Mitigation Bank Prospectus
Review Workbook
November 2022
EPA-840-B-22004
Prepared by: Prepared for:
*>EPA
Ecosystem
Planning 8c
United States
KESTORATION Environmental Protection
Agency
Ecosystem Planning and Restoration, LLC
8808 Centre Park Drive, Suite 205
Columbia, MD 21045
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Acknowledgements
This project was funded by the U.S. Environmental Protection Agency (EPA) through EPA IDIQ contract
(EP-C-17-001) to Ecosystem Planning and Restoration (EPR). Erin Knauer, Environmental Scientist
with EPR, and Steven Martin, subject matter expert, co-wrote and edited this document with oversight,
guidance, and close review by staff from EPA's Office of Wetlands Oceans and Watersheds: Brian Topping,
Palmer Hough, and Emily French (former Oak Ridge Institute of Science and Education Fellow). Brian,
Palmer, and Emily also led the effort to assemble a steering committee (SC) to solicit input from regulators
and industry experts across the nation. The review and individual input from the steering committee
members were essential to making this document a more comprehensive and relevant guide for interagency
reviewers, federal and state regulators, and industry professionals alike to reference in producing and/
or reviewing mitigation instruments and associated documents. The steering committee included the
following participants:
Kate Thompson, Washington Department of Ecology
Devin Schenck, The Nature Conservancy
Pam Fetterman, Ecogenesis/Ecological Restoration Business Association
Melissa Scianni, EPA Region IX
Melody Rudenko, Oregon Department of State Lands
Charlotte Kucera, U.S. Fish and Wildlife Service
Stacia Bax, Missouri Department of Natural Resources
Jessi Miller, U.S. Fish and Wildlife Service
Susan-Marie Stedman, NOAA
Donna Collier, Valencia Wetland Trust/National Environmental Banking Association
Andrew D Beaudet, U.S. Army Corps of Engineers Headquarters
Michelle L Mattson, Institute for Water Resources, U.S. Army Corps of Engineers
Valerie L Layne, Institute for Water Resources, U.S. Army Corps of Engineers
Calvin L Alvarez, Alaska District, U.S. Army Corps of Engineers
Special thanks are due to other collaborators including:
Jeanne Richardson, Norfolk District, U.S. Army Corps of Engineers
Sara Johnson, Ecological Restoration Business Association
Stephanie TomCoupe, National Fish and Wildlife Foundation
Timothy Dicintio, National Fish and Wildlife Foundation
Citation:
Knauer, E., Martin, S., Topping, B., Hough, P., and French, E. 2022. Bank Prospectus Review
Workbook and Checklist. Document No. EPA-840-B-22004
Cover Image:
Erin Knauer - Constructed wetlands at an EPR designed Maryland wetland restoration site.
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Dislaimer: This document organizes technical and programmatic information to facilitate the efficient
review of a draft mitigation bank prospectus. It is not intended, nor can it be relied upon, to create any
rights enforceable by any party in litigation with the United States. Anyone may decide to use the questions
and information provided in this document or not. The statutory provisions and regulations described in
this document contain legally binding requirements. This document does not substitute for those provisions
or regulations, nor is it a regulation itself. Thus, it does not impose legally binding requirements on EPA,
the Corps, States, or the regulated community and may not apply to a particular situation based on the
circumstances. Any decisions regarding a particular mitigation bank will be made based on the statute and
regulations. Therefore, interested parties are free to raise questions and objections about the substance of
these documents and the appropriateness of the application of these documents to a particular situation.
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Table of Contents
Acknowledgements ii
Introduction 1
Background 4
Terminology 9
Commonly Used Acronyms 12
1. Objectives 13
2. How the Bank will be Established and Operated 15
3. Proposed Service Area 16
4. Need and Technical Feasibility 18
5. Ownership Arrangements 22
6. Qualifications 25
7. Ecological Suitability 27
8. Assurance of Sufficient Water Rights 32
Conclusion 3 5
References 36
APPENDIX A: REVIEW CHECKLIST 38
Figures
Figure 1. Mitigation bank and ILF workbooks and checklists 2
Figure 2. Bank program development 6
Figure 3. Service areas for Meridian Ranch vernal pool mitigation bank 16
Figure 4. Physical, biological, and chemical elements and typical measurements 28
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Introduction
In 2007, the U.S. Army Corps of Engineers (Corps) and the U.S. Environmental Protection Agency (EPA)
began training federal, state, and tribal members of Interagency Review Teams (IRTs) on the review
and approval process for mitigation banks and in-lieu fee (ILF) programs through national and regional
courses.1 In 2008, the Corps and EPA issued joint regulations known as the Mitigation Rule which
standardized the review and approval process for mitigation banks and ILF programs. This review
workbook and checklist reflect the lessons learned through more than a decade of teaching and learning
from participants across the country. This workbook is one of a series of five review workbooks, with
one for each of the following: Mitigation Bank Prospectus, Mitigation Bank Instrument, ILF Prospectus,
ILF Instrument, and ILF Project Site Plan. Each workbook is accompanied by a checklist that takes the
mitigation review elements from each workbook and puts them in a fillable document to help track
the IRT members' review progress and comments. Where the review elements are the same for
mitigation banks and ILF programs, the corresponding workbooks are the same.
The workbooks provide many references and example practices discussed during the trainings and are
organized according to the mitigation elements identified in the Mitigation Rule. Each mitigation element
includes the relevant regulatory text, examples of how it is addressed from different District templates or
instruments, and a series of questions to help IRT members adequately review all the relevant information
needed to understand the proposal. The workbooks and checklists are technical resources to provide an
organized structure for reviewing mitigation bank and ILF program proposals and ensuring that all aspects
of the Mitigation Rule are considered. The checklist includes each review element question in a table for
easily identifying what information has been reviewed and where any comments or questions remain after
review. Bank and ILF proposals can often be hundreds of pages long and organized as a single or multiple
documents. The checklists have been designed to help track where information is and determine if more
information or clarification is needed.
The complete set of five workbooks covers each of the major review steps for a mitigation bank and an ILF
program development, as shown below (Figure 1). Bank review starts with the workbook and checklist
for the mitigation bank prospectus. The bank prospectus workbook covers the eight review elements from
the Mitigation Rule associated with a mitigation bank prospectus. Next is the mitigation bank instrument
review workbook, which starts by asking if there are any unresolved questions from the bank prospectus
review and then focuses on the 18 elements required for mitigation bank instruments. The ILF proposal
review is a bit more complicated, with three workbooks and associated checklists. The ILF program
prospectus covers the eight review elements from the Mitigation Rule associated with an ILF prospectus
(six in common with the Mitigation Bank Prospectus Workbook). The ILF program instrument workbook
differs from the bank instrument review workbook because it only covers 11 review elements needed for
establishing the program, five in common with bank instruments, and six that only pertain to ILF program
instruments (Figure 1). Lastly, there is the ILF project site plan review workbook that covers 19 review
elements, including all 18 elements required for a mitigation bank instrument and one additional element
specific to establishing ILF sites.
1 See: https://www.conservationfund.org/our-work/conservation-leadership-network/our-services/training-resources-3rd-
party-mitigation-interagency-review-team
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Figure 1. Mitigation bank and ILF workbooks and checklists
ILF Review Steps
r i
Draft / Final
Prospectus
r ^
Draft / Final
Instrument
r i
Draft / Final
Project Site Plan
1
r
ILF Prospectus
Review
Workbook and
Checklist
V J
1
r n
ILF Instrument
Review
Workbook and
Checklist
v J
1
r
ILF Project Site Plan
Review Workbook
and Checklist
V
Mitigation Bank Review Steps
Draft / Final
Prospectus
Mitigation Bank Prospectus
Review Workbook and
Checklist
Draft / Final
Instrument
r
Mitigation Bank Instrument
Review Workbook and
Checklist
This workbook and checklist are intended for use by members of the IRT to facilitate the review of a
mitigation bank prospectus. The purpose of this prospectus review workbook is to assist IRT reviewers in
evaluating whether a proposed bank would be potentially suitable to provide compensatory mitigation for
lost aquatic resource functions and services. It is not intended to provide local guidelines and policies or
replace any locally developed templates, tools, or guidelines used to prepare and review a bank prospectus.
Workbook Organization
This workbook and associated checklist cover eight separate review elements described below that are
typically associated with a bank prospectus. The checklist includes each review element and its components
with space to indicate if each component is addressed (yes/no), is complete (yes/no), the page #s where it
is addressed, and space for anycomments about the component.
Prospectus Workbook Review Elements
1.
Objectives of the proposed mitigation bank
2.
How the bank will be established and operated
3.
Proposed service area(s)
4.
General need for and technical feasibility of the proposed bank
5.
Proposed ownership arrangements and long-term management strategy for the mitigation bank
6.
Qualifications of the Sponsor
7.
Ecological suitability of the site to achieve the proposed bank's objectives
8.
Assurance of sufficient water rights to support the long-term sustainability of the proposed bank
(33 CFR 332.8(d)(2)/40 CFR 230.98(d)(2))
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The Mitigation Rule does not provide detailed descriptions for all review elements. As a result, many districts
and associated states have clarified the requirements in local prospectus templates, outlines, checklists,
and guidelines. (Many of these documents may be found on the Regulatory In-Lieu Fee and Banking
Information Tracking System [RIBITS] website https://ribits.ops.usace.army.mil/). In addition, the eight
review elements listed will not all be given equal weight in reviewing the prospectus. Some elements like
the assurance of sufficient water rights or ecological suitability may be critical in determining if a proposed
bank is potentially suitable to provide compensatory mitigation. For example, ensuring sufficient water
rights to establish and maintain a mitigation bank is critical in many western states. In determining which
elements are critical to the initial evaluation of a prospectus, consideration should first be given to district/
state guidelines and practices.
Note, for the addition of land, a new credit type to an approved bank, a new site to an umbrella bank, or
incorporation of a permittee responsible mitigation (PRM) into a mitigation bank, the Sponsor must submit
to the Corps a written request for instrument modification accompanied by all appropriate documentation
(33 CFR 332.8(g)(l)/40 CFR 230.98(g)(1)). The same elements required in a prospectus for a new bank
are typically required of a proposed bank modification involving the addition of land or credit types to
an existing bank. Depending on the district and/or state, the process may require review and approval
of phase plans and associated permits, but not submittal of a new prospectus. In many districts/states,
the mitigation plan for a phased bank provides considerably more detail for the initial phase than for
subsequent phases.
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Background
For every permit issued by the Corps under the Clean Water Act (CWA) section 404, adverse impacts to
wetlands, streams, estuaries, and other aquatic resources must be avoided and minimized to the extent
practicable. For those unavoidable impacts, compensatory mitigation is typically required to replace
the loss of wetland, stream, and other aquatic resource functions in the watershed.2 The term "watershed"
used throughout this workbook includes consideration of landscape and seascape perspectives.
