In July 2000, the Kentucky Legislature passed KRS 150.255 which established The Kentucky Wetland and Stream Mitigation Fund.  The KDFWR Stream and Wetland Restoration Program manages this fund to provide a consistent and successful approach to fulfill compensatory mitigation requirements associated with Section 404 and 401 requirements of the US Army Corps of Engineers and the Kentucky Division of Water.   

A US Army Corps of Engineers Clean Water Act 404 Permit and KY Division of Water 401 Water Quality Certification are required for activities resulting in the permanent loss of streams or wetlands.    Projects typically involved in this process include highway construction, mining, development, or other construction activities that take place in or near streams or wetlands.  The guidelines for mitigation direct projects to include avoidance and minimization of impacts.  Additionally, the Section 404 (b)(1) guidelines specify a clear sequence of priorities for mitigation with the preference for mitigation to be located near the impact site(s).  The intent is to maintain the physical, chemical, and biological integrity of aquatic resources within the same watershed or regional area as the impacts. 

A 404 Permit applicant may consider a range of options to mitigate impacts.  An applicant may propose to conduct the mitigation with the project either on-site or off-site.  An applicant might also consider using a private mitigation bank if one is available.  Another option for applicants is to pay a fee to another entity that is approved by the Corps of Engineers to conduct the mitigation in-lieu of doing the mitigation themselves.  This method of mitigation is termed “in-lieu fee mitigation”.  The Kentucky Wetland and Stream Mitigation Fund is funded through in-lieu fee mitigation.  The monies in the fund are used to implement projects that improve degraded streams and wetlands throughout the Commonwealth with the majority of projects focused on stream restoration and enhancement on private lands.  Thus, the success of the program is largely dependent on cooperation and development of partnerships with private landowners.

There are three in-lieu fee recipients approved by the Corps of Engineers in Kentucky that have entered into agreements with the Corps to accept in-lieu fee payments.  These recipients are the Metropolitan Sewer District – Jefferson County, Northern Kentucky University servicing the northern Kentucky region, and KDFWR for the remainder of the state.  The agreements between the recipient and the Corps of Engineers serve to ensure that mitigation is completed, is sufficient to compensate for losses, and adheres to applicable guidelines.

In addition to the in-lieu fee agreement, KDFWR entered into a second agreement that established an oversight board of resource and regulatory agencies referred to as the Mitigation Review Team (MRT). The MRT is composed of the US Corps of Engineers, US Environmental Protection Agency, Kentucky Division of Water, US Fish & Wildlife Service, and KDFWR.   The function of the MRT is to define conditions under which in-lieu-fees may be used, to review and approve individual mitigation projects, and to provide annual reviews of the completed and on-going mitigation projects.   KDFWR abstains from voting on individual projects under their program and only participates in programmatic activities of the MRT.

The MRT requires that all KFDWR in-lieu fee projects be permanently protected through easements or ownership.  This involves identifying landowners willing to donate a Conservation Easement or purchase of land by a resource agency, institution, or non-profit organization.  Conservation Easement boundaries are typically up to a 50 ft. corridor on either side of the stream bank.  Projects at least 1,000 feet in length are preferred to achieve an economy of scale with stream construction costs. 

KDFWR Stream and Wetland Restoration In-Lieu Fee Program Contacts

If you have questions or comments regarding the Program, please contact one of us as listed below.  If you are interested in the Program and have a potential site for a project, please fill out a Site Proposal Form (PDF Format or HTML Format) and mail or e-mail it to one of the below contacts.

Joseph Zimmerman
#1 Sportsman’s Lane
Frankfort, KY  40601
Phone – 502/564-7109 ext. 4453
joseph.zimmerman@ky.gov

Nick Ozburn
#1 Sportsman's Lane
Frankfort, KY  40601
Phone - 502/564-7109 ext. 4547
nick.ozburn@ky.gov

Andy Mowrey
#1 Sportsman's Lane
Frankfort, KY  40601
Phone - 502/564-7109 ext. 4451
andy.mowrey@ky.gov

Other Sources of Information

US Corps of Engineers – KY in lieu fees Q’s and A’s
US Corps of Engineers – Mitigation
US Corps of Engineers – Q’s and A’s National Wetlands Mitigation Action Plan
KY Division of Water – Wetland Guide
KY Division of Water – Related Links