20200579 Ver 1_Mitigation Bank Instrument_20200731

ID#* 20200579 Version* 1
Select Reviewer:*
Katie Merritt
Initial Review Completed Date 07/31/2020
Mitigation Project Submittal - 7/31/2020
Is this a Prospectus, Technical Proposal or a New Site?* r Yes r No
Type of Mitigation Project:*
r" Stream r- Wetlands r` Buffer V Nutrient Offset
(Select all that apply)
Project Contact Information
Company/Owner:* City of Wilson
Contact Name:* Email Address:*
Noah Parsons [e-mail]
Project Information
Project Type: r DMS r Mitigation Bank
Project Name: 2020-0579 Whirligig Station
County: Wilson
Document Information
Mitigation Document Type:*
Mitigation Bank Instrument
File Upload: 2020-0579 Wilson_ MBI_Whirligig.pdf 4.29MB
Rease upload only one RDF of the corrplete file that needs to be subrritted...
Signature
Print Name:* Rebecca Stubbs
Signature:*

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AGREEMENT TO ESTABLISH THE WHIRLIGIG STATION MITIGATION BANKING INSTRUMENT IN THE
NEUSE RIVER BASIN FOR NUTRIENT OFFSET MITIGATION CREDITS PURSUANT TO THE NEUSE
NUTRIENT MANAGEMENT STRATEGY
TABLE OF CONTENTS
I. PREAMBLE ..................................................................................................................................... 2
II. LOCATION AND GEOGRAPHIC SERVICE AREA.................................................................................. 2
III. AUTHORITIES ................................................................................................................................. 2
IV. ESTABLISHMENT OF MITIGATION SITE ........................................................................................... 3
V. MITIGATION PLAN.......................................................................................................................... 3
VI. POST CONSTRUCTION DOCUMENTATION ...................................................................................... 5
VII. CALCULATION OF MITIGATION CREDITS ......................................................................................... 6
VIII. CREDIT RELEASE SCHEDULE ............................................................................................................ 7
IX. PROCEDURE FOR DEBITING AND CREDITING MITIGATION CREDITS ................................................ 7
X. MITIGATION SITE BANK CLOSURE................................................................................................... 8
XI. GENERAL PROVISIONS .................................................................................................................... 9
ATTACHMENTS
A - Division of Water Resources Authority Document
B - Rule Text 15A NCAC 02B .0703
C - Nutrient Offset Ledger Template
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I.PREAMBLE
This Mitigation Banking Instrument (“Instrument”) regarding the establishment, use, operation, and
maintenance of the Whirligig Station Sand Filter Mitigation Site (“Mitigation Site”) to provide Neuse
Nutrient Strategy nutrient load reduction credit (“Nutrient Offset Credits”) is made and entered into
by and among the City of Wilson acting as the Bank Sponsor (“Sponsor”) and the North Carolina
Department of Environmental Quality – Division of Water Resources (“DWR”). This Instrument is in
accordance with 15A NCAC 02B .0703 (Attachment B).
The purpose of the Bank is:
A.To provide mitigation and sell any resulting Nutrient Offset Credits to third parties in the City of
Wilson limits including extraterritorial jurisdictions (ETJs) of the City for development (both
existing and proposed) or for use on City projects requiring such mitigation.
II.LOCATION AND GEOGRAPHIC SERVICE AREA
A.The Geographic Service Area (“GSA”) is the designated area wherein a Bank can reasonably be
expected to sell Nutrient Offset Credits for impacts due to development activities.
B.The Site is located within the Neuse River Basin in the State of North Carolina, United States
Geological Survey (“USGS”) 8-digit Hydrologic Unit Code (“HUC”) 03020203 within the City of
Wilson.
C.Sale or transfer of Nutrient Offset Credits shall be limited to the 8-digit HUC 03020203 in the
Neuse River Basin and in the City limits and extraterritorial jurisdiction of the City of Wilson,
excluding the Tar-Pamlico Watershed, unless otherwise authorized by DWR in accordance with
15A NCAC 02B .0295.
D.The Whirligig Station Mitigation Site is comprised of land in the City of Wilson, NC and is currently
an existing parking area. The project is located at 35.724181° N and 77.912967° W.
III.AUTHORITIES
A.The Bank will be used to provide Nutrient Offset Credit in accordance with the requirements in
the DWR Authority document referenced herein as “Attachment A” and attached to this
Instrument.
B.Projects eligible for utilization of the credits are those requiring authorization under the
requirements of Attachment A and any new approved North Carolina (“State”) statutes and rules
for the Neuse Nutrient Sensitive Waters Management Strategy.
C.The selling of mitigation credits generated from the Mitigation Site approved under this
instrument, shall be consistent with approved State statutes and rules for the Neuse Nutrient
Sensitive Waters Management Strategy.
D.Mitigation activities proposed under this Instrument and corresponding Mitigation Plan to
generate Nutrient Offset Credits shall be consistent with State statutes and rules for the Neuse
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Nutrient Sensitive Waters Management Strategy that are in place at the time a complete
Mitigation Plan is submitted to DWR.
