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Minnesota's Water Bank Program By Bruce Gerbig Thc conflict over the drainage of Minnesota's wetlands has gone on for decades. Not until recently, has the tide ebbed in favor of the preservation interests. And not until the grealest share of lhe wetland resource went down the tile drain. One of the factors which helped change the trend is Minnesota's State Water Bank Program. Prior to implementation of the State Water Bank Pro- gram, drainage interests argued that denial of a drainage permit constituted "a taking without compensation". Under certain circumstances this may have been the case. Recog- nizlng this, the legislature established the current State Water Bank Program in 1976. The program didn't really get going, however, until 1979-1980 due to the need to f'n'st map out the wetlands on a statewide basis. The current enabling legislation is based upon the idea that if a person is denied a permit to drain a wetland, then he/she is entitled to just compensation. Provided however, that he/she proves that the drainage is economically and otherwise feasible. In order for an area to qualify for State Water Bank Program payments, the area must be classified as a ~Wetland" according to Minnesota Statutes, Chapter 105. Wetlands subject to the water permit program administered by the Division receive the highest priority. The landowner's duty is to show that drainage of the area would not violate any properly agreements, that outlet rights can be obtained, that the proposed drainage would be profitable and that the area, if drained, would make high quality cropland. The foLlowing is a summary of steps involved with a typical water bank proposal. 1. Application. Landovmer applies to the DNR for a permit to drain wetland for agricultural purposes. The proposal must be documented with soils information, drainage plan and proof of property ownership. 2. DN~ has 60 days to evaluate complete application and to offer five forms of compensation to the applicant ranging from outright purchase to leasing of the wetland. If no offer is made, the landowner may drain it. 3. Landowner specifies forms of compensation to be considered and identifies any additional land (up to 1 acre per each acre of wetland) which he desires the DNR to con- sider in a formal appraisal. 4. DNR then has 60 days to appraise the wetland and submit appraisal for certification. 5. At the end of the 60 days, or sooner, the DNR pre- sents the appraisal of the selected forms of compensation to the landowner. He then selects the option that best suits his purposes. Payment follows. If the landowner declines to ac- cept any compensation, he is denied the right to drain the wetland. The Department has the authority under the State Water Bank Program to offer up to five options for compensation. They are: · an offer of a State Water Bank Agreement. · an offer of a purchase the area (it' public access is available). . an offer to acquire an easement on the area. · an offer to acquire a conservation restriction on the area. . an offer to lease the area. A state water bank agreement is a special 10 year land contract with annual payments in which the landowner sets aside his wetland from all agricultural use. A conservation restriction is similar to a waterbank agreement but instead of 10 annual pasnnents, one lump sum payment is made. The value of the lump sum payrnent is equal to the present value of ten annual water bank agreement payments. To date, $1,950,000 has been paid 1o landowners en- rolled in the program, ~4th an additional $946,000 obligated for future payments on existing contracts. Table 1 gives a break-do~m of the number of acres enrolled into the pro- gram and what types of compensation have been chosen. Table 1 Water Bank Program Enrollment Number of Total .Type or Compensation Azreements Acres W.B. Agreement 67 2231 Purchase 26 1558 Easement 2 51 Conservation Restriction 6 275 Lease 20 1862 8 TOTALS = 121 5977 Terms for all Water Bank Program options, except leases, restrict the use of the area from al/ agricultural purposes. Leases provide for agricultural use as climatic conditions allow, however, no payment is made for the year the agricultural use takes place. If the landowner chooses to sell the area, it will be established as a Wildlife Manage- ment Area open to public use and hunting. The Water Bank Agreement, lease, easement and conservation restriction options do not grant any right of public access to the area, unless the landowner agrees. As you've probably gathered, the Stat6 Water Bank Program is an expensive, bureaucratic process. Unfortu- nately this is what it takes to preserve wetlands ia this day and age. This could change, however. A proposal is cur- rently being considered by the legislature which would streamline most appraisal procedures and shorten the time it takes to pay the landowner. Without a continuing f'mancial commitment to such programs, our wetland heritage ~411 not survive. At the present the funding is on an even keel with drainage requests. %rhea corn and soybeans hit $3.50 and $8.00 re- spectively per bushel again,.., watch out. The demand for drMnage could then easily exceed available water bank funding. If that happens it could mean the "Kiss of Death" to this program. For more information on ~hi~ program you can contact the author at (612) 296-0515 or any of our Regional or Area Hydrologists outstate. Editor's Note: Bruce Gerbig is a Hydrologist SuperMsor in charge of the State Water Bank Program. Bruce has a Masters of Forestry Degree from the University of Minnesota. He has been ~Sth the DNR since 1975. He served three of those years at the New Ulm Regional office.