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Indiana Department of Natural Resources

Land Acquisition  > Stream and Wetland Mitigation Program Indiana Stream and Wetland Mitigation Program

The Department is excited to announce its proposed sponsorship of a statewide in-lieu fee (ILF) mitigation program, Indiana’s Stream & Wetland Mitigation Program (IN SWMP). In the fall of 2013, the DNR, with assistance from the Indiana Department of Transportation and the Indiana Department of Environmental Management, initiated the approval process with the U.S. Army Corps of Engineers (Corps) and the Indiana Department of Environmental Management (IDEM) for establishing the state’s first stream and wetland in-lieu fee compensatory mitigation program. 

The Department’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 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 Commission, it is not yet in effect and must still be reviewed by the Attorney General’s Office and Governor’s Office. 

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 whose legal obligation to provide compensatory mitigation is then transferred to the sponsor of the in-lieu fee program upon receipt of an associated credit fee. 

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 which exists to promote, support, assist, sustain and encourage the charitable, educational and scientific programs, projects and policies of the IDNR. 

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.

Approval process for creating an in-lieu fee program:

Phase I - Draft Prospectus, a voluntary step in the process. - COMPLETED.

Phase II - Prospectus - OUT FOR PUBLIC COMMENT UNTIL AUG 18th 

  1. The Prospectus describes the overarching framework for how the program will be established, operated and managed further broken into eight required elements.
  2. This phase in the approval process also includes a U.S. Army Corps of Engineers sponsored public comment period once the Prospectus has been determined as complete.

Phase III -  Draft Instrument

  1. The Draft Instrument builds upon the elements of the Prospectus and calls for additional elements such as how many Advanced Credits the program will seek to sell along with how the Credit Fee will be calculated.
  2. The Draft Instrument also incorporates all the comments previously submitted under Phase II.

Phase IV - Final Instrument

  1. The Final Instrument firms up any loose programmatic ends and once completed enables the program sponsor to begin selling Advanced Credits and operating the program.

In-Lieu Fee Frequently Asked Questions:

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 implement 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:

  • “Permittee-responsible” mitigation: Generally, the wetlands are built after the permit is issued and the adverse impact occurs. Mitigation can occur on or off site. In these situations the permit recipient retains responsibility for the success of the mitigation.
  • Wetland mitigation banking: Wetland areas are established before unavoidable permitted losses occur. These are typically used to offset unknown wetland losses associated with several permits, rather than a single project. Bank credits can be sold to permit recipients to meet permit requirements. Like an in-lieu fee program, the responsibility for the success of the mitigation transfers to the bank sponsor when credits are purchased.

Q: What are the benefits of an in-lieu fee program?
A: ILF programs provide many benefits, such as:

  • Project sites can be selected based on local watershed needs and local watershed plans.
  • Flexibility to combine mitigation needs from small project impacts into larger, more sustainable wetland complexes.
  • Ease of use - the permit recipient pays a fee into a fund that transfers their mitigation responsibilities to the ILF sponsor.
  • Provides the state a better opportunity at mitigation success by having an ILF sponsor, experienced in completing restoration projects, implement the mitigation plan.
  • Provides permanent protection – the regulatory agencies require mechanisms for long-term protection, management, and maintenance of the project sites.

Contact Information

Carl J. Wodrich
Director of Ecological Services
(317) 232-1291