skip to content
Primary navigation

Wetland Banking

wetlands banner

The Office of School Trust Lands is currently exploring the establishment of wetland banking credits on school trust lands. The fiduciary obligation of school trust land trustees requires that economic activity be undertaken on trust lands whenever possible. Taking advantage of wetland banking on currently unproductive trust lands with aquatic features furthers the fulfillment of this statutory duty.

Minnesota’s Wetlands Conservation Act provides for the establishment of wetland credits that can be developed and sold as mitigation for construction projects that remove wetland areas. This procedure creates local markets for the sale of “credits” to those needing them for planned projects.

While school trust lands contain thousands of acres of wetlands, only those lands containing drained or degraded wetlands (i.e. wetlands needing restoration) would be eligible for a wetland credit program. Restoration is the re-establishment or rehabilitation of a wetland or other aquatic resource with the goal of returning natural or historic functions and characteristics to a former or degraded wetland, and results in a gain of wetland function or wetland acres, or both. Because wetland preservation does not result in a net gain of wetland acres, existing and functional wetland areas are generally not eligible. Therefore, the School Trust Lands Office will need to identify high-opportunity trust lands by developing an inventory of mitigation values associated with the trust land portfolio. Evaluating school trust lands through this lens will provide the trust with another tool to align the goals of sound natural resource conservation principles with the fiduciary obligation of revenue generation. A criteria-based inventory and evaluation process will be used to identify a suitable land base where the trust could participate in wetland banking activities. The trust will then be able to establish a new asset management class and create a program to pursue the appropriate and highest value transactions for these ecological attributes. If the inventory shows that wetland restoration opportunities do not exist on trust lands, it may also show other lands in need of restoration that could be exchanged for school trust lands.

Currently, school trust lands that may be eligible for garnering wetland banking credits are (for the most part) economically unproductive. So long as efforts to participate in wetland banking mitigation markets are based on determinations that particular land holdings are suitable for such use, and that participation would be a reasonable investment as part of the management of the larger trust portfolio and otherwise in the best interests of the trust, then the standard of securing the maximum long-term economic returns from these lands would clearly be met. Therefore, pursuit of such transactions which generate reasonable revenues to the permanent school fund would be consistent with the trust responsibility, and achieve strategic objectives in diversifying asset management and increasing long-term values of presently unproductive trust lands.

back to top