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

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A DETAILED LOOK AT WETLAND AND CONSERVATION BANKINGecological benefit of the conservation project.” 196 Forexample, if a landowner were to commit to manage inperpetuity a wetland restored under a 15-year Partnersfor Fish and Wildlife agreement, some credit would beavailable under the §404 mitigation program since thelandowner is going above and beyond that which thefederal program is supporting.Note that the guidance only specifically addressesfederally funded wetland conservation projects. On itsface, the guidance does not appear to limit the use ofstate or local funds to carry out wetland conservationprojects that generate credits within a bank.The Banking Guidance also addresses creditingfor banks established on public lands. It states:“Mitigation credits generated by banks [on publiclands] should be based solely on those values in thebank that are supplemental to the public program(s)already planned or in place, that is, baseline valuesrepresented by existing or already planned public programs,including preservation value, should not becounted toward bank credits.” 197 So, for example, if abank is established within a state park, credits mayonly be certified for restoration or other mitigationactivities that enhance the functions of the site and forwhich the agencies involved had not already plannedor secured funding.Federal conservation banking guidance, on the otherhand, lumps together federal, state, and local programsbenefiting endangered species and says thatwhere such programs are used to achieve permanentprotection of particular lands, the Service “will notrecommend, support, or advocate the use of suchlands as conservation banks for mitigating impacts tospecies listed under the ESA.” 198 Thus, the conservationbanking guidance is more restrictive than thewetlands mitigation banking guidance, at least whenpublic funds from any source have been used to protectsites permanently. The Service’s view seems to bethat if particular sites have been protected throughother means, they are ineligible to become banks that196 Banking Guidance (1995), § II, B, 2.can sell or use credits to offset the adverse impacts offuture projects elsewhere.In one other respect, however, the conservation bankingguidance seems to draw a distinction between federalfunding and other sources of governmental funding.That is, the guidance says that “[w]here Federalfunds have been used in the establishment of a bank,the allocation of credits to the bank will be proportionateto the non-Federal contribution. A bank capableof sustaining 10 credits, but with a 50 percent Federalcontribution, will be allocated 5 credits.” 199 This statementis not particularly noteworthy, except for the factthat it only applies to federal funding. If, for example,that same hypothetical bank capable of sustaining tencredits had a 50 percent state contribution rather thana 50 percent federal contribution, the federal guidancewould seem to allow recognition of all ten credits (howthose credits would be allocated between the stateand its private partner would presumably be up tothem to decide). At least that is the implication of theguidance’s silence on the question of a banking projectthat receives a funding contribution from a state orother non-federal public source.Both the wetland banking guidance and the endangeredspecies conservation banking guidance thusappear to allow a state either to establish a bank of itsown or to contribute financially to the establishmentof a bank by another. Doing the latter may be a way inwhich states can influence the siting of privately ownedbanks in priority conservation areas identified in statewildlife action plans. In effect, states may be able tosteer private investments toward banks that furtherstate wildlife action plan goals by offering financialinducements unavailable to banks elsewhere.Duration and Character of Management at BankSitesWetland Mitigation BanksThere are several stages in the life of a wetland mitigationbank, including the operational stage of thebank, when the terms of the banking instrument are ineffect and bank credits are being generated and sold,and the long-term management phase, the period afterthe credits have been sold and performance standards197 Banking Guidance (1995), § II, B, 2.198 Guidance on Conservation Banks (2003), § II, B, 4.199 Guidance on Conservation Banks (2003), § II, B, 4.48 Environmental Law Institute
A DETAILED LOOK AT WETLAND AND CONSERVATION BANKINGhave been met. 200 Different management requirementsgenerally apply during each of these distinct phases.Requirements for each phase should be spelled out inthe banking instrument.Before a wetland mitigation bank can sell credits, thebank site must be secured. 201 In practice the Corpsrequires most, if not all, banks to be protected inperpetuity. 202 The exceptions are in Louisiana, wherethe life of marsh mitigation banks is only 20 years and50 years for forested wetland mitigation banks 203 andbanks sited on public lands. In 2002, ELI reported thatof the 54 banks on public lands nationwide, fewer thanhalf of the authorizing instruments specify the legalassurances for land protection. 204Existing federal guidance states that wetland mitigationbanks should be protected using “appropriatereal estate arrangements.” 205 Although the agencies donot require a specific type of protection mechanism,enforcement problems encountered with deed restrictionsled the Corps to suggest in 2002 that conservationeasements are preferable to deed restrictions. 