Section 404 of the Clean Water Act (CWA)

Compensatory mitigation means the restoration (re-establishment or rehabilitation), establishment (creation), enhancement, and/or in certain circumstances preservation of wetlands, streams and other aquatic resources for the purposes of offsetting unavoidable adverse impacts which remain after all appropriate and practicable avoidance and minimization has been achieved.

Under the regulations, there are three mechanisms for providing compensatory mitigation (listed in order of preference as established by the regulations): mitigation banks, in-lieu fee programs, and permittee-responsible mitigation.

Mitigation Banking

Compensatory mitigation is an important part of a complex regulatory framework that includes Section 404 of the Clean Water  Act, Section 404(b)(1) guidelines, the 401 Water Certification Program, the River and Harbor Act of 1899, and other federal laws including the Endangered Species Act.  

• “In-lieu-fee” mitigation occurs in circumstances where a permittee provides funds to an in-lieu-fee sponsor instead of either completing project-specific mitigation or purchasing credits from a mitigation bank approved under the Banking Guidance. For more information, click here.

• Stream mitigation refers to the restoration, enhancement, or, for streams of national or state significance because of the resources they support, preservation of streams and their associated floodplains for the purpose of compensating for unavoidable adverse impacts which remain after all appropriate and practicable avoidance and minimization has been achieved. A large portion of the permits issued under the Section 404 program are for impacts to rivers and streams. Compensatory stream mitigation may be required for impacts to perennial and intermittent streams and should be designed to restore, enhance, and maintain stream uses that are adversely impacted by authorized activities.