Department of Public Health and Environment REGULATION NO. 87 - DREDGE AND FILL CONTROL REGULATION 5 CCR 1002-87 [Editor’s Notes follow the text of the rules at the end of this CCR Document.]

87.1 GENERAL PROVISIONS

(1) Authority The Water Quality Control Commission is authorized to promulgate this Control Regulation pursuant to sections 25-8-205(1)(h), and 25-8-205.1, C.R.S.

(2) Purpose In conjunction with the legislative directive in House Bill (HB) 24-1379 and as authorized by section 25-8-205(11)(a), C.R.S., this control regulation establishes requirements, prohibitions, and standards for the discharge of dredged or fill material into state waters to be implemented by the Water Quality Control Division through a discharge authorization program. The purpose of this control regulation is to implement the state dredge and fill discharge authorization program established by HB24-1379. The intent of this regulation is to protect state waters from adverse impacts of dredge and fill activities through a regulatory program structured around avoidance and minimization of adverse impacts and compensation for unavoidable adverse impacts of dredge and fill activities, and which generally relies upon the U.S. Army Corps of Engineers’ (USACE) program framework as established under Section 404 of the federal Clean Water Act.

(3) Materials Incorporated by Reference Throughout this regulation materials are adopted and incorporated by reference pursuant to section 24-4-103(12.5), C.R.S.

(a) Date of Incorporation (i) 40 C.F.R. Part 230, Subparts A through I are incorporated by reference herein. All references to 40 C.F.R. Part 230 (the federal “404(b)(1) Guidelines”) include only the version in effect as of May 29, 2024, and not later amendments to the incorporated material. Specifically, the incorporated version of 40 C.F.R. Part 230, Subparts A through I, is the version published on December 24, 1980, as amended up to and including amendments published on April 21, 2020, and effective on June 22, 2020 (“effective date June 22, 2020”).

(ii) All other materials incorporated by reference in this Regulation 87 include only those versions cited and not later amendments to incorporated material. Cited incorporated materials include: Colorado Department of Agriculture’s definition of “noxious weeds” and Noxious Weeds Lists A, B, and C at 8 CCR 1206-2, (3.1), (4.1), (5.1), (Lists A, B, C) (effective date May 15, 2025).

Colorado Parks and Wildlife definition of “invasive species” at Chapter P-8, 2 CCR 405-8(800)(A)(1) (effective date May 1, 2020). U.S. Army Corps of Engineers, “A Field Guide to the Identification of the Ordinary High Watermark (OHWM) in the Arid West Region of the Western United States” (September 2008).

U.S. Army Corps of Engineers, “A Guide to Ordinary High Water Mark (OHWM) Delineation for Non-Perennial Streams in the Western Mountains, Valleys, and Coast Region of the United States” (August 2014).

U.S. Department of Agriculture, Natural Resources Conservation Service, “Field Indicators of Hydric Soils in the United States, Version 9.2” (2025).

U.S. Department of Agriculture, Natural Resources Conservation Service, “Field Indicators of Hydric Soils in the United States, Errata Version 9.0” (“April and September 2025”).

Definition of “Approved Jurisdictional Determination” at 33 C.F.R. §

331.2 (effective date Jan. 3, 2017).

40 C.F.R. § 230.7 (“General Permits”) (effective date January 3, 2017).

(b) Location of Materials Incorporated by Reference (i) The incorporated version of 40 C.F.R. Part 230, Subparts A through I (effective date June 22, 2020), is available on the Water Quality Control Division’s website at https://cdphe.colorado.gov/dredge- and-fill. The versions of the other federal publications incorporated by reference herein (U.S. Army Corps of Engineers and U.S. Department of Agriculture guidance documents) are also available for public inspection at any time at no cost on the division’s website. As of the date of Regulation 87’s adoption, the versions of all other federal regulations incorporated by reference are also available for public inspection at any time at no cost in the online edition of the Code of Federal Regulations (C.F.R.) hosted by the United States Government Printing Office, at www.govinfo.gov.

(ii) All materials incorporated by reference in this regulation are available for public inspection at any time at no cost on the Water Quality Control Division’s website at https://cdphe.colorado.gov/dredge-and-fill and during regular business hours, for a reasonable charge, at the Department at: Colorado Department of Public Health and Environment Water Quality Control Division 4300 Cherry Creek Drive South Denver, Colorado 80246-1530 (303) 692-3500 (iii) As of the date of Regulation’s 87’s adoption, the versions of all non- C.F.R. federal materials incorporated by reference are also available for public inspection during business hours, for a reasonable charge, at their issuing federal agency offices: U.S. Army Corps of Engineers Cold Regions Research and Engineering Laboratory U.S. Army Engineer Research and Development Center 72 Lyme Road Hanover, NH 03755 U.S. Department of Agriculture, Natural Resources Conservation Service (NCRS)

NRCS Distribution Center 14th and Independence Ave., SW, Room 5109-S Washington, DC 20250 (888) 526-3227 nrcsdistributioncenter@ia.usda.gov (iv) Materials incorporated by reference in this regulation that contain the Colorado Department of Agriculture’s definition of “noxious weeds” and Noxious Weeds Lists A, B, and C, and the Colorado Parks and Wildlife definition of “invasive species” are available for public inspection during regular business hours, for a reasonable charge, at the respective agency at:

Colorado Department of Agriculture 305 Interlocken Parkway Broomfield, CO 80021 (303) 869-9000 Colorado Parks and Wildlife Headquarters 6060 Broadway Denver, Colorado 80216 (303) 297-1192 (c) If the material incorporated by reference refers to other sections of the referenced document that conflict with current language of Regulation 87, the current language of Regulation 87 takes precedence.

(4) Severability The provisions of this regulation are severable, and if any provisions or the application of the provisions to any circumstances is held invalid, the application of such provision to other circumstances, and the remainder of this regulation shall not be affected thereby.

(5) Water Rights The interpretation and implementation of this regulation, including the Temporary Authorizations, Individual Authorizations, General Authorizations, and Notices of Coverage issued by the division under the authority of House Bill 24-1379 and this regulation shall be subject to, and do not amend or limit, the water rights provisions of section 25-8-104, C.R.S.

(6) Guidance for Program Implementation The division may establish guidance to assist in administering the dredge and fill discharge authorization program. Additionally, the division may rely upon relevant guidance from the federal U.S. Environmental Protection Agency (U.S. EPA) and the USACE, including technical guidance and environmental analyses under the federal “National Environmental Policy Act of 1969” (“NEPA”), 42 U.S.C. Sec. 4231 et seq., as amended, in administering the program, to the extent such guidance is consistent with HB 24-1379 and this Regulation 87.

87.2 DEFINITIONS

Additional definitions, as they relate to specific sections of this regulation, can be found in those sections.

(1) “Activity as a Whole,” as used in Section 87.6 concerning Individual Authorizations, means the discharge of dredged or fill material into state waters that triggers the need for an Individual Authorization in the first instance, and additionally, where applicable, “project operation” as defined in this Section 87.2. “Activity as a Whole” encompasses direct and indirect impacts to the aquatic resource(s) caused by the construction and operation of the project, both upstream and downstream of the triggering discharge of dredged or fill materials.

(2) “Aquatic Resource” or “Aquatic Resources” means any state waters, the habitats for interrelated and interacting communities and populations of plants and animals that are formed by state waters, and those plants and animals themselves.

(3) “Avoidance” means mitigating an aquatic resource impact by selecting the least- damaging project type, spatial location, and extent compatible with achieving the purpose of the project. Avoidance is achieved through an analysis of appropriate and practicable alternatives and a consideration of impact footprint.

(4) “Commission” means the Colorado Water Quality Control Commission created by section 25-8-201 of the Colorado Water Quality Control Act.

(5) “Compensatory Mitigation” means the restoration, reestablishment, rehabilitation, establishment, creation, enhancement, or preservation of the aquatic resource for the purpose of offsetting unavoidable adverse impacts to the aquatic resource that remain after all appropriate and practicable avoidance and minimization have been achieved.

(6) “Direct Impacts,” as used in the definition of “activity as a whole” and in subsection 87.6(7)(c)(iii), means those impacts or effects on the aquatic resource caused by the dredge and fill project/activity which occur at the same time and place.

(7) “Discharge of Dredged or Fill Material” means any addition of dredged or fill material into, including redeposit of dredged or fill material other than incidental fallback within, state waters. The term includes:

(a) The addition of dredged or fill material to a specified discharge site located in state waters;

(b) Runoff or overflow from a contained land or water disposal area; and (c) Any addition, including redeposit other than incidental fallback, of dredged or fill material into state waters that is incidental to any activity, including mechanized land clearing, ditching, channelization, or other excavation. Discharge of Dredged or Fill Material” does not include:

(d) Discharges of pollutants into state waters resulting from the onshore processing of dredged material that is extracted for any commercial use other than fill, which discharges are subject to Section 402 of the federal Clean Water Act, even though the extractions and deposit of such material may require a Section 404 Permit or an authorization issued pursuant to this regulation;

(e) Activities that involve only the cutting or removing of vegetation above the ground, such as mowing, rotary cutting, and chain sawing, so long as the activity neither substantially disturbs the vegetation’s root system nor involves mechanized pushing, dragging, or other similar activities that redeposit excavated soil material; or (f) Incidental fallback.

(8) “Discharge of Fill Material” means the addition of fill material into state waters. The term includes:

(a) Placement of fill material that is necessary for the construction of any structure or infrastructure in state waters;

(b) The building of any structure, infrastructure, or impoundment requiring rock, sand, dirt, or other material for its construction;

(c) Site development fills for recreational, industrial, commercial, residential, or other uses;

(d) Causeways or road fills;

(e) Dams and dikes;

(f) Artificial islands;

(g) Property protection or reclamation devices such as riprap;

(h) Levees;

(i) Placement of fill material for infrastructure such as sewage treatment facilities, intake and outfall pipes associated with power plants, and subaqueous utility lines;

(j) Placement of fill material for construction or maintenance of any liner, berm, or other infrastructure associated with solid waste landfills; and (k) Placement of overburden, slurry, tailings, or similar mining-related materials.

“Discharge of Fill Material” does not include:

(l) Plowing, cultivating, seeding, or harvesting for the production of food, fiber, or forest products; or (m) Placement of pilings in state waters, unless the placement has or would have the effect of a discharge of fill material. Placement of pilings for linear projects, such as bridges, elevated walkways, and power line structures, generally does not have the effect of a discharge of fill material. Furthermore, placement of pilings in state waters for a pier, a wharf, or an individual house on stilts generally does not have the effect of a discharge of fill material. Examples of activities that would have the effect of a discharge of fill material include projects where the pilings are so closely spaced that sedimentation rates would be increased, projects in which the pilings themselves effectively would replace the bottom of a body of state waters, projects involving the placement of pilings that would reduce the reach or impair the flow or circulation of state waters, and projects involving the placement of pilings that would result in the adverse alteration or elimination of aquatic functions.

(9) “Division” means the Water Quality Control Division of the Colorado Department of Public Health and Environment.

(10) “Dredge and Fill Activity/Project” means an activity/project that includes the discharge of dredged or fill material into state waters.

(11) “Dredged Material” means material that is excavated or dredged from state waters.

(12) “Ephemeral stream” means a stream channel or a reach of stream channel that contains an ordinary high watermark as defined in this Section 87.2, carries flow during, and for a short duration as the direct result of precipitation events (i.e., in the form of rain, sleet, graupel, hail, or snow), and that has a channel bottom that is always above the groundwater table.

(13) “Fens or Peatlands” means wetlands with organic soil that are classified as a histosol in the guidance document titled “Field Indicators of Hydric Soils in the United States” published by the federal Natural Resources Conservation Service (Version 9.2, 2025) and the associated Errata, Version 9.0 (September 2025).

(14) “Fill Material” means material placed in state waters where the material has the effect of:

(a) Replacing any portion of state waters with upland; or (b) Changing the bottom elevation of any portion of any state waters. “Fill material” includes rock, sand, soil, clay, plastics, construction debris, wood chips, overburden from mining or other excavation activities, and materials used to create any structure or infrastructure in state waters. Fill material cannot contain solid waste, which means any garbage, refuse, sludge from a waste treatment plant, water supply treatment plant, or air pollution control facility, and other discarded material, including solid, liquid, semisolid, or contained gaseous material resulting from industrial or commercial operations or from community activities.

(15) Fully Satisfied,” as that term is used in sections 87.6 and 87.8(4) of this regulation referring to “fully satisfied” compensatory mitigation obligations as a trigger for requesting termination of an Individual Authorization or Certification of Project Completion for a Temporary Authorization or Notice of Coverage under a General Authorization, means completion of all compensatory mitigation obligations in this regulation except for those outlined in a Long-Term Management Plan under subsection 87.10(7)(d).

(16) “General Authorization” (statewide or regional) means an authorization issued by the division under Section 87.7 to discharge dredged or fill material into state waters, which corresponds to a Nationwide or Regional General Permit issued by the USACE, which has either statewide or regional applicability, and covers a specified category of activities. “Colorado-Specific General Authorization” is a type of authorization that does not correspond to any Nationwide or Regional General Permit issued by the USACE, has either statewide or regional applicability, and is developed by the division pursuant to 25-8-205.1(5)(b)(I), C.R.S., to achieve greater efficiency and to address Colorado-specific needs.

(17) “General Conditions Document” (or “Colorado General Conditions”) means the document issued by the division and modeled on the United States Army Corps of Engineers’ Nationwide Permit General Conditions. The Colorado General Conditions document contains definitions that apply to all division-issued General Authorizations and conditions (i.e., requirements) that complement the terms and conditions of those General Authorizations. Where a dredge and fill project is covered under a General Authorization, the project proponent must also comply with any applicable requirements in the General Conditions document.

(18) “Indirect Impacts,” as used in the definition of “activity as a whole” and subsection 87.6(7)(c)(iii), means those impacts or effects on the aquatic resource that are caused by the dredge and fill project/activity and are later in time or farther removed in distance, but are still reasonably foreseeable.

(19) “Individual Authorization” means an authorization issued by the division under Section 87.6 to discharge dredged or fill material into state waters which is specific to a particular project/activity. Individual Authorizations may include conditions that relate to the “activity as a whole” to ensure that project operation complies with state water quality requirements.

(20) “Isolated Ordinary High Watermark Reaches” means reaches of state waters with an ordinary high watermark that are bordered upstream and downstream by uplands.

(21) “Isolated Ponds and Impoundments” means ponds and impoundments that are not within the one-hundred-year floodplain or within one thousand five hundred (1,500) feet of an ordinary high watermark of other state waters. In the absence of one-hundred-year floodplain mapping by the Federal Emergency Management Agency, the one thousand five hundred feet distance criterion applies.

(22) “Isolated State Waters” are isolated wetlands, isolated ponds and impoundments, and isolated ordinary high watermark reaches.

(23) “Isolated Wetlands” means wetlands wholly surrounded by uplands. “Isolated wetlands” does not include wetlands where any portion of the wetland is within the one-hundred-year floodplain or within one thousand five hundred (1,500) feet of the ordinary high watermark of other state waters. In the absence of one- hundred-year floodplain mapping by the Federal Emergency Management Agency, the one thousand five hundred feet distance criterion applies.

(24) “Minimization” means mitigating aquatic resource impacts by managing the severity of a project’s impacts on the aquatic resource at the selected site. Minimization is achieved through the incorporation of appropriate and practicable design and risk avoidance measures.

(25) “Nationwide Permit” means a general permit issued by the USACE under the authority of Section 404 of the federal Clean Water Act with national applicability and covering a specified category of activities.

(26) “Notice of Complete Application” means the written notification issued by the division to an applicant for an Individual Authorization to indicate that the division considers the application to be complete. The Notice of Complete Application marks the beginning of the time period in which the division is required to issue or deny an application.

(27) “Notice of Coverage” means a notification issued by the division under Section 87.8(2) in instances where an application to discharge dredged or fill material into state waters is required under the terms of a division-issued General Authorization or in response to a voluntary request by a project proponent in instances where an application may not be required. The Notice of Coverage is the document that authorizes project commencement.

(28) “Ordinary High Watermark (OHWM)” means that line on the shore established by the fluctuations of water and indicated by physical characteristics, such as:

(a) A clear, natural line impressed on the bank;

(b) Shelving;

(c) Changes in the character of soil;

(d) Destruction of terrestrial vegetation;

(e) The presence of litter and debris; or (f) Other appropriate means that consider the characteristics of the surrounding area, such as vegetation patterns and geomorphic features associated with the OHWM for ephemeral streams described in the USACE guidance documents titled: “A Field Guide to the Identification of the Ordinary High Watermark (OHWM) in the Arid West Region of the Western United States” (September 2008) and “A Guide to Ordinary High Water Mark (OHWM) Delineation for Non-Perennial Streams in the Western Mountains, Valleys, and Coast Region of the United States” (August 2014).

(29) “Person” means an individual, corporation, partnership, association, state or political subdivision thereof, federal agency, state agency, municipality, commission, or interstate body.

(30) “Pre-Construction Notification” means a notification submitted by a project proponent to the USACE prior to commencement of a dredge and fill project/activity in waters of the United States for the purpose of allowing USACE to verify that the particular activity is authorized by a Nationwide Permit or Regional General Permit. The requirement to submit Pre-Construction Notification is specific to certain Nationwide Permits and Regional General Permits (i.e., some of them require Pre-Construction Notification, and some do not), and the term also appears in the Nationwide Permit General Conditions. The equivalent to a Pre-Construction Notification in terms of Colorado’s dredge and fill program is an “application” for coverage under a General Authorization.

(31) “Pollutant” means dredged spoil, dirt, slurry, solid waste, incinerator residue, sewage, sewage sludge, garbage, trash, chemical waste, biological nutrient, biological material, radioactive material, heat, wrecked or discarded equipment, rock, sand, or any industrial, municipal, or agricultural waste.

(32) “Project” means any work or activity that results in discharge or placement of dredged or fill material into state waters. “Project” and “activity” are intended to have the same meaning and are used interchangeably throughout this regulation.

(33) “Project Operation,” (or “operation of a project”) as used in the definition of “Activity as a Whole” and as used in Section 87.6 concerning Individual Authorizations, means activities related to the movement and storage of water, such as water diversions and reservoir operation, including releases from reservoirs that occur after project construction is complete, and which have the potential to adversely impact the quality of state waters.

(34) “Project Proponent” means a person who is: (i) considering conducting a dredge and fill activity in Colorado or applying for authorization coverage under Colorado’s dredge and fill program; or (ii) conducting a project that is covered under a Temporary Authorization, General Authorization, or Individual Authorization. For Individual Authorizations, the project proponent must be the owner or operator of the project.

(35) “Regional General Permit” means a general permit issued by the USACE under the authority of Section 404 of the federal Clean Water Act with regional applicability and covering a specified category of activities.

(36) “Section 404 Permit” means a permit issued by the USACE pursuant to Section 404 of the Clean Water Act. The term includes an Individual Section 404 Permit, activities authorized under a Nationwide or Regional General Permit, and a Letter of Permission issued in accordance with regulations of the USACE.

(37) “Special Aquatic Sites” means those sites identified in Subpart E of the 404(b)(1) Guidelines (effective date June 22, 2020) that are present in Colorado, specifically, sanctuaries and refuges, wetlands, vegetated shallows, and riffle and pool complexes as described in Subpart E. They are geographic areas, large or small, possessing special ecological characteristics of productivity, habitat, wildlife protection, or other important and easily disrupted ecological values. These areas are generally recognized as significantly influencing or positively contributing to the general overall environmental health or vitality of the entire ecosystem of a region.

(38) “State Waters” means any and all surface and subsurface waters that are contained in or flow in or through this state, including wetlands, but does not include waters in sewage systems, waters in treatment works of disposal systems, waters in potable water distribution systems, and all water withdrawn for use until use and treatment have been completed.

(39) “Temporary Authorization” means an authorization issued by the division under Section 87.8(1) to discharge dredged or fill material into state waters for those projects that would meet eligibility requirements associated with relevant USACE Nationwide and Regional General Permits. Temporary Authorizations will only be issued from January 1, 2025, through the date when Statewide General Authorizations become effective. The duration of a Temporary Authorization shall not exceed two years.

(40) “Upland” means any land area that, under normal circumstances, is not a wetland, and does not lie below the ordinary high watermark.

(41) “Waters of the United States” or “WOTUS,” as used in this Regulation 87, means water features and wetlands that are jurisdictional under the federal Clean Water Act and its implementing regulations.

(42) “Wetlands” means areas that are inundated or saturated by surface or groundwater at a frequency and for a duration sufficient to support, under normal circumstances, a prevalence of vegetation typically adapted for life in saturated soil conditions.

87.3 SCOPE AND APPLICABILITY

(1) Indian Tribes Nothing in this control regulation applies to the activities of federally recognized Indian tribes, Indians, their political subdivisions, or tribally controlled affiliates, which activities are undertaken or to be undertaken on lands within the boundaries of an Indian reservation located within the state. Additionally, nothing in this regulation applies to the activities of third-party non-Indian project proponents, which activities are undertaken or to be undertaken with respect to reservation waters on Indian trust lands, tribally-owned fee lands, or Indian- owned fee lands within the boundaries of an Indian reservation located within the state. With regard to privately owned fee land, as defined in section 25-7- 1302(4), C.R.S., within the boundaries of an Indian reservation located within the state, this regulation applies only to the discharge of dredged or fill material by persons who are not Indians.

(2) Local Government Authority Nothing in these regulations shall be construed to limit a local government’s authority to impose land-use or zoning requirements or other limitations on the activities subject to these regulations.

(3) Prohibition on the Discharge of Dredged or Fill Material The requirements of this control regulation, and the dredge and fill program administered by the division under the authority of HB24-1379 and this regulation, apply to projects/activities resulting in the discharge of dredged or fill material into state waters, unless: (a) the activity qualifies for an exemption listed in subsection 87.3(4) of this regulation, which includes project/activity coverage under an active U.S. Army Corps of Engineers’ (USACE) Section 404 permit; or (b) the discharge, regardless of the type of activity, occurs into any of the excluded water features listed in subsection 87.3(6). Except when conducting an exempted activity described in subsection 87.3(4) or when discharging into an excluded type of water described in subsection 87.3(6), no person shall discharge dredged or fill material into state waters without first obtaining coverage for the discharge under: an Individual Authorization, a Temporary Authorization, or a General Authorization.

(4) Exempted Activities Activities that are exempt from the requirements of this Regulation 87 do not require a discharge authorization. Except for the exemption for voluntary stream restoration efforts, the commission is only authorized to clarify the exemptions identified in HB24-1379 at section 25-8-205.1(8)(b), C.R.S., without limiting or expanding their scope. Further, the commission is not authorized to add or remove exemptions from the following list of exempted activities as identified in section 25-8-205.1(8)(b), C.R.S:

(a) Activities in receipt of an active Section 404 Permit that was issued prior to May 25, 2023, including subsequent modifications to such active Section 404 Permits, provided such modifications do not change the nature and effect of the permitted activity on state waters that are not subject to the USACE jurisdiction;

(b) Activities in receipt of an approved jurisdictional determination (whether expired or not) issued by the USACE prior to May 25, 2023, finding that the state waters into which the proposed discharge of dredged or fill material will occur are not waters of the United States, unless there has been a significant hydrological change since the determination was issued;

(c) Activities in receipt of an active Section 404 Permit that was issued on or after May 25, 2023, except to the extent that the project area of the Section 404 Permit involves a discharge of dredged or fill material into state waters that have been determined by the USACE to not be waters of the United States under the Section 404 Permit. The clause beginning “except to the extent” in the preceding sentence shall be implemented as follows:

(i) Cases necessitating dual jurisdiction:

(A) Where the USACE chooses not to regulate discharges into certain state waters within the project area under a Section 404 permit because it has affirmatively determined that those water features/wetlands (either through issuing an Approved Jurisdictional Determination as defined in 33 C.F.R. 331.2 (effective date Jan. 3, 2017), or a less formal method) are not WOTUS; or (B) Where the USACE chooses to treat all water features/wetlands within the project area as federally jurisdictional by covering all waters under a Section 404 Permit (without issuing an Approved Jurisdictional Determination as defined in 33 C.F.R. 331.2 (effective date

1. Jan. 3, 2017)), but does not require compensatory mitigation for unavoidable adverse impacts to all state waters within that project area (where compensatory mitigation thresholds are otherwise triggered) because the USACE has made the determination (even informally) that certain waters within the project area are not WOTUS.

(C) For the cases described in subsections 87.3(4)(c)(i)(A) and

1. (B) above, the division shall defer to any Section 404 Permit issued by the USACE in terms of selection of the LEDPA and the public interest review conducted by the USACE for the project and shall not conduct a separate alternatives analysis/LEDPA selection or public interest review. See subsection 87.6(4).

(ii) Cases that do not necessitate dual jurisdiction:

Where the USACE chooses to treat all water features/wetlands within the project area as federally jurisdictional by covering all waters under a Section 404 Permit (with or without issuing an Approved Jurisdictional Determination as defined in 33 C.F.R.

331.2 (effective date Jan. 3, 2017)), and the Section 404 Permit

requires compensatory mitigation for unavoidable adverse impacts to all state waters within that project area (where compensatory mitigation thresholds are otherwise triggered), the division will defer to the USACE and not seek to exercise dual jurisdiction.

(d) Activities associated with a project for which the project proponent applied for an Individual Section 404 Permit prior to May 25, 2023, even if the USACE determined that the activity was covered under a Nationwide Permit or Regional General Permit instead;

(e) Normal farming, silviculture, and ranching activities, such as plowing, seeding, cultivating, minor drainage, application of on-farm chemicals, harvesting for the production of food, fiber, and forest products, or upland soil and water conservation practices. As used in subsection 87.3(4), “upland soil and water conservation practices” means any discharge of dredged or fill material into state waters incidental to soil and water conservation practices for the purpose of improving, maintaining, or restoring uplands, including rangeland management practices, erosion control practices, and vegetation management practices;

(f) Maintenance, including emergency reconstruction of recently damaged parts, of currently serviceable structures, such as dikes, dams, levees, lagoons, groins, riprap, breakwaters, causeways, bridge abutments or approaches, and transportation structures. Maintenance also includes minor deviations in a structure’s configuration or filled area to accommodate changes in materials, construction techniques, regulatory requirements, or construction codes or safety standards.

(g) Construction and/or maintenance of specified structures and features, as follows:

(i) Construction or maintenance of the following structures: Farm ponds, stock ponds, farm lagoons, springs (i.e., maintained springs), recharge facilities located in uplands, and irrigation ditches or acequias (as defined in subsection 87.3(4)(g)(v) below), except that new work to construct or any work to extend, expand, or relocate an existing irrigation ditch or acequia for municipal or industrial purposes is not an exempt activity.

(ii) Maintenance of the following structures/features: Drainage ditches, roadside ditches, ditches or canals conveying wastewater or water for irrigation, municipal purposes, domestic purposes, industrial purposes, commercial purposes, augmentation, recharge, wildlife, recreation, compact compliance, or any other purpose; and maintained natural features conveying water for irrigation or wildlife purposes if use of the maintained natural feature existed as of January 1, 2024.

(iii) “Construction” as used in subsection 87.3(4)(g)(i) means:

(A) New work to construct the structures listed in subsection 87.3(4)(g)(i) above, and any work that results in an extension or expansion of an existing structure listed in subsection 87.3(4)(g)(i). For purposes of this exemption, this definition of “construction” does not include new work to construct or any work to extend, expand, or relocate an existing irrigation ditch or acequia for municipal or industrial purposes.

(B) For irrigation ditches or acequias only, “construction” also includes activities such as placement of new control structures, ditch relocation, ditch conversion into pipe, and lining, which means placing impervious material such as concrete, clay, or geotextile within the flow perimeter of an open canal, lateral, or ditch with the intent of reducing seepage losses and improving conveyance efficiency. All new lining of irrigation ditches or acequias, in instances where the ditch has not previously been lined, is considered “construction.” For purposes of this exemption, this further explanation of the term “construction” does not apply to new work to construct or work to extend, expand or relocate an existing irrigation ditch or acequia for municipal or industrial purposes.

(iv) “Maintenance” as used in subsection 87.3(4)(g)(i) and 87.3(4)(g)(ii) includes:

(A) Repairs to an existing the structure or feature to keep it in its existing state or proper condition or to preserve it from failure or decline;

(B) Excavation of accumulated sediments back to original contours; reshaping of side-slopes; and bank stabilization to prevent erosion where reasonably necessary using control measures (i.e., best management practices). For drainage ditches, such maintenance work must use materials that are compatible with existing bank materials;

(C) Armoring, lining, and piping a previously armored, lined, or piped section of a ditch for the purpose of repair, so long as all work occurs within the footprint of the previous work; and (D) Replacement of existing control structures where the original function is not changed and the original approximate capacity is not increased.

(v) Definition of “irrigation ditch or acequia”: As used in subsections 87.3(4)(g)(i) and 87.3(4)(g)(iii) above, “irrigation ditch or acequia” includes a human-made feature or a maintained natural feature if use of the maintained natural feature existed on January 1, 2024, and an upland swale that moves or conveys water to an ultimate irrigation use or place of use, or moves or conveys irrigation water, also known as “runoff,” away from irrigated lands. “Irrigation ditch or acequia” may include a distribution system or its parts, including human-made canals, laterals, ditches, siphons, pumps, headgates, wing walls, weirs, diversion structures, pipes, pump systems, return structures, and such other facilities appurtenant to and functionally related to irrigation ditches, such as flow measuring devices. If a ditch carries water that is used for irrigation, irrigation return flows or return flow obligations, aquifer recharge, aquifer or stream augmentation or replacement, or precipitation or snowmelt that moves from an irrigated field either to or away from an area subject to being irrigated, that ditch is considered an irrigation ditch and not a drainage ditch.

(vi) Definition of “drainage ditch”: As used in subsection 87.3(4)(g)(ii) above, “drainage ditch” means a ditch that is designed for at least the partial purpose of increasing drainage of a particular land area or infrastructure for purposes including agriculture; transportation, including roadside and railroad transportation; mosquito abatement; and stormwater management.

(h) Construction of temporary sedimentation basins on a construction site, where the construction does not include placement of fill material into state waters;

(i) Construction or maintenance of farm roads, forest roads, or temporary roads for moving wildfire and post-fire mitigation equipment and related materials or mining equipment where such roads are constructed and maintained in accordance with control measures (i.e., best management practices) to assure that flow and circulation patterns and chemical and biological characteristics of the state waters are not impaired, that the reach of the state waters is not reduced, and that any adverse impacts on the state waters will be otherwise minimized. Installation of perched culverts is not an exempt activity because such structures restrict the passage of fish and other aquatic organisms;

(j) Activities for the purpose of providing emergency response to, preventative mitigation of, or recovery from damage caused by a fire, a flood, or other natural disaster so long as the activity is conducted in a manner that minimizes the loss of state waters to the extent practicable and in accordance with control measures (i.e., best management practices) that do not interfere with efforts to address the underlying emergency;

(k) Maintenance of water reuse facilities, wastewater reclamation facilities, water management facilities, water treatment facilities, or wastewater treatment facilities. Such maintenance includes reconstruction due to recent damage or maintenance of currently serviceable structures, such as pumps, control systems, weirs, gates, clarifiers, solids handling, filters, sedimentation basins, treatment ponds and lagoons, and related features, which maintenance activities keep the facility in its existing state or proper condition to preserve it from failure or decline;

(l) Maintenance activities in off-channel reservoirs that do not directly affect a connected natural stream. Such maintenance includes emergency reconstruction due to recent damage; maintenance of currently serviceable structures such as spillways, outlet structures, gates, pumps, and control systems; and reshaping of side slopes, bank stabilization, or dredging, which maintenance activities keep an off-channel reservoir in its existing state or proper condition and to preserve it from failure or decline;

(m) Wildlife habitat management activities, including seeding, planting, cultivating, minor drainage, vegetation management, including herbicide applications and removal of invasive species root systems, irrigating, water management, and maintenance of ditches, dikes, embankments, impoundments, water control features, and other water conveyance features that are human-made or maintained or that occur naturally to support wildlife habitat. “Wildlife habitat management” means activities that occur on land managed primarily for wetland or riparian habitats to support wetland and riparian species and does not include activities that are incidental to land used for residential, industrial, or commercial purposes; and (n) Voluntary stream restoration efforts in ephemeral streams that have been damaged, degraded, or destroyed.

(i) Voluntary stream restoration efforts in damaged, degraded, or destroyed ephemeral streams must meet the following criteria to qualify for this exemption:

(A) The project does not require compensatory mitigation, nor is the project being done to provide compensatory mitigation for another project;

(B) The project is designed solely to provide “ecological lift,” as defined in subsection 87.3(4)(n)(v) below, where the activity is taking place;

(C) The project does not lower the elevation of the streambed, alter the stream’s location or capacity, or install streambank hardening that causes channelization, incision, or disconnection from the floodplain;

(D) The project does not use grouted riprap, concrete, or other grouted materials, or other unnatural, synthetic materials such as tires, car frames, barbed wire, or concrete/asphalt; and (E) Project proponents must employ sufficient planning, operation, and maintenance practices to ensure the project results in ecological lift and does not result in demonstrable ecological harm.

(ii) The division may issue accompanying guidance concerning the criteria in subsections 87.3(4)(n)(i)(A) through (E) to qualify for this exemption, and to provide further explanation of terms used in subsection 87.3(4)(n).

(iii) Projects exempted under this subsection are not exempted from legal requirements pertaining to the use, diversion, and storage of water under Colorado law. All such projects must be constructed and operated in a manner consistent with all requirements of Title 37 of the Colorado Revised Statutes.

(iv) As used in subsection 87.3(4)(n) and throughout this regulation, “ephemeral stream” means a stream channel or a reach of stream channel that contains an ordinary high watermark (as defined in Section 87.2), carries flow during, and for a short duration as the direct result of precipitation events (i.e., in the form of rain, sleet, graupel, hail, or snow), and that has a channel bottom that is always above the groundwater table.

(v) As used in subsection 87.3(4)(n), “ecological lift” means an improvement in the biological health, as well as the chemical, geomorphic, or hydrologic health, of an area that has been damaged, degraded, or destroyed.

(vi) As used in subsection 87.3(4)(n), “demonstrable ecological harm” means any significant negative impact caused by a project to the structure, function, or natural processes of an ecosystem, including habitat degradation, disruption of ecological processes, or the decline or death of native plant and/or animal populations within the project area. This can include degradation of water quality, soil erosion, habitat loss, introduction of invasive species, or harm to native species. “Demonstrable” means the harm is significant, evident, verifiable, and capable of being proven through scientific measurements or by expert judgment and observation.

(5) Recapture Provision Consistent with Section 404 of the federal Clean Water Act and corresponding federal regulations, any discharge of dredged or fill material into state waters incidental to any of the otherwise-exempted activities identified in subsection 87.3(4)(e) through (m) must have a dredge and fill discharge authorization if both of the following conditions apply: (1) It is part of an activity whose purpose is to convert an area of state waters into a use to which they were not previously subject; and (2) where the flow or circulation of state waters may be impaired or the reach of such waters reduced. If the activity would convert an area to a use to which it was not previously subject, but it would not impair the flow and/or circulation or reduce the reach of state waters, then the recapture provision does not apply. Piping and lining of irrigation ditches or acequias, as described in subsection 87.3(4)(g)(i)(B), do not meet the conditions of this recapture provision.

