By Andrew Cawley, Mitigation Banking Specialist
This month, the California Project Delivery Team (PDT), the interagency group which oversees statewide mitigation and conservation banking programs, is concluding the public comment period for the updated Bank Enabling Instrument (BEI) template. The BEI template is a document that outlines procedures for establishing mitigation and conservation banks within California. The updates include input from the state and federal regulatory agencies that participate in Bank entitlement and oversight.
The template, last released in 2017, has largely remained the same with the latest update. Some of the more notable changes include consolidating several exhibits, improving reporting and tracking features for utilizing credits, and clarification on the difference between a “Signatory Agency” and a “non-signatory Agency” member of the Interagency Review Team (IRT).
Since mitigation and conservation bank packages can involve thousands of pages of literature, consolidating several exhibits is a welcome improvement to the new template. The Interim Management Plan, a major document with the previous template, has been removed and will instead be combined with the Development Plan. Other changes include combining the Bank Closure Plan and Title Report with other exhibits. These changes increase efficiency in drafting and reviewing the documents as well as minimizing redundancy.
Clarification of Agencies and Their Roles
The clarification between Signatory and non-signatory agencies is an important distinction the new template offers, as it is vital to understand the roles and responsibilities individual agencies can play. The IRT, which oversees the establishment, use, operation, and maintenance of a Bank, can include both Signatory and non-signatory agencies. The new template clarifies that the role of non-signatory agencies is to advise and make recommendations to the Signatory agencies, who are ultimately responsible for overseeing a Bank.
Advanced Sale of Credits
Finally, one further change could alter how credits are sold. The BEI template now distinguishes between a “credit sale” and a “credit transfer.” A credit sale occurs when a project proponent purchases credits from a Bank. Paying for credits secures their price and availability. A credit transfer, on the other hand, occurs when the credits are formally used to satisfy a mitigation requirement. Whereas these two actions were implicitly combined in the past (i.e. you could only sell a credit when it was being applied to a specific mitigation requirement), they are now separate. Essentially, it now allows a Bank sponsor to sell credits prior to a transfer. Why is this important? If a project proponent knows they’re going to need credits in the future, but they haven’t permitted a project yet (think phased projects, entities with long-term planning projects in the pipeline, or a multi-step residential or commercial development), they can purchase credits (“credit sale”) from a Bank, and then draw them from the bank (“credit transfer”) as the project needs arise. While many mitigation banks were already able and willing to reserve credits for project proponents future use in exchange for a deposit, certain public agencies were unable to enter into these reservation agreements due to budget or policy constraints. The new credit sale/transfer structure is anticipated to allow more flexibility for public agencies and facilitate long-term strategic mitigation planning.
As a state leader in mitigation and conservation banking, WRA’s conservation strategies team is experienced with the proposed changes and their potential implications. Contact WRA’s Principal Nate Bello with questions about the new policy at firstname.lastname@example.org.