standard E1527-05 “Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process” or any successive ASTM standard active at the time of the assessment.
(b) The department shall collect a fee of twenty-five thousand dollars ($25,000) per bank agreement package to fund the cost of the department’s review services. The fee shall be collected at the time the bank agreement package is submitted to the department.
(c) Within 30 calendar days following the department’s receipt of a bank agreement package and fee pursuant to subdivision (a), the department shall determine whether or not the package is complete and give written notice of the determination to the person who submitted the package.
(1) If the department determines that the bank agreement package is not complete, it may be made complete and resubmitted.
(2) If the department determines that the bank agreement package is complete, within 90 calendar days of that determination, the department shall determine whether or not it is acceptable and notify the person who submitted the package of the determination. If the department determines that the bank agreement package is not acceptable, the department shall state the reasons.
(d) The department may request clarifying information during the bank agreement review process.
(e) If the department needs supplemental information during its review of the bank agreement package in order to fully evaluate the proposed bank, the regional manager or departmental equivalent, or a higher level department employee, shall provide the person seeking to establish the bank a written request for the needed information. Upon the department’s receipt of the requested information, a new 90-day period shall begin during which the department shall determine acceptability pursuant to paragraph (2) of subdivision (c). If the department does not receive the requested information within 60 calendar days of the department’s request, the bank agreement package will be deemed unacceptable.
(f) If the person seeking to
establish the bank proposes changes to the bank agreement package that have not been solicited by the department during its 90-day review period, including, but not limited to, parties, number or type of credits, bank size, number or type of species, credit release schedule, service area, design change, or other changes as identified by the department as necessitating additional review time, the department, acting through the regional manager or department equivalent, or a higher level department employee, shall assess a one-time fee of ten thousand dollars ($10,000) to cover the reasonable cost of the department’s services in reviewing the changes. A new 90-day review period shall begin upon the department’s receipt of the proposed changes and the associated review fee, during which it will determine acceptability pursuant to paragraph (2) of subdivision (c).
(g) If the department determines that 90 days is insufficient time to complete its
review of the bank agreement package for reasons including, but not limited to, the size, location, or complexity of the bank, that the package includes a development or construction plan, complexity of the bank agreement package, or substantial variations from recommended standard forms, the department may extend the 90-day period for reviewing the bank agreement package by an additional 60 calendar days.
(h) If the department determines that a bank agreement package is not acceptable, the package may be resubmitted in accordance with subdivision (a) if further consideration is desired. Any resubmittal shall be accompanied by payment of a new bank agreement package review fee.
(Amended by Stats. 2023, Ch. 132, Sec. 25. (AB 1760) Effective January 1, 2024.)
(a) Any person seeking to amend any bank shall submit to the department a complete bank amendment package containing each of the original bank agreement package documents, including any prior amendments, as well as any documents proposed to be amended or that would be affected by the proposed amendment. The department may adopt and amend guidelines and criteria for the bank amendment package pursuant to subdivision (c) of Section 1799.1.
(b) (1) Within 30 calendar days following its receipt of a draft bank amendment package and any fee required by subdivision (c), the department shall determine whether or not the package is complete and give written notice of that determination to the person who submitted the package.
(2) If the department determines that the bank amendment package is complete, then within 90 calendar days of that determination, the department shall determine whether or not the package is acceptable and notify the person who submitted the package of that determination. If the bank amendment package is determined not to be acceptable, the determination shall state the reasons. The department may request clarifying information during the bank amendment review process. The department may extend the 90-day period for reviewing the bank amendment package by an additional 60 days if the department determines that 90 days is insufficient time to complete its review of a bank amendment package for reasons that may include, but are not limited to, the size, location, or complexity of the bank or bank amendment documents, that the package includes a development plan, or that there are substantial variations from recommended standard forms.
