Common use of Mitigation Fees Clause in Contracts

Mitigation Fees. The RWP and CCAA intend that Mitigation Fees will be paid in proportion to impacts to LEPC habitat. The following activities require payment of Mitigation Fees to offset impacts to the LEPC: construction of oil and gas pads, compressor stations, private roads (e.g., lease roads), distribution lines, and industrial buildings (collectively “Impact Activities”). The Enrollment Fees will serve as prepayment of Mitigation Fees and will not be paid in addition to Mitigation Fees. The Enrollment Fees are intended to be used immediately to implement conservation activities to benefit the LEPC before Impact Activities are proposed. WAFWA will maintain a Participant’s Enrollment Fees and Mitigation Fees in a Habitat Conservation Fund Account specific to the Participant’s CI, as described below. Participants must pay Mitigation Fees, and WAFWA must ensure the availability of necessary offset units, before Impact Activities can occur. To avert the possibility of delays in development if the species is listed, Participants are strongly encouraged to maintain a prepayment balance in excess of Enrollment Fees and after the initial three-year prepayment period based on an estimate of future development impacts. Because WAFWA applies Mitigation Fees and contracts for the necessary offset units on an annual basis, Participants will need to submit Mitigation Fees based on anticipated development for the following calendar year before October 1 of each year (i.e., prior to the start of WAFWA annual sign-up period) to ensure sufficient offset units are available by January 1 of the following year to mitigate such anticipated development. Participants are encouraged to confer with WAFWA to estimate the Mitigation Fees necessary for future anticipated development. Pre-paid Mitigation Fees will be maintained in the Habitat Conservation Fund Account of the Participant until they are needed. If a Participant expects development to occur among ecoregions that is not proportional to the Participant’s enrolled acres in those ecoregions, the Participant should advise WAFWA upon enrollment or payment of Enrollment Fees so that WAFWA can attempt to acquire offset units in the appropriate ecoregion. Participants will monitor their Habitat Conservation Fund Accounts and review the balances of pre-paid Enrollment and Mitigation Fees. If a Participant determines its pre-paid Enrollment and Mitigation Fees will be less than the amount of Mitigation Fees necessary for remaining Impact Activities anticipated in any given year, the Participant should contact WAFWA at least 60 days prior to depleting its Enrollment and/or Mitigation Fees in its Habitat Conservation Fund Account to (i) determine the amount of additional Mitigation Fees necessary; (ii) afford WAFWA sufficient opportunity to secure the additional necessary offset units; and (iii) limit the potential for any disruption to Participant’s Impact Activities. WAFWA shall use good faith efforts to expedite securing the additional necessary offset units and agrees there is a substantial likelihood it will be able to secure the additional necessary offset units prior to any disruption to Participant’s Impact Activities. If a Participant provides notice to WAFWA less than 60 days prior to depleting its Enrollment and Mitigation Fees available in its Habitat Conservation Fund Account, WAFWA shall still use good faith efforts to expedite securing the additional necessary offset units. The Participant acknowledges that WAFWA may not be able to secure the additional necessary offset units in time to prevent disruption to Participant’s Impact Activities and therefore may assess an administration fee of 18.75% rather than 12.5% on the associated Mitigation Cost. To allow WAFWA adequate time to generate offset units after the CCAA is approved, the requirement that offset units be secured prior to the commencement of Impact Activities is waived until March 30, 2015 (“Waiver Period”). However, Participants must pay Mitigation Fees prior to Impact Activities in accordance with the terms of this Section, Appendix A of this CCAA, and Exhibit 2 of the CI during the Waiver Period. During the Waiver Period, WAFWA will use best efforts to contemporaneously secure sufficient offset units to mitigate for Impact Activities in accordance with the CCAA; however, in no way shall commencement of a Participant’s Impact Activities be delayed or prevented due to a shortage of offset units during the Waiver Period. WAFWA will identify whether additional offset units are necessary to mitigate the Impact Activities that occurred during the Waiver Period using the mitigation framework outlined in Appendix A of this CCAA and Exhibit 2 of the CI, and any temporary shortfalls in offset units must be fulfilled by March 30, 2015. The goal to achieve and maintain no more than 30% of area in impacted acres in focal areas (CHAT 1) and no more than 60% of connectivity areas in impacted acres (CHAT 2), as provided in page 105 of RWP, will remain in effect during the Waiver Period. If WAFWA determines that additional offset units are required to mitigate for Impact Activities that occurred during the Waiver Period, Participants, WAFWA and FWS shall confer to identify a mutually acceptable remedy to all Parties. One such remedy may be that additional offset units must be generated before Participants may proceed with new Impact Activities in a given ecoregion. In this event, because Participants’ Impact Activities may be delayed while additional offset units are generated, Participants and WAFWA have a strong incentive to work cooperatively to ensure that sufficient offset units exist to mitigate for Impact Activities during the Waiver Period. After March 30, 2015, WAFWA will require that sufficient offset units are available for mitigation prior to the commencement of Impact Activities. The mitigation framework used in the CCAA incentivizes avoidance of high quality habitat and provides conservation for the LEPC in perpetuity. Therefore the conservation benefit from initiating the long-term, landscape-scale conservation delivery program described in the RWP and utilized in the CCAA will outweigh temporary shortfalls in mitigation during this Waiver Period.

