Traditional Mitigation Banking and the New In Lieu-Fee Mitigation Program

Introduction to Wetland Mitigation

If, after avoidance and minimization, wetland impacts associated with a new development are greater than 10,000 square feet, a project may require an individual wetland permit. An individual wetland permit carries with it the responsibility for the permittee to mitigate impacts to wetlands occurring as a result of the project. The Wisconsin Department of Natural Resources (WDNR) provides three avenues to satisfy mitigation requirements which include wetland mitigation banking, in-lieu fee (ILF) mitigation, and permittee responsible on-site mitigation. Permittee responsible on-site mitigation is generally discouraged by the WDNR as it can be very difficult to achieve success. So this article will focus the differences between mitigation banking and the new ILF mitigation program.

Traditional Mitigation Banking

The only way to previously satisfy compensatory wetland mitigation obligations, aside from permittee responsible on-site mitigation, was purchasing credits directly from a mitigation bank. This means the permittee is responsible for establishing their own mitigation site within the same local watershed as the occurrence of wetland impacts. Mitigation banking requires credits to be purchased from an approved mitigation bank which will use the funds to manage a “bank” or wetland restoration site that has already been established. The program divides the state into 12 watersheds or Bank Service Areas (BSAs). Ideally credits will be purchased from a bank located within the same BSA as the impacts, in an effort to mitigate impacts to the BSA from a holistic point of view. This is an effective means for watershed management; however, difficulties arise with this system when there is a lack of mitigation banks and available credits for purchase within BSAs. There are currently only ten listed operating mitigation banks within the state. Many of the 12 BSAs are without an operating mitigation bank, which means there is a lack of purchasable credits for impacts in those areas. To alleviate this problem BSAs are grouped into three larger, “major basins” where permittees are able to expand their search for purchasable credits with approval from the WDNR if credits are not available in the BSA where impacts are to occur. In theory, this is a good approach to watershed management, but it becomes difficult in practice when active mitigation banks and credits are scarce, as is the current case in Wisconsin. This is what prompted the formation of the new in-lieu fee mitigation program.

 

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Bank Service Areas (BSA’s)(12) color coordinated, Major Basins (3) Outlined in heavy black border (Image source: WDNR)

ILF Mitigation

The WDNR recently established the Wisconsin Wetland Conservation Trust (WWCT), a wetland in-lieu fee mitigation program, sponsored and administered by the WDNR. This program allows permittees to purchase WWCT credits directly from the WDNR to satisfy compensatory mitigation requirements. The revenue generated by the WWCT in-lieu fee program will then be used to fund future projects that restore, enhance, establish and preserve wetlands, ideally within the BSA in which wetland impacts are to occur. This differs from the traditional wetland mitigation banking system where credits are purchased directly from mitigation banks, where restoration or restoration plans have already been established. The ILF mitigation program allows for the purchase of credits when credits from mitigation banks not available. However, the WDNR still prefers credits to be purchased from mitigation banks if possible. ILF credit costs range from $59,000 to $62,000. This is comparable to credit costs of mitigation banks, although individual mitigation banks are able to set their own prices.

Implementation

The actual individual permitting and mitigation credit purchasing process remains relatively unchanged after the ILF mitigation program implementation. Mitigation options are typically discussed during a pre-application meeting with the WDNR Water Management Specialist that is handling a particular permit application. The WDNR prefers the purchase of credits from tradition mitigation banks when possible, but the ILF provides a viable alternative when the purchase of credits from an appropriate mitigation bank is not an option. As with either of the two options, the amount of credits to be purchased and mitigation ratios will be influenced by the amount of impact, the type of wetland impacted and the quality of the wetlands impacted. This information will be reviewed during the early steps of the permitting process. Cost per credit between the two avenues of mitigation are comparable, but individual mitigation banks are able to set their own credit prices, so costs may vary from bank to bank. Ultimately, the creation of the ILF mitigation program provides a much needed alternative to satisfying wetland compensatory mitigation criteria for individual wetland permit applicants when credits from mitigation banks become scarce in your BSA.

 

For additional information or assistance with the permitting process, please contact one of our wetland specialists:

Mike Al-wathiqui

mike.al-wathiqui@graef-usa.com

 

 

 

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