Compensatory mitigation refers to the restoration, establishment (creation), enhancement, or
preservation of wetlands, streams, estuaries, or other aquatic resources in order to offset these
unavoidable adverse impacts.
In 2008, the Corps and EPA issued
joint regulations known as the
Mitigation Rule.3 These regulations
established standards for all
compensatory mitigation projects to
offset permitted losses under CWA
section 404. The Mitigation Rule
recognizes three mechanisms for
satisfying compensatory mitigation
requirements: mitigation banks,
ILF programs, and permittee-
responsible mitigation (PRM).
Equivalent standards are required
for all compensatory mitigation
projects. This document focuses
on reviewing and developing
a mitigation bank prospectus.
• Mitigation Banks: A mitigation
bank is a project where aquatic resource conservation (restoration, establishment, enhancement,
or preservation) has been initiated in advance of permitted losses of aquatic resource functions or
services. Banks typically provide consolidated compensation for multiple permit actions. With the
approval of regulatory agencies, permittees can acquire credits from a mitigation bank to meet their
permit requirements for compensatory mitigation. The bank Sponsor (not the permittee) is responsible
for the success of the bank project. Banks provide off-site compensation, meaning it is at a location
not typically on or immediately adjacent to the permitted impacts. Bank operation is governed by an
instrument that the Sponsor drafts, often based on district or state-provided templates, and is subject to
review and approval by the Corps and its state and federal counterparts who compose the IRT.
2 For some resource types, it may be preferable to site compensatory mitigation projects using geographic units other than
watersheds. For example, for vernal pools, landscape units known as vernal pool regions maybe preferable; for coral reefs, tidal
wetlands, and other marine and estuarine resources, seascape units such as reef complex or littoral drift cell may be preferable.
According to RIBITS, projects using seascape or landscape units to site compensatory mitigation projects make up less than
5% of ILF projects.
3 The appropriate citation from the Code of Federal Regulations associated with the Corps is 33 CFR Part 332 and EPA is 40
CFR Part 230, both are included throughout the workbooks.
Organization of the Mitigation Rule
(Corps: 33 CFR 332/ EPA 40 CFR 230)
• The Mitigation Rule is divided into eight sections:
1. Purpose and general considerations
2. Definitions
3. General compensatory mitigation requirements
4. Planning and documentation
5. Ecological performance standards
6. Monitoring
7. Management
8. Mitigation banks and in-lieu fee (ILF) programs
• The first seven sections apply to all forms of compensatory
mitigation
• The last section establishes standards that apply only to
mitigation banks and ILF programs
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• ILF Programs: ILF programs are established by a public agency or non-profit organization (the ILF
Sponsor) and sell credits to permittees. The Sponsor commits to use those funds to perform mitigation
activities. Typically, the Sponsor collects funds from multiple permittees in order to pool the financial
resources necessary to build and maintain the mitigation site. The ILF Sponsor is responsible for the
success of the mitigation. Like banking, ILF mitigation is also typically off-site; however, unlike banking,
the mitigation typically occurs after the permitted impacts. Many districts/states require additional
compensation to offset this temporal lag (see 33 CFR 332.3(f)(2)/40 CFR 230.93(f)(2)). Like banks,
ILF program operation is governed by an instrument drafted by the Sponsor, often based on district or
state-provided templates, and is subject to review and approval by the Corps and the IRT.
Templates: Many districts have developed prospectus templates to increase review efficacy. These
templates are becoming more commonplace and encouraged by many district and state policies and
practices. The IRT staff should be aware of language revision constraints and refrain from commenting
on prior, approved language within the templates or providing comments that conflict with the
approved template.
• Permittee-Responsible Mitigation: PRM is undertaken by a permittee to compensate for aquatic
resource impacts resulting from a specific project. The permittee performs the mitigation after the
permit is issued but prior to or concurrent with the initiation of permitted impacts. The permittee is
responsible (liable) for the implementation, success, and long-term protection and management of the
mitigation project. The permit governs the PRM. There is no IRT involvement or instrument associated
with PRM, and PRM may occur at the site of the permitted impacts or an off-site location within the
same watershed.
Mitigation Preference Hierarchy: The mitigation rule established a preference hierarchy for
mitigation credits ((33 CFR 332.3(b)(2) and (3)/40 CFR 230.93(b)(2) and (3)). Under this hierarchy, if
the appropriate type (wetland, stream, etc.) of released credits are available from a mitigation bank or
released credits from an ILF project in a service area that includes the permitted impact, those credits are
generallypreferred over advance credits from ILF programs or PRM projects that have not been initiated.
Using released credits from banks and ILF projects is generally a preferred form of compensatory
mitigation under the Mitigation Rule because they implement projects in advance of permitted losses, thus
reducing temporal losses of functions and uncertainty over project success. Additionally, banks consolidate
compensatory mitigation projects where ecologically appropriate, in turn combining resources (including
financial as well as agency resources) and scientific and technical expertise. (Note, this may be more of a
challenge or even impractical for small PRM projects.) A Bank prospectus may also include descriptions of
how the mitigation project will provide offsets under other regulatory authorities such as state counterparts
to CWA section 404, CWA section 402, or the Endangered Species Act.
The development of a bank prospectus follows a four-step approval process (see Figure 2). The Sponsor
is responsible for preparing and submitting all documentation associated with the bank prospectus
to the IRT for review.4 The timelines depicted in Figure 2 are contingent upon the submittal of
complete documents by the Sponsor at each step in the process.
4 Development and review of ILF program instruments as well, as ILF projects (project sites implemented by an ILF
program), follow the same four-step process as the development of bank instruments. An ILF project proposal is required to
provide the same information as a bank project.
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Figure 2. Bank program development
Draft
Prospectus-
The IRThas 30
days to review
Up to 90-day
period to
process, irtcl.
required public
notice
Draft
Instrument
Up to a 90-day
period for
review and
comment by
the IRT
Up to 30-
day period
for Corps
review and
approval/
disapproval
Up to 45-
day
period for
IRT to
object to
the Corps
decision
Draft Prospectus submittal is considered an optional step in the Mitigation Rule, although many districts/
states require submittal. The purpose is to identify any potential issues (both cautionary elements and
potential fatal flaws) with the proposed bank early in the process so the Sponsor can address them prior
to the start of the formal process. A robust and timely review of the draft prospectus by IRT members may
save agencies and prospective Sponsors resources before a considerable investment is made in a proposal
unlikely to be approved.
Prospectus submittal is required for all bank proposals. The prospectus provides a summary of the bank
proposal at a sufficient level of detail to support informed review and comment by the IRT and the public
(33 CFR 332.8(d)(2)/40 CFR 230.98(d)(2)). The Corps will provide the Sponsor with an initial evaluation
letter (IET) stating the potential suitability of the proposal to provide compensatory mitigation. If the
proposal is suitable, the Sponsor may be directed to prepare a draft instrument. If the proposal is deemed
unsuitable, the Sponsor may revise the prospectus to address the deficiencies and resubmit. An approved
prospectus does NOT guarantee approval of a proposed bank.
Prospectus Review and Public Notice (33 CFR 332.8(d)(4)/40 CFR 230.98(d)(4))
A prospectus review begins when the Sponsor submits a complete prospectus to the Corps (and IRT).
Within 30 days of receipt of a complete prospectus or a requested instrument modification, the district will
issue a public notice for the proposal. The public notice is typically for a 30-day comment period and, at a
minimum, must include a summary of the prospectus and indicate that the full prospectus is available to
the public for review. Many districts will either include the prospectus with the public notice or provide a
web link to the prospectus. For modifications of approved instruments, the public notice must summarize
and make available to the public whatever documentation is appropriate.
The Corps must notify the Sponsor if the comment period is extended beyond 30 days and explain why a
longer comment period is necessary.
Copies of all comments received in response to the public notice must be distributed to the IRT and the
Sponsor within 15 days of the close of the public comment period.
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Initial Evaluation of the Prospectus (33 CFR 332.8(d) (5)/40 CFR 230.98(d)(5))
After the end of the comment period, the district engineer (Corps) will review the public notice comments
received and typically, in consultation with the IRT, provide an initial evaluation letter (IEL) as to the
potential of the proposed mitigation bank to provide compensatory mitigation for activities authorized by
Department of the Army (Corps) permits. The IEL must be provided to the Sponsor within 30 days of the
end of the public notice comment period. If the Corps determines that the proposed mitigation bank has
the potential for providing appropriate compensatory mitigation for activities authorized by Corps permits,
the IEL will inform the Sponsor that it may proceed with the preparation of the draft bank instrument.
Note: The Chair or co-chairs are responsible for determining the prospectus completeness and issuing the
initial evaluation letter. These are distinct steps in the bank development process. While some districts/
states may comingle these two steps, it should not be done if it results in delays in providing review
comments to the Sponsor.
If the Corps determines that the proposed mitigation bank does not have the potential for providing
appropriate compensatory mitigation for Corps permits, the IEL must discuss the reasons for that
determination. The Sponsor may revise the prospectus to address these concerns and submit the revised
prospectus to the Corps. If the Sponsor submits a revised prospectus, a revised public notice will be
issued. On several occasions, districts have determined that a proposed bank is not potentially suitable for
compensatory mitigation regardless of revision. In those cases, districts and/or Sponsors have withdrawn
those proposals from further consideration.
This initial evaluation procedure does not apply to proposed modifications of approved instruments (33
CFR 332.8(d)(5)(iv)/40 CFR 230.98 (d)(5)(iv)).
Delays in Prospectus Review
Delays in the timelines specified in the Mitigation Rule can affect bank planning and feasibility. For example,
purchase and sale agreements for land purchases generally allow a limited time period for due diligence/
feasibility evaluation. The Sponsors ability to develop program elements is more difficult when regulatory
timelines are not followed.
Review can be delayed for a number of reasons, including:
• Completion of Endangered Species consultation
• Completion of Cultural/Historic resources coordination (Section 106 NHRPA)
• Government to Government coordination (tribal coordination)
• Sponsor's failure to provide necessary information
• The necessary information cannot be secured within the specified timeframe
• IRT members failing to provide timely reviews
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Draft Instrument is submitted to the IRT by the Sponsor for review and comment. The IRT Chair or co-
chairs are responsible for providing all comments to the Sponsor to be addressed in the final instrument
within 90-days of receipt of the complete draft Bank Instrument. Review can be delayed for a number of
reasons, including:
• Endangered Species consultation
• Cultural/Historic resources coordination (Section 106 NHRPA)
• Government to Government coordination (tribal coordination)
• Sponsor's failure to provide necessary information
• Necessary information cannot be secured within the specified timeframe
Final Instrument is then submitted to the IRT by the Sponsor, along with documentation indicating
how the Sponsor addressed previous comments on the draft instrument. Within 30-days of receipt of the
complete Bank Instrument, the Corps must notify the rest of the IRT of its intent to approve/disapprove
the Final Instrument. If a federal member of the IRT disagrees, they may then object to the Corps decision
and initiate a formal dispute resolution process. There is no automatic approval of a bank (or ILF program)
instrument.