206Regardless, the instrument used should restrict usesthat might “jeopardize the purpose of the bank.” 207Financing of bank management – remedial and longtermThe 1995 Banking Guidance states that the bank sponsoris responsible for establishing two types of fundsto ensure the operation and long-term protection ofthe bank: remedial funds and long-term managementfunds. 208 The banking instrument should identify theterms of both funds and the entity responsible for holdingthe funds and carrying out the required activities.200 Banking Guidance (1995), § II, E, 1.201 Banking Guidance (1995), § II, D, 6.202 Banks and Fees (2002), p. 80. Of the 219 instruments reviewed,76 percent indicated the mechanism that would be used to protectthe land in perpetuity.203 La. Admin. Code tit. 43:I, §724. Banks and Fees (2002), p. 85.204 Banks and Fees (2002), p. 44.205 Banking Guidance (1995), § II, E, 2.206 RGL 02-2 (2002), § 3, g.207 Banking Guidance (1995), § II, E, 2.208 Banking Guidance (1995) § II, E, 2.Remedial funds are those set aside to “cover contingencyactions in the event of bank default orfailure.” 209 The amount of funds required should beadjusted to reflect the risk of the bank failing to meetits performance standards and the amount of creditsreleased before ecological performance standards havebeen met. Financial assurances for remedial actionsmay be phased-out or reduced as the bank’s performancestandards are met. 210 For example, the bankinginstrument for WetBank – Gunnison in Coloradoindicates that 33 percent of the performance bond willbe released upon establishment of wetland vegetation,33 percent upon establishment of woody riparian vegetation,and the final 34 percent upon attainment ofnoxious weed control. 211Long-term management funds are those designed toprovide the long-term steward of the site – either thebank’s sponsor or a third party to whom the real estateprotection instrument had been transferred – with theresources necessary to carry out the long-term managementresponsibilities spelled out in the bankinginstrument. The entity taking on the long-term stewardshipof compensation sites should secure adequatefunding to provide for the long-term managementneeds of the sites. One California non-profit organizationthat specializes in the long-term management ofwetland and habitat mitigation sites, the Center forNatural Lands Management, has developed a tool forcalculating adequate long-term management financialneeds. The Property Analysis Record (PAR) is a computerizeddatabase methodology that estimates thecosts of management activities and generates reportsto substantiate long-term funding requirements,including endowments. 212The state wildlife action plans all provide detailedinformation on conservation actions for species ofconservation concern. If these actions are sufficientlywell-developed for wetland species, they could be209 Banking Guidance (1995), § II, E, 5.210 Banks and Fees (2002), p. 67.211 Still Water - Ohio Creek, LLLP. Banking Instrument for theWetBank – Gunnison Wetland Mitigation Bank. Banking Instrument.Gunnison County, CO. 1999. p. 16.212 For more on PAR see: http://www.cnlm.org/cms/index.php?option=com_content&task=view&id=21&Itemid=155.Design of U.S. Habitat Banking Systems to Support the Conservation of Wildlife Habitat and At-Risk Species 49
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Page 7 and 8: EXECUTIVE SUMMARYExecutive SummaryA
Page 9 and 10: EXECUTIVE SUMMARYbanks or habitat b
Page 11 and 12: IntroductionIntroductionAvariety of
Page 13 and 14: WETLAND AND CONSERVATION BANKING IN
Page 27 and 28: State Wildlife Action Plans3. State
Page 29 and 30: STATE WILDLIFE ACTION PLANSshed). C
Page 31 and 32: STATE WILDLIFE ACTION PLANSPlans th
Page 33 and 34: STATE WILDLIFE ACTION PLANSFuture i
Page 35 and 36: A DETAILED LOOK AT WETLAND AND CONS
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Page 65 and 66: ConclusionsConclusionsThis report c
Page 67 and 68: CONCLUSIONSsuch as habitat conserva
Page 69 and 70: CONCLUSIONSthe state Attorney Gener
Page 71 and 72: CONCLUSIONSGeneral RecommendationsF
Page 73: AppendicesA. Federal Wetland Compen
Page 76 and 77: APPENDIX AProjects for Aquatic Reso
Page 78 and 79: APPENDIX Aland mitigation banks, um
Page 80 and 81: APPENDIX BMemphis District, U.S. Ar
Page 82 and 83: APPENDIX BJacksonville District, U.
Page 84 and 85: Appendix CAppendix CState Wetland M
Page 86 and 87: APPENDIX CState Statute(s) Regulati
Page 88 and 89: Appendix DAppendix DState Conservat
Page 90 and 91: APPENDIX Emitigation banking and ha
Page 92 and 93: APPENDIX EDelaware (Phase IV)Delawa
Page 94 and 95: APPENDIX Estaff intend to make the
Page 96 and 97: APPENDIX EMitigation banking regula
Page 98 and 99: APPENDIX EMississippi (Phase IV)The
Page 100 and 101: APPENDIX ENew Mexico (Phase III)The
Page 102 and 103: APPENDIX Eand mitigation banking. 1
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APPENDIX EVirginia (Phase III)Virgi
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APPENDIX Egation bank may be used t
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APPENDIX FGeorgiaGeorgia Department
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Appendix GWETLAND MITIGATION BANKIN
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APPENDIX GWETLAND MITIGATION BANKIN
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APPENDIX GErwin, K.L. 1991. An Eval
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APPENDIX GPorej, D. 2004. Faunal As
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Appendix HAppendix HBibliography of
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APPENDIX HEcosystem Marketplace, Sp
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APPENDIX ILegal and Financial Mecha
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