U.S. Fish & Wildlife Service

Conservation Banking

Incentives for Stewardship

Conservation banks are permanently

protected privately or publicly owned

lands that are managed for endangered,

threatened, and other at-risk species.

A conservation bank is like a biological

bank account. Instead of money, the bank

owner has habitat or species credits to sell.

The U.S. Fish and Wildlife Service

(FWS) approves habitat or species credits

based on the natural resource values on the

bank lands. In exchange for permanently

protecting the bank lands and managing

them for listed and other at-risk species,

conservation bank owners may sell

credits to developers or others who need

to compensate for the environmental

impacts of their projects.

Conservation banking offers a range of

opportunities. Lands used for ranching,

farming, and timber operations can

function as conservation banks if habitat

is managed for listed and at-risk species.

Habitat may also be restored for listed

species. Streams or other corridors that

provide habitat linkages between existing

protected areas may be enhanced and

managed. Rather than building on their

lands, developers may choose to establish

conservation banks.

Who benefits?

A conservation bank is a market enterprise that offers landowners incentives to

protect habitats of endangered, threatened,

and other at-risk species. Landowners can

profit from selling habitat or species credits

to parties who need to compensate for

environmental impacts. Landowners can

generate income, keep large parcels of

land intact, possibly reduce their taxes,

and preserve open space.

Developers and others whose activities

result in adverse environmental impacts

typically are required to compensate for

such impacts. Providing compensatory

habitat off-site is often the best solution.

However, it is difficult to locate appropriate

lands and costly to restore and protect them

and provide for their long-term management. Conservation banks provide a simple,

economical alternative for developers and

other project proponents. A one-time purchase

of credits saves developers time and money

and provides regulatory certainty.

Conservation banking benefits listed

species and other wildlife and plants by

establishing large reserves that function

as compensatory conservation areas for

multiple projects. It costs less per acre

to manage a conservation bank than the

equivalent acreage divided among many

small, isolated reserves. Larger reserves

are more likely to ensure ecosystem

functions, foster biodiversity, and provide

opportunities for linking existing habitat.

In coordination with other tools, this

collaborative, incentive-based approach

to conservation may aid in the recovery

of listed species.

Conservation banking also benefits the

public and the community by protecting

open space and contributing to a healthy

environment. It works best in concert with

regional conservation planning where the

community is involved in determining which

areas are conserved and which areas are

developed to achieve an environmentally

and economically healthy community.

Background

Conservation banking for federally

listed species has its roots in wetland

mitigation banking. In the early 1990s,

the FWS began working with other

Federal agencies to establish wetland

mitigation banks. In 1995, the final

policy on wetland banking, Federal

Guidance for the Establishment, Use,

and Operation of Mitigation Banks,

was published (60 FR 58605-58614). In

that same year, the State of California

established a policy to promote regional

conservation by encouraging a second

generation of mitigation banks, called

conservation banks, to preserve existing

habitats. At that time, the FWS began

approving conservation banks for a

variety of federally listed species, many

in cooperation with other Federal agencies

and the State of California. Between 1995

The 1200 acre Wilson Valley Mitigation Bank, Riverside County, California.

USFWS photo by Michelle Morgan
and 2006 approximately 60 conservation

banks were approved, most of them

in California.

In May 2003, in what has been termed

“a hallmark event in the 30-year history

of the Endangered Species Act,” the FWS

issued the first comprehensive Federal

guidelines designed to promote conservation

banks as a tool for mitigating adverse

impacts to species listed as endangered or

threatened under the Endangered Species

Act. Although no two banks will be

developed or used in an identical fashion,

the guidelines foster national consistency

by standardizing establishment and

operational criteria for conservation banks.

A copy of the guidance is available at

http://endangered.fws.gov/policies/

conservation-banking.pdf.

What lands are eligible?

Private, Tribal, State and local government

lands are eligible to become conservation

banks. Federal lands may require special

consideration concerning applicability of

the lands for mitigation purposes and review

and approval by the FWS for consistency

with other regulations and policies.