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Terminology
Assessment methodology: The mechanism or tool used to evaluate the loss of functions or services at
the permitted impact site as well as the gain in functions or services provided at the compensation site.
Assessment methods vary by aquatic resource type (i.e., wetlands, streams) and between districts/states.
Bank phases: A separate segment or stage of bank construction or development. In order to separate a
bank into Phases, the Sponsor should demonstrate, to the satisfaction of the IRT, that the initial Phase
would be ecologically viable and acceptable as a standalone bank if additional Phases are never constructed.
Subsequent Phases must build upon the ecological and aquatic resource functions of the initial Phase.
Compensatory mitigation methods: There are four compensatory mitigation methods, restoration,
establishment, enhancement, and preservation:
• Restoration encompasses two types of actions, re-establishment of aquatic resources in a place where
those resources formerly occurred (e.g., prior converted cropland) and rehabilitation of degraded
aquatic resources. Much of the stream mitigation implemented involves the rehabilitation of degraded
streams;
• Establishment (creation) is the development of an aquatic resource where one did not previously
occur;
• Enhancement is the manipulation of one or more characteristics of an aquatic resource to improve or
intensify one or more aquatic resource functions; and
• Preservation means removing any threat of destruction or adverse modification to an aquatic resource
through appropriate physical and legal mechanisms.
Credit: A unit of measure (functional, areal, or other suitable metrics) representing the accrual or attainment
of aquatic functions or services at a mitigation site. The measure is based on restored, established, enhanced,
or preserved aquatic resources. Credits are the currency that a bank has to trade in.
District: Refers to an Army Corps of Engineers (Corps) district office.
Functions: Functions are the physical, chemical, and/or biological processes that occur in ecosystems (for
example, denitrification or carbon sequestration).
Hydrologic Unit Codes (HUCs): A nationwide hierarchical mechanism used to delineate watersheds
based on surface hydrologic features. This system first developed by the USGS divides the country into
21 regions (2-digit), 222 subregions (4-digit), 370 basins (6-digit), 2,270 subbasins (8-digit), -20,000
watersheds (10-digit), and -100,000 sub-watersheds (12-digit). HUCs are often used in the definition of
mitigation bank and ILF program service areas.
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Instrument: Refers to banking instrument and all associated exhibits/attachments. In some cases, the
instrument is all-inclusive; in other cases, the instrument is the framework, and the exhibits/attachments
provide the detail on each element (monitoring, site selection, etc.). It may also be referred to as a mitigation
banking instrument (MBI), banking instrument (BI), or bank enabling instrument (BEI).
IRT (Interagency Review Team): An interagency group of federal, tribal, state, and/or local regulatory
and resource agency representatives that reviews documentation for, and advises the co-chairs (Corps
district and any other agency chairing the IRT) on the establishment and management of a mitigation
bank or an ILF fee program (33 CFR 332.2/40 CFR 230.92). The reference to the IRT or IRT reviewer in
this workbook is a reference to the IRT co-chairs (Corps and any other counterpart state, tribal, or federal
agency with independent regulatory authority) as well as other IRT members (other federal, tribal, state, or
local agency included on the IRT).
Multiple authority banks: Also called "joint banks." These are mitigation banks that provide compensatory
mitigation for resource impacts under more than one regulatory authority. Examples include banks that
provide compensation for resources regulated under CWA section 404 and the Endangered Species Act.
Each regulatory agency has authority over credits providing compensation for impacts authorized under
its jurisdiction.
Resource type: The type of aquatic resource considered. Examples include wetlands, streams, marine
habitats, or subsets like vernal pools, pine savannas, tidal marsh, intermittent streams, lagoons, etc.
RIBITS: The national web-based application used by a number of federal agencies to track mitigation
bank and in-lieu fee activities. Sponsors and regulators use RIBITS for the management of ledger and
reporting activities. To access it, go to: https://ribits.ops.usace.army.mil/ords/f?p=107:2
Service area: The geographic area within which impacts can be mitigated at a specific bank or ILF Program,
as specified in the instrument (33 CFR 332.2/40 CFR 230.92.2).
Services: The benefits that human populations receive from the functions provided by ecosystems (for
example, flood flow attenuation or water quality improvement).
Sponsor: Bank Sponsor; any government or non-profit conservation organization responsible for
establishing and operating a bank. The bank Sponsor is responsible for the success of the bank and all
associated project sites.
Subordination agreement (in the context of other interests in property): In compensatory mitigation,
a subordination agreement makes any previously recorded easements, liens, or encumbrances take second
place in the mitigation site protection instrument. For example, suppose a mitigation site protection
instrument was recorded after a deed to secure a debt, and the land was subsequently foreclosed upon
to settle the debt. In that case, the site protection instrument could be terminated. Subordination makes
the compensatory mitigation interest the primary property interest ("first in the right") and allows greater
assurance that the mitigation site will withstand adverse actions such as foreclosure.
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Temporal loss: The time lag between the loss of aquatic resource functions or services caused by the
permitted impacts and the replacement of aquatic resource functions or services at the compensatory
mitigation site.
Umbrellabank instrument: Single mitigation banking instrument that mayprovide for future authorization
of additional mitigation bank sites. As additional bank sites are selected, they must be included in the
mitigation banking instrument as modifications to the original instrument (33 CFR 332.8(h)/40 CFR
230.98(h)). These modifications are subject to the prospectus and public notice requirements associated
with any proposed mitigation bank.
Watershed approach: An analytical and strategic approach for selecting compensatory mitigation projects
that consider the needs of a watershed and how the location and types of compensatory mitigation projects
within the watershed address those needs. This same approach can be applied to other landscape/seascape
units.
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Commonly Used
Acronyms
Bank Enabling Instrument (BEI)
Banking Instrument (BI)
Compensatory Planning Framework (CPF)
Environmental Protection Agency (EPA)
Geographic Information Systems (GIS)
Hydrologic Unit Codes (HUCs)
Initial Evaluation Letter (IEL)
In-lieu fee (ILF)
Interagency Review Team (IRT)
Letters of Intent (LOI)
Long-term management (LTM)
Mitigation Banking Instrument (MBI)
Permittee Responsible Mitigation (PRM)
Regulatory In-lieu Fee and Bank Information Tracking System (RIBITS)
United States Army Corps of Engineers (Corps or USACE)
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1. Objectives
Objectives are an essential element of a bank prospectus.
Before objectives can be identified, however, the bank's
overarching goals need to be specified. A goal is a broad
statement of what is intended to be accomplished by
implementing the proposed mitigation bank, or in other words, the banks purpose. The goal(s) should
provide an overview of the intended result and list the major functions and services to be achieved by the
proposed mitigation bank (Ossinger 1999). For example, the overall goal of a proposed mitigation bank
might be to restore 100 acres of emergent and forested wetlands to a condition similar to historic wetlands
in the watershed, which would provide:
• overwintering habitat for salmonids and breeding habitat for native amphibians,
• flood storage and improvements in water quality for the adjacent stream system, and
• creditsto help meetthe demandfor compensatorymitigation within the programs proposed service area.
Objectives identify the specific components necessary to accomplish the mitigation banks goal(s).
These objectives are typically a list of specific, measurable outcomes used to demonstrate whether (or
not) the banks goals have been achieved. One goal may have several objectives. The goal described in
the paragraph above identifies six objectives; the first four are phrased as functions or ecological services
(flood flow attenuation, overwintering habitat for salmonids, etc.), and the remaining two relate to banking
operations/demand and conservation values. Ossinger (1999) provides a good reference for understanding
and identifying goals, objectives, and subsequently the development of enforceable performance standards
used to evaluate the attainment of a banks objectives.
la. Does the prospectus include a description of the aquatic resource type(s) and amount(s) the bank site
would provide?
The type and amount of resource(s) provided by the proposed bank should be identified so reviewers can
evaluate whether they are consistent with the bank site's compensatory mitigation potential. A prospectus
may propose establishing resource types (wetlands or streams) that are not in demand or are unlikely
to be required as compensatory mitigation in a service area, for example, restoration of freshwater tidal
wetlands in the mid-Atlantic region. While these freshwater tidal systems are important aquatic resources,
few permits are issued authorizing impacts on them. For this reason, these types of proposals are generally
discouraged and should be reviewed carefully. More intensive management may also be expected for some
aquatic resources. For example, fire-dependent systems (i.e., pine savannah habitat on the Gulf Coast and
some tidal or brackish marsh habitat along the East Coast) require ongoing management to maintain their
condition and function. IRT reviewers should also determine if the proposed resource types and amounts
specified in a prospectus are consistent with the local district/state's credit determination mechanism.
Objectives
Objectives of the proposed mitigation
bank or in-lieu fee program (33 CFR
332.8(d)(2)(i)/40 CFR 230.98(d)(2)(i)).
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lb. Does the prospectus identify the functions and services expected to be provided by the bank site?
The functions and services provided by the proposed bank should be clearly identified to ensure they are
relevant to the bank site and its associated watershed/landscape setting. Different resource types provide
different functions and services. For example, seasonal palustrine wetland restoration may not provide the
same functions or services as tidal wetland restoration.
Descriptions should focus on the functions and services targeted for improvement or preservation by the
project and explain why they are appropriate for the site. For example, one of the functions performed by
many seasonal wetlands is denitrification. Denitrification and the resulting water quality improvement
would be an appropriate goal for a bank site located in a watershed with chronic eutrophic conditions.
lc. Is the bank site located within a watershed or landscape position where it is likely to provide the
proposed functions and services?
Consider whether the functions and services identified in the prospectus are realistic for the proposed
bank site. Does the site provide an opportunity to replace lost functions or services? Does it provide an
opportunity to enhance existing but compromised functions or services? For example, a wetland restoration
project located adjacent to a conservation area may be more likely to contribute to biodiversity (function)
than a project with no connection to other habitats; restoration of a headwaters seasonal wetland may
be more likely to support denitrification (function) than a project located on the mainstem of a river;
and floodplain restoration in higher order floodplains may be more likely to contribute to floodwater
abatement (service) than a project located on a first-order stream.
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2. How the Bank will be
Established and Operated
The details of how a mitigation bank is established and
operated are discussed in the Mitigation Bank Instrument
Review Workbook.
However, the prospectus should provide a high-level
overview of the proposed bank site work plan, including location, type of mitigation proposed, general
baseline conditions, and a concept plan of the bank layout. This overview should also address the work
anticipated for establishing (constructing) and operating (maintaining) the bank. State/district guidelines
vary widely in the criteria and level of detail required.
