STORAGE NAME: h1175.NRD
DATE: 3/14/2025
1
FLORIDA HOUSE OF REPRESENTATIVES
BILL ANALYSIS
This bill analysis was prepared by nonpartisan committee staff and does not constitute an official statement of legislative intent.
BILL #: HB 1175
TITLE: Mitigation Banks
SPONSOR(S): Duggan
COMPANION BILL: SB 492 (McClain)
LINKED BILLS: None
RELATED BILLS: SB 1142
Committee References
Natural Resources & Disasters
Agriculture & Natural Resources
Budget
State Affairs
SUMMARY
Effect of the Bill:
The bill revises requirements related to mitigation banking. Specifically, the bill:
Creates a standardized schedule for releasing mitigation credits and removes the requirement that the
Department of Environmental Protection (DEP) and water management districts (WMDs) determine the
release schedule on a case-by-case basis based on statutorily enumerated factors.
Allows project applicants to use mitigation credits from outside a mitigation service area when an
insufficient number or type of credits are available within the impacted area.
Requires DEP or a WMD to verify the availability, or lack thereof, of mitigation banking credits within the
impacted watershed.
Establishes multipliers that must be applied for out-of-service-area and out-of-kind mitigation credits.
Requires all mitigation banks in the state to provide accounting reports of mitigation credits to DEP or a
WMD, which must be compiled and reported to the Governor and Legislature.
The bill also requires a WMD, upon application by the fee simple owner of parcel for which a WMD owns a
conservation easement, to release the conservation easement if certain criteria are met.
Fiscal or Economic Impact:
The bill may have an indeterminate negative fiscal impact on DEP associated with the reporting requirements of
the bill. The bill may have a positive fiscal impact on mitigation bankers who may be able to sell out-of-service-area
credits to individuals under the new regulations of the bill. The bill may also have a positive fiscal impact on
developers that are able to proceed with projects through the use of out-of-service-area credits.
JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY
ANALYSIS
EFFECT OF THE BILL:
Mitigation Bank Credit Release Schedule
The bill creates a standardized schedule for releasing mitigation credits that have been awarded to mitigation
banks through a permit approved by the Department of Environmental Protection (DEP) or a Water Management
District (WMD) and removes the requirement that DEP and WMDs determine the release schedule on a case-by-
case basis based on statutorily enumerated factors. The bill requires DEP or a WMD to release the credits as
follows:
30 percent of credits must be released for the recording of the conservation easement and establishment
of financial assurances required by the mitigation bank permit.
For preservation-only banks 100 percent of the awarded credits must be released for recording the
conservation easement and the establishment of financial assurances required by the mitigation bank
permit. JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY
2
30 percent of awarded credits must be released following completion of initial construction activities as
established by the mitigation bank permit.
20 percent of awarded credits must be released in increments as monitoring indicates interim
performance criteria established by the mitigation bank permit are being met.
20 percent of awarded credits must be released upon meeting the final success criteria established in the
mitigation bank permit. (Section 1)
The bill revises a provision that prohibits a mitigation credit from being released for freshwater wetland creation
until the success criteria established in the mitigation bank permit are met. Instead, the bill prohibits such credits
from being released until the success criteria established in the mitigation bank permit for initial construction
activities are met. (Section 1)
Mitigation Service Area
The bill specifies that a mitigation bank service area established by DEP or a WMD for a mitigation bank is
considered to have met the cumulative impact requirements for wetland and surface waters within any regional
watershed included in the mitigation bank service area. (Section 1)
Out-of-Service-Area Credits
The bill authorizes credits released from a mitigation bank to be used to offset impacts resulting from a project if
the project meets current established mitigation requirements and the out-of-service-area criteria established by
the bill. (Section 1)
If the requirements to determine that a project is not contrary to the public interest are met and there is an
insufficient number or type of credits available within the mitigation bank service area that the impacts associated
with a proposed project are located, the bill allows a project applicant to apply for a one-time use of credits from a
mitigation bank outside the mitigation bank service area to offset impacts of the project. If the number of credits
within a mitigation service area only partially offset the impacts associated with a proposed project in the
mitigation service area, the bill authorizes the project applicant to use out-of-service-area credits to account for the
difference between the released credits available in the mitigation bank service area and the credits required to
offset the impacts associated with the proposed project. (Section 1)
In order to use out-of-service-area credits, the project applicant must request approval for such use from DEP or
the WMD within which the impacted regional watershed is located. Upon receiving such request, the bill requires
DEP or a WMD to contact all mitigation banks within the mitigation service area encompassing the location of the
proposed impacts within three business days and request an accounting of available credits. The accounting may
not include credits reserved for other project applicants. The bill requires mitigation banks that have been
contacted by DEP or a WMD to provide the accounting within five business days. Once DEP or a WMD has received
the accounting from the mitigation banks, the bill requires DEP or a WMD to determine if sufficient credits are
available to offset impacts associated with the proposed project and notify the project applicant of such
determination. The bill authorizes a project applicant to rely on such determination for a period of one year after
the determination. (Section 1)
The bill requires DEP or a WMD to apply a proximity factor to determine the adequacy of mitigation credits by
applying multipliers to the credits in the following manner:
A 1.2 multiplier must be applied for the use of out-of-service-area credits located within a regional
watershed immediately adjacent to the regional watershed in which the proposed impacts are located.
