According to the EPA a mitigation bank is a wetland, stream, or other aquatic resource area that has been restored, established, enhanced, or (in certain circumstances) preserved for the purpose of providing compensation for unavoidable impacts to aquatic resources permitted under Section 404 or a similar state or local wetland regulation. A mitigation bank may be created when a government agency, corporation, nonprofit organization, or other entity undertakes these activities under a formal agreement with a regulatory agency. Mitigation banks have four distinct components:
The bank site: the physical acreage restored, established, enhanced, or preserved.
The bank instrument: the formal agreement between the bank owners and regulators establishing liability, performance standards, management and monitoring requirements, and the terms of bank credit approval.
The Interagency Review Team (IRT): the interagency team that provides regulatory review, approval, and oversight of the bank.
The service area: the geographic area in which permitted impacts can be compensated for at a given bank.
The Banking Instrument describes the work to be done and the assessment method to be used to add certified credits to the bank. The Corps of Engineers tracks the available credits at each bank through their RIBITS website, which can be found here.
Valencia Wetlands Trust is based on the Montana Wetland Assessment Method, 1999 version. This is a functional unit based method that measures twelve different values being credited. There is no requirement for "in-kind" mitigation, as long as the functions being impacted are included at the site.
Mitigation banks are authorized by the Federal Government to assume the legal liability from the permit holder for the long term success of the mitigation. Once credits are purchased, the legal responsibilities lie with the bank. This transfer of liability is a very attractive feature for Section 404 permit holders, who would otherwise be responsible for the design, construction, monitoring, ecological success, and long-term protection of the site. Mitigation sites must be monitored annually by qualified wetland scientists for a minimum of five years, and as much as ten years. Financial guarantees are required, and reserve accounts must be created and be made available in case of failures. Wetland banks do all of this for you.