(c) (1) The department shall collect a fee of either seven thousand five hundred dollars ($7,500) or twenty-five thousand dollars ($25,000) per bank amendment package to fund the reasonable cost of the department’s review services. The fee of seven thousand five hundred dollars ($7,500) is intended to cover the reasonable cost of the department’s services in reviewing simple amendments, such as a change in bank name, ownership change, address change, or proposed decrease in the number of credits proposed. The fee of twenty-five thousand dollars ($25,000) is intended to cover the reasonable cost of the department’s services in reviewing all other amendments, including, but not limited to, requests for increase change in service area, or increase in the number of credits. A regional manager or department equivalent, or a higher level department representative employee, shall determine which of the two fees is appropriate and
shall provide notification of that determination to the person who submitted the request for bank amendment package pursuant to paragraph (3).
(2) An initial fee of seven thousand five hundred dollars ($7,500) shall be submitted to the department with the bank amendment package.
(3) Within 30 calendar days following the department’s receipt of a bank amendment package and the initial fee, pursuant to paragraph (2), the department shall determine whether or not the package is complete and give written notice of the determination to the person who submitted it and, if applicable, notice pursuant to paragraph (1) that the person shall remit an additional fee of seventeen thousand five hundred dollars ($17,500). If noticed by the department, the additional fee of seventeen thousand five hundred dollars ($17,500) shall be submitted to the department within 30 days of the notice. If the
additional fee is not received by this date, the review timelines in this section shall be suspended until the fee is received by the department.
(4) If the department determines that the bank amendment package is not complete, the package may be made complete and resubmitted. If the department determines that the bank amendment package is complete, then within 90 calendar days of that determination and the receipt of the additional fee pursuant to paragraph (3), if applicable, the department shall determine whether or not the bank amendment package is acceptable and notify the person who submitted the package of the determination.
(d) (1) If the department determines that the bank amendment package is not acceptable the determination shall state the reasons.
(2) The department may request
clarifying information during the bank amendment review process.
(e) If the department needs supplemental information during its review of the bank amendment package in order to fully evaluate the proposed amendment, the regional manager or department equivalent, or a higher level department employee, shall provide the person seeking to amend the bank, in writing, a written request for the needed information. Upon the department’s receipt of the requested information, a new 90-day period shall begin during which the department will determine acceptability pursuant to paragraph (4) of subdivision (c). If the department does not receive the requested information within 60 calendar days of the department’s request, the bank amendment package shall be deemed unacceptable.
(f) If the person seeking to amend the bank proposes changes to the bank amendment package that have not been
solicited by the department during its the department’s 90-day review period, including, but not limited to, parties, number or type of credits, bank size, number or type of species, credit release schedule, service area, design change, or other changes as identified by the department to require additional review time, the department, acting through the regional manager or department equivalent, or a higher level department employee, shall assess a one-time fee of ten thousand dollars ($10,000) to cover the reasonable cost of the department’s services in reviewing the changes. A new 90-day review period shall begin upon receipt of the proposed changes and the fee, during which the department shall determine acceptability pursuant to paragraph (4) of subdivision (c).
(g) If the department determines that 90 days is insufficient time to complete its review of the bank amendment package for reasons, including, but not limited to, the size,
location, or complexity of the bank or bank amendment package, that the package includes a development or construction plan, or substantial variations from recommended standard forms, the department may extend the 90-day period for reviewing the bank amendment package by an additional 60 calendar days.
(h) If the department determines that a bank amendment package is not acceptable, then the package may be resubmitted in accordance with subdivision (a) if further consideration is desired. Any resubmittal shall be accompanied by payment of all applicable bank amendment package review fees.
(Amended by Stats. 2023, Ch. 132, Sec. 26. (AB 1760) Effective January 1, 2024.)
A bank prospectus, agreement, or amendment package submitted to the department, but not approved as of January 1, 2013, shall be reviewed for completeness or acceptability in accordance with the timelines provided by this chapter and only after the department has collected all appropriate fees pursuant to this chapter.
(Added by Stats. 2012, Ch. 565, Sec. 14. (SB 1148) Effective January 1, 2013.)