When credits are not available in the regional watershed immediately adjacent to the regional watershed in
which the proposed impacts are located, an additional 0.25 multiplier must be applied for each additional
regional watershed located outside the regional watershed immediately adjacent to the watershed in which
the proposed impacts are located.
An additional 0.50 multiplier must be applied if the mitigation used to offset impacts entails out-of-kind
replacement. (Section 1)
JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY
3
The bill prohibits multipliers from being applied for use of out-of-service-area credits located within the same
regional watershed as the proposed impacts. The bill requires the use of multipliers to meet the cumulative impact
requirements for wetland and surface waters. (Section 1)
Annual Reporting
Beginning July 1, 2026, and each July 1 thereafter, the bill requires every mitigation bank in the state to submit a
report to DEP or a WMD with an accounting of the number and type of credits the mitigation bank has available for
sale. The report may not include names of parties who have reserved credits or the contract price paid for the
credits. The bill requires DEP or a WMD to compile the annual reports to provide an assessment of the state’s
mitigation banking system and submit a report to the Governor and Legislature by October 1, 2026, and each
October 1 thereafter. (Section 1)
Water Management District Conservation Easements
The bill requires a WMD, upon the application by the fee simple owner of a parcel of land subject to a conservation
easement with a WMD, to release the conservation easement if the following conditions are met:
The land subject to the easement is less than 15 acres and is bordered on three or more sides by
impervious surfaces;
Any undeveloped adjacent parcels of land are less than 15 acres and similarly bordered on three or more
sides by impervious surfaces;
The land contains no historical, architectural, archeological, or cultural significance; and
Prior to the release of the conservation easement, the applicant must have secured sufficient mitigation
credits using the uniform mitigation assessment method from a mitigation bank located in the state to
offset the loss of wetlands located on the land subject to the conservation easement. (Section 2)
The bill requires the ad valorem taxes on property released from a WMD’s conservation easement to be assessed
based on the just value of the property. The bill authorizes such property to be used for development consistent
with the zoning designation of the adjacent lands. (Section 2)
Effective Date
The effective date of the bill is July 1, 2025. (Section 3)
FISCAL OR ECONOMIC IMPACT:
STATE GOVERNMENT:
The bill may have an indeterminate negative fiscal impact on DEP associated with providing a report to the
Governor and Legislature as required by the bill.
PRIVATE SECTOR:
The bill may have a positive fiscal impact on mitigation bankers who may be able to sell out-of-service-area credits
to individuals under the new regulations of the bill. The bill may also have a positive fiscal impact on developers
that are able to proceed with projects through the use of out-of-service-area credits.
RELEVANT INFORMATION
SUBJECT OVERVIEW:
Regulation of Surface Waters and Wetlands
DEP regulates activities in, on, or over surface waters, as well as any activity that alters surface water flows,
through environmental resource permits (ERPs). ERPs are required for development or construction activities
typically involving the dredging or filling of surface waters, construction of flood protection facilities, building
dams or reservoirs, or any other activities that affect state waters.
1 ERP applications are processed by either DEP
1
South Florida WMD (SFWMD), Environmental Resource Permits, https://www.sfwmd.gov/doing-business-with-
us/permits/environmental-resource-permits (last visited Mar. 10, 2025). JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY
4
or one of the state's WMDs in accordance with the division of responsibilities specified in operating agreements
between DEP and the WMDs.
2
Cumulative Impact Requirements
DEP and WMDs are required to consider the cumulative impacts upon surface water and wetlands in the same
basin when determining whether to grant or deny an ERP.
3 These considerations include the cumulative impacts
of:
The activity for which the permit is sought.
Projects that are existing, wetland or surface water alteration activities that are under construction, or
projects for which permits or determinations of wetland delineation have been sought within that basin.
Activities that are under review, approved, or vested as a development of regional impact,
4 or other surface
water or wetland alteration activities that may reasonably be expected to be located within surface waters
or wetlands in the same drainage basin, based on the comprehensive plans of the local governments having
jurisdiction over the activities, or applicable land use restrictions and regulations.
