In-Lieu Fee Program


In-Lieu
Fee Program

MARS’ Statewide In-Lieu Fee Program provides compensatory mitigation for unavoidable impacts to Montana wetlands and streams and other aquatic habitats. Collection of mitigation fees is an innovative approach to fund and implement restoration and protection work in concert with more traditional conservation and restoration funding.


The Clean Water Act and the Rivers and Harbors Act require that any activity involving discharges of dredged or fill material into waters of the United States or into navigable waters must compensate for the damage or loss of aquatic resources. Entities or individuals planning such activities must apply for permits through the Army Corps of Engineers. Once authorized, the permittee is responsible for providing compensatory mitigation in the form of restoration, enhancement, establishment or preservation of wetlands or streams to offset losses. The permittee has three options for providing mitigation:

  • Permittee-responsible– The permittee retains the responsibility for performing the necessary mitigation and insuring its success. This is the most traditional form of compensatory mitigation, and is typically completed at the same site where the impact occurred.
  • Mitigation banking– The permittee can pay a third party to assume their mitigation responsibility. Mitigation banks are commercial, for-profit businesses with projects completed at a single location through initial investment and then sold to permittees to fulfill their mitigation requirement.
  • In-Lieu Fee– This method, like mitigation banking, is a form of third party, offsite compensatory mitigation. Generally, In-Lieu Fee programs are administered by government agencies or non-profit organizations. Projects are selected based on watershed priorities and funded by fees collected from the permittees.

MARS is the certified sponsor of the Montana Statewide In-Lieu Fee Program (ILF). MARS works with closely with the Army Corps of Engineers and an Interagency Review Team (IRT) to screen, review and monitor ILF projects. As the ILF program sponsor, MARS accepts all mitigation responsibility on behalf of the permittee. The objectives of the ILF program as outlined in our Instrument are:

  • Provide an in-lieu fee alternative to mitigation banks and permittee-responsible compensatory mitigation
  • Consolidate mitigation for impacts from smaller projects within a watershed into larger projects with greater ecological value
  • Provide compensatory mitigation in a timely and effective manner to minimize temporal loss of ecological functions and services
  • Use a watershed approach to identify the most appropriate off-site mitigation options with potentially greater ecological value than on-site options
  • Operate in a financially self-sustaining manner by collecting sufficient mitigation fees to insure project success
  • Provide public benefit by applying mitigation resources toward improvement of ecologically impaired aquatic resources that have important ecological value to the watershed

MARS must base its mitigation fees for ILF projects on the actual costs of restoring, enhancing, and protecting streams and wetlands including sufficient funds to monitor, manage, and protect project sites in perpetuity to ensure lost habitat functions from permitted projects are restored and preserved. Fees fund planning, design and construction, long-term monitoring, and site protection. A permittee’s purchase of mitigation credits from MARS permanently and legally transfers mitigation responsibilities to MARS. MARS is committed to implementing restoration to mitigate impacts within three growing seasons of the credit sale.

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Interagency Review Team

  • Army Corps of Engineers
  • U.S. Environmental Protection Agency
  • U.S. Fish and Wildlife Service
  • Montana Fish Wildlife & Parks
  • Montana Dept. of Environmental Quality

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