IV.ESTABLISHMENT OF MITIGATION SITE
A.In accordance with 15A NCAC 02B .0703, DWR has provided a “Site Viability Letter” for the
Mitigation Site proposed under this Instrument. The Site Viability Letter is not an approval of the
site to generate mitigation credits, but is a preliminary review of the Mitigation Site that details
and confirms existing land use conditions and identifies features (that meet general criteria to be
suitable to generate mitigation credits. Table 1.0 below outlines when a Site Viability Letter was
issued by DWR for the mitigation site proposed under this Instrument:
Table 1.0 – Site Viability Letter Details
Mitigation Site DWR Site
Evaluation Viability Letter Received Viability Letter
Expiration Date
Whirligig Station
Mitigation Site N/A June 5, 2020 TBD
B.A valid Site Viability Letter is required prior to submittal of each Mitigation Plan. Site Viability
Letters will either expire on the dates listed in the table above or upon submittal of an individual
As-Built Report to the DWR, whichever comes first. If a Site Viability Letter expires prior to
submittal of a complete Mitigation Plan as described in Section V to DWR, then the Sponsor must
submit a formal request to DWR for a new Site Viability Letter for that Mitigation Site.
C.The Mitigation Site proposed for inclusion under this Instrument shall require a Mitigation Plan
be submitted to, and approved, by DWR prior to use of the Site for mitigation purposes or the
sale or transfer of any associated credits. The contents of the Mitigation Plan are provided in
Section V.
D.The Mitigation Plan submitted under this instrument will be placed on public notice and made
available for public commenting for 30 calendar days.
E.Nutrient Offset Credit may be achieved on the Mitigation Site through establishment and
maintenance of the stormwater control measure (SCM providing nutrient treatment on the
Whirligig Station Mitigation Site) as provided in the Operation and Maintenance Manual.
F.The Mitigation Site is expected to provide Nutrient Offset Credits in accordance with 15A NCAC
02B .0703 and are expected to provide Nutrient Offset Credit as follows:
1.Nutrient treatment as provided by the SCM located on the Mitigation Site.
V.MITIGATION PLAN
A.The Mitigation Plan submitted under this Instrument shall be submitted to DWR for review and
must be approved by DWR prior to any release of nutrient credits as provided by this Mitigation
Site. The Mitigation Plan must describe any changes that have occurred to the site between the
date of the Site Viability Letter and the date the Mitigation Plan is submitted to DWR. The
Mitigation Plan shall include detailed information consistent with the sections below concerning;
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1) site location (8-digit HUC and other geographical information is required); 2) existing conditions
with current photos; 3) nutrient offset activities; 4) monitoring and maintenance plans; 5)
financial assurances; 6) associated nutrient credit calculations, which shall include credit
generation, service area, and accounting as appropriate for each regulatory authority; 7) Site
Viability Letter from DWR; and 9) service area figure for each mitigation type.
Permitting
B.The Sponsor will obtain all applicable federal, state and local documentation, permits, or
authorizations needed for construction and to maintain the Mitigation Site. This Instrument does
not qualify as, or substitute for, such documentation, permit, or authorization.
Construction
C.Any restoration and/or enhancement activities or proposed construction to the SCM on the
Mitigation Site to produce Nutrient Offset Credit must be approved by DWR in writing prior to
implementation. The failure of the Sponsor to comply with this requirement may result in a
revised or reduced credit release schedule for that specific Mitigation Site.
D.Requests for deviation from the approved Mitigation Plan must be submitted to DWR in writing.
Written approval from the DWR must be received prior to implementing any deviation from the
approved Mitigation Plan.
Property Disposition & Long-Term Management
E.Prior to the release of any credits, the Sponsor shall record permanent maintenance and access
easements at the Wilson County Register of Deeds sufficient to ensure protection, operation, and
maintenance of the SCM for the duration specified in the approved Mitigation Plan.
F.The form of the maintenance easement shall be consistent with the standards employed by the
State of North Carolina in the protection of SCM areas and shall be approved by the DWR prior to
the release of any credits.
G.The Sponsor shall not grant additional easements, right of ways, or any other property interest in
or to the project areas, without prior approval from the DWR.
Financial Assurances
H.Following approval of the Mitigation Plan, the Sponsor shall provide documentation to DWR
demonstrating annual maintenance costs and annual replacement costs (for major repairs) are
added to the City of Wilson budget as a line item. The minimum amount to be budgeted annually
is detailed in the Mitigation Plan and should be included in the City’s budget in a manner that is
protected in perpetuity.
I.To comply with this section, the City of Wilson must provide the required maintenance and annual
replacement cost within the City’s budget, accounting for inflation as necessary, into perpetuity.
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VI.POST CONSTRUCTION DOCUMENTATION
As-Built Report
A.The Sponsor agrees to perform all necessary work, in accordance with the provisions of this
Instrument and corresponding Mitigation Plan, to establish, maintain, and monitor the SCM until
Items B (1) and (2) of Section X have been satisfied.
B.The Sponsor will submit an as-built plan and report for the Mitigation Site within 30 calendar days
after completing the establishment of the nutrient offset area and SCM construction. The As-Built
report will describe any deviation from the approved Mitigation Plan and will document the
following:
1.Stormwater SCMs: outlet structure information, surface area/volume calculations,
hydrograph routing information, photo point locations as appropriate.
