In-Lieu Fee Programs

In 2008, EPA and the U.S. Army Corps of Engineers (the Corps) issued revised regulations governing compensatory mitigation for authorized impacts to wetlands, streams, and other waters of the U.S. under Section 404 of the Clean Water Act commonly referred to as the Final Mitigation Rule. These regulations are designed to improve the effectiveness of compensatory mitigation to replace lost aquatic resource functions and area, expand public participation in compensatory mitigation decision making, and increase the efficiency and predictability of the mitigation project review process.

In-lieu fee (ILF) program means a program involving the restoration, establishment, enhancement, and/or preservation of aquatic resources through funds paid to a governmental or non-profit natural resources management entity to satisfy compensatory mitigation requirements for Department of the Army permits. Similar to a mitigation bank, an in-lieu fee program sells compensatory mitigation credits to permittees whose obligation to provide compensatory mitigation is then transferred to the in-lieu program sponsor. However, the rules governing the operation and use of in-lieu fee programs are somewhat different from the rules governing operation and use of mitigation banks. The operation and use of an in-lieu fee program are governed by an in-lieu fee program instrument. According to the 2008 Rule, an in-lieu fee program instrument is “the legal document for the establishment, operation, and use of an in-lieu fee program.”

Useful Links and Publications:

Federal Register Notice Compensatory Mitigation for Losses of Aquatic Resources; Final Rule

In-Lieu Fee Mitigation: Model Instrument Language and Resources (Environmental Law Institute, 2009)

Fitting Together the Puzzle Pieces: Developing a Sustainable In-Lieu Fee Program for Wetland Mitigation (University of North Caroline Environmental Finance Center, 2015)

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

U.S. Army Corps of Engineers webpage on ILF Programs

Mitigation Rule Familiarization workshops: Between August 2008 and January 2009, EPA and the Corps conducted familiarization workshops on the new rule in Atlanta, GA; Denver, CO; Seattle, WA; Baltimore, MD; Oakland, CA; and Dallas, TX. PDFs of the presentations are available on this EPA website.

RIBITS (Regulatory In-lieu fee and Bank Information Tracking System) was developed by the Corps with support from the EPA to provide better information on mitigation banking and in-lieu fee programs across the country. RIBITS allows users to access information on the types and numbers of mitigation bank and in-lieu fee program sites, associated documents, mitigation credit availability, service areas, as well information on national and local policies and procedures that affect mitigation bank and in-lieu fee program development and operation.

In-Lieu Fee Programs Approved under the 2008 Mitigation Rule 

ILF Instrument Development and Execution: The North Carolina Experience (Sept. 2010)

State of Oregon In-Lieu Fee Program—Challenges and Successes under the New Rule (2009)

CA Department of Fish and Game: Land Management Endowment Program and Approach Overview (2010)

For more information on compensatory mitigation general, please go to ASWM’s Mitigation webpage by clicking here.