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 wetlands, streams, and other waters of the United States unless a permit issued by the U.S. Army Corps of Engineers (Corps) .When there is a proposed discharge, all appropriate and practicable steps must first be taken to avoid and minimize impacts to aquatic resources. For unavoidable impacts, compensatory mitigation is required to replace the loss of wetland, stream, and/or other aquatic resource functions. The Corps is responsible for determining the appropriate form and amount of compensatory mitigation required. Methods of providing compensatory mitigation include aquatic resource restoration, establishment, enhancement, and in certain circumstances, preservation.
 
Mitigation is frequently required as a condition for issuing DA Permits and is intended to replace lost natural functions and values. When evaluating compensatory mitigation options, the Corps will consider what would be environmentally preferable. In making this determination, the Corps shall assess the likelihood for ecological success and sustainability, the location of the compensation site relative to the impact site and their significance within the watershed, and the costs of the compensatory mitigation project. Compensatory mitigation requirements shall be commensurate with the amount and type of impact that is associated with a particular DA Permit. Permit applicants are responsible for proposing an appropriate compensatory mitigation option to offset unavoidable impacts. Due to the difficulty of precisely quantifying the functional value of aquatic systems, including wetlands, the Chicago District currently accepts acreage replacement of the impacted system.
 
On April 10, 2008, the U.S. Army Corps of Engineers and U.S. Environmental Protection Agency issued the Final Compensatory Mitigation Rule to clarify how to provide compensatory mitigation for unavoidable impacts to the nation's wetlands and streams. The rule enables the agencies to promote greater consistency, predictability and ecological success of mitigation projects under the Clean Water Act. The new rule improves and consolidates existing regulations and guidance, to establish equivalent standards for all types of mitigation under the Clean Water Act Section 404 regulatory program. The rule does not change when compensatory mitigation is required, but it does change where and how it is required.
 
These equivalent standards take into account the inherent differences among mitigation banks, in-lieu fee programs, and permittee-responsible mitigation, in an effort to maximize the number of ecologically-successful compensatory mitigation projects that project proponents can use to offset their permitted losses of aquatic resources.

Compensatory mitigation is typically accomplished through either Mitigation Banks, In-Lieu Fee Mitigation, or Permittee Responsible Mitigation.  Per the Final Compensatory Mitigation Rule there is a preference to the use of mitigation bank credits when available for the appropriate resource type and within the watershed.  If permitted impacts are not located in the service area of an approved mitigation bank, or the approved mitigation bank does not have the appropriate number and resource type of credits available to offset those impacts, in-lieu fee mitigation, if available, is generally preferable to permittee-responsible mitigation.

A permit applicant may obtain credits from a mitigation bank. A mitigation bank is a wetland, stream or other aquatic resource area that has been restored, established, enhanced, or preserved. This resource area is then set aside to compensate for future impacts to aquatic resources resulting from permitted activities. The value of a bank is determined by quantifying the aquatic resource functions restored, established, enhanced, and/or preserved in terms of "credits." Permittees, upon approval of regulatory agencies, can acquire these credits to meet their requirements for compensatory mitigation.

Mitigation banking involves the restoration, creation, enhancement, and, in exceptional circumstances, preservation of wetlands and/or other aquatic resources expressly for the purpose of providing compensatory mitigation for wetland losses authorized by Corps permits. The newly established wetland acreage (credits) may then be sold to permittees who need to provide compensatory mitigation for unavoidable impacts. (i.e., "debits"). The U.S. Army Corps of Engineers tracks credits through RIBITS - Regional In-Lieu Fee and Banking Information Tracking System.  We also have maps of Mitigation Banks with Available Credit.

The District, in cooperation with the United States Fish and Wildlife Service and the United States Environmental Protection Agency, has developed the Interagency Coordination Agreement on Wetland Mitigation Banking (ICA). The ICA outlines the criteria for establishing and operating wetland mitigation banks within the regulatory boundaries of the Chicago District. It also establishes the procedures for sales from the mitigation bank to those parties needing wetland mitigation as a condition of their Department of the Army permit. This local agreement is consistent with the April 2008 Final Compensatory Mitigation Rule on mitigation banking.

The decision to allow the use of a mitigation bank for compensatory mitigation must comply with the Final Compensatory Mitigation Rule.  Per the Rule there is a preference to use available mitigation credits in a particular service area if there are of the appropriate type to compensate for the impact.

A permit applicant may make a payment to an in-lieu fee program that will conduct wetland, stream or other aquatic resource restoration, creation, enhancement, or preservation activities. In-lieu fee programs are generally administered by government agencies or non-profit organizations that have established an agreement with the regulatory agencies to use in-lieu fee payments collected from permit applicants.  In-Lieu Fee Mitigation programs are currently active for our counties in Indiana, and there are currently none available for our counties in Illinois.  Please visit the Indiana Stream and Wetland Mitigation Program for more information regarding their in-lieu fee program.

Mitigation banks and in-lieu fee mitigation are forms of "third-party" compensation because a third party, the bank or in-lieu fee sponsor assumes responsibility from the permittee for the implementation and success of the compensatory mitigation.

Permittee responsible mitigation is defined as an aquatic resource restoration, establishment, enhancement, and/or preservation activity undertaken by the permittee (or an authorized agent or contractor) to provide compensatory mitigation for which the permittee retains full responsibility. Permittee responsible mitigation may include on-site or offsite mitigation. The proposed compensatory mitigation should utilize a watershed approach and fully consider the ecological needs of the watershed. Where an appropriate watershed or sub-watershed plan is available, mitigation site selection should be based on recommendations in the plan. The applicant shall describe in detail how the mitigation site was chosen and will be developed, based on the specific resource need of the impacted watershed. A good mitigation design selects an appropriate site and takes into consideration all-important multi-disciplinary factors that affect self-sustaining ecological systems, such as wetlands and associated uplands. If the whole landscape design is not integrated with site water management, mitigation efforts may not achieve the performance standards.  Proposed permittee responsible mitigation should be in a written report addressing all of the requirements of the Final Compensatory Mitigation Rule and utilizing the Monitoring and Performance Standards, which outline the criteria for establishing mitigation banks as well as permittee responsible mitigation.