2.Aerial map of the Mitigation Site that was included in the approved Mitigation Plan.
Financial Assurance
C.After completion of the SCM construction on the Mitigation Site, the Sponsor shall continue to
provide annual maintenance and replacement costs within the City’s budget. The minimum
amount to be budgeted annually shall be 15% of the total construction cost of the sand filter and
should be included in the City’s budget in a manner that is protected against modification in
perpetuity. Documentation of the total construction cost shall be provided to DWR in addition to
confirmation of the maintenance and replacement costs in the City’s budget, updated annually.
D.The initial nutrient credit release will not occur until the completion of construction, as-built
certification, recordation of the deed and plat with easements, and the establishment of an
operation and maintenance agreement, therefore, a performance bond will not be provided by
the City for this Mitigation Site.
Monitoring and Maintenance Reports
E.In accordance with the Operation and Maintenance Manual associated with the Mitigation Site,
the Site should be inspected monthly and within 24 hours after every storm event greater than
1.0 inches. Reports and records of operation and maintenance should be kept in a known set
location to be available upon request.
F.Inspection activities should be performed in accordance with the Operation and Maintenance
Manual’s detailed list of potential problems.
G.Photo point locations should remain consistent for all inspections and should be established upon
the initial inspection.
H.In addition to point locations photos, best available recent aerial images should also be provided
with maintenance reports.
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Contingency Plans/Remedial Actions
I.In the event the Mitigation Site fails to achieve the performance criteria described in this
Instrument and in the approved Mitigation Plan, the Bank Sponsor shall develop necessary
contingency plans in coordination with DWR and implement appropriate remedial actions for the
Mitigation Site. Depending on the degree of remedial actions required, DWR may modify the
monitoring period.
VII.CALCULATION OF MITIGATION CREDITS
Nutrient Offset Credits
A.Nutrient Credit Generation by the SCM: The Sponsor and DWR agree:
1.The pounds of nitrogen offset by the SCM shall be 63.89 pounds per year.
This space left blank intentionally, do not add text to this space.
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VIII.CREDIT RELEASE SCHEDULE
A.Upon submittal of all appropriate documentation by the Sponsor, and subsequent approval by
DWR, it is agreed that the mitigation credits associated with the Whirligig Station Mitigation Site
will become available for sale to a third party in accordance with Section II and the Credit Release
Schedule below in Table 2.0
Table 2.0 - Credit Release Schedule for Nutrient Offset Credits
Task Project Milestone
% Credit
Available for
Sale
1
Monitoring and Maintenance Financial Assurance Documentation
Provided, Approval of As-Built Report, O&M Agreement Established, Deed
and Plat with Easements Recorded
75
2 First Monitoring Report Approved by DWR* & financial assurance
renewed with documentation provided 25
Total 100%
* DWR Approval provided upon a determination that the site is meeting success criteria
contained within the approved Mitigation Plan. Initial Monitoring Report Inspection shall be
conducted by an NCSU Stormwater SCM Construction Inspection certified third-party entity.
B.DWR may modify Credit Release Schedules based on the information submitted or the order in
which required information is received. DWR will notify the Sponsor of any modification to the
credit release schedule.
IX.PROCEDURE FOR DEBITING AND CREDITING MITIGATION CREDITS
Credit Ledgers
A.The Bank Sponsor shall maintain one credit ledger for the Mitigation Site under this Instrument:
The credit ledger shall provide the accounting for the Nutrient Offset Credits in pounds per year
and acres.
B.Each credit ledger shall be submitted on a separate 8 ½ in. x 11 in. spreadsheet with legible font
style and font size. All ledgers shall be submitted using the templates provided in Attachment D
of this Instrument or any updated versions to this template as provided by DWR.
C.The credit ledger shall be submitted to DWR quarterly.
Credit Processing
D.Nutrient Offset Credits generated from this Mitigation Site will be used to offset nitrogen nutrient
loads within the 03020203 HUC of the Neuse River Basin and specifically those areas within that
HUC that are located within the City Limits and Extraterritorial Jurisdiction of the City of Wilson,
excluding any areas within the Tar-Pamlico Watershed, in accordance with 15A NCAC 02B .0703.
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E.The Bank Sponsor shall obtain verification of nutrient offset need from DWR in the 03020203 HUC
of the Neuse River Basin, excluding the Tar-Pamlico Watershed, prior to debiting Nutrient Offset
Credits from the Mitigation Site.
F.All credit and debit transactions for the Mitigation Site under this Instrument shall be accurately
depicted in the credit ledger. The Sponsor shall submit an accurate and up-to-date credit ledger
for the Mitigation Site by the 10th of each month. At a minimum and only upon request, NC DEQ
shall receive a hard copy of the updated credit ledger along with corresponding Mitigation Credit
Transfer Certificates and all corresponding letters from City of Wilson or DWR where applicable
once a year. Notification of all credit sales shall be provided to DWR until all credits that have
been released have been sold.
