United States Department of the Interior

Washington, D.C. 20240

                                                                                             January 3, 2001
In Reply Refer To:


Regional Directors, Regions 1, 2, 3, 4, 5, 6, and 7




Director                /s/ Marshall P. Jones




Interagency Federal  Guidance Concerning the Use of In-Lieu-Fee Mitigation Agreements Under Section 404 of the Clean Water Act

Attached is a copy of the Federal Register notice establishing national guidelines for the use and
operation of in-lieu-fee mitigation arrangements under the Corps of Engineers wetlands regulatory

The purpose of the guidance is to encourage consistency in the establishment and application of
in-lieu-fee mitigation systems across the nation, and to provide guidelines concerning the
appropriate use of in-lieu-fee to satisfy compensatory mitigation needs.  The guidance expands on
the discussion of in-lieu-fee mitigation arrangements found in the November 25, 1995, Federal
mitigation banking guidance.  Major features of the guidance include the establishment of an
interagency review team for all proposed in-lieu-fee agreements, and strong support for the
concept of mitigation sequencing, which requires that all practicable steps must be taken to avoid
and minimize wetland losses before compensatory mitigation is considered.

If you have any questions concerning this guidance, or need additional information, please contact
Dr. Benjamin N. Tuggle, Chief, Division of Federal Program Activities, at 703/358-2161.


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