Grant programs for wetland mitigation and property development projects on Department of Natural Resources lands and making an appropriation. (FE)

Under current law, DNR must issue wetland general permits for discharges of dredged or fill material into certain wetlands and may require a person to apply for and obtain a wetland individual permit if DNR determines that conditions specific to the site require additional restrictions on the discharge in order to provide reasonable assurance that no significant adverse impacts to wetland functional values will occur. Under current law, before DNR may issue a wetland individual permit, it must require the restoration, enhancement, creation, or preservation of other wetlands to compensate for adverse impacts to a wetland resulting from the discharge, also known as mitigation.

Under the authority of current law, and in consultation with the U.S. Army Corps of Engineers (ACE), DNR has created the in lieu fee subprogram as one method by which wetland mitigation may be accomplished. Under this subprogram, payments are made to DNR or another entity for the purposes of improving or preserving wetlands or other water resource features.

This bill requires DNR to establish a wetland mitigation grant program (“mitigation program”) using up to $2,500,000 each fiscal year from moneys received under the in lieu fee program and from surcharge fees charged for each application to proceed under a wetland general permit. Under the mitigation program, nonprofit organizations may apply to DNR on a rolling basis for grants to conduct projects to create, restore, or enhance wetlands on certain DNR lands.

The bill requires DNR to identify land under its jurisdiction that is appropriate to include in the mitigation program, but limits eligible land to that acquired by the state in whole or in part with funding from the Warren Knowles-Gaylord Nelson stewardship program or the Warren Knowles-Gaylord Nelson stewardship 2000 program (DNR stewardship land). The bill requires DNR to include in the mitigation program no less than 25 percent of all DNR stewardship land and, with some exceptions, to include land in every watershed located on DNR stewardship land.

The bill requires DNR to issue a request for proposals within three months after identifying appropriate lands or at the beginning of the next fiscal year, whichever is earlier, and no later than July 1 of each subsequent year. Under the bill, DNR must select and announce grant recipients at the end of each quarter, as funds are available.

The bill imposes requirements for what a wetland mitigation grant application must include, such as specifications of the wetland functional values that the project area does not provide or only sparsely provides and those that the proposed project would restore, enhance, or create. If an application is approved, the bill requires DNR and the grantee to identify all DNR permits that are required in order for the grantee to conduct the project, requires DNR to waive all permit fees for those permits, and limits the timelines for approval of those permits.

Generally, under current law, when a person notifies DNR of an intent to conduct an activity under a general permit, if DNR does not request any additional information about the activity that is subject to the notification and does not inform the applicant that an individual permit will be required by a certain deadline, the activity is considered to be authorized by the general permit. With respect to a general permit required to conduct a project under the mitigation program, this bill requires DNR to inform an applicant that the activity is authorized by the general permit, instead of relying on passive review.

The bill also authorizes DNR to submit a request to ACE that ACE move up all deadlines relating to its review and approval of wetland mitigation project proposals under the in lieu fee subprogram.

The bill requires DNR to pay out a wetland mitigation grant in three phases, withholding the final payment until the grantee certifies that the project is complete.

If the grantee fails to certify that the project is complete by the date indicated for completion in its application, the bill requires DNR to use the remaining unpaid grant amount to either complete the project or contract with or issue a grant to another nonprofit organization to complete the project, unless DNR agrees to modify the deadline because of unusual or unforeseen circumstances. Under the bill, an organization that fails to certify completion of a project by the date indicated in its application for completion, or another date agreed to by DNR, is not eligible for a new grant for two grant cycles.

The bill requires DNR to report to the legislature on the effectiveness of the mitigation program's first five years and any recommended changes.

Property development grants.

The bill also requires DNR to establish a separate grant program under which it makes grants to nonprofit organizations for certain property development activities relating to wetlands affected by a project under a wetland mitigation grant. Property development activities that may be funded under this grant program include those that increase public access to, awareness about, or recreational use of the affected wetland, or that improve habitat in, on, or near, the affected wetland. Under the bill, the property development grant program is funded from the property development and local assistance subprogram of the Warren Knowles-Gaylord Nelson stewardship 2000 program.

Though it is separate from the wetland mitigation grant program, the bill requires an application for a property development grant to be submitted at the same time as an application for a wetland mitigation grant, requires DNR to make a determination on both grants at the same time, and prohibits DNR from awarding a property development grant unless it also awards a wetland mitigation grant. The bill also restricts a property development grant to no more than 10 percent of the amount of the wetland mitigation grant and provides that a property development grant may not be paid until the grantee certifies that the project funded by the wetland mitigation grant is complete.