The nation's Section 404 permitting program, of the Clean Water Act (CWA), represents one of the longest regulatory histories of designing and implementing credit trading programs to satisfy regulatory requirements. The role and the function of in-lieu fee (ILF) programs in supporting this regulatory structure have undergone a substantial change. For the first time in the history of the Sec. 404 program, 33 CFR Part 332 and 40 CFR Part 230, Subpart J (the "2008 mitigation rule" or "rule"), prioritizes the use of off-site mitigation over on-site-mitigation. Additionally, the rule prioritizes advanced, third-party mitigation; especially as achieved through mitigation banks; over any off-site compensatory mitigation provided by ILF programs (33 CFR 332.3(b)(1)). This new regulatory environment favors the use of commercial mitigation bank credits while acknowledging that the limited permittee demand of off-site mitigation credits, in particular areas, justifies the continuing need for ILF programs (Corps and EPA 2008, p.19606,19611). This research examines how regulatory officials use ILF programs under the 2008 mitigation rule, and, it determines the extent to which ILF programs are capable of fulfilling the role envisioned for them under the 2008 mitigation rule. Simulation results indicate that commercial mitigation banks cannot meet risk adjusted returns under limited credit demand conditions. ILF programs offer some additional financial capacity to fill the void in commercial bank coverage; but, this potential is limited in low demand conditions. Furthermore, empirical case studies of a Virginia and Georgia provide evidence that regulatory officials rely on ILF programs to provide off-site compensatory mitigation almost exclusively in the absence of private credit supply, as intended in the 2008 rule. Evidence in Georgia and Virginia also indicate that, in some situations, ILF programs face difficulties in providing mitigation under the constraints of limited demand and more stringent regulatory requirements. / Master of Science

Central Appalachian headwater streams in coalfield areas are prone to mining disturbances, and compensatory mitigation is required in cases of documented impacts. Stream construction on reclaimed mines is a common mitigation strategy. Streams constructed as compensatory mitigation are meant to restore structural and functional attributes of headwater streams and are often evaluated by measuring structural ecosystem characteristics. However, replacement of stream ecosystem functions is essential for mitigation of mining disturbances from an ecosystem perspective. This research compared selected structural and functional measures in eight constructed streams on mined areas to those of four forested reference streams across two years. Three organic matter functions were evaluated: riparian litterfall input, leaf breakdown, and periphyton accrual. Constructed streams were typically warmer than reference streams and also had elevated specific conductance, elevated oxidized nitrogen concentrations, depressed benthic macroinvertebrate richness, and lower levels of canopy cover. Functionally, litterfall input and total leaf breakdown means for constructed streams were approximately 25% and 60% of reference means, respectively. Leaf breakdown in constructed streams appeared to be inhibited as a result of reduced processing by benthic macroinvertebrates as well as inhibition of microbial and physicochemical pathways. Constructed streams with total breakdown rates most similar to reference-stream levels had the coldest stream temperatures. Areal periphyton biomass, benthic algal standing crop, and senescent autotrophic organic matter in constructed streams were roughly quadruple, double, and quintuple those of reference streams, respectively. Indicator ratios also suggested stream-type differences in periphyton structure. Mean algal accrual was greater in constructed streams than in reference streams during leaf-on seasons. My results suggest that light is likely the primary factor driving accrual rate differences during summer and fall, but that temperature may also be important during fall. Planting a diverse assemblage of native riparian trees and ensuring their successful development can inhibit benthic irradiance and thermal energy inputs while providing similar quantity and quality of OM to constructed streams, thereby fostering replacement of reference-like OM functions in some streams. / Ph. D.