Design of US Habitat Banking Systems to Support the Conservation ...

A DETAILED LOOK AT WETLAND AND CONSERVATION BANKINGlocal regulatory and resource agency representativesthat are signatories to a bank agreement and overseethe establishment, use, and operation of a conservationbank.” Apart from this definition, the Guidancementions such review teams only twice, and then onlyin passing. Those brief mentions provide that the partiesto a banking agreement should establish a reviewteam and that state and local agencies that participatein a bank agreement should be part of the team. Theonly specific task of the team otherwise mentioned inthe Guidance is that of receiving monitoring reportssubmitted to it in accordance with the terms of abanking agreement.Characterization and Quantification of Creditsand DebitsThe goal of any form of compensatory environmentalmitigation is to secure some resource gain from conservationefforts at a mitigation site to compensate, oroff-set, a resource loss at an authorized impact site.Of necessity, this requires that resource agencies beable to characterize and quantify the relevant gainsand losses at the two sites in a manner that allows fora meaningful comparison. This is an inherently difficulttask, but it bears emphasis that it is a task thatresource agencies must undertake regardless of themitigation method employed (i.e. project-by-projectversus banking). In order to avoid completely arbitraryproject-by-project mitigation decisions, resource agenciesresponsible for setting mitigation requirementsmust do so in accordance with some consistentlyapplied principles.Whereas the principles that guide project-by-projectcompensatory mitigation decisions are often not readilydiscerned, those that apply to wetland and conservationbanks are generally quite transparent. Indeed,one of the virtues of banking may be that it obligesresource agencies to clearly articulate the consistentprinciples upon which their mitigation decisions willbe made. Those principles determine not only howmany credits a bank may offer, but also how many ofthose credits will be required to compensate for specificresource losses at impact sites.Wetland Mitigation BanksWetland mitigation banks need a system for evaluatingthe amount of functional loss at the impact siteand the amount of functional gain at the bank site todetermine the amount of compensation required tooffset the functional loss. The “currency” that is used toevaluate the amount of compensation that is requiredis a wetland credit. A wetland mitigation bank credit isdefined as a “unit of measure representing the accrualor attainment of aquatic functions” at a bank. 171 Creditsare generally characterized by a functional measure,acres, or some combination thereof.The anticipated number of credits that the bank willgenerate is generally outlined in the bank instrument.Before credits may be released for sale they must becertified by the MBRT. The banking instrument alsospecifies the method or methods that will be used tocertify credits. Federal guidance states that mitigationshould provide for functional replacement andsuggests that bank sponsors use an “appropriate functionalassessment methodology” 172 to assess the resultsof compensatory activities and determine the numberof credits that will be available at the bank. In orderto evaluate whether or not functional replacement isbeing achieved, the same functional assessment methodologyused to evaluate credits at the compensationsite should be used to evaluate debits at the impactsite.Several federal guidance documents have stated thatin the absence of more definitive information onthe functions of a specific wetland site, a minimumone-to-one acreage replacement may be used as areasonable surrogate to achieve no net loss of wetlandfunctions. 173 In practice, banks often rely on acreage,or some combination of functional assessment, acreage,and best professional judgment, to determine thenumber of credits available.Functional equivalency measuresAlthough the use of functional equivalency measuresfor determining credits remains the goal, the devel-171 Banking Guidance (1995), § III. F.172 Banking Guidance (1995), § D.7.173 1990 MOA, § III. B.; Banking Guidance (1995), § 2.d.7.; RGL 02-2(2002), § 2.d.4.44 Environmental Law Institute