Generally, lands previously designated

for conservation purposes through another

program are not eligible unless designation

as a bank provides an additional conservation benefit to listed species. Before the

FWS can approve a conservation bank,

landowners are required to:

• enter into a Conservation Banking

Agreement with the FWS;

• grant a conservation easement to an

eligible third party, precluding future

development of the property and

restricting certain land uses;

• develop a long-term management

plan for the bank lands; and

• provide funding for monitoring

and long-term management of the

bank lands.

In return, the FWS approves landowners

to sell credits to those requiring mitigation

for species that occur on the bank lands

and that are within the bank’s designated

service area.

What is a conservation easement?

A conservation easement is a legal contract

between the landowner (grantor) and the

easement holder (grantee) in which the

landowner gives up certain development

rights and agrees to certain restrictions

on the property. Public agencies, land

trusts, and other nonprofit conservation

organizations are typical groups that States

authorize to hold conservation easements.

Restrictions on the property may include

a reduction in the number of livestock that

may be grazed, prohibition of recreational

off-road vehicle use, or prohibition of

construction of new roads and buildings.

Any activities that are inconsistent with

the purposes of the conservation bank are

restricted under the easement. Because

perpetual conservation easements are

binding on future owners, the resource

values of these properties are protected

indefinitely. Many States and local governments offer tax benefits associated with

this type of property encumbrance.

What is a management plan?

A management plan identifies tasks

for operating and maintaining a bank

site as well as methods for monitoring

and maintaining desired habitats for listed

and at-risk species. A management plan

may include removing trash on a regular

basis; mending and replacing fencing;

monitoring the listed species or habitat

conditions; controlling exotic, invasive

species that interfere with the naturally

functioning ecosystem; conducting

prescribed burns; and other activities

to maintain the habitat. A management

plan is long-term, requires careful

development, and should take into account

any foreseeable changes that may affect

property management. A management

plan should be as specific as possible,

but flexible enough to allow changes in

management practices in response to

monitoring results (sometimes referred

to as an adaptive management approach).

How is management funded?

Most often a perpetual, or non-wasting,

endowment is established to fund

the long-term management of the

conservation bank. The landowner

deposits money, typically referred to as

an endowment, in an interest-bearing

account in an amount sufficient to generate

enough yearly income to fund the annual

management of the conservation bank.

Since only the interest is available for

use and the principal is not withdrawn,

the endowment is “non-wasting,” providing

a perpetual source of funding for

management of the conservation bank.

Other methods of funding the long-term

management of the bank may be used,

provided they ensure adequate funding.

What are credits?

Credits are units representing listed

and other at-risk species or habitat for

those species on the conservation bank

lands. A credit may be equivalent to

 (1) an acre of habitat for a

 particular species;

 (2) the amount of habitat required

 to support a breeding pair;

 (3) a wetland unit along with its

 supporting uplands; or

 (4) some other measure of habitat

 or its value to the listed species.

Methods of determining available credits

may rely on ranking or weighting of

habitats based on habitat condition, size

of the parcel, or other factors. A

conservation bank may have more than

one type of credit if more than one listed

species or habitat type occurs at the bank.

What is a service area?

The service area for a conservation bank

is the area outside the bank property within

which the bank owner may sell credits.

The FWS and the banker determine

service areas for conservation banks based

on physical and ecological attributes such

as watersheds, soil types, species recovery

units, and/or species and population

distributions. Banks with more than one

type of credit may have different service

areas designated for different credit types.

What projects are eligible?

Only projects that would otherwise be

permitted and are suitable for off-site

mitigation may use conservation banks.

The species and habitats for which the

project proponent requires mitgation

must be present at the conservation

bank. Conservation banking is not a

substitute for avoiding and minimizing

effects on listed species. The purpose of

conservation banking is not to encourage

development of listed species’ habitats, but

rather to provide an ecologically effective

alternative to small on-site preserves,which

are not defensible.

Contact Us

If you would like more information on

conservation banking, please contact the

FWS Regional Office with responsibility

for the State or Territory in which the

project is being proposed. A map of our

Regional Offices can be found at

http://offices.fws.gov/directory/

listofficeregion.cfm

U. S. Fish and Wildlife Service

Endangered Species Program

4401 N. Fairfax Drive, Room 420

Arlington, VA 22203

703/358 2106

http://endangered.fws.gov

October 2006