5
Mitigation
Mitigation serves as the third step in a sequence of permitting actions, which must be followed to offset the adverse
impacts to surface waters resulting from the construction activities allowed by an ERP.
6 When evaluating a
proposed project for permitting, DEP or a WMD must consider whether the project is not contrary to the public
interest or clearly in the public interest.
7 If a project is contrary to the public interest or cannot be considered as
clearly in the public interest, an applicant may still be granted a permit if the applicant proposes mitigation for
such activities.
8
Mitigation usually consists of restoration, enhancement, creation, preservation, or a combination thereof and is
accomplished by providing onsite mitigation, offsite mitigation, or purchasing mitigation credits from permitted
mitigation banks.
9 The ecological benefits of mitigation compensate for the functional loss resulting from the ERP
impact.
10
Mitigation Banking
Mitigation banking is a practice in which an environmental enhancement and preservation project is conducted by
a public agency or private entity (banker) to provide mitigation for unavoidable environmental impacts within a
defined region referred to as a mitigation service area. The bank is the site itself, and the currency sold by the
banker to the ERP applicant is a credit.
11 A mitigation bank can be established and operated in phases if each phase
independently meets the requirements for the establishment and operation of a mitigation bank.
12 Mitigation
banks are authorized by a state permit, which is issued by either a WMD or DEP depending on the location of the
bank and the activity it mitigates, and by the United States Army Corps of Engineers.
13
2
DEP, Submerged Lands and Environmental Resources Coordination Program, https://floridadep.gov/water/submerged-lands-
environmental-resources-coordination (last visited Mar. 10, 2025).
3
Section 373.414(8)(a), F.S.
4
A development of regional impact means any development that, because of its character, magnitude, or location, would have
a substantial effect upon the health, safety or welfare of citizens of more than one county. Section 380.06, F.S.
5
Section 373.414(8)(a), F.S.
6
Environmental Protection Agency, Wetlands Compensatory Mitigation, available at
https://www.epa.gov/sites/production/files/2015-08/documents/compensatory_mitigation_factsheet.pdf (last visited Mar.
10, 2025).
7
Section 373.414(1), F.S.; See Section 373.414(1)(a), F.S., for the criteria DEP or WMD must consider to determine if
something is contrary to the public interest or clearly in the public interest.
8
Section 373.414(1)(b), F.S.
9
Id.; Section 373.4135, F.S.
10
DEP, Mitigation, https://floridadep.gov/water/submerged-lands-environmental-resources-
coordination/content/mitigation (last visited Mar. 10, 2025).
11
“Mitigation credit” means a standard unit of measure that represents the increase in ecological value resulting from
restoration, enhancement, preservation, or creation activities. Section 372.4136(19), F.S.
12
Section 373.4136(2), F.S.
13
DEP, Mitigation and Mitigation Banking, https://floridadep.gov/water/submerged-lands-environmental-resources-
coordination/content/mitigation-and-mitigation-banking (last visited Mar. 10, 2025). JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY
5
The uniform mitigation assessment method (UMAM) provides a standardized procedure for assessing the
ecological functions provided by surface waters, the amount that those functions are reduced by a proposed
impact, and the amount of mitigation necessary to offset that loss.
14 The UMAM evaluates functions by considering
an ecological community’s current condition, hydrologic connection, uniqueness, location, fish and wildlife
utilization, time lag, and mitigation risk. The UMAM is also used to determine the degree of improvement in
ecological value of proposed mitigation bank activities.
15
To obtain a mitigation bank permit, the applicant must provide reasonable assurance that the mitigation bank will:
Improve ecological conditions of the regional watershed;
Provide viable and sustainable ecological and hydrological functions for the proposed mitigation service
area;
Be effectively managed in perpetuity;
Not destroy areas with high ecological value;
Achieve mitigation success; and
Be adjacent to lands that will not adversely affect the long-term viability of the mitigation bank due to
unsuitable land uses or conditions.
16
The applicant must also provide reasonable assurances that:
Any surface water management system that will be constructed, altered, operated, maintained, abandoned,
or removed within a mitigation bank will meet the requirements of part IV of ch. 373, F.S., which regulates
management and storage of surface waters, and adopted rules;
The applicant has sufficient legal or equitable interest in the property to ensure perpetual protection and
management of the land within a mitigation bank; and
The applicant can meet the financial responsibility requirements prescribed for mitigation banks.
17
A banker applying for a permit to establish a mitigation bank must provide documentation of financial
responsibility and financial assurance mechanisms for the construction and implementation of the bank, and the
perpetual management and maintenance of the bank.
18 This can be achieved by obtaining a surety or performance
bond, irrevocable letter of credit, or insurance policy. The banker is required to demonstrate continuous fiscal
responsibility until all of the permit conditions are completely satisfied and approved for release by DEP.
