What is wetland mitigation banking?


Courtesy of Common Sense Solutions, LLC

A mitigation bank is a wetland, stream, or other aquatic resource area that has been restored, established, enhanced, or (in certain circumstances) preserved for the purpose of providing compensation for unavoidable impacts to aquatic resources permitted under Section 404 or a similar state or local wetland regulation.  The concept has been around since the 1970’s.  In 1995 U.S. federal agencies released guidance on establishing, using, and operating mitigation banks.

Recently, there has been a renewed interest in its use as a regulatory tool. Basically, mitigation banking creates an economic incentive for restoring, creating, enhancing and/or preserving wetlands.  Mitigation banks typically involve the consolidation of many small wetland mitigation projects into a larger, potentially more ecologically valuable site

Mitigation banks require the up-front compensation prior to affecting a wetland at another site. This ensures the success of the mitigation before unavoidable damage occurs at another site. With proper implementation and guidelines, mitigation banking has the potential to increase ecological benefits, save money for project applicants, and improve efficiencies in application and permitting processes.

A mitigation bank may be created when a government agency, corporation, nonprofit organization, or other entity undertakes these activities under a formal agreement.  Mitigation banks have four distinct components:

  • The bank site: the physical acreage restored, established, enhanced, or preserved;
  • The bank instrument: the formal agreement between the bank owners and regulators establishing liability, performance standards, management and monitoring requirements, and the terms of bank credit approval;
  • The Interagency Review Team (IRT): the interagency team that provides regulatory review, approval, and oversight of the bank; and
  • The service area: the geographic area in which permitted impacts can be compensated for at a given bank.

The value of a bank is defined in 'compensatory mitigation credits.' A bank's nstrument identifies the number of credits available for sale and requires the use of ecological assessment techniques to certify that those credits provide the required ecological functions. Although most mitigation banks are designed to compensate only for impacts to various wetland types, some banks have been developed to compensate specifically for impacts to streams (i.e., stream mitigation banks).

The successful location, certification and management of a mitigation bank is a complex process that requires a professional team. The banking process is generally made up of the following milestones:

  • The regional evaluation and site selection (including feasibility analyses);
  • Site Acquisition: Initial sites will be put into contract either through direct purchase agreements, options contracts, leasing public lands or partnering with landowners using investor capital;
  • Wetland Mitigation Bank Certification Process: The certification process results in the execution of “Banking Instruments” or 'Memorandum of Agreements' with the regional Wetland Mitigation Banking Review Team (MBRT);
  • Site Modification: The construction required to modify the site from a non-wetland to a wetland; and
  • Credit Marketing and Sales: The sale of credits created by the constructed wetland.

Common Sense Solutions, LLC (CSS) possesses premier expertise that can represent your interests while navigating through the complexities of a project.

As our client, CSS will work with land owners, state/federal agencies, and investors on all aspects of bank creation including: economic and ecological feasibility, property selection, wetland construction, permit negotiations and technical evaluations.  CSS focuses on identifying and creating high value mitigation banks that command high credit demand, have low acquisition and construction costs and are mostly likely to get certified.

CSS will explain which proposal's are most ecologically sound and likely to be approved by regulators. At significant milestones, we will provide critical scientific information such as wetland soils, flora and fauna identification, hydrology, ecological benefit, regulatory jurisdictions and requirements, the area's development history and trends, alternative analysis and our recommendations. Graphic portrayal, a map and photographs will be included.  If requested, CSS is also available to provide testimony at public hearings and regulatory meetings.

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