GENERAL OVERVIEW OF WETLANDS MITIGATION BANKING

The Need for Wetland Mitigation

Section 404 of the Clean Water Act provides that any non-exempt activity that adversely affects a wetland must be pre-authorized by obtaining a permit. To qualify for a Section 404 permit, compliance with Section 404 (b)(1) sequencing guidelines must be demonstrated. In brief, the sequence is avoidance, minimization and mitigation. Applicants first must establish that impacts to wetlands cannot be avoided. Permit applicants then must demonstrate that reasonable efforts to minimize impacts to wetlands have been made in the design and construction plans. Having taken the first two steps, applicants then must provide a plan for compensation, usually through mitigation, for unavoidable impacts.

Wetland Mitigation Banks

On November 28, 1995, five Federal Agencies, (U.S. Army Corps of Engineers, U.S. Environmental Protection Agency, Fish and Wildlife Service, Natural Resource Conservation Service, and National Oceanic and Atmospheric Administration), published in the Federal Register their "final policy guidance regarding the establishment, use and operation of mitigation banks for the purpose of providing compensation for adverse impacts to wetlands . . . ." In this Guidance, the Agencies "recognize the potential benefits mitigation banking offers for streamlining the permit evaluation process and providing more effective mitigation" and "encourage the . . . use of mitigation banks."

As stated in the Guidance, "The objective of a mitigation bank is to provide for the replacement of the chemical, physical and biological functions of wetlands and other aquatic resources which are lost as a result of authorized impacts." The guidance acknowledges that "mitigation banks . . . can have several advantages over individual mitigation projects . . . ." Six such advantages are enumerated. They are:

1. It may be more advantageous for maintaining the integrity of the aquatic ecosystem to consolidate compensatory mitigation into a single large parcel;
2. Consolidation of resources can increase the potential for the establishment and long-term management of successful mitigation that maximizes opportunities for contributing to biodiversity and/or watershed function;
3. Use of mitigation banks may reduce permit processing times and provide more cost-effective compensatory mitigation opportunities;
4. Compensatory mitigation is typically implemented and functioning in advance of project impacts, thereby reducing temporal losses of aquatic functions and uncertainty over whether the mitigation will be successful;
5. Consolidation of compensatory mitigation within a mitigation bank increases the efficiency of limited agency resources in the review and compliance monitoring of mitigation projects, and thus improves the reliability of efforts to restore, create or enhance wetlands for mitigation purposes; and
6. The existence of mitigation banks can contribute towards attainment of the goal for no overall net loss of the Nation's wetlands by providing opportunities to compensate for authorized impacts when mitigation might not otherwise be appropriate or practicable.

The Guidance, written at a time when Nationwide Permits were issued for impacts of 3 acres and less, states a preference for the use of mitigation banks: "In general, use of a mitigation bank to compensate for minor aquatic resource impacts . . . is preferable to on-site mitigation." "With respect to larger aquatic resource impacts, use of a bank may be appropriate if it is capable of replacing essential physical and/or biological functions of the aquatic resources which are expected to be lost or degraded."

Individual Mitigation Bank Sites

Permit applicants with unavoidable wetland impacts in Colorado historically have been required to design and construct their own mitigation sites, either on-site or off-site. They have been required to monitor and maintain these sites, until they fully comply with wetland jurisdictional requirements. Prior to the availability of wetland mitigation banks, this was the only method available to satisfy mitigation obligations. This option, while still available, imposes significant costs, commitment of an uncertain amount of time (at least several years) until final certification, potential limitations on the fullest and best use of the construction site and risks that may be difficult or impossible to manage. Wetland mitigation banks offer an alternative for meeting mitigation requirements that is frequently advantageous to the developer in terms of time, cost, project flexibility and risk.

Contact Middle South Platte River Wetland Mitigation Bank:

David Yardley
msprwetlandbank@earthlink.net
(970) 593-5631

John Ryan:
jryan@lawrinc.com
(708) 878-3903