Mitigation Credit Transfer Certificates
G.All credit sales will include a Mitigation Credit Transfer Certificate (“Certificate") that is required
to be provided to the buyer of Nutrient Offset Credits, that will include, at a minimum, the
following information;
1.Bank Details: (1) Sponsor Name, (2) Bank Parcel name as it appears in this Instrument and,
(3) DWR project number for the Mitigation Plan.
2.Credit Details: (1) date of receipt, (2) identify if full or partial payment, and (3- when
applicable) amount of nitrogen credits purchased in pounds per year and confirmation
from the City of Wilson or DWR of the amount required.
3.Permitted Project Details: (1) project name as it appears on DWR or local government
permits and/or certifications, (2) 8-digit HUC, (3) river basin, (4) nutrient strategy
applicable to the project with impacts, and (5 – when applicable) designated local
government (City of Wilson) requiring Nutrient Offset Credits for this project.
H.If DWR determines the Bank is operating at a deficit (e.g. the Sponsor is closing on sales and/or
transferring credit that is not available), or the Bank is selling credits out of compliance with
statutes, rules or this Agreement, the sale/transfer of credits will immediately cease, and the
DWR, in consultation with the Sponsor, will determine what remedial actions are necessary.
X.MITIGATION SITE BANK CLOSURE
A.Mitigation Site Bank Closure shall be identified as the event when there are no Nutrient Offset
Credits left to sell. At the time of the Mitigation Site Bank Closure, the Sponsor is not relieved
of maintenance responsibilities and the financial assurances associated with required
maintenance.
B.Mitigation Site Bank Closure shall commence only after all credits have been released and
debited and updated ledgers showing zero credit balances have been submitted and approved
by DWR.
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XI.GENERAL PROVISIONS
A.Upon the presentation of proper credentials, and during normal business hours, the Sponsor shall
grant permission to the Director of DWR, or an authorized representative of the Director of DWR
to enter the property containing the Mitigation Site.
B.Amendments: This Banking Instrument may be amended or modified only with written approval
of all signatory parties, including the USACE if it is applicable to the amendment.
C.Any transfer of the Sponsor’s rights or obligations outlined in this Instrument or any other
agreement referenced in this Instrument to a third party must be approved by DWR prior to the
transfer.
D.Force Majeure: Before or after 100% of all the credits have been released in accordance with the
credit release schedule in Section VIII, the Sponsor shall take remedial action to restore the
property to its condition prior to the event, in a manner sufficient to provide adequate mitigation
to cover credits that were sold prior to the occurrence of the event. Such remedial action shall be
taken by the Sponsor only to the extent necessary and appropriate, as determined by DWR and
the Sponsor.
DWR must concur in writing that a force majeure event has occurred for this provision to apply.
E.Oversight: Actions taken by DWR may include, but are not limited to, the following:
1.Site visits,
2.Issuance of Site Viability Letters,
3.Mitigation Plan review and approval of items listed in Section V of this Instrument,
4.As-Built report review and approval of items listed in Section VI of this Instrument,
5.Monitoring Report review and approval of items listen in Section VI of this Instrument,
6.Credit Ledger review and approval of items listen in Section IX of this Instrument,
7.Certificate review of items listed in Section IX of this Instrument and cross analysis to
credit ledgers and,
8.Information requests, file reviews and audits.
Reports, ledgers, files and other information shall be made available to DWR upon request, unless
otherwise specified in this or any other document.
F.Validity of this Instrument: This Instrument will become valid on the date of the last party’s
signature.
G.Specific Language of this Instrument Shall Be Controlling: To the extent that specific language in
this document changes, modifies, or deletes terms and conditions contained in those documents
that are incorporated into the Instrument by reference, and that are not legally binding, the
specific language within the Instrument shall be controlling.
H.Any disputes over decisions regarding this Instrument, shall be referred to the Director of DWR
for a decision. The Director’s decision is subject to review as provided in Articles 3 and 4 of G.S.
150B.
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I.This Agreement shall be binding upon the parties and is entered into knowingly, intelligently and
voluntarily.
J.Notices: All Notices and other communication which may be or are required to be given or made
by any party to the other shall be in writing and shall be deemed to have been properly given and
received on the date delivered in person, received via email with a delivery receipt requested, or
deposited in the United States mail, registered or certified, return receipt requested, to the
addresses set out below or at such other addresses as specified by written notice delivered in
accordance herewith.
If to Bank Sponsor: 112 Goldsboro St. E.
Wilson, NC 27894
Attn: Noah Parsons, Stormwater Compliance Specialist
If to DWR: NC Division of Water Resources – 401 & Buffer Permitting Branch
Attn: Nutrient Offset Banking Coordinator
1617 Mail Service Center
Raleigh, NC 27699-1617
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I.Applicable Law: This Agreement shall be construed under the laws of the State of North Carolina.
CITY OF WILSON, NORTH CAROLINA
By: (Print)
(Signature)
Title:
Date:
NORTH CAROLINA DEPARTMENT OF ENVIRONMENTAL QUALITY-DIVISION OF WATER RESOURCES
By: (Print)
(Signature)
Title:
Date:
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ATTACHMENT A
Authorities pertaining to the Mitigation Banking Instrument
General Statutes:
G.S. §143-214.11 Ecosystem Enhancement Program
G.S. §143-214.26 Nutrient Offset Credits
G.S. §143-214.7 Stormwater runoff rules and programs
G.S. §143-215.8B Basinwide Water Quality Management Plans
Session Laws
S.L. 2015-246
S.L. 2015-149
S.L. 2014-90
S.L. 2014-120
S.L. 2013-413
S.L. 2013-121
S.L. 2013-265
S.L. 2012-200 (Amendment to G.S. §143-214.23 and G.S. §143-215.1) S.L. 2011-343 (Amendment to G.S.
