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New Wetlands Mitigation Banking Law: Will You Be Banking With The State?

Updated: Jul 23, 2020

By Sarah Everhart

River in front of a farm (Photo by Edwin Remsberg).

Governor Hogan recently signed the Nontidal Wetlands Mitigation Banking law (H.B. 797) meant to improve Maryland’s wetlands conservation and restoration strategies. The new law removes obstacles and clarifies policies related to wetland mitigation to spur more public-private partnerships and wetlands protection projects.

Maryland has a “no net loss” of wetlands goal which means that if a wetland is impacted or converted into another type of land use, it must be mitigated or replaced with a new wetland habitat. In 1993, the Nontidal Wetlands Protection Act was amended to encourage the development of a wetlands mitigation banking industry in Maryland, but the law has not been successful.

What exactly is a mitigation bank and why is it necessary?

A mitigation bank is a wetlands restoration, enhancement, or conservation area professionally managed and monitored. A person required to mitigate for a wetland impact and can meet this requirement by creating a replacement wetland habitat. This type of solution, however, can result in a patchwork of small, ecologically-isolated projects which are often less successful than larger projects promoted by a mitigation bank. We have all seen sad looking replacement wetland habitats alongside large scale commercial projects, right? Wetland mitigation banks offer an alternative.

A successful wetland mitigation bank allows those who need to do mitigation to buy wetland mitigation credits for larger projects completed by an approved mitigation bank, or pay a fee to a compensation fund used to implement these kinds of projects. This is good news for farmers who would prefer to pay rather than converting production land into wetland mitigation habitat.

According to the Maryland Department of the Environment, wetland mitigation banks:

  1. Use planning and scientific expertise to improve site selection, design, construction, and monitoring of a mitigation project, providing a greater likelihood of ecological success than other mitigation options

  2. Ensure larger, potentially more ecologically valuable sites which encourage greater diversity of habitat and wetland functions, including carbon sequestration for greenhouse gas reductions

  3. Provide long-term stewardship of the mitigation site

  4. Accept liability for ensuring success of the mitigation project, reducing the uncertainty over whether the mitigation will successfully offset the impacts authorized by the permit

  5. Streamline the application process and reduce processing times by providing cost-effective mitigation opportunities.

The new law, which takes effect July 1, is consistent with federal environmental rules making mitigation banking the first preference for mitigation. It eliminates an outdated compensation ratio for using mitigation bank credits and defines the area where a mitigation bank can be used with important safeguards to ensure fair and effective results.

The Maryland Department of the Environment will be taking additional steps over the summer with stakeholders to improve existing regulations and procedures on mitigation banks and in-lieu fees.

According to the Governor, the “bill is living proof our state is open for business and committed to the environment. This is good news for our state, the Chesapeake Bay, and the local watersheds throughout Maryland.”

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