Mitigation Fees. The RWP and CCAA intend that Mitigation Fees will be paid in proportion to impacts to LEPC habitat. The following activities require payment of Mitigation Fees to offset impacts to the LEPC: construction of oil and gas pads, compressor stations, private roads (e.g., lease roads), distribution lines, and industrial buildings (collectively “Impact Activities”). The Enrollment Fees will serve as prepayment of Mitigation Fees and will not be paid in addition to Mitigation Fees. The Enrollment Fees are intended to be used immediately to implement conservation activities to benefit the LEPC before Impact Activities are proposed. WAFWA will maintain a Participant’s Enrollment Fees and Mitigation Fees in a Habitat Conservation Fund Account specific to the Participant’s CI, as described below. Participants must pay Mitigation Fees, and WAFWA must ensure the availability of necessary offset units, before Impact Activities can occur. To avert the possibility of delays in development if the species is listed, Participants are strongly encouraged to maintain a prepayment balance in excess of Enrollment Fees and after the initial three-year prepayment period based on an estimate of future development impacts. Because WAFWA applies Mitigation Fees and contracts for the necessary offset units on an annual basis, Participants will need to submit Mitigation Fees based on anticipated development for the following calendar year before October 1 of each year (i.e., prior to the start of WAFWA annual sign-up period) to ensure sufficient offset units are available by January 1 of the following year to mitigate such anticipated development. Participants are encouraged to confer with WAFWA to estimate the Mitigation Fees necessary for future anticipated development. Pre-paid Mitigation Fees will be maintained in the Habitat Conservation Fund Account of the Participant until they are needed. If a Participant expects development to occur among ecoregions that is not proportional to the Participant’s enrolled acres in those ecoregions, the Participant should advise WAFWA upon enrollment or payment of Enrollment Fees so that WAFWA can attempt to acquire offset units in the appropriate ecoregion. Participants will monitor their Habitat Conservation Fund Accounts and review the balances of pre-paid Enrollment and Mitigation Fees. If a Participant determines its pre-paid Enrollment and Mitigation Fees will be less than the amount of Mitigation Fees necessary for remaining Impact Activities anticipated in any given year, the Participant should contact WAFWA at least 60 days prior to depleting its Enrollment and/or Mitigation Fees in its Habitat Conservation Fund Account to (i) determine the amount of additional Mitigation Fees necessary; (ii) afford WAFWA sufficient opportunity to secure the additional necessary offset units; and (iii) limit the potential for any disruption to Participant’s Impact Activities. WAFWA shall use good faith efforts to expedite securing the additional necessary offset units and agrees there is a substantial likelihood it will be able to secure the additional necessary offset units prior to any disruption to Participant’s Impact Activities. If a Participant provides notice to WAFWA less than 60 days prior to depleting its Enrollment and Mitigation Fees available in its the Habitat Conservation Fund AccountFund, WAFWA shall still use good faith efforts to expedite securing the additional necessary offset units. The Participant acknowledges that WAFWA may not be able to secure the additional necessary offset units in time to prevent disruption to Participant’s Impact Activities and therefore may assess an administration fee of 18.75% rather than 12.5% on the associated Mitigation Cost. To allow WAFWA adequate time to generate offset units after the CCAA is approved, the requirement that offset units be secured prior to the commencement of Impact Activities is waived until March 30, 2015 (“Waiver Period”). However, Participants must pay Mitigation Fees prior to Impact Activities in accordance with the terms of this Section, Appendix A of this CCAA, and Exhibit 2 B of the CI during the Waiver Period. During the Waiver Period, WAFWA will use best efforts to contemporaneously secure sufficient offset units to mitigate for Impact Activities in accordance with the CCAA; however, in no way shall commencement of a Participant’s Impact Activities be delayed or prevented due to a shortage of offset units during the Waiver Period. WAFWA will identify whether additional offset units are necessary to mitigate the Impact Activities that occurred during the Waiver Period using the mitigation framework outlined in Appendix A of this CCAA and Exhibit 2 B of the CI, and any temporary shortfalls in offset units must be fulfilled by March 30, 2015. The goal to achieve and maintain no more than 30% of area in impacted acres in focal areas (CHAT 1) and no more than 60% of connectivity areas in impacted acres (CHAT 2), as provided in page 105 of RWP, will remain in effect during the Waiver Period. If WAFWA determines that additional offset units are required to mitigate for Impact Activities that occurred during the Waiver Period, Participants, WAFWA and FWS shall confer to identify a mutually acceptable remedy to all Parties. One such remedy may be that additional offset units must be generated before Participants may proceed with new Impact Activities in a given ecoregion. In this event, because Participants’ Impact Activities may be delayed while additional offset units are generated, Participants and WAFWA have a strong incentive to work cooperatively to ensure that sufficient offset units exist to mitigate for Impact Activities during the Waiver Period. After March 30, 2015, WAFWA will require that sufficient offset units are available for mitigation prior to the commencement of Impact Activities. The mitigation framework used in the CCAA incentivizes avoidance of high quality habitat and provides conservation for the LEPC in perpetuity. Therefore the conservation benefit from initiating the long-term, landscape-scale conservation delivery program described in the RWP and utilized in the CCAA will outweigh temporary shortfalls in mitigation during this Waiver Period.