§143-214.11)
S.L. 2009- 337 (Amendment to G.S. §143-214.11)
Administrative Rules:
15A NCAC 02B .0202 Definitions
15A NCAC 02B .0223 Nutrient Sensitive Waters
15A NCAC 02B .0703 Nutrient Offset Payments
Neuse River Basin Buffer and Neuse Nutrient Strategy
Session Laws
S.L. 2019-86
S.L. 2011-394
S.L. 1998-221 (Part I)
S.L. 1995-572
Administrative Rules:
15A NCAC 02B .0701 Nutrient Strategies Definitions
15A NCAC 02B .0710 Neuse Nutrient Strategy: Purpose & Scope
15A NCAC 02B .0711 Neuse Nutrient Strategy: Stormwater
15A NCAC 02B .0712 Neuse Nutrient Strategy: Agriculture
15A NCAC 02B .0241 Delegation of Authority for the Protection and Maintenance of Existing Riparian
Buffers
15A NCAC 02B .0703 NUTRIENT OFFSET CREDIT TRADING
(a) PURPOSE. The purpose of this Rule is to establish standards and procedures applicable to providers for
approval of nutrient reduction projects and associated nutrient offset credits that will be transferred to persons or
entities subject to nutrient rules of this Subchapter. Nutrient offset credit is distinct from nutrient accounting for
direct compliance with individual nutrient strategy rules, which is not governed by this Rule. Nutrient accounting
includes joint compliance by multiple local governments as authorized in individual nutrient strategy rules. Nutrient
offset credits represent a compliance option to the extent allowed by nutrient rules of this Subchapter, including:
(1) the Neuse Nutrient Strategy as set forth in Rule .0710 of this Section;
(2) the Tar -Pamlico Nutrient Strategy as set forth in Rule .0730 of this Section;
(3) the Jordan Lake Nutrient Strategy as set forth in Rule .0262 of this Subchapter, including to the
extent that the requirements of this Rule related to the nutrient offset credits are incorporated by
the Jordan Lake rules; and
(4) the Falls Lake Nutrient Strategy as set forth in Rule .0275 of this Subchapter, including to the
extent that the requirements of this Rule related to the nutrient offset credits are incorporated by
the Falls Lake rules.
(b) GEOGRAPHIC RESTRICTIONS. Nutrient offset credits may be used to satisfy regulatory obligations only
when generated by a nutrient reduction project within an allowable geographic area identified in G.S. 143-214.26, as
designated by the U.S. Geological Survey, with the following additional restrictions:
(1) Nutrient offset credits may be used to satisfy regulatory obligations incurred in the upper Falls
watershed only if they were generated by a nutrient reduction project located within the upper
Falls watershed, as this geographic area is described in 15A NCAC 02B .0276.
(2) Nutrient offset credits may be used to satisfy regulatory obligations incurred in the lower Falls
watershed only if they were generated by a nutrient reduction project located within the Falls Lake
watershed, as these geographic areas are described in 15A NCAC 02B .0276.
(3) Nutrient offset credits may be used to satisfy regulatory obligations incurred in the Jordan Lake
watershed only if they were generated by a nutrient reduction project in the same subwatershed of
the Jordan Lake watershed, as these geographic areas are described in 15A NCAC 02B .0262.
(4) Nutrient offset credits may be used to satisfy regulatory obligations incurred in the Neuse 01 8-
digit cataloguing unit, as designated by the U.S. Geological Survey, outside of the Falls Lake
watershed only if they were generated by a nutrient reduction project located outside of the Falls
Lake watershed.
(5) Nutrient offset credits generated by nutrient reduction projects for compliance with an estuarine
nutrient strategy shall be generated in an area that is within or drains to:
(A) surface waters identified for restoration under the applicable nutrient -related TMDL or
nutrient strategy; or
(B) surface waters classified as SA, SB, or SC that fails to meet the chlorophyll -a water
quality standard in a subsequent integrated report.
(c) NUTRIENT OFFSET CREDIT APPROVAL STANDARD. Providers shall demonstrate that a nutrient
reduction project is designed, constructed, implemented, and sustained in a manner that, according to the best
available scientific evidence, studies, and principles, will generate the estimated nutrient load reduction for the
duration of time for which credits are approved. Nutrient offset credits shall be generated and transferred in
accordance with G.S. 143-214.26.
(d) QUANTIFYING NUTRIENT OFFSET CREDITS. The quantity of nutrient offset credits eligible to be
generated by a nutrient reduction project shall be determined according to the following provisions:
(1) Nutrient reduction credit sought on developed lands shall be calculated in relation to load
reductions achieved relative to the project site's current loading condition, as determined by the
provider and verified by the Division;
(2) Nutrient load reductions shall be site -specific estimates of decreases in annual mass load of
nitrogen or phosphorus to the nearest receiving surface water feature. Such estimates shall be
supported by the weight of evidence from available, current and applicable research, may involve
water quality modeling or engineering formulas and calculations, and shall reflect as closely as
possible project design specifications.
