WETLAND AND CONSERVATION BANKING IN DETAILturn, been delegated <strong>to</strong> <strong>the</strong> agency’s 38 district <strong>of</strong>fices(see Fig. 1). 27The Corps’ direction on administering <strong>the</strong> §404 programderives from <strong>the</strong> Department <strong>of</strong> <strong>the</strong> Army regulations(33 CFR 320-331). The regulations have evolvedover time <strong>to</strong> reflect new authorities and developingcase law. The regulations are supplemented by <strong>the</strong>federal guidance issued by <strong>the</strong> Corps and interagencyguidance issued in conjunction with <strong>the</strong> o<strong>the</strong>r sisterwetland agencies. In addition, individual Corps districtsissue <strong>the</strong>ir own guidance on <strong>the</strong> program, includingguidance specifically pertaining <strong>to</strong> wetland mitigationbanking. In many instances, <strong>the</strong> district-specificguidance is modeled after national guidance and isdeveloped in response <strong>to</strong> a request from Headquarters.At least 32 <strong>of</strong> <strong>the</strong> Corps’ 38 districts have issued generalguidance or standard operating procedures on compensa<strong>to</strong>rymitigation. Seventeen districts have issuedguidance specifically on mitigation banking and 10 <strong>of</strong>27 33 CFR Part 320.1 (a) (1).<strong>the</strong>se have issued <strong>the</strong> mitigation banking guidance inconjunction with o<strong>the</strong>r federal and/or state agencies(see Appendix B for a bibliography <strong>of</strong> Corps districtbanking guidance).State Wetland Mitigation <strong>Banking</strong> PolicyMany states in <strong>the</strong> U.S. have wetland programs withregula<strong>to</strong>ry provisions that complement <strong>the</strong> §404program. Some <strong>of</strong> <strong>the</strong>se programs create additionalregula<strong>to</strong>ry requirements over and above §404 andsome have wetland regula<strong>to</strong>ry thresholds that aremore stringent than §404. Thus, <strong>the</strong>se programs <strong>of</strong>tenrequire mitigation for impacts not covered by §404.A comprehensive survey <strong>of</strong> state wetland programscompleted in 2007 found that at least 20 states havestatutes authorizing state wetland mitigation bankingprograms or authorizing <strong>the</strong> state <strong>to</strong> purchase creditsfrom a wetland mitigation bank; at least 16 states havewetland mitigation banking regulations; and at least18 states have developed guidance on wetland mitigationbanking, <strong>of</strong>ten in coordination with <strong>the</strong> Corps or aMitigation Bank Review Team (MBRT) (see AppendixC for chart and Appendix E for narrative descriptions).FIGURE 1. U.S. Army Corps <strong>of</strong> Engineers – Division and District Boundaries12 Environmental Law Institute
WETLAND AND CONSERVATION BANKING IN DETAILA review <strong>of</strong> <strong>the</strong>se laws, regulations, and policies alongwith interviews with state wetland program staffreveal that at least eleven states (Arkansas, California,Florida, Michigan, Minnesota, New Jersey, NorthCarolina, Oregon, Virginia, Washing<strong>to</strong>n, and Wisconsin)have active wetland mitigation banking programs. Inaddition <strong>to</strong> having laws, regulations, or policies thataddress wetland mitigation banking, <strong>the</strong>se states supportbanking through programmatic commitments <strong>of</strong>staff and funding.The ways in which <strong>the</strong>se state wetland laws, regulations,and policies interact with <strong>the</strong> federal wetlandmitigation banking process varies from state <strong>to</strong> state.Three states with active banking programs – Florida,Michigan, and Oregon – are discussed below <strong>to</strong> provideexamples <strong>of</strong> how state and federal wetlands programsinteract <strong>to</strong> affect mitigation banking on <strong>the</strong> ground.Wetland Mitigation <strong>Banking</strong> in FloridaFlorida has one <strong>of</strong> <strong>the</strong> nation’s oldest and best developedstate wetland regula<strong>to</strong>ry programs. The statelegislature approved mitigation banking legislation. 28The Florida Department <strong>of</strong> Environmental Protection(DEP) Florida and <strong>the</strong> Florida water managementdistricts (WMD) promulgated rules governing bankingin February 1994. 