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• 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 instrument (BEI) 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). Mitigation banks are a form of "third-party" compensatory mitigation, in which the responsibility for compensatory mitigation implementation and success is assumed by a party other than the permittee. This transfer of liability has been a very attractive feature for Section 404 permit-holders, who would otherwise be responsible for the design, construction, monitoring, ecological success, and long-term protection of the site.  

Both wetland and stream mitigation banks are used to compensate for adverse impacts generally occurring within a specified service area, or designated watershed. The US Army Corps of Engineers (USACE), along with other state and federal agencies, approves a specified number of wetland/stream credits available to be sold by the bank sponsor. Permittees needing to compensate for adverse project-related impacts to streams may purchase credits from bank sponsors, upon approval by the USACE, to compensate for those impacts.  Each state and USACE District, however, continues to quantify wetland and stream credits uniquely; therefore, understanding the credit generation and impact assessment process for each individual District is critical.   At Sierra Ridge Consulting our team of biologists and consultants can establish the proper metrics and valuations to satisfy the State and Federal requirements for establishing a Mitigation Bank.

​​Mitigation banking has a number of advantages over traditional permittee-responsible compensatory mitigation because of the ability of mitigation banking programs to:

• Reduce uncertainty over whether the compensatory mitigation will be successful in offsetting project impacts;
• Assemble and apply extensive financial resources, planning, and scientific expertise not always available to many permittee-responsible compensatory mitigation proposals;
  
• Reduce permit processing times and provide more cost-effective compensatory mitigation opportunities; 
  
• Increase effectiveness and success over typical mitigation-site or project-by-project approaches; and
• Enable the efficient use of limited agency resources in the review and compliance monitoring of compensatory mitigation projects because of consolidation.
  

Third-party compensatory mitigation such as mitigation banks offer advantages over permittee-responsible mitigation in the fulfillment of regulatory goals.  One such advantage identified by National Research Council (NRC) is the consensus-driven, inter-agency review process used to approve banks.   It is also noted by the NRC that banks are more likely than traditional compensatory mitigation to achieve desired long-term outcomes and to create mitigation sites that are protected in perpetuity by organizations dedicated to resource conservation.

By establishing a mitigation bank, landowners can are able to generate significant financial benefits through the sale of their wetland and stream credits, as well as protect their land from future development under a perpetual conservation easement.  Landowner’s still retain rights to passively use their property as open space for hunting, hiking, bird watching, and other activities, while protecting their land and the environment for the future generations. 

What are the benefits of a Mitigation Bank?

​A mitigation bank is a wetland, stream, or other aquatic resource area that has been restored, established, enhanced, or preserved for the purpose of providing compensation for unavoidable impacts to aquatic resources permitted under Section 404 of the Clean Water Act.   A mitigation bank may be created when a government agency, corporation, nonprofit organization, or other entity undertakes these activities under a formal agreement with a regulatory agency. Mitigation banks have four distinct components:

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What is a Mitigation Bank?

Mitigation Banking