Mitigation Banking

Mitigation banking is a practice in which landowners or project developers can preserve or restore wetlands, streams, aquatic resources, wildlife habitat, water quality, and other natural features or ecological functions to offset environmental impacts. Mitigation banking offers an opportunity to replace lost environmental functions within the same watershed, ecoregion, or area as adverse impact sites, even if mitigation does not take place on-site. In this way it enhances the effects of environmental restoration by pooling offsets from multiple adverse impact sites into larger, more intensive, or more impactful restoration efforts than would be achievable by a collection of smaller, individual project-by-project environmental offset projects or a fragmented network of smaller preserved sites.

Regulatory Framework

Generally, mitigation bank credit purchases are done to fulfil Federal, State or local government permit requirements. If these permits allow the loss of environmental function as a result of the built project, mitigation credits (sometimes called ‘bank credits’) may be required to offset those losses. A combination of quantitative site assessment and mathematical formulas are used to:

1. Score the baseline, pre-project environmental quality of the development site
2. Quantify the adverse impacts of the proposed project on the development site
3. Determine the number of mitigation credits required at a given mitigation bank to offset the proposed impacts

The assessment methods and formulas used differ by jurisdiction. Typical jurisdictional lines that affect these method changes include:

• US Army Corps of Engineers Districts (based on major watershed boundaries)
• State boundaries
• Water management districts, coastal zones or other sub-State divisions. These vary significantly according to geography

Mitigation banking is the process where degraded wetlands or streams are speculatively restored by a person or entity, under an agreement with USACE and other agencies, according to specific guidelines and subject to performance metrics. That restoration will generate offset ‘credits’ that can then be purchased by anyone with unavoidable impacts to those resources.

The development process includes:

1. Environmental studies to determine current and potential future conditions ( Wetland Delineations , Threatened and Endangered Species Surveys, Stream Characterization and Assessments, etc.)
2. Coordination with USACE and other federal and state agencies to establish project viability.
3. Permitting to establish a bank or PRM site
4. Completion of project design, including habitat restoration plans
5. Completion of project construction
6. Monitoring for credit releases
7. Project close out and (if applicable) transfer to a long-term steward

Types of Mitigation Banks

• Wetland mitigation banks: restore, enhance or preserve wetland habitat.
• Stream mitigation banks: restore, enhance or preserve streams or similar aquatic resources.
• Conservation banks: focus on threatened habitat for wildlife, biodiversity or other regional environmental concerns.
• Endangered species banks: focus on Federal and State listed species, along with their critical habitat.
• Water quality banks: focus on improvement of water quality associated with aquatic resources.

* There are also permittee responsible mitigation projects and in-lieu fee programs that are related mitigation approaches, but are not banks.

Mitigation Credit Purchase

During a mitigation credit transaction, there are typically 3 parties involved:

1. The Applicant is finalizing an environmental permit and needs credits to satisfy the mitigation requirement of the permit.
2. The Mitigation Banker has compensatory mitigation credits for sale of the type required by the permit.
3. The Agency or Agencies have regulatory oversight over the environmental permit being sought by the Applicant and the mitigation bank operated by the Banker.

The Applicant purchases mitigation credits in an amount required by the Agencies and, the Mitigation Banker receives payment from the Applicant, and the Mitigation Banker verifies the transaction with the Agencies. The credits provided to the Applicant are deducted from the Banker’s inventory and the permit sought by the Applicant is finalized.

Mitigation Banking Experience

Cypress has extensive experience with wetland delineations and jurisdictional determinations in US Army Corps of Engineers Districts throughout the United States. Our staff have performed hundreds of wetland delineations and wetland mapping studies up to 110,000 acres in size and hundreds of miles in length for linear projects, including projects for real estate developers, railways, transportation authorities, State/ Federal/ municipal governments, individual homeowners, civil engineering firms, construction firms and nonprofit organizations.