19 Further,
the financial responsibility mechanisms must guarantee that the banker will perform all of its obligations under
the permit.
20
Mitigation Credits
The number of potential credits permitted for the bank and the credit required for ERPs are determined by DEP or
a WMD.
21 The credits are awarded to the proposed mitigation bank, or a phase of such bank.
22 A banker may apply
to modify the mitigation bank permit to obtain additional mitigation credits.
23 Once DEP or a WMD has approved
the total number of credits for a mitigation bank, the credits must be released in a schedule as prescribed in the
mitigation banking permit.
24 This release can include a portion of credits released for sale or use prior to a
mitigation bank meeting all of the performance criteria specified in the mitigation bank permit.
25 The release
schedule for a specific mitigation bank or phase must be related to the actions required to implement the bank,
14
DEP, Uniform Mitigation Assessment Method (UMAM), https://floridadep.gov/water/submerged-lands-environmental-
resources-coordination/content/uniform-mitigation-assessment (last visited Mar. 10, 2025).
15
Id.
16
Section 373.4136(1), F.S.; Rule 62-342.400, F.A.C.
17
Id.; see also rule 62-342.700, F.A.C.
18
Rule 62-342.700(3), F.A.C.
19
Id.
20
Id.
21
Section 373.4136(4), F.S
22
Id.
23
Id.
24
Section 373.4136(5), F.S.
25
Section 373.4136(5)(a), F.S. JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY
6
such as site protection, site preparation, earthwork, removal of wastes, planting, removal or control of nuisance
and exotic species, installation of structures, and annual monitoring and management requirements for success.
26
Mitigation Service Areas
DEP and WMDs are responsible for establishing mitigation service areas for each mitigation bank permit.
27 A
mitigation service area is the geographic area within which mitigation credits from a mitigation bank can be
purchased.
28 When determining the boundaries for a mitigation service area, DEP or a WMD is required to consider
certain factors
29 and must use regional watersheds
30 to guide the establishment of such areas.
31 Generally,
mitigation credits may only be withdrawn and used to offset adverse impacts in the mitigation service area.
32
However, if an applicant for an ERP is required to engage in mitigation activities, and meets the cumulative impact
requirements for impacts on surface waters and wetlands within the same drainage basin, the following exceptions
apply, allowing an applicant to obtain credits from outside their mitigation service area:
Projects with adverse impacts partially located within the mitigation service area.
Linear projects, such as roadways, transmission lines, distribution lines, pipelines, railways, or seaports.
Projects with a total adverse impact of less than one acre in size.
33
Conservation Easements
A conservation easement is a legal agreement that provide a perpetual,
34 undivided interest in property to protect
natural, scenic, or open space values of real property.
35 A WMD may hold a conservation easement through
donation or sale of property to that district. Conservation easements may also be proposed to offset environmental
impacts from development and be a required component of a mitigation plan for a permit issued by a WMD.
36 To
protect wetlands or to offset impacts from permitted construction projects, the wetlands that remain on a
permitted property, along with natural areas bordering them, often are placed in a conservation easement.
37
Frequently, these easements are located on or behind future home lots.
38
OTHER RESOURCES:
Map of Mitigation Bank Service Areas
26
Section 373.4136(5)(b), F.S.
27
Section 373.4136(6), F.S.
28
Section 373.403(21), F.S.
29
Section 373.4136(6)(a), F.S.
30
“Watershed” means the land area that contributes to the flow of water into a receiving body of water. Section 373.403(12),
F.S.
31
Section 373.4136(6)(b), F.S.
32
Section 373.4136(6), F.S.
33
Section 373.4136(6)(d), F.S.
34
A perpetual easement is specific to a parcel, meaning that even if the land is exchanged and there is a new owner, the
conservation easement agreement remains. St. Johns River WMD (SJRWMD), Conservation Easements,
https://www.sjrwmd.com/permitting/conservation-easements/#FAQ-01 (last visited Mar. 10, 2025).
35
DEP, Conservation Easements, https://floridadep.gov/lands/environmental-services/content/conservation-easements (last
visited Mar. 10, 2025).
36
SJRWMD, Conservation Easements, https://www.sjrwmd.com/permitting/conservation-easements/ (last visited Mar. 10,
2025).
37
Id.
38
Id. JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY
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BILL HISTORY
COMMITTEE REFERENCE ACTION DATE
STAFF
DIRECTOR/
POLICY CHIEF
ANALYSIS
PREPARED BY
Natural Resources & Disasters
Subcommittee
Moore Gawin
Agriculture & Natural Resources
Budget Subcommittee
State Affairs Committee