A fundamental precept of the Regulatory Program is the Department of the Army’s mitigation policy (33 CFR Part 320.4 (r)), which applies to all Regulatory Program authorizations, including general permits. When the USACE reviews a project that would require Department of the Army authorization, its evaluation typically includes a determination of whether the applicant has taken sufficient measures to mitigate the project’s likely adverse impact on the aquatic ecosystem.

Memorandum of Agreement (MOA) signed February 6, 1990 between the USACE and the EPA, mitigation was defined as a sequential process of avoiding, minimizing, and compensating for adverse impacts to the aquatic ecosystem.

Avoid: Take all appropriate and practicable measures to avoid those adverse impacts to the aquatic
ecosystem that are not necessary.
Minimize: Take all appropriate and practicable measures to minimize those adverse impacts to the
aquatic ecosystem that cannot reasonably be avoided.
Compensate: Implement appropriate and practicable measures to compensate for adverse project impacts to the aquatic ecosystem that cannot reasonably be  avoided or further minimized. This step is also referred to as compensatory mitigation.  The purpose of compensatory mitigation is to replace those aquatic ecosystem functions that would be lost or impaired as a result of a USACE-authorized activity.

The District Engineer will normally require the implementation of all appropriate and practicable compensation as a condition of the Department of the Army authorization.  Compensatory mitigation is required at minimum 1:1 ratio (acres mitigated : acres impacted) for all wetland impacts requiring a preconstruction notification for a nationwide permit unless it has been waived (determined on a case-by-case basis).

Regulatory Guidance Letter 02-2 applies to all compensatory mitigation proposals associated with permit applications submitted for approval after December 24, 2002.  USACE Districts will use watershed and ecosystem approaches when determining compensatory mitigation requirements; consider the resource needs of the watersheds where the impacts will occur; and also consider the resource needs of neighboring watersheds.  Mitigation and the Section 404 Regulatory Program (Draft - dated May 28, 2002) is a paper developed by the Fort Worth District that provides a description of the sequential process of mitigation, definitions of types of mitigation, mitigation options, and a checklist for the development of a mitigation plan.

The USACE and EPA revised the compensatory mitigation regulations in April 10, 2008, governing compensatory mitigation for losses of aquatic reosurces authorized by permits issued by the Department of Army (33 CFR Parts 325 and 332 and 40 CFR Part 230). The "compensaotry mitigation regulations" are intended to establish performance standards and criteria for compensatory mitigation. The regulations include a watershed approach to improve water quality and success of compensatory mitigation projects replacing losses of aquatic resource functions, services, and values resulting from activities authorized by Department of Army permits. 

Mitigation banking is the restoration, enhancement, creation, and, in exceptional circumstances, preservation undertaken to compensate in advance for adverse impacts to the aquatic ecosystem.  Mitigation banking may be appropriate when compensatory mitigation cannot be practicably achieved or would not be as environmentally beneficial at the impact site or a nearby site.  The USACE, EPA, National Resources Conservation Service, United States Fish and Wildlife Service, and National Marine Fisheries Service Federal Mitigation Banking Final Policy (Federal Register: November 28, 1995 (Volume 60, Number 228)) guidance regarding the establishment, use, and operation of mitigation banks for the purpose of providing compensation for adverse impacts to wetlands and other aquatic resources is provided to clarify the manner in which mitigation banks may be used to satisfy mitigation requirements of the CWA Section 404 permit program and the wetland conservation provisions of the Food Security Act (FSA) (i.e., ``Swampbuster'' provisions).  Recognizing the potential benefits mitigation banking offers for streamlining the permit evaluation process and providing more effective mitigation for authorized impacts to wetlands, the agencies encourage the establishment and appropriate use of mitigation banks in the Section 404 and "Swampbuster" programs.

Mitigation Banking in the Fort Worth District (dated December 23, 2008) describes the current status of mitigation banking in the Fort Worth District and other USACE districts in Texas. On June 16, 2011, Fort Worth Mitigation Banking Guidelines were issued in a Public Notice to better help with the process of establishing new mitigation bank proposals as well as mitigation bank expansions. There are a number of mitigation banks operating in the Fort Worth District (click here for a map of bank locations).