(3) Unless specifically excepted in Rule, reductions shall not include those already implemented to
satisfy other requirements under the same nutrient strategy; other local, State or federal
requirements; or those resulting from State or federal compensatory mitigation requirements.
Specifically, a nutrient reduction project shall not generate nutrient offset credits and buffer or

wetland mitigation credits in spatially overlapping areas. However, restored forest buffer areas
associated with stream mitigation projects may generate both stream and nutrient offset credits in
spatially overlapping areas within 50 feet from the top of the stream bank.
(4) Stream, buffer, or wetland mitigation credit that has not been used to satisfy a mitigation
requirement may be converted into nutrient offset credit if the credit -generating project or portion
thereof complies with this Rule.
(5) A nutrient reduction project may generate both nitrogen and phosphorus offset credits in the same
area.
(6) A nutrient reduction project may be designed to generate permanent nutrient offset credit or term
nutrient offset credit and shall specify which, or both, in the project plan. Permanent nutrient
reduction credits and term nutrient reduction credits shall be maintained separately, even if
associated with the same nutrient offset project.
(7) Permanent nutrient offset credits may be utilized for temporary compliance purposes. If so, for
each pound of annual term compliance credit received, 1/301 of one pound of permanent nutrient
offset credit shall be utilized and retired by removal from the applicable ledger.
(8) Nutrient offset credits that were approved prior to the adoption of this Rule may make application
to be reclassified. The Division shall approve the application associated with any nutrient offset
project to reclassify credits as permanent that meet the requirements for permanent credits at the
time of the application to be reclassified. Other nutrient offset credits that were approved prior to
the adoption of this Rule or that were conditionally approved pursuant to a mitigation banking
instrument or other agreement with DEQ prior to the adoption of this Rule, shall be considered
term credits and may be transferred between term and permanent ledgers at a ratio of 30 years of
term nutrient offset credit to one permanent nutrient offset credit.
(9) Term nutrient offset credits shall be associated with the calendar year or years in which the
associated nutrient load reductions are generated.
(e) PROJECT APPROVAL STANDARDS. Providers shall comply with the following requirements to request
approval from the Division to implement a nutrient reduction project for the purpose of generating nutrient offset
credits.
(1) NUTRIENT OFFSET BANKING INSTRUMENT. Providers seeking approval of a nutrient offset
bank shall submit their draft nutrient offset banking instrument to the Division prior to seeking
approval of project plans. A nutrient offset banking instrument shall provide legal and financial
assurances that a provider will implement, maintain, and sustain nutrient reduction projects as
proposed in subsequent project plans and associated nutrient reduction practice design
specifications.
(2) PROJECT PLAN REQUIREMENTS. Prior to initiating a nutrient reduction project, providers
shall submit a project plan proposal to the Division for review and approval that includes the
following elements:
(A) A site location and site boundaries of the proposed project.
(B) The geographic area eligible to be served by nutrient offset credits in accordance with
Paragraph (b) of this Rule or in compliance with in -lieu fee nutrient offset requirements
applicable at the time an in -lieu fee payment was accepted.
(C) Documentation of the conditions of the site at the time of the submittal of the project
plan.
(D) Documentation of the condition of the site during the baseline period of the applicable
nutrient strategy, unless excepted by Subparagraph (d)(1) of this Paragraph. The Division
may accept more recent documentation if it determines such documentation establishes
the probable loading condition of the site during the baseline period.
(E) A description of the proposed project that supports compliance with the standard in
Paragraph (c) of this Rule. Projects conforming to minimum design criteria for
stormwater control measures in 15A NCAC 02H .1050 through .1062 shall be deemed as
meeting this requirement. Design criteria for stormwater control measure variants and
additional nutrient reduction practices established in the Division's Catalog of Nutrient
Reduction Practices also meet this requirement.
(F) Nutrient credit calculations determined in conformance with Paragraph (d) of this Rule.
(G) Identification of the property owner and parties responsible for obtaining all permits and
other authorizations needed to:

(i) establish the proposed project;
(ii) construct and ensure initial performance of the project;
(iii) report on and successfully complete the project by completing all crediting
milestones;
(iv) hold and enforce all easement or other protection mechanisms; and
(v) ensure maintenance of the project for its credited duration.
(H) A description of how the project will be implemented, which shall include a timeline and
a commitment to provide an as -built report upon the full project construction or
installation.
(1) A description of how the project will be maintained and monitored after it has been
installed and for its duration.
(J) A description of how the project will be sustained for its credited life, including a
commitment to repair and renovate it as needed to maintain its performance, to keep
records of all such operation, maintenance, monitoring, repair and renovation, and to
notify the Division of any significant performance remediation needs and plans.
(K) Identification of federal or State grant funding contributing to project implementation.
