U.S. Army Corps Public Notice (Corps) and related Virginia Department of Environmental Quality (DEQ) In-Lieu Fee (ILF) program Prospectus Documentation (June 2025) were careful to announce that a proposed new State-run, State-financed In-Lieu Fee program would restrict use and acquisition of 'advance' mitigation credits. And, while this is what DEQ represented last year, the DEQ and Corps on March 3, 2026 gifted the new DEQ ILF an estimated $140 Million - $300 Million in advance mitigation credits. These unearned environmental credits designed to enable unmitigated development impacts to go forward across Virginia while creating immediate revenue for the Department.
The initial credits - hundreds of thousands of unearned environmental offsets - are for sale by DEQ to private and public projects with impacts planned to Virginia’s wetlands and waterways. Importantly, these projects are also regulated by permits from the agency.
According to information received under Freedom of Information Act (FOIA), DEQ's leadership says they intend to take 'unlimited' numbers of advance credits for at least the next two years. This would create immediate, widespread, and unmitigated environmental impacts to waters across the state. Read unredacted email from DEQ Read 'Thoughts on ILF' - unredacted from DEQ
It’s also noteworthy that the DEQ ILF plans to potentially undertake Permittee-Responsible Mitigation (PRM) projects to satisfy the needs of large impacts (when/if actual replacement for the damaged water resources is undertaken sometime in the future). This and other planned activities appear in direct conflict to the federal 2008 Final Mitigation Rule. The Nature Conservancy (TNC), National Environmental Banking Association (NEBA), former Corps Mitigation officials and others, in voicing opposition to the State, highlighted that the program does not conform to the Rule.
Read TNC Opposition Letter to DEQ
Read former Corps mitigation official's Opposition Letter to DEQ
Watch this space for additional public document releases on this latest state-sponsored in-lieu fee program. More information on ILF's and how they consistently fail the environment can be found online www.ILF-Portal.org
Mitigation banking is often discussed in terms of credits—wetland credits, stream credits, or other units used to compensate for unavoidable environmental impacts. But the value of a mitigation bank extends far beyond the regulatory credit itself. Well-designed mitigation banks can provide a broad range of ecosystem services that benefit watersheds, wildlife, communities, and taxpayers.Cleaner Water •
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