WHAT IS BIOBANKING?
Biobanking is a NSW State Government initiative to preserve endangered flora and fauna. The scheme is administered by the Office of Environment and Heritage.
The scheme is designed to offset any endangered species which are to be impacted by development - e.g. roadworks, railways, housing developments. It provides an opportunity for landholders to utilise the value of endangered species in heavily vegetated areas of land which are unsuitable for farming or grazing.
Any development which involves the destruction of threatened flora or habitats is assessed by its "credit" value and these credits are offset by the purchase of the same credit species protected by a registered Biobank. Different flora and fauna attract different credit values.
WHAT IS THE PROCESS?
To establish a Biobank there are various steps which need to be undertaken:-
a. An initial assessment to confirm that the subject flora/fauna is appropriate for Biobanking;
b. A preliminary site assessment to give a guide to the number of credits which could be generated on the site.
This preliminary assessment can cost up to $5,000.00;
c. Lodgement of an Expression of Interest based on the preliminary assessment for potential purchasers to access;
d. Once a purchaser does make a firm offer a full assessment is undertaken.
This full assessment will cost $35,000.00 to $40,000.00.
e. A Biobanking Agreement is prepared by the OEH and contracts for the sale and transfer of the credits follow.
f. The Biobanking Agreement requires constant management of the Biobank and Annual reporting and review.
HOW ARE YOU PAID?
The Biobanking Agreement includes a $ value for each credit -
e.g. 30 credits generated on the Biobank @$10,000.00 per credit = $300,000.00.
An assessment is made based on the condition of the Biobank and a proportion of the $300,000.00 is put aside in what is called the Part A funds. Part A funds are held in trust by the OEH in perpetuity and annual payments are made to the landowner from that fund for the management of the Biobank. The Part A Fund must be filled to 80% before any annual payment is made to the landowner.
The Part B funds assessed are the funds calculated to be "left over" (capital proceeds) after the Part A Fund is filled and is payable directly to the landowner on settlement of any sale.
Example: 30 credits generated sold at $10,000.00
Biobank in good condition: Part A Fund $150,000.00
Balance to landowner: Part B $150,000.00
Note: Part B is Capital Gains taxed from the date of the registration of the Biobank.