While mitigation banking is the preferred option for addressing 404/401 mitigation requirements at the state and federal level, local jurisdictions are also directed to use “best available science” in determining the type and location of any compensatory mitigation requirements. Numerous studies performed within the last 20 years on the success and effectiveness of mitigation actions show that large, consolidated mitigation bank projects have a higher success rate, compared to traditional permittee-responsible mitigation projects that are smaller, often isolated and lack regulatory oversight during the monitoring period.  For information on how to propose the use of bank credits please visit Ecology’s Bank Use Guidance Criteria which serves as an outline for developing a mitigation plan using bank credits.

An Overview of Critical Area Mitigation Banking

Resource Impact Bank Credits: Impact Acreage
Wetland, Category I Case-by-Case
Wetland, Category II 1.2:1
Wetland, Category III 1:1
Wetland, Category IV .85:1
Critical Buffer Area Case-by-Case
Parties seeking to build in or impact critical areas are required to obtain permits from local, state, and federal regulators. They must first demonstrate that everything has been done to avoid and minimize the proposed fill or degradation of critical areas. If avoidance and minimization do not eliminate the proposed impacts, they must replace functions to compensate. This is called “wetland or buffer mitigation.” Mitigation banking is the creation of mitigation “credits” from the implementation of a sustainable wetland project in advance of impacts by wetland professionals.  These credits can then be purchased by parties required to do wetland or buffer mitigation for a permitted project.


Up to now, the usual method of mitigation for impacting activities was “on-site mitigation,” an option that many builders and developers were not skilled in implementing, often resulting in a low rate of success.  It was often difficult, if not impossible, to establish fundamental wetland functions, such as hydrology, at these small, on-site mitigation projects.   Worse, over time these sites have proven not to be sustainable and degrade to poor quality wetland habitat. In addition, these projects were usually very costly, both per unit area and to remedy if they failed. With regulatory agencies short on resources, agency oversight also suffered, some projects were never implemented and most have not been properly followed up on.


Today, many government regulators, developers, and environmentalists have embraced the concept of “mitigation banking” after realizing the high rate of ecological failure at on-site mitigation projects. Mitigation banks are favored in many cases over on-site mitigation because the mitigation is done in advance of the impact, and mitigation projects are consolidated into large sites resulting in a more valuable integrated ecosystem. Additionally, mitigation banking allows developers to legally transfer their mitigation, monitoring and reporting obligations to the mitigation banker; transferring the risk to wetland mitigation professionals.


Bank Operation and Management

Prior to approval and throughout its life, mitigation banks are subject to extensive regulation and careful scrutiny by a team of regulatory agencies on the local, state, and federal level. This committee is known at the Interagency Review Team (IRT). The IRT awards “credits” to the mitigation banker for the net gain in wetland function and value at the project site, these credits are released over time as the mitigation bank meets performance goals. Once released, the mitigation banker can sell these credits, with agency approval, to any party within a defined geographic service area.  The service area is typically a watershed or a portion of the watershed where comparable habitat to the bank site occurs and may be impacted.  Upon completion, the integrated ecosystem of a mitigation bank must be self-sustaining, require minimal maintenance and be endowed with a perpetual management trust fund to preserve and maintain it in perpetuity.

Mitigation banks bring together wetlands restoration experts whose entire focus is to develop the most ecologically successful mitigation sites possible and to ensure their long-term sustainability. Mitigation bankers have the resources, desire, and economic incentive to keep up with monitoring and long term maintenance, ensuring that the mitigation process is successful.

The Importance of Wetlands
The term “wetlands” refers to lands that are covered or saturated with surface and/or ground water at a frequency and duration sufficient to support vegetation adapted for such saturated soils. Wetlands serve a variety of functions such as flood water storage, food chain support, groundwater recharge, biological productivity, biogeochemical cycling, and habitat for threatened and endangered species. Some of the benefits of wetlands are flood and sediment control, filtration of surface water runoff, and protection of biodiversity. In addition, wetlands provide research and educational opportunities, and passive recreational settings.