In 2007, the state of Maine developed an In Lieu Fee Compensation Program (ILFP) to augment its regulatory program, and the Maine Natural Resource Conservation Program (MNRCP) to allocate the funds collected. An agreement for services between the Maine Department of Environmental Protection (DEP) and The Nature Conservancy (TNC) was signed on October 3, 2007 outlining TNC's responsibility to administer MNRCP. A Memorandum of Agreement between the New England District of the U.S. Army Corps of Engineers (“Corps”), the DEP, and TNC was signed on January 31, 2008. This report outlines the MNRCP activities from February 1, 2009 to January 31, 2010.

Mitigating adverse environmental impacts is an integral part of the Maine Natural Resources Protection Act (NRPA), administered by DEP, and the federal Clean Water Act (CWA) and the Rivers and Harbors Act (RHA), administered by the Corps. In general, mitigation is a sequential process of avoiding adverse impacts, minimizing impacts that cannot practicably be avoided, and compensating for those impacts that cannot be further minimized. Both state and federal agencies may require appropriate and practicable compensatory mitigation as part of their permitting process. The goals of ILFP and MNCRP are to: substantially increase the extent and quality of restoration, enhancement, creation, and preservation of protected natural resources over that typically achieved by other forms of compensatory mitigation for activities that impact significant wildlife habitat, wetlands and other waters of the State of Maine; reduce the extent of cumulative adverse impacts to resources that are considered protected natural resources under NRPA and /or the federal Clean Water Act and Rivers and Harbors Act; and provide DEP and Corps permit applicants greater flexibility in compensating for adverse impacts to protected natural resources. Protected resources in Maine include not only freshwater and coastal wetlands but also rivers, streams and significant wildlife habitat, which includes significant vernal pools, seabird nesting islands, high and moderate value waterfowl and wading bird habitats, and high or moderate value shorebird nesting, feeding, and staging areas.

In most situations, applicants for permits to impact protected natural resources apply to the DEP, which determines if the applicant has taken the required steps to avoid and minimize impacts to resources and whether the project can use the ILF Program to offset remaining unavoidable impacts. If ILF is chosen for mitigation, DEP assesses the applicable fee, based on the schedule attached as Appendix A, and accepts the payment of those fees from the applicant. Fees are paid at the beginning of the application process and are not refundable. In some situations, during the Corps review of an application for which DEP did not require an ILF payment, the Corps may determine that an ILF payment is the appropriate compensation for an impact to waters of the United States. In those situations the Corps will notify the applicant of the applicable fee amount but the applicant will send the fee to DEP for deposit.

Once the fee has been paid, the DEP fills out a “Project Summary Form”, attached as Appendix B, and sends this form plus a map, a copy of the invoice reflecting the fee amount, a copy of the check, and a copy of the final permit to TNC, generally in advance of a state-issued check for the fee amount. TNC inputs this information into a database which tracks impacts, income from fees, and compensation project information, including expenditures. Each impact site is located in GIS using the map provided by DEP in their project summary packet. Once the check is received from the state by TNC, it is placed in an account specific to the biophysical region in which the impact took place for subsequent allocation through MNRCP (see Appendix C for a map of the biophysical regions and the impact sites). For the period of this Annual Report, five percent of the fee was set aside for administrative and overhead expenses incurred by TNC in running the program, as stipulated in the agreement for services between TNC and DEP.