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The DNR continues to move forward with its proposed sponsorship of a statewide in-lieu fee (ILF) mitigation program, the Indiana’s Stream & Wetland Mitigation Program (IN SWMP). In the fall of 2013, the DNR, with assistance from the Indiana Department of Transportation (INDOT) and the Indiana Department of Environmental Management (IDEM), started the approval process with the U.S. Army Corps of Engineers (Corps) and IDEM for establishing the state’s first stream and wetland in-lieu fee compensatory mitigation program.
In June 2014, the DNR submitted a Prospectus to the Corps and the Interagency Review Team (IRT). The Corps had a public notice period soliciting comments on the Prospectus July 16, 2014, through Aug. 18, 2014. During the public notice period, the DNR held a series of public information sessions around the state on Aug. 5-7, during which an overview presentation of the proposed program was given, then followed by a question-and-answer session. Attendees were encouraged to provide comments to the Corps before the comment period closed.
The DNR’s ILF program, when established, will provide stream and wetland mitigation credits that can be used for compensatory mitigation for unavoidable impacts to waters of the United States and isolated wetlands in the State of Indiana. Permits are required by the Corps in accordance with Section 10 of the Rivers and Harbors Act of 1899 (33 USC 403) for work in or affecting traditionally navigable “waters of the United States” and in accordance with Section 404 of the Clean Water Act (CWA) for the discharge of dredged and/or fill material into “waters of the U.S.,” and by IDEM under Section 401 Water Quality Certification of the CWA and Indiana’s Isolated Wetlands law (Indiana Code 13-18-22).
Additionally, the Indiana Natural Resources Commission (NRC) adopted new rules allowing for an in-lieu fee for permits for construction in a floodway, public freshwater lake or navigable waterway issued by the DNR Division of Water under the Flood Control Act, Lakes Preservation Act or Navigable Waterways Act. While this rule was formally adopted by the NRC, it is not yet in effect and must still be reviewed by the Attorney General’s Office and Governor’s Office. The DNR’s Division of Fish & Wildlife is also working on a non-rule policy document that will assist it and the regulated community on how the in-lieu fee option will be carried out.
Currently, these permits require an applicant to restore aquatic resources and habitat either (1) at or near the project site, or (2) using an approved mitigation bank. The DNR’s IN SWMP ILF program will add an additional mitigation option for permit applicants.
What is an in-lieu fee program?
An in-lieu fee program involves the restoration, establishment, enhancement and/or preservation of aquatic resources through funds paid to a government or non-profit natural resources management entity to satisfy compensatory mitigation requirements for permits. An in-lieu fee program sells “advance credits” to permittees by purchasing these credits in-lieu of performing mitigation themselves (i.e., permitee-responsible mitigation), the legal obligation to provide compensatory mitigation is then transferred to the sponsor of the in-lieu fee program (Indiana DNR) upon receipt of associated credit fees.
Fees collected for these credit sales will be deposited in the appropriate accounts owned and managed by the Indiana Natural Resources Foundation, a not-for-profit organization that exists to promote, support, assist, sustain and encourage the charitable, educational and scientific programs, projects and policies of the DNR.
In-lieu fee programs are regulated by the U.S. Army Corp of Engineers under the 2008 Federal Rule (33 CFR Part 332), “Compensatory Mitigation for Losses of Aquatic Resources” (“Mitigation Rule”) as published in the Federal Register by the Corps of Engineers and the U.S. Environmental Protection Agency on April 10, 2008.
Phase I - Draft Prospectus, a voluntary step in the process. - COMPLETED.
Phase II - Prospectus - COMPLETED – June 2014 submission; Corps Public Notice was July 16 – Aug. 18, 2014; DNR Public Meetings held across the state Aug. 5-7, 2014, during Corps public comment period.
The Prospectus describes the overarching framework for how the program will be established, operated and managed, further broken into eight required elements
This phase in the approval process also includes a Corps-sponsored public comment period once the Prospectus has been determined as complete.
Phase III - Draft Instrument - SUBMITTED to the Corps and IRT, Aug. 19, 2015; Corps review period of 90 days. There is no public comment period for the Draft Instrument.
**The Draft Instrument is subject to comments from the Corps and the IRT members, including the draft credit fee schedule. The credit fees are not yet approved and not considered final until the Final Instrument is approved. We anticipate Final Instrument approval sometime in first half of 2016. The Final Instrument will incorporate comments received from the USACE and the IRT on the Draft Instrument.
Phase IV - Final Instrument
Q: What is in-lieu fee mitigation?
A: ILF mitigation involves the restoration, creation, enhancement, or preservation of aquatic resources through funds paid to a governmental or non-profit natural resources management entity to satisfy compensatory mitigation for federal, state, and local permits.
ILF credits can be used for compensatory mitigation only after a permitting/regulatory agency determines that unavoidable wetland impacts will be adequately offset by the ILF credits. If the agencies determine that the ILF credits compensate for the aquatic resource loss/impacts, the permit recipient then purchases credits (i.e., pays a fee) from the sponsor.
The funds from the credit purchase are used by the sponsor to carry out a mitigation project instead of (i.e., in-lieu of) the permittee completing their own mitigation project.
Q: How is in-lieu fee different from other types of mitigation?
A: In-Lieu Fee mitigation: In-lieu fee programs sell advance credits to permit recipients whose obligation to provide compensatory mitigation is then transferred to the sponsor of an approved in-lieu fee program. The sponsor of the ILF program then becomes responsible for the success of mitigation projects. The ILF projects are usually constructed after impacts have occurred and fees have been collected.
Other approaches to provide compensation for wetland impacts that result from development are listed below:
Q: What are the benefits of an in-lieu fee program?
A: ILF programs provide many benefits, such as:
Carl J. WodrichDirector of Ecological Services