N.J. Admin. Code § 7:7-17.17

Current through Register Vol. 56, No. 17, September 3, 2024

Section 7:7-17.17 - Financial assurance for mitigation projects; general provisions

(a) Financial assurance in accordance with this section is required for mitigation projects involving restoration, creation, or enhancement activities as mitigation for impacts to intertidal and subtidal shallows, tidal waters, and wetlands. Financial assurance is not required for a mitigation proposal or mitigation bank proposal submitted by a government agency or an entity that is exempt from the requirement to provide financial assurance under Federal law.

(b) The person responsible for conducting mitigation identified at (b)1 or 2 below shall establish and maintain financial assurance in accordance with this section:

1. Where mitigation is required pursuant to a permit, the permittee or mitigation bank sponsor of a wetlands mitigation project or mitigation bank; or

2. Where mitigation is required as part of the remedy for a violation, the person designated to provide mitigation in the enforcement document.

(c) The person identified at (b) above shall establish and maintain financial assurance in the amount specified at (f) below, until the Department determines that the mitigation site or mitigation bank has satisfied the applicable performance standards, permit conditions, enforcement document, or settlement agreement.

(d) Financial assurance shall comprise one or more of the instruments identified at (d)1 through 5 below. A template for each of the types of financial assurance identified at (d)1 through 4 below is available from the Department at the address set forth at 7:7-1.6.

1. A fully funded trust fund, in accordance with 7:7-17.18;

2. A line of credit, in accordance with 7:7-17.19;

3. A letter of credit, in accordance with 7:7-17.20;

4. A surety bond, in accordance with 7:7-17.21; and/or

5. Other forms of financial assurance, other than self-insurance or self-guarantee, as determined by the Department to meet the requirements of this section.

(e) Financial assurance that meets the requirements of this section shall be provided at least 30 calendar days prior to undertaking mitigation activities approved under a permit or mitigation banking instrument, or as required under an enforcement document or settlement.

(f) The amount of financial assurance shall be based on an itemized estimate provided by an independent contractor and shall include the following:

1. Construction costs, equal to 115 percent of the estimated cost of completing the creation, restoration, or enhancement of intertidal and subtidal shallows, tidal waters, or wetlands; and

2. Maintenance costs, equal to 115 percent of the estimated cost of monitoring and maintaining the site, including the cost to replant the wetlands mitigation area.

(g) The Department shall review the financial assurance annually and adjust the amount as necessary to reflect current economic factors.

(h) The Department shall require additional financial assurance in accordance with (f) above if additional construction and/or monitoring is required to ensure success of the mitigation project.

(i) The portion of financial assurance required under (f)1 above shall be released upon the Department's determination that construction (including grading and planting) of the mitigation project or bank has been successfully completed in accordance with the approved mitigation proposal.

(j) The portion of financial assurance required under (f)2 above shall be released when the Department determines that the mitigation project or bank is successful pursuant to 7:7-17.11(k) (for an intertidal and subtidal shallows or tidal waters mitigation project), 17.13(g) (for a wetlands mitigation project), or 17.22(j) (for a mitigation bank), as applicable.

(k) If the Department determines that the person responsible for conducting mitigation and providing financial assurance as specified at (b) above has failed to perform a mitigation project or bank as required by a permit, mitigation banking instrument, enforcement document, or settlement agreement, the Department shall:

1. Provide written notice of this determination to the person; and

2. Require that the mitigation project or bank be brought into conformance with the permit, mitigation banking instrument, enforcement document, or settlement agreement within 30 calendar days after receipt of the notice, unless the time frame for compliance is extended in writing by the Department.

(l) No sooner than 30 days from the date the person required to establish the financial assurance receives the notice under (k) above, the Department may, at its discretion, perform the mitigation project or bank by drawing on the funds available in the financial assurance.

N.J. Admin. Code § 7:7-17.17

Adopted by 47 N.J.R. 1392(a), effective 7/6/2015