2a. Does the prospectus provide narrative, mapping (aerial, topo) and/or photographs identifying the
bank site location, property boundaries, and other baseline conditions?
The prospectus should lay out the baseline conditions (the "what" - "where" - "when" - "how" - "why")
with enough detail to allow for an informed evaluation of the proposed bank site. Aerial photographs
and/or mapping of the proposed bank site and surrounding area (including adjacent landmarks) should
accompany the narrative. Some of the information presented in this discussion may overlap with other
elements of the prospectus, including ecological suitability and assurance of water rights. The level of detail
and presentation will vary depending on local district/state guidelines, templates, and standards.
2b. Does the prospectus discuss the conceptual plan of the bank site, including layout, construction
process, and post-establishment operations and maintenance?
Similar to 2a, the prospectus should lay out the conceptual plan or vision of the bank site, describe how
the proposed work will meet the bank site's stated goals and objectives, and provide enough detail to allow
for an informed evaluation of the work plan and post-establishment operations. The narrative should
encompass the construction process and long-term maintenance of the bank site(s), including: the type
and approximate size and location of each proposed aquatic resource type and other habitats proposed,
aquatic functions the bank is anticipated to provide (any target habitat and or species), descriptions of any
alterations to hydrology, anticipated grading needs and proposed structures, and a clear understanding
of how the design will be self-sustaining post establishment. If this mitigation bank is implemented in
phases, the prospectus should detail the proposed phases. The initial phase should be sufficiently large
to stand alone and provide meaningful and sustainable compensation even if subsequent phases are not
implemented.
As a reminder, the narrative may be presented as a high-level summary. Still, it should touch on each aspect
described above to demonstrate a complete and thorough preliminary evaluation of a proposed bank site's
potential. Figures illustrating the conceptual design and preliminary anticipated construction features
(backfilled ditches, berms, culverts, or other structures, etc.) should accompany the narrative.
How the bank will be established
How the mitigation bank will be
established and operated (33 CFR
332.8(d)(2)(ii)/40CFR230.98(d)(2)(H)).
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3. Proposed Service Area
Economic viability may be considered in
determining the size of the service area (33 CFR
332.8(d)(6)(ii)(A)/40 CFR 230.98(d)(6)(ii)(A)).
The service area is particularly important to the
Sponsor because it may affect the bank's viability
If the service area is too small, credit demand may
be insufficient, which may affect the economic feasibility of the bank. Therefore, the IRT Chair or co-chairs
and the IRT should strive to provide clear guidance on the appropriate size or limits of the bank service
area at the prospectus stage.
FYI: For more detailed information on
(geographic) service areas, refer to the Banking
Instrument Workbook, Element 7: Geographic
Service Area.
The proposed service area, also referred to as
geographic service area, is defined as the area or
areas within which a mitigation bank is authorized
to provide compensatory mitigation. A service area
maybe identified by watershed, ecoregion, physiographic province, and/ or other geographic or ecological
bases. Districts/states vary in their requirements for defining a proposed bank(s) s service area, with most
relying on watershed-based or ecological rationale. Many districts use the USGS eight (8)-digit Hydrologic
Unit Code (HUC) as an organizing unit to define the service area.
Proposed Service Area
The proposed service area (33 CFR 332.8(d)(2)
(iii)/40 CFR 230.98(d)(2)(iii)).
3a. Does the bank prospectus appropriately size the service area to ensure that the proposed aquatic
resources will effectively compensate for permitted impacts and replace lost functions/services?
For the prospectus, the service area should be
appropriately sized to offset permitted impacts
and replace lost functions/services. Many
districts/states require justification or a rationale
for determining the limits and/or ecological
appropriateness of the proposed service area
and accompanying mapping showing the bank
site(s) location and its position within the
proposed service area(s) (Figure 3).
Figure 3. Service areas for Meridian Ranch vernal pool mitiga-
tion bank.
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3b. Does the bank prospectus identify the basis of the service area (i.e., watershed, coastal bay system,
ecoregion, species distribution) and provide justification/rationale supporting its location and extent?
The size of the service area may be related to the extent of the functions and services provided by the
bank. For example, the distribution of some aquatic resource types (i.e., vernal pools, coniferous bogs) is
not based on watershed but on the landscape, elevation, climate, stratigraphy, geomorphology, or species
distribution/use of an area by a distinct population (e.g., Atlantic salmon in Maine). A vernal pool bank in
Northern California (see Figure 3) might have a service area for vernal pool re-establishment credits and
another service area for vernal pool preservation credits. The service area for vernal pool re-establishment
considers vernal pool regions defined by the USFWS as well as the associated watershed and presence of
listed species. These vernal pool re-establishment credits may be used to offset impacts under the CWA
section 404 or the Endangered Species Act. In contrast, the service area for vernal pool preservation credits
is based solely on vernal pool regions defined by the USFWS; these are not typically used to offset impacts
authorized under CWA section 404.
3c. Does the service area comply with local, district, and/or state requirements (scale, size, or resource
type)?
Refer to the local district/state for guidelines (or guidance documents), templates, and/or specific regulations,
and to the Mitigation Bank Instrument Review Workbook, Element 7: Geographic Service Area, for more
information on mitigation bank proposals that should include in their service area descriptions.
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4. Need and Technical Feasibility
General need and technical feasibility are
identified as required elements in a prospectus
under the Mitigation Rule; however, what should
be included in this element is not clearly defined
in the regulations. A number of districts (e.g.,
Portland, New Orleans, Fort Worth, Jacksonville,
and Norfolk) and states (California) have clarified their interpretation of these terms.
It may be useful for IRT reviewers to evaluate General Need and Technical Feasibility as separate concepts:
• General need refers to the need for the type (s) of compensatory mitigation credits that would be
generated by the proposed bank. That need is a consideration of whether there is both a market demand
and an ecological resource demand for the type(s) of credits that may be generated by the proposed
bank. The lack of an identified need for the proposed bank's credits would not typically be considered a
fatal flaw when reviewing a prospectus but more of an additional risk to the Sponsor. Resource scarcity
may also be a factor in determining need.
FYI on Resource Scarcity: Scarce resources used to be common but are now rare in occurrence.
Examples include vernal pools in the Northeast, Atlantic white cedar (Chamaecyparis thyoides) on the
East Coast, freshwater tidal wetlands in the Pacific Northwest, or eelgrass (Zostera marina) in southern
California. Suppose a formerly common resource type, like coastal prairie in the states in the Gulf of
Mexico Region, has transitioned into degraded forested wetlands through invasion of Chinese tallow
tree (Triadica sebifera). In that case, it may be more appropriate to consider restoration of coastal
prairie habitat rather than utilizing the more commonly available bottomland hardwood credits to
offset impacts to these resources.
• Technical feasibility refers to whether, in general, implementation of the bank project is possible given
current science and technology and is compatible with project site characteristics (general topography,
land use, watershed/landscape characteristics, potential hydrologic regimes, etc.). Technical feasibility
also includes consideration of potential constraints to project implementation. For example, using liners
or compacted soils may not be considered an appropriate mechanism to establish a wetland hydrologic
regime. These artificial features may be compromised by weathering, the effects of tree roots, or the
burrowing of animals which may affect the integrity of the desired hydrologic regime on site.
Note: If the initial examination of site conditions shows a proposed bank is not technically feasible, the
bank may be considered fatally flawed and, thus, potentially unsuitable for compensatory mitigation.
The more detailed analysis in Element 7: Ecological Suitability and Element 8: Assurance of sufficient
water rights may also be considered in determining technical feasibility.
Need and Technical Feasibility
The general need for and feasibility of the pro-
posed mitigation bank (33 CFR 332.8(d)(2)(iv)/40
CFR 230.98(d)(2)(iv)).
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An IRT reviewer should also consider whether state or local level plans could preclude a bank's development.
For example, State Water Plans, Transportation Improvement Plans, or local transportation master plans
may pose conflicts that preclude the establishment of a mitigation bank and should be identified as early in
planning as possible. The Hearts Bluff Game Ranch v. U.S. court case (2012) is an example of a state water
plan taking precedent over mitigation bank establishment.
General Need:
4a. Does the prospectus provide information on past, current, or anticipated demand for the proposed
compensation?
It is important that the Sponsor consider the potential demand for the mitigation credits that the proposed
bank site might provide. IRT reviewers should consider whether the prospectus provides a general
discussion of market demand, including current and projected credit demand and availability, and/
or related documentation that demonstrates the general need for the mitigation bank. This discussion
should not be a detailed market analysis, which may contain proprietary information. Additionally, some
prospectuses will consider other mitigation programs (other banks, ILFs, etc.) within or adjacent to their
targeted bank site(s) and the credit types available from these other programs as part of their analysis of
need/demand. The prospectus should include any state or local government requirements, guidelines, and/
or templates in determining the demand for proposed compensation in a given bank site, (e.g., Wisconsin
Wetland Conservation Trust prospectus (Wisconsin Department of Natural Resources [WI DNR] 2013).
Suggested references may include past permit data (Corps regulatory program data), data on current and
past mitigation bank and ILF activity in the area (RIBITS), local wetland inventories for cities within the
proposed bank site area, protected wetlands within the area, identification of the types of aquatic resources
likely to be impacted by future development, etc. The Portland District Prospectus Template (2019) is a
good example of this approach.
If an IRT observes that there does not appear to be sufficient need for the bank or the type of credits it
would provide, they should communicate this to the Sponsor so they can evaluate the financial feasibility
of the project.
4b. Is the proposed scale of the bank (expected number of credits) appropriate for the expected market
demand?
The prospectus should address whether the size and expected number of credits to be generated by the bank
site appears appropriate to the anticipated market demand. Why does this matter? If credit availability far
exceeds demand, it may discourage the development of new banks utilizing current science, technology,
and standards and could affect the funding of monitoring and maintenance activities for existing banks.
If there isn't enough demand for the credits, there is the risk of a bank failing to fully comply with its
instrument. Although infrequent, failing to comply with an instrument may lead to a claim on financial
assurances and may call into question the long-term viability of the bank. A default by a bank before
achieving all performance standards may pose the risk of loss of compensatory mitigation for all the
permits that entailed the purchase of credits at the bank. In examining the proposed scale of the bank,
IRT reviewers should also consider historic and current demand for the type of credits the proposed
bank would generate. If the IRT has concerns with the scale of the bank, it should be sufficient for the
bank Sponsor to provide documentation to support the need for mitigation credits within the region.
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Older banks maybe operatingunder previous and outdated guidelines and thus exempted from incorporating
current mitigation practices and standards (performance standards, monitoring requirements, long-term
management funding, etc.). Some of these older banks have extensive credit inventories based on these
outdated standards and practices. Excessive credit availability may prevent the establishment of new banks,
and because these credits may be based on outdated standards, they may not fully offset permitted losses.
