Common use of Changes in Mitigation Fees Due to Adaptive Management Clause in Contracts

Changes in Mitigation Fees Due to Adaptive Management. In the event the RWP or elements of its conservation strategy are adjusted through adaptive management, the Mitigation Fees assessed on the Participant will not increase or decrease more than 4% in any given year from the Mitigation Fees for the prior calendar year. The 3% limit on inflation adjustments and 4% limit on adaptive management adjustments apply to all Mitigation Fees. Thus, annual increases to Mitigation Fees associated with development in a particular ecoregion, within a particular CHAT category, focal or connectivity area, and in an area with a particular site condition score, will not exceed 3% due to inflation and 4% due to adaptive management of the Mitigation Fees for development in areas with the same variables. Put otherwise, inflation adjustments will not cause the Mitigation Fee to develop a specific parcel of land in Year N+1 (e.g., year 2) to increase more than 3% beyond the Mitigation Fee to develop that same parcel of land in Year N (e.g., year 1) (assuming habitat quality on the parcel remains the same from year to year). Similarly, adaptive management adjustments will not cause the Mitigation Fee to develop a specific parcel of land in Year N+1 (e.g., year 2) to increase more than 4% of the Mitigation Fee to develop that same parcel of land in Year N (e.g., year 1) (assuming habitat quality on the parcel remains the same from year to year). The following formula mathematically reflects the maximum annual increase to Mitigation Fees: Maximum Mitigation Fee for Yn+1 =

Changes in Mitigation Fees Due to Adaptive Management. In the event the RWP or elements of its conservation strategy are adjusted through adaptive management, the Mitigation Fees assessed on the Participant will not increase or decrease more than 4% in any given year from the Mitigation Fees for the prior calendar year. The 3% limit on inflation adjustments and 4% limit on adaptive management adjustments apply to all Mitigation Fees. Thus, annual increases to Mitigation Fees associated with development in a particular ecoregion, within a particular CHAT category, focal or connectivity area, and in an area with a particular site condition score, will not exceed 3% due to inflation and 4% due to adaptive management of the Mitigation Fees for development in areas with the same variables. Put otherwise, inflation adjustments will not cause the Mitigation Fee to develop a specific parcel of land in Year N+1 (e.g., year 2) to increase more than 3% beyond the Mitigation Fee to develop that same parcel of land in Year N (e.g., year 1) (assuming habitat quality on the parcel remains the same from year to year). Similarly, adaptive management adjustments will not cause the Mitigation Fee to develop a specific parcel of land in Year N+1 (e.g., year 2) to increase more than 4% of the Mitigation Fee to develop that same parcel of land in Year N (e.g., year 1) (assuming habitat quality on the parcel remains the same from year to year). The following formula mathematically reflects the maximum annual increase to Mitigation Fees: Maximum Mitigation Fee for Yn+1 == (Mitigation for Yn x 0.04) + (Mitigation for Yn x 0.03) + Mitigation Fee for Yn The Mitigation Fees for Year “Y1” are those reflected on the version of the HEG in effect when the Participant executes the CI. Prior to October 1, 2014, the HEG in effect is available at xxx.xxxxx.xxx; the range of Mitigation Fees associated with this HEG is identified in Section C of this Appendix. Mitigation Fees for subsequent years are those in effect on December 31. The RWP contemplates that some evaluations and adjustments will occur less frequently than annually (i.e., on a five- or ten-year basis). The 4% annual maximum adjustment resulting from adaptive management applies to all adjustments under the adaptive management provisions of the RWP, regardless of frequency. In other words, an adjustment that only occurs every five Number years cannot cause Mitigation Fees in any given year to increase more than 4% of the prior year’s Mitigation Fees. Number APPENDIX B: Process for Generating Units from Remediation The Participant may remediate impacts and generate remediation units (“Remediation Units”) for the remediated impacts. Remediation Units can be generated by performing remediation activities throughout the Covered Area of the CCAA (EOR + 10); remediation activities need not be performed on lands enrolled either in a CI or in the RWP, as long as the Participant can provide WAFWA or a WAFWA-approved Service Provider the access necessary to perform site evaluations. Remediation Units will be credited to the Participant’s Habitat Conservation Fund Account; however, Remediation Units may only be applied in the ecoregion in which the remediation occurred. Remediation Units will be reserved for the Participant that performed the remediation; however, the Participant may elect to transfer the Remediation Units. The process for quantifying units is described in this Appendix. The Participant may generate Remediation Units for the remediation of impacts from Impact Activities for which Mitigation Fees have been paid. The Participant may also generate Remediation Units for the remediation of impacts for which Mitigation Fees have not been paid (i.e., existing impacts). Different processes will be used for quantifying offset units depending on whether the impacts to be remediated result from Impact Activities for which Mitigation Fees have been paid. In order to demonstrate that impacts will be remediated, the Participant must provide WAFWA with documentation demonstrating that the remediation activities have occurred and that the remediated area has been seeded with native vegetation, at least to the minimum standard defined by the Natural Resources Conservation Service’s Conservation Practice Code 550 (Range Planting).

