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<br />While tbe a:J,{.'ncies '1ppellr
<br />
<br />concerned rl1m all()~dl/g
<br />
<br />creditS s()le~:'.Iorpr<?sen.,'(llion
<br />
<br />mayJnl,,<;trate their goal
<br />
<br />OEC"09-98 11.27 FROH.H.8,S,S,
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<br />. B:Inking agrc:c:metlls with regulatory agmcies that
<br />escblish bank standards for pcIformance, monitor-
<br />ing. maintt.'ruInce, and long.<cnn management:
<br />.... Risk allocation for mitigation faUure rhal: Is restricr,
<br />ed to events wirhin a credit supplier's con""';
<br />. Flcdblc: mec!wlisms. such as higher uading ratios
<br />and pcIforflWlce bonds, for allootlng liability in
<br />the e.,-ent of failure;
<br />. Rules to determinc how credits will be defined and
<br />their level assessed;
<br />Flaible rcgulaIoty systems and
<br />avoidance of price controls to
<br />ensure consisten")' In mitiga-
<br />tion requirements and a wider
<br />marlcet; and '
<br />. Integration of mitigation bank-
<br />Ing with region21 and 10C2l
<br />wa~hed planning initiatives,
<br />Making these facro,", worle: to
<br />promote banking is the biggest
<br />challenge confronting r~ors
<br />and bank developers alike,
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<br />will benefit :ull~nt. functioning wetlands ~'Stems.
<br />Some Corps dlstricrs are already giving credit for wet-
<br />lands p~on at a ratio of 10 to 1 (ren .acres of
<br />preservation gencrues one acre of credit), Because
<br />bani: sponsors can receive credit by merely placing a
<br />con$el'\'2.tion casc:ment o\'er wetlands. pL:lns WI rely
<br />on preservalion should enhance the economic viability
<br />of many b3nk;.
<br />However, making 'cxccptloD21' circums1:1nc<s the
<br />sole basis for pn:sc:rvation credits and requiring evidence
<br />of a "demoostr2ble cIueu:" to the I="
<br />served wetlands. for full credit, :are
<br />major limirations that m:ry pose an
<br />insurmountable hl.lfdle for bank
<br />sponsors, While the agencies appear
<br />OJDccmed rh:II allOWing credits sole-
<br />ly for ~t1on may frustrate their
<br />goal of achiC\ing 'no net loss" of
<br />wetlands. the reverse is more likdy.
<br />Devdopers who are willing to pur-
<br />clwc: wetlands and place conserva.
<br />tion e2SeIlImtS h:lve rcmo\'e(j the
<br />wctJands from a.ay thre:U: of fu=
<br />permitted (or ilkgaI) impacts. These
<br />preserved wctbnds also an fit into
<br />~er watershed planning su:neg!es
<br />and provi&: certainty to planners,
<br />regulators. and the public,
<br />ReloZionsbip to E:dsling
<br />Mifigarion Requirements. The
<br />Guidance aprcssly reqUires a per>-
<br />mit applicant to avoid and thm to minimize adverse
<br />impacts to wctl2nds before being allowed to use: a
<br />bank. This process, known as sequencing. is a basic
<br />part of the Or::m Water ACt Section 404 progr.un,
<br />Under this requirement, a bank sponsor is liIcely to
<br />inquire wbether the geographic (seMce) area is faCing
<br />high-gro,,;th pn:ssurcs and wh:lt the likely impactS to
<br />""erlands in the watenhed of the proposed bank site
<br />will be, In addition, betore using a bank. an applicant
<br />will h:lw: to demonstrate th.at there is no practicable
<br />oppommity f"r on-site mitigation or Wt "use of a bank
<br />Is environmenWly preferable to on.site compensation. "
<br />Guidance. at 13,
<br />While the sequencing process has been a basic
<br />pan of the program for.,.ears. strict adherence to this
<br />policy could prcvmt a banking m.arker from ever
<br />emerging, If a permit applic:ult must try to avoid even
<br />marginal wetlands and thm demonstrate Wt on~ite
<br />mitigation is not feasible. the bank sponsor is given lit-
<br />tle up-fronl assu=ce of viable m.arket demand for
<br />credits. A better solution would be to allow for more
<br />flexibility to deviate from tile sequcnd.ng process.
<br />especially whae the bank site will clearly provide
<br />gr<:2ter environmenral benefits than on.site wctlands,
<br />Such flexibility would offer greater eeonomic incen,
<br />tlves and assure a bener environmental result,
<br />
<br />Fetkral Guidance
<br />
<br />of achievi//g. "no net loss"
<br />
<br />of wet/a m Is. tbe reI 'ei'$e
<br />
<br />'The 1995 Guidance addresses
<br />most of the conditions needed to
<br />make mitigation banking work. It
<br />establishes basic policies and proce-
<br />d= and includes :sev<:r:aI key pro-
<br />Visions Wt. if properly implemenl-
<br />ed, could 'prime" the fledgling private mitigation bank-
<br />ing industry,
<br />fkmJl Sf'" Pu.nning, The Guidance emphasizes
<br />choosing 3 site that IS ecologically suiable to support
<br />aquatic functions, Banks may be sited on public and
<br />private lmds, and the Guidance encourages coopera.
<br />tive arnngements bctwem public and private entities,
<br />With publicly owned bnds, bank sponsors avoid diffi.
<br />culties associated with priv.r.te land acquisition. Banks
<br />may be used to compensate for wc:tWld impacts under
<br />otller prog:ra=. such as Army Corps of Engineers' civU
<br />works projects and Supelfund (Comprehensive
<br />Environmenralllesporuc. Compensation and Uability
<br />Acr. 42 V.s,c. H 9601 et seq,) d~JIIups, Mitigation
<br />banking also can be expanded to endeavors such as
<br />naNI31 resource damage restoration under Superfund
<br />and habil:lt conservation planning under the
<br />Endangered Spedes ACI. 16 U,S,C. U 1531 er uq, Even
<br />Stale programs. like SUte tdorest:1tion laws. C2n be
<br />combined with wetlands banking, which only enlargeS
<br />market opportunities,
<br />Under certain circwnstaDces. the Guidance allows
<br />credits for the preset"lltion of _tlands and adjacent
<br />upland areas. which can filter nu<ri<:nts and sedimenl
<br />from stormWater. Be<:ause: the Guidance prefen "..et-
<br />lands to be restored "'ther than created. resloration
<br />
<br />is more m~I!Zr,
<br />
<br />~
<br />
<br />Nli&E Summer 1998
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