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Does your property have a stream that is eroding away? Does it have wetlands, perhaps limiting the available area for agriculture? If so, you may be eligible to work with the Wetland and Stream Mitigation “Fee-In-Lieu-Of” (FILO) program, administered by the Kentucky Department of Fish and Wildlife Resources (KDFWR).
We are a group of specialists who undertake stream and wetland restoration projects on eligible properties. To do so, landowners may either agree to a conservation easement on their property or sell it in its entirety to KDFWR.
FILO’s mission is to offset the loss of aquatic resources in the state due to development, roads, etc., as required by Federal regulations . Projects are funded from the Mitigation Fund held in trust solely for compensating aquatic resource loss. No state tax general funds or hunting/fishing license dollars are used.
Are you a landowner interested in contributing to stream and wetland mitigation? Read more about what projects entail below.
Stream Instability and Habitat We work on streams that are unstable, eroding, and have trees removed from stream banks. Projects whose primary purpose is sewer improvements or utility lines do not qualify. Properties with existing wetlands or indicators of potential wetlands (hydrology, soil, vegetation) may be eligible for preservation, enhancement, rehabilitation or establishment of wetland habitat.
Both Stream Banks Generally, both sides of the stream must be available for work. In many cases, several landowners may be involved in the same project to provide access to both banks and appropriate protection.
Stream and Wetland Size A minimum of 1,000 feet of the stream is needed to develop stream projects; the longer the project, the better. Wide, deep streams or rivers are often too big and expensive to undertake restoration. Instead, we work on smaller intermittent or perennial streams. As for wetlands, the ideal size varies from project to project.
Mineral Ownership The project area cannot be mined or developed for coal, oil, gas or other mineral production. Sites where mineral rights cannot be restricted will not qualify. In some cases, inactive leases may be acceptable.
Project Assessment Potential projects are screened by FILO staff and evaluated for eligibility. The U.S. Army Corps of Engineers has final approval authority.
Property Title A title review confirms ownership and identifies legal restrictions such as liens or easements.
Permanent Protection All projects must be permanently protected through sale or conservation easement.
Conservation Easements
Read a Sample Easement
Engineering We analyze streams and watersheds to develop design plans including hydraulics, flow, channel design, and budgets. Engineering firms complete design work at no cost to landowners.
Construction Work includes reshaping stream banks, installing structures, and planting vegetation within the easement.
Monitoring Streams are monitored for at least 7 years and wetlands for 10 years before long-term management begins.
For credit assistance, contact Tricia Orme at tricia.orme@ky.gov or 502-564-7905 Ext. 3421.
Credit sales are on a first-come, first-serve basis. No reservations in advance of permit concurrence with USACE. Credit rate changes could happen at any time and should be expected.
In order to better distribute funds and meet mitigation needs, the state is divided into service areas based on river basins and physiography. Credit availability and rate depends on service area (see map and fee schedule).
The EIU rate is based on the Eastern Kentucky Stream Assessment Protocol (EKSAP), the AMU rate is based on the Central Kentucky Assessment Protocol (CKAP).
Effective 05/01/2025 - Fees have changed for both Stream and Wetland Service areas.
Effective 04/05/2022 - No available AMU Wetland Credits in Upper and Lower Cumberland River Service Areas.
Effective 02/10/2020 - Check availability prior to purchasing credits.
Effective 11/17/2014 - No Credits are currently being sold in the Big Sandy Service Area.
The Stream Team is also known as the Wetland and Stream Mitigation “Fee-in-Lieu-Of” Program, or FILO for short. An in-lieu-fee program is an agreement between a regulatory agency and a sponsor and is meant to mitigate impacts to aquatic resources resulting from activities requiring permits, such as development, road construction, and other projects.
Under an in-lieu-fee agreement, permittees pay fees to the sponsor in lieu of providing the permittee-responsible compensatory mitigation required by regulations. The sponsor uses the funds from those fees, which are paid in the form of credits, to offset the loss of aquatic resources by creating, restoring, enhancing, or preserving wetlands and streams.
Kentucky Revised Statute 150.255 authorizes KDFWR to conduct mitigation and to recover costs associated with conducting mitigation. No state general fund tax or Department license dollars are used to fund the program.
The Instrument is a document approved by USACE that officially establishes KDFWR as an in-lieu-fee sponsor. The Instrument requires that KDFWR uses full cost accounting in setting credit prices, pursuant to federal regulations (2008 “Final Rule” 33 C.F.R. §332.8(o)(5)(ii)).
This means that credit rates must be sufficient to fund all expected costs of the mitigation program. The sponsor shall determine the cost of compensatory mitigation credits and may adjust them as necessary.
Credit Sales Breakdown
Service Area Costs 70–80%
Administrative 10–20%
Reserve 10–15%
Read the Instrument
Administrative and program operating costs may include:
Most of the funds coming from credit sales in each of the eleven service areas are dedicated solely to projects in that same service area. This covers the costs of the following activities:
The Reserve is maintained by credit sales and monthly interest accruing to the in-lieu-fee program account. The Reserve has a minimum non-wasting limit that functions as an endowment. The non-wasting limit enables the program to maintain enough funding to meet long-term mitigation obligations.
Activities funded by the Reserve are subject to the approval of the Corps of Engineers, except for minor actions that do not require permit authorization.
The purposes of the Reserve are:
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