This is relevant because district/state requirements for compensatory mitigation are periodically revised to
incorporate new research, monitoring findings, and lessons learned, and these older banks typically are not
obligated to comply with these more current guidelines, regulations, or standards.
FYI: In a 2017 examination of RIBITS data, IWR staff found more than 400 operational mitigation
banks across the country that were approved prior to the issuance of the 2008 Mitigation Rule; many
were approved in the 1990s (see Martin NMEBC Long-term management & Funding for Mitigation
Banks May 2017).
Note, there is uncertainty associated with projecting future demand. For example, future regulatory changes
could reduce the demand for compensation or, alternatively, could markedly increase the demand for
mitigation credits. Similarly, changes in homebuilding, roadbuilding, or any number of industrial sectors
can lead to increased or decreased permit applications for impacts, increasing or decreasing the demand
for compensatory mitigation.
4c. Does the project address ecological resource needs within the watershed in which the bank site is
located?
The prospectus should identify any watershed, estuary, or conservation plans with which it is compatible.
The prospectus should briefly identify and address any ecological impairments or chronic environmental
problems (water quality, flooding, etc.) that the bank site could help address. The prospectus should also
identify any national, regional, or local benefits the bank might provide and any current or potential
threats to the resource types (development, pollution, alteration, etc.) that the bank would help abate or
offset within the proposed bank site's watershed or landscape. Note, this coverage should be introductory
and overarching, with more detail expected in subsequent elements, including Element 5: Ownership
Arrangements and Element 7: Ecological Suitability.
Technical Feasibility:
4d. Does the prospectus address the technical feasibility of the proposed bank?
The prospectus should identify proposed methods to implement the bank project. For example, if the bank
entails wetland restoration, the prospectus should consider whether the existing soils are compatible with
wetland re-establishment/re-habilitation (i.e., hydric) or if additional measures (compaction, geotechnical
materials, soil amendments, etc.) would be required to better ensure an appropriate hydrologic regime. If
the prospectus identifies artificial features to make a site compatible with the proposed concept design, this
should be considered a red flag and examined more closely.
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A prospectus should identify the current and proposed water sources that would support the bank's aquatic
resources, including any past hydrologic manipulations and how they might be addressed or reversed. The
prospectus should briefly describe the current and intended vegetation community(ies) on the bank site,
whether there are any known invasive species in the vicinity of the bank, and how any known invasive
species would be managed. Existing topographic data are often key to evaluating the technical feasibility of
a proposed bank site. The best and most useful topographic analyses are based on LIDAR (Laser Imaging,
Detection, and Ranging) or an on-site survey. Ultimately, LIDAR data should be confirmed with an on-site
survey in the draft instrument phase.
Consider whether the prospectus addresses the proposed construction work and its feasibility, for example,
by describing or providing conceptual construction plans for areas of intended earthwork (i.e., ditch
backfill, berm/levee removal, spoil removal, excavation) of the proposed bank site.
4e. Does the prospectus identify any constraints that would limit the mitigation potential of the proposed
bank?
The prospectus should provide a general list of possible constraints with brief discussions on how the
constraints may limit the banks mitigation potential. Constraints will be covered more in-depth in Element
5: Ownership Arrangements and Element 7: Ecological Suitability; however, the assessment of technical
feasibility and identification of fatal flaws would include a description of any constraints that would limit
construction, site-protection, or long-term sustainability of the bank. If an existing (approved) or
proposed mitigation bank or ILF program overlaps with one or more of the proposed bank site's service
areas, the prospectus should evaluate if and how this existing mitigation may limit/affect the demand for
mitigation credits that would be provided by the proposed bank site. Other constraints affecting a bank
site's potential may include stakeholder interests, including those of local and tribal governments (such as
fishing rights), existing adjacent land uses, roadways, utility lines, stormwater outfalls, liens, easements,
or encumbrances on the property, property access, inability to acquire property and/or provide
long-term protection, presence of state and/or federally listed species (restoration activities may
provide habitat enhancement opportunities as well), and extent of historic properties.
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5. Ownership Arrangements
The concept of ownership arrangements, as identified in
the Mitigation Rule and as interpreted by districts/states,
includes the following considerations for a proposed bank:
• Ownership - Bank ownership will influence the
long-term protection mechanism or site protection
instrument used for the bank
• Other property interests - These other interests may include other easements (drainage, utility, open
space, conservation, etc.), financial interests (such as contracts, liens, and mortgages), and severed
rights (mineral, oil and gas, timber)
• Proposed long-term protection mechanism - The site protection mechanism used to legally protect the
proposed bank site (conservation easement, declaration of restrictions, transfer of title, conservation
land use agreement, etc.)
• Proposed long-term management strategy - How the Sponsor intends for the bank site to be managed
once banking operations have ceased and the bank moves into long-term management.
FYI: For more detailed information on long-term protection mechanisms, refer to the Banking
Instrument Review Workbook, Element 6: Site Protection Instrument.
5a. Does the prospectus identify how the proposed bank will manage site ownership arrangements?
The prospectus may undertake a range of potential ownership arrangements for a bank site, including:
• Fee simple ownership - The bank Sponsor owns the bank and bank property in full.
• Mitigation easement - An increasingly common mechanism where the bank Sponsor does not own
the land but secures (through purchase or donation) from the landowner the right to develop and
operate a mitigation bank on the property.
• Joint ownership, Limited Liability Partnerships, or Limited Liability Corporations - This is a
common mechanism for mitigation banks. It can enable multiple parties to combine their lands
into a single bank, and it also may limit each of the partners or members in the corporations
personal liability.
• Government ownership (federal, state, local, or tribal ownership) - This is becoming an increasingly
common mechanism. However, ownership by federal or state agencies can complicate the long-
term protection of the bank property. The prospectus should identify any portion of the bank that
would occur on public lands and the public entity that owns the land.
Note, the prospectus should also address the possibility of transfer of bank ownership. This is becoming
more common in banking as banks are consolidated under fewer owners.
Ownership Arrangements
The proposed ownership arrangements
and long-term management strategy for
the mitigation bank (33 CFR 332.8(d)(2)
(v)/40 CFR 230.98(d)(2)(v)).
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5b. Does the prospectus identify the form of long-term site protection mechanism proposed (conservation
easement, declaration of restrictions, etc.) for a bank site?
Each type of long-term protection or site protection mechanism (conservation easement, declaration of
restrictions, title transfer, conservation land use agreement, etc.) proposed for future bank sites has different
considerations (Wood and Martin 2016). The mechanism used depends upon land ownership (discussed
in 5a above). Most districts/states prefer conservation easements where the landowner (grantor) gives
responsibility to another party, the easement holder (or grantee), to enforce the easement, including any land
use restrictions or prohibitions. Conservation easements are more durable than deed restrictions (Wood
and Martin 2016). However, easements may not be feasible in cases where there are no conservation-based
or compatible organizations to hold the easement. In some cases, easements cannot be legally recorded
over some state lands, such as subtidal or intertidal areas. Similarly, easements cannot be recorded over
federal-owned lands. These considerations are discussed further in Wood and Martin (2016).
5c. Does the prospectus identify any existing easements or other property restrictions?
Any easements or other property restrictions recorded on the deed prior to recording the site protection
instrument would be considered primary interests. These easements, such as drainage, utility, or rights
of way, would be unaffected by the site protection instrument and could be exercised unless they are
subordinated to the site protection instrument. This is the real estate concept of "first in time, first in right".
Most districts/states require the prospectus (or associated exhibits) to include information on easements
and other interests. This information may take the form of a preliminary title report, title commitment, or
title insurance. Typically, maps are also required which depict the property's boundaries and the location
and extent of any easements on the bank property.
5d. Does the prospectus or associated exhibits identify any other interests in the property (financial,
mineral/timber, water rights)? If so, does the prospectus (or associated exhibits/attachments) explain how
those other interests may affect the bank site?
All other interests may not be identified in a preliminary title report or title commitment; however, most
are identified as exceptions (exclusions) in a title insurance policy. It is vital that the prospectus (or more
often exhibits to the prospectus) identify all other interests on the bank property, including a copy of the
associated legal documents.
Exercising some interests (for example, timbering or mining minerals on site) could adversely affect the
bank site. Many districts require Sponsors to submit information identifying these other interests in the
bank property, including how they might affect the bank and how the Sponsor plans to address these
interests (for example, by purchasing subsurface or timber rights, excluding those lands from the bank site,
etc.). Wood and Martin (2016) discuss these other interests further.
5e. If the site is located on public lands, does the prospectus identify any additional long-term protection
measures? Do they seem sufficient?
As noted in 5a and 5b, it may not be possible to record a conservation easement or other restriction on
federal- or state-owned lands, so consideration may need to be given to other measures to protect the site
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that are either already in place or may be overlaid on existing mechanisms. The Mitigation Rule identifies
Federal Facility Management plans (such as Forest Management plans, Integrated Natural Resource
Management Plans, etc.) as one such mechanism (33 CFR 332.7(a)(l)/40 CFR 230.97(a)(1)). Management
plans are typically reviewed and revised periodically, so by themselves may not provide the necessary long-
term protection of a bank site. In a number of cases, a second mechanism, like a conservation land use
agreement, may be developed and executed between the regulatory agency and the federal landowner to
provide an additional, more durable mechanism (Wood and Martin 2016).
5f. Does the prospectus identify the proposed long-term management arrangements, including the
party(ies) responsible for long-term management?
The prospectus should describe the long-term management strategy for the proposed bank site, including:
• Whether the Sponsor or the landowner (if different) would be the long-term manager of the bank once
it has closed
• Whether the responsibility for long-term management can be transferred
• The intended mechanism for financing long-term management (i.e., endowment, trusts, appropriations)
• The expected long-term management activities needed to maintain ecological functions and services
provided by the bank
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6. Qualifications
Qualifications are a necessary component of a prospectus that establishes whether the parties responsible
for the bank proposal have the appropriate credentials and experience to complete the mitigation
project(s) they have proposed. While all district/state guidance includes qualifications as necessary
criteria to include in a complete prospectus, there is wide variation in the detail of information required.
Some districts/states reiterate the Mitigation Rule, which focuses on the Sponsors qualifications and past
experience in mitigation projects or related activities. Others also require identification and experience of
the consultants working with the Sponsor, some combination of owner and Sponsor identification and legal
arrangement between parties (if not the same entity), or in the case of the Charleston District, a breakdown
of identities for the bank owner/legal entity,
bank Sponsor, conservation or other easement
holders, and long-term bank stewards (the
Charleston District combines qualifications
and ownership arrangement elements).
An IRT reviewer should refer to their local
district/state guidelines for more information.
6a. Does the prospectus identify the parties (Sponsor and/or agent) that will undertake the work?
