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<classification authority="sudocs">GA 1.13:GAO-01-325</classification>
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<titleInfo>
 <title>Wetlands Protection: Assessments Needed to Determine Effectiveness of In-Lieu-Fee Mitigation</title>
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<abstract>Of the estimated 220 million acres of marshes, bogs, swamps, and
other wetlands in the United States during the colonial times,	 
more than half have disappeared and others have become degraded. 
This decrease is due, primarily, to agricultural activities and  
development. Developers whose projects may harm wetlands must,	 
according to environmental regulations, first avoid and then	 
minimize adverse impacts to wetlands to the extent practicable.  
If harmful impacts are unavoidable, the developer must compensate
by restoring a former wetland, enhancing a degraded wetland,	 
creating a new wetland, or preserving an existing wetland. Such  
mitigation efforts can occur under the following three types of  
arrangements: (1) mitigation banks, under which for-profit	 
companies restore wetlands under Army Corps of Engineers	 
agreements and then sell credits for these wetlands to		 
developers; (2) in-lieu-fee arrangements under which developers  
pay public or non-profit organizations fees for establishing	 
wetland areas, usually under formal Corps agreements; and (3) ad 
hoc arrangements, under which developers pay individuals or	 
companies to perform the mitigation. This report, determines the 
extent to which (1) the in-lieu-fee option has been used to	 
mitigate adverse impacts to wetlands, (2) the in-lieu-fee option 
has achieved its intended purpose of mitigating such impacts, and
(3) in-lieu-fee organizations compete with mitigation banks for  
developers&apos; mitigation business. This report also discusses the  
use of ad hoc arrangements as a mitigation option. Most of the	 
arrangements were designed to use fees received from developers  
to restore, enhance, or preserve wetlands, with a few		 
arrangements designed to allow wetlands to be created. During	 
fiscal years 1998 through 2000, developers used the in-lieu-fee  
option to fulfill mitigation requirements for more than 580 acres
of adversely affected wetlands, and paid more than $39.5 million 
to in-lieu-fee organizations. The extent to which the in-lieu-fee
option has achieved its purpose of mitigating adverse impacts to 
wetlands is uncertain. Although Corps officials in 11 of the 17  
districts with the in-lieu-fee option said that the number of	 
wetland acres restored, enhanced, created, or preserved by	 
in-lieu-fee organizations equaled or exceeded the number of	 
wetland acres adversely affected, data submitted by more than	 
half of those districts did not support these claims. Officials  
in 9 of the 17 districts said that functions and economic values 
lost from the adversely affected wetlands were replaced at the	 
same level or better through in-lieu-fee mitigation, but	 
officials in more than half of those districts also acknowledged 
that they have not tried to assess whether mitigation efforts	 
have been ecologically successful. As a result, the Corps cannot 
be certain that in-lieu-fee mitigation has been effective. Corps 
district officials in 9 of the 17 districts with the in-lieu-fee 
option said that organization and mitigation banks were competing
with each other by providing similar mitigation services in the  
same geographic area. No competition existed in 5 of the 17	 
districts because either no mitigation banks were available, or  
in-lieu-fee organizations and mitigation banks provided different
services, or served different geographic areas. GAO found that	 
hoc arrangements typically were for one-time projects without a  
formal agreement. Oversight of mitigation affairs was lacking in 
almost half of the districts using such arrangements. Corps	 
districts disagreed on whether responsibility for the ecological 
success of ad hoc mitigation rests with the ad hoc fund recipient
or the developer.</abstract>
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<subject>
 <topic>Environmental monitoring</topic>
 <topic>Environmental policies</topic>
 <topic>Water resources conservation</topic>
 <topic>Clean Water Action Plan</topic>
</subject>
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  <title>United States Code</title>
  <partNumber>Title 33 Section 1344</partNumber>
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