HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/CS/HB 1073 Mitigation
SPONSOR(S): Infrastructure Strategies Committee, Water Quality, Supply & Treatment Subcommittee,
Truenow
TIED BILLS: IDEN./SIM. BILLS: CS/CS/CS/SB 1532
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY
CHIEF
1) Water Quality, Supply & Treatment 15 Y, 0 N, As CS Guy-Hudson Curtin
Subcommittee
2) Agriculture & Natural Resources Appropriations 13 Y, 0 N Byrd Pigott
Subcommittee
3) Infrastructure Strategies Committee 22 Y, 0 N, As CS Guy-Hudson Harrington
SUMMARY ANALYSIS
There are a number of tools available to address negative impacts to waters and wetlands. Mitigation banking
is a practice in which an environmental enhancement and preservation project is conducted by a public agency
or private entity to mitigate unavoidable environmental impacts to wetlands and other surface waters
associated with a permitted project. There are currently 131 state-authorized mitigation banks in Florida that
cover 227,496 acres. Water Quality Enhancement Areas (WQEA) provide regional treatment and address
pollutants in a watershed, basin, sub-basin, targeted restoration area or waterbody in which the WQEA is
located that do not meet applicable state water quality criteria. The Department of Environmental Protection
(DEP) awards water quality enhancement credits, each of which represent a quantity of pollutant removed.
Currently, credits may only be sold to governmental entities.
The bill creates a process for the establishment and operation of a private mitigation bank using local
government-owned land, including lands acquired for conservation, when such land is located in a credit-
deficient basin as defined in the bill. Habitat type credits provided by the private mitigation bank would be used
to address the unavailability or deficiency of certain habitat type credits.
The bill requires the local government to execute a use agreement with the private applicant at which time the
credit deficiency is confirmed. However, once the use agreement is executed the mitigation bank application
may proceed, even if the credit deficiency is relieved. Among other things, the use agreement requires the
private applicant to provide financial assurance which will be used for long-term management of the land and
agree to operate and maintain the private mitigation bank until final permit success criteria are met. When
determining the number of mitigation bank credits to award to a private mitigation bank, the bill prohibits
increasing the location factor assessment and scoring value in the uniform mitigation assessment method
(UMAM) when the proposed private mitigation bank is located in or adjacent to the local government’s
conservation lands. The bill authorizes DEP, in coordination with the water management districts (WMD), to
adopt rules to implement the requirements of the bill relating to mitigation banking.
The bill authorizes private sector entities to apply to purchase water quality enhancement credits and
authorizes the use of WQEAs for certain areas where environmental resource permit performance standards
are not being met.
The bill will have an indeterminate fiscal impact on state and local government. See Fiscal Analysis.
The bill provides an effective date of July 1, 2024.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
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 FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
Wetlands are transitional areas between land and deep water, and they are sufficiently inundated with
water so that they support vegetation which grows in saturated soils. 1 “Florida wetlands generally
include swamps, marshes, bayheads, bogs, cypress domes and strands, sloughs, wet prairies, riverine
swamps and marshes, hydric seepage slopes,2 tidal marshes, mangrove swamps and other similar
areas.”3 Prior to development, wetlands covered approximately one half of Florida. 4 Today,
approximately 11 million acres of wetlands cover Florida and the state boasts more wetlands than any
of the other 47 conterminous States.5
Regulation of Activities in Wetlands
The Clean Water Act (CWA) is the primary federal law that regulates water pollution in the United
States and it prohibits the discharge of any pollutant6 into waters of the United States (WOTUS).7 The
discharge of dredged or fill material into WOTUS, including wetlands, is regulated by a program
established in Section 404 of the CWA.8 States may apply to the U.S. Environmental Protection Agency
(EPA) to assume the federal dredge and fill permitting program; Florida assumed the 404 permitting
program in 2020.9 On February 15th of this year a judge in the United States District Court for the
District of Columbia vacated the EPA’s approval of Florida’s assumption package as violative of the
Endangered Species Act.10 The ruling applies to pending and future 404 permit applications; however,
the State 404 Program may be preserved for those applications which are not likely to adversely affect
listed species.11
DEP regulates surface water flows via the Environmental Resource Permit (ERP) Program, a permitting
process that addresses and regulates impacts to the landscape including clearing, grading,
construction of structures and filling and dredging, whether the work occurs in uplands, wetlands or
other surface waters.12 An ERP permit may be issued by DEP, a WMD or a local government to which
DEP delegated ERP permitting authority.13 ERPs are designed to prevent flooding, protect wetlands
and other surface waters and protect Florida’s water quality from stormwater pollution. 14
1 Melanie R. Darst, Helen M. Light, and Benjamin F. McPherson, U.S. Geological Survey (USGS) Water-Supply Paper 2425, Florida
Wetland Resources, https://www.fws.gov/media/wetland-resources-florida, p. 153 (last visited Jan. 25, 2024); S. 373.019(27), F.S.