The prospectus should, at a minimum, identify the Sponsor and any other parties involved in the development
and operations of the proposed bank. This might also include the agent or consultant conducting the
design, construction, monitoring and/or management, and permitting services for the proposed bank.
Regardless of the manner and detail of credentials, the qualification documentation should ensure that the
individual or entity signing the prospectus and banking instrument has the authority to do so on behalf of
the bank Sponsor. Proof may include a copy of an entity's operating agreement, an agreement between the
individual and the Sponsor, or a notarized letter from the landowner and/or the Sponsor authorizing an
agent or consultant.
Note, parties with other legal arrangements associated with the bank, like a bank owner, easement holder,
and long-term steward, are generally identified under the ownership arrangement element.
6b. Does the prospectus list the Sponsor and/or agents prior mitigation or restoration experience (including
design, implementation, and monitoring) and describe past activities related to this type of compensatory
mitigation?
The intention of the qualifications element in the prospectus is to establish if the Sponsor and/or agent has
the appropriate credentials and experience to design and implement the proposed bank. As such, some
type of past compensatory mitigation or aquatic restoration experience is necessary. If a Sponsor and/or
agent has no previous experience in compensatory mitigation or aquatic restoration activities, the bank/
mitigation project may be at a much higher risk of failure.
Qualifications
The qualifications of the Sponsor to successfully
complete the type(s) of mitigation project(s)
proposed, including information describing any
past such activities by the Sponsor (33 CFR 332.8(d)
(2)(vi)/40 CFR 230.98(d)(2)(vi)).
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6c. Does the prospectus distinguish between the qualifications of the Sponsor and agent/consultant?
This may become important if a Sponsor replaces their agent. A replacement should have the appropriate
qualifications and previous mitigation and/or restoration experience to competently assume the associated
responsibilities of its predecessor.
6d. Is the Sponsor and/or agent qualified?
As mentioned in 6b, whether or not the Sponsor and/or agent is qualified to conduct the proposed project
affects the likelihood of success of the proposed bank.
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7 Ecological Suitability
Determining whether a proposed bank is ecologically
suited to meet its objectives is critical when evaluating a
prospectus. The Mitigation Rule does not provide detailed
considerations when assessing ecological suitability at the
prospectus stage. However, the site selection portion of
the Mitigation Rule, applicable to all mitigation projects
(including PRM, mitigation banks, and ILF projects),
provides clarification.
Despite considerable variability in the format and
organization of district/state prospectus templates and
guidelines, all require the prospectus to document how
the proposed bank site addresses the mitigation site
selection factors presented below.
Mitigation Rule - Site Selection: The mitigation site must be ecologically suitable for providing
the desired aquatic resource functions. In determining the ecological suitability of the bank site, the
following factors should be considered:
• Hydrologic conditions, soil characteristics, and other physical and chemical characteristics
• Watershed-scale features, such as aquatic habitat diversity, connectivity, and other landscape-scale
functions
• Size and location of the mitigation site relative to hydrologic sources and other ecological features
• Compatibility with adjacent land uses and watershed management plans
• Reasonably foreseeable effects the mitigation bank site(s) will have on ecologically important
aquatic or terrestrial resources, cultural sites, or habitat for federal or state listed species
• Other relevant factors include, but are not limited to: development trends, anticipated land use
changes, habitat status and trends, relative location of impact and mitigation sites in the stream
network, local/regional goals for restoration/protection of particular habitat types or functions
(i.e., habitat corridors, habitat for species of concern), water quality goals, floodplain management
goals, and the relative potential for chemical contamination of aquatic resources
33 CFR 332.3(d)(l)/40 CFR 230.93(d)(1)
When evaluating a bank site's ecological suitability, consideration should be given to the physical, chemical,
and biological criteria, which are often interrelated. For example, when reviewing a proposed stream
mitigation bank site's hydrologic regime, the contributing channel condition (physical), water quality
(chemical), and biota (biological) are all related components to be considered. Figure 4 provides examples
of various physical, chemical, and biological elements and their associated measurement approaches.
Ecological Suitability
For a proposed mitigation bank, the
prospectus must also address:
(A) The ecological suitability of the site
to achieve the objectives of the proposed
bank, including the physical, chemical, and
biological characteristics of the bank site
and how the site will support the planned
types of aquatic resources and functions
(33 CFR 332.8(d)(2)(vii)(A)/40 CFR
230.98(d)(2)(vii)(A)).
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Figure 4. Physical, biological, and chemical elements and typical measurements
St.-"--£5
PHYSICAL
(Hydrology/Soils)
BIOLOGICAL
SoflnlW pH
Ohiofv*d
°*Ygen frt**
CHEMICAL
7a. Does the prospectus identify historic ecological characteristics of the site?
The prospectus should provide a robust characterization of the ecological characteristics of the site; it
might include ecological features like a historic plant or aquatic resource communities and associated
hydrologic regimes (if available), historic land uses, and alterations to the site (disturbances or alteration
of plant communities, hydrologic regimes, soils, stream channel morphology, etc.). This is especially
important if the proposed bank would re-establish aquatic resources that previously occurred at the
proposed bank site. The historical context of a proposed bank site may assist in evaluating the likelihood
of successful restoration/re-establishment. There is a high chance of re-establishing wetlands on cropland
that was previously wetland, depending on the degree of anthropogenic disturbance (i.e., creating drainage
channels and changing the sites topography).
Characterization of ecological features is often inferred from historic information (aerial images, narratives,
maps, etc.). Except for some relict hydric soil indicators that may be present, physical evidence of historic
community types is often rarely available. Streams are the exception, as the channel is generally still present,
albeit altered or relocated. See also question 7b.
7b. Does the prospectus summarize current conditions for the bank site and surroundings?
Summaries of current conditions typically include information on land use, current zoning, vegetation,
hydrologic regime, soils on and adjacent to the proposed bank site, historic properties, impaired waters
(e.g., CWA 303(d)-listed streams), rare, threatened, or endangered (RTE) species, etc. This may be
especially relevant if the proposed bank would entail rehabilitation of currently degraded aquatic resources
on the bank site. Current conditions may also include any known financial or real estate encumbrances
(mortgages, liens, rights-of-way, servitudes, easements, etc.) that could affect the potential of the bank site
to meet its objectives on the property.
The prospectus should provide enough detail for a reviewer to evaluate if the conditions/components are
compatible with the bank site's obj ectives. For example, a wetland mitigation bank prospectus should discuss
the sites previous and recent use, such as agricultural production. Cropland often includes areas with
hydric soil, which may increase the likelihood of successful wetland re-establishment. When describing
land use, the prospectus should also consider activities on adjacent lands, including previous, current, and
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future uses. If adjacent lands are already conserved, would the bank site expand or buffer these protected
lands or habitats for RTE species?
Alternately, an IRT reviewer may consider whether adjacent land uses such as residential development,
landfills, or active/abandoned mines are compatible with the bank site's objectives and whether the aquatic
resources on the proposed bank site would be buffered or protected from any adjacent incompatible
activities or uses.
Finally, IRT reviewers should consider whether the proposed bank addresses the causes of any current (or
future, for preservation) degradation. In other words, will the proposed bank address causes of degradation
and/or impairments in the bank site or larger watershed?
7c. Does the prospectus identify any existing hydrologic disturbances or alterations on/adjacent to the
proposed bank site (including those the Sponsor may not be able to manage or control)?
Hydrologic disturbances or alterations maybe present on the proposed bank site or off-site such as upstream
of the bank site or adjacent lands.
Hydrologic alterations on-site may include ditches and drainage, surface or groundwater withdrawal,
and/or impoundments. Addressing these alterations—for example, by eliminating surface drainage, water
withdrawals, or removing impoundments—may present opportunities for aquatic resource restoration or
enhancement. However, in some cases, the proposed bank Sponsor may not have the necessary ownership,
water rights, or other legal authority to alter drainage or water withdrawals needed to re-establish or
rehabilitate the intended aquatic resources on the proposed bank site. This, in turn, would affect whether
a site is ecologically suitable (see Element 8: Assurance of Sufficient Water Rights questions 8c and 8d).
Engineered structures supporting the hydrologic regime of the proposed bank, like dams or weirs, may be
necessary for restoring, establishing, or enhancing the proposed aquatic resource, but they will also require
periodic maintenance and management. Ultimately, an IRT reviewer should ask if the current/proposed
site's hydrologic regime is sustainable for the proposed bank site (see question 4d. of Element 4: Need and
Technical Feasibility).
Off-site hydrologic alterations, including drainage, water withdrawals, water diversions, and/or
impoundments, may also affect the suitability of the proposed bank site. In areas with extensive regional
drainage networks—for example, in agricultural regions of the mid-Atlantic and Mid-West—removing
ditches or drainage features on-site may not provide a sufficient hydrologic regime for the intended aquatic
resource because too much water is being diverted regionally (lowering the water table) by ditch/drainage
features. Similarly, ongoing groundwater withdrawals on adjacent lands for agriculture or development
activities, especially on sites underlain by more pervious substrates like limestone, may result in insufficient
hydrology to sustain restoration efforts. Alterations to an adjacent river system, including impoundments,
levees, and diversions, could affect a proposed bank site if the proposed hydrologic regime primarily
depends upon overbank flooding. Future development upstream of a proposed bank site can increase
the amount of impervious surface, resulting in flashier and greater peak flows following storm events and
reductions in base flows due to reduced infiltration, complicating hydrologic restoration/establishment on
the bank site. Other changes in adjacent land use, like timbering or conversion to agriculture, may result
in changes in hydrologic and sediment inputs into the bank site. Consideration should also be given to
the effects of climate change, which may result in changes to precipitation rates and storm event intensity
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and frequency, and to sea level rise which could affect the viability of tidal compensation including tidal
marshes, sea grass, kelp, and shellfish beds.
7d. Does the prospectus include or refer to reference data (on-site or off-site reference areas, narratives,
and historic or ecologic data)?
Reference data should be part of the preliminary assessment and characterization of the bank site. Data may
be qualitative or quantitative, take the form of narratives or raw data from one or more sites, and/or may
vary between site-specific or regional data. These data can help reviewers evaluate the potential uplift and
suitability of proposed mitigation measures for the bank site, which in turn may increase the confidence
in the technical feasibility of the proposed bank. At the prospectus stage, the expectation should be that
a Sponsor provides readily available and/or publicly accessible data (such as USGS stream gauge data,
reference curves, and in some cases, wetland hydrologic data from certain resource types, like vernal pools
in California or mineral flats in Virginia). Refer to local state/district guidelines and practices for more on
any reference data requirements.
Reference data are often used to characterize the best attainable target aquatic resource type(s) (St. Paul
District Corps of Engineers 2019). Because of historic landscape and watershed alterations and adjacent
land uses, it may not be possible or even advisable to attempt to restore aquatic resources to an unaltered or
pre-settlement condition. IRT reviewers should look at the proposal in light of the best attainable conditions
given regional landscape alterations.
