Background

Wetlands protect and improve water quality, provide habitat for fish and wildlife, reduce damage caused by storm surges and flooding, and recharge underground sources of drinking water. Given the important role wetlands play in the environment, strict regulations are in place to ensure their protection.

Any person, business, or agency proposing to impact existing wetlands must first make every attempt to avoid and minimize the impact. For the impacts that are unavoidable, the replacement of any loss is required through compensatory wetland mitigation overseen by the U.S. Army Corps of Engineers.

What Is Compensatory Wetland Mitigation?

Unavoidable impacts to wetland areas are compensated for through the restoration and protection of another wetland area – referred to as a wetland mitigation bank. This is part of a set of standards implemented by the U.S. Environmental Protection Agency (EPA) and the Corps of Engineers to promote "no net loss" of wetlands.

What Is a Wetland Mitigation Bank?

A wetland mitigation bank is a wetland site that has been restored and protected by formal agreement between the Corps of Engineers and the wetland mitigation bank sponsor. This agreement includes construction and monitoring standards to ensure quality and performance of the wetland mitigation bank site. A wetland mitigation bank sponsor may be a government agency, non-profit organization, or corporation. The Corps, in cooperation with other Federal, state, or local agencies, determines the amount of environmental credits a wetland mitigation bank can provide. Mitigation credits are then used to offset environmental impacts from projects permitted by the Corps under Section 404 of the Clean Water Act.

The Wetland Mitigation Process

Any entity proposing a project that impacts an existing wetland must be permitted to do so by the Corps of Engineers based on regulations under the Clean Water Act, which may require compensatory wetland mitigation. One method to satisfy this requirement is to purchase environmental credits produced by a wetland mitigation bank. The Corps determines the amount of credits an applicant must obtain, which is stated in the conditions of the permit. Other methods to satisfy this requirement are in-lieu fee mitigation or permittee-responsible mitigation. These methods may be used when mitigation banks are not available.