The Department may accept monetary compensation if it determines that mitigation for nontidal wetland losses is not a feasible alternative. Monetary compensation may not substitute for the requirement to avoid or minimize nontidal wetland losses. When a permittee or person conducting an agricultural activity maintains that mitigation is not a feasible alternative based on the requirements of §C of this regulation, the permittee or person conducting an agricultural activity shall propose that the Department accept monetary compensation. A proposal for acceptance of monetary compensation shall be submitted as a part of Phase I of a mitigation plan or as part of the mitigation component of the soil conservation and water quality plan submitted to the Department for review. Monetary compensation may be accepted under one or more of the following circumstances: The size of the nontidal wetland loss is less than 1 acre. In-kind mitigation of nontidal wetlands to be lost is technically infeasible. An acceptable mitigation site cannot be located within the areas identified in Regulation .03H of this chapter, as documented by submission of: A map and description of sites rejected. A justification of why each site was unsuitable for mitigation. Other information required by the Department. The Department recommends the use of the compensation fund. Monetary compensation proposals may be rejected if the Department determines that: Mitigation requirements can be fulfilled on-site; or Conditions in §C of this regulation are not fulfilled. The Department shall render decisions on proposals to accept monetary compensation based on §B of this regulation as part of a final permit or mitigation component decision. The Nontidal Wetland Compensation Fund shall include: Monetary compensation paid by a permittee or person conducting an agricultural activity instead of engaging in the creation, restoration, or enhancement of nontidal wetlands; A civil or criminal penalty imposed by a court pursuant to COMAR 26.23.01.05 or 26.23.02.09; and Other monetary contributions to the Nontidal Wetland Compensation Fund from other sources. Funds in the Nontidal Wetland Compensation Fund may be used only for the creation, restoration, or enhancement of nontidal wetlands. This includes: Development of mitigation plans; Location and acquisition of land; Acquisition of easements; Design, construction, planting, monitoring, and maintenance of mitigation sites; and Purchase of credits in mitigation banks. The Department may determine monetary compensation fees based on costs anticipated to construct mitigation projects, including location and acquisition of land, design, construction, maintenance, and monitoring costs. The Department may use the following to determine these costs: Land acquisition costs derived from fair market value of the converted nontidal wetland by the permittee or person conducting an agricultural activity, based on at least two independent appraisals or other evidence of land value which may be acceptable to the Department; Design costs derived from a percentage of construction costs or actual costs for projects similar in size and complexity completed by a permittee, person conducting an agricultural activity, or the Department; Construction costs derived on a case-by-case basis, taking into account the following factors: Nontidal wetland type, size, and functions; Amount of planting, grading, and other site preparations; and Costs of similar mitigation projects completed by permittees, persons conducting agricultural activities, or the Department; and Monitoring and maintenance costs derived from a percentage of construction costs or actual costs for projects similar in size and complexity completed by a permittee, person conducting an agricultural activity, or the Department. Funds credited and any interest accrued to the Nontidal Wetland Compensation Fund shall remain available until expended, and may not revert to the general fund. The Department shall prepare an annual report on the Nontidal Wetland Compensation Fund that includes an accounting of: Financial receipts and expenditures to and from the Fund; and Mitigation projects completed and in progress. The Department shall provide a copy of the annual report to the General Assembly as provided under State Government Article, §2-1312, Annotated Code of Maryland.