Changes in Mitigation Fees Due to Adaptive Management. In the event the RWP or elements of its conservation strategy are adjusted through adaptive management, the Mitigation Fees assessed on the Participant will not increase or decrease more than 4% in any given year from the Mitigation Fees for the prior calendar year. The 3% limit on inflation adjustments and 4% limit on adaptive management adjustments apply to all Mitigation Fees. Thus, annual increases to Mitigation Fees associated with development in a particular ecoregion, within a particular CHAT category, focal or connectivity area, and in an area with a particular site condition score, will not exceed 3% due to inflation and 4% due to adaptive management of the Mitigation Fees for development in areas with the same variables. Put otherwise, inflation adjustments will not cause the Mitigation Fee to develop a specific parcel of land in Year N+1 (e.g., year 2) to increase more than 3% beyond the Mitigation Fee to develop that same parcel of land in Year N (e.g., year 1) (assuming habitat quality on the parcel remains the same from year to year). Similarly, adaptive management adjustments will not cause the Mitigation Fee to develop a specific parcel of land in Year N+1 (e.g., year 2) to increase more than 4% of the Mitigation Fee to develop that same parcel of land in Year N (e.g., year 1) (assuming habitat quality on the parcel remains the same from year to year). The following formula mathematically reflects the maximum annual increase to Mitigation Fees: Maximum Mitigation Fee for Yn+1 == (Mitigation for Yn x 0.04) + (Mitigation for Yn x 0.03) + Mitigation Fee for Yn The Mitigation Fees for Year “Y1” are those reflected on the version of the HEG in effect when the Participant executes the CI. Prior to October 1, 2014, the HEG in effect is available at xxx.xxxxx.xxx; the range of Mitigation Fees associated with this HEG is identified in Section C of this Appendix. Mitigation Fees for subsequent years are those in effect on December 31. The RWP contemplates that some evaluations and adjustments will occur less frequently than annually (i.e., on a five- or ten-year basis). The 4% annual maximum adjustment resulting from adaptive management applies to all adjustments under the adaptive management provisions of the RWP, regardless of frequency. In other words, an adjustment that only occurs every five years cannot cause Mitigation Fees in any given year to increase more than 4% of the prior year’s Mitigation Fees. APPENDIX B: Process for Generating Units from Remediation The Participant may remediate impacts and generate remediation units (“Remediation Units”) for the remediated impacts. Remediation Units can be generated by performing remediation activities throughout the Covered Area of the CCAA (EOR + 10); remediation activities need not be performed on lands enrolled either in a CI or in the RWP, as long as the Participant can provide WAFWA or a WAFWA-approved Service Provider the access necessary to perform site evaluations. Remediation Units will be credited to the Participant’s Habitat Conservation Fund Account; however, Remediation Units may only be applied in the ecoregion in which the remediation occurred. Remediation Units will be reserved for the Participant that performed the remediation; however, the Participant may elect to transfer the Remediation Units. The process for quantifying units is described in this Appendix. The Participant may generate Remediation Units for the remediation of impacts from Impact Activities for which Mitigation Fees have been paid. The Participant may also generate Remediation Units for the remediation of impacts for which Mitigation Fees have not been paid (i.e., existing impacts). Different processes will be used for quantifying offset units depending on whether the impacts to be remediated result from Impact Activities for which Mitigation Fees have been paid. In order to demonstrate that impacts will be remediated, the Participant must provide WAFWA with documentation demonstrating that the remediation activities have occurred and that the remediated area has been seeded with native vegetation, at least to the minimum standard defined by the Natural Resources Conservation Service’s Conservation Practice Code 550 (Range Planting).

Changes in Mitigation Fees Due to Adaptive Management. In the event the RWP or elements of its conservation strategy are adjusted through adaptive management, the Mitigation Fees assessed on the Participant will not increase or decrease more than 4% in any given year from the Mitigation Fees for the prior calendar year. The 3% limit on inflation adjustments and 4% limit on adaptive management adjustments apply to all Mitigation Fees. Thus, annual increases to Mitigation Fees associated with development in a particular ecoregion, within a particular CHAT category, focal or connectivity area, and in an area with a particular site condition score, will not exceed 3% due to inflation and 4% due to adaptive management of the Mitigation Fees for development in areas with the same variables. Put otherwise, inflation adjustments will not cause the Mitigation Fee to develop a specific parcel of land in Year N+1 (e.g., year 2) to increase more than 3% beyond the Mitigation Fee to develop that same parcel of land in Year N (e.g., year 1) (assuming habitat quality on the parcel remains the same from year to year). Similarly, adaptive management adjustments will not cause the Mitigation Fee to develop a specific parcel of land in Year N+1 (e.g., year 2) to increase more than 4% of the Mitigation Fee to develop that same parcel of land in Year N (e.g., year 1) (assuming habitat quality on the parcel remains the same from year to year). The following formula mathematically reflects the maximum annual increase to Mitigation Fees: Maximum Mitigation Fee for Yn+1 == (Mitigation for Yn x 0.04) + (Mitigation for Yn x 0.03) + Mitigation Fee for Yn The Mitigation Fees for Year “Y1” are those reflected on the version of the HEG in effect when the Participant executes the CI. Prior to October 1, 2014, the HEG in effect is available at xxx.xxxxx.xxx; the range of Mitigation Fees associated with this HEG is identified in Section C of this Exhibit. Mitigation Fees for subsequent years are those in effect on December 31. The RWP contemplates that some evaluations and adjustments will occur less frequently than annually (i.e., on a five- or ten-year basis). The 4% annual maximum adjustment resulting from adaptive management applies to all adjustments under the adaptive management provisions of the RWP, regardless of frequency. In other words, an adjustment that only occurs every five years cannot cause Mitigation Fees in any given year to increase more than 4% of the prior year’s Mitigation Fees. Exhibit 3