29 Mitigation banks in Floridamust obtain a mitigation banking instrument approvedby <strong>the</strong> federal interagency Mitigation Bank ReviewTeam that operates in Florida and a state bank permitapproved by DEP or <strong>the</strong> appropriate WMD. In 1998,<strong>the</strong> Florida MBRT 30 developed joint state/federalguidelines <strong>to</strong> provide direction <strong>to</strong> <strong>the</strong> MBRT reviewprocess and “streamline <strong>the</strong> respective evaluation processesand reduce redundancy between <strong>the</strong> State andFederal reviews.” 31 The state’s MBRT is co-chaired by<strong>the</strong> Corps and <strong>the</strong> lead state agency (ei<strong>the</strong>r FL DEP ora WMD). Approval <strong>of</strong> banks begins as a joint federal/state review, but state and federal approval processesmay diverge as <strong>the</strong> proposal moves forward due <strong>to</strong> differentrequirements. However, <strong>the</strong> state and federalMBRTs continue <strong>to</strong> coordinate throughout. As <strong>of</strong> 2005,Florida had 55 approved, pending, or sold-out banks.A pending bank is one with a completed draft bankinginstrument or prospectus, but for which <strong>the</strong> Corps hasnot yet approved <strong>the</strong> banking instrument. A sold-outbank is one that was approved and subsequently soldall <strong>of</strong> <strong>the</strong> available credits (i.e., <strong>the</strong> bank has beencompletely debited).Wetland Mitigation <strong>Banking</strong> in MichiganMichigan is only one <strong>of</strong> two states (<strong>the</strong> o<strong>the</strong>r beingNew Jersey) that has assumed administration <strong>of</strong> <strong>the</strong>§404 program, as allowed under <strong>the</strong> CWA. In order<strong>to</strong> assume <strong>the</strong> program, Michigan was required <strong>to</strong>develop a wetlands permit program similar <strong>to</strong> <strong>the</strong>federal program and submit an application <strong>to</strong> assume<strong>the</strong> program <strong>to</strong> EPA. 32 Michigan assumed §404 in 1984.Under <strong>the</strong> state’s wetlands law, mitigation is requiredas a condition <strong>of</strong> many permits. 33 Administrativerules for mitigation banking were promulgated in1997. 34 In order <strong>to</strong> establish a bank in <strong>the</strong> state, <strong>the</strong>bank sponsor must enter in<strong>to</strong> a Wetland Mitigation<strong>Banking</strong> Agreement with <strong>the</strong> Michigan Department<strong>of</strong> Environmental Quality (DEQ). In 2001, DEQ issueda Wetland Mitigation <strong>Banking</strong> Handbook 35 outlining<strong>the</strong> process for establishing a bank, planning considerations,and bank management. DEQ is required bystate regulations <strong>to</strong> maintain a registry <strong>of</strong> established28 FL. STAT. ANN. § 373.4135 and 373.4136. Fla. Stat. ch. 373.4135-.4137, ch. 373.414, ch. 403.9322. See: Reiss, Kelly Chinners, EricaHernandez, Mark T. Brown. May 2007. “An Evaluation <strong>of</strong> <strong>the</strong>Effectiveness <strong>of</strong> Mitigation <strong>Banking</strong> in Florida: Ecological Successand Compliance with Permit Criteria.” Florida Department <strong>of</strong>Environmental Protection. http://www.dep.state.fl.us/water/wetlands/docs/mitigation/Final_Report.pdf.29 Florida Mitigation Bank Review Team. Oc<strong>to</strong>ber 1998. “Joint State/Federal Mitigation Bank Review Team Process for Florida.” http://www.saj.usace.army.mil/regula<strong>to</strong>ry/permitting/mitigation/mBanks.htm.30 Comprised <strong>of</strong> FL DEP, water management districts, Corps, EPA,NMFS, FWS, and NRCS.31 Florida Mitigation Bank Review Team. Oc<strong>to</strong>ber 1998. “Joint State/Federal Mitigation Bank Review Team Process for Florida.” http://www.saj.usace.army.mil/regula<strong>to</strong>ry/permitting/mitigation/mBanks.htm.32 Clean Water Act, Section 404 Program Definition and PermitExemptions; Section 404 State Program Regulations, June 6, 1988,Federal Register, 40 CFR Parts 232 and 233.33 Part 303, Wetlands Protection, <strong>of</strong> <strong>the</strong> Natural Resources andEnvironmental Protection Act, 1994 PA 451, as amended.34 12 Mich. Admin. Code R. §§281.951-.961.35 Michigan Department <strong>of</strong> Environmental Quality. September 2001.“MDEQ Wetland Mitigation <strong>Banking</strong> Handbook.” See: http://www.deq.state.mi.us/documents/deq-water-wetlands-webhandbook.pdf.<strong>Design</strong> <strong>of</strong> U.S. <strong>Habitat</strong> <strong>Banking</strong> <strong>Systems</strong> <strong>to</strong> <strong>Support</strong> <strong>the</strong> <strong>Conservation</strong> <strong>of</strong> Wildlife <strong>Habitat</strong> and At-Risk Species 13