Minnesota’s In-lieu fee Program Gaining Steam

Legislation has been introduced to implement Minnesota’s first in-lieu fee (ILF) wetland impact replacement program.

In essence, an ILF program allows someone with a wetland impact to pay into a fund, rather than buy wetland bank credits or replace the wetland on their own.  The holder of the ILF collects multiple payments and at a later date uses the money to restore wetlands or purchase existing bank credits.

Current legislation would help better define what in-lieu fee (ILF) is in Minnesota and allows Minnesota’s Board of Water and Soil Resources (BWSR) to be the ILF operator (S.F. 1515 and H.F. 1489).  This means that BWSR itself will collect ILF payments and restore wetlands on their own, or potentially purchase existing bank credits.

What does In-lieu fee mean for me?  Depends upon who you are.  As a wetland banker, will it be business as usual, or will BWSR dominate the wetland credit marketplace?  You could very well be competing with BWSR for the sale of your wetland credits.

As a buyer, it offers an alternative to purchasing credits from a limited number of wetland banks available in their watershed or Bank Service Area, potentially bring the cost of credits down, but not necessarily.

A question we’ve been asking is why is an ILF program needed in Minnesota?  An ILF program is most often started when there is demand for replacement wetlands, but there are no banks to satisfy the need.  Minnesota’s wetland banking system is one of the largest and most diverse in the nation.

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