(3) FINANCIAL ASSURANCES. Providers seeking approval of a nutrient offset bank shall provide
the financial assurance that a project plan will be constructed as proposed. The financial assurance
shall be in the form of a completion bond, credit insurance, letter of credit, escrow, or other
vehicle acceptable to the Division in accordance with this Subparagraph, payable to, or for the
benefit of, the Division, to ensure the involved property is secured in fee title or by easement and
that planting or construction, monitoring or maintenance are completed as necessary to meet the
requirements of the project plan.
(4) PROJECT PLAN APPROVAL. The Division shall approve the provider's project plan proposal
after verifying the provider's compliance with Subparagraphs (1), (2) and (3) of this Paragraph and
completing an onsite review to verify that preconstruction site conditions are suitable to generate
the credits proposed by the project plan. However, the Division may partially or fully waive these
requirements for term practices or projects if it determines that the burden of compliance is
disproportionate to the value of the credits being generated and alternative means are used to
satisfy the basic credit approval standard set forth in Paragraph (c) of this Rule.
(f) RELEASE AND ACCOUNTING FOR NUTRIENT OFFSET CREDITS. The Division shall release nutrient
offset credits from an approved project in the following manner:
(1) The Division shall release credits to providers upon confirmation that project -specific milestones
reflected in the project plan's credit release schedule have been met. Project -specific milestones
for permanent nutrient offset credits shall conform to the following requirements:
(A) Credits shall not be released until the property is secured in fee title or by easement and
financial assurance is posted for planting or construction of the project.
(B) No more than 50 percent of the credits shall be released for a project until financial
assurance is provided for monitoring and maintenance activities lasting until project
completion.
(C) No more than 80 percent of the credits shall be released for a project until the provider
complies with the requirements of Paragraph (g).
(2) Once credits are released for a nutrient offset bank and until bank closure, nutrient offset bank
providers shall provide a credit/debit ledger to the Division at intervals no less frequently than
quarterly.
(3) The Division shall not release any credits for a project if that project is financed in whole or in part
by State grant funding or federal grant funding.
(g) MAINTAINING PERMANENT NUTRIENT OFFSET CREDITS. All permanent nutrient offset projects shall
comply with the following requirements:
(1) A provider shall transfer responsibility for oversight of a completed permanent project to a
perpetual steward in accordance with this Paragraph and the approved project plan. A perpetual
steward may also transfer responsibility to another perpetual steward in accordance with the terms
of this Paragraph, subject to DWR approval. Perpetual stewards may not assume project
maintenance or restoration responsibilities.

(2) The provider shall create and transfer to the perpetual steward a non -wasting endowment or other
dedicated financial surety to provide for the oversight of the completed permanent project. The
endowment amount shall be proportionate to the duties accepted by the perpetual steward.
(3) For projects utilizing conservation easements, the provider shall acquire and then transfer a
conservation easement to a perpetual steward in accordance with 26 U.S.C. 170(h) and the
Conservation and Historic Preservation Agreements Act, G.S. 121, Article 4. The terms of the
conservation easement shall be consistent with a Division -approved template or be approved by
the Division as conforming to Paragraph (c) of this Rule. Non -governmental perpetual stewards
shall be accredited by the Land Trust Accreditation Commission or approved by the Division.
(4) For projects utilizing SCMs, they shall be placed in and protected by recorded drainage easements
with recorded access easements to the nearest public right-of-way for purposes of operation and
maintenance. These easements shall be granted in favor of the person or entity responsible for
operating and maintaining the structures, with a note as to the responsible person or entity.
Easements shall be of sufficient width for inspection and maintenance of the project.
The Division may temporarily or permanently invalidate permanent credits generated by an SCM
if it determines that the SCM has been impacted due to failure to comply with the terms of an
associated project plan, nutrient offset banking instrument, easement, maintenance agreement,
other protective agreement, or this Rule.
(5) Projects designed to restore a natural ecological community at the project site, which are
completed and then damaged by natural causes, may be passively restored exclusively through
natural ecological processes.
(h) RENEWING TERM NUTRIENT OFFSET CREDITS. Expiring term nutrient offset credits may be renewed by
the provider upon providing documentation to the Division that the project meets the credit approval standard
set forth in Paragraph (c) of this Rule for the duration of the renewal period.
(i) ADDITIONAL PROVISIONS REGARDING THE DIVISION OF MITIGATION SERVICES.
(1) DMS shall establish and revise nutrient offset rates as set out in 15A NCAC 02R .0602. Offset
payments accepted by DMS shall be placed into the Riparian Buffer Restoration Fund
administered by the Department pursuant to G.S. 143-214.21.
(2) On or before November 30 of each year, DMS shall provide an annual report to the Division
concerning the nutrient in -lieu fee program that includes a requirement ledger. The requirement
ledger shall include all nutrient offset credit requirements paid by 8-digit cataloguing unit or for
each geographic area identified in Paragraph (b) of this Rule, the date by which the requirement
shall be satisfied by a project, and the projects and credits that have been applied to all
requirements.
(3) Subject to the geographic restrictions in Paragraph (b) of this Rule, DMS may accept payments for
nutrient offset credits prior to initiating projects. After accepting payment, DMS shall construct
projects that, upon completion as described in the approved project plan, will generate nutrient
offset credits sufficient to fulfill all new requirements generated by these payments. Projects shall
be instituted before the end of the first full State fiscal year after DMS receives payment and
constructed before the end of the third full State fiscal year after DMS receives payment. DMS
may also acquire credits from another provider to apply toward its requirements.
