(1) Purpose. Financial security instruments
are required for CM sites as a guarantee that the CM will be constructed,
monitored and maintained in accordance with removal-fill authorization
Financial security Instruments are required for CM projects except in the
(a) No financial
security instrument is required for projects conducted by government
(b) The Department may
waive the requirement for a financial security instrument for wetland impacts
0.20 of an acre or less; and
Financial security instruments are not required when CM is satisfied by
purchase of credits from a wetland mitigation bank, an in-lieu fee program or
payment in-lieu mitigation.
Types of Financial Security Instruments.
The Department may allow the following types of financial security instruments:
(a) Surety bonds executed by the permit
holder and a corporate surety licensed to do business in Oregon;
(b) Assignment of deposit must be issued by a
bank licensed to do business in Oregon, assigned to the Department, and upon
the books of the bank issuing such certificates;
(c) Letters of credit issued by a bank
authorized to do business in the State of Oregon that are irrevocable prior to
release by the Department; and
Such other financial instrument as the Department deems appropriate to secure
the financial commitment of the applicant to fulfill the success requirements
of the CM.
Security Form. The applicant must file the financial security instrument or
instruments on a form or forms prescribed and furnished by the Department.
Financial security instruments must be made payable to the Department and must
be submitted to the Department prior to permit issuance or prior to release of
credits from a mitigation bank.
Commencement of the Liability Period. The period of liability will begin at the
time of authorization issuance. The liability period must be renewed until the
Department deems the CM to be complete and the Department releases the
permittee from any further monitoring requirements.
(6) Determining the Amount. For issuance of
an authorization requiring a financial security, the Department will set the
amount of the financial security instrument equal to either the current cost of
mitigation bank credit(s) within a service area covering the removal-fill site,
or the current cost of payment in-lieu mitigation, whichever is greater. For
mitigation banks, the amount must be sufficient to ensure a high level of
confidence that the mitigation will be successfully completed.
(7) Financial Security Instrument
Replacement. The Department may allow a permit holder to replace an existing
financial security instrument with another if the total liability is
transferred to the replacement. The Department will not release an existing
financial security instrument until the permit holder has submitted and the
Department has approved the replacement.
Financial Security Instrument Release.
The Department will authorize release of the financial security instrument when
the CM meets the requirements of the CM plan and the conditions of the
removal-fill authorization. The permit holder must file a request with the
Department for the release of all or part of a financial security instrument.
The request must include:
(a) The precise
location of the CM area;
permit holder's name;
removal-fill authorization number and the date it was approved;
(d) The amount of the financial security
instrument filed and the portion proposed for release; and
(e) A description of the results achieved
relative to the permit holder's approved CM plan.
(9) Forfeiture. The Department may declare
forfeiture of all or part of a financial security instrument for any project
area or an increment of a project area if CM activities fail to meet success
criteria, the permittee fails to provide monitoring reports, or fails to follow
other permit conditions related to mitigation. The Department will identify, in
writing, the reasons for the declaration.
(10) Determination of Forfeiture Amount and
Use of Funds. The permit holder must forfeit the amount of the outstanding
liability in the financial security instrument. The Department will either use
the funds collected from the security forfeiture to complete the CM or deposit
the proceeds in the Oregon Removal-Fill Mitigation Fund.