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Overview of in-lieu fee mitigation

Mitigation project at Cold Creek Natural Area

When permitted projects will create unavoidable impacts to the environment, project sponsors must offset, or "mitigate" the environmental impacts associated with the project. The mitigation process includes avoiding and minimizing impacts as much as possible, and then making up for any unavoidable impacts through implementation of a mitigation project. Mitigation projects can occur on-site (at or near the place where the impact project occurs) or off-site. King County Code prioritizes on-site mitigation when it is ecologically feasible and likely to succeed long-term. However, if mitigation on or adjacent to the development site is impractical or won’t result in meaningful ecological benefit, off-site mitigation becomes an option under King County code and state and federal rules. Off-site mitigation options may include use of a mitigation bank, "permittee-responsible" mitigation, or in-lieu fee mitigation through the Mitigation Reserves Program.

In a Federal Rule PDF (567 KB) published in April 2008, The U.S. Army Corps of Engineers (the Corps) and the U.S. Environmental Protection Agency (EPA) define an in-lieu fee program as:

“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... 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.”

Basics of mitigation reserves program

Here is a step-by-step example of the process for mitigating unavoidable permitted impacts to wetlands, rivers, streams, and buffers through the MRP*:

  1. Applicants work with regulatory agencies and tribes to identify ways a proposed project can avoid and minimize environmental impacts.
  2. Regulatory agencies determine preferred options for mitigating unavoidable impacts. The Federal Rule establishes a preference hierarchy for the different types of compensatory mitigation available to an applicant. The order of preference outlined in the Federal Rule is as follows:
    • Mitigation Banks
    • In-lieu fee (ILF) Programs
    • Permittee-responsible mitigation under a watershed approach
    • Permittee-responsible mitigation that is on-site and in-kind
    • Permittee-responsible mitigation that is off-site and/or out-of-kind.
  3. If the applicant chooses to use the KC MRP (and the regulatory agencies approve), the ecological impacts translated into a number of debits associated with the impact.
  4. The applicant buys credits from the KC MRP to offset the debits associated with the impact. By purchasing credits, the applicant satisfies their compensatory mitigation requirements and has no further involvement in the mitigation implementation.
  5. The KC MRP chooses a mitigation site from a predefined Roster. Roster sites may be publicly or privately owned, and will be chosen using science-based watershed priorities.
  6. The KC MRP plans, implements, monitors, and maintains projects at chosen sites that will achieve ecological “lift.” On balance, completed projects should result in a number of credits equal to or greater than the number of debits associated with the original impacts (note: the applicant does not have any responsibility for the success of implemented mitigation projects).

*At multiple points in the process, an Interagency Review Team will review and approve project proposals. The IRT is co-chaired by the Corps and the Washington Department of Ecology (Ecology); other members will include representatives from state and federal regulatory agencies, tribes, and local governments.


For more information about King County’s Mitigation Reserves Program, please contact Megan Webb, Program Manager (in the Water & Land Resources Division’s Rural and Regional Services Section).