United States

Environmental

Protection Agency

Source: Federal Guidance for the Establishment, Use and Operation of Mitigation Banks. 60 Fed. Reg. 228, 58605-58614. 1995

The American Crocodiles, a Federal Endangered Species,

makes its home in the Everglades Mitigation Bank.

Photo by James Valentine

Source: US Army Corps of Engineers Regulatory Guidance Letter No. 02-2, December 24,

2002

The objective of the Clean Water Act (CWA) is “to restore and maintain the

chemical, physical, and biological integrity of the Nation’s waters.” Toward

achievement of this goal, the CWA prohibits the discharge of dredged or fill

material into waters of the United States unless a permit issued by the Army

Corps of Engineers or approved State under CWA Section 404 authorizes such

a discharge.

When there is a proposed discharge, the impact of the discharge must be

avoided and minimized to the extent practicable. For unavoidable impacts,

compensatory mitigation is required to replace the loss of wetland functions in

the watershed. Compensatory mitigation is defined as, “the restoration, creation,

enhancement, or in exceptional cases preservation of wetlands and/or other aquatic resources for the purpose

of compensating for unavoidable impacts.”

Mitigation Sequencing Guidelines

In 1990, the Environmental Protection Agency (EPA)

and the Department of Army entered into a

Memorandum of Agreement (MOA) to clarify the type

and level of mitigation required under Section 404

regulations. The agencies established a three-part

process, known as mitigation sequencing to help guide

mitigation decisions:

1. Avoid - Adverse impacts are to be avoided and no

discharge shall be permitted if there is a practicable

alternative with less adverse impact.

2. Minimize - If impacts cannot be avoided, appropriate

and practicable steps to minimze adverse impacts must

be taken.

3. Compensate - Appropriate and practicable

compensatory mitigation is required for unavoidable

adverse impacts which remain.

P

roposed projects that will cause adverse impacts to wetlands and

other aquatic resources typically require some type of compensatory

mitigation. The Army Corps of Engineers (or approved state authority)

is responsible for determining the appropriate form and amount of

compensatory mitigation required. Some types of mitigation are wetland

establishment, restoration, enhancement and protection/maintenance.

• Establishment (Creation): The development of a wetland or other

aquatic resource through manipulation of the physical, chemical or

biological characteristics where a wetland did not previously exist.

Successful creation results in a net gain in wetland acres.

• Restoration: Re-establishment or rehabililitation of a wetland or other

aquatic resouce with the goal of returning natural or historic functions

and characteristics to a former or degraded wetland. Restoration may

result in a gain in wetland function and/or wetland acres.

• Enhancement: Activities conducted within existing wetlands that

heighten, intensify, or improve one or more wetland functions.

Enhancement is often undertaken for a specific purpose such as to

improve water quality, flood water rention or wildlife habitat.

Enhancement results in a change in wetland function(s), but does not

result in a gain in wetland acres.

• Protection/Maintenance (Preservation): The protection of ecologically

important wetlands or other aquatic resources into perpetuity through

the implementation of appropriate legal and physical mechanisms (i.e.

conservation easements, title transfers). Preservation may include

protection of upland areas adjacent to wetlands as necessary to ensure

protection and/or enhancement of the aquatic ecosystem. Preservation

does not result in a net gain of wetland acres and should only be used in

exceptional circumstances.

Methods of Compensatory Mitigation:
Mechanisms for Compensatory Mitigation:

Compensatory mitigation for unavoidable wetland impacts

can be located on or adjacent to the development site (onsite mitigation) or when environmentally preferable can

be performed at another location (off-site mitigation).

Mitigation Banking and In-Lieu Fee Programs are

typically off-site mitigation, while project-specific

mitigation can be located on- or off-site.

• Project Specific Mitigation: Restoration, creation,

enhancement and, in exceptional circumstances,

preservation of wetlands undertaken by a permittee

in order to compensate for wetland impacts

resulting from a specific project. The permittee

performs the mitigation after the permit is issued

and is ultimately responsible for implementation

and success of the mitigation.

Federal Wetlands Mitigation Policy Guidance

Available at: www.epa.gov/owow/wetlands/guidance

Memorandum Of Agreement Between The Department of the Army and The Environmental Protection

Agency. 1990. Contains the policy and procedures to be used in determining the type and level of

mitigation necessary to demonstrate compliance with the Section 404(b)(1) guidelines.

Federal Guidance for the Establishment, Use and Operation of Mitigation Banks. Interagency guidance

issued in 1995 to clarify the use of mitigation banks to compensate for authorized impacts to aquatic

resources.

Federal Guidance on the Use of In-Lieu-Fee Arrangements for Compensatory Mitigation under Section 404 of

the Clean Water Act and Section 10 of the Rivers and Harbors Act. Interagency guidance issued in 2000 to

clarify the agencies policy on the manner in which in-lieu-fee mitigation may be used to satisfy

compensatory mitigation requirements.

National Wetlands Mitigation Action Plan. Interagency guidance issued in 2002 to further achievement of

the national goal of achieving no net loss of wetlands. Includes a series of actions to improve the

ecological performance and results of wetlands compensatory mitigation under the Clean Water Act and

related programs.

Wetlands Mitigation Regulatory Guidance Letter (RGL). Guidance to Corps field staff on Compensatory

Mitigation Projects (issued in 2002). This RGL supports the national policy for “no overall net loss” of

wetlands, clarifies mitigation requirements for authorized impacts to aquatic resources and reinforces the

Corps commitment to protect waters of the United States.

Recent Evaluations of Wetlands Compensatory Mitigation

BANKS AND FEES: The Status of Off-Site Wetland Mitigation in the United States. 2002. Environmental

Law Institute, Washington, D.C. Available at www.eli.org

Stakeholder Forum on Federal Wetlands Mitigation. 2001-2003. Environmental Law Institute, Washington,

D.C. Available at www.eli.org

National Academy of Sciences. Compensating for Wetland Losses Under the Clean Water Act. 2001. National

Academy Press, Washington, D.C. Available at www.nap.edu

Wetlands Protection: Assessments Needed to Determine Effectiveness of In-Lieu-Fee Mitigation. 2001.

General Accouting Office Report GAO-01-325. Available at www.gao.gov

EPA-843-F-03-002

• Mitigation Banking: A wetlands mitigation bank is a wetland

area that has been restored, created, enhanced or (in

exceptional circumstances) preserved, which is then set aside

to compensate for future conversions of wetlands for

development activities. The value of a bank is determined by

quantifying the wetland functions restored or created in terms

of “credits.” Permittees, upon approval of regulatory

agencies, can acquire these credits to meet their requirements

for compensatory mitigation. The bank sponsor is ultimately

responsible for success of the project.

• In-Lieu Fee Mitigation: Mitigation that occurs where a

permittee provides funds to an in-lieu-fee sponsor, generally a

public agency or non-profit organization, instead of

completing project-specific mitigation or purchasing credits

from a mitigation bank. The Fee Adminstrator is responsible

for the the success of the mitigation.