Under Section 404 of the Clean Water Act, KYTC must obtain a permit from the US Army Corps of Engineers (USACE) if project work will result in dredged or fill material being discharged into waters of the United States (WOTUS). Generally, WOTUS include navigable waters, lakes, ponds, small streams, some ditches, and adjacent wetlands.

According to the Highway Design Guidance Manual all water that is not clearly sheet flow should be treated as a WOTUS. This includes streamflow in ephemeral, intermittent, or perennial streams, wetlands, tributaries, some roadside ditches, and humanly constructed impoundments (e.g., ponds, lakes).

Examples of activities that require a Section 404 permit include:

• Depositing fill, dredged, or excavated material.
• Grading or mechanized land clearing of wetlands.
• Ditch excavation in wetlands and associated discharge of dredged materials into wetlands.
• Ditch modifications that have a connection to WOTUS
• Fill for residential, commercial, or recreational developments.
• Placement of riprap and road fills.
• Bank and stream channel stabilization projects.

The USACE issues general permits and individual permits. General permits can be issued at the nationwide or regional level and cover activities that have minimal effects on WOTUS. Actions resulting in minor impacts that fall below notification requirements (BNR) for a particular Nationwide Permit do not require explicit USACE authorization and can proceed without the Cabinet notifying the Corps. 

Table 1 summarizes the key characteristics of permits the USACE frequently issues to the Cabinet. Nationwide Permits and Individual Permits, including a Letter of Permission, are the most common. Processing times for permits range from 6 months to 18 months.

The USACE is obligated to permit the Least Environmentally Damaging Practicable Alternative (LEDPA), however, the agency must also evaluate countervailing factors during decision making, including the presence of endangered species, cultural resources, or social impacts. In some cases, the USACE  authorizes an alternative with greater impacts to wetlands and streams, if these factors justify doing so.

This article reviews the basics of the Section 404 process for project managers (PM) and describes the methods used to evaluate permit requirements. It also discusses mitigation strategies used to offset impacts to WOTUS. Although PMs do not handle permitting or mitigation directly, having a sound knowledge of mitigation techniques (e.g., payment of in-lieu fees, purchasing wetland or steam mitigation credits) can help them facilitate efforts by the Division of Environmental Analysis (DEA) to complete the environmental process.

PMs can apply the following best practices to streamline Section 404 permitting and accelerate project delivery: 

• Begin the Section 404 permitting process as early as possible to keep it off the critical path and minimize project delays.
• Begin coordination with outside agencies (e.g., USACE) as soon as possible so their concerns can be addressed and strategies identified