(a) Until the department has approved a bank, in writing, and, if applicable, a conservation easement has been recorded on the site, no bank shall be operative, vested, or final, nor bank credits issued. No amendment to an approved bank shall be effective without the written approval of the department.
(b) Following approval of a final bank agreement package and establishment of a bank, the department shall conduct compliance review activities as provided in the approved bank enabling instrument.
(c) (1) The department shall establish and maintain a database that allows bank sponsors to accurately update and add
information about mitigation and conservation banks. This data shall be available on the department’s Internet Web site or accessible by a link from the department’s Internet Web site. The available information shall include, but is not limited to, the total number of each type of bank credit, the types of credits sold or obligated, the number of credits sold or obligated, the number of credits applied, the balance of each type of credit remaining, the status of the species and habitat at the bank, links to the bank’s long-term management plans, and links to the complete annual monitoring reports required by departmental policy.
(2) Information contained in the database created pursuant to former Chapter 9 (commencing with Section 1850) on January 1, 2011, shall be incorporated into the database established pursuant to paragraph (1).
(d) By January 1, 2014, and annually
thereafter, the department shall provide a report to the Legislature. The report shall include the following information based on data from the previous calendar year:
(1) Number of new bank applications, prospectuses, bank agreement packages, and amendments received.
(2) Number of bank applications approved, rejected because not complete, rejected because not acceptable, and withdrawn.
(3) Name of new or existing bank, geographic location, number of acres, number of credits approved for each habitat type or species, and number of credits sold.
(4) An accounting of fees collected pursuant to this chapter.
(5) A statement of whether or not the timelines for bank review in this chapter were
met.
(6) Other information determined by the department to be relevant in assessing the effectiveness of the department’s mitigation and conservation banking program.
(e) (1) The department shall collect fees to pay for all or a portion of the department’s bank implementation and compliance costs.
(2) The department shall collect a total payment of sixty thousand ($60,000) per bank, apportioned by an amount that equals the ratio of the number of credits released to the total number of credits in the bank, and shall be identified in the bank enabling instrument. Payments shall be due following each credit release no later than the due date for the submission of the bank’s annual report. The payments shall be submitted following each credit release and no later than the time of the submission of
the bank’s annual report. The department may require the bank to cease selling credits and may stop credit releases until these fees are paid in full. The department shall assess a penalty of 10 percent of the amount of fees due if there is a failure to remit the amount payable when due.
(Added by Stats. 2012, Ch. 565, Sec. 14. (SB 1148) Effective January 1, 2013.)
(a) The department shall annually adjust the fees in this chapter pursuant to Section 713.
(b) Moneys received pursuant to this chapter shall be deposited in a separate dedicated account within the Fish and Game Preservation Fund and expended for the purposes of this chapter.
(c) The department shall adopt and amend guidelines and criteria to implement this chapter. The department shall develop these guidelines and criteria in coordination with interested parties, including, but not limited to, bank sponsors, conservation organizations, and federal and state bank approving agencies. The guidelines shall incorporate all relevant documents
and program guidance, including, but not limited to, the 2011 Memorandum of Understanding approved by the United States Fish and Wildlife Service, the United States Army Corps of Engineers, and the United States Environmental Protection Agency, for the purpose of jointly establishing a framework for developing and using combined or coordinated approaches to mitigation and conservation banking in California. Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to the development, adoption, or amendment, of guidelines or criteria pursuant to this section. The guidelines and criteria shall be posted on the department’s Internet Web site.
(d) The costs of a conservation and mitigation banking program, including, but not limited to, costs incurred by the department during its guideline adoption and review, approval, establishment, monitoring, and oversight of banks, shall be reimbursed
from revenues of conservation and mitigation bank application fees imposed pursuant to Sections 1798.5, 1798.6, and 1799.
(Added by Stats. 2012, Ch. 565, Sec. 14. (SB 1148) Effective January 1, 2013.)