(6) Excluded Types of Waters Notwithstanding the definition of “state waters” in section 25-8-103(19), C.R.S., and in subsection 87.3(2), an authorization is not required for the discharge of dredged or fill material into the following types of waters, and such a discharge is not otherwise prohibited or regulated under subsection 87.3(5). The commission is only authorized to clarify exclusions without limiting or expanding their scope. The commission is not authorized to add or remove any of the following exclusions as identified in section 25-8-205.1(8)(d), C.R.S.:

(a) For ditches and canals that convey water or wastewater, those portions of the ditches/canals that are excavated on upland;

(b) Stormwater control features that are constructed to convey, treat, or store stormwater and that are created in upland;

(c) Artificially irrigated areas that would revert to uplands if irrigation ceased;

(d) Artificial lakes, lagoons, or ponds that are created entirely by excavating or diking upland to collect and retain water and that are used exclusively for stock watering, irrigation, settling basins, or rice growing;

(e) Wetlands that are adjacent to a ditch or canal and supported by water in the adjacent ditch or canal;

(i) A wetland is “adjacent to” a ditch or canal if it is next to, adjoining, or in close proximity to that ditch or canal; and (ii) A wetland is “supported by” a ditch or canal when the ditch or canal provides a sufficient quantity, frequency, and duration of water to support, under normal circumstances, a prevalence of vegetation typically adapted for life in saturated soil conditions. The portion of the wetland that would cease to be a wetland absent water provided by that ditch or canal is “supported by” that ditch or canal.

(f) Recharge facilities, including ponds, included in uplands for the purpose of facilitating recharge of aquifers or streams;

(g) Artificial reflecting or swimming pools or other small ornamental bodies of water created by excavating or diking upland to retain water for primarily aesthetic reasons;

(h) Water-filled depressions created in uplands incidental to mining or construction activity and pits excavated in uplands for the purpose of obtaining fill, sand, or gravel, unless and until the construction or excavation operation is abandoned and the resulting water feature is state waters;

(i) Swales and erosional features, such as gullies, small washes, and rills, that do not contain wetlands or an ordinary high watermark;

(j) Groundwater. As used in this regulation, “groundwater” means subsurface waters in a zone of saturation that are or can be brought to the surface of the ground or to surface waters through wells, springs, seeps, or other discharge areas. “Groundwater” does not include wetlands.

(k) Prior converted cropland. “Prior converted cropland" means any area that, prior to December 23, 1985, was drained or otherwise manipulated for agricultural purposes, which includes land use that makes the production of an agricultural product possible, including grazing and haying. Cropland that is left idle or fallow for conservation or agricultural purposes for any period of time remains in agricultural use and, if the cropland otherwise qualifies under subsection 87.3(5)(k), is prior converted cropland. The commission and the division shall recognize designations of prior converted cropland made by the United States Secretary of Agriculture. An area is no longer considered prior converted cropland if the area is abandoned and has reverted to wetlands. “Abandonment” occurs when prior converted cropland is not used for, or in support of, agricultural purposes at least once in the immediately preceding five years. The division shall determine whether prior converted cropland has been abandoned. Final determinations on prior converted cropland abandonment are subject to requests for an adjudicatory hearing before the commission under the procedures in section 21.4 of Regulation No. 21 (5 CCR 1002-21).

(7) Process for Determining Federal versus State Program Coverage; Process for Obtaining an Official Determination Concerning the Applicability of State Exemptions, Recapture Provision, and Exclusions (a) The following procedures apply to all projects/activities where a project proponent is uncertain as to whether any wetland, lake, stream, or other water feature(s) into which the discharge of dredged or fill material is proposed falls under federal jurisdiction:

(i) Before submitting an application for a state dredge and fill authorization or coverage under a state dredge and fill authorization, the project proponent must ensure that any wetland, lake, stream, or other water feature(s) into which the discharge of dredged or fill material is proposed are not “waters of the United States” (WOTUS), as defined by the USACE and EPA. The division will not make determinations as to whether a wetland, lake, stream, or other water feature is a WOTUS. Therefore, prior to seeking state dredge and fill coverage, the division expects project proponents to exercise due diligence in communicating with the USACE concerning potential federal jurisdiction.

(ii) Notwithstanding situations where dual jurisdiction under subsection 87.3(4)(c)(i) applies, where the USACE determines that a wetland, lake, stream, or other water feature into which the proposed discharge of dredged or fill material will occur is a WOTUS, and thus requires a Section 404 permit, the project proponent must conduct its project/activity under the coverage of a Section 404 permit.

(iii) Where the USACE determines that a particular activity is exempt from federal dredge and fill regulation (i.e., the activity results in a “non-prohibited” discharge as that term appears in Section 404(1)(f) of the federal Clean Water Act), then the project/activity is also considered exempt from state dredge and fill program requirements.

(iv) Notwithstanding the exemption in subsection 87.3(4)(c) as it relates to USACE asserting jurisdiction and requiring compensatory mitigation for all waters and wetlands within a project area, where the USACE determines that the wetland, lake, stream, or other water feature is not a WOTUS, the project proponent must conduct the project under the appropriate state dredge and fill authorization, unless a state exclusion under subsection 87.3(6) or exemption under subsection 87.3(4) applies. In such cases, project proponents may, but are not required to, seek an “official determination” from the division under subsection 87.3(7)(b) below as to the applicability of any of the state program exclusions in subsection 87.3(6).

(v) The division is not bound by any USACE determination concerning whether an exclusion from the definition of WOTUS applies to a particular wetland or water feature (even where the federal WOTUS exclusion identified by USACE is identical or nearly identical to a state dredge and fill program exclusion in subsection 87.3(6)). The division reserves the right to make independent determinations concerning whether wetlands/water features qualify for any exclusion as defined under the state dredge and fill program.

(b) A project proponent is not required to, but may, seek an official determination from the division as to the applicability of any of the exemptions for activities in subsection 87.3(4), the recapture provision in subsection 87.3(5), or any of the exclusions for water features in subsection 87.3(6).

(i) Requests for an official determination of applicability shall be submitted to the division in writing, and sufficient information shall be provided for the division to render its official determination. Such information includes, but is not limited to, a detailed description of the proposed activity and/or the relevant water feature(s), including photographs of the proposed project site. The division may ask for additional information from the project proponent when the division deems it necessary to render an official determination. The division may also perform site visits as it deems necessary to render an official determination.

(ii) In all cases, the initial burden will be on the project proponent to demonstrate that the identified exemption(s) or exclusion(s) apply, or in the case of the recapture provision, that the identified activity does not meet at least one part of the two-part test in subsection 87.3(5).

(iii) The division shall act upon such requests as soon as practicable and shall provide its official determination to the project proponent in writing.

(iv) Official determinations issued by the division under this subsection 87.3(7)(b) are subject to requests for an adjudicatory hearing before the Water Quality Control Commission pursuant to section 25-8-403, C.R.S., and section 21.4 of Regulation No. 21 (5 CCR 1002-21).

87.4 GUIDELINES FOR PROTECTION

(1) Section 404(b)(1) Guidelines The provisions of 40 C.F.R. Part 230—Section 404(b)(1) Guidelines for Specification of Disposal Sites for Dredge and Fill Material (Subparts A through I) as adopted by the U.S EPA, commonly known as the “404(b)(1) Guidelines,” effective on June 22, 2020, are hereby incorporated by reference into this Regulation 87, subject to the modifications outlined in subsection 87.4(4) below. Subpart J (Mitigation) of the 404(b)(1) Guidelines is not incorporated by reference herein, but instead has been revised in this regulation at section 87.10.

(2) Summary of the 404(b)(1) Guidelines The 404(b)(1) Guidelines (effective date June 22, 2020) are divided into ten subparts that are summarized here to provide additional clarity:

(a) Subpart A presents those provisions of general applicability, such as purpose and definitions.

(b) Subpart B establishes the conditions that must be satisfied in order to make a finding that a proposed discharge of dredged or fill material complies with Regulation 87.

(c) Subpart C addresses potential impacts on the physical and chemical characteristics of the aquatic ecosystem.

(d) Subpart D addresses potential impacts on the biological characteristics of the aquatic ecosystem.

(e) Subpart E addresses potential impacts on special aquatic sites as identified in that subpart.

(f) Subpart F addresses potential effects on human use characteristics as identified in that subpart.

(g) Subpart G prescribes a number of physical, chemical, and biological evaluations and testing procedures to be used to reach the required factual determinations under Regulation 87.

(h) Subpart H details actions to minimize adverse effects.

(i) Subpart I concerns advanced identification of disposal areas.

(j) Subpart J (not incorporated by reference herein, but instead restated and revised in this regulation at section 87.10) establishes standards and criteria for all types of compensatory mitigation to offset unavoidable impacts to the aquatic resource under an authorized dredge and fill activity.

(3) Process for the Division’s Implementation of the 404(b)(1) Guidelines (a) Individual Authorizations Subject to the relevant restrictions and prohibitions in section 25-8-104, C.R.S., when evaluating an application for an Individual Authorization for the discharge of dredge or fill material into state waters, the division will utilize the 404(b)(1) Guidelines (effective date June 22, 2020) in the manner outlined in section 87.6 in its independent evaluation of practicable alternatives, including the applicant’s preliminary “least environmentally damaging practicable alternative,” and for determining any appropriate conditions for the selected alternative.

(b) General Authorizations (i) To confirm compliance with the 404(b)(1) Guidelines (effective date June 22, 2020) and section 25-8-205.1(5)(b)(I), C.R.S., prior to issuance, reissuance, or modification of any General Authorization, and subject to the relevant restrictions and prohibitions in section 25-8-104, C.R.S.:

(ii) For all General Authorizations or the General Conditions document issued by the division corresponding to the USACE Nationwide and Regional General Permits and Nationwide Permits General Conditions, the division will consider the USACE analysis conducted pursuant to 40 C.F.R. § 230.7 (“General permits”) (effective date January 3, 2017), and the division will not be required to conduct its own separate analysis under the 404(b)(1) Guidelines (effective date June 22, 2020). The division may, in its discretion, choose to conduct an independent analysis of any General Authorization under 40 C.F.R. § 230.7 where the division determines that such analysis is necessary to confirm that state waters are sufficiently protected from adverse impacts, including cumulative impacts, related to the discharges authorized under a particular General Authorization. The division shall determine within 90 days of the close of the public comment period whether the evidence in the record shows that either:

(A) the General Authorization results in a lesser degree of protection of aquatic ecosystems than the initially-issued General Authorization or the associated General Conditions Document which shall be based on the 2021 version of the USACE Nationwide Permits;

(B) activities regulated under the General Authorization or the General Conditions document have the potential to cause more than minimal or cumulative adverse impacts to state waters; or (C) the terms and conditions of the General Authorization or the General Conditions document may warrant changes to address Colorado-specific needs.

If the division finds the circumstances in (A), (B), or (C) are met, the division shall conduct its own separate analysis of the relevant General Authorization under the 404(b)(1) Guidelines (effective date June 22, 2020).

(D) Based on the 404(b)(1) analysis, the division may choose to modify the terms and conditions of the General Authorization or the General Conditions document to address Colorado- specific needs, i.e., those outlined in (A), (B) or (C). The automatic reissuance provision of 87.7(2)(c) will not prevent the division from initiating or completing its own independent 404(b)(1) analysis.

(E) If the division determines that modifications to a General Authorization or the General Conditions document are necessary as a result of the 404(b)(1) analysis, it shall reopen the General Authorization and/or the General Conditions document and make those modifications within one year of that General Authorization’s automatic reissuance under subsection 87.7(2)(c). Any modifications to a General Authorization or the General Conditions document proposed by the division as a result of a 404(b)(1) analysis shall be subject to the public notice and comment procedures in subsection 87.7(5).

(iii) In developing any new Colorado-Specific General Authorization under subsection 87.7(2)(a) of this regulation (i.e., those that do not correspond to any Nationwide or Regional General Permit issued by the USACE), the division will adhere, to the extent relevant and practicable, to the conditions and evaluation process outlined in 40 C.F.R. § 230.7 (effective date January 3, 2017). In cases where the division has decided to create a Colorado-Specific General Authorization for a particular category of activities at the request of a third party, that party must conduct, to the extent relevant and practicable, the evaluation under 40 C.F.R. § 230.7 (effective date January 3, 2017) and submit such evaluation for the division’s consideration and final approval.

(c) Compensatory Mitigation The subparts of the 404(b)(1) Guidelines (effective date June 22, 2020) incorporated into this regulation by reference do not apply to establishing compensatory mitigation requirements under any division-issued Individual Authorization, Temporary Authorization, or Notice of Coverage under a General Authorization. Such compensatory mitigation requirements shall instead be subject to Section 87.10 of this regulation.

(4) Modifications to Adapt the 404(b)(1) Guidelines (effective date June 22, 2020) to Colorado’s Dredge and Fill Program (a) The 404(b)(1) Guidelines (effective date June 22, 2020) refer to “navigable waters” or “waters of the United States,” which shall be replaced, as the context requires, with “state waters” as defined herein.

(b) The Guidelines refer to the duties and responsibilities of the “permitting authority,” “district engineer” (USACE), “administrator,” or “regional administrator” (U.S. EPA), which shall be replaced with “the division.” (c) The Guidelines refer to “general permits,” which shall be replaced with “Temporary Authorizations” or “General Authorizations,” as the context requires.

(d) The Guidelines refer to “applicable toxic effluent standard or prohibition under section 307 of the [Clean Water] Act,” which shall include toxic standards adopted by the Commission under section 25-8-204, C.R.S.

(e) The Guidelines contain a definition of “pollutant” at 40 C.F.R. 230(3)(j) that differs from the definition of the “pollutant” in this Regulation at 87.2(29). For purposes of this regulation, the Regulation 87.2(29) definition shall be used.

(f) To the extent the Guidelines refer to agency consultation with the U.S. Fish and Wildlife Service under Section 7 of the Endangered Species Act, those requirements shall not apply to the division. Instead, dredge and fill project proponents shall be solely responsible for compliance with the requirements of the Endangered Species Act, including Section 10 consultation with the U.S. Fish and Wildlife Service and related requirements, where appropriate.

(g) The Guidelines contain several provisions that reference the “basic purpose” of a project and “overall project purposes.” In the federal framework, these terms are used in the context of the alternatives analysis for projects requiring an Individual Section 404 Permit. In Subsection 87.6(2) of this regulation, which deals with a project’s purpose and need and the alternative analysis, the term “basic purpose” from the Guidelines is not used and the Guidelines’ “overall project purposes” terminology has been replaced with the project’s “fundamental needs.” Accordingly, this regulation does not incorporate the following provisions from the 404(b)(1) Guidelines (effective date June 22, 2020):

(i) Section 230.10(3)(l) - Definition of “practicable”;

(ii) Section 230.10(a)(2) - Explanation of the term “practicable alternative”; and (iii) Section 230.10(a)(3) - Presumption of availability of practicable alternatives that do not involve special aquatic sites unless the project is “water-dependent.”

The portions of each of the above provisions that the commission chose to retain have been included verbatim in subsection 87.6(2), and thus not incorporated by reference.

(h) Portions of the 404(b)(1) Guidelines (effective date June 22, 2020) related to coastal areas, marine habitats, and marine species shall not apply to Colorado’s dredge and fill program. These include:

(i) Section 230.2(b) - Reference to discharges into territorial seas.

(ii) Section 230.3(n) - Definition of territorial sea.

(iii) Section 230.10(a)(1) - References to ocean waters.

(iv) Section 230.10(a)(5) - Reference to Coastal Zone Management (review and implementation).

(v) Section 230.10(b)(4) - Reference to marine sanctuary protections.

(vi) Section 230.24(a) - Reference to tides.

(vii) Section 230.25 - Reference to salinity gradients in estuaries.

(viii) Section 230.30(a) - Reference to threatened and endangered marine mammals, fish, and reptiles under the authority of the Department of Commerce.

(ix) Section 230.43(a) - References to estuarine or marine systems.

(x) Section 230.44 - Reference to coral reefs.

(xi) Section 230.54 - Reference to national seashores.

(xii) Section 230.60(a) - Reference to coastal areas.

(xiii) Section 230.60(b)(1) - Reference to proximity to tidal movement.

(xiv) Section 230.80(d) - Reference to Coastal Zone Management Plans/Programs.

(5) Subpart J of the Guidelines is not incorporated into this regulation by reference. The compensatory mitigation requirements set forth in section 87.10 are derived from Subpart J, but include certain modifications to ensure that compensatory mitigation requirements meet Colorado-specific needs, while compensating for all functions of state waters that are lost as a result of an authorized activity, as required by section 25-8-205.1(5)(c), C.R.S.

87.5 DIVISION CONSULTATION AND COORDINATION WITH FEDERAL AND

STATE AGENCIES, LOCAL GOVERNMENTAL ENTITIES, AND THE SOUTHERN UTE INDIAN TRIBE (1) General Provisions (a) Subsections 87.5(1)(b) through 87.5(1)(d) below outline the applicability and scope of the division’s consultation and coordination with federal and state agencies, local government entities, and the Southern Ute Indian Tribe (SUIT) on issues related to the authorization to discharge dredged or fill materials into state waters, including the division’s case-by-case determinations concerning applicability of the exemptions, recapture provision, and exclusions in subsections 87.3(4) through (6).

(b) The division may only consider input and recommendations on matters within the special expertise, legal authority, or jurisdiction of the particular consulting agency, entity, or tribe, as further detailed in subsections 87.5(2) through (5), below. The division is not obligated to accept or incorporate any input or recommendations from consulting agencies, entities, or the SUIT into its final authorizations. The division retains final decision-making authority over the terms and conditions of all dredge and fill authorizations, the content of guidance and policies, and the applicability of the exemptions, recapture provision, and exclusions in subsections 87.3(4) through (6).

(c) The terms “consult” or “consultation” as used in section 87.5 mean to give a federal, state, local, or tribal entity the opportunity to provide special expertise to authorization processes and technical groups, act as a cooperating agency, or engage as mutually agreed by the agency, entity, or tribe. Consultation typically involves the receipt of technical input or recommendations to inform division decision-making.

(d) The terms “coordinate or “coordination” as used in section 87.5 mean to communicate with a federal, state, local, or tribal entity for the purpose of sharing general information about a dredge and fill project and any federal, state, local, or tribal requirements applicable to such project to ensure consistency, or conversely, to avoid conflict or contradiction, in regulatory approaches. Coordination typically involves email or phone communications on an as-needed basis, as opposed to a structured process or protocol for receiving technical input or recommendations.

(e) Memoranda of Understanding. The Memoranda of Understanding (MOUs) identified in subsections 87.5(2) through (6) below shall incorporate the language of this regulation to dictate the situations that trigger division consultation with that particular agency, entity, or tribe and the scope of the substantive matters on which such agency, entity, or tribe may provide input. The MOUs shall include respective agency roles and responsibilities concerning coordination, internal deadlines, and a waiver of consultation provision for failure to meet certain deadlines, to ensure the timeliness of application review and division issuance. All MOUs developed to support the implementation of Regulation 87 shall be consistent with statutory water rights provisions in section 25-8-104 and Title 37, C.R.S. All finalized MOUs shall be made available to the public on the division’s dredge and fill webpage.

(2) Federal Agencies (a) U.S. Army Corps of Engineers and U.S. Environmental Protection Agency The division shall consult with the appropriate district office of the United States Army Corps of Engineers (USACE) and may consult with the United States Environmental Protection Agency (U.S. EPA) Region 8 on jurisdictional issues concerning “waters of the United States” (i.e., whether the USACE considers a certain waterbody or wetland to fall under federal jurisdiction). Additionally, where the division becomes aware of any project that may be subject to both state and federal jurisdiction under subsection 87.3(4)(c), the division shall coordinate/consult with the appropriate USACE district office to avoid overlapping or duplicative requirements for the project. The division may also coordinate/consult with the appropriate USACE district office to seek determinations of whether a dredge and fill project/activity is operating under, and in compliance with, a Section 404 Permit. See subsection 87.11(2)(b)(i)(A). The division may enter into one or more MOUs with these agencies to outline protocol for consultation/coordination on such jurisdictional issues, with an emphasis on streamlining state and federal requirements and processes wherever possible.

(b) Other Federal Agencies The division may consult or coordinate with other federal agencies, as needed on a case-by-case basis, including federal agencies that own the land on which a project is planned to occur, or that have expertise in environmental, natural resource, or agriculture-related issues relevant to the project.

(3) State Agencies (a) State Engineer’s Office/Colorado Water Conservation Board Pursuant to the requirement in section 25-8-104(4)(d), C.R.S., the division shall consult with the State Engineer’s Office (SEO) and the Colorado Water Conservation Board (CWCB) before making any decision concerning dredge and fill discharge authorizations or adopting any policy where a project proponent, a third party, or the division claims that such decision or policy has the potential to cause material injury to water rights. And specifically, when requested by a project proponent, a third party, or by its own initiative, the division shall consult with the SEO and CWCB before making any decision concerning any purpose and need statement or alternatives analysis required under section 87.6 which has the potential to cause material injury to water rights. Further protocol for agency consultation and coordination shall be established through an MOU among the division, SEO, and CWCB.

(b) Colorado Parks and Wildlife (i) The division shall consult with Colorado Parks and Wildlife (CPW) in the following situations:

(A) Before issuing any Individual Authorization; and (B) Before issuing any Temporary Authorization or Notice of Coverage under a General Authorization:

1. (I) Where the activity is covered under any Nationwide or Regional General Permit (or, once issued, the corresponding state General Authorizations) that requires Pre-Construction Notification/Application for Coverage under a General Authorization and results in the loss of greater than 0.5 acres of state waters;
2. (II) Where the activity is covered under Nationwide Permit 13 or Nationwide Permit 43 (or, once issued, the corresponding state General Authorizations) and is more than 500 linear feet along the bank, or it will exceed an average of one cubic yard per running foot, as measured along the length of the treated bank, below the plane of the ordinary high watermark; or (III) Where the activity is covered under Nationwide Permit 27 (or, once issued, the corresponding state General Authorization); and

(C) During the application review process for any water projects requiring a fish and wildlife mitigation plan pursuant to section 37-60-122.2, C.R.S.

(ii) The division may consult with CPW, on a case-by-case basis and as the division deems appropriate, before issuing, reissuing, modifying, or revoking any General Authorization or the associated General Conditions document.

(iii) For the situations in subsection 87.5(3)(b)(i) that require consultation, and when the division exercises its discretion to initiate a consultation concerning a General Authorization under subsection 87.5(3)(b)(ii), CPW may provide input or recommendations such as conditions to mitigate impacts of the proposed project/activity on or associated with the aquatic resource. CPW’s input includes the potential impacts to outdoor recreation and wildlife resources, including fish, wildlife, and their habitats. For Individual Authorizations, the division shall consult with CPW during its consideration of the materials relevant to subsections 87.6(2) and 87.6(7).

(iv) Further protocol for agency consultation and coordination shall be established through an MOU between the division and CPW.

(c) Colorado Department of Agriculture The division may consult with the Colorado Department of Agriculture (CDA), as needed on a case-by-case basis, concerning issues raised by a project proponent, a third party, or the division about the applicability of any of the agriculture-related exemptions, the recapture provision as it relates to agriculture activities, or agriculture-related exclusions outlined in subsections 87.3(4) through (6). Further protocol for agency consultation and coordination on these topics shall be established through an MOU between the division and CDA.

(d) Other State Agencies The division may consult or coordinate with other state agencies, as needed on a case-by-case basis, including the State Historic Preservation Office, regarding proposed projects involving sites under its jurisdiction and state agencies that own the land on which a project is planned to occur, or that have expertise in environmental, natural resource, or agriculture-related issues relevant to the project. For the purposes of historic and cultural resource review, the State Historic Preservation Office is the appropriate agency for consultation for historic and cultural resources, rather than any federal agency.

(4) Local Governmental Entities (a) Where a proposed dredge and fill project is located within the jurisdiction of a local governmental entity that has enacted its own wetlands and/or stream protection ordinance, the division shall coordinate with that local governmental entity for the purpose of gaining mutual understanding of the relevant state and local requirements for the project.

(b) The division may consult or coordinate with local governmental entities, as needed on a case-by-case basis, including local governmental entities that own the land on which a project is planned to occur, or that have expertise in environmental, natural resource, or agriculture-related issues relevant to the project.

(c) Further protocol for consultation or coordination may be established through an MOU between the division and any local governmental entity. Such MOUs may cover issues such as timing of permitting and dispute resolution procedures.

(d) Definition of “Local Governmental Entity”

For purposes of this regulation, "Local Governmental Entity" means a city, county, city and county, special district, school district, a designated planning and management agency under Section 208 of the federal Clean Water Act, or other unit of local government.

(5) Southern Ute Indian Tribe The division shall consult with the Southern Ute Indian Tribe concerning any proposed dredge and fill project occurring on non-Indian-owned fee lands within Reservation boundaries that are subject to this regulation. See subsection 87.3(1). Further protocol for communication may be established through an MOU between the division and the Southern Ute Indian Tribe.

87.6 INDIVIDUAL AUTHORIZATIONS

(1) An Individual Authorization shall be required for dredge and fill projects in the following circumstances:

(a) Where the federal Nationwide or Regional General Permit (and once issued by the division, the General Authorization) that applies to the proposed activity contains a permanent loss of state waters threshold (most commonly, 0.5 acres of wetlands), triggering the need for an Individual Authorization; or (b) Where the division determines, through its review of an application for a Temporary Authorization or for coverage under a General Authorization, that the project/activity will result in more than minimal individual or cumulative adverse impacts to the aquatic resource.

(2) Pre-Application Requirements for Individual Authorizations (a) Project proponents seeking an individual authorization shall consult with the division in advance of submitting an application to ensure the application is complete at the time of submittal.

(b) The pre-application consultation under this section 87.6(2) shall be initiated within 30 days following the project proponent’s submission of an initial purpose and need statement. The division and project proponent shall work together to complete the pre-application consultation, including actions outlined in sections 87.6(2)(c)-(g) within one year of the project proponent’s submission of an initial purpose and need statement. For highly complex projects, including, for example, water supply projects involving reservoir construction or expansion, external factors outside of the division’s control may extend this timeline. In the case of an extension, the division shall provide written justification for that extension, including a description of the specific items needing to be addressed to ensure the pre-application requirements are complete. Throughout this process, the project proponent shall provide all information required to complete steps (c)-(g) in a timely manner and the division shall work expeditiously to review and make determinations on all submissions.

(c) Development of the Purpose and Need Statement During the pre-application period, the project proponent shall work with the division to prepare a purpose and need statement for the project, which shall include the following:

(i) The “need(s)” statement must include a fundamental need. Where a project is proposed to address multiple fundamental needs, the project proponent must explain why the multiple needs must be resolved with one project, as opposed to independently. The “fundamental need(s)” must clearly outline the larger, fundamental problems or opportunities that the project is proposing to address and the applicant’s demonstrated objectives in addressing those problems or opportunities. It must include evidence demonstrating that the problem or opportunity exists. The project’s fundamental need(s) does not include incidental project benefits and amenities that do not address the demonstrated problems or opportunities.

(ii) The “purpose” statement must contain an explanation of the project’s purpose(s). The project’s “purpose(s)” must be derived from and designed to meet the demonstrated fundamental need(s) and shall describe how the proposed project will meet that fundamental need(s).

(iii) The purpose and need statement must also contain a statement as to whether the proposed project is “water-dependent,” and if so, a detailed explanation as to why. A project is “water-dependent” if it is proposed to occur in a “special aquatic site” (as defined in Section

87.2 and Subpart E of the 404(b)(1) Guidelines) (effective date

June 22, 2020) and requires access or proximity to, or siting within, a special aquatic site in order to fulfill its fundamental need(s). Where the activity associated with a discharge which is proposed for a special aquatic site does not require access or proximity to or siting within the special aquatic site in question to fulfill its fundamental need (i.e., is not “water dependent”), practicable alternatives that do not involve special aquatic sites are presumed to be available, unless clearly demonstrated otherwise by the project proponent. In addition, where a discharge is proposed for a special aquatic site, all practicable alternatives to the proposed discharge that do not involve a discharge into a special aquatic site are presumed to have less adverse impact on the aquatic ecosystem, unless clearly demonstrated otherwise.

(iv) The division shall consider the project proponent’s proposed purpose and need statement, along with supporting evidence and documentation, and shall exercise its independent judgment in approving, modifying, or requesting additional information supporting that description. The purpose and need statement should not be so restrictive as to constrain consideration of a reasonable range of alternatives.

(d) Identification of a Reasonable Range of Alternatives Upon the division’s approval, the purpose and need statement shall be used to identify a reasonable range of alternatives for the proposed project, which must include a “no action” alternative. The division may suggest and discuss additional alternatives with the project proponent for inclusion in the array of alternatives to be considered for practicability.

(e) Determination of Practicable Alternatives The project proponent shall consult with the division in making determinations as to whether each alternative within the reasonable range of alternatives identified is a “practicable alternative” to be carried forward for the comparative analysis under the 404(b)(1) Guidelines (effective date June 22, 2020). Determination of “practicable alternatives” shall be based on the definition of the term in subsection (i) and the associated procedures outlined in subsections (ii) to (iii), below:

(i) “Practicable alternative” means an alternative that is available and capable of being done after taking into consideration cost, existing technology, and logistics in light of the project’s fundamental need(s). These cost and logistical considerations include whether there is a need to file a change of water rights application for existing water rights or an application to adjudicate new water rights. If it is otherwise practicable, an alternative in which the project proponent may need to reasonably obtain, utilize, expand, or manage, an area that they do not presently own, in order to fulfill the fundamental need(s) of the proposed project may be considered practicable. Similarly, if it is otherwise practicable, an alternative in which the project proponent may need to change water rights that they presently own and which could be changed– both at a reasonable cost and within a reasonable time frame–to fulfill the fundamental need(s) of the proposed project may be considered practicable. An alternative in which the project proponent may need to acquire or adjudicate a new water right, or change water rights that they do not presently own but which could be obtained, changed, decreed, utilized, or managed–both at a reasonable cost and within a reasonable time frame–to fulfill the fundamental need(s) of the proposed project may also be considered practicable.

(ii) The division shall document in writing its basis for any finding that (1) a project proponent can implement an alternative that would require the project proponent’s use of an area not presently owned or controlled by the project proponent; and/or (2) the project proponent can implement an alternative that would require the project proponent to change existing water rights or obtain water rights not presently decreed to it for such use. This shall include factual determinations that such land or water rights can be obtained to fulfill the fundamental need(s) of the proposed project– at a reasonable cost and in a reasonable time frame–or that the point of diversion, type of use, place of use, time of use, or storage location of an existing water right can be changed to fulfill the fundamental need(s) of the proposed project–at a reasonable cost and in a reasonable time frame–to allow for selection of a less environmentally damaging alternative that fulfills the fundamental need(s) of the project. Where such information is provided by the project proponent, the likely yield, priority date, and operational terms and conditions of an alternative and its associated water rights must be a part of such factual determinations. The division may request, and the project proponent shall provide, any information or evidence necessary for the division to make the required factual determinations referenced in this subsection.

(iii) Where the project proponent asserts that implementing one or more of the identified practicable alternatives would cause or result in material injury to water rights or otherwise violate the relevant restrictions and prohibitions concerning water rights in section 25-8- 104, C.R.S., the project proponent shall provide information documenting the asserted injury. Alongside such documentation, the project proponent shall also analyze how other proposed alternatives both avoid the alleged injury and result in equal or less environmental damage than the allegedly injurious alternative. If the division believes that an alternative exists which could overcome such alleged injury, but which was not included in the original array of alternatives, it may suggest and discuss such alternative(s) with the project proponent. The project proponent must then must consider that alternative for practicability. After such consideration, if the project proponent asserts that the potential remains for an alternative to cause material injury to water rights, the division shall consult with the State Engineer’s Office and Colorado Water Conservation Board regarding that assertion. Where, after consultation, the division concludes that the alternative would likely cause material injury to water rights, such alternative will not be practicable and thus would not be subject to the comparative analysis under the 404(b)(1) Guidelines (effective date June 22, 2020). Nothing in this subsection is intended to supersede or abrogate the requirement under section 25-8-104(1), C.R.S. that “the question of whether such material injury to water rights exists and the remedy therefor shall be determined by the water court.” (f) Comparative Analysis under the 404(b)(1) Guidelines The project proponent must conduct a comparative analysis under the 404(b)(1) Guidelines (effective date June 22, 2020) of all of the identified practicable alternatives (except for any other alternatives that are determined likely to cause or result in material injury to water rights). The comparative analysis will result in the selection of the least environmentally damaging practicable alternative (“LEDPA”).

(g) All Project proponents seeking an Individual Authorization shall schedule a pre-application meeting with division staff, which must be held at least 30 days before the project proponent intends to submit its application. The purpose of such a meeting will be to identify any remaining information the division may need to consider the application complete. In its discretion, the division may waive the pre-application meeting requirement.

(3) Individual Authorization Application Requirements An application for an Individual Authorization shall include:

(i) A completed individual dredge and fill authorization application form, signed by the authorized representative;

(ii) Project location information, including a map and a description of the impacted state waters;

(iii) A description of the anticipated project construction and operation activities, including drawings, sketches, or site plans. Plans should be clear, accurate, and contain all necessary information to quantify impacts to the aquatic resource;

(iv) A schedule for completing the project/activity;

(v) The location and dimensions of adjacent structures;

(vi) A list of permits, licenses, or authorizations required by other federal, state, or local agencies for the work, including all approvals or denials already made; and an applicant statement documenting how the dredge and fill activity will occur in compliance with the Endangered Species Act, and whether any habitat used by threatened or endangered species may be impacted by any project alternative, for consideration under Subpart D of the 404(b)(1) Guidelines (effective date June 22, 2020);

(vii) A summary of the applicant’s coordination with any local, state, and federal agencies concerning the proposed project.

(viii) A description of water quality-related conditions in any applicable local, state, and federal permits, or licenses held by the applicant, or in any agreements previously entered into by the applicant;

(ix) A list of selected control measures chosen for the project in accordance with widely accepted industry standards and guidance. Control measures must protect the chemical, biological, and physical integrity of the receiving water(s). The control measures must be selected, designed, installed, and adequately sized in accordance with good engineering, hydrologic, and pollution control practices for the intended application. Good engineering, hydrologic and pollution control practices are methods, procedures, and practices that: (a) are based on basic scientific fact(s); (b) reflect best industry practices and standards; (c) are appropriate for the conditions and pollutant sources; and (d) provide appropriate solutions to meet the associated authorization requirements, including practice-based effluent limits.

(x) A purpose and need statement, as approved by the division during the pre-application process described in subsection 87.6(2).

(xi) The reasonable range of alternatives identified by the applicant (as required under subsection 87.6(2)(d)) and the comparative analysis of practicable alternatives utilizing the 404(b)(1) Guidelines (effective date June 22, 2020), including identifying a preliminary “least environmentally damaging practicable alternative” (LEDPA) (as required under subsection 87.6(2)(e)-(f)).

(xii) A description of projected impacts summarizing how the concepts of avoidance, minimization, and mitigation were utilized in the applicant’s comparative analysis of practicable alternatives to support its selection of the LEDPA.

(xiii) A statement describing how the applicant has addressed the requirement to avoid and minimize adverse impacts to the aquatic resource(s); and (xiv) A compensatory mitigation plan that describes how the applicant is offsetting any unavoidable adverse impacts to the aquatic resource(s) that remain after all appropriate and practicable avoidance and minimization of adverse impacts have been achieved.

(xv) The results of the division-approved functional assessment utilized by the applicant to determine the amount and type of compensatory mitigation that will offset all lost functions of the aquatic resource(s). Applicants may also choose to utilize functional assessment methods to inform the avoidance and minimization of adverse impacts to the aquatic resource(s) and assist in identifying the least environmentally damaging alternative; however, a functional assessment method shall not be the only tool used to assess the full suite of environmental impacts caused by each alternative. The functional assessment may also be used to quantify unavoidable impacts and monitor the success of mitigation projects.

(4) Use of Materials Developed in Other Regulatory Processes For projects that involve a major federal action under the NEPA and that impact both waters of the United States and state waters that are not under federal jurisdiction, project proponents do not need to complete the pre-application process under subsection 87.6(2), with the exception of the pre-application meeting as stated in subsection 87.6(2)(g). Submittal of any purpose and need statement, alternatives analysis, projected impacts analysis developed by the applicant through the NEPA/Section 404 permitting process shall satisfy the corresponding pre-application requirements in subsection 87.6(2). However, the division may require an authorization specifying compensatory mitigation requirements for state waters within the project area for which the USACE does not require compensatory mitigation for unavoidable adverse impacts. See subsection 87.3(4)(c)(i)(A) and (B).

In such cases, to meet the avoidance, minimization, and compensatory mitigation requirements of the state dredge and fill program, applicants must submit the authorization application requirements as outlined in subsection 87.6(3). The scope of any resulting authorization, if approved, will be limited to compensatory mitigation requirements for unavoidable adverse impacts to state waters as described in subsections 87.3(4)(c)(i)(A) and (B). To satisfy this application requirement, applicants may submit documentation from other federal, state, or local environmental and permitting processes to the extent those documents address the state waters described in subsections 87.3(4)(c)(i)(A) and (B) and the division will assess whether these documents satisfy the corresponding state application requirements. If they do, the applicant does not need to submit additional documentation. If they do not, the division may require the applicant to submit additional documentation under subsection 87.6(3).

(5) Notification to Applicants The division shall provide written notification to the applicant of the date the application for an Individual Authorization was received and, within 30 days of receipt of the application, shall provide a separate written notification of whether the application is considered complete. Upon determination that an application is not complete, the division shall provide written notice to the applicant of the information necessary to consider the application complete. The date the division provides the Notice of Complete Application will mark the beginning of the two- year time period in which the division is required to issue or deny the Individual Authorization. Issuance of a Notice of Complete Application does not preclude the division from requesting additional information from the applicant throughout the application review process that the division deems necessary for processing the application. If no notification of completeness is provided within 30 days of receipt of the application, then the application shall be considered complete as of that 30th day for purposes of beginning the two-year time period in which the division is required to issue or deny the Individual Authorization.

(6) Public Notice and Comment on Application Materials (a) The division shall notify the public of all applications for Individual Authorization (except for renewal applications). Such notice shall include the following information concerning the proposed project/activity:

(i) Applicable statutory authority or authorities;

(ii) The name of the applicant;

(iii) The location of the proposed activity, including a description of the state waters that will be impacted by the project/activity;

(iv) A brief description of the proposed activity so as to provide sufficient information concerning the size and nature of the activity to generate meaningful comments; and (v) Where to locate all application materials online, with the exception of materials that are privileged or confidential under Colorado law (such as confidential business information).

(b) Within 15 business days of issuing the Notice of Complete Application, the division shall send an email notification that includes the information described in subsection 87.6(6)(a) to all persons who have signed up for Dredge and Fill Protection Program notifications through the division’s website. Within that period of time, the division shall also post the information described in subsection 87.6(6)(a) on its Dredge and Fill Protection Program webpage.

(c) The division shall also notify the public of applications for Individual Authorization in the next Water Quality Information Bulletin that is published after issuance of the Notice of Complete Application. Such notification shall include the information described in subsection 87.6(6)(a).

(d) The division shall provide additional information regarding the application to interested members of the public if requested.

(e) Written comments on the application shall be submitted to the division within 30 days of publication of the Water Quality Information Bulletin as described in subsection 87.6(6)(c). The division may extend the public comment period for good cause shown.

(f) The division shall consider all public comments as it evaluates any application for Individual Authorization. The division shall make all submitted comments publicly available, provide a summary of major issues raised in comments, and explain its rationale for addressing major issues.

(7) Division Evaluation of Applications for Individual Authorization The division’s evaluation of applications for Individual Authorization shall include the following:

(a) Independent review of all materials submitted by the project proponent as required in subsection 87.6(3). The division’s review of the project proponent’s purpose and need statement shall inform its review of the alternatives analysis. As part of its review under this section 87.6, or as a result of applicant comments under 87.6(11)(a), public comments, or agency consultation, the division may request additional information from an applicant, where needed.

(b) Division Review of the Applicant’s Purpose and Need Statement and Alternatives Analysis Based on Public Comments or other New Information.

Within 60 days after the public comment period on the application closes under subsection 87.6(6)(e), in consideration of any relevant comments received or other new information that was not available during the pre- application period described in subsection 87.6(2), the division shall conduct an independent review of the applicant's purpose and need statement and proposed reasonable range of alternatives, including the elimination of the alternatives that the applicant has determined are not practicable. Based on the division’s review and any information received during the public comment period, before the expiration of the 60-day review period, the division shall, where it deems necessary: (i) Ask the applicant to provide any additional information necessary to complete its independent review; (ii) notify the applicant of its intent to modify the purpose and need statement or the proposed alternatives; or (iii) notify the applicant of its intent to add alternatives consistent with the framework outlined in section 87.6(2)(d) above. The division may also revisit the alternatives analysis if new information becomes available any time during the two-year application review period that warrants an assessment of additional alternatives. After the division identifies all practicable alternatives, it shall conduct its own comparative analysis of such alternatives under the Section 404(b)(1) Guidelines (effective date June 22, 2020) to make an independent determination of the LEDPA.

(i) The discharge of dredged or fill material is prohibited where there is a practicable alternative to the proposed discharge that would have less adverse impact on state waters, so long as the alternative does not have other significant adverse environmental consequences.

(c) General Conditions to Protect Aquatic Resources Once the division confirms the least environmentally damaging practicable alternative, the division shall craft conditions, considering applicant input, to include in the Individual Authorization related to the dredge and fill activity (i.e., construction of the project) that are designed to:

(i) Remove or reduce the impact to state waters of a discharge of dredged or fill material;

(ii) Protect downstream uses; and (iii) Address the direct, indirect, and cumulative impacts of the project on the chemical, physical, and biological integrity of state waters. The division shall not impose any condition under this subsection 87.7(7)(c) that would have the effect of violating the relevant prohibitions and restrictions in section 25-8-104, C.R.S., concerning water rights.

(d) Analysis of Compliance with State Water Quality Requirements In addition to crafting the conditions in subsection 87.6(7)(c), the division shall also conduct a water quality impacts analysis of the least environmentally damaging practicable alternative, focused on ensuring that the “activity as a whole” complies with the applicable state water quality requirements outlined in this subsection 87.6(7)(d). This analysis of water quality impacts applies to the discharge of dredged or fill material during construction, as well as impacts from the operation of the project (i.e., a hydroelectric project or water supply project). This analysis is intended to serve the same purpose as the Section 401 water quality impacts analyses the division conducts for Individual Section 404 Permits issued under federal authority. As such, for efficiency, any 401 Certification analysis addressing the water quality impacts of a dual jurisdiction project’s construction or operational aspects, including any conditions resulting from that analysis as described in subsection 87.6(7)(e) below, will be used for the water quality impacts analysis under this subsection. However, where 401 certification conditions do not cover all state waters that are impacted by the project, the division shall include conditions in the Individual Authorization to ensure that the activity as a whole will comply with applicable state water quality requirements covering all state waters. The division shall consider the following state water quality requirements in its water quality impacts analysis:

(i) Where applicable, antidegradation review pursuant to the Basic Standards and Methodologies for Surface Water, Regulation No. 31 (5 CCR 1002-31), section 31.8, except that “significance determinations” for reviewable waters under section 31.8(3)(c) shall be made with respect to the net effect of the new or increased water quality impacts of the proposed project, taking into account any environmental benefits within the project area, including any water quality improvements or mitigation measures proposed to be implemented within the project area. Where possible, water quality improvements or mitigation measures shall be located in the same watershed where the reviewable segment(s) are located;

(ii) The Basic Standards and Methodologies for Surface Water, Regulation No. 31 (5 CCR 1002-31), and the Basic Standards for Ground Water, Regulation No. 41 (5 CCR 1002-41);

(iii) Classifications and water quality standards assigned to the waters affected by the activity/project at the date of issuance of the Individual Authorization;

(iv) Any applicable effluent limitations or control regulations;

(v) Control measures required by this Regulation 87;

(vi) The discharge provisions of the Colorado Discharge Permit System, Regulation No. 61 (5 CCR 1002-61), as appropriate; and (vii) Water quality-related conditions in any applicable local, state, and federal permits, licenses, or authorizations held by the applicant, or in any agreements previously entered into by the applicant.

(e) Conditions to Ensure Compliance with State Water Quality Requirements (i) The division shall coordinate with the applicant to craft conditions in Individual Authorizations, where necessary, to ensure that the “activity as a whole,” which includes the triggering discharge of dredged and fill material, as well as the “project operation” (as those terms are further defined in Section 87.2), will comply with the applicable state water quality requirements outlined in subsection 87.6(7)(d). Conditions related to this subsection 87.6(7)(e) are intended to serve the same purposes that conditions in a state 401 certification would serve under a federal Individual Section 404 Permit.

(ii) For water supply projects and hydroelectric projects that have an ongoing operational component, conditions related to project operation may include routine water quality monitoring and adaptive management requirements for the purposes of addressing any major changes to the underlying assumptions that formed the basis for the authorization conditions and/or complying with future revisions to water quality standards that are relevant to authorization conditions.

(iii) The division shall not impose any conditions under this subsection 87.6(7)(e) that would have the effect of violating the relevant restrictions or prohibitions in section 25-8-104, C.R.S., concerning water rights. The division shall not require any project proponent to implement adaptive management or conduct project operation in a manner that would violate the relevant restrictions or prohibitions in section 25-8-104, C.R.S.

(iv) Temporary exceedances of water quality standards shall be deemed in compliance with the authorization conditions related to the dredge and fill activity so long as such exceedance will not be of a degree to cause conditions acutely toxic to aquatic life or to exceed standards assigned to protect a domestic drinking water supply where that is a classified use.

(f) The division shall deny an application for an Individual Authorization if it determines that the project will not comply with the 404(b)(1) Guidelines (effective date June 22, 2020).

(8) Official State Position on Fish and Wildlife Mitigation For water development projects subject to the requirements of section 37-60- 122.2, C.R.S., the division shall take into consideration the official state position regarding mitigation for fish and wildlife resources established pursuant to section 37-60-122.2, C.R.S., and may adopt all or part of such position into Individual Authorizations as conditions.

(9) Compensatory Mitigation Requirements The division shall include compensatory mitigation requirements in all Individual Authorizations consistent with section 87.10 of this regulation.

(10) Project Monitoring, Record-Keeping, and Reporting Requirements The division shall include appropriate monitoring, record-keeping, and reporting requirements in all Individual Authorizations. For some hydro-electric and water supply projects, such requirements shall remain in place through subsequent authorization renewals for the purpose of informing adaptive management associated with the ongoing operation of such projects.

(11) Issuance of Individual Authorizations (a) Following preparation of a draft of the final Individual Authorization, the division shall provide the applicant with a 30-day review period prior to issuance. During this period, the applicant may submit comments limited to factual or technical errors. The division shall consider any such comments before issuing the final authorization.

(b) The division shall notify the public of the issuance of final Individual Authorizations on the day of issuance by sending an email notification to all persons who have signed up for Dredge and Fill Protection Program notifications through the division’s website, and shall also post the link to the Individual Authorizations on its Dredge and Fill Protection Program webpage. The division shall also provide notice in the next Water Quality Information Bulletin that is published after issuance of any final Individual Authorization, including a link to the Authorization as posted on the division's Dredge and Fill Protection Program webpage. The 30 days in which directly affected parties may request an adjudicatory hearing on an Individual Authorization shall begin on the day the Authorization is published in the Water Quality Information Bulletin.

(c) An Individual Authorization issued by the division will become effective and final on its date of issuance.

(12) Time Periods for Division Determination on Individual Authorization Applications (a) The division shall issue a final Individual Authorization or deny the application within two years after issuing its Notice of Complete Application.

(b) For projects that, as determined by the division on a case-by-case basis, involve minimal to moderate costs and have minimal water quality impacts or limited potential water quality impacts, the division shall, at the time it issues the Notice of Complete Application, inform the applicant that the project qualifies for a shorter review period than two years. The division shall also include the approximate amount of time it will take to review and make a final determination on the application.

(c) The shorter review period in subsection 87.6(12)(b) above may be extended by a written mutual agreement between the division and the applicant, so long as the review period does not extend beyond a total review period of two years from the Notice of Complete Application.

(13) Duration of Individual Authorizations; Requests for Renewal; Continuing Obligations for Projects/Activities Involving Ongoing Operation; Requests for Modification; Requests for Termination (a) Duration of Individual Authorizations The duration of all initial Individual Authorizations shall be five years. An Individual Authorization covers the “activity as a whole,” including the discharge of dredged or fill material into state waters for project construction and the operation of the project/activity, where applicable. Individual Authorizations may also contain requirements related to compensatory mitigation that extend beyond the five-year term of the initial authorization. Construction occurring under an Individual Authorization shall be completed within five years of issuance unless the authorization is renewed pursuant to subsection 87.6(13)(b) below. The annual fee for Individual Authorizations described in Section 87.12 shall continue to apply until the construction site(s) is established or restored to preconstruction condition and the division determines that all terms and conditions in the authorization related to construction and compensatory mitigation have been fully satisfied.

(b) Requests for Renewal In cases where project construction will not be commenced prior to expiration of the authorization’s five-year term, or where such work has commenced but the construction-related and/or compensatory mitigation requirements will not be fully satisfied prior to such expiration, the project proponent shall submit a written request to the division for renewal of the initial authorization at least 90 days before the authorization’s expiration date. The request shall include an explanation of the basis for the request. The duration of such authorization renewals to complete the dredge and fill project and any compensatory mitigation obligations may be less than five years. Such renewals are not subject to the public notice and comment procedures in section 87.6(6).

(c) Continuing Obligations for Projects/Activities Involving Ongoing Operation In cases where the project proponent has fully satisfied all construction- related and compensatory mitigation requirements, but where ongoing authorization requirements/conditions remain concerning “project operation” (as that term is defined in Section 87.2) (e.g., hydroelectric or water supply projects), the project proponent shall remain responsible for complying with/satisfying all terms and conditions of the underlying Individual Authorization related to project operation, which are designed to ensure ongoing compliance with applicable state water quality requirements (akin to 401 certification conditions under the federal Section 404 program). To accomplish this, the project proponent must enter into a binding, enforceable “Ongoing Operations Agreement” with the division prior to or at the time of issuance of its Individual Authorization. Such agreement shall require the project proponent to comply with the terms and conditions of its Individual Authorization that are related to project operation after that Individual Authorization’s expiration or termination, and throughout the duration of the project’s operation.

(i) The Ongoing Operations Agreement shall contain terms specifying that, after the underlying Individual Authorization has expired or has been terminated, the Ongoing Operations Agreement will remain effective for the duration of the project’s operation, and that such Agreement will be terminated upon the project’s closure by signature of all parties to the Agreement.

(ii) The Ongoing Operations Agreement shall contain a term that authorizes the division to use the mutual modification, division- initiated modification, or revocation procedure pursuant to subsection 87.11(1), and that any such mutual modification, division-issued modification, or revocation shall be considered a “final agency action” pursuant to subsection 87.11(1)(c).

(iii) Any violation of an Ongoing Operations Agreement is a violation of Regulation 87 and thus subject to the division’s enforcement authority under 87.11(2).

(iv) Projects/activities operating under an Ongoing Operations Agreement following the underlying Individual Authorization’s expiration or termination will not be subject to annual fees under section 87.12.

(d) Requests for Modification A project proponent may request modification of an Individual Authorization to account for changes to the project as described in the application. The project proponent must submit any modification request in writing with all applicable information necessary for the division to determine whether to grant or deny the request. All such modifications are subject to the applicable public notice procedures in subsection 87.6(5).

(e) Requests for Termination A project proponent may submit a written request for termination of an Individual Authorization prior to its expiration date. The division shall grant such requests through issuance of a Notice of Termination where the project proponent has demonstrated to the division’s satisfaction that the site is established or restored to preconstruction condition and that all terms and conditions incorporated into the Individual Authorization related to construction and compensatory mitigation have been fully satisfied.

(14) Requests for Adjudicatory Hearings on Individual Authorizations (a) A final Individual Authorization, including all terms and conditions incorporated into such authorization, is subject to administrative reconsideration by the commission under section 25-8-403, C.R.S. The commission’s final agency action shall be subject to judicial review under sections 25-8-404 and 24-4-106, C.R.S.

(b) Directly affected parties may request an adjudicatory hearing on an Individual Authorization by filing such a request with the commission within 30 days after publication of the final Authorization in the Water Quality Information Bulletin.

(c) Only technical or factual errors identified by the applicant pursuant to 87.6(11)(a) or issues of law or fact identified by persons during the public comment period on the application, unless not reasonably ascertainable from the application materials, may be identified in a request for adjudicatory hearing on an Individual Authorization. For reasonably ascertainable issues, the request for hearing must demonstrate, by providing a specific citation to the administrative record, including document name and page number, that each issue being identified in the request for hearing was identified during the public comment period. For each issue that was not raised during the public comment period, the request for hearing must state affirmatively that such issue was not reasonably ascertainable during the public comment period and include an explanation as to why.

87.7 GENERAL AUTHORIZATIONS

(1) Recognition of Federal Permits As authorized in section 25-8-205.1(5)(b)(II), C.R.S., until the division issues its own General Authorizations under the provisions of section 87.7(2), the division shall recognize the USACE Nationwide and Regional General Permits that are relevant and applicable in Colorado for projects impacting state waters. The division shall utilize Temporary Authorizations under subsection 87.8(1) to authorize dredge and fill discharges under Nationwide and Regional General Permits in cases where (a) the relevant federal permit(s) or the Nationwide Permit General Conditions that apply to the activity being conducted require Pre- Construction Notification; and/or (b) compensatory mitigation requirements are triggered under the relevant federal permit(s). Where a division-issued Temporary Authorization is not required, project proponents must comply with all relevant terms and conditions of the Nationwide and/or Regional General Permit(s) that apply to the activity being conducted.

(2) Categories, Terms and Conditions, and Duration of General Authorizations The division has the following duties with respect to General Authorizations:

(a) With the exception of the Isolated State Waters General Authorization as described in subsection 87.7(2)(f), the division shall issue General Authorizations for the discharge of dredged or fill material into state waters for categories of activities that are similar in nature and similar in impact on the quality of state waters, cause only minimal adverse impacts to state waters when performed separately, and have only minimal cumulative adverse impacts on state waters. The categories of General Authorizations must correspond with the various Nationwide and Regional General Permits issued by the USACE. The division may tailor the terms of certain Nationwide Permits, Regional General Permits, or the Nationwide Permit General Conditions, or create Colorado-Specific General Authorizations, at its discretion (either on its own or at the request of a third party), to achieve greater efficiency and to address Colorado- specific needs, including but not limited to voluntary ecological restoration and enhancement projects that are not exempt under subsection 87.3(4)(n). Tailoring the terms of Nationwide Permits, Regional General Permits, or the Nationwide Permit General Conditions under the authority of this subsection 87.7(2)(a) shall not have the effect of rendering any General Authorization less protective than the corresponding 2021 federal Nationwide Permit, Regional General Permit, or the Nationwide Permit General Conditions, consistent with the baseline of protection established in subsections 87.7(2)(b) and (c), below.

(b) The division’s initial General Authorizations and associated General Conditions document, to be issued in 2026 after this regulation becomes effective, shall be based on the 2021 versions of the USACE Nationwide and Regional General Permits and the 2021 version of the Nationwide Permit General Conditions. Statewide and Regional General Authorizations and the associated General Conditions document issued by the division shall be valid for a period of five years.

(c) The division shall review its General Authorizations and the associated General Conditions document every five years consistent with the requirements in subsection 87.4(3)(b)(i) to ensure that each General Authorization causes only minimal adverse impacts to state waters when performed separately, and have only minimal cumulative adverse impacts on state waters. Based on that review, the division will decide to either modify, reissue, or revoke each General Authorization. To maintain consistency with the five-year cycle of federal permit review, beginning in 2031, the division’s modification, reissuance, or revocation of its General Authorizations and General Conditions document shall occur within one year after the USACE takes final action to modify, reissue, or revoke its Nationwide Permits, Regional General Permits, and Nationwide Permit General Conditions. If a Statewide or Regional General Authorization or the associated General Conditions document is not reissued or modified within five years of its effective date, it shall be automatically reissued unless affirmatively revoked.

(d) Beginning in 2031, the division shall update its Statewide and Regional General Authorizations and associated General Conditions document to maintain consistency with the corresponding reissued federal Nationwide and Regional General Permits and the Nationwide Permit General Conditions. The division, however, shall not incorporate any terms or conditions that the division determines result in a lesser degree of protection of state waters than its General Authorizations and the associated General Conditions document, initially issued in 2026.

(e) The division may create additional General Authorizations to reflect additional Nationwide or Regional General Permits issued by the USACE in the future.

(f) In addition to the General Authorizations described in subsections 87.7(2)(a) through (d) above, the division shall, as directed by HB24-1379 at section 25-8-205.1(5)(b)(III),C.R.S., issue an Isolated State Waters General Authorization for discharges to isolated state waters (which include isolated wetlands, isolated ponds and impoundments, and isolated ordinary high watermark reaches as defined in Section 87.2), and which shall be valid for a period of five years. The division shall review its Isolated State Waters General Authorization every five years to reassess the degree of protection provided by the terms and conditions contained therein. Based on that review, the division shall either reissue the Isolated State Waters General Authorization without modification or modify the authorization, so long as such modifications are consistent with the statutory directives. The division may not choose to revoke the Isolated State Waters General Authorization unless directed to do so through statute. The division’s reissuance or modification of the Isolated State Waters General Authorization shall be subject to the public notice and comment procedures in subsection 87.7(5).

(3) Use of Multiple General Authorizations At its discretion, the division may allow a project proponent to combine two or more different General Authorizations to cover a “single and complete project” (commonly referred to as “stacking” of General Authorizations). However, the same General Authorization cannot be used more than once for a single and complete project. Project proponents seeking to utilize two or more different General Authorizations for the same project must submit a written notice to the division identifying the General Authorization to be stacked prior to commencing the project. The notice must include the following information: The project proponent’s name and contact information; the project location; a brief description of the project; the specific General Authorizations being stacked, including a brief rationale for seeking to utilize multiple General Authorizations, and an estimate of the acreage of state waters that will be impacted by the project. The division will retain such notices for administrative purposes, but no separate approval is required. No fee shall be charged for such notices. If any of the General Authorizations being stacked independently require Preconstruction Notification or an application to be filed or an approval from the division, those requirements will continue to apply.

(a) For purposes of this subsection 87.7(3) only, “single and complete project” means the total project proposed or accomplished by one owner/developer or partnership or other association of owners/developers. For example, if construction of a residential development affects several different areas of a headwater or isolated state waters, or several different headwaters or isolated state waters, the cumulative total of all filled areas should be the basis for deciding whether or not the project will be covered by a Temporary Authorization/General Authorization. For linear projects, the “single and complete project” (i.e., single and complete crossing) will apply to each crossing of a separate state water (i.e., single waterbody) at that location; except that for linear projects crossing a single waterbody several times at separate and distant locations, each crossing is considered a single and complete project. However, individual channels in a braided stream or river, or individual arms of a large, irregularly-shaped wetland or lake, etc., are not considered separate waterbodies.

(4) Prohibition on Commencing a Project under a General Authorization An applicant for an Individual Authorization shall not proceed with any portion of the same project under a General Authorization while the division is evaluating the application for an Individual Authorization. This does not preclude an applicant from conducting investigative field work in support of project planning under one or more of the General Authorizations.

(5) Public Notice and Comment (a) The division shall notify the public each time it proposes to issue, reissue, modify, or revoke any Statewide General Authorization, Regional General Authorization, or the associated Colorado General Conditions document. If the division fails to act as contemplated in the previous sentence, automatic reissuance under subsection 87.7(2)(c) shall trigger public notice and comment. Such notification shall include the entire content of the draft General Authorization(s). The first time the division issues Statewide General Authorizations, Regional General Authorizations, and the Colorado General Conditions document (in 2026), the division shall provide a redlined version of each draft authorization that clearly indicates where the draft state authorization differs from the corresponding federal Nationwide Permit, Regional General Permit, or Nationwide Permit General Conditions. For each subsequent reissuance or modification, the division shall provide a redlined version of each General Authorization that clearly indicates where the draft differs from the prior version of the same Statewide or Regional General Authorization.

(b) The division shall provide such notice by email to all persons who have signed up for Dredge and Fill Protection Program notifications through the division’s website and shall also post the notice on its Dredge and Fill Protection Program webpage.

(c) On the same day the division provides the notice in subsection 87.7(5)(b) above, the division shall notify the public through its Water Quality Information Bulletin of any proposal to issue, reissue, modify, or revoke any Statewide or Regional General Authorization or the associated General Conditions document, which shall include a link to the division’s Dredge and Fill Protection Program website to obtain additional information.

(i) Due to time constraints, section 87.7(5)(c) is not required for the first round of General Authorizations (issued by the division throughout 2026). Instead, the division may provide public notice for the first round of General Authorizations by complying only with section 87.7(5)(b).

(d) Written comments on the division’s draft Statewide and Regional General Authorizations and the associated General Conditions document shall be submitted to the division within 30 days of the public notice described in subsections 87.7(5)(b) and (c). The division may extend the public comment period for good cause shown.

(e) Any comments intended to trigger the need for the division to conduct a 404(b)(1) analysis under subsection 87.4(3)(b) must cite to the particular subparts of the 404(b)(1) Guidelines (effective date June 22, 2020) that the commenter asserts are implicated.

(f) The division shall consider all public comments prior to issuing, reissuing, modifying, or revoking any Statewide or Regional General Authorization or the associated General Conditions document. The division shall make all submitted comments publicly available, provide a summary of major issues raised in comments, and explain its rationale for addressing those major issues.

(6) Issuance of General Authorizations The division shall notify the public of the issuance of final General Authorizations on the day of issuance by sending an email notification to all persons who have signed up for Dredge and Fill Protection Program notifications through the division’s website, and shall also post the link to the General Authorizations on its Dredge and Fill Protection Program webpage. The division shall also provide notice in the next Water Quality Information Bulletin that is published after issuance of any final General Authorization, including a link to the Authorization as posted on the division’s Dredge and Fill Protection Program webpage. The 30 days in which directly affected parties may request an adjudicatory hearing on a General Authorization shall begin on the day the Authorization is published in the Water Quality Information Bulletin.

A General Authorization issued by the division will become effective and final on its date of issuance.

(7) Requests for Adjudicatory Hearings on General Authorizations and the associated General Conditions Document (a) Final General Authorizations issued by the division and the associated General Conditions document are subject to administrative reconsideration by the commission under section 25-8-403, C.R.S. The commission’s final agency action is subject to judicial review under sections 25-8-404, C.R.S., and 24-4-106, C.R.S.

(b) Directly affected parties may request an adjudicatory hearing on the applicable General Authorization by filing such a request with the commission within 30 days after publication of the final General Authorization in the Water Quality Information Bulletin.

(c) Only issues of law or fact identified by persons during the public comment period on the draft General Authorization or the associated General Conditions document, unless not reasonably ascertainable during the public comment period, may be identified in a request for adjudicatory hearing on a General Authorization or the General Conditions document. For reasonably ascertainable issues, the request for hearing must demonstrate, by providing a specific citation to the administrative record, including document name and page number, that each issue being identified in the request for hearing was identified during the public comment period. For each issue that was not raised during the public comment period, the request for hearing must state affirmatively that such issue was not reasonably ascertainable during the public comment period and include an explanation as to why.

(d) Division determinations on Notices of Coverage under Statewide General Authorizations and Regional General Authorizations are not available for administrative reconsideration or stay before the commission, but are instead considered a “final agency determination/action” subject to judicial review under sections 25-8-404, C.R.S., and 24-4-106, C.R.S.

87.8 TEMPORARY AUTHORIZATIONS AND NOTICES OF COVERAGE UNDER

GENERAL AUTHORIZATIONS (1) Temporary Authorizations Until the division-issued General Authorizations become effective:

(a) When a proposed project includes a discharge of dredged or fill material into state waters, and the activity is of a type that would require Pre- Construction Notification and/or compensatory mitigation under the relevant USACE Nationwide Permit or Regional General Permit or under the Nationwide Permits General Conditions (2021 versions), the project proponent is required to apply for and obtain a Temporary Authorization from the division prior to commencing the dredge and fill project.

(b) The division shall provide written notice of receipt to the applicant on the date it receives the application. Applications received after 5:00 p.m. will be dated the next day. Within 15 business days of receipt of the application, the division shall notify the applicant if additional information is required to deem the application complete and, if so, what additional information is required and by what date. If additional information is required, and the applicant submits all necessary information, the division will inform the applicant whether the application is complete within 15 business days of receiving that information. The 45-day time period for the division to take action on an application for a Temporary Authorization begins on the date the division informs the applicant that it has received a complete application. Nothing herein precludes the division from requiring additional information from an applicant during the 45-day review period that the division deems necessary to process the application. If the division does not issue a Temporary Authorization or deny the application within 45 days of the completeness notification, the project may proceed without the Temporary Authorization.

(c) The division shall provide notice of receipt to the applicant on the date it receives the application. Applications received after 5:00 p.m. will be dated the next day. Within 15 business days of receipt of the application, the division shall notify the applicant if additional information is required to deem the application complete and, if so, what additional information is required and by what date. If additional information is required, and the applicant submits all necessary information, the division will inform the applicant whether the application is complete within 15 business days of receiving that information. The 45-day time period for the division to take action on an Application for Coverage under a General Authorization begins on the date the division informs the applicant that it has received a complete application. Nothing herein precludes the division from requesting additional information from an applicant during the 45-day review period that the division deems necessary to process the application.

(d) Temporary Authorizations shall include terms and conditions, including those for compensatory mitigation, as are necessary to address discharges that occur while the Temporary Authorization is in effect, and must include conditions necessary to protect the public health and the environment.

(e) The term of a Temporary Authorization shall not exceed two years. Temporary Authorizations shall not be issued after August 31, 2026. Temporary Authorizations issued on or before August 31, 2026 shall be valid for their full term, but where a dredge and fill project has not commenced, or has commenced but will not be completed by the expiration date in the Temporary Authorization, the project proponent shall apply for coverage under the relevant division-issued General Authorization at least 45 days prior to such expiration date. In such circumstances, Notices of Coverage must include such terms and conditions, including those for compensatory mitigation, as are necessary to address discharges that occurred under the Temporary Authorization.

(2) Notices of Coverage under General Authorizations After the division-issued General Authorizations become effective:

(a) When an application (referred to as “Pre-Construction Notification” in section 25-8-205.1(5)(d), C.R.S.) is required under the relevant division- issued General Authorization for the proposed project/activity or under the associated General Conditions document, project proponents are required to apply for General Authorization coverage at least 30 calendar days before commencing the dredge and fill project/activity, unless a shorter application period is allowed under the applicable General Authorization. The division may only require project proponents to apply for coverage under a General Authorization in cases where the corresponding federal Nationwide Permit, Regional General Permit, or the Nationwide Permit General Conditions require Pre-Construction Notification. However, for any General Authorization(s) the division chooses to create under Section 87.7(2)(a) (i.e., to achieve greater efficiency and to address Colorado- specific needs), the division may choose to require an Application for Coverage.

(b) The division shall provide written notice of receipt to the applicant on the date it receives the application. Applications received after 5:00 p.m. will be dated the next day. Within 15 business days of receipt of the application, the division shall notify the applicant if additional information is required to deem the application complete and, if so, what additional information is required and by what date. If additional information is required, and the applicant submits all necessary information, the division will inform the applicant whether the application is complete within 15 business days of receiving that information. The 45-day time period for the division to take action on an Application for Coverage under a General Authorization begins on the date the division informs the applicant that it has received a complete application. Nothing herein precludes the division from requiring additional information from an applicant during the 45-day review period that the division deems necessary to process the application. Notwithstanding the requirement in subsection (a) above for project proponents to submit an application at least 30 days before commencing a dredge and fill project/activity, the project proponent shall not commence the project/activity until the division issues a Notice of Coverage (referred to as a “Notice of Authorization” in section 25-8- 205.1(5)(d)(I), C.R.S.). Consistent with section 25-8-205.1(5)(d), C.R.S., within 45 days of receipt of a complete Application for Coverage under a General Authorization, the division may take any of the following actions on such application:

(i) Issue a Notice of Coverage to the applicant;

(ii) Issue a written notice to the applicant that the activity does not meet the criteria for the General Authorization applied for and is instead subject to coverage under a different General Authorization; or (iii) Issue a written Notice of Denial to the applicant based on the division’s determination that, considering the factors outlined in subsection 87.6(1), the activity is not eligible for coverage under a General Authorization and instead must be covered under an Individual Authorization. In such case, the division must include the basis for its determination with specificity.

If the division does not issue a Notice of Coverage or issue either of the written notices described in subsections 87.8(2)(b)(ii)-(iii) above within 45 days after notifying the project proponent of receipt of a complete application, the project may proceed without the Notice of Coverage.

(c) The division’s Notices of Coverage may include conditions, on a case-by- case basis, to clarify the terms and conditions of the underlying General Authorization or to ensure that the project will only have minimal individual and cumulative adverse impacts on state waters.

(d) Any project in receipt of a Notice of Coverage that has commenced construction or is under contract to commence construction in reliance upon a General Authorization at the time the relevant General Authorization expires will remain authorized under the version of the General Authorization in effect at the time of coverage, provided that project construction is completed within two years, or as soon as practicable, after a natural disaster that impedes completion within that time, after that General Authorization’s expiration date. In cases where project construction will not be completed within that two-year timeframe, the project proponent shall, at least 45 days prior to the end of the two years, apply for a Notice of Coverage under the most recent version of the relevant General Authorization and shall thereafter be subject to any new or modified terms and conditions therein.

(3) Requests for Modification A project proponent may request modification to a Temporary Authorization or Notice of Coverage under a General Authorization to account for changes to the project as described in the initial application. The project proponent must submit any modification request in writing with all applicable information necessary for the division to determine whether to grant or deny the request. The division shall either approve or deny such requests within 30 days of receiving the request.

(4) Requests for Certification of Project Completion The project proponent may submit a written request for Certification of Project Completion prior to the expiration of a Temporary Authorization or a Notice of Coverage. The division shall grant such requests where the project proponent has demonstrated that the discharge of dredged or fill material has been completed, the temporary impacts to the site are restored to preconstruction condition, and all conditions in the Nationwide/Regional General Permit and Temporary Authorization or General Authorization and Notice of Coverage that are related to construction and compensatory mitigation have been fully addressed/satisfied. Once the division has issued a Certification of Project Completion, no further annual fees will be assessed.

(5) Requests for Judicial Review of Temporary Authorizations and Notices of Coverage Division determinations on Temporary Authorizations under a Nationwide Permit or Regional General Permit and Notices of Coverage under a division-issued General Authorization (including denial of an Application for Coverage under a General Authorization under subsection 87.8(2)(b)(iv)) are considered “final agency determinations/actions” by the division, subject to judicial review under sections 25-8-404, C.R.S., and 24-4-106, C.R.S.

87.9 REQUIREMENTS APPLICABLE TO ALL PROJECTS SUBJECT TO DREDGE

AND FILL AUTHORIZATIONS (1) Requirements for Dredge and Fill Projects The following requirements apply to all projects subject to Individual Authorizations, Temporary Authorizations, and General Authorizations issued by the division:

(a) Upon the presentation of credentials as required by law, the project proponent shall allow the division or an authorized representative of the division to conduct inspections as follows:

(i) To enter, at reasonable times, upon the premises where a regulated activity is located or conducted, or where any records must be kept under the terms and conditions of the relevant dredge and fill authorization(s);

(ii) To have access to and to copy, at reasonable times, any records required to be kept under the terms and conditions of the relevant dredge and fill authorization(s);

(iii) To have access to and to inspect, at reasonable times, any facilities, equipment (including monitoring and control equipment), practices, operations, or monitoring method regulated by or required in the relevant dredge and fill authorization(s);

(iv) To enter, at reasonable times, upon the premises where a regulated activity is located or conducted to inspect or investigate any actual, suspected, or potential source of water pollution, or to ascertain compliance or noncompliance with the Colorado Water Quality Control Act, any other applicable state or federal statute or regulation, or any order issued by the division;

(v) To enter, at reasonable times, upon the premises where a regulated activity is located or conducted, to sample or monitor any discharge of pollutants for the purposes of assuring compliance with the terms of the relevant dredge and fill authorization(s); and (vi) To enter, at reasonable times, any compensatory mitigation site to ascertain how the mitigation project is operating for the purposes of assuring compliance with the terms of the relevant dredge and fill authorization(s).

(b) In the event of any changes in control or ownership of facilities where the construction activity or operation of the project is taking place, the successor shall be notified in writing by their predecessor of the existence of the requirements of subsection 87.9(1), the existence of a dredge and fill authorization for the project, including the relevant authorization conditions. A copy of such notification shall be provided to the division within 30 days after the change in control or ownership.

(c) Any bypass of control measures necessary to maintain compliance with the requirements and/or conditions in authorizations is prohibited, except where such circumstances are unavoidable to prevent loss of life or severe property damage. The division shall be notified in writing within 24 hours of any bypass.

(d) The project proponent shall notify the division within 24 hours of discovering any spill or other discharge to state waters not authorized by the relevant authorization(s).

(e) Construction operations within state waters shall be restricted to only those project areas specified in the dredge and fill authorization.

(f) Work should be carried out diligently and completed as soon as practicable. To the maximum extent practicable, discharges of dredged or fill material shall be restricted to those periods when impacts to designated uses are minimal.

(g) Control measures must be selected, designed, installed, and adequately sized in accordance with good engineering, hydrologic, and pollution control practices for the intended application. Control measures must be implemented properly in order to prevent a bypass of such measures. If applicable, the project shall incorporate provisions for operation, maintenance, and replacement of Control measures to assure compliance with the requirements identified in subsection 87.9(1), and any other conditions placed in the dredge and fill authorization. All such provisions shall be identified and compiled in an operation and maintenance plan, which the project proponent will retain and make available for inspection within a reasonable timeframe upon request by any authorized representative of the division.

(h) The use of chemicals during project construction and operation shall be in accordance with the manufacturer’s specifications. There shall be no excess application and introduction of chemicals into state waters.

(i) All solids, sludges, dredged or stockpiled materials, and all fuels, lubricants, and other toxic materials shall be controlled in a manner so as to prevent such materials from entering state waters.

(j) Discharges of dredged or fill material to state waters in excess of that necessary to complete the project are prohibited.

(k) Discharges to state waters not identified in the authorization are prohibited.

(l) To prevent the spread of invasive species, all equipment must be decontaminated before arrival at the site of an authorized activity and, where reasonably practicable, before it is removed from the site. Decontamination will be performed as required in any authorization. “Invasive species,” as used in this subsection 87.9(1)(l), includes aquatic nuisance species as defined by Colorado Parks and Wildlife Chapter P-8, 2 CCR 405-8(800)(A)(1) (effective date May 1, 2022) and “noxious weeds” as defined by the Colorado Department of Agriculture, 8 CCR 1206-2, (3.1), (4.1), (5.1) (effective date May 15, 2025) (Lists A, B, C).

87.10 COMPENSATORY MITIGATION

(1) Purpose and General Considerations (a) Purpose The purpose of this subpart is to establish standards and criteria for the use of all types of compensatory mitigation, including on-site and off-site, proponent-responsible mitigation, mitigation banks, and in-lieu fee mitigation to offset unavoidable impacts to the functions of state waters authorized through the issuance of authorizations by the division. The standards and criteria shall, to the maximum extent practicable, maximize available credits and opportunities for mitigation, provide for regional variations in aquatic resource conditions, functions, and values, and apply equivalent standards and criteria to each type of compensatory mitigation.

(b) Sequencing Nothing in subsection 87.10(1)(b) affects the requirement that all division authorizations subject to the Colorado Dredge and Fill Authorization Program comply with applicable provisions of this part. Pursuant to these requirements, the division will issue an Individual Authorization only upon a determination that the proposed discharge complies with applicable provisions of the 404(b)(1) Guidelines (effective date June 22, 2020), including those that require the applicant to take all appropriate and practicable steps to avoid and minimize adverse impacts to state waters. Practicable means available and capable of being done after taking into consideration cost, existing technology, and logistics in light of the project’s fundamental need(s).

Compensatory mitigation for unavoidable impacts may be required to ensure that an activity requiring an authorization complies with the 404(b)(1) Guidelines (effective date June 22, 2020). The division may determine that an Individual Authorization for the proposed activity cannot be issued because of the lack of appropriate and practicable compensatory mitigation options.

(c) Accounting for Regional Variations Where appropriate, the division shall account for regional characteristics of aquatic resource types, functions, and services when determining performance standards and monitoring requirements for compensatory mitigation projects.

(2) Definitions For additional definitions of terms used in Section 87.10, refer to Section 87.2 (a) “Adaptive Management” means the development of a management strategy that anticipates likely challenges associated with compensatory mitigation projects and provides for the implementation of actions to address those challenges, as well as unforeseen changes to those projects. It requires consideration of the risk, uncertainty, and dynamic nature of compensatory mitigation projects and guides modification of those projects to optimize performance. It includes the selection of appropriate measures that will ensure that the aquatic resource functions are provided and involves analysis of monitoring results to identify potential problems of a compensatory mitigation project, and the identification and implementation of measures to rectify those problems.

(b) “Advance Credits” means any credits of an approved mitigation bank or in- lieu fee program that are available for sale prior to being fulfilled in accordance with an approved mitigation project plan. Advance credit sales require an approved mitigation bank or in-lieu fee program instrument that meets all applicable requirements, including a specific allocation of advance credits, by service area where applicable. In the case of a mitigation bank, the instrument must contain a schedule for credit release associated with specific milestones. In-lieu fee instruments must contain a schedule for fulfillment of advance credit sales.

(c) “Advance Proponent-Responsible Mitigation (APRM)” means an aquatic resource restoration, establishment, enhancement, and/or preservation activity that is a minimum of three acres, undertaken by the proponent (or an authorized agent or contractor) to provide compensatory mitigation in advance of authorized impacts to state waters. Advance proponent- responsible mitigation includes environmentally preferable aspects of a mitigation bank, including minimization of temporal losses and risk of mitigation failure, but the proponent retains full responsibility for the mitigation and its compliance with all approved performance standards and operating provisions. The key difference between APRM and a single- user mitigation bank is that APRM is described and reviewed in a mitigation plan as part of an authorization application, rather than following the prospectus to instrument path of a mitigation bank.

(d) “Agent” means an attorney, consultant, or other person or organization who may be appointed by the project proponent to assist such project proponent in applying for an authorization, carrying out mitigation, or otherwise interacting with the division in reference to the state dredge and fill program.

(e) “Approved Credits” means any credits of an approved mitigation bank or in-lieu fee program that are available for sale subsequent to fulfilling the requirements of an approved mitigation project plan, including the attainment of performance.

(f) “Applicant” means a proponent of an action regulated under the State of Colorado Dredge and Fill Program who has applied for a division authorization (general or individual).

(g) “Aquatic Resource” has the same meaning as defined in section 87.2.

(h) “Authorized” means the individual, organization, agency, or entity that has received a state authorization to carry out a project/activity regulated under the State of Colorado Dredge and Fill Program.

(i) “Buffer” means an upland, wetland, and/or riparian area that protects and/or improves aquatic resource functions associated with wetlands, rivers, streams, and lakes, including protecting such state waters from disturbances associated with adjacent land uses.

(j) “Compensatory Mitigation” has the same meaning as defined in section 87.2.

(k) “Compensatory Mitigation Project” means compensatory mitigation implemented by the proponent as a requirement of a division authorization (i.e., proponent-responsible mitigation), or by a mitigation bank or an in- lieu fee program.

(l) “Condition” means the relative ability of an aquatic resource to support and maintain a community of organisms having a species composition, diversity, and functional organization comparable to reference aquatic resources in the region.

(m) “Credit” means a unit of measure (e.g., a functional or areal measure or other suitable metric) representing the accrual or attainment of aquatic functions at a compensatory mitigation site. The measure of aquatic functions is based on the resources restored, established, enhanced, or preserved.

(n) “Days” means calendar days.

(o) “Debit” means a unit of measure (e.g., a functional or areal measure or other suitable metric) representing the loss of aquatic functions at an impact or project site. The measure of aquatic functions is based on the resources impacted by the authorized activity.

(p) “Enhancement” means the manipulation of the physical, chemical, or biological characteristics of an aquatic resource to heighten, intensify, or improve a specific aquatic resource function(s). Enhancement results in the gain of selected aquatic resource function(s), but may also lead to a decline in other aquatic resource function(s). Enhancement does not result in a gain in the aquatic resource area.

(q) “Ephemeral stream” has the same meaning as defined in section 87.2.

(r) “Establishment” (creation) means the manipulation of the physical, chemical, or biological characteristics present to develop an aquatic resource that did not previously exist at an upland site. Establishment results in a gain in the aquatic resource area and its functions.

(s) “Fulfillment of Advance Credit Sales of an In-Lieu Fee Program” means application of credits released in accordance with a credit release schedule in an approved mitigation project plan to satisfy the mitigation requirements represented by the advance credits. Only after any advance credit sales within a service area have been fulfilled through the application of released credits from an in-lieu fee project (in accordance with the credit release schedule for an approved mitigation project plan), may additional released credits from that project be sold or transferred to proponents. When advance credits are fulfilled, an equal number of new advance credits is restored to the program sponsor for sale or transfer to applicants.

(t) “Functional Assessment Method” means a procedure by which the status and integrity of the physical, chemical, and biological processes of the aquatic resource is enumerated and described.

(u) “Functional Capacity” means the degree to which an area of aquatic resource performs a specific function.

(v) “Functions” means the physical, chemical, and biological processes that occur in ecosystems.

(w) “General Authorization” (statewide or regional) has the same meaning as defined in section 87.2.

(x) “Impact” means adverse effect.

(y) “Individual Authorization” has the same meaning as defined in section 87.2.

(z) “In-Kind” means a resource of a similar structural and functional type to the impacted resource.

(aa) “In-Lieu Fee Program” means a program involving the restoration, establishment, enhancement, and/or preservation of aquatic resources through funds paid to a governmental or non-profit natural resources management entity to satisfy compensatory mitigation requirements for division authorizations. Similar to a mitigation bank, an in-lieu fee program sells compensatory mitigation credits to proponents whose obligation to provide compensatory mitigation is then transferred to the in-lieu program sponsor. However, the rules governing the operation and use of in-lieu fee programs are somewhat different from the rules governing the operation and use of mitigation banks. The operation and use of an in-lieu fee program are governed by an in-lieu fee program instrument.

(bb) “In-Lieu Fee Program Instrument” means the legal document for the establishment, operation, and use of an in-lieu fee program.

(cc) “Instrument” means a mitigation banking instrument or an in-lieu fee program instrument.

(dd) “Interagency Review Team (IRT)” means an interagency group of federal, tribal, state, and/or local regulatory and resource agency representatives that reviews documentation for, and advises the division on, the establishment and management of a mitigation bank or an in-lieu fee program.

(ee) “Mitigation Bank” means a site, or suite of sites, where resources (e.g., wetlands, streams, riparian areas) are restored, established, enhanced, and/or preserved for the purpose of providing compensatory mitigation for impacts authorized by division authorizations. The operation and use of a mitigation bank are governed by a mitigation banking instrument. A commercial mitigation bank sells compensatory mitigation credits to proponents whose obligation to provide compensatory mitigation is then transferred to the mitigation bank sponsor. Alternatively, a future proponent may be the sponsor of a single-user mitigation bank, in which credits are debited to offset the proponent's own impacts. A single-user bank is generally appropriate when a sponsor’s future impacts are predicted to be substantial but involve multiple projects that are yet to be defined. A single-user bank differs from a commercial mitigation bank in that there is no transfer of responsibility for the mitigation from the proponent to a third party; the bank sponsor, being the proponent, retains the obligation to provide and maintain mitigation in accordance with the instrument.

(ff) “Mitigation Banking Instrument” means the legal document for the establishment, operation, and use of a mitigation bank.

(gg) “Off-Site” means an area that is neither located on the same parcel of land as the impact site, nor on a parcel of land contiguous to the parcel containing the impact site.

(hh) “On-Site” means an area located on the same parcel of land as the impact site, or on a parcel of land contiguous to the impact site.

(ii) “Out-of-Kind” means a resource of a different structural and functional type from the impacted resource.

(jj) “Performance Standards” are observable or measurable physical (including hydrological), chemical, and/or biological attributes that are used to determine if a compensatory mitigation project meets its objectives.

(kk) “Proponent-Responsible Mitigation” means an aquatic resource restoration, establishment, enhancement, and/or preservation activity undertaken by the proponent (or an authorized agent or contractor) to provide compensatory mitigation for which the proponent retains full responsibility.

(ll) “Preservation” means the removal of a threat to, or preventing the decline of, aquatic resources by an action in or near those aquatic resources. This term includes activities commonly associated with the permanent protection and maintenance of aquatic resources through the implementation of appropriate legal and physical mechanisms, such as a conservation easement, fee title transfer to an agency or organization that will permanently protect the aquatic resources, or federal, state, or local land use designation that provides permanent protection. Preservation does not result in a gain of aquatic resource area or functions.

(mm) “Project Proponent” (or “proponent”) has the same meaning as defined in section 87.2.

(nn) “Re-Establishment” means the manipulation of the physical, chemical, or biological characteristics of a site with the goal of returning natural/historic functions to a former aquatic resource. Re-establishment revitalizes a former aquatic resource and results in a gain in aquatic resource area and functions.

(oo) “Reference Aquatic Resources” are a set of aquatic resources that represent the full range of variability exhibited by a regional class of aquatic resources as a result of natural processes and anthropogenic disturbances.

(pp) “Rehabilitation” means the manipulation of the physical, chemical, or biological characteristics of a site with the goal of repairing natural/historic functions to a degraded aquatic resource. Rehabilitation results in a gain in aquatic resource function, but does not result in a gain in aquatic resource area.

(qq) “Release of Credits” means a determination by the division, in consultation with the Interagency Review Team, that credits associated with an approved mitigation plan are available for sale or transfer, or in the case of an in-lieu fee program, for fulfillment of advance credit sales. A proportion of projected credits for a specific mitigation bank or in-lieu fee project may be released upon approval of the mitigation plan, with additional credits released as milestones specified in the credit release schedule are achieved.

(rr) “Restoration” means the manipulation of the physical, chemical, or biological characteristics of a site with the goal of returning natural/historic functions to a former or degraded aquatic resource. For the purpose of tracking net gains in aquatic resource areas, restoration is divided into two categories: re-establishment and rehabilitation.

(ss) “Riparian Areas” are mesic, non-wetland habitats influenced by streams, rivers, or lakes that lie outside of the ordinary high watermark. Riparian areas provide a variety of ecological functions and services and help improve or maintain local water quality. For the purposes of this regulation, riparian areas are distinguished from wetlands, which may lie in close proximity to them.

(tt) “Service Area” means the geographic area within which impacts can be mitigated at a specific mitigation bank or an in-lieu fee program, as designated in its instrument.

(uu) “Services” mean the benefits that human populations receive from functions that occur in ecosystems.

(vv) “Sponsor” means any public or private entity responsible for establishing, and in most circumstances, operating a mitigation bank or in-lieu fee program.

(ww) “Temporal Loss” is the time lag between the loss of aquatic resource functions caused by the authorized impacts and the replacement of aquatic resource functions at the compensatory mitigation site. Higher compensation ratios may be required to compensate for temporal loss. When the compensatory mitigation project is initiated prior to, or concurrent with, the authorized impacts, the division may determine that compensation for temporal loss is not necessary, unless the resource has a long development time.

(xx) “Upland” has the same meaning as defined in section 87.2.

(yy) “Watershed” means a land area that drains to a common waterway, such as a stream, lake, estuary, wetland, or ultimately the ocean.

(zz) “Watershed Approach” means an analytical process for making compensatory mitigation decisions that support the sustainability or improvement of aquatic resources in a watershed. It involves consideration of watershed needs and how locations and types of compensatory mitigation projects address those needs. A landscape perspective is used to identify the types and locations of compensatory mitigation projects that will benefit the watershed and offset losses of aquatic resource functions and services caused by activities authorized by division authorizations. The watershed approach may involve consideration of landscape scale, historic and potential aquatic resource conditions, past and projected aquatic resource impacts in the watershed, and terrestrial connections between aquatic resources when determining compensatory mitigation requirements for division authorizations.

(aaa) “Watershed Plan” means a plan developed by federal, tribal, state, and/or local government agencies or appropriate non-governmental organizations, in consultation with relevant stakeholders, for the specific goal of aquatic resource restoration, establishment, enhancement, and preservation. A watershed plan addresses aquatic resource conditions in the watershed, multiple stakeholder interests, and land uses. Watershed plans may also identify priority sites for aquatic resource restoration and protection. Examples of watershed plans include special area management plans, advance identification programs, and wetland management plans.

(3) General Compensatory Mitigation Requirements (a) General Considerations (i) The fundamental objective of compensatory mitigation is to offset all of the functional losses resulting from unavoidable impacts to state waters authorized by division authorizations. The division shall establish compensatory mitigation requirements in authorizations on a case-by-case basis using either a functional assessment method or by applying acre-based ratios using the watershed approach as described by the United States Army Corps of Engineers (USACE). The division must determine the compensatory mitigation required in a division authorization based on what is practicable and capable of compensating for the aquatic resource functions that will be lost as a result of the authorized activity. When evaluating compensatory mitigation options, the division will consider what would be environmentally preferable. In making this determination, the division must assess the likelihood for ecological success and sustainability, the timing of the impacts compared to the timing of compensatory mitigation completion, the location of the compensation site relative to the impact site and their significance within the watershed, and what is practicable and capable for the aquatic resource functions that will be lost as a result of the authorized activity.. In many cases, the environmentally preferable compensatory mitigation may be provided through mitigation banks or in-lieu fee programs because they usually involve consolidating compensatory mitigation projects where ecologically appropriate, consolidating resources, providing financial planning and scientific expertise (which often is not practical for proponent-responsible compensatory mitigation projects), reducing temporal losses of functions, and reducing uncertainty over project success. Compensatory mitigation requirements must be commensurate with the amount and type of impact associated with a particular division authorization. Applicants are responsible for proposing an appropriate compensatory mitigation option to offset unavoidable impacts.

(ii) Compensatory mitigation may be performed using the methods of restoration, enhancement, establishment, and, in certain circumstances, preservation. Restoration should generally be the first option considered because the likelihood of success is greater and the impacts to potentially ecologically important uplands are reduced compared to establishment, and the potential gains in terms of aquatic resource functions are greater, compared to enhancement and preservation.

(iii) Compensatory mitigation projects may be sited on public or private lands. Credits for compensatory mitigation projects on public land must be based solely on aquatic resource functions provided by the compensatory mitigation project, over and above those provided by public programs already planned or in place. All compensatory mitigation projects must comply with the standards in this part if they are to be used to provide compensatory mitigation for activities authorized by division authorizations, regardless of whether they are sited on public or private lands and whether the sponsor is a governmental or private entity.

(b) Functional Assessment Methods (i) When required by conditions of an authorization, a functional assessment method approved, developed, or modified by the division, shall be used to determine compensatory mitigation requirements that offset all lost functions of state waters.

(ii) The division may approve the use of any existing functional assessment method that has been approved by the USACE for use in Colorado. The division may also develop a new functional assessment method or modify an existing functional assessment method for use in Colorado’s program.

(iii) The division may, consistent with subsection 87.10(3)(b)(v) below, update, revise, or modify any functional assessment method, as it deems necessary.

(iv) The division shall provide guidance and routine training concerning the use of any new functional assessment method it develops or any existing functional assessment method it modifies.

(v) As soon as practicable, any functional assessment methods approved, developed, or modified by the division must satisfy the following minimum criteria:

(A) The method uses a general framework that applies to all state waters and incorporates specific guidance for different categories of streams and wetlands;

(B) The method quantifies the status of state waters based on functional parameters that reflect the chemical, physical, and biological integrity of the waterbody or wetland;

(C) The method accurately detects changes in the functional status of a state water, including the anticipated losses likely to be caused by the authorized activity or the improvements in site conditions resulting from compensatory mitigation projects;

(D) The method produces quantitative scores for each functional parameter analyzed; and (E) The method’s results may serve as input to a separately developed mitigation accounting protocol which calculates credits and debits and follows accepted USACE protocol.

(c) General Hierarchy of Preference for Compensatory Mitigation The division recognizes the following general hierarchy of preference for compensatory mitigation type and location, listed in order of preference at 87.10(3)(c)(i)-(vi), below. The specific circumstances of a proposed impact may alter the preference hierarchy for mitigation type or location. These circumstances may include, for example, the location of available mitigation banks or in-lieu fee sites, the types of aquatic resources included in available mitigation banks or in-lieu fee sites, the aquatic resources available for compensatory mitigation on site, watershed needs, and the proven ability of the applicant to carry out successful, environmentally-beneficial proponent-responsible mitigation projects.

(i) Approved credits from a mitigation bank or in-lieu fee program.

(ii) Advance mitigation bank or in-lieu fee credits.

(iii) Advance proponent-responsible credits.

(iv) Proponent-responsible mitigation using the watershed approach.

(v) Proponent-responsible mitigation through on-site and in-kind mitigation.

(vi) Proponent-responsible mitigation through off-site and/or out-of-kind mitigation.

In general, the required compensatory mitigation should be located within the same watershed and ecoregion as the impact site, and should be located where it is most likely to successfully replace lost functions and services, taking into account such watershed scale features as aquatic habitat diversity, habitat connectivity, relationships to hydrologic sources (including the availability of water rights), trends in land use, ecological benefits, and compatibility with adjacent land uses. Compensatory mitigation projects should not be located where they will increase risks to aviation by attracting wildlife to areas where aircraft-wildlife strikes may occur (e.g., near airports) and should take into consideration the potential for increasing interactions between wildlife and motorized vehicles. Subsections 87.10(d)(i) through (vi) below describe the mitigation options that are available to a project proponent.

(d) Compensatory Mitigation Type and Location (i) Mitigation Bank Credits (A) When authorized impacts are located within the service area of an approved mitigation bank and the bank has the appropriate number and resource type of credits available, the proponent's compensatory mitigation requirements may be met by securing those credits from the sponsor.

(B) Since an approved instrument (including an approved mitigation plan and appropriate real estate and financial assurances) for a mitigation bank is required to be in place before its credits can begin to be used to compensate for authorized impacts, using a mitigation bank can help reduce risk, uncertainty, and loss of resource functions and services. Mitigation bank credits are not released for debiting until specific milestones associated with the mitigation bank site’s protection and development are achieved. The use of mitigation bank credits can therefore also help reduce the risk that mitigation will not be fully successful. Mitigation banks typically involve larger, more ecologically valuable parcels and more rigorous scientific and technical analysis, planning, and implementation than proponent-responsible mitigation. Also, the development of a mitigation bank requires site identification in advance, project-specific planning, and significant investment of financial resources, which is often not practicable for in-lieu fee programs.

(C) Approved credits from a mitigation bank or in-lieu fee program should usually be given equal and highest preference by the division. However, the same considerations enumerated in this subsection may also be used to override this preference, where appropriate, as, for example, when rigorous scientific and technical analysis demonstrates that a proponent-responsible project will restore an outstanding resource, or that the proponent- responsible project will provide local ecological needs in the watershed, improve ecological values, and the proponent has demonstrated successful mitigation projects in the past.

(ii) In-Lieu Fee Program Credits (A) Where authorized impacts are located within the service area of an approved in-lieu fee program, and the sponsor has the appropriate number and resource type of credits available, the proponent’s compensatory mitigation requirements may be met by securing those credits from the sponsor. When they are available, resource-appropriate, approved in-lieu fee credits should be given preference equal to approved mitigation bank credits. That preference will usually be higher than for other forms of mitigation.

(B) In most cases, however, project proponents will purchase advance in-lieu fee credits. Advance in-lieu fee credits are often preferable to proponent-responsible mitigation because in-lieu fee projects typically involve larger, more ecologically valuable parcels, and more rigorous scientific and technical analysis, planning, and implementation than proponent- responsible mitigation. They also devote significant resources to identifying and addressing high-priority resource needs on a watershed scale, as reflected in their compensation planning framework. For these reasons, the division should give preference to in-lieu fee program credits over proponent-responsible mitigation, where these considerations are applicable.

(C) However, as with the preference for mitigation bank credits, where appropriate, the division may also use the same considerations enumerated in this subsection to override this preference. Additionally, when it is deciding between in-lieu fee mitigation and any form of proponent-responsible mitigation, the division should consider whether proponent- responsible mitigation is likely to successfully meet performance standards before advance credits secured from an in-lieu fee program are fulfilled.

(iii) Advance Proponent-Responsible Mitigation under a Watershed Approach (A) A proponent of APRM must submit an APRM plan containing the required components of a mitigation bank prospectus (see subsection 87.10(8)(ii)(A) through (G)) to the division, and the division must both verify the site’s baseline conditions and approve the APRM plan before the proponent may start construction of the APRM. Proponents seeking to use APRM must include a description of their proposed APRM in the mitigation plan submitted with their project application for division authorization.

(B) When future impacts are predictable and a minimum of three acres, the prospective project proponent may initiate compensatory mitigation in advance of an authorization application or authorized impact. The project proponent must still adhere to the requirements of avoidance and minimization of impacts to state waters, irrespective of the amount of advance proponent-responsible mitigation

1. (APRM) the proponent may propose. The proponent must initially identify the APRM’s resource type and location using the principles of a watershed approach as outlined in subsection 87.10(3)(e). The division will then review the proposed APRM and make a final determination of sufficiency under 87.10(3)(e). Mitigation may be in-kind or out-of-kind and may occur on-site or off-site based on the outcomes of the watershed approach.

(C) Advance proponent-responsible mitigation shares similarities with a mitigation bank, which may make it environmentally preferable to the mechanisms described in subsections 87.10(3)(d)(iv) through (vi). Because, under an APRM approach, mitigation is implemented and preferably fully functioning prior to an authorized impact, using APRM can help reduce risk, uncertainty, and temporal loss of aquatic resource functions and services. The amount of APRM is accounted for using credits following the procedures of a mitigation bank (as outlined in subsection 87.10(8).

(D) Appropriate real estate and financial assurances for the APRM are required to be in place before its credits can be used to compensate for authorized impacts, thereby reducing risk and uncertainty. Advance proponent- responsible mitigation credits are not released for debiting until specific milestones associated with the mitigation site’s protection and development are achieved. Using APRM can therefore help reduce the risk that mitigation will not be fully successful. Prospective applicants undertaking APRM typically envision larger or multiple projects, and mitigation plans may involve larger, more ecologically valuable parcels, more rigorous scientific and technical analysis, planning, and implementation, increasing the effectiveness of the compensatory mitigation. Development of APRM requires advance site identification, project-specific planning, and significant investment of financial resources that are often not practicable for in-lieu fee programs or other mechanisms of proponent-responsible mitigation.

(E) Advance proponent-responsible mitigation receives agency consultation and public review process commensurate with Section 87.5, 87.6(5), and 87.7(5). For APRM undertaken prior to an authorized impact, but which the division determines does not fully meet performance standards included in the approved APRM plan by the time of the authorized impact, the division will require compensation ratio adjustments commensurate with the existing level of mitigation development and performance. Such APRM may be included in an authorization application’s mitigation plan, but it will be considered as a different form of proponent- responsible mitigation with regard to compensation ratio setting and must be brought into compliance with performance standards concurrently with the authorized impact or as soon as practicable thereafter.

(F) Completion of successful mitigation does not guarantee permit authorization or approval of a mitigation plan. The prospective proponent undertaking APRM retains all risk associated with developing mitigation in advance of an application for authorization. The division bears no liability for any aspect of APRM that is unusable or unacceptable for any reason, and the division has the authority to require an alternate mitigation approach, for example, the purchase or debiting of mitigation bank credits, if the APRM is unsuccessful or is undersized because the project impacts were underestimated. It is recommended that the prospective applicant notify the division early in the APRM planning process and expect agency interaction during planning and implementation to help ensure the suitability of proposed mitigation. Advance proponent-responsible mitigation may only be used to meet compensatory mitigation requirements of a single proponent that received prior division approval for construction of the APRM site, unless there is a transfer of property title. In such a case, mitigation credit and responsibility shall be transferred with the title.

(iv) Proponent-Responsible Mitigation under a Watershed Approach Proponent-responsible mitigation is an option where authorized impacts are not in the service area of an approved mitigation bank or in-lieu fee program that has the appropriate number and resource type of credits available; and if mitigation would be onsite or near the authorized impact and that mitigation would improve important aquatic resources and address watershed needs. Where proponent-responsible mitigation is practicable and likely to be successful and sustainable, the resource type and location for the required proponent-responsible mitigation should be determined using the principles of a watershed approach as outlined in subsection 87.10(3)(e). Mitigation may be in-kind or out-of-kind and may occur on-site or off-site based on the outcomes of the watershed approach.

(v) Proponent-Responsible Mitigation through On-Site and In-Kind Mitigation In cases where a watershed approach is not practicable, the division should consider opportunities to offset anticipated aquatic resource impacts by requiring on-site and in-kind compensatory mitigation. The division must also consider the practicability of on- site compensatory mitigation and its compatibility with the proposed project.

(vi) Proponent-Responsible Mitigation through Off-Site and/or Out-of- Kind Mitigation If, after considering opportunities for on-site, in-kind compensatory mitigation as provided in subsection 87.10(3)(d)(v), the division determines that these compensatory mitigation opportunities are not practicable, are unlikely to compensate for the authorized impacts, or will be incompatible with the proposed project, and if an alternative, practicable mitigation opportunity is identified that is off- site, out-of-kind, or both off-site and out-of-kind that has a greater likelihood of offsetting the authorized impacts or is environmentally preferable to on-site or in-kind mitigation, the division should require that this alternative compensatory mitigation be provided.

(e) Watershed Approach to Compensatory Mitigation The division must use a watershed approach to establish compensatory mitigation requirements in division authorizations to the extent appropriate and practicable. Where a watershed plan is available, the division will determine whether the plan is appropriate for use in the watershed approach for compensatory mitigation. In cases where the division determines that an appropriate watershed plan is available, the watershed approach may be based on that plan. Where no such plan is available, the watershed approach should be based on sound, science-based information provided by the project sponsor or available from other sources. The ultimate goal of a watershed approach is to maintain and improve the quality and quantity of aquatic resources within watersheds through strategic selection of compensatory mitigation sites.

(i) Considerations (A) A watershed approach to compensatory mitigation considers the importance of landscape position and resource type of compensatory mitigation projects for the sustainability of aquatic resource functions within the watershed. Such an approach considers how the types and locations of compensatory mitigation projects will provide the desired aquatic resource functions and will continue to function over time in a changing landscape. It also considers the habitat requirements of important species; habitat loss or conversion trends; sources of watershed impairment; and current development trends; as well as the requirements of other regulatory and non-regulatory programs that affect the watershed, such as stormwater management or habitat conservation programs. It includes the protection and maintenance of terrestrial resources, such as non-wetland riparian areas and uplands, when those resources contribute to or improve the overall ecological functioning of aquatic resources in the watershed. Compensatory mitigation requirements determined through the watershed approach should not focus exclusively on specific functions (e.g., water quality or habitat for certain species), but should provide, where practicable, the suite of functions typically provided by the affected aquatic resource.

(B) Locational factors (e.g., hydrology, surrounding land use) are important to the success of compensatory mitigation for impacted habitat functions and may lead to siting of such mitigation away from the project area. However, consideration should also be given to functions and services (e.g., water quality, flood control, shoreline protection) that will likely need to be addressed at or near the areas impacted by the authorized impacts.

(C) A watershed approach may include on-site compensatory mitigation, off-site compensatory mitigation (including mitigation banks or in-lieu fee programs), or a combination of on-site and off-site compensatory mitigation.

(D) A watershed approach to compensatory mitigation should include, to the extent practicable, inventories of historic and existing aquatic resources, including identification of degraded aquatic resources and identification of immediate and long-term aquatic resource needs within watersheds that can be met through proponent-responsible mitigation projects, mitigation banks, or in-lieu fee programs. Planning efforts should identify and prioritize aquatic resource restoration, establishment, and enhancement activities, and preservation of existing aquatic resources that are important for maintaining or improving ecological functions of the watershed. The identification and prioritization of resource needs should be as specific as possible to improve the usefulness of the watershed approach in determining compensatory mitigation requirements.

(ii) Information Needs (A) In the absence of a watershed plan determined by the division under subsection 87.10(3)(e) to be appropriate for use in the watershed approach, the division will use a watershed approach based on analysis of information regarding watershed conditions and needs, including potential sites for aquatic resource restoration activities and priorities for aquatic resource restoration and preservation. Such information includes: current trends in habitat loss or conversion; cumulative impacts of past development activities, current development trends, the presence and needs of sensitive species; site conditions that favor or hinder the success of compensatory mitigation projects; and chronic environmental problems such as flooding or poor water quality.

(B) This information may be available from sources such as wetland maps, soil surveys, U.S. Geological Survey topographic and hydrologic maps, aerial photographs;

1. information on rare, endangered, and threatened species and critical habitat; local ecological reports or studies; and other information sources that could be used to identify locations for suitable compensatory mitigation projects in the watershed.

(C) The level of information and analysis needed to support a watershed approach must be commensurate with the scope and scale of the proposed impacts requiring a division authorization, as well as the functions lost as a result of those impacts.

(iii) Watershed Scale The size of the watershed addressed using a watershed approach should not be larger than is appropriate to ensure that the aquatic resources provided through compensation activities will effectively compensate for adverse impacts to aquatic resources resulting from activities authorized by division authorization. The division should consider relevant environmental factors and appropriate locally-developed standards and criteria when determining the appropriate watershed scale in guiding compensation activities.

(f) Site Selection The compensatory mitigation project site must be ecologically suitable for providing the desired aquatic resource functions. In determining the ecological suitability of the compensatory mitigation project site, the division must consider, to the extent practicable, the following factors:

(i) Hydrological conditions, soil characteristics, and other physical and chemical characteristics;

(ii) Watershed-scale features, such as aquatic habitat diversity, habitat connectivity, and other landscape-scale functions;

(iii) The size and location of the compensatory mitigation site relative to hydrologic sources (including the availability of water rights) and other ecological features;

(iv) Compatibility with adjacent land uses and watershed management plans;

(v) Reasonably foreseeable effects the compensatory mitigation project will have on ecologically important aquatic or terrestrial resources (e.g., fens and mature forests), cultural sites, or habitat for federally- or state-listed threatened and endangered species; and (vi) Other relevant factors including, but not limited to, development trends, anticipated land use changes, habitat status and trends, the relative locations of the impact and mitigation sites in the stream network, local or regional goals for the restoration or protection of particular habitat types or functions (e.g., re-establishment of habitat corridors or habitat for species of concern), water quality goals, floodplain management goals, and the relative potential for chemical contamination of the aquatic resources.

The division may require on-site, off-site, or a combination of on-site and off-site compensatory mitigation to replace authorized losses of aquatic resource functions and services.

Applicants should propose compensation sites adjacent to existing aquatic resources or where aquatic resources previously existed.

(g) Mitigation Type (i) In general, in-kind mitigation is preferable to out-of-kind mitigation because it is most likely to compensate for the functions and services lost at the impact site. For example, emergent wetland compensatory mitigation projects are most likely to compensate for unavoidable impacts to emergent wetlands, while ephemeral stream compensatory mitigation projects are most likely to compensate for unavoidable impacts to ephemeral streams. Thus, except as provided in subsection 87.10(3)(g)(ii) below, the required compensatory mitigation shall be of a similar type to the affected aquatic resource.

(ii) If the division determines, using the watershed approach in accordance with subsection 87.10(3)(e), that out-of-kind compensatory mitigation will serve the aquatic resource needs of the watershed, the division may authorize the use of such out-of- kind compensatory mitigation. The basis for authorization of out-of- kind compensatory mitigation must be documented in the administrative record for the authorization action.

(iii) For difficult-to-replace resources (e.g., fens, springs, and forested wetlands), if further avoidance and minimization are not practicable, the required compensation should be provided, if practicable, through in-kind restoration, enhancement, or preservation since there is greater certainty that these methods of compensation will successfully offset authorized impacts.

(h) Amount of Compensatory Mitigation (i) If the division determines that compensatory mitigation is necessary to offset unavoidable impacts to aquatic resources, the amount of required compensatory mitigation must be sufficient to replace lost aquatic resource functions. In cases where appropriate functional or condition assessment methods or other suitable metrics are available, these methods should be used where practicable to determine how much compensatory mitigation is required.

(ii) The division must require a mitigation ratio greater than one-to-one where necessary to account for the method of compensatory mitigation (e.g., preservation), the likelihood of success, differences between the functions lost at the impact site and the functions expected to be produced by the compensatory mitigation project, temporal losses of aquatic resource functions, the difficulty of restoring or establishing the desired aquatic resource type and functions, and/or the distance between the affected aquatic resource and the compensation site. The rationale for the required replacement ratio must be documented in the administrative record for the authorization action.

(iii) If an in-lieu fee program will be used to provide the required compensatory mitigation, and the appropriate number and resource type of released credits are not available, the division must require sufficient compensation to account for the risk and uncertainty associated with in-lieu fee projects that have not been implemented before the authorized impacts have occurred.

(iv) Mitigation banks and in-lieu fee programs may be used to compensate for impacts to aquatic resources authorized by General Authorizations and Individual Authorizations, including after-the-fact authorizations, in accordance with the general hierarchy of preference in subsection 87.10(3)(c). Mitigation banks and in-lieu fee programs may also be used to satisfy requirements arising out of an enforcement action.

(i) Preservation Preservation may be used to provide compensatory mitigation for activities authorized by division authorization when all the following criteria are met:

(i) The resources to be preserved provide important physical, chemical, or biological functions for the watershed;

(ii) The resources to be preserved contribute significantly to the ecological sustainability of the watershed. In determining the contribution of those resources to the ecological sustainability of the watershed, the division must use appropriate, quantitative assessment tools, where available;

(iii) Preservation is determined by the division to be appropriate and practicable;

(iv) The resources are under threat of destruction or adverse modifications; and (v) The preserved site will be permanently protected through an appropriate real estate or other legal instrument (e.g., easement, title transfer to state resource agency, or land trust). Where preservation is used to provide compensatory mitigation, to the extent appropriate and practicable, the preservation shall be done in conjunction with aquatic resource restoration, establishment, and/or enhancement activities. This requirement may be waived by the division where preservation has been identified as a high priority using a watershed approach described in subsection 87.10(3)(e), but compensation ratios shall be higher than when other mitigation mechanisms are used.

(j) Buffers The division may require the restoration, establishment, enhancement, and/or preservation, as well as the maintenance, of riparian areas and/or buffers around aquatic resources where necessary to ensure the long- term viability of those resources. Buffers may also provide habitat or corridors necessary for the ecological functioning of aquatic resources. If buffers are required or approved by the division as part of the compensatory mitigation project, compensatory mitigation credit may be provided for those buffers.

(k) Relationship to other Federal, Tribal, State, and Local Programs Compensatory mitigation projects for division authorizations may also be used to satisfy the environmental requirements of other programs, such as federal, tribal, state, or local wetlands regulatory programs, consistent with the terms and requirements of these programs and subject to the following considerations:

(i) The compensatory mitigation project must include appropriate compensation required by the division authorization for unavoidable impacts to aquatic resources authorized by that authorization.

(ii) Under no circumstances may the same credits be used to provide mitigation for more than one authorized activity. However, where appropriate, compensatory mitigation projects, including mitigation banks and in-lieu fee projects, may be designed to holistically address requirements under multiple programs and authorities for the same activity.

(iii) Compensatory mitigation projects may also be used to provide compensatory mitigation under the Endangered Species Act or for Habitat Conservation Plans, as long as they comply with the requirements of subsection 87.10(3)(k)(i) and (ii).

(l) Authorization Conditions (i) The compensatory mitigation requirements for a division authorization, including the amount and type of compensatory mitigation, must be clearly stated in the special conditions of the Individual Authorization or General Authorization Notice of Coverage. The special conditions must be enforceable.

(ii) For an Individual Authorization that requires proponent-responsible mitigation, the special conditions must:

(A) Identify the party responsible for providing the compensatory mitigation;

(B) Incorporate, by reference, the final mitigation plan approved by the division;

(C) Articulate the objectives, performance standards, and monitoring required for the compensatory mitigation project, unless they are provided in the approved final mitigation plan; and (D) Describe any required financial assurances or long-term management provisions for the compensatory mitigation project, unless they are specified in the approved final mitigation plan.

(iii) For a General Authorization activity that requires proponent- responsible compensatory mitigation, the special conditions must describe the compensatory mitigation proposal, which may be either conceptual or detailed. The General Authorization Notice of Coverage must also include a special condition that states that the proponent cannot commence work in state waters until the division approves the final mitigation plan, unless the division determines that such a special condition is not practicable and not necessary to ensure timely completion of the required compensatory mitigation. To the extent appropriate and practicable, special conditions of the General Authorization Notice of Coverage should also address the requirements in subsection 87.10(3)(l)(ii).

(iv) If a mitigation bank or in-lieu fee program is used to provide the required compensatory mitigation, the special conditions must indicate whether a mitigation bank or in-lieu fee program will be used, and specify the number and resource type of credits the proponent is required to secure. In the case of an Individual Authorization, the special condition must also identify the specific mitigation bank or in-lieu fee program that will be used. For General Authorization Notices of Coverage, the special conditions may either identify the specific mitigation bank or in-lieu fee program, or indicate that the specific mitigation bank or in-lieu fee program used to provide the required compensatory mitigation must be approved by the division before the credits are secured.

(m) Party Responsible for Compensatory Mitigation (i) For proponent-responsible mitigation, the special conditions of the division authorization must clearly indicate the party or parties responsible for the implementation, performance, and long-term management of the compensatory mitigation project.

(ii) For mitigation banks and in-lieu fee programs, the instrument must clearly indicate the party or parties responsible for the implementation, performance, and long-term management of the compensatory mitigation project(s). The instrument must also contain a provision expressing the sponsor’s agreement to assume responsibility for a proponent’s compensatory mitigation requirements, once that proponent has secured the appropriate number and resource type of credits from the sponsor and the division has received the documentation described in subsection 87.10(3)(m)(iii) below.

(iii) If use of a mitigation bank or in-lieu fee program is approved by the division to provide part or all of the required compensatory mitigation for a division authorization, the proponent retains responsibility for providing the compensatory mitigation until the appropriate number and resource type of credits have been secured from a sponsor and the division has received documentation that confirms that the sponsor has accepted the responsibility for providing the required compensatory mitigation. This documentation may consist of a letter or form signed by the sponsor, with the authorization number and a statement indicating the number and resource type of credits that have been secured from the sponsor. Copies of this documentation will be retained in the administrative records for both the authorization and the instrument. If the sponsor fails to provide the required compensatory mitigation, the division may pursue measures against the sponsor to ensure compliance.

(iv) Upon purchase of the requisite number and type of credits from the sponsor, and division receipt of documentation confirming the sponsor has accepted responsibility for providing the required compensatory mitigation, the project proponent’s compensatory mitigation requirements are satisfied and discharged in full.

(n) Timing Implementation of the compensatory mitigation project shall be, to the maximum extent practicable, in advance of or concurrent with the activity causing the authorized impacts. The division shall require, to the extent appropriate and practicable, additional compensatory mitigation to offset temporal losses of aquatic functions that will result from the authorized activity.

(o) Financial Assurances (i) The division shall require sufficient financial assurances to ensure a high level of confidence that the compensatory mitigation project will be successfully completed, in accordance with applicable performance standards. In cases where an alternate mechanism is available to ensure a high level of confidence that the compensatory mitigation will be provided and maintained (e.g., a formal, documented commitment from a government agency or public authority), the division may determine that financial assurances are not necessary for that compensatory mitigation project.

(ii) The amount of the required financial assurances must be determined by the division, in consultation with the project sponsor, and must be based on the size and complexity of the compensatory mitigation project, the degree of completion of the project at the time of project approval, the likelihood of success, the past performance of the project sponsor, and any other factors the division deems appropriate. Financial assurances may be in the form of performance bonds, escrow accounts, casualty insurance, letters of credit, legislative appropriations for government- sponsored projects, or other appropriate instruments, subject to the approval of the division. The rationale for determining the amount of the required financial assurances must be documented in the administrative record for either the division authorization or the instrument. In determining the assurance amount, the division shall consider the cost of providing replacement mitigation, including costs for land acquisition, planning and engineering, legal fees, mobilization, construction, and monitoring.

(iii) If financial assurances are required, the division authorization must include a special condition requiring the financial assurances to be in place prior to commencing the authorized activity.

(iv) Financial assurances shall be phased out once the division has determined that the compensatory mitigation project will be successful in accordance with its performance standards. The division authorization or instrument must clearly specify the conditions under which the financial assurances are to be released to the proponent, sponsor, and/or other financial assurance provider, including, as appropriate, linkage to achievement of performance standards, adaptive management, or compliance with special conditions.

(v) A financial assurance must be in a form that ensures that the division will receive notification at least 120 days in advance of any termination or revocation. For third-party assurance providers, this may take the form of a contractual requirement for the assurance provider to notify the division at least 120 days before the assurance is revoked or terminated.

(vi) Financial assurances shall be payable at the direction of the division to its designee or to a standby trust agreement. When a standby trust is used (e.g., with performance bonds or letters of credit), all amounts paid by the financial assurance provider shall be deposited directly into the standby trust fund for distribution by the trustee in accordance with the division’s instructions.

(p) Compliance with Applicable Law The compensatory mitigation project must comply with all applicable federal, state, and local laws. The division authorization, mitigation banking instrument, or in-lieu fee program instrument must not require participation by the division or any other federal agency in project management, including receipt or management of financial assurances or long-term financing mechanisms, except as determined by the division or other agency to be consistent with its statutory authority, mission, and priorities.

(4) Planning and Documentation (a) Pre-Application Consultations Potential applicants for Individual Authorizations are encouraged to participate in pre-application meetings with the division and appropriate agencies to discuss potential mitigation requirements and information needs.

(b) Public Review and Comment (i) For an activity that requires an Individual Authorization pursuant to Regulation 87, the public notice for the proposed activity must contain a statement explaining how impacts associated with the proposed activity are to be avoided, minimized, and compensated for. This explanation shall address, to the extent that such information is provided in the mitigation statement required paragraph, the proposed avoidance and minimization and the amount, type, and location of any proposed compensatory mitigation, including any out-of-kind compensation, or indicate an intention to use an approved mitigation bank or in-lieu fee program. The level of detail provided in the public notice must be commensurate with the scope and scale of the impacts. The notice shall not include information that the division and the proponent believe should be kept confidential for business purposes, such as the exact location of a proposed mitigation site that has not yet been secured. The proponent must clearly identify any information being claimed as confidential in the mitigation statement when submitted. In such cases, the notice must still provide enough information to enable the public to provide meaningful comment on the proposed mitigation.

(ii) For Individual Authorizations, the division must consider any timely comments and recommendations from other state agencies, tribal, or local governments, and the public.

(iii) For activities authorized by General or Individual Authorizations, the review and approval process for compensatory mitigation proposals and plans must be conducted in accordance with the terms and conditions of those authorizations and applicable regulations, including the applicable provisions of this part.

(c) Mitigation Plan (i) For Individual Authorizations, the proponent must prepare a draft mitigation plan and submit it to the division for review. After addressing any comments provided by the division, the proponent must prepare a final mitigation plan, which must be approved by the division prior to issuing the Individual Authorization. The approved final mitigation plan must be incorporated into the Individual Authorization by reference. The final mitigation plan must include the items described in subsections 87.10(4)(c)(i) through (xiii), but the level of detail of the mitigation plan should be commensurate with the scale and scope of the impacts. As an alternative, the division may determine that it would be more appropriate to address any of the items described in subsections 87.10(4)(c)(i) through (xiii) as authorization conditions, instead of components of a compensatory mitigation plan. For proponents who intend to fulfill their compensatory mitigation obligations by securing credits from approved mitigation banks or in-lieu fee programs, their mitigation plans need to include only the items described in subsections 87.10(4)(c)(iv) and (v), and the name of the specific mitigation bank or in-lieu fee program to be used.

(ii) For General Authorizations, if compensatory mitigation is required, the division may approve a conceptual or detailed compensatory mitigation plan to meet required time frames for General Authorization Notices of Coverage, but a final mitigation plan incorporating the elements in subsections 87.10(4)(c)(i) through (xiii), at a level of detail commensurate with the scale and scope of the impacts, must be approved by the division before the proponent commences work in state waters. As an alternative, the division may determine that it would be more appropriate to address any of the items described in subsections 87.10(4)(c)(i) through (xiii) as authorization conditions, instead of components of a compensatory mitigation plan. For proponents who intend to fulfill their compensatory mitigation obligations by securing credits from approved mitigation banks or in-lieu fee programs, their mitigation plans need include only the items described in subsections 87.10(4)(c)(iv) and (v), and either the name of the specific mitigation bank or in-lieu fee program to be used or a statement indicating that a mitigation bank or in-lieu fee program will be used (contingent upon approval by the division).

(iii) Mitigation banks and in-lieu fee programs must prepare a mitigation plan including the items in subsections 87.10(4)(c)(i) through (xiii) for each separate compensatory mitigation project site. For mitigation banks and in-lieu fee programs, the preparation and approval process for mitigation plans is described in subsection 87.10(8).

(A) A description of the project objectives, including resource type(s) and amount(s) that will be provided, the method of compensation (i.e., restoration, establishment, enhancement, and/or preservation), and the manner in which the resource functions of the compensatory mitigation project will address the needs of the watershed, ecoregion, physiographic province, or other geographic area of interest.

(B) A description of the factors considered during the site selection process. This should include consideration of watershed needs, on-site alternatives where applicable, and the practicability of accomplishing ecologically self- sustaining aquatic resource restoration, establishment, enhancement, and/or preservation at the compensatory mitigation project site (see subsection 87.10(3)(f)).

(C) A description of the legal arrangements and site protection instrument, including site ownership, that will be used to ensure the long-term protection of the compensatory mitigation project site (see subsection 87.10(7)(a)).

(D) A description of the baseline ecological characteristics of the proposed compensatory mitigation project site and, in the case of an application for a division authorization, the impact site. This may include descriptions of historic and existing plant communities, historic and existing hydrology, soil conditions, a map showing the locations of the impact and mitigation site(s) or the geographic coordinates for those site(s), and other site characteristics appropriate to the type of resource proposed as compensation. The baseline information should also include a delineation of state waters on the proposed compensatory mitigation project site. A prospective proponent planning to secure credits from an approved mitigation bank or in-lieu fee program only needs to provide baseline information about the impact site, not the mitigation bank or in-lieu fee project site.

(E) A description of the number of credits to be provided, including a brief explanation of the rationale for this determination (see subsection 87.10(3)(h)).

1. (I) For proponent-responsible mitigation, this should include an explanation of how the compensatory mitigation project will provide the required compensation for unavoidable impacts to aquatic resources resulting from the authorized activity.
2. (II) For proponents intending to secure credits from an approved mitigation bank or in-lieu fee program, the proposal should include the number and resource type of credits to be secured and how these were determined.

(F) A detailed written specifications and work descriptions for the compensatory mitigation project, including, but not limited to, the geographic boundaries of the project;

1. construction methods, timing, and sequence; source(s) of water, including connections to existing waters and uplands; methods for establishing the desired plant community; plans to control invasive plant species and preventing the spread of aquatic nuisance species; the proposed grading plan, including elevations and slopes of the substrate; soil management; and erosion control measures. For stream compensatory mitigation projects, the mitigation work plan may also include other relevant information, such as planform geometry, channel form (e.g., typical channel cross-sections), watershed size, design discharge, and riparian area plantings.

(G) A description and schedule of maintenance requirements to ensure the continued viability of the resource once initial construction is completed.

(H) Ecologically-based performance standards that will be used to determine whether the compensatory mitigation project is achieving its objectives (see subsection 87.10(5)).

(I) A description of parameters to be monitored in order to determine whether the compensatory mitigation project is on track to meet performance standards and whether adaptive management is needed. A schedule for monitoring and reporting on monitoring results to the division must be included (see subsection 87.10(6)).

(J) A description of how the compensatory mitigation project will be managed after performance standards have been achieved to ensure the long-term sustainability of the resource, including long-term financing mechanisms and the party responsible for long-term management (see subsection 87.10(7)(d)).

(K) An adaptive management strategy to address unforeseen changes in site conditions or other components of the compensatory mitigation project, including the party or parties responsible for implementing adaptive management measures. The adaptive management plan will guide decisions for revising compensatory mitigation plans and implementing measures to address both foreseeable and unforeseen circumstances that adversely affect compensatory mitigation success (see subsection 87.10(7)(c)).

(L) A description of financial assurances that will be provided and how they are sufficient to ensure a high level of confidence that the compensatory mitigation project will be successfully completed, in accordance with its performance standards (see subsection 87.10(3)(o)).

(M) The division may require additional information as necessary to determine the appropriateness, feasibility, and practicability of the compensatory mitigation project.

(5) Ecological Performance Standards (a) The approved mitigation plan must contain performance standards that will be used to assess whether the project is achieving its objectives. Performance standards should relate to the objectives of the compensatory mitigation project, so that the project can be objectively evaluated to determine if it is developing into the desired resource type, providing the expected functions, and attaining any other applicable metrics (e.g., acres).

(b) Performance standards must be based on attributes that are objective and verifiable. Ecological performance standards must be based on the best available science that can be measured or assessed in a practicable manner. Performance standards may be based on variables or measures of functional capacity described in functional assessment methodologies, measurements of hydrology or other aquatic resource characteristics, and/or comparisons to reference aquatic resources of a similar type and landscape position. The use of reference aquatic resources to establish performance standards will help ensure that those performance standards are reasonably achievable by reflecting the range of variability exhibited by the regional class of aquatic resources as a result of natural processes and anthropogenic disturbances. Performance standards based on measurements of hydrology should take into consideration the hydrologic variability exhibited by reference aquatic resources, especially wetlands. Where practicable, performance standards should take into account the expected stages of the aquatic resource development process, in order to allow early identification of potential problems and appropriate adaptive management.

(6) Monitoring (a) General (i) Monitoring the compensatory mitigation project site is necessary to determine if the project is meeting its performance standards and to determine if measures are necessary to ensure that the compensatory mitigation project is accomplishing its objectives. The submission of monitoring reports to assess the development and condition of the compensatory mitigation project is required, but the content and level of detail for those monitoring reports must be commensurate with the scale and scope of the compensatory mitigation project, as well as the compensatory mitigation project type. The mitigation plan must address the monitoring requirements for the compensatory mitigation project, including the parameters to be monitored, the length of the monitoring period, the party responsible for conducting the monitoring, the frequency for submitting monitoring reports to the district engineer, and the party responsible for submitting those monitoring reports to the division.

(ii) The division may conduct site inspections on a regular basis (e.g., annually) during the monitoring period to evaluate mitigation site performance.

(b) Monitoring Period The mitigation plan must provide for a monitoring period that is sufficient to demonstrate that the compensatory mitigation project has met performance standards, but not less than five years. A longer monitoring period may be required for aquatic resources with slow development rates (e.g., forested wetlands, fens, bogs). Following project implementation, the division may reduce or waive the remaining monitoring requirements upon a determination that the compensatory mitigation project has achieved its performance standards. Conversely, the division may extend the original monitoring period upon a determination that performance standards have not been met, or that the compensatory mitigation project is not on track to meet them. The division may also revise monitoring requirements when remediation and/or adaptive management is required.

(c) Monitoring Reports (i) The division must determine the information to be included in monitoring reports. This information must be sufficient for the division to determine how the compensatory mitigation project is progressing towards meeting its performance standards, and may include plans (such as as-built plans), maps, and photographs to illustrate site conditions. Monitoring reports may also include the results of functional, condition, or other assessments used to provide quantitative or qualitative measures of the functions provided by the compensatory mitigation project site.

(ii) The proponent or sponsor is responsible for submitting monitoring reports in accordance with the special conditions of the division authorization or the terms of the instrument. Failure to submit monitoring reports in a timely manner may result in compliance action by the division.

(iii) Monitoring reports must be provided by the division to interested state, tribal, and local resource agencies and the public, upon request.

(7) Management (a) Site Protection (i) The aquatic habitats, riparian areas, buffers, and uplands that comprise the overall compensatory mitigation project must be provided long-term protection through real estate instruments or other available mechanisms, as appropriate. Long-term protection may be provided through real estate instruments such as conservation easements held by entities such as state, tribal, or local resource agencies, non-profit conservation organizations, or private land managers; the transfer of title to such entities; or by restrictive covenants. For government property, long-term protection may be provided through facility management plans or integrated natural resources management plans. When approving a method for long-term protection of non-government property other than transfer of title, the division shall consider relevant legal constraints on the use of conservation easements and/or restrictive covenants in determining whether such mechanisms provide sufficient site protection. To provide sufficient site protection, a conservation easement or restrictive covenant should, where practicable, establish in an appropriate third party (e.g., governmental or non-profit resource management agency) the right to enforce site protections and provide the third party the resources necessary to monitor and enforce these site protections.

(ii) The real estate instrument, management plan, or other mechanism providing long-term protection of the compensatory mitigation site must, to the extent appropriate and practicable, prohibit incompatible uses (e.g., clear-cutting or mineral extraction) that might jeopardize the objectives, development, or functioning of the compensatory mitigation project. When incompatible uses occur at a mitigation site, the division may require additional mitigation including, but not limited to, the purchase or debiting of mitigation bank or in-lieu fee credits to offset the functional losses caused by the incompatible use. Where appropriate, multiple instruments recognizing compatible uses (e.g., fishing or grazing rights) may be used.

(iii) The real estate instrument, management plan, or other long-term protection mechanism must contain a provision requiring 60-day advance notification to the division before any action is taken to void or modify the instrument, management plan, or long-term protection mechanism, including transfer of title to, or establishment of any other legal claims over, the compensatory mitigation site.

(iv) For compensatory mitigation projects on public lands, where facility management plans or integrated natural resources management plans are used to provide long-term protection, and changes in statute, regulation, or agency needs or mission results in an incompatible use on public lands originally set aside for compensatory mitigation, the public agency authorizing the incompatible use is responsible for providing alternative compensatory mitigation that is acceptable to the division for any loss in functions resulting from the incompatible use.

(v) A real estate instrument, management plan, or other long-term protection mechanism used for site protection of proponent- responsible mitigation must be approved by the division in advance of, or concurrent with, the activity causing the authorized impacts.

(b) Sustainability Compensatory mitigation projects shall be designed, to the maximum extent practicable, to be self-sustaining once performance standards have been achieved. This includes minimization of active engineering features (e.g., pumps) and appropriate siting to ensure that natural hydrology and landscape context will support long-term sustainability. Where active long- term management and maintenance are necessary to ensure long-term sustainability (e.g., prescribed burning, invasive species control, maintenance of water control structures, easement enforcement), the responsible party must provide for such management and maintenance. This includes the provision of long-term financing mechanisms where necessary. Where needed, the acquisition and protection of water rights must be secured and documented in the authorization conditions or instrument.

(c) Adaptive Management (i) If the compensatory mitigation project cannot be constructed in accordance with the approved mitigation plans, the proponent or sponsor must notify the division. A significant modification of the compensatory mitigation project requires approval from the division.

(ii) If monitoring or other information indicates that the compensatory mitigation project is not progressing towards meeting its performance standards as anticipated, the responsible party must notify the division as soon as possible. The division will require and evaluate measures to address deficiencies in the compensatory mitigation project. The division will consider whether the compensatory mitigation project is providing ecological benefits comparable to the original objectives of the compensatory mitigation project.

(iii) The division, in consultation with the responsible party (and other federal, tribal, state, and local agencies, as appropriate), will determine the appropriate measures. The measures may include site modifications, design changes, revisions to maintenance requirements, and revised monitoring requirements. The measures must be designed to ensure that the modified compensatory mitigation project provides aquatic resource functions comparable to those described in the mitigation plan objectives.

(iv) Performance standards may be revised in accordance with adaptive management to account for measures taken to address deficiencies in the compensatory mitigation project. Performance standards may also be revised to reflect changes in management strategies and objectives if the new standards provide for ecological benefits that are comparable or superior to the approved compensatory mitigation project. No other revisions to performance standards will be allowed except in the case of natural disasters.

(d) Long-Term Management (i) In cases where the project proponent has fully satisfied all compensatory mitigation obligations, and where the monitoring period under section 87.10(6) has been completed, but where requirements/conditions remain concerning long-term management and/or monitoring of the compensatory mitigation project, the project proponent shall remain responsible for complying with/satisfying all terms and conditions of the underlying authorization or instrument related to compensatory mitigation management. To accomplish this, the project proponent must enter into a binding, enforceable “Long-Term Management Plan” with the division (and land stewardship entity, if relevant) prior to or at the time of issuance of its Individual or Temporary Authorization or Notice of Coverage under a General Authorization. Such Plan shall require the project proponent (and land stewardship entity, if relevant) to comply with the terms and conditions of the underlying authorization that are related to management of the compensatory mitigation project after that authorization’s expiration or termination.

(A) The Long-Term Management Plan shall contain terms specifying that, after the underlying authorization has expired or has been terminated, the Long-Term Management Plan may be terminated by signature of all parties to the Plan.

(B) The Long-Term Management Plan shall contain a term that authorizes the division to use the mutual modification, division-initiated modification, or revocation procedure pursuant to subsection 87.11(1), and that any such mutual modification, division-issued modification, or revocation shall be considered a “final agency action” pursuant to subsection 87.11(1)(c).

(C) Any violation of a Long-Term Management Plan is a violation of Regulation 87 and thus subject to the division’s enforcement authority under 87.11(2).

(D) Projects/activities operating under a Long-Term Management Plan following the underlying authorization's expiration or termination will not be subject to annual fees under section 87.12.

(ii) The Authorization conditions or Instrument, as well as the Long- Term Management Plan, must identify the party responsible for ownership and all long-term management of the compensatory mitigation project. The Authorization conditions or Instrument, and the Long-Term Management Plan, may contain provisions allowing the proponent or sponsor to transfer the long-term management responsibilities of the compensatory mitigation project site to a land stewardship entity, such as a public agency, non-governmental organization, or private land manager, after review and approval by the division. The land stewardship entity need not be identified in the original authorization or instrument or the Long-Term Management Plan, as long as the future transfer of long-term management responsibility is approved by the division.

(iii) A Long-Term Management Plan should include a description of long-term management needs, annual cost estimates for these needs, and identify the funding mechanism that will be used to meet those needs.

(iv) Any provisions necessary for long-term financing must be addressed in the original authorization or instrument. The division may require provisions to address inflationary adjustments and other contingencies, as appropriate. Appropriate long-term financing mechanisms include non- wasting endowments, trusts, contractual arrangements with future responsible parties, and other appropriate financial instruments. In cases where the long-term management entity is a public authority or government agency, that entity must provide a plan for the long-term financing of the site. All such provisions must also be included in the Long-Term Management Plan.

(v) For proponent-responsible mitigation, any long-term financing mechanisms must be approved in advance of the activity causing the authorized impacts.

(8) Mitigation Banks and In-Lieu Fee Programs (a) General Considerations (i) All mitigation banks and in-lieu fee programs must have an approved instrument signed by the sponsor and the division prior to being used to provide compensatory mitigation for division authorizations.

(ii) To the maximum extent practicable, mitigation banks and in-lieu fee project sites must be planned and designed to be self-sustaining over time, but some active management and maintenance may be required to ensure their long-term viability and sustainability. Examples of acceptable management activities include maintaining fire-dependent habitat communities in the absence of natural fire and controlling invasive exotic plant species.

(iii) All mitigation banks and in-lieu fee programs must comply with the standards in this part if they are to be used to provide compensatory mitigation for activities authorized by division authorizations, regardless of whether they are sited on public or private lands and whether the sponsor is a governmental or private entity.

(b) Interagency Review Team (i) The division will review documentation for the establishment and management of mitigation banks and in-lieu fee programs. The division may establish an Interagency Review Team (IRT) to assist with the review.

(ii) In addition to the division, representatives from the Colorado Parks and Wildlife, Colorado Division of Water Resources, USACE, U.S. EPA, U.S. Fish and Wildlife Service, and other federal, state, and local agencies, as invited by the division, may participate in the IRT. The IRT may also include representatives from tribal, state, and local regulatory and resource agencies, where such agencies have authorities and/ or mandates directly affecting, or affected by, the establishment, operation, or use of the mitigation bank or in-lieu fee program. The division will seek to include all public agencies with a substantive interest in the establishment of the mitigation bank or in-lieu fee program on the IRT, but retains final authority over IRT composition if a new IRT is created.

(iii) The primary role of the IRT is to facilitate the establishment of mitigation banks or in-lieu fee programs through the development of mitigation banking or in-lieu fee program instruments. The IRT will review the prospectus, instrument, and other appropriate documents and provide comments to the division. The division and the IRT should use a watershed approach to the extent practicable in reviewing proposed mitigation banks and in-lieu fee programs. Members of the IRT may also sign the instrument if they so choose. By signing the instrument, the IRT members indicate their agreement with the terms of the instrument. As an alternative, a member of the IRT may submit a letter expressing concurrence with the instrument. The IRT will also advise the division in assessing monitoring reports, recommending remedial or adaptive management measures, approving credit releases, and approving modifications to an instrument. In order to ensure timely processing of instruments and other documentation, comments from IRT members must be received by the division within the time limits specified in subsection 87.10(8). Comments received after these deadlines will only be considered at the discretion of the division when doing so does not jeopardize the deadlines for division action.

(iv) The division will give full consideration to any timely comments and advice of the IRT. The division alone retains final authority for approval of the instrument in cases where the mitigation bank or in- lieu fee program is used to satisfy compensatory mitigation requirements of division authorizations.

(v) MOAs with Other Agencies The division and members of the IRT may enter into a memorandum of agreement (MOA) with any federal, state, or local government agency or tribal entity to perform all or some of the IRT review functions described in subsection 87.10(8). Such MOAs must include provisions for appropriate federal oversight of the review process. The division retains sole authority for final approval of instruments and other documentation required under subsection 87.10(8) when the bank or in-lieu fee program is created solely for compensatory mitigation for use under Regulation 87.

(c) Compensation Planning Framework for In-Lieu Fee Programs (i) The approved instrument for an in-lieu fee program must include a compensation planning framework that will be used to select, secure, and implement aquatic resource restoration, establishment, enhancement, and/or preservation activities. The compensation planning framework must support a watershed approach to compensatory mitigation. All specific projects used to provide compensation for division authorizations must be consistent with the approved compensation planning framework. Modifications to the framework must be approved by the division as significant modifications to the instrument after consultation with the IRT. The compensation planning framework must contain the following elements:

(A) The geographic service area(s), including a watershed- based rationale for the delineation of each service area;

(B) A description of the threats to aquatic resources in the service area(s), including how the in-lieu fee program will help offset impacts resulting from those threats;

(C) An analysis of historic aquatic resource loss in the service area(s);

(D) An analysis of current aquatic resource conditions in the service area(s), supported by an appropriate level of field documentation;

(E) A statement of aquatic resource goals and objectives for each service area, including a description of the general amounts, types, and locations of aquatic resources the program will seek to provide;

(F) A prioritization strategy for selecting and implementing compensatory mitigation activities;

(G) An explanation of how any preservation objectives identified in subsection 87.10(8)(c)(i)(E) and addressed in the prioritization strategy in subsection 87.10(8)(c)(i)(F) satisfy the criteria for use of preservation in subsection 87.10(3)(i);

(H) A description of any public and private stakeholder involvement in plan development and implementation, including, where appropriate, coordination with federal, state, tribal, and local aquatic resource management and regulatory authorities;

(I) A description of the long-term protection and management strategies for activities conducted by the in-lieu fee program sponsor;

(J) A strategy for periodic evaluation and reporting on the progress of the program in achieving the goals and objectives in subsection 87.10(8)(c)(i)(E), including a process for revising the planning framework as necessary; and (K) Any other information deemed necessary for effective compensation planning by the division.

(ii) The level of detail necessary for the compensation planning framework is at the discretion of the division, and will take into account the characteristics of the service area(s) and the scope of the program. As part of the in-lieu fee program instrument, the compensation planning framework will be reviewed by the IRT, and will be a major factor in the division’s decision on whether to approve the instrument.

(d) Review Process (i) The sponsor is responsible for preparing all documentation associated with the establishment of the mitigation bank or in-lieu fee program, including the prospectus, instrument, and other appropriate documents, such as mitigation plans for a mitigation bank. The prospectus provides an overview of the proposed mitigation bank or in-lieu fee program and serves as the basis for public and initial IRT comments. For a mitigation bank, the mitigation plan, as described in subsection 87.10(4)(c), provides detailed plans and specifications for the mitigation bank site. For in- lieu fee programs, mitigation plans will be prepared as in-lieu fee project sites are identified after the instrument has been approved and the in-lieu fee program becomes operational. The instrument provides the authorization for the mitigation bank or in-lieu fee program to provide credits to be used as compensatory mitigation for division authorizations.

(ii) Prospectus The prospectus must provide a summary of the information regarding the proposed mitigation bank or in-lieu fee program, at a sufficient level of detail to support informed public and IRT comments. The review process begins when the sponsor submits a complete prospectus to the division. For modifications of approved instruments, submittal of a new prospectus is not required; instead, the sponsor must submit a written request for an instrument modification accompanied by appropriate documentation. The division must notify the sponsor within 30 days whether or not a submitted prospectus is complete. A complete prospectus includes the following information:

(A) The objectives of the proposed mitigation bank or in-lieu fee program.

(B) How the mitigation bank or in-lieu fee program will be established and operated.

(C) The proposed service area.

(D) The general need for and technical feasibility of the proposed mitigation bank or in-lieu fee program.

(E) The proposed ownership arrangements and long-term management strategy for the mitigation bank or in-lieu fee project sites.

(F) The qualifications of the sponsor to successfully complete the type(s) of mitigation project(s) proposed, including information describing any past such activities by the sponsor.

For a proposed mitigation bank, the prospectus must also address:

(G) The ecological suitability of the site to achieve the objectives of the proposed mitigation bank, including the physical, chemical, and biological characteristics of the bank site and how that site will support the planned types of aquatic resources and functions; and (H) Assurance of sufficient water rights or other water supply to support the long-term sustainability of the mitigation bank. For a proposed in-lieu fee program, the prospectus must also include:

(I) The compensation planning framework (see subsection 87.10(8)(c)); and (J) A description of the in-lieu fee program account required by subsection 87.10(8)(i).

(iii) Preliminary Review of Prospectus Prior to submitting a prospectus, the sponsor may elect to submit a draft prospectus to the division for comment and consultation. The division will provide copies of the draft prospectus to the IRT and will provide comments back to the sponsor within 30 days. Any comments from IRT members will also be forwarded to the sponsor. This preliminary review is optional but is strongly recommended. It is intended to identify potential issues early so that the sponsor may attempt to address those issues prior to the start of the formal review process.

(iv) Public Review and Comment Within 30 days of receipt of a complete prospectus or an instrument modification request that will be processed in accordance with subsection 87.10(8)(g)(i), the division will provide public notice of the proposed mitigation bank or in-lieu fee program, in accordance with the applicable public notice procedures in subsection 87.6(5). The public notice must, at a minimum, include a summary of the prospectus and indicate that the full prospectus is available to the public for review upon request. For modifications of approved instruments, the public notice must instead summarize, and make available to the public upon request, whatever documentation is appropriate for the modification (e.g., a new or revised mitigation plan). The comment period for public notice will be 30 days, unless the division determines that a longer comment period is appropriate. The division will notify the sponsor if the comment period is extended beyond 30 days, including an explanation of why the longer comment period is necessary. Copies of all comments received in response to the public notice must be distributed to the other IRT members and to the sponsor within 15 days of the close of the public comment period. The division and IRT members may also provide comments to the sponsor at this time, and copies of any such comments will also be distributed to all IRT members. If the construction of a mitigation bank or an in-lieu fee program project requires a division authorization, the public notice requirement may be satisfied through the public notice provisions of the authorization processing procedures, provided all of the relevant information is provided.

(v) Initial Evaluation (A) After the end of the comment period, the division will review the comments received in response to the public notice and make a written initial evaluation as to the potential of the proposed mitigation bank or in-lieu fee program to provide compensatory mitigation for activities authorized by division authorizations. This initial evaluation letter must be provided to the sponsor within 30 days of the end of the public notice comment period.

(B) If the division determines that the proposed mitigation bank or in-lieu fee program has potential for providing appropriate compensatory mitigation for activities authorized by division authorizations, the initial evaluation letter will inform the sponsor that he/she may proceed with preparation of the draft instrument (see subsection 87.10(8)(d)(vi)).

(C) If the division determines that the proposed mitigation bank or in-lieu fee program does not have the potential to provide appropriate compensatory mitigation for division authorizations, the initial evaluation letter must discuss the reasons for that determination. The sponsor may revise the prospectus to address the division’s concerns and submit the revised prospectus to the division. If the sponsor submits a revised prospectus, a revised public notice will be in accordance with subsection 87.10(8)(d)(iv).

(D) This initial evaluation procedure does not apply to proposed modifications of approved instruments.

(vi) Draft Instrument After considering comments from the division, the IRT, and the public, if the sponsor chooses to proceed with the establishment of the mitigation bank or in-lieu fee program, they must prepare a draft instrument and submit it to the division. In the case of an instrument modification, the sponsor must prepare a draft amendment (e.g., a specific instrument provision, a new or modified mitigation plan) and submit it to the division. The division must notify the sponsor within 30 days of receipt whether the draft instrument or amendment is complete. If the draft instrument or amendment is incomplete, the division will request from the sponsor the information necessary to make the draft instrument or amendment complete. Once any additional information is submitted, the division must notify the sponsor as soon as it determines that the draft instrument or amendment is complete. The draft instrument must be based on the prospectus and must describe in detail the physical and legal characteristics of the mitigation bank or in-lieu fee program and how it will be established and operated. For mitigation banks and in-lieu fee programs, the draft instrument must include the following information:

(A) A description of the proposed geographic service area of the mitigation bank or in-lieu fee program. The service area is the watershed, ecoregion, physiographic province, and/or other geographic area within which the mitigation bank or in- lieu fee program is authorized to provide compensatory mitigation required by division authorizations. The service area must be appropriately sized to ensure that the aquatic resources provided will effectively compensate for adverse impacts to aquatic resources across the entire service area. The division, in consultation with the IRT, will determine the appropriateness of service area size. A U.S. Geological Survey 8-digit hydrologic unit code (HUC) watershed or a smaller watershed may be an appropriate service area, for example. In mountainous terrain, service areas may be intersected with ecoregions or may include elevational limits, such as an 8-digit HUC above 8,000 feet of elevation. A secondary service area may be defined to include adjacent watershed(s) or ecoregion(s). In accordance with the watershed approach, use of credits from the secondary service area may necessitate an increase in mitigation requirements. In rural areas, where any existing mitigation banks do not have mitigation credits available, one or more contiguous 8-digit HUCs or a 6-digit HUC watershed may be an appropriate service area.

1. Under certain circumstances where small portions of the 6- digit HUC watershed are present and extend beyond state lines, one or more contiguous 6-digit HUCs may be combined to form a service area. Delineation of the service area must also consider any locally developed standards and criteria that may be applicable. The economic viability of the mitigation bank or in-lieu fee program may also be considered when determining the size of the service area. The basis for the proposed service area must be documented in the instrument. An in-lieu fee program or umbrella mitigation banking instrument may have multiple service areas governed by its instrument (e.g., each watershed in the state may be a separate service area under the instrument); however, all impacts and compensatory mitigation must be accounted for by service area;

(B) Accounting procedures;

(C) A provision stating that legal responsibility for providing the compensatory mitigation lies with the sponsor once a proponent secures credits from the sponsor;

(D) Default and closure provisions;

(E) Reporting protocols; and (F) Any other information deemed necessary by the division. For a mitigation bank, a complete draft instrument must include the following additional information:

(G) Mitigation plans that include all applicable items listed in subsection 87.10(4)(c)(i) through (xiii); and (H) A credit release schedule, which is tied to the achievement of specific milestones. All credit releases must be approved by the division, in consultation with the IRT, based on a determination that required milestones have been achieved. The division, in consultation with the IRT, may modify the credit release schedule, including reducing the number of available credits or suspending credit sales or transfers altogether, where necessary to ensure that all credit sales or transfers remain tied to compensatory mitigation projects with a high likelihood of meeting performance standards; For an in-lieu fee program, a complete draft instrument must include the following additional information:

(I) The compensation planning framework (see subsection 87.10(8)(c));

(J) Specification of the initial allocation of advance credits (see subsection 87.10(8)(n)) and a draft fee schedule for these credits, by service area, including an explanation of the basis for the allocation and draft fee schedule;

(K) A methodology for determining future project-specific credits and fees; and (L) A description of the in-lieu fee program account required by subsection 87.10(8)(i).

(vii) IRT Review Upon receipt of notification by the division that the draft instrument or amendment is complete, the sponsor must provide the division with copies of the draft instrument or amendment in a distributable digital format approved by the division or one physical copy for each IRT member. The division will promptly distribute copies of the draft instrument or amendment to the IRT members for a 30-day comment period. The 30-day comment period begins the day after the division distributes the copies of the draft instrument or amendment to the IRT. Following the comment period, the division will discuss any comments with the appropriate agencies and with the sponsor. The division will seek to resolve issues using a consensus-based approach, to the extent practicable, while still meeting the decision-making time frames specified in subsection 87.10(8). Within 90 days of receipt of the complete draft instrument or amendment by the IRT members, the division must notify the sponsor of the status of the IRT review. Specifically, the division must indicate to the sponsor if the draft instrument or amendment is generally acceptable and what changes, if any, are needed. If there are significant unresolved concerns that may lead to a formal objection from one or more IRT members to the final instrument or amendment, the division will indicate the nature of those concerns.

(viii) Final Instrument The sponsor must submit a final instrument to the division for approval, with supporting documentation that explains how the final instrument addresses the comments provided by the IRT. For modifications of approved instruments, the sponsor must submit a final amendment to the division for approval, with supporting documentation that explains how the final amendment addresses the comments provided by the IRT. The final instrument or amendment must be provided directly by the sponsor to all members of the IRT. Within 30 days of receipt of the final instrument or amendment, the division will notify the IRT members whether or not it intends to approve the instrument or amendment. If no IRT member objects, by initiating the dispute resolution process in subsection 87.10(8)(e) within 45 days of receipt of the final instrument or amendment, the division will notify the sponsor of its final decision and, if the instrument or amendment is approved, arrange for it to be signed by the appropriate parties. If any IRT member initiates the dispute resolution process, the division will notify the sponsor. Following the conclusion of the dispute resolution process, the division will notify the sponsor of its final decision, and if the instrument or amendment is approved, arrange for it to be signed by the appropriate parties. For mitigation banks, the final instrument must contain the information items listed in subsections 87.10(8)(d)(vi)(A) to (H). For in-lieu fee programs, the final instrument must contain the information items listed in subsections 87.10(8)(d)(vi)(A) to (F) and (I) to (L). For the modification of an approved instrument, the amendment must contain appropriate information, as determined by the division. The final instrument or amendment must be made available to the public upon request.

(e) Dispute Resolution Process (i) Within 15 days of receipt of the division’s notification of intent to approve an instrument or amendment, any state or local agency potentially affected by the instrument or amendment, and/or other senior officials of agencies or tribal entities represented on the IRT may notify the division and other IRT members by letter if they object to the division’s approval of the proposed final instrument or amendment. This letter must include an explanation of the basis for the objection and, where feasible, offer recommendations for resolving the objections. If the division does not receive any objections within this time period, it may proceed to final action on the instrument or amendment.

(ii) The division must respond to the objection within 30 days of receipt of the letter. The division’s response may indicate an intent to disapprove the instrument or amendment as a result of the objection, an intent to approve the instrument or amendment despite the objection, or may provide a modified instrument or amendment that attempts to address the objection. The division’s response must be provided to all IRT members.

(f) Modification of Instruments (i) Approval of an Amendment to an Approved Instrument Modification of an approved instrument, including the addition and approval of umbrella mitigation bank sites or in-lieu fee project sites or expansions of previously approved mitigation bank or in-lieu fee project sites, must follow the appropriate procedures in subsection 87.10(8)(d), unless the division determines that the streamlined review process described in subsection 87.10(8)(f)(ii) is warranted.

(ii) Streamlined Review Process The streamlined modification review process may be used for the following modifications of instruments: changes reflecting adaptive management of the mitigation bank or in-lieu fee program, credit releases, changes in credit releases and credit release schedules, and changes that the division determines are not significant. If the division determines that the streamlined review process is warranted, it must notify the IRT members and the sponsor of this determination and provide them with copies of the proposed modification. IRT members and the sponsor have 30 days to notify the division if they have concerns with the proposed modification. If IRT members or the sponsor notify the division of such concerns, the division shall attempt to resolve those concerns. Within 60 days of providing the proposed modification to the IRT, the division must notify the IRT members of its intent to approve or disapprove the proposed modification. If no IRT member objects, by initiating the dispute resolution process in subsection 87.10(8)(e), within 15 days of receipt of this notification, the division will notify the sponsor of its final decision and, if the modification is approved, arrange for it to be signed by the appropriate parties. If any IRT member initiates the dispute resolution process, the division will notify the sponsor. Following the conclusion of the dispute resolution process, the division will notify the sponsor of its final decision, and if the modification is approved, arrange for it to be signed by the appropriate parties.

(g) Umbrella Mitigation Banking Instruments A single mitigation banking instrument may provide for future authorization of additional mitigation bank sites. As additional sites are selected, they must be included in the mitigation banking instrument as modifications, using the procedures in subsection 87.10(8)(g). Credit withdrawal from the additional bank sites shall be consistent with subsection 87.10(8)(m).

(h) In-Lieu Fee Program Account (i) The in-lieu fee program sponsor must establish a program account after the instrument is approved by the division, prior to accepting any fees from proponents. If the sponsor accepts funds from entities other than proponents, those funds must be kept in separate accounts. The program account must be established at a financial institution that is a member of the Federal Deposit Insurance Corporation. All interests and earnings accruing to the program account must remain in that account for use by the in-lieu fee program for the purposes of providing compensatory mitigation for division authorizations. The program account may only be used for the selection, design, acquisition, implementation, and management of in-lieu fee compensatory mitigation projects, except for a small percentage (as determined by the division in consultation with the IRT and specified in the instrument) that can be used for administrative costs.

(ii) The sponsor must submit proposed in-lieu fee projects to the division for funding approval. Disbursements from the program account may only be made upon receipt of written authorization from the division, after the division has consulted with the IRT. The terms of the program account must specify that the division has the authority to direct those funds to alternative compensatory mitigation projects in cases where the sponsor does not provide compensatory mitigation in accordance with the time frame specified in subsection 87.10(8)(m)(iv).

(iii) The sponsor must provide annual reports to the division and the IRT. The annual reports must include the following information:

(A) All income received, disbursements, and interest earned by the program account;

(B) A list of all authorizations for which in-lieu fee program funds were accepted. This list shall include: the division authorization number, the service area in which the authorized impacts are located, the amount of authorized impacts, the amount of required compensatory mitigation, the amount paid to the in-lieu fee program, and the date the funds were received from the proponent;

(C) A description of in-lieu fee program expenditures from the account, such as the costs of land acquisition, planning, construction, monitoring, maintenance, contingencies, adaptive management, and administration;

(D) The balance of advance credits and released credits at the end of the report period for each service area; and (E) Any other information required by the division.

(iv) The division may audit the records pertaining to the program account. All books, accounts, reports, files, and other records relating to the in-lieu fee program account shall be available at reasonable times for inspection and audit by the division.

(i) In-Lieu Fee Project Approval (i) As in-lieu fee project sites are identified and secured, the sponsor must submit mitigation plans to the division that include all applicable items listed in subsections 87.10(4)(c)(i) through (xiii). The mitigation plan must also include a credit release schedule consistent with subsection 87.10(8)(n)(viii) that is tied to achievement of specific performance standards. The review and approval of in-lieu fee projects will be conducted in accordance with the procedures in subsection 87.10(8)(f), as modifications of the in- lieu fee program instrument. This includes compensatory mitigation projects conducted by another party on behalf of the sponsor through requests for proposals and awarding of contracts.

(ii) If a division authorization is required for an in-lieu fee project, the authorization should not be issued until all relevant provisions of the mitigation plan have been substantively determined to ensure that the division authorization accurately reflects all relevant provisions of the approved mitigation plan, such as performance standards.

(j) Coordination of Mitigation Banking Instruments and Division Authorization Issuance In cases where initial establishment of the mitigation bank, or the development of a new project site under an umbrella banking instrument, involves activities requiring division authorization, the authorization should not be issued until all relevant provisions of the mitigation plan have been substantively determined. This is to ensure that the division authorization accurately reflects all relevant provisions of the final instrument, such as performance standards.

(k) Project Implementation (i) The sponsor must have an approved instrument prior to collecting funds from proponents to satisfy compensatory mitigation requirements for division authorizations.

(ii) Authorization to sell credits to satisfy compensatory mitigation requirements in division authorizations is contingent on compliance with all of the terms of the instrument. This includes constructing a mitigation bank or in-lieu fee project in accordance with the mitigation plan approved by the division and incorporated by reference in the instrument. If the aquatic resource restoration, establishment, enhancement, and/or preservation activities cannot be implemented in accordance with the approved mitigation plan, the division must consult with the sponsor and the IRT to consider modifications to the instrument, including adaptive management, revisions to the credit release schedule, and alternatives for providing compensatory mitigation to satisfy any credits that have already been sold.

(iii) An in-lieu fee program sponsor is responsible for the implementation, long-term management, and any required remediation of the restoration, establishment, enhancement, and/or preservation activities, even though those activities may be conducted by other parties through requests for proposals or other contracting mechanisms.

(l) Credit Withdrawal from Mitigation Banks The mitigation banking instrument may allow for an initial debiting of a percentage of the total credits projected at mitigation bank maturity, provided the following conditions are satisfied: the mitigation banking instrument and mitigation plan have been approved, the mitigation bank site has been secured, appropriate financial assurances have been established, and any other requirements determined to be necessary by the division have been fulfilled. The mitigation banking instrument must provide a schedule for additional credit releases as appropriate milestones are achieved (see subsection 87.10(8)(o)(viii)). Implementation of the approved mitigation plan shall be initiated no later than the first full growing season after the date of the first credit transaction.

(m) Advance Credits for In-Lieu Fee Programs (i) The in-lieu fee program instrument may make a limited number of advance credits available to proponents when the instrument is approved. The number of advance credits will be determined by the division, in consultation with the IRT, and will be specified for each service area in the instrument. The number of advanced credits will be based on the following considerations:

(A) The compensation planning framework;

(B) The sponsor’s past performance for implementing aquatic resource restoration, establishment, enhancement, and/or preservation activities in the proposed service area or other areas; and (C) The projected financing necessary to begin planning and implementation of in-lieu fee projects.

(ii) To determine the appropriate number of advance credits for a particular service area, the division may require the sponsor to provide confidential supporting information that will not be made available to the general public. Examples of confidential supporting information may include prospective in-lieu fee project sites.

(iii) As released credits are produced by in-lieu fee projects, they must be used to fulfill any advance credits that have already been provided within the project service area before any remaining released credits can be sold or transferred to proponents. Once previously provided advance credits have been fulfilled, an equal number of advance credits is re-allocated to the sponsor for sale or transfer to fulfill new mitigation requirements, consistent with the terms of the instrument. The number of advance credits available to the sponsor at any given time to sell or transfer to proponents in a given service area is equal to the number of advance credits specified in the instrument, minus any that have already been provided but not yet fulfilled.

(iv) Land acquisition and initial physical and biological improvements must be completed by the third full growing season after the first advance credit in that service area is secured by a proponent, unless the division determines that more or less time is needed to plan and implement an in-lieu fee project. If the division determines that there is a compensatory mitigation deficit in a specific service area by the third growing season after the first advance credit in that service area is sold, and determines that it would not be in the public interest to allow the sponsor additional time to plan and implement an in-lieu fee project, the division must direct the sponsor to disburse funds from the in-lieu fee program account to provide alternative compensatory mitigation to fulfill those compensation obligations.

(v) The sponsor is responsible for complying with the terms of the in- lieu fee program instrument. If the division determines, as a result of review of annual reports on the operation of the in-lieu fee program (see subsections 87.10(8)(o)(ii) and 87.10(8)(p)(i)), that it is not performing in compliance with its instrument, the division will take appropriate action under subsection 87.10(8)(n)(x) to ensure compliance with the in-lieu fee program instrument. Proponents that secured credits from the in-lieu fee program are not responsible for in-lieu fee program compliance.

(n) Determining Credits (i) Units of Measure The principal units for credits and debits are acres, linear feet, functional assessment units, or other suitable metrics of particular resource types. Functional assessment units or other suitable metrics may be linked to acres or linear feet.

(ii) Assessment Where practicable, an appropriate assessment method (e.g., hydrogeomorphic approach to wetlands functional assessment, index of biological integrity) or other suitable metric must be used to assess and describe the aquatic resource types that will be restored, established, enhanced, and/or preserved by the mitigation bank or in-lieu fee project.

(iii) Credit Production The number of credits must reflect the difference between pre- and post-compensatory mitigation project site conditions, as determined by a functional or condition assessment or other suitable metric.

(iv) Credit Value Once a credit is debited (sold or transferred to a proponent), its value cannot change.

(v) Credit Costs The cost of compensatory mitigation credits provided by a mitigation bank or in-lieu fee program is determined by the sponsor. For in-lieu fee programs, the cost per unit of credit must include the expected costs associated with the restoration, establishment, enhancement, and/or preservation of aquatic resources in that service area. These costs must be based on full cost accounting, and include, as appropriate, expenses such as land acquisition, project planning and design, construction, plant materials, labor, legal fees, monitoring, and remediation or adaptive management activities, as well as administration of the in-lieu fee program. The cost per unit credit must also take into account contingency costs appropriate to the stage of project planning, including uncertainties in construction and real estate expenses. The cost per unit of credit must also take into account the resources necessary for the long- term management and protection of the in-lieu fee project. In addition, the cost per unit credit must include financial assurances that are necessary to ensure the successful completion of in-lieu fee projects.

(vi) Credits Provided by Preservation These credits should be specified as acres, linear feet, or other suitable metrics of preservation of a particular resource type. In determining the compensatory mitigation requirements for division authorizations using mitigation banks or in-lieu fee programs, the division should apply a higher mitigation ratio if the requirements are to be met through the use of preservation credits than if other forms of mitigation were used. In determining this higher ratio, the division must consider the relative importance of both the impacted and the preserved aquatic resources in sustaining watershed functions.

(vii) Credits Provided by Riparian Areas, Buffers, and Uplands These credits should be specified as acres, linear feet, or other suitable metrics of riparian area, buffer, and uplands, respectively. Non-aquatic resources can only be used as compensatory mitigation for impacts to aquatic resources authorized by division authorizations when those resources are essential to maintaining the ecological viability of adjoining aquatic resources. In determining the compensatory mitigation requirements for division authorizations using mitigation banks and in-lieu fee programs, the division may authorize the use of riparian area, buffer, and/or upland credits if it determines that these areas are essential to sustaining aquatic resource functions in the watershed and are the most appropriate compensation for the authorized impacts.

(viii) Credit Release Schedule The release of credits must be tied to performance-based milestones (e.g., construction, planting, and establishment of specified plant and animal communities). The credit release schedule should reserve a majority share of the total credits for release only after full achievement of ecological performance standards. When determining the credit release schedule, factors to be considered may include, but are not limited to: The method of providing compensatory mitigation credits (e.g., restoration), the likelihood of success, the nature and amount of work needed to generate the credits, and the aquatic resource type(s) and function(s) to be provided by the mitigation bank or in-lieu fee project. The division will determine the credit release schedule, including the share to be released, only after full achievement of performance standards, after consulting with the IRT. Once released, credits may only be used to satisfy compensatory mitigation requirements of a division authorization if the use of credits for a specific authorization has been approved by the division.

For single-site mitigation banks, the terms of the credit release schedule must be specified in the mitigation banking instrument. The credit release schedule may provide for an initial debiting of a limited number of credits once the instrument is approved and other appropriate milestones are achieved (see subsection 87.10(8)(l)). For in-lieu fee projects and umbrella mitigation bank sites, the terms of the credit release schedule must be specified in the approved mitigation plan. When an in-lieu fee project or umbrella mitigation bank site is implemented and is achieving the performance-based milestones specified in the credit release schedule, credits are generated in accordance with the credit release schedule for the approved mitigation plan. If the in-lieu fee project or umbrella mitigation bank site does not achieve those performance-based milestones, the division may modify the credit release schedule, including reducing the number of credits.

(ix) Credit Release Approval Credit releases for mitigation banks and in-lieu fee projects must be approved by the division. In order for credits to be released, the sponsor must submit documentation to the division demonstrating that the appropriate milestones for credit release have been achieved and requesting the release. The division will provide copies of this documentation to the IRT members for review. IRT members must provide any comments to the division within 15 days of receiving this documentation. However, if the division determines that a site visit is necessary, IRT members must provide any comments to the division within 15 days of the site visit. The division must schedule the site visit so that it occurs as soon as it is practicable, but the site visit may be delayed by seasonal considerations that affect the ability of the division and the IRT to assess whether the applicable credit release milestones have been achieved. After full consideration of any comments received, the division will determine whether the milestones have been achieved and the credits can be released. The division shall make a decision within 30 days of the end of that comment period and notify the sponsor and the IRT.

(x) Suspension and Termination If the division determines that the mitigation bank or in-lieu fee program is not meeting performance standards or complying with the terms of the instrument, appropriate action will be taken. Such actions may include, but are not limited to, suspending credit sales, adaptive management, decreasing available credits, utilizing financial assurances, and terminating the instrument.

(o) Accounting Procedures (i) For mitigation banks, the instrument must contain a provision requiring the sponsor to establish and maintain a ledger to account for all credit transactions. Each time an approved credit transaction occurs, the sponsor must notify the division.

(ii) For in-lieu fee programs, the instrument must contain a provision requiring the sponsor to establish and maintain an annual report ledger in accordance with subsection 87.10(8)(h)(iii), as well as individual ledgers that track the production of released credits for each in-lieu fee project.

(p) Reporting (i) Ledger Account The sponsor must compile an annual ledger report showing the beginning and ending balance of available credits and authorized impacts for each resource type, all additions and subtractions of credits, and any other changes in credit availability (e.g., additional credits released, credit sales suspended). The ledger report must be submitted to the division, which will distribute copies to the IRT members. The ledger report is part of the administrative record for the mitigation bank or in-lieu fee program. The division will make the ledger report available to the public upon request.

(ii) Monitoring Reports The sponsor is responsible for monitoring the mitigation bank site or the in-lieu fee project site in accordance with the approved monitoring requirements to determine the level of success and identify problems requiring remedial action or adaptive management measures. Monitoring must be conducted in accordance with the requirements in subsection 87.10(6), and at time intervals appropriate for the particular project type and until such time that the division, in consultation with the IRT, has determined that the performance standards have been attained. The instrument must include requirements for periodic monitoring reports to be submitted to the division, which will provide copies to other IRT members.

(iii) Financial Assurance and Long-Term Management Funding Report The division may require the sponsor to provide an annual report showing beginning and ending balances, including deposits into and any withdrawals from, the accounts providing funds for financial assurances and long-term management activities. The report should also include information on the amount of required financial assurances and the status of those assurances, including their potential expiration.

(q) Use of Credits Except as provided below, all activities authorized by division authorizations are eligible, at the discretion of the division, to use mitigation banks or in-lieu fee programs to fulfill compensatory mitigation requirements for division authorizations. The division will determine the number and type(s) of credits required to compensate for the authorized impacts. Authorization applicants may propose to use a particular mitigation bank or in-lieu fee program to provide the required compensatory mitigation. In such cases, the sponsor must provide the authorization applicant with a statement of credit availability. The division must review the applicant's compensatory mitigation proposal and notify the applicant of its determination regarding the acceptability of using that mitigation bank or in-lieu fee program.

(r) IRT Concerns with Use of Credits If, in the view of a member of the IRT, an issued authorization or series of issued authorizations raises concerns about how credits from a particular mitigation bank or in-lieu fee program are being used to satisfy compensatory mitigation requirements (including concerns about whether credit use is consistent with the terms of the instrument), the IRT member may notify the division in writing of the concern. The division shall promptly consult with the IRT to address the concern. Resolution of the concern is at the discretion of the division and is consistent with applicable statutes, regulations, and policies regarding compensatory mitigation requirements for division authorizations. Nothing in subsection 87.10(8) limits the authorities designated to IRT agencies under existing statutes or regulations.

(s) Site Protection (i) For mitigation bank sites, real estate instruments, management plans, or other long-term mechanisms used for site protection must be finalized before any credits can be released.

(ii) For in-lieu fee project sites, real estate instruments, management plans, or other long-term protection mechanisms used for site protection must be finalized before advance credits can be released.

(t) Long-Term Management (i) The legal mechanisms and the party responsible for the long-term management and the protection of the mitigation bank site must be documented in the instrument or, in the case of umbrella mitigation banking instruments and in-lieu fee programs, the approved mitigation plans. The responsible party should make adequate provisions for the operation, maintenance, and long-term management of the compensatory mitigation project site. The long- term management plan should include a description of long-term management needs and identify the funding mechanism that will be used to meet those needs.

(ii) The instrument may contain provisions for the sponsor to transfer long-term management responsibilities to a land stewardship entity, such as a public agency, non-governmental organization, or private land manager.

(iii) The instrument or approved mitigation plan must address the financial arrangements and timing of any necessary transfer of long-term management funds to the steward.

(iv) Where needed, the acquisition and protection of water rights should be secured and documented in the instrument or, in the case of umbrella mitigation banking instruments and in-lieu fee programs, the approved mitigation site plan.

(u) Grandfathering of Existing Instruments (i) Mitigation banking instruments. Credits from existing federal mitigation banking instruments are eligible for use as compensatory mitigation under Regulation 87. Credits must be debited from the bank ledger using the procedure described in the mitigation bank instrument.

(ii) In-lieu fee program instruments. Credits from in-lieu fee program instruments are eligible for use as compensatory mitigation under Regulation 87. Credits must be debited from the bank ledger using the procedure described in the in-lieu fee instrument.

87.11 MUTUAL MODIFICATION AND DIVISION-INITIATED (UNILATERAL)

MODIFICATION OR REVOCATION TO PROTECT STATE WATERS; DIVISION ENFORCEMENT; AFTER-THE-FACT AUTHORIZATIONS The division is authorized to utilize the following mechanisms to ensure compliance with the dredge and fill program requirements.

(1) Mutual Modification and Division-Initiated (Unilateral) Modification or Revocation (a) Upon the division’s determination that the construction or operation of a project is adversely impacting state waters despite compliance with a dredge and fill authorization, the division and the project proponent may mutually agree to modify the authorization to achieve protection of state waters. Temporary exceedances of water quality standards shall be deemed in compliance with the authorization, so long as such exceedance will not be of a degree to cause conditions acutely toxic to aquatic life or to exceed standards assigned to protect a domestic drinking water supply where that is a classified use.

(b) If the division determines that the division and the project proponent are unable to mutually agree on terms to ensure protection of state waters, the division may unilaterally modify or revoke an Individual Authorization, Temporary Authorization, or Notice of Coverage under a General Authorization to protect state waters.

(c) Notice and comment procedures and judicial review rights concerning mutual or unilateral modifications and revocation are as follows:

(i) For Individual Authorizations: Prior to issuing any final mutual or unilateral modification or Notice of Revocation, the division shall make a draft of the modified Individual Authorization or Notice of Revocation available to the public for comment. Public notice shall be accomplished through email notification to all persons who have signed up for Dredge and Fill Protection Program notifications through the division’s website, posting the information on the division’s Dredge and Fill Protection Program webpage, and inclusion in the Water Quality Information Bulletin. Public comment will be accepted for 30 days after publication in the Water Quality Information Bulletin and will be considered prior to any final division determination. Public comment will only be accepted on the draft modifications, not on the unchanged authorization terms and conditions. The division may suspend (i.e., disallow work under) an Individual Authorization pending the public notice process when it determines that either new factual information or a change in the underlying assumptions used to establish the terms and conditions of the authorization (or both) results in adverse impacts to state waters, despite a project’s compliance with that authorization.

(ii) For Temporary Authorizations and Notices of Coverage under General Authorizations: Prior to issuing a final unilateral modification or Notice of Revocation, the division shall make a draft of the modified Temporary Authorization or Notice of Coverage, or the Notice of Revocation available to the project proponent for comment. The project proponent shall have 30 days during which to submit written comment. Comments from the project proponent will only be accepted on the draft modifications, not on any unchanged terms and conditions. Where necessary to protect state waters, the division may suspend a Temporary Authorization or Notice of Coverage under a General Authorization pending this 30- day comment period.

(iii) Judicial Review of any Mutual or Unilateral Modification or Notice of Revocation: The division’s issuance of a final mutual or unilateral modification or Notice of Revocation of an Individual Authorization, Temporary Authorization, or a Notice of Coverage under a General Authorization occurring under this subsection 87.11(1) shall be considered “final agency action” subject to judicial review under section 25-8-404, C.R.S., and section 24-4-106, C.R.S., of the State Administrative Procedure Act. Where necessary to protect state waters, the division may continue any suspension of the Individual Authorization, Temporary Authorization, or Notice of Coverage under a General Authorization pending final judicial review.

(2) Division Enforcement (a) Any person holding a Temporary Authorization, Notice of Coverage under a General Authorization, or Individual Authorization issued under the authority of this Regulation 87, or who is undertaking a project/activity that triggers the need for coverage under a federal Nationwide Permit or Regional General Permit (or, once issued, a General Authorization), but for which Pre-Construction Notification/Application for Coverage is not required, must comply with all terms and conditions of the applicable federal permit (per section 25-8-205.1(5)(b)(II), C.R.S., until the division issues its own General Authorizations), or state dredge and fill authorization. Any violation of a Temporary Authorization (including the underlying Nationwide General Permit or Regional General Permit), a General Authorization (including Notices of Coverage), Notice of Coverage under a General Authorization (including Notices of Coverage), or Individual Authorization issued under the authority of this Regulation 87 is considered a violation of this regulation.

(b) Where the division has reason to believe that a dredge and fill project/activity is taking place, or has taken place, in state waters in violation of: 25-8-205.1, C.R.S., this Regulation 87 or a state-issued dredge and fill discharge authorization, the division may take the following types of enforcement actions against the person(s) conducting such project/activity, as the division deems appropriate:

(i) Issue a notice of alleged violation (NOAV) of this control regulation, as authorized under section 25-8-602, C.R.S. The NOAV may include the nature of any corrective action proposed to be required. The alleged violator may request a hearing on the NOAV under section 25-8-603;

(ii) Issue a cease-and-desist order under section 25-8-605, C.R.S.;

(iii) Issue a clean-up order under section 25-8-606, C.R.S;

(iv) Initiate a suit for a restraining order or injunction under 25-8-607; and/or (v) Impose civil penalties pursuant to section 25-8-608, C.R.S.

(3) After-the-Fact Authorizations (a) In circumstances where a dredge and fill project has commenced without the required dredge and fill authorization, and does not fall under an exemption or exclusion, the project proponent may be subject to enforcement under 87.11(2). The project proponent must then apply for an after-the-fact authorization once any initial corrective measures required by the division have been completed. The division may accept and process an after-the-fact application for a Temporary Authorization, coverage under a General Authorization, or Individual Authorization, unless the division determines that one of the exceptions listed in subsections 87.11(3)(a)(i) through (iv) below is applicable.

(i) No application will be processed until restoration of state waters has been completed, which eliminates current and future detrimental impacts to the satisfaction of the division.

(ii) No application will be accepted in connection with a violation where the division determines that legal action is appropriate until such legal action has been completed.

(iii) No application will be accepted where a federal, state, or local authorization or certification required for the project has already been denied.

(iv) No application will be accepted nor will the processing of an application be continued when the division is aware of enforcement litigation that has been initiated by a federal, state, or local regulatory agency, unless the division determines that concurrent processing of an after-the-fact application is clearly appropriate.

(b) Upon completion of the division review of an after-the-fact application for a Temporary Authorization, coverage under a General Authorization, or Individual Authorization, the division shall determine whether such authorization or Notice of Coverage should be issued (with special conditions if appropriate) or denied. In reaching a decision to issue, the division must determine that the work involved complies with the requirements set forth in subsections 87.11(3)(a)(i)-(iv) above. The division must also require the applicant to demonstrate what measures should have been taken to avoid or minimize impacts to the aquatic resource and may require enhanced mitigation for unauthorized impacts. Applications for Individual after-the-fact Authorizations shall be subject to the public notice procedures in subsection 87.6(6). If the division determines that a denial is warranted, the division’s Notification of Denial should prescribe any final corrective actions required. The division’s notification should also establish a reasonable period of time for the applicant to complete such actions, unless the division determines that further information is required before the corrective measures can be specified. If further information is required, the final corrective measures may be specified at a later date. If an applicant refuses to undertake prescribed corrective actions ordered subsequent to authorization denial or refuses to accept a conditioned authorization, the division may initiate legal action.

87.12 DREDGE AND FILL PROGRAM FEES

(1) Purpose and Use of Program Fees (a) Fees collected pursuant to section 87.12 shall be deposited in the Clean Water Cash Fund created by section 25 8 210(4), C.R.S., to implement the state dredge and fill discharge authorization program established by House Bill 24 1379. ‑ ‑ (b) Fee revenue ‑is intended to offset approximately 40% of the program’s direct and indirect costs; General Fund appropriations shall support the remaining 60%, as consistent with the Clean Water Program’s overall funding structure.

(c) Fee categories described in subsection 87.12(2) below are subject to change and may be revised by rule to recover program costs and maintain the funding split, as described in subsection 87.12(1)(b).

(2) The division shall assess fees according to the categories as described in Table 87.12(2) and corresponding subsections 87.12(2)(a) through (e) below. DESCRIPTION FEE Fees only apply to projects that require submittal of an application to the division.

1. $4,320 per project per year until a Certification of Project Completion is Temporary Authorizations and Notices of issued.

Coverage under General Authorizations for projects not requiring compensatory mitigation, excluding projects that qualify under subsection (e) below.

Fees only apply to projects that require submittal of an application to the division.

1. $9,000 per project per year until a Certification of Project Completion is issued.

Temporary Authorizations and Notices of Coverage under General Authorizations for projects requiring compensatory mitigation.

Consultation. $180 per hour.

Individual Authorizations. $180 per hour, beginning with a pre- application consultation with the division.

1. $9,000 per year until Notice of Termination is issued or Ongoing Operations Agreement is entered into with the division.

Temporary Authorizations for projects conducted under USACE Nationwide Permit 27 (Aquatic Habitat Restoration) and Notices of Coverage $500 per authorization per year until a under the division’s equivalent General Certification of Project Completion is Authorization, once issued and effective.

1. issued.

Voluntary ephemeral stream restoration projects under subsection 87.3(4)(n) are exempt and therefore not subject to this fee.

(a) Temporary Authorizations and Notices of Coverage under General Authorizations for projects which require submittal of an application and do not require compensatory mitigation, excluding projects that qualify under subsection 87.12(2)(e) below.

(i) Fee Submission: The applicant shall submit the initial fee with the application. Annual fees thereafter will be due on the anniversary of the issuance of the Notice of Coverage each year until issuance of the Certification of Project Completion.

(ii) Fee Amount: $4,320 per project per year.

(b) Temporary Authorizations and Notices of Coverage under General Authorizations for projects which require submittal of an application and require compensatory mitigation.

(i) Fee Submission: The applicant shall submit the initial fee with the application. Annual fees thereafter shall be paid on the anniversary of the issuance of the Notice of Coverage each year the authorization remains active until issuance of the Certification of Project Completion.

(ii) Fee Amount: $9,000 per project per year.

(c) Consultation (i) Fee Amount: $180 per hour for consultation that exceeds two hours. The division will provide up to two hours of consultation for each project at no cost.

(ii) Consultation includes, but is not limited to, assistance in determining whether an authorization is required, identifying the appropriate authorization type, evaluating mitigation requirements and plan, and discussing application completeness.

(iii) Each project proponent is entitled to one no cost pre application meeting under subsections 87.12(2)(a), (b), (d), and (e). ‑ ‑ (iv) Basic informational inquiries are not subject to hourly fees.

(v) Billing only begins when consultation becomes detailed, site- specific, or project-based.

(vi) For consultation meetings, fees will be charged per agency hour not by staff per hour.

(d) Individual Authorizations (i) Fee Amount: $180 per hour.

(ii) Fees are charged at an hourly rate based on the actual cost of staff time, beginning with pre-application consultation and including staff activities such as:

(A) Pre-application consultation with the division, except for the mandatory pre-application meeting described in subsection 87.6(2)(g). Additional pre-application meetings will be charged by agency hour not by staff per hour.

(B) Review of a complete application;

(C) Review of project impacts analysis;

(D) Review of purpose and need statement;

(E) Review of alternatives analysis;

(F) Review of compensatory mitigation plan;

(G) Review of the preliminary least environmentally damaging practicable alternative as indicated by the applicant;

(H) Formulation of authorization conditions in coordination with the applicant that are designed to ensure compliance with applicable state water quality requirements; and (I) Agency coordination and consultation associated with the activities described under subsections 87.12(2)(d)(ii)(G) and (H).

(J) The division shall provide an estimate of the cost of completing the individual authorization after the pre- authorization consultation.

(iii) Annual Fee (A) Fee Submission: An annual fee shall be paid on the anniversary of the issuance of the Individual Authorization, unless waived by the division.

(B) Fee Amount: $9,000 per year until the division notifies the project proponent of its determination that all construction and compensatory mitigation requirements in the Individual Authorization have been satisfied, which shall be accomplished through either a Notice of Termination, or, for projects with ongoing operational conditions, entering into an Ongoing Operations Agreement with the division prior to expiration of the underlying Individual Authorization.

(e) Temporary Authorizations for projects conducted under USACE Nationwide Permit 27 (Aquatic Habitat Restoration) and Notices of Coverage under the division’s equivalent General Authorization, once issued and effective. Voluntary ephemeral stream restoration projects under subsection 87.3(4)(n) are exempt and therefore not subject to this fee.

Fee Submission: The applicant shall submit the initial fee with the Preconstruction Notification/Application for Coverage. Annual fees thereafter shall be paid on the anniversary of the issuance of the Notice of Coverage until the issuance of the Certification of Project Completion.

(i) Fee Amount: $500 per authorization per year.

(3) Inflation Adjustments.

Fees may be adjusted annually based on the percentage change in the United States Department of Labor’s Bureau of Labor Statistics Consumer Price Index for Denver- Aurora-Lakewood for All Items and All Urban Consumers, or its successor index. Revised fee amounts may take effect January 1 of the following year.

(4) The division shall review the fees in this section annually, beginning in January 2028 to allow for initial data collection following the program’s implementation. If data collected during the review, including authorization volume, processing times, or project completion durations, indicate that fee adjustments are necessary to ensure fund solvency, then the division shall propose a revised fee schedule as part of this regulation or Water Quality Control Commission Regulation No. 102.

87.13 STATEMENT OF BASIS, SPECIFIC STATUTORY AUTHORITY AND

PURPOSE; DECEMBER 8-10, 2025 RULEMAKING; FINAL ACTION FEBRUARY 9, 2026; EFFECTIVE DATE MARCH 30, 2026 The provisions of sections 25-8-205.1, and 25-8-205(1)(h), C.R.S., provide the specific statutory authority for adoption of this control regulation. The Water Quality Control Commission (commission) also adopted, in compliance with section 24-4-103(4), C.R.S., the following statement of basis and purpose.

BASIS AND PURPOSE The commission promulgated rules to implement a state dredge and fill discharge authorization program. The rules focus on avoiding and minimizing adverse impacts of dredge and fill activities on state waters, and compensating for any unavoidable adverse impacts.

The rules incorporate the guidelines developed pursuant to Section 404(b)(1) of the federal Clean Water Act.

Section 87.1 – General Provisions 87.1(1) – Purpose. House Bill 24-1379, titled “Regulate Dredge and Fill Activities in State Waters,” was signed into law on May 29, 2024, and became effective on July 1, 2024.

HB24-1379 established a program codified into Colorado’s Water Quality Control Act (under the “control regulations” provision in section 25-8-205, C.R.S.). It directs the commission to establish rules for the Water Quality Control Division (division) to implement a program to regulate the discharge of dredged and fill material into state waters to fill the void left by the United States Supreme Court’s decision in Sackett v. EPA (May 2023), which left many of Colorado’s seasonal streams and wetlands unprotected from the impacts of dredge and fill activities (e.g., mining and construction, including infrastructure projects). The scope of the state’s dredge and fill authorization program covers all “state waters” that are not otherwise excluded from state dredge and fill program requirements under HB24-1379. The bill also amended the definition of “state waters” in the Water Quality Control Act to expressly include wetlands, thereby codifying the division’s longstanding interpretation of the term. Additional details regarding the underlying purpose of HB24-1379, and by extension, its implementing regulations, are outlined in the legislative declaration at section 25-8- 205.1(1), C.R.S.

HB24-1379 sets up a dredge and fill discharge authorization program based on the permitting program administered by the United States Army Corps of Engineers (USACE) under Section 404 of the federal Clean Water Act. It requires the commission to establish rules by December 31, 2025, to implement the program. HB24-1379 divides the commission’s rulemaking duties into three categories, as explained below:

(1) Program rules. These are rules to implement the state dredge and fill discharge authorization program, focusing on avoidance, minimization of adverse impacts to the aquatic resource, and compensation for such impacts by incorporating the USACE’s current Section 404(b)(1) Guidelines (codified in federal regulation). The commission’s program rules must include: procedures for issuing, modifying, and terminating authorizations; the duration of authorizations; establishment of fees; details concerning the division’s consultation with local, state, and federal agencies and the Southern Ute Indian Tribe; and an exemption for certain voluntary stream restoration efforts on ephemeral streams. The commission’s program rules may include further minor clarification of the HB24-1379’s exemptions and exclusions and shorter deadlines than two years for the division to process Individual Authorization applications for relatively less extensive projects.

(2) Rules for Individual Authorizations. These rules must include: application requirements, including those specified in HB24-1379; a prohibition against the discharge of dredged or fill material where there is a practicable alternative that would have less impact, as well as criteria for the division to implement the prohibition; and monitoring, record-keeping, and reporting requirements. The commission’s rules must also direct the division to include conditions in Individual Authorizations that are designed to protect state waters, including conditions akin to those included in “401 certifications” to ensure compliance with water quality requirements.

(3) Rules for compensatory mitigation. These rules must include a framework for “methods for ensuring that impacts to wetlands and streams are fully compensated through functional assessments and ratios that can be applied through individual mitigation projects or by applying acre-based ratios that are based on the [USACE] watershed approach.”

87.1(3) – Materials Incorporated by Reference. This subsection contains the requirements of the State Administrative Procedure Act (section 24-4-103(12.5), C.R.S.) to allow for incorporation of federal regulations by reference within Regulation 87, which the commission has done in Section 87.4 of the regulation through reference to the U.S. Environmental Protection Agency’s Section 404(b)(1) Guidelines, and in other sections of the regulation that reference other Colorado agency regulations, U.S. Department of Agriculture guidance, and USACE regulations and guidance documents. Consistent with HB24-1379, the provision expressly notes that the version of the 404(b)(1) Guidelines in effect at the time HB24-1379 was signed into law shall serve as the baseline (i.e., floor) for protection.

87.1(5) – Water Rights. This subsection reiterates the requirement in the Water Quality Control Act that rules adopted by the commission under HB24-1379, as well as the division’s interpretation and implementation of the rules, are subject to the relevant prohibitions and restrictions in section 25-8-104, C.R.S., concerning water rights.

87.1(6) – Guidance for Program Implementation. HB24-1379 authorizes the division both to create its own guidance to assist in program implementation, and to rely on USACE and EPA Guidance. The commission believes that it will be beneficial for both the division and the regulated community for the Division to develop its own guidance on certain topics, but also to rely on longstanding federal guidance in situations where it makes sense to maintain consistency between the state and federal dredge and fill programs. A prime example of such federal guidance is the U.S. Army Corps of Engineers, Environmental Laboratory, “Corps of Engineers Wetlands Delineation Manual,” (January 1987, Final Report). The commission intends for the division’s dredge and fill program to primarily rely on this well-accepted guidance in making wetlands delineation determinations. Section 87.2 – Definitions Many of the defined terms in Section 87.2 come directly from HB24-1379, and most of those statutory definitions are verbatim from the USACE and/or the U.S. EPA’s definitions of those terms in federal regulations. Some of the terms used and defined in Regulation 87 that do not have corresponding federal definitions are as follows: The term “activity as a whole” in the context of the state’s dredge and fill program has limited applicability. It relates only to Individual Authorizations, which may include conditions that relate to the “activity as a whole” to ensure compliance with applicable “state water quality requirements,” as outlined in subsection 87.6(7)(d) and (e). The term, as well as the basis of the definition the commission adopted, are derived from the 1994 U.S Supreme Court decision in PUD No. 1 of Jefferson County v. Washington Dep’t of Ecology, 511 U.S. 700 (1994). The division has relied upon the “activity as a whole” concept in several 401 certifications for water supply projects that required USACE Individual Section 404 Permits (e.g., the Southern Delivery System and the Northern Integrated Water Supply Project). The commission also opted to define the terms “project operation,” “direct impacts,” and “indirect impacts” as those terms are used in the definition of “activity as a whole.”

The terms “isolated state waters,” “isolated ordinary high watermark reaches,” “isolated ponds and impoundments,” and “isolated wetlands” and their definitions are specific to the state program. These water features (discharges to which will be covered under a Colorado-Specific General Authorization) are defined as those outside of the 100-year floodplain or more than 1,500 feet of the ordinary high watermark (OHWM) of other state waters.

The definition for “ordinary high watermark” comes from HB24-1379 and is used in several contexts throughout HB24-1379 and Regulation 87. Recognizing that delineating the OHWM in ephemeral and intermittent surface water features can be challenging, the commission added references to the USACE documents titled: “A Field Guide to the Identification of the Ordinary High Watermark (OHWM) in the Arid West Region of the Western United States” and “A Guide to Ordinary High Water Mark (OHWM) Delineation for Non-Perennial Streams in the Western Mountains, Valleys, and Coast Region of the United States” as specific resources to assist with such OHWM identification. The commission has incorporated these guidance documents by reference as prime examples of “other appropriate means that consider characteristics of the surrounding area” in identifying the ordinary high watermark in ephemeral and intermittent streams. These guides may also be used to assist in characterizing the physical features identified in the OHWM definition. Other resources include, but are not limited to, the Natural Resources Conservation Service Web Soil Survey, other soil and vegetation maps, and aerial photography.

The commission considered, but ultimately rejected, the proposal to include a definition for “public interest,” which, if adopted, would have applied only in the context of the division’s “public interest review” of projects applying for an Individual Authorization. Relatedly, the commission rejected all but the first sentence of the division’s proposed subsection 87.6(7)(f). The rejected text set forth a process for the public interest review and would have allowed the division to deny an application for an Individual Authorization upon determining that the project would be contrary to the public interest. The commission recognizes that the General Assembly intended the USACE Section 404 program to serve as the basis for the state’s program and that the “public interest review” is a longstanding, core component of the federal Section 404 framework. The commission determined, however, that, while it understands that it has the statutory authority under HB24-1379 to include a “public interest review” in the regulations, requiring the division to conduct a “public interest review” as an independent step in the division’s consideration of Individual Authorization applications was not necessary given the overlap with components of the required Section 404(b)(1) analysis. Section 87.3 – Scope and Applicability This section of the regulation is intended to provide clarity regarding the types of dredge and fill activities and the types of state waters subject to regulation under HB24-1379 and this regulation.

87.3(1) – Indian Tribes. This subsection is intended to address the unique “checkerboard” pattern of Indian-owned and non-Indian-owned lands within the external boundaries of the Southern Ute Indian Tribe (SUIT) Reservation and state/tribal jurisdiction over those lands. The same language concerning jurisdiction within the Southern Ute Indian Tribe reservation is in HB24-1379, and it is also found in other state statutes and regulations. The commission included this provision to reiterate the limited scope of the state’s jurisdiction to regulate dredge and fill activities within the SUIT reservation boundaries. On the other hand, Colorado exercises no jurisdiction within the Ute Mountain Ute Reservation, and thus, the state’s dredge and fill program does not apply to dredge and fill activities within that reservation. 87.3(2) – No Preemption of Local Authority. Historically, local governments have enacted land use, zoning, and other ordinances that regulated activities in wetlands and state waters in parallel with the federal Section 404 program. There was no intent that Regulation 87 preempt local governmental regulations or home rule authority. Rather, the requirements of both the state and local programs will apply to projects that include impacts to state waters and waters regulated under local programs. Therefore, the commission included a statement clarifying that the state dredge and fill program does not preempt local regulation and that requirements of both programs will apply to a project. The division should coordinate closely with local governments that have their own wetlands protection programs to facilitate, among other things, streamlining respective processes and program requirements as applied to specific projects, and determining compensatory mitigation obligations for projects. 87.3(3) – Prohibition on the Discharge of Dredged or Fill Material. Colorado’s program regulates the discharge of dredged or fill material into state waters. This subsection provides the basic regulatory trigger for the state dredge and fill program - a prohibition on discharges of dredged or fill material into state waters without first obtaining an authorization for such discharge from the division, unless an exemption or an exclusion applies.

87.3(4) – Exempted Activities. This subsection lists the types of activities exempted from regulation under Colorado’s dredge and fill program. Mindful of the ambiguities that have led to confusion in the context of the federal program, the General Assembly included a fair amount of detail in each exemption. Exempted activities do not require dredge and fill authorization coverage from the division. Regardless of the “type” of water feature involved, the state dredge and fill program requirements do not apply to exempted activities unless they are “recaptured” into regulation under subsection 87.3(5). The exempted activities listed and described in this subsection of the regulation come directly from HB24-1379, with limited additional language to provide clarity. With the exception of the voluntary ephemeral stream restoration exemption, the General Assembly authorized the commission to make only “minor clarifications of the terminology used to define the exemptions … without limiting or expanding” their scope. The bill and the regulation contain all of the federal exemptions as found in Section 404 of the Clean Water Act. However, per the bill, the scope of certain exemptions under the state program is broader than the federal 404 program. For example, the exemption outlined in subsection (g), “Construction and/or maintenance of specified structures and features,” deals with the construction and maintenance of water conveyance and holding structures, including agricultural structures, such as farm ponds, stock ponds, and irrigation ditches. This exemption, when read along with the definitions of its key terms, “construction,” “maintenance,” and “irrigation ditch/acequia,” encompasses nearly all activities related to construction and maintenance of irrigation ditches impacting state waters, including headgate placement and maintenance, as well as piping and lining of irrigation ditches and maintenance on all types of ditches. The only “exception to the exemption” is for “construction of new work or to extend, expand, or relocate an existing irrigation ditch or acequia for municipal or industrial purposes.” Construction in this context is not an exempt activity, regardless of whether the ditch water will also be used for irrigation, because the exemption for ditch construction is intended to strictly benefit agriculture projects. The commission adopted the division’s proposal to reorganize the various provisions of the exemption as found in the bill for the purpose of clarity, but did not make any substantive revisions other than (1) including flow measuring devices as an example of “facilities appurtenant to and functionally related to irrigation ditches” in the definition of “irrigation ditch or acequia”; and (2) reiterating the “exception to the exemption” concerning construction of ditches for municipal or industrial purposes in the definition of "construction" itself.

The commission determined that the regulated community would benefit from additional detail regarding the division’s implementation of the exemption at 87.3(4)(c) for “[a]ctivities in receipt of an active Section 404 Permit that was issued on or after May 25, 2023, except to the extent that the project area of the Section 404 Permit involves a discharge of dredged or fill material into state waters that have been determined by the USACE to not be waters of the United States under the Section 404 Permit…” The “except to the extent that” language may, in certain circumstances, result in dual jurisdiction (i.e., USACE and the division) over a particular project/activity. As such, the commission adopted a framework that is intended to put project proponents on notice regarding the circumstances that may give rise to dual jurisdiction and proponents’ obligations in those circumstances. Under the framework, project proponents are responsible for coordinating with USACE to determine whether they must also obtain a state authorization for a project/activity that USACE elected to cover under a Section 404 Permit.

Generally, dual jurisdiction will be triggered only in situations where the USACE 404 Permit does not require compensatory mitigation for unavoidable adverse impacts to all wetlands and water features within the project area. See 87.3(4)(c)(i). It is the commission’s understanding that in some situations USACE will require compensatory mitigation for unavoidable impacts to aquatic resources within the project area that are not WOTUS. In such cases, project proponents do not need to seek state dredge and fill coverage. See 87.3(4)(c)(ii). Project proponents should be proactive in communicating with USACE concerning this aspect of their 404 Permit. If the USACE 404 Permit compensatory mitigation requirements apply to WOTUS only but the project impacts additional state water features and wetlands, it is the project proponent’s responsibility to seek dredge and fill authorization coverage from the division to ensure that avoidance, minimization, and compensatory mitigation obligations are met for those non-WOTUS wetlands and water features (or alternatively, to determine whether a state exemption or exclusion applies). For all projects involving dual jurisdiction, the commission directs the division to coordinate with USACE to streamline processes to prevent delays in allowing projects to move forward as planned. Per the direction in HB24-1379, subsection 87.3(4)(n) outlines the exemption for voluntary ephemeral stream restoration efforts and includes the criteria that must be met for the exemption to apply. This exemption differs from the others in that the General Assembly gave the commission discretion to craft its scope and parameters. The regulatory provision also directs the division to issue guidance to provide better clarity and examples of the terminology used therein. Where a restoration project is occurring in an intermittent or perennial stream, or where the regulatory criteria to qualify for the exemption are not met, such projects will be required to be conducted under Nationwide Permit 27 (or the division equivalent, once issued). 87.3(5) – Recapture provision This provision acts as an “exception” to all exemptions other than 87.3(4)(a)-(d), and (n). If triggered, this exception “recaptures” the otherwise exempt activity into the dredge and fill regulatory framework. While HB24-1379’s recapture provision is identical to the recapture provision in Section 404(f)(2) of the federal Clean Water Act, subsection 87.3(5) elaborates on the exemption in a manner consistent with USACE’s recapture provision in the federal regulations. The 87.3(5) recapture provision clarifies that an otherwise exempt activity is “recaptured” into being regulated only where both 87.3(5)(1) and (2) apply. The commission also added the important clarification that “piping and lining of irrigation ditches or acequias, as described in subsection 87.3(4)(g)(iii)(B), do not meet the conditions of this recapture provision.” The commission recognizes that this particular language differs from the way the federal agencies currently apply the Clean Water Act’s recapture provision in the context of piping and lining of ditches. But this is an independent state program that is intended to consider Colorado-specific needs, one of which is promoting water conservation through ditch lining and piping. Moreover, this language does not expand the recapture provision in HB24-1379; it describes the commission’s interpretation of the provision as applied to the otherwise exempted activity of piping and lining irrigation ditches. The commission believes that the regulated community will benefit from division guidance on this topic, including examples of when the recapture provision would apply to otherwise exempted activities.

87.3(6) – Excluded types of waters. The excluded water features in HB24-1379, most of which are human-made features located in upland, are still considered “state waters” in all other regulatory contexts. However, dredge and fill discharges into those excluded water features are not subject to regulation under this new program. The type of activity resulting in the discharge to an excluded water feature is not relevant; where an excluded water feature identified in HB24-1379 and section 87.3(6) is involved, the requirements of Colorado’s dredge and fill program do not apply. 87.3(6)(e) – This exclusion is for “wetlands that are adjacent to a ditch or canal and supported by water in the adjacent ditch or canal.” Prehearing filings and testimony at the hearing made it apparent that parties had disparate interpretations of the terms “adjacent to” and “supported by.” The commission therefore determined that defining these terms provided essential clarity and regulatory certainty, ensuring that stakeholders and the division have consistent understanding regarding the scope and nature of the wetlands covered by this exclusion. The commission does not believe the definitions change the statutory exclusion’s scope. In consideration of statements submitted into the record by the bill’s sponsors and other materials, the commission believes that the definitions it adopted are consistent with the legislative intent to protect state wetlands while allowing dredge and fill projects within specifically-excluded waters to advance. Contrary to concerns raised by the agricultural community during the hearing, the commission does not view these definitions as resulting in additional burden on this sector. To the contrary, the definitions ensure that routine maintenance work on ditches and canals (that are used for agriculture or any other purpose) can be conducted without triggering state dredge and fill program obligations, even when those activities impact wetlands that are “next to, adjoining, or in close proximity to” ditches or canals and that are “supported by” water in the adjacent ditch or canal. The commission notes that this exclusion applies regardless of the type of activity taking place within the excluded waters. Therefore, for example, if there are wetlands that are both adjacent to and supported by a ditch or canal, and if a project proponent is piping or lining that ditch or canal (for any purpose), and impacts those excluded wetlands, such a project does not require an authorization or compensatory mitigation. However, the commission also notes that project proponents must determine whether an adjacent wetland is “supported by” a ditch or canal, and therefore whether the exclusion applies, prior to engaging in the dredge and fill activity.

87.3(6)(i) - This exclusion for “swales and erosional features, such as gullies, small washes, and rills, that do not contain wetlands or an ordinary highwater mark [OHWM]” differs from the similar federal exclusion, which includes a “water flow” component instead of reference to the OHWM. Throughout the rulemaking hearing process, various parties pointed out challenges associated with making this determination in the context of ephemeral water features. The commission understands that the division will need to make case-by-case determinations as to whether a particular water feature meets this exclusion, or whether it is instead a regulated ephemeral stream or isolated OHWM reach as defined in Section 87.2. The division should make these determinations using tools that are readily available, which may include site visits, USACE guidance documents (e.g., the 2007 USACE Jurisdictional Determination Form Instructional Guidebook), aerial photographs, topographic maps, vegetation maps, and soil maps. Consistent with USACE guidance on OHWM delineations, the commission intends for the following principles to be a starting point for this program: erosional features (e.g., gullies and rills) do not contain wetlands or an OHWM and are characterized by weathering that contributes to the loss of soil and rocks from events like wind, water and ice; typically, a swale can be defined as a shallow feature that has slight to moderate slopes, can have grass or other low lying vegetation throughout the swale, and can move water from one place to another; swales tend to slow water so it can infiltrate into the soil; swales do not tend to impact the chemical, physical, or biological integrity of downstream waters.

87.3(6)(j) – Groundwater is excluded from Colorado’s dredge and fill requirements. As used in this regulation, “groundwater means subsurface waters in a zone of saturation that are or can be brought to the surface of the ground or to surface waters through wells, springs, seeps, or other discharge areas. ‘Groundwater’ does not include wetlands.” This definition mirrors the definition of “groundwater” in commission Regulation 41 (Basic Standards for Groundwater). The commission construes this definition to mean that once groundwater reaches the surface through wells, springs, seeps, or other discharge areas, it ceases to be groundwater, and thus, the exclusion no longer applies. Once groundwater reaches the surface of the ground or surface waters, authorization to discharge dredged or fill material into those waters under this regulation would be required, unless a separate exclusion or exemption applies. The definition of groundwater as being subsurface waters “that are or can be brought to the surface of the ground or to surface waters through wells, springs, seeps, or other discharge areas” does not mean that the water is perpetually considered groundwater even after it daylights, and, in most cases, mixes with surface waters. The commission views the emphasized phrase in the previous sentence as an introduction to the various mechanisms by which groundwater can and does reach the earth’s surface, but the definition does not indicate that such water continues to be groundwater at that point. Such interpretation would lead to absurd results by drastically limiting the scope of protection intended under HB24-1379, as it would result in removing protection of any surface water contained in or flowing through the state that has ever been beneath the ground. Indeed, Regulation 41, which contains the same definition, sets forth the statewide water quality standards for groundwater. The standards in that regulation do not apply to groundwater after it is brought to the surface. Instead, once subsurface water reaches the earth’s surface, it is subject to the water quality standards framework for surface waters in commission Regulation 31 and the individual basin regulations pertaining to classifications and standards of surface waters. 87.3(7) – Process for Determining Federal Versus State Program Coverage; Process for Obtaining an Official Determination Concerning the Applicability of State Exemptions, Recapture Provision, and Exclusions 87.3(7)(a) – This subsection describes the process that project proponents must follow when uncertainty exists as to whether any wetland, lake, stream segment, or other water feature(s) qualify as “waters of the United States” (i.e., whether the project falls under federal jurisdiction). It reiterates that the division will not be making WOTUS determinations and thus project proponents should seek USACE input, just as they would have done prior to existence of the Colorado dredge and fill program. Notwithstanding the exemption in subsection 87.3(4)(b) (situations where USACE issued an approved jurisdictional determination prior to the Sackett decision finding that the waters in question are not WOTUS), if USACE makes a determination that a certain wetland or water feature is not a WOTUS, the project proponent must either conduct the project under the appropriate authorization from the division or, under the process outlined in subsection 87.3(7)(b), seek an official determination from the division that a state exclusion or exemption applies.

87.3(7)(b) – This subsection provides the process for a project proponent to seek an official determination from the division as to the applicability of any of the exemptions in subsection 87.3(4), the recapture provision in subsection 87.3(5), or any of the exclusions in subsection 87.3(6). The commission recognizes that even though the exemptions and exclusions outlined in this regulation are detailed, a certain amount of ambiguity is inherent with respect to certain terminology used to describe exemptions and exclusions. The commission found that, in most instances, attempting to define these terms in this regulation would not lead to further clarity. Rather, the division needs to address the applicability of exemptions and exclusions on a case-by-case basis where uncertainty exists. Seeking an official determination from the division is not mandatory. Any such requests must be submitted in writing and contain sufficient information for the division to provide an official determination. The division may also conduct a site visit, if necessary, to make the determination. In all cases, the initial burden will be on the project proponent to demonstrate that the identified exemption(s) or exclusion(s) apply, or in the case of the recapture provision, that the identified activity does not meet at least one part of the two-part test in subsection 87.3(5). The commission directs the division to act upon requests for official determination as soon as practicable.

Section 87.4 – Guidelines for Protection 87.4(1) – Section 404(b)(1) Guidelines. HB24-1379 requires the commission to “incorporate the guidelines developed pursuant to Section 404(b)(1) of the federal act,” and further states that the commission’s rules must be “as protective” as the federal Section 404(b)(1) Guidelines in place on May 29, 2024. The 404(b)(1) Guidelines, which are not guidance but rather enforceable regulations, aim to avoid and minimize harm to the physical, chemical, and biological characteristics of aquatic ecosystems (referred to in this regulation as the “aquatic resource”). The 404(b)(1) Guidelines specify the various criteria for evaluating the potential impacts of dredge and fill projects on the aquatic ecosystem and are required to be used in evaluating/comparing project alternatives to select the least environmentally damaging alternative. Due to the length of the 404(b)(1) Guidelines, the commission has chosen to incorporate the federal 404(b)(1) Guidelines by reference into this Regulation 87 (except for Subpart J - Compensatory Mitigation), rather than to restate them verbatim in Regulation 87. As incorporated into this regulation, the 404(b)(1) Guidelines will be implemented and enforceable by the division.

87.4(2) – Summary of the 404(b)(1) Guidelines. The commission included a short description of the various subparts (A-J) of the 404(b)(1) Guidelines (as they appear in EPA regulations) to provide additional context and a better understanding of their contents.

87.4(3) – Process for the Division’s Implementation of the 404(b)(1) Guidelines. Subsections (a) and (b) outline the contexts in which the Section 404(b)(1) Guidelines will be used by the division for Individual and General Authorizations, respectively. Proponents are required to utilize the 404(b)(1) Guidelines in evaluating alternatives and selecting the least environmentally damaging practicable alternative in the context of an application for an Individual Authorization. For General Authorizations that correspond with the USACE Nationwide and Regional General Permits, to avoid duplication of efforts and to facilitate consistency between the state and federal dredge and fill programs, the division will consider the USACE’s 404(b)(1) Guidelines analysis in that agency’s formulation of protective terms and conditions, and the division will not generally be required to conduct its own independent 404(b)(1) analysis for those General Authorizations. However, where the division determines that evidence presented during the public comment period on the draft General Authorization shows that a particular General Authorization is not sufficiently protective of state waters, the division will be required to conduct a 404(b)(1) analysis for that particular authorization. The division may then choose to modify the terms and conditions of the General Authorization or Conditions document based on that 404(b)(1) analysis. Finally, under subsection 87.4(3)(b)(iii), for “Colorado-Specific” General Authorizations that do not correspond with a USACE Nationwide or Regional General Permit (e.g., recreational trail maintenance), either the division or the third party requesting a Colorado-Specific General Authorization, must conduct a 404(b)(1) analysis to the extent relevant and practicable.

Subsection 87.4(3)(c) clarifies that Subpart J of the 404(b)(1) Guidelines is not to be relied upon for determining appropriate compensatory mitigation requirements for division-authorized projects. Instead, Section 87.10 of Regulation 87 shall be utilized for that purpose.

87.4(4) – Modifications to Adapt the 404(b)(1) Guidelines to Colorado’s Dredge and Fill Program.

This subsection contains a non-exhaustive list of terminology and provisions from the 404(b)(1) Guidelines, as incorporated by reference into Regulation 87, that do not apply to Colorado’s dredge and fill program. The commission may add items to this list as they are identified by the commission, the division, or other interested parties, during periodic reviews of this Regulation 87.

Section 87.5 – Division Consultation and Coordination With Federal and State Agencies, Local Governmental Entities, and the Southern Ute Indian Tribe The General Assembly directed the division to seek input from other agencies and entities with special expertise in matters that overlap with the division’s duties under HB24-1379 and this Regulation 87. The commission believes that such coordination/consultation will result in a stronger state dredge and fill program, both in terms of environmental protection and consistency with other agency/entity requirements that may govern a specific project.

Section 87.5 outlines the mandatory and discretionary triggers for such consultation and coordination. This section is intended to include a transparent and comprehensive inventory of the subject matter and scope of division consultation and coordination with outside agencies and entities. In this section, the commission reiterated that the division may consult with other agencies/entities only on subjects within the jurisdiction of those agencies/entities and that the division is never bound to recommendations from those agencies/entities; the division will remain the ultimate decision-maker regarding the issues subject to such consultation/coordination as to the state dredge and fill program, without preempting the jurisdictional authority of local governmental agencies. The commission intends that, where stated in Section 87.5, the division must enter into Memoranda of Understanding (MOUs) with outside agencies, entities, or the Southern Ute Indian Tribe. The terms of such MOUs are to be limited to details concerning communicating about the subject matter(s) specified in the regulation, such as roles and responsibilities, internal deadlines to provide input, points of contact, and the manner of communication.

As indicated in subsection 87.3(2), this regulation does not preempt local land use, zoning, or other local regulation. Therefore, in situations where the division and local governmental entities have overlapping jurisdiction, an MOU may be used to streamline implementation. The commission recognizes that specific requirements and processes can vary among agencies and entities. Ongoing consultation and coordination will support program evaluation, development of conditions, and consideration of mechanisms to ensure implementation consistent with this regulation and HB24-1379. The commission also distinguished the terms “consultation” and “coordination” as used in this section of the regulation. Consultation is intended to be a more formal process that typically involves an MOU outlining procedures and protocol for communications, whereas coordination refers to less formal interactions between the division and the outside agency/entity for purposes of giving notice of a project and receiving general input.