2 Seepage slopes are wetlands located on the sides of rolling hills. “Unusual hydrology and frequent fires combine to create an
environment that supports a variety of carnivorous and other sun -loving herbaceous plants” and “there are many rare or endemic
species . . . that can be found in seepage slopes in the Florida Panhan dle.” UF, IFAS Extension, Florida’s Seepage Slope Wetlands
(Apr. 11, 2018), https://edis.ifas.ufl.edu/publication/UW367 (last visited Jan. 25, 2024).
3 S. 373.019(27), F.S.; see also Department of Environmental Protection (DEP), Wetland Evaluation and Delineation (last updated
Feb. 17, 2023), https://floridadep.gov/water/submerged-lands-environmental-resources-coordination/content/wetland-evaluation-and
(last visited Jan. 25, 2024).
4 Darst, supra note 1.
5 Id.
6 33 U.S.C. § 1311(a). The definition of the term “pollutant” is quite broad. 33 U.S.C. § 1362(6).
7 33 U.S.C. § 1362(12)(A). “The term ‘navigable waters’ means the waters of the United States, including the territorial seas.” 33
U.S.C. §1362(7).
8 EPA, Section 404 of the Clean Water Act, Permit Program under CWA Section 404 (last updated Mar. 31, 2023),
https://www.epa.gov/cwa-404/permit-program-under-cwa-section-404 (last visited Jan. 25, 2024).
9 40 C.F.R. § 233.1. See also DEP, State 404 Program (last updated Oct. 17, 2023), https://floridadep.gov/water/submerged-lands-
environmental-resources-coordination/content/state-404-program (last visited Jan. 25, 2024).
10 Ctr. for Biological Diversity v. Regan, No. 21-119 (D.C. Feb. 15, 2024), on file with the Water Quality, Supply & Treatment
Subcommittee.
11 Id.
12 DEP, Environmental Resource Permitting Online Help (last updated Feb. 8, 2022), https://floridadep.gov/water/submerged-lands-
environmental-resources-coordination/content/environmental-resource-0 (last visited Jan. 25, 2024).
