Section R634-3-5 - Term Mitigation Credit Program(1) Application; Minimum Qualifications. Any person desiring to enter into a Term Mitigation Agreement with the Department to create Credits to mitigate the impacts of disturbances to sage-grouse habitat within Utah, must: (a) Own or control and manage at least 100 contiguous acres adjacent to Occupied Habitat in any SGMA in Utah identified in the Plan that is not Functional Habitat or a Corridor, but with completion of a Credit Generation Project may become Functional Habitat or a Corridor or own, manage and control at least 100 acres of Occupied Habitat that may become Protected Habitat.(b) File a completed application with the Department, which, at a minimum, shall include: (i) name of the owner(s) of the surface and mineral rights on the property;(ii) legal description of the proposed Project Area and the total number of acres owned by the applicant;(iii) the number of acres on which Credits will be generated and what action is proposed to generate Credits;(iv) the term of years the person will maintain the Credits on the property, after completing any Credit Generation Project on the property as identified in the Term Mitigation Agreement; (v) if a habitat protection project, a draft of the conservation easement; and(vi) the Application Fee.(c) Upon receiving any completed application, the Department will make a habitat suitability determination identifying whether the proposed Credit Generation Project will likely result in Functional Habitat or Corridor(s) on the property or Protected Habitat and identify the number of potential Credits which may result from the creation of Functional Habitat, Corridors, or Protected Habitat. In the event another person owns the mineral rights on an applicant's property, the Department may request a mineral report for the property.(d) The Department may deny any application that is incomplete or does not meet the guidelines outlined in this Section.(e) The Department will consult with the concerned county government(s) and other appropriate agencies before approving the application.(2) Establishment of Term Mitigation Agreement.(a) If the Department determines that an applicant's property is suitable for generating Credits, it may enter into a Term Mitigation Agreement with the property owner, identifying, at a minimum:(i) the scope of work necessary to create and maintain Credits on the Property;(ii) the entity or person(s) responsible to perform any Credit Generation Projects;(iii) a management plan identifying maintenance and verification duties for the landowner or a third-party entity;(iv) the years duration for the Credits;(v) an option clause for renewing the agreement for an additional term of years;(vi) the legal or financial mechanisms utilized by the landowner to provide assurances to the Department that the Credits generated on the landowner's property will be in place for the duration of the agreement; and(vii) for split-estate properties, the Department may require the owner(s) of a mineral estate to co-sign the Term Mitigation Agreement and provide a written guarantee that the mineral estate will not be developed during the term of the agreement.(b) In no event shall the term of a Term Mitigation Agreement be less than twenty (20) years, which starts when the credit generation project is verified.(3) Credit Generation Projects (a) Prior to initiation of any Credit Generation Project, the Department will assess the Project Area to Verify the number of acres of Functional Habitat, Corridors and Occupied Habitat present on the Project Area before the landowner conducts any Credit Generation Projects.(b) After conducting any necessary pre-project assessments, a Credit Provider or its designees will complete any Credit Generation Projects as outlined in the Term Mitigation Agreement.(4) Verification; Tracking of Credits.(a) Once the Credit Generation Projects are completed, as identified in the Term Mitigation Agreement, a Verifier will inspect the Credit Generation Project area, determine the number of Credits generated on the property, and provide a report to the Department and to the landowner identifying the number of Credits available on the property that may be transferred to a Credit Buyer utilizing the Credit Exchange Service.(b) Prior to entering the Credits in the Credit Exchange Service, the Department shall collect the Agreement Fee from the Credit Provider to offset any costs of administering the Term Mitigation Agreement and issue a Certificate of Credits to the owner.(c) Upon certifying the Credits, the Department will track the Credits in the Credit Exchange Service identified in Section 3-7(1).(5) Assessment and Monitoring of Credits. (a) Credits generated under this Section will be monitored by the Credit Provider and the Department, as outlined in the Term Mitigation Agreement, to ensure that Credits continue to serve as Functional Habitat, Corridors, or Protected Habitat for sage-grouse throughout the duration of the Term Mitigation Agreement.(b) Credits will be monitored using the Department's Monitoring and Credit Maintenance Policies developed under Section 3-7(5). The Program Administrator may utilize monitoring results to amend the Credit maintenance requirements outlined in the Term Mitigation Agreement.(6) Durability and Assurances.(a) Prior to the Department listing any Credits on the Credit Exchange Service, the Credit Provider shall provide the Department with financial and/or legal assurances that the Credits developed will be protected for the duration of the Term Mitigation Agreement. Financial assurances may include Letters of Credit, Performance or Guarantee Bonds, Escrow Agreements, endowments or Causality Insurance coverage to offset any losses or reverses to the Credits on the property. Legal assurances may include permanent or term easements, deed restrictions, and contractual guarantees.(7) Credit Expiration; Renewal of Exchange Agreements.(a) All Credits generated or transferred under this Section will automatically expire at the end of the term set out in the Term Mitigation Agreement regardless of whether or not the Credit was transferred. Upon expiration of any Credit, the Department will remove the Credit from the Credit Exchange Service.(b) The Term Mitigation Agreement can be renewed for an additional term as outlined in the agreement. Prior to reissuing the Credits in the Credit Exchange Service, the Department or a Verifier will confirm that the Credits remain as Functional Habitat or Corridors.(c) In the event the Department or any person terminates the Term Mitigation Agreement prior to the terms outlined in the agreement, the person providing the Credit Generation Project shall pay the Department its actual costs to obtain or create replacement Credits to complete the remaining years listed in the agreement.(8) Federal Agency Use of Term Credits. (a) Any federal regulatory agency that directs Credit Buyers to purchase Term Credits from the Credit Exchange Service is encouraged but not required to utilize the Mitigation Ratios recommended herein, including mitigating at four acres for every one acre of Permanent Disturbance.(b) Any federal regulatory agency may place additional requirements on a Credit Buyer for maintaining, monitoring, verifying or providing additional assurances for Credits utilized to offset disturbances to sage-grouse habitat on federal land. The federal agency, or a Credit Buyer will be responsible for any additional monitoring or verification requirements developed by a federal agency.Utah Admin. Code R634-3-5
Adopted by Utah State Bulletin Number 2018-8, effective 3/26/2018