Section 87.6 – Individual Authorizations 87.6(1) - The circumstances that trigger the need to apply for and obtain an Individual Authorization for a dredge and fill project or activity Individual Authorizations are intended to cover larger or more complex projects (i.e., where the permanent loss of state waters after avoidance and minimization exceeds thresholds set forth in the various Nationwide Permits and corresponding division- issued General Authorizations, typically 0.5 acres). As USACE has with the 404 permitting program, the division also has discretion to require an Individual Authorization where the division determines the activity will result in more than minimal individual or cumulative adverse impacts to the aquatic resource. 87.6(2) - Pre-Application Requirements for Individual Authorizations The commission determined that a pre-application process for Individual Authorizations would benefit both project proponents and the division by providing the framework for a coordinated effort in terms of the division’s approval of a purpose and need statement and the practicable alternatives that are to be analyzed under the 404(b)(1) Guidelines, resulting in the applicant’s proposed LEDPA. This collaborative work done on the “front end” of an application will result in the division being able to conduct a more efficient and focused independent review of all application materials and public comments received on those materials.

Subsection 87.6(2)(c) requires the project proponent to work with the division to develop a purpose and need statement for the proposed project. The purpose and need statement is used to identify a reasonable range of alternatives, 87.6(2)(d), which is then analyzed for practicability, 87.6(2)(e). The “practicable alternatives” are then each analyzed more thoroughly in a comparatives analysis, under the 404(b)(1) Guidelines or subsection 87.6(2)(f), which results in selecting the least environmentally damaging practicable alternative (LEDPA). Given the uncertainty that currently exists at the federal level concerning how the concepts of “basic purpose” and “overall purpose,” as found in the 404(b)(1) Guidelines, are to be applied in a purpose and need statement, the commission opted not to use that terminology. Instead, the commission took the opportunity to design its own purpose and need statement framework, with clearer terminology, for this important step of the pre-application process. The commission’s intent in doing so is to ensure that the range of reasonable alternatives derived from the purpose and need statement is neither so narrow as to preclude a reasonable range of alternatives for practicability consideration nor so broad as to result in alternatives that do not meet the project’s core need. To achieve this, Regulation 87’s purpose and need statement’s framework focuses on the “fundamental need(s)” (i.e., fundamental problems or opportunities) that the project is proposing to address and on requiring the project proponent to demonstrate both the proposed need(s) and their objectives in addressing them.

Subsection 87.6(2)(e) requires project proponents to consult with the division in making determinations as to the practicability of each alternative within the reasonable range of alternatives. The considerations in this subsection regarding “practicable alternatives” are derived from the 404(b)(1) Guidelines, with the important addition of water rights considerations. This subsection outlines a process for the division to take into consideration the project proponent’s need to file a change of water rights application or an application to adjudicate new water rights in determining the practicability of alternatives. Again, the framework adopted by the commission links “practicability” of alternatives to the demonstrated “fundamental need(s)” that the project proposes to address. This subsection also includes a process for a project proponent to assert that implementing one or more of the identified practicable alternatives would cause or result in material injury to water rights, which ultimately may result in such alternative(s) not being subject to the comparative analysis under the 404(b)(1) Guidelines and 87.6(2)(e).

87.6(3) – Application Requirements for Individual Authorizations. Applications for Individual Authorizations require significantly more information and documentation than applications for Temporary Authorizations or coverage under a General Authorization. The commission has included detailed application requirements in this subsection of the regulation to put project proponents on notice as to expectations for a “complete” application, including an alternatives analysis that compares a reasonable range of practicable alternatives. The application requirements in this subsection are derived mainly from two sources: USACE regulations governing application requirements for Individual Section 404 Permits and Regulation 82 (the Commission’s 401 Certification Regulation).

87.6(4) - Use of Materials Developed in Other Regulatory Processes. This subsection reiterates a provision from HB24-1379 requiring the division to accept any alternatives analysis, purpose and need statement, and projected impacts analysis developed through the Section 404/NEPA process, as well as other documentation from local, state, or federal permitting processes, for the purpose of fulfilling Individual Authorization application requirements.

87.6(5) – Notification to Applicants. This subsection contains requirements to notify applicants of the date of receipt of an application and to, within 30 days of that receipt, notify the applicant whether the division deems the application “complete” for purposes of starting the timeframe in which the division must take action on the application. This subsection also outlines procedures for what notice the division must provide when an application is not deemed complete. It also describes processes and timelines surrounding the Notice of Complete Application.

87.6(6) – Public Notice and Comment on Application Materials. Many of the public notice and comment procedures in this subsection have their basis in the procedures for Colorado Discharge Permit System permits in Regulation 61, while the substantive requirements (i.e., the information the public notice must contain) are derived from the USACE regulations and the commission’s Regulation 82 (401 Certification Regulation). The commission has determined that the approach outlined in this section—which allows the public to review all application materials, including the project proponent’s alternatives analysis, proposed LEDPA, and compensatory mitigation plan—provides sufficient opportunity for meaningful public input while giving the division time to fully review and act on the application within the two-year statutory period. 87.6(7) – Division Evaluation of Applications for Individual Authorization. This subsection outlines the process that the division must follow in reviewing applications for Individual Authorizations. This subsection generally follows the USACE process for reviewing applications for Individual Section 404 Permits. One of the application requirements is to provide a list of control measures chosen for the project. This serves the purpose of addressing the requirements of Subpart H of the 404(b)(1) Guidelines (Actions to Minimize Adverse Effects). Control measures must be selected, designed, installed, and maintained in accordance with good engineering, hydrologic and pollution control practices to prevent pollution or degradation of state waters. These measures must effectively minimize erosion, sediment transport, and other pollutants related to the activity. Control measures are methods, procedures, and practices that reflect best industry practices and standards such as those identified in documents such as the Mile High Flood District’s Urban Storm Drainage Criteria Manual Volume 3 (or any subsequent volume).

As indicated in this subsection, the division must conduct an independent review, based on public comments or other new information, of the applicant’s materials submitted and analyses conducted during the pre-application period, including the purpose and need statement and alternatives analysis. The commission views this independent evaluation of practicable alternatives, which will result in final selection of the LEDPA, as a critical step in the application review process. The commission reiterates that the division must comply with the relevant prohibitions and restrictions in section 25-8-104 of the Water Quality Control Act when considering the “practicability” of project alternatives. After the LEDPA is selected based on the division’s independent review of all application materials and consideration of public comments, the division must conduct the water quality evaluation to ensure that the dredge and fill projects, and where appropriate, the operation of the project, will comply with the state water quality requirements (a “401 certification-type” analysis). Such analysis will apply to the “activity as a whole” (i.e., the dredge and fill activity that triggers the need for an authorization in the first instance and then project operation after construction is complete). This analysis and the conditions derived from such analysis will typically apply to water supply projects that have an operational component or to hydroelectric projects. This evaluation may result in the division incorporating conditions into the authorization, including, but not limited to, monitoring and adaptive management, to ensure that water quality remains protected over time. Monitoring and adaptive management requirements provide the flexibility to avoid reopening an Individual Authorization, for example, when the predicted water quality impacts from the operation of a project prove to be inaccurate over time or when water quality standards change in the future. Again, the division may not include any conditions in an Individual Authorization or require a project proponent to implement adaptive management protocols that would violate the relevant prohibitions and restrictions in section 25-8-104, C.R.S., concerning water rights.

87.6(8) – Official State Position on Fish and Wildlife Mitigation; 87.6(9) – Compensatory Mitigation Requirements; and 87.6(10) – Project Monitoring, Record-Keeping, and Reporting Requirements. These subsections, which are required by HB24-1379, provide direction to the division for formulating terms and conditions of Individual Authorizations. The division is required to: (1) take into consideration the official state position regarding mitigation for fish and wildlife resources when formulating conditions for Individual Authorizations in the context of water development projects involving the construction of reservoirs (while not being required to include any of the official state position as conditions); (2) include compensatory mitigation requirements consistent with Section 87.10; and (3) include monitoring, record-keeping and reporting requirements.

87.6(11) – Issuance of Individual Authorizations. This subsection allows for the applicant to review a draft of the final Individual Authorization to identify factual or technical errors for the division to consider prior to issuance. The intent of this process is to allow for an efficient and focused review by the applicant to identify technical errors and to allow the division to correct such errors before issuance. This process is not intended to allow comments regarding legal or policy concerns applicants may have with the draft of the final Individual Authorization. This subsection also contains requirements for notification of issuance of an Individual Authorization, including publication in the Water Quality Information Bulletin.

87.6(12) - Time Periods for Division Determination on Individual Authorization Applications. The maximum period of time for the division to issue an Individual Authorization or deny the application is two years after the division issues a Notice of Complete Application, as required by HB24-1379. Where the division determines that a project involves minimal to moderate costs and have minimal water quality impacts or limited potential water quality impacts (e.g., general less complex projects), the division shall inform the applicant that the application qualifies for a shorter review period, along with the approximate amount of time it will take to make a final determination on the application.

87.6(13) - Duration of Individual Authorizations; Requests for Renewal; Coverage for Projects/Activities Involving Ongoing Operation; Requests for Modification; Requests for Termination. HB24-1379 restricts all authorizations (both Individual and General) to a term of five years. Under subsection (b), where construction on a project has not yet begun or has not been completed within that five years, the applicant must request renewal of the authorization. Project proponents must maintain authorization coverage (and pay the annual fee) until all construction-related and compensatory mitigation requirements in the authorization are fully satisfied. Subsection (c) deals with projects that have Individual Authorization conditions associated with the ongoing operation of the project (typically, water supply and hydroelectric projects). Instead of requiring renewal of the underlying Individual Authorization every five years, the commission adopted the concept of a binding and enforceable “Ongoing Operations Agreement” between the project proponent and the division, which will be entered into prior to issuance of the Individual Authorization. Such agreements will require the project proponent to comply with the terms and conditions of its Individual Authorization that are related to project operation after that Individual Authorization’s expiration and throughout the duration of the project’s operation. Once the underlying Individual Authorization for the dredge and fill work expires or is terminated, the project proponent will no longer be subject to annual fees. Subsection (d) allows project proponents to request modifications to an Individual Authorization to account for changes in the project. Subsection (e) sets forth the procedures for a request for termination of an Individual Authorization, which the division will grant upon determining that all construction related compensatory mitigation, and if applicable operation-related obligations, have been fully satisfied. 87.6(14) – Requests for Adjudicatory Hearings on Individual Authorizations. Subsection (a), which mirrors 25-8-205.1(5)(a)(IV), C.R.S., sets forth the general requirements for requests for adjudicatory hearings on Individual Authorizations to the commission. Subsection (b), requiring issues identified in a request for hearing to have been raised during the public comment process whenever possible, is taken from Regulation 61. It is intended to promote issues being brought to the division’s attention early in the application review process to allow an opportunity for resolution and avoid unnecessary litigation.

Section 87.7 – General Authorizations 87.7(1) – Recognition of Federal Permits. As authorized in HB24-1379, this provision requires the division to recognize the various USACE Nationwide and Regional General Permits as applying to projects impacting state waters until it issues its own corresponding General Authorizations in 2026. The provision directs the division to utilize Temporary Authorizations in tandem with relevant Nationwide/Regional General Permit(s) in situations where Pre-Construction Notification is required or where compensatory mitigation requirements are triggered by the relevant federal permit. 87.7(2) – Categories, Terms and Conditions, and Duration of General Authorizations. Consistent with HB24-1379, subsection (a) provides that once this regulation becomes effective, the division is required to issue General Authorizations. The activity categories of such General Authorizations must correspond with the various Nationwide and Regional General Permits issued by USACE. HB24-1379 authorizes the division to deviate from the corresponding federal permits or to create its own General Authorizations to achieve greater efficiency and to address Colorado-specific needs. Any deviations from a corresponding federal permit, however, cannot result in weaker protection than the corresponding federal permit. Creation of “Colorado-Specific General Authorizations” is within the discretion of the division. A third party proposing a Colorado-Specific General Authorization must present evidence to the division demonstrating the need for creation of the new authorization, such as why the activity should not be covered by an existing General Authorization and that the activity occurs frequently enough to justify creation of a Colorado-Specific General Authorization. The rationale must also contain information that the proposed authorization will cover activities that are similar in nature and similar in impact on the quality of state waters, cause only minimal adverse impacts to state waters when performed separately, and have only minimal cumulative adverse impacts on state waters. The third party must also justify why the proposed authorization should or should not require an Application for Coverage.

Subsection (b) carries forth the statutory requirement of a 5-year duration for General Authorizations. The division must review its General Authorizations prior to their expiration to ensure they cause only minimal adverse impacts to state waters and have only minimal cumulative adverse impacts on state waters. Based on that review, the division will decide whether to modify, reissue as-is, or revoke each authorization. For consistency with the federal program, subsection (c) provides that the division’s review of its General Authorizations must align with the USACE’s 5-year cycle for reviewing its federal Nationwide and Regional General Permits, and the division must take action on its corresponding General Authorizations within one year of USACE action on its permits.

Subsection (d) directs the division, in reissuing its authorizations, to update their terms and conditions to maintain consistency with the corresponding federal permits, except for when the division determines that any revised federal term or condition results in less protection of state waters than the initially-issued General Authorizations, which shall be based on the 2021 Nationwide and Regional General Permits. The commission determined that the division must use the 2021 USACE permits as the baseline for protection and that maintaining the quality of Colorado’s water resources does not allow for any measure of “backsliding” from those baseline protections. Subsection (e) authorizes the division to create additional General Authorizations to correspond with any new Nationwide or Regional General Permits issued by USACE in the future.

Finally, subsection (f) directs the division to review its Isolated State Waters General Authorization, which HB24-1379 authorized the division to issue prior to the adoption of this regulation, every five years to reassess its degree of protection of such water features. The commission authorized the division, based on its periodic review, to either modify or reissue this particular authorization every five years. The division may not, however, revoke this particular General Authorization, as the authority for this Colorado- Specific Authorization is derived from statute, and thus the commission believes that only the General Assembly can direct its revocation.

87.7(3) – Use of Multiple General Authorizations. This provision gives the division discretion to allow project proponents to combine two or more different General Authorizations to cover a “single and complete project,” as that term is defined in the same subsection. Project proponents seeking to utilize this approach must submit a written notice to the division prior to commencing the project to allow the division to learn more about what types of projects are seeking to use the “stacking” approach and to ensure that such projects are appropriately using it (i.e., that the project does not require an Individual Authorization).

87.7(4) – Prohibition on Commencing a Project under a General Authorization. Consistent with USACE regulations, this provision prohibits an applicant for an Individual Authorization from using a General Authorization to proceed with any portion of the same project while the division is reviewing the application for Individual Authorization.

87.7(5) – Public Notice and Comment. The public notice and comment procedures for General Authorizations are derived from Regulation 61, the Colorado Discharge Permit System Regulations. When issuing General Authorizations for the first time, the division must clearly show any changes from the corresponding federal permits in redline. Likewise, when reissuing its General Authorizations, the division must show any changes from the previous version in redline format. Notice shall be accomplished in three ways: (1) posting the draft(s) on the division’s dredge and fill website; (2) emailing the draft(s) to all persons who have signed up for Dredge and Fill Program notifications; and (3) including a notification and link to the draft(s) in the monthly Water Quality Information Bulletin. The division must consider all public comments, make such comments publicly available, summarize the major issues raised in public comments, and explain its rationale for addressing those major issues. 87.7(6) - Issuance of General Authorizations. This subsection states that General Authorizations shall become final and effective on the day of issuance and that notice of issuance shall be published in the Water Quality Information Bulletin, which triggers the 30-day timeframe for a request for an adjudicatory hearing on the General Authorization.

87.7(7) – Requests for Adjudicatory Hearings on General Authorizations and the Associated General Conditions Document. Subsection (a), taken in large part directly from HB24-1379, sets forth the general requirements for requests for adjudicatory hearings on General Authorizations to the commission. Subsection (b), requiring all issues identified in a request for hearing to have been raised (unless not reasonably ascertainable) during the public comment process, is taken from Regulation 61 and 40 CFR § 124.19. It is intended to promote issues being brought to the division’s attention before issuance to allow an opportunity for resolution and avoid unnecessary litigation. Subsection (c) indicates that division determinations on Notices of Coverage under General Authorizations are not available subjects for hearings before the commission, but rather, any requests for review or stay must be filed in state district court under section 25-8-404, C.R.S., and section 24-4-106 of the State Administrative Procedure Act.

Section 87.8 – Temporary Authorizations and Notices of Coverage Under General Authorizations 87.8(1) – Temporary Authorizations. This subsection deals with the statutorily-created mechanism the division is required to use to regulate dredge and fill projects in state waters until such time as the division issues its own General Authorizations (in 2026). It outlines the situations, as provided in HB24-1379, where project proponents are required to apply for and obtain Temporary Authorizations prior to conducting a dredge and fill project in state waters, which are: (a) the activity would require Pre-Construction Notification; and/or (b) compensatory mitigation under the relevant USACE Nationwide or Regional General Permit or under the General Conditions applicable to all Nationwide Permits. Once the division issues a written Notice of Complete Application, the division has 45 days to issue a Temporary Authorization or deny the application. If no action is taken within that time period, the project may proceed without the authorization. Temporary Authorizations, which are intended to complement the Nationwide or Regional General Permit that applies to the activity being conducted, must include protective terms and conditions, including compensatory mitigation requirements.

Subsection 87.7(1)(e) reiterates that Temporary Authorizations are an interim measure as directed under HB24-1379, to be used to allow projects to move forward until the division issues its own General Authorizations. The duration of a Temporary Authorization cannot be more than two years, and the division must stop issuing them on August 31, 2026. Temporary Authorizations issued before that date will continue to be in effect until expiration, but where a dredge and fill project has not commenced, or has commenced but will not be completed by the expiration date in the Temporary Authorization, the project proponent must apply for coverage under the relevant division-issued General Authorization at least 45 days prior to such expiration date. 87.8(2) – Notices of Coverage under General Authorizations. This subsection explains how to obtain coverage for a dredge and fill project after the transition period ends, i.e., once the division issues its own General Authorizations. When required under the General Authorization that corresponds with the type of activity being conducted, project proponents must apply for coverage and obtain a Notice of Coverage under that particular General Authorization prior to commencing the dredge and fill project/activity. Just as with applications for Temporary Authorizations, once the division issues a written Notice of Complete Application, the division has 45 days to either issue a Notice of Coverage under the applicable General Authorization; issue a written notice that the activity does not meet the criteria for the General Authorization applied for and is instead subject to coverage under a different General Authorization; or or deny the application on the basis that the project should be covered under an Individual Authorization. If no action is taken within that time period, the project may proceed without the authorization.

Subsection 87.8(2)(d) deals with the situation where a project that has begun construction has a Notice of Coverage under a current General Authorization or is under contract to begin construction in reliance upon a current General Authorization. Such projects will remain authorized under that version of the General Authorization, but construction must be completed within two years (or as soon as practicable after a natural disaster that impedes completion within that time) after that General Authorization’s expiration date. In cases where project construction will not be completed within that two-year timeframe, the project proponent shall, at least 45 days prior to the end of the two years, apply for a new Notice of Coverage under the most recent version of the relevant General Authorization.

87.8(3) – Requests for Modification. This subsection allows for a project proponent to request modification to its Temporary Authorization or Notice of Coverage under a General Authorization to account for changes to the project as initially described in the application. Such requests must be made in writing, and the division must approve or deny the request within 30 days of receipt.

87.8(4) – Requests for Certification of Project Completion. The project proponent may submit a written request for certification of completion prior to the expiration of a Notice of Coverage. The division will grant such requests where the project proponent has demonstrated all post-construction and compensatory mitigation obligations have been satisfied. Once the division has issued a certification of completion, no further annual fees will be assessed.

87.8(5) – Judicial Review of Temporary Authorizations and Notices of Coverage. As provided in HB24-1379, the division’s determinations on Temporary Authorizations and Notices of Coverage under any division-issued General Authorization are considered “final agency determinations/actions” and are not available subjects for hearings before the commission. Such requests for review or stay must go directly to the state district court under section 25-8-404, C.R.S., and section 24-4-106 of the State Administrative Procedure Act.

Section 87.9 – Requirements Applicable to All Projects Subject to Dredge and Fill Authorizations.

The commission included this list of requirements for general consistency with its Regulation 82, “401 Certification Regulation.” These longstanding “state-only” requirements in Regulation 82 have historically applied to all projects in Colorado subject to 404 permits issued by USACE (including Individual, Nationwide, and Regional General Permits), and in that context, they are only “enforceable” by the division, not USACE or EPA. Although some of these requirements may be somewhat redundant with terms included in division-issued dredge and fill authorizations, they are intended to fill gaps in cases where authorizations do not specifically include such requirements. All projects/activities subject to a division-issued dredge and fill authorization, even in cases where an application for a Temporary Authorization or coverage under a General Authorization is not required, must comply with these requirements. The commission has determined that these basic requirements are fundamental to establishing and maintaining a successful and protective state dredge and fill program.

One item that does not appear in Regulation 82 is the requirement at subsection 87.9(1)(l) to decontaminate dredge and fill equipment to prevent the spread of invasive species and noxious weeds. This provision requires decontamination before arrival at a site of authorized dredge and fill activities in state waters, and, where “reasonably practicable,” before it is removed. The commission opted not to include the details proposed by the division describing the various decontamination methods, but did include the definitions of “invasive species” and “noxious weeds.” The commission believes it is appropriate for the state’s dredge and fill program to include robust requirements to control invasive species, but determined that these technical requirements are better suited for inclusion in the division’s General Conditions document or the General Authorizations themselves.

Section 87.10 – Compensatory Mitigation The content of Section 87.10 is based on 40 CFR Part 230 Subpart J - Compensatory Mitigation for Losses of Aquatic Resources under the Clean Water Act Section 404 program (or Subpart J of the 404(b)(1)Guidelines). Subpart J has been the basis of the Section 404 compensatory mitigation requirements since 2008 and is well-known by those in the regulated community. The commission determined that general consistency between the state and federal mitigation programs would contribute to a successful state program, but that the state should take this opportunity to tailor certain aspects of Subpart J to better suit Colorado’s varied geography and semi-arid climate. The commission determined that substantive deviations from certain provisions of Subpart J, including changing references to the federal program’s terms, regulations, agencies, and documents, and striking or revising requirements regarding habitats and contexts not found in Colorado were warranted to better reflect regional conditions and needs. The commission deviated from the federal requirements of Subpart J as follows: 87.10(1) – Purpose and General Considerations 87.10(1)(a) – The “Purpose” provision replaces references to the federal program (e.g., waters of the United States, USACE, federal regulations) with references to the state program. Federal references to “wetlands” were changed to “aquatic resources” to account for the compensatory mitigation program covering both streams and wetlands.

87.10(2) – Definitions The regulation includes some definitions that diverge from the federal definitions and adds some definitions for clarity under the state program. The following terms diverge from the federal Subpart J in the respective manners:

87.10(2)(b) – “Advance Credits” includes mitigation banks. 87.10(2)(g) – “Aquatic Resource” clarifies the term under the state program. 87.10(2)(cc) – “Mitigation Bank” clarifies the differences between commercial and single-user mitigation banks.

87.10(2)(jj) – “Preservation” includes additional terms explaining that protections must be permanent and provide examples of acceptable legal or physical protective mechanisms.

87.10(2)(qq) – “Riparian Areas” distinguishes wetlands from riparian habitats more clearly. The context of Subpart J and Section 87.10’s use of the term “riparian areas” support this distinction. The State definition provides additional detail on the unique characteristics of riparian habitats, but this additional detail does not change the scope of Subpart J’s compensatory mitigation requirements. The following terms are not found in Subpart J and were included in the State program to add clarity in the respective stated manners:

87.10(2)(c) – “Advance Proponent-Responsible Mitigation (APRM)” includes this mitigation option in the regulation.

87.10(2)(d) - “Agent” defines a person or entity appointed by a project proponent, applicant, or sponsor to assist such project proponent, applicant, or sponsor in meeting the requirements of the state dredge and fill program. 87.10(2)(e) – “Approved Credits” distinguishes between advance credits and those that are released following the full attainment of performance standards and other requirements of the mitigation plan (“approved credits”). 87.10(2)(f) – “Applicant” clarifies the term under the state program. 87.10(2)(h) – “Authorization” clarifies the term under the state program. 87.10(2)(i) – “Authorized” clarifies the term under the state program. 87.10(2)(r) - “Ephemeral Stream” clarifies the term under the state program. 87.10(2)(kk) – “Project Proponent” clarifies the term under the state program. 87.10(2)(vv) – “Upland” was defined for ease of reference; this definition was derived from HB24-1379.

87.10(3) – General Compensatory Mitigation Requirements 87.10(3)(a) – “General Considerations.” Section 25-8-205.1(4)(c), C.R.S., directs the commission to adopt rules concerning compensatory mitigation, which must include methods for ensuring impacts to wetlands and streams are fully compensated through functional assessment methods or “by applying acre- based ratios using the watershed approach as described by the USACE.” 25-8- 205.1(4)(c), C.R.S., also provides that any compensatory mitigation requirements included in division-issued authorizations “must compensate for all functions of state waters that will be lost as a result of the authorized activity.” 25-8- 205.1(5)(c)(II), C.R.S. The commission recognizes that acre-based compensation ratios must be assigned in accordance with rigorous, objective criteria in order to ensure that project proponents compensate for “all [lost] functions of state waters.” Id. Therefore, the commission directs the division to issue comprehensive guidance on Compensatory Mitigation Requirements, Guidelines, and Procedures. This guidance document must include but not be limited to: (1) the watershed approach, including mitigation ratios; (2) approved functional assessment methodology and credit & debit accounting protocols; (3) mitigation bank service area requirements; (4) mitigation site selection and eligibility; (5) performance standards; and (6) monitoring requirements. 87.10(3)(b) – “Functional Assessment Methods,” clarifies how the division can approve, develop, or modify functional assessment methods and the criteria for the functional assessment methods to be used when assessing compensatory mitigation projects and losses to state waters.

Certain parties requested that the commission limit its regulations to require the use of functional assessment methods for determining compensatory mitigation requirements. The commission declined and determined that the statute mandates that both functional assessment and acre-based ratio approaches be included in the rules. However, the commission expects the division to develop robust guidance to meet its obligation to ensure that compensatory mitigation in its authorizations compensates for “all functions of state waters that will be lost.” 87.10(3)(c) – “General Hierarchy of Preference for Compensatory Mitigation,” explains the preference hierarchy for compensatory mitigation type and location. It is based on the federal preference framework, but the State framework expressly identifies “advance proponent-responsible mitigation (APRM)” and distinguishes between advance and approved credits for banks/in-lieu fee programs. Approved credits, which are those from bank and in-lieu fee mitigation that have met all performance standards, are preferred over advance credits which have not yet met performance standards. Consistent with federal guidelines, proponent-responsible mitigation (PRM) is ranked below banking and in-lieu fee credits. Within types of PRM, though, advance PRM is given highest preference because it comparatively reduces risk of mitigation under- performance and temporal impacts.

The regulation allows for considerable flexibility in applying the preference hierarchy in response to project circumstances and local conditions. For example, on-site, PRM may be preferable to other mechanisms, such as banks, when a project impacts important aquatic resources, or when otherwise preferable mitigation options are located a long distance from the authorized impact. The preference hierarchy’s flexibility is also intended to address a potential shortage of mitigation credits available to proponents across the state, particularly in the early stages of the program.

87.10(3)(d) – “Type and Location of Compensatory Mitigation,” departs from Subpart J for consistency with 87.10(3)(c) – General Hierarchy of Preference for Compensatory Mitigation.

87.10(3)(d)(i) – “Mitigation Bank Credits,” describes additional caveats to the preference hierarchy to engender greater flexibility to project proponents and the division. This subsection explains the relative ranking of approved or advanced bank credits.

87.10(3)(d)(ii) – “In-Lieu Fee Program Credits,” provides a State-specific explanation of the relative ranking of approved or advanced in-lieu fee credits. 87.10(3)(d)(iii) – “Advance Proponent-Responsible Mitigation Under the Watershed Approach,” explains and clarifies the use of this existing, but under- documented, mitigation option. Since APRM is less well-known than other mechanisms and received considerable stakeholder feedback, the definition for this term is more robust. This subsection describes size thresholds for APRM along with consideration of type (“in-kind” or “out-of-kind”), location (“on-site” or “off-site”), and long-term responsibility for the mitigation. The definition clarifies requirements regarding mitigation underperformance and emphasizes that the project proponent, applicant, or sponsor retains all risk associated with undertaking mitigation in advance of authorization or unavoidable impacts to a state water.

87.10(3)(d)(iv) – “Proponent-Responsible Mitigation Under the Watershed Approach,” includes a caveat concerning “preferences” or the “hierarchy” of mitigation type. This subsection acknowledges circumstances in which on-site mitigation can be preferable to other options. It provides clarification on the project proponent’s ability to use out-of-kind or off-site mitigation based on the outcomes of the watershed approach.

87.10(3)(e) - “Watershed Approach to Compensatory Mitigation,” clarifies the potential role of existing watershed plans in mitigation planning, and further characterizes information needs in the event no appropriate watershed plan exists.

87.10(3)(h) – “Amount of Compensatory Mitigation,” states that the amount of required compensatory mitigation must be sufficient to replace lost aquatic functions and outlines methods by which to determine how much compensatory mitigation is required. The subsection requires the division to use a mitigation ration of greater than one-to-one where necessary. Following parties’ testimony at hearing, the commission determined that it would not allow the division to approve less than one-to-one linear foot compensation for ephemeral stream losses where the mitigation occurs on a perennial stream. 87.10(4) – Planning and Documentation 87.10(4)(c)(iii)(F) – “Mitigation Plan,” refers to preventing the spread of aquatic nuisance species based on current concerns regarding the spread of invasive aquatic species in Colorado waters.

87.10(7) – Management 87.10(7)(a)(ii) – “Site Protection,” explains that, if foregoing an incompatible use at the mitigation site is impracticable for the proponent, the division may require additional mitigation.

87.10(8) – Mitigation Banks and In-Lieu Fee Programs 87.10(8)(b)(i) – “Interagency Review Team,” indicates that the division may create an interagency review team (“IRT”) composed of agencies it invites or the division may be the sole member of the IRT. This allows the division the flexibility to use existing USACE IRTs or develop a new one in response to bank or in-lieu fee program circumstances.

87.10(8)(d)(vi)(B) – “Draft Instrument,” describes the allowable service areas in a Colorado-specific context, including example elevational limits. It also describes the use of secondary service areas, which are included in federal guidance but not in Subpart J of the 404(b)(1) Guidelines.

87.10(8)(o)(viii) – “Credit Release Schedule,” requires that a “majority” share of credits be reserved until full achievement of ecological performance standards. 87.10(8)(v) – “Grandfathering of Existing Instruments,” allows the use of credits from existing federal mitigation banks or in-lieu fee programs, established after 2008, for mitigation under the State program.

Section 87.11 – Mutual Modification and Division-Initiated (Unilateral) Modification or Revocation to Protect State Waters; Division Enforcement; After-the-Fact Authorizations The commission included this section to outline the available options for ensuring that state waters are protected from the impacts of dredge or fill material. 87.11(1) – Mutual Modification and Division-Initiated (Unilateral) Modification or Revocation. This subsection describes the situation where a project is in compliance with a division-issued authorization, but the division determines that the project is nevertheless adversely impacting state waters. The first step is for the division to seek mutual agreement on appropriate modifications to the authorization that will result in protection. Then, if agreement cannot be reached, the division may unilaterally modify or revoke the authorization to protect state waters. The subsection also includes public notice and the availability of judicial review for unilateral modification or revocation of Individual Authorizations.

87.11(2) – Division Enforcement. This subsection restates the various enforcement mechanisms for (1) violating the regulation; (2) violating the terms and conditions of a division-issued authorization (including Temporary Authorizations, General Authorizations, and Individual Authorizations) or Notices of Coverage under a General Authorization; and (3) discharging dredged or fill material into state waters without obtaining a required Temporary Authorization, Notice of Coverage under a General Authorization, or Individual Authorization from the division. The subsection contains cross-references to the various enforcement mechanisms found in Part 6 of the Water Quality Control Act. Like with other programs under the WQCA, it is within the division’s discretion to determine which of the statutory enforcement mechanisms is appropriate in any given situation. The enforcement mechanisms include: issuing a notice of violation, issuing a cease and desist order or a clean-up order (including corrective measures), initiating a suit for a restraining order or injunction, if necessary, and imposing civil penalties under section 25-8-608 of the Water Quality Control Act. The commission directs the division to utilize the framework from its existing civil penalty policies (general and stormwater), as it deems appropriate, to derive appropriate penalty amounts for dredge and fill program violations until it issues a penalty policy specific to the dredge and fill program.

This subsection allows enforcement documents the flexibility to appropriately address enforcement in all cases, including where the dredge and fill project/activity may be occurring in WOTUS and thus may require a USACE Section 404 permit. The commission anticipates that the division will publish a Regulation 87 enforcement policy which will include procedures for enforcement actions where the dredge and fill project/activity may be occurring in WOTUS.

87.11(3) – After-the-Fact Authorizations. This subsection sets forth the procedures for “after-the-fact” authorizations. The language in this subsection is derived from USACE regulations. Where a project proponent has commenced their dredge and fill project without the required authorization, the project proponent must apply for an after-the-fact authorization to continue the project. The project proponent may apply for such authorization only after completing any initial corrective measures that the division requires. This provision outlines several circumstances where an after-the-fact authorization may not be appropriate, which are intended to identify relatively egregious situations, such as where the project proponent does not cooperate with a division in taking timely steps to remediate any damage to state waters caused by the project proponent’s lack of diligence. In situations where the division determines that denying an after-the-fact authorization is appropriate, it should require the project proponent to complete final corrective actions and state a timeline for their completion or the additional information needed before such actions can be specified. The project proponent cannot be granted an after-the-fact authorization until they have completed all such requirements. Applications for Individual after-the-fact Authorizations are subject to public notice and comment procedures.

Section 87.12 – Dredge and Fill Program Fees The commission recognizes that the General Assembly has established that funding for the dredge and fill efforts will come from both cash funds paid through permit fees and the General Fund. The commission established fees to support the program and recognizes that the division’s efforts are in a start-up phase and expects the division to propose adjustments to the fees, beginning in January 2028, and continuing annually for the next several years. To support these proposals, the commission directs the division to collect data on the volume of authorizations, the length of time a project owner/operator holds an authorization, mitigation efforts, and inflation. The commission established fees to annually generate approximately $190,000 in cash fee revenue, which will likely be adjusted for inflation in the future. The commission also acknowledges that the department currently receives General Fund support for the program and the department expects this support to continue into the future.

Recognizing the importance of voluntary stream restoration efforts, the commission has adopted a substantially lower authorization fee for USACE Nationwide Permit 27 (Aquatic Habitat Restoration), or the division’s equivalent General Authorization, to encourage voluntary efforts to improve aquatic habitat, including but not limited to actions under this authorization to improve water quality in mine drainages. ______________________________________________________________________ Editor’s Notes History New rule eff. 03/30/2026.