13 Id.
14 Id.
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 While the State 404 Program and the ERP Program are separate programs, approximately 85 percent
of review requirements of the two programs overlap.15 DEP’s Submerged Lands and Environmental
Resources Coordination Program is responsible for the consistent implementation of both the State 404
Program and the ERP Program.16 Both programs require avoidance and minimization measures to
reduce impacts to wetlands and any remaining adverse impacts to be offset by mitigation. The
methodology ratified by the Legislature for identifying and delineating the extent of wetlands and
surface waters 17 is also the methodology used to establish the boundary of state-assumed waters
under the State 404 Program.18 Provisions of state law that conflict with federal requirements under the
CWA do not apply to state-administered 404 permits.19
ERP permitting is governed by s. 373.4131, F.S. DEP implements this section of law in ch. 62-330,
F.A.C., which provides for the permitting rules, application process and standards by which applications
are considered and approved or denied. The ERP Applicant’s Handbook, which is incorporated by
reference into DEP rules, provides guidance on DEP’s ERP program, which includes all permitted
activities governed by ch. 373, part IV, F.S., relating to management and storage of surface waters .20
Applicants for an ERP must adhere to requirements in both the ERP Applicant’s Handbook, Vol. I,
which governs general permitting while WMD-specific permitting requirements are contained in the
ERP Applicant’s Handbook, Vol. II, for which there is one per WMD. 21
Mitigation Banks
Some permitted projects result in unavoidable adverse impacts to wetlands and other surface waters.
Mitigation activities for such projects include activities that preserve, create, enhance and/or restore
wetlands and other surface waters.22 Mitigation banking is a practice in which an environmental
enhancement and preservation project is conducted by a public agency or private entity to provide
mitigation for unavoidable environmental impacts within a defined region referred to as a mitigation
service area.23
A mitigation bank consists of a wetland, stream or other aquatic resource area that has been restored,
established or preserved to offset such environmental impacts. 24 Mitigation banks are an alternative to
permittee-responsible mitigation.25 Permittee-responsible mitigation refers to mitigation undertaken by
the permittee to provide compensatory mitigation for which the permittee retains full responsibility. 26 If
mitigation credits are not available, state law allows permittee-responsible mitigation consisting of the
restoration and enhancement of lands owned by a local government.27
State law directs DEP and the WMDs “to participate in and encourage the establishment of private and
public mitigation banks and offsite regional mitigation.” 28 In general, a governmental entity may not
15 DEP, State 404 Program, supra note 9.
16 DEP, Submerged Lands and Environmental Resources Coordination Program, https://floridadep.gov/water/submerged-lands-
environmental-resources-coordination (last visited Jan. 25, 2024).
17 S. 373.4211, F.S.
18 R. 62-331.010(3), F.A.C.
19 S. 373.4146(3), F.S.
20 DEP, Environmental Resource Permit Applicant’s Handbook Volume I (General and Environmental), p. 1-4 (Dec. 22, 2020)
Modified Document, 1/6/2021, https://www.flrules.org/gateway/reference.asp?No=Ref-12078 (last visited Jan. 21, 2024).
21 DEP, ERP Stormwater (last updated June 7, 2022), ERP Stormwater | Florida Department of Environmental Protection (last visited
Jan.. 25, 2024).
22 DEP, Mitigation and Mitigation Banking (last updated May 31, 2023), https://floridadep.gov/water/submerged-lands-
environmental-resources-coordination/content/mitigation-and-mitigation-banking (last visited Jan. 24, 2024).
23 Id. “Mitigation service area” means the geographic area within which mitigation credits from a mitigation bank may be used to
offset adverse impacts of activities regulated under this part. S. 373.403(21), F.S.
24 EPA, Mitigation Banks under CWA Section 404 (last updated Oct. 31, 2023), Mitigation Banks under CWA Section 404 | US EPA
(last visited Jan. 25, 2024).
25 S. 373.4135(1)(b ), F.S.
26 EPA, Mechanisms for Providing Compensatory Mitigation under CWA Section 404 (last updated Apr. 6, 2023),
https://www.epa.gov/cwa-404/mechanisms-providing-compensatory-mitigation-under-cwa-section-404 (last visited Jan. 25, 2024).
27 S. 373.4135(1)(b ), F.S.
28 S. 373.4135(1), F.S.
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 create or provide mitigation for a project other than its own except when a local government has
allowed a public or private mitigation project to be created on land it purchased for conservation
purposes.29
The mitigation bank is the site itself and the currency sold by the banker to the impacted permittee is a
credit, representing the wetland ecological value equivalent to the complete restoration of one acre. 30
The permitting agencies determine the number of potential credits permitted for the bank and the credit
debits required for impact permits.31
Mitigation banks are authorized by an ERP permit issued by DEP, the St. Johns River WMD, the
Southwest Florida WMD, and/or the South Florida WMD, depending on the location of the bank and the
Operating and Delegation Agreements between DEP and the WMDs.32 DEP is responsible for
permitting mitigation banks within the Northwest Florida WMD and the Suwannee River WMD. 33
Mitigation banks also require federal authorization34; a number of agencies are involved in processing
the federal authorization35 - called a Mitigation Banking Instrument - and the U.S. Army Corps of
Engineers (USACE) typically serves as the lead agency. 36
Requirements for mitigation bank permits differ between mitigation bank instruments issued by the
USACE and state permits issued by DEP or the WMDs. Under the federal process, a mitigation
banking instrument serves as the legal document for the establishment, operation and use of a
mitigation bank.37 They are approved by an interagency review team, through procedures involving
public notice and comment.38 Mitigation banking instruments must include certain detailed elements,
such as a comprehensive mitigation plan including financial assurances and a credit release schedule
that is tied to the achievement of specific milestones.39
Once mitigation credits have been awarded to a mitigation bank, the permitting agency is required to
establish a schedule, in the permit, for the release of credits. 40 Once a credit is released it may be sold
or used to offset adverse impacts associated with a permitted project. 41 The permitting agency is
prohibited from releasing all of a mitigation bank’s credits until the bank meets the mitigation success
criteria established in its mitigation bank permit.42 In addition, with certain exceptions, credits may only
be withdrawn and used to offset impacts in the mitigation service area. 43
29 S. 373.4135(1)(b ), F.S.
30 DEP, Mitigation and Mitigation Banking, supra note 22.
31 Id.
32 R. 62-342.100(2), F.A.C.; DEP, Mitigation Banking Rule and Procedure Synopsis (last updated Feb. 17, 2023),
https://floridadep.gov/water/submerged-lands-environmental-resources-coordination/content/mitigation-banking-rule-and (last visited
Dec. 20, 2023).
33 DEP, Mitigation Banks and Mitigation Banking (last updated Feb. 17, 2023), https://floridadep.gov/water/submerged-lands-
environmental-resources-coordination/content/mitigation-and-mitigation-banking (last visited Jan. 25, 2024).
34 DEP, Mitigation and Mitigation Banking, supra note 22.
35 33 C.F.R. § 332.8(b)(2).
36 33 C.F.R. § 332.8(b)(1).
37 33 C.F.R. s. 332.2.
38 33 C.F.R. s. 332.8; 40 C.F.R. s. 230.98.
39 See generally 33 C.F.R. s. 332.8(d)(6); see also 40 C.F.R. s. 230.98(d)(6).
40 S. 373.4136(5), F.S.
41 Id.
42 S. 373.4136(5)(b ), F.S.
43 S. 373.4136(6), F.S.; S. 373.4136(6)(d), F.S.
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 Currently, there are 131 state-authorized mitigation banks in Florida that cover 227,496 acres.44
45
Water Quality Credit Trading
Water quality credit trading is a market-based approach that can be used to attain water quality
improvements.46 Water quality credit trading allows one source of pollution to control a pollutant at
levels greater than required and sell credits to another source, the buyer, which uses the credits to
supplement their level of water treatment in order to comply with regulatory requirements.47 Pollutant
reductions achieved through water quality credit trading must result in water quality that is as good as
or better than what would be achieved through treatment. 48
DEP is responsible for regulating water quality credit trading.49 Water quality credits 50 can only be
traded within the boundaries of a basin management action plan51 (BMAP) or a Reasonable Assurance
Plan (RAP) area.52 Credits cannot be generated for a reduction in nutrient loading that is required under
a regulatory program, including BMAPs or RAPs