(4) If DMS fails to meet deadlines associated with project institution or construction as specified in
Subparagraph (3) of this Paragraph, then DMS shall develop an action strategy to include in the
annual report specified in Subparagraph (2) of this Paragraph. Action strategies shall include all of
the following:
(A) a list of factors resulting in delays or deficiencies in procurement, project
implementation, or construction;
(B) specific actions and a timeline planned by DMS to satisfy outstanding credit requirements
such that a project will be instituted before the end of the first full state fiscal year after
the action strategy is submitted to the Division in the annual report and constructed
before the end of the third full state fiscal year after the action strategy is submitted to the
Division in the annual report, unless otherwise specified in the action strategy;
(C) the anticipated date by which all outstanding nutrient offset credit requirements will be
satisfied; and
(D) an evaluation of current progress in relation to any prior action strategies.

0) NUTRIENT OFFSET CREDIT TRANSACTIONS. Parties who seek to acquire nutrient offset credits under
rules of this Subchapter shall do so in compliance with those rules, the requirements of Paragraph (b) of this Rule,
G.S. 143-214.26, and the following:
(1) Offset payments made to DMS shall be contingent upon acceptance of the payment by DMS.
DMS shall consider its financial, temporal, and technical ability to satisfy the request to make its
determination.
(2) Where persons seek to satisfy regulatory obligations for more than one nutrient type, they shall
acquire nutrient reduction credits to address each type.
(3) Projects shall be approved and the associated offset credits released by the Division before they
may be utilized for NPDES wastewater permit compliance purposes.
(4) For offset credits used to meet NPDES wastewater discharge requirements, the applicant shall
provide 50 percent additional credits to address the uncertainty factor for using unmonitored
nonpoint source reductions to meet point source discharge limits. Application of this ratio is in
addition to other ratios that may be applied, including delivery or transport factors where
applicable. Exceptions to the application of this uncertainty factor are as follows:
(A) The uncertainty factor for wastewater dischargers in the Jordan Lake watershed shall
instead be determined in accordance with 15A NCAC 02B .0273(2)(d)(ii) until final
action is taken with respect to that rule's next readoption pursuant to G.S. 150B-21.3A,
S.L. 2016-94, and S.L. 2018-5.
(B) The uncertainty factor for wastewater dischargers in the Falls Lake watershed shall
instead be determined in accordance with 15A NCAC 02B .0282(2)(b)(i) until final
action is taken with respect to that rule's next readoption pursuant to G.S. 150B-21.3A,
S.L. 2016-94, and S.L. 2018-5.
(5) Delivery factors shall be applied to estimate nutrient reductions to an impaired water body subject
to a nutrient strategy if required under rules of this Subchapter for that strategy.
(6) Term credits may be utilized for compliance only during the year in which they are generated and
as described in Subparagraph (d)(2) of this Rule. They may not be cumulatively banked for future
years.
(k) DEVELOPER -RESPONSIBLE NUTRIENT OFFSET PROJECTS. A developer subject to new development
stormwater requirements of this Subchapter may satisfy its nutrient reduction obligations by generating its own
offsite credits. It may do so by establishing a nutrient offset bank and generating credits in accordance with this
Rule. Alternatively, the developer shall comply with all provisions of this Rule governing the generation of nutrient
offset credits by a provider with the following modifications:
(1) Instead of a credit release schedule, credit for the project may be assigned upon construction of the
project and submission to the Division of the as -built report as described in the project plan;
(2) Credit shall be assigned at a 50 percent rate based on the design specifications of the fully
completed project(s); and
(3) Liability for the generation of credits as described in the project plan remains with the developer
until the completion of all milestones associated with the project.
(1) NPDES WASTEWATER PERMITTEE-RESPONSIBLE NUTRIENT OFFSET PROJECTS. A locality,
authority, utility, or sanitation district operating a permitted wastewater facility subject to wastewater rules of this
Subchapter may generate nutrient offset credits by installing projects in accordance with this Rule. Any credits
generated may then be utilized for compliance purposes as if acquired from another provider.
History Note: Authority G.S. 143-214.1; 143-214.20; 143-214.21; 143-214.26;
Eff. August 1, 1998;
Amended Eff. August 1, 2006;
Amended Eff. September 1, 2010;
Recodified from 15A NCAC 02B. 0240 Eff. April 1, 2020;
Readopted Eff. April 1, 2020.

Sale/
Release Date
Purchaser or % Credit
Release Project w/ HUC #Gov't
Requiring
Pounds of
Nitrogen Acres Pounds of
Nitrogen Acres Pounds of
Nitrogen Acres
Credits Released/Available
to Bank
Credits Debited/Sold From
Bank Nutrient Credit Balance
City of Wilson Whirligig Station (HUC 03020203 Hominy Swamp of the Neuse River Basin)
Nitrogen Credit Ledger
Date Last Updated:
NC DEQ Mitigation Site Project #:
Total Credits Released To Date: