JMB Companies

About Mitigation Banking

What is wetland mitigation banking?

According to the National Mitigation Banking Association, Wetland Mitigation Banking is the restoration, creation, enhancement, or preservation of a wetland, stream, or other habitat area undertaken expressly for the purpose of compensating for unavoidable resource losses in advance of development actions, when such compensation cannot be achieved at the development site or would not be as environmentally beneficial.


How do mitigation banks work?


After a site is selected by the owner/sponsor and after intense scrutiny and investigation by a number of governmental agencies, a mitigation bank is approved and built. After this initial approval, for the next 20 years, the owner/sponsor must meet compliance with such factors such as survivable, species ratio, and hydrological restoration practices to keep the mitigation bank “active” (ability to sell offset credits). When the owner/sponsor meets these requirements for compliance a release of credits is awarded. Then the owner/sponsor may sell these credits in their designated hydrological unit code (HUC). The selling of credits technically means a legal transfer of the liability for mitigation from the permittee to the owner/sponsor of that mitigation bank.

What do wetland mitigation banks do for the environment?

Mitigation Banks restore, enhance, and create important ecosystems such as wetlands and streams. Creating a Mitigation Bank also requires the owner/sponsor to place a conservation easement in perpetuity on the land. A trust fund is setup and is specifically dedicated to management of the bank.


What do Wetland Mitigation Banks do for economic development?


Having Mitigation Banks saves developers from the time-consuming permit approval process of restoration, creation, or enhancement of wetlands or other habitats. Mitigation banking companies also assume all of the risk which protects the developers from the long term commitment that comes with creating a Mitigation Bank which the developer may not be experienced in.

The Legal History of Mitigation Banking

The 1972 Clean Water Act was the first regulatory acknowledgment of the need to protect the United States vital wetlands. In Section 404 of the Clean Water Act it requires a permit to discharge dredged or fill materials into waters, to avoid and minimize impacts when possible, and the requirement to provide compensatory mitigation for unavoidable impacts. In 1988 George H.W. Bush set a national policy of “No Net Loss” of wetland values and functions. In 1993 the Army Corps of Engineers and the Environmental Protection Agency successively released provisional guidance (RGL 93-2) clarifying the role of mitigation banks in the Clean Water Act and more specifically the Section 404 permitting program. Two years later this document would be expanded to include guidelines for the use and establishment of mitigation banks.

Learn more about mitigation banking HERE.