7e. Does the prospectus identify any factors that may contribute to the site's long-term sustainability?
A site maybe considered more sustainable because of adjacent land uses, through design/land management
measures (is the resource self-sustaining? are there structures or measures required for maintenance?),
hydrologic elements (refer to Element 7 question 7c for additional discussion of hydrologic considerations),
and/or financial and site protection mechanisms.
As discussed in question 7b, adjoining land use such as conservation or development can affect a bank site's
long-term sustainability. Adjacent conserved lands may better ensure that a bank site is more resilient in
the face of existing and future threats such as climate change. If an adjacent conserved land is also managed
for the same aquatic resource type as the proposed bank, they may share similar management goals or even
be managed jointly. Alternately, incompatible land uses like adjoining development may encroach or alter
the contributing hydrology to the bank site or impact the proposed bank site (for example, by encouraging
local disturbances or invasive species development).
The prospectus should recognize if any engineering structures or land management measures are necessary
to maintain aquatic resources. Structures may include weirs, water control structures, or irrigation that
require some degree of maintenance and management. Examples where land management activities are
necessary include vernal pool systems in central and southern California that may require chemical/
mechanical/grazing measures to maintain native plant community and structure, bog turtle (RTE) habitat
in the mid-Atlantic that requires livestock management to maintain boggy low vegetation conditions,
prescribed burns of pine savanna in the Southeast and Gulf coasts, and invasive species management which
occurs throughout the United States.
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It is not too early in the bank development process for the prospectus to identify potentially appropriate
short-term financial assurance mechanisms. Financial assurance amounts are typically based on a more
complete project proposal, not the conceptual design found in most prospectus. Element 5 of the Mitigation
Bank Instrument Review Workbook provides additional information on short-term financial assurances.
The prospectus should discuss the mechanism proposed for long-term management and associated
financing (not detailed management actions or funding amounts). Long-term management needs and the
associated costs of management (supplies, labor) can help inform the selection of sites where the cost of
long-term management can be better controlled. Locating a bank site next to a conserved area can reduce
the amount of fencing (and the associated expense) needed to secure the bank site. Minimizing engineered
features like concrete culverts, dams, weirs, and pumps can reduce the cost of long-term management of
the bank site. Refer to question 5f in Element 5: Ownership Arrangements in this workbook and Element
12 in the Long-Term Management in the Bank Instrument Review Workbook.
Durable long-term protection of a bank site is critical to the sustainability of a proposed bank site. Several
different mechanisms can be used alone or in combination to provide meaningful site protection (see
Element 5: Ownership Arrangements question 5b). It is vital that other interests in the proposed bank
site property, like existing easements, severed rights, liens, mortgages, etc., be identified early in the bank
development process (see Element 5: Ownership Arrangements questions 5c and 5d). If a bank site does
not have durable long-term protection that prevents activities incompatible with bank operations, then the
effort and resources spent in the design and implementation of the bank proposal may be wasted.
7f. Does the prospectus discuss factors that would limit the compensatory mitigation potential of the
proposed bank? Are measures proposed to address those limitations?
Factors limiting the mitigation potential of the bank site may include any watershed, physical, chemical,
or biological elements that would constrain construction, site protection, management of the bank site,
wetland function, etc. Are there any factors that may complicate a proposed banks design, development,
and/or implementation? For example, adjacent development activities may limit the amount of property
available to implement the bank and/or the types of mitigation activities that can occur on the property.
Consider whether the prospectus explains how the aquatic resources on the bank site would be
protected from potentially adverse adjacent land uses, for example, through buffers and easements.
7g. Does the prospectus address the bank site's ecological connectivity to other adjacent conserved areas
(if there are any)?
Those conserved areas might include other protected natural resource habitats or corridors (i.e., other
mitigation banks, national wildlife refuges, areas already under conservation easement, or state wildlife
management areas). Does the prospectus consider whether the bank site is compatible with any existing
local or regional plans (local master plans, transportation improvement plans, zoning) and conservation
plans (species recovery, watershed management, wildlife habitat action plan, Special Area Management
Plans (SAMPs)?
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8. Assurance of Sufficient
Water Rights
The Mitigation Rule requires that a bank
Sponsor and/or agent provide assurance of
sufficient water rights for their proposed
mitigation project(s). Why is this needed,
and what is the basis for this requirement?
A Primer on Water Regulation in the
United States:
Water regulation in the United States occurs at the federal, state, and tribal levels. At the federal level, the
"original" owner is the federal government resulting in water owned by the government or a private owner.
There are two main types of water regulation at the state level: prior appropriation and riparian doctrines.
There are two additional types of water rights in place, a hybrid system containing parts of the two stated
doctrines and federal reserved rights, which pertain to Native Americans.
• Prior appropriation rights: Most states spanning from Texas to the west coast abide by prior appropriation,
a 'first come, first right to water' outlook, whereby access to water is determined by order of rank of
the rights to use water in a system (i.e., the first user of the water source). The individual or entity with
first rights may consume and use the water as long as it is applied to beneficial use, with subsequent
individuals/entities in line for water usage. Beneficial use is a states interpretation of the appropriate
use of water, which may apply to domestic, agricultural, industrial, or recreational settings, amongst
other options (National Agricultural Law Center, University of Arkansas accessed January 2021). The
prior appropriation doctrine allowed settlers to divert water from its natural course, and thus a senior
appropriator would not need to own the land adjacent to a watercourse to stake their claim and use this
water for their beneficial use. This doctrine is still practiced today in a number of western states and is
a debated issue as it allows senior appropriators unlimited use of water even in times of water shortages
and prolonged droughts.
• Riparian rights: Typically applied in states with abundant water sources, like along the east coast of the
United States, riparian ownership is based on land ownership; you must own the parcel of land adjacent
to a watercourse, including streams, lakes and/or ponds (National Agricultural Law Center, University
of Arkansas website). If you are not a riparian landowner, you have no rights and no water access.
Riparian landowners have the right to make "reasonable use" of a water system, which under natural
uses includes drinking and watering livestock and garden, and under artificial uses includes irrigation/
agriculture and industry. A notable difference to prior appropriations doctrine, under the riparian
doctrine, a landowner does not have to use the water in order to retain their right to it, since their
right to use is tied to land ownership. Modern-day application of the riparian doctrine has many states
taking on control of water use and distribution under a permit system. This allows states to strategize
and project water usage for times of drought or water shortages.
Water rights
For a proposed mitigation bank, the prospectus must also
address:
Assurance of sufficient water rights to support the long-
term sustainability of the bank (33 CFR 332.8(d)(2)(vii)
(B)/40 CFR 230.98(d)(2)(vii)(B)).
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• Hybrid system: In some states, elements of prior appropriation and riparian are combined to function
in accordance with the state's water needs and availability.
• Federal reserved rights: Water rights for Native American reservations and public lands are established
by federal law The rank order of priority for water use and water quantity (over other appropriators)
is determined by the date of the reservations establishment and the quantity necessary "to fulfill the
purpose of the reservation" (National Agricultural Law Center, University of Arkansas website).
Regulations have been and continue to be developed in response to increasing demand for and access to
water exceeding local water supplies. This is more of an issue in the western states, where years of drought
and decreased water availability are exacerbated by the strain of existing water regulations that result in
unequal access to water.
Hydrologic Disturbances and Other Influences:
Hydrologic disturbance consists of any scenario where the water on or flowing into a bank site may be
manipulated, interrupted, diverted, reduced or even eliminated the water from flowing into the site.
The source of hydrology and disturbance can be wide-ranging. Examples include diverting upstream
hydrology for agricultural (irrigation) or industrial purposes, either through ditching or channel alteration,
municipal stormwater management directing storm flows away from or into the site, or utilities/other
entities diverting groundwater that may have otherwise surfaced at the site as groundwater seeps. It may
also include water rights situations, where an individual or entity claims rights to the hydrology either
on-site or upstream under prior appropriation rights or if they own the land adjacent to the bank site via
riparian rights. An IRT reviewer should consider the hydrologic sources/inputs to the proposed bank site
and if there may be any potential disturbance to this water supply from adjacent landowners, utilities, or
other entities. Additionally, an on-site hydrologic disturbance may include any temporary or long-term
structural management requirements (i.e., weirs, levees, ditches, etc.) proposed on a bank site.
Current and Future Assurance of Water Availability:
It is important for the contributing drainage area and all sources of hydrology available to a site to be
identified since, as noted in the previous element, possible disturbances may affect the current and future
availability of hydrology. Equally important in the west are downstream water rights. If a bank requires a
water diversion to establish or sustain the site, appropriative water rights may be required. Understanding
the seniority of the water rights may affect bank establishment and operation.
An IRT reviewer may also consider if the hydrology source(s) is sufficient to support the proposed bank in
the long-term. Is it a sustainable source? Is it at risk of a third-party water rights claims, diversion, or even
damming? IRT reviewers may benefit from reviewing historic hydrology of the site to determine whether the
source of hydrology for the site is stable, whether it is ephemeral, seasonal, or perennial. Consider whether
the watershed and/or site has experienced (prolonged) drought or changes in precipitation patterns and
seasonality. Finally, are there any on-site hydrologic disturbances, such as previously mentioned structural
management requirements, proposed for the bank site? How do these affect the water availability for the
site in the long-term?
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8a. Has the prospectus identified the hydrologic source(s) available to the proposed bank site?
The document should identify what hydrologic source(s) are available for use at the bank site. As mentioned
previously these sources may include the stream channel, groundwater, or stormwater flows.
8b. Does/do the source(s) provide a seasonal or continuous hydroperiod for the site? What are the
hydrologic input(s) and output(s) for the site (precipitation, tidal, overbank flooding, evapotranspiration,
groundwater, etc.)?
The site should have a long-term sustainable hydrologic source. The hydroperiod of each source should be
provided to ensure a sustainable water supply for the proposed bank site in the long-term, whether provided
by one source or a cumulative/combination of sources. This is also a good opportunity to determine if any
structural management requirements have been proposed that allow the site to maintain hydrologic input
and if the structure(s) proposed would be temporary or permanent fixtures.
8c. Does the prospectus discuss the history of the hydrologic source(s) to the proposed bank site?
Site context is important as it provides a good understanding of what aquatic resources may have been
present in the past and the type and quantity of hydrologic input that sustained this aquatic resource. For
example, wetland areas have historically been ideal land types to convert to arable land, with hydrologic
inputs (streams and seeps) managed through ditching, diversion, and/or plugging with drainage tiles.
If evidence of hydrologic input is present, reverting an agricultural field back to a wetland area can be
successful if historic hydrology input (quantity and type) is also restored. For stream realignment, in
addition to hydrologic inputs, consideration should be given to the geologic context, including stratigraphy,
permeability of layers, and type of substrate present (cobble, bedrock, sands, etc.).
8d. Does/do the source(s) have any disturbances, encumbrances, or limitations to availability or use, and
have these been identified and discussed in the prospectus?
The prospectus should identify and provide explanations for any potential limitations, as described in
Hydrologic Disturbances and Other Influences on water availability or use for the bank site, as this needs
to be considered to determine if a sufficient supply of sustainable long-term hydrology is available.
8e. Does the Sponsor have necessary water rights to establish and manage the site sustainably in the long-
term?
Similar to 8c., the prospectus should identify and discuss what water rights are relevant to the site, and if the
Sponsor has control over these rights/water usage. If a Sponsor is leasing water rights, for example, do the
legal agreements between the Sponsor and holder of water rights ensure long-term hydrology availability
for the site? On a separate note, do the water regulations for the site consider a bank site a beneficial or
reasonable use of water? Has the Sponsor accounted for the legality of water use for their proposed bank
site? For areas where appropriative rights are applied, how does the bank rank compare to other users in the
system? Is there a risk of water not being available due to more senior rights holders exercising their rights?
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Cone usion
As discussed in the introduction to the Mitigation Bank Prospectus Review Workbook, the preliminary
focus when reviewing a bank prospectus is to determine whether the proposed bank is potentially suitable
to provide appropriate compensatory mitigation. A good start for determining if a proposal is potentially
suitable is for the IRT member to follow the guidance provided in each element of this prospectus review
workbook and review and respond to the associated checklist questions. Once a prospectus is determined
suitable by the IRT, the Sponsor may begin the next step in the mitigation bank process, drafting a mitigation
bank instrument. An approved prospectus does not guarantee that a subsequent bank instrument will be
approved.
It is the responsibility of the IRT Chair or co-chairs in consultation with IRT members to determine
whether a prospectus is potentially suitable. The Chair or co-chairs, in turn, depend on individual IRT
members to provide their expertise (knowledge and experience). So, it is incumbent for the IRT members
to give a thoughtful and timely review of the prospectus.
In cases where the information provided in the prospectus is insufficient for the IRT Chair or co-chairs to
make their determination—for example, if the Sponsor has not secured or accounted for other important
interests in the bank property (such as timber or mineral rights), the Sponsor will need to provide additional
effort and/or information to address or resolve these issues. For these cases where additional information
is needed, it is the responsibility of the IRT Chair or co-chairs and members to discuss the situation clearly
and comprehensively with the Sponsor. In these discussions, it is essential to distinguish between necessary
information and information that is useful but not critical to a potential suitability determination.
In cases where the IRT Chair or co-chairs determines that some aspect of the proposal is fatally flawed
(for example, extensive groundwater withdrawal around a proposed bank site resulting in an insufficient/
unsustainable hydrologic regime for proposed wetland restoration), the IRT Chair should advise the
Sponsor of the fatal flaw(s) before the Sponsor undertakes the additional expense of developing a bank
instrument.
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References
This includes literature referenced in the workbook as well as a sampling of prospectus outlines, templates,
and instructions issued by districts and states across the United States that were reviewed and at times
referenced in this prospectus review workbook. This list was current as of January 2022; however, bank
instruments, templates, and tools will be revised over time.
Baltimore District, U.S. Army Corps of Engineers (USACE). 2018. Information Required
for a Complete Mitigation Bank Prospectus. https://ribits.ops.usace.army.mil/ords/
f?p=107:150:4026675501498::NQ::P150 DOCUMENT ID:6134
California Multi-Agency Product Delivery Team. 2010. Checklist: Prospectus for Mitigation Banks, http://
www.spd.usace.army.mil/Portals/13/docs/regulatory/banking/checklist.pdf
Charleston District, USACE. Mitigation Bank Prospectus Template, https://ribits.ops.usace.army.mil/ords/
f?p=107:150:4026675501498::NQ::P150 DOCUMENT ID:47828
Fort Worth District, USACE. 2013. Mitigation Bank Prospectus Form.
Jacksonville District, USACE. 2021. InstructionalCompanionfortheJacksonvilleDistrictMitigationBanking
Instrument Template. https://ribits.ops.usace.army.mil/ords/f?p=107:150:4026675501498::NQ::P150
DOCUMENT ID:93213
The National Agricultural Law Center, Division of Agriculture Research and Extension, University of
Arkansas System. Water Law: An Overview. Accessed January 2021. https://nationalaglawcenter.org/
overview/ water-law/
New Orleans District, USACE. 2016. Prospectus Template.
Norfolk District, USACE and Virginia DEQ. 2018. Complete Prospectus /Proposal Checklist. https://ribits.
ops.usace.armymil/ords/f?p=107:27:14131302048545::NQ::P27 BUTTON KEY:10
Ossinger, M. 1999. Success standards for wetland mitigation projects - a guideline. Washington State
Department of Transportation, Environmental Affairs Office. 31pp
Portland District, USACE and Oregon Department of State Lands. 2019. Oregon Mitigation Bank
Prospectus Template.
St. Paul District, USACE. 2019. Target hydrology and performance standards for compensatory mitigation.
Regulatory Branch Guidance, Version 6.0 https://www.mvp.usace.army.mil/Missions/Regulatory/
Mitigation/
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U.S Fifth Circuit Court of Appeals Decision. 2012. Hearts Bluff Game Ranch LLC v. United States. 13pp.
Wood, C. and S. Martin 2016. Compensatory Mitigation Site Protection Instrument Handbook for
the Corps Regulatory Program. Institute for Water Resources White Paper. 21pp. https://www.iwr.
usace.army.mil/Portals/70/docs/iwrreports/Site Protection Instrument Handbook August 2016.
pdf?ver=2016-08-29-082816-237
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APPENDIX A: REVIEW
CHECKLIST
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Mitigation Bank Prospectus
Review Checklist
The Mitigation Bank Prospectus Review Checklist reflects the content of each element of in the Mitigation
Bank Prospectus Review Workbook. For each element, the checklist asks whether the question was
addressed (yes/no), whether the narrative is complete (yes/no), and the page number(s) of the narrative. A
comment section for reviewer input is also included.
Review Elements
Questions
Addressed
(Y/N)
Complete
(Y/N)
Page
#(s)
Reviewer Comments
1. Objectives of the Proposed
Bank
la. Does the prospectus include a
description of the aquatic resource
type(s) and amount(s) the bank site
would provide?
lb. Does the prospectus identify the
functions and services expected to
be provided by the bank site?
lc. Is the bank site located within
a watershed or landscape position
where it is likely to provide the
proposed functions and services?
2. How the Bank will be
Established and Operated
2a. Does the prospectus provide
narrative, mapping (aerial, topo),
and/or photographs identifying
the bank site location, property
boundaries, and other baseline
conditions?
2b. Does the prospectus discuss
the conceptual plan of the bank
site, including layout, construction
process, and post-establishment
operations and maintenance?
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Review Elements
Questions
Addressed
(Y/N)
Complete
(Y/N)
Page
#(s)
Reviewer Comments
3. Proposed Service Area
3a. Does the bank prospectus
appropriately size the service
area to ensure that the proposed
aquatic resources will effectively
compensate for permitted impacts
and replace lost functions/services?
3b. Does the bank prospectus
identify the basis of the service area
(i.e., watershed, coastal bay system,
ecoregion, species distribution)
and provide justification/rationale
supporting its location and extent?
3c. Does the service area comply
with local, district, and/or state
requirements (scale, size, or
resource type)?
4. Need and Technical Feasibility
4a. Does the prospectus provide
information on past, current, or
anticipated demand for the proposed
compensation?
4b. Is the proposed scale of the
bank (expected number of credits)
appropriate for the expected market
demand?
4c. Does the project address
ecological resource needs within the
watershed in which the bank site is
located?
4d. Does the prospectus address the
technical feasibility of the proposed
bank?
4e. Does the prospectus identify
any constraints that would limit the
mitigation potential of the proposed
bank?
5. Ownership Arrangements
5a. Does the prospectus identify
how the proposed bank will manage
site ownership arrangements?
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Review Elements
Questions
Addressed
(Y/N)
Complete
(Y/N)
Page
#(s)
Reviewer Comments
5b. Does the prospectus identify the
form of long-term site protection
mechanism proposed (conservation
easement, declaration ofrestrictions,
etc.) for a bank site?
5c. Does the prospectus identify
any existing easements or other
property restrictions?
5d. Does the prospectus or associated
exhibits identify any other interests
in the property (financial, mineral/
timber, water rights)? If so, does the
prospectus (or associated exhibits/
attachments) explain how those
other interests may affect the bank
site?
5e. If the site is located on public
lands, does the prospectus identify
any additional long-term protection
measures? Do they seem sufficient?
5f. Does the prospectus identify the
proposed long-term management
arrangements, including the
party(ies) responsible for long-term
management?
6. Qualifications
6a. Does the prospectus identify the
parties (Sponsor and/or agent) that
will undertake the work?
6b. Does the prospectus list the
Sponsor and/or agent's prior
mitigation or restoration experience
(including design, implementation,
and monitoring) and describe past
activities related to this type of
compensatory mitigation?
6c. Does the prospectus distinguish
between the qualifications of the
Sponsor and agent/consultant?
6d. Is the Sponsor and/or agent
qualified?
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November 2022
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7. Ecological Suitability
7a. Does the prospectus identify
historic ecological characteristics of
the site?
7b. Does the prospectus summarize
current conditions for the bank site
and surroundings?
7c. Does the prospectus identify any
existing hydrologic disturbances
or alterations on/adjacent to the
proposed bank site (including those
the Sponsor may not be able to
manage or control)?
7d. Does the prospectus include or
refer to reference data (on-site or
off-site reference areas, narratives,
and historic or ecologic data)?
7e. Does the prospectus identify any
factors that may contribute to the
site's long-term sustainability?
7f. Does the prospectus discuss
factors that would limit the
compensatory mitigation potential
of the proposed bank? Are measures
proposed to address those
limitations?
7g. Does the prospectus address the
bank site's ecological connectivity to
other adjacent conserved areas (if
there are any)?
8. Assurance of Sufficient Water
Rights
8a. Has the prospectus identified the
hydrologic source(s) available to the
proposed bank site?
8b. Does/do the source(s) provide a
seasonal or continuous hydroperiod
for the site? What are the hydrologic
input(s) and output(s) for the site
(precipitation, tidal, overbank
flooding evapotranspiration,
groundwater, etc.)?
8c. Does the prospectus discuss the
history of the hydrologic source(s)
to the proposed bank site?
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November 2022
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8d. Does/do the source(s) have
any disturbances, encumbrances,
or limitations to availability or use,
and have these been identified and
discussed in the prospectus?
8e. Does the Sponsor have necessary
water rights to establish and manage
the site sustainably in the long-term?
Mitigation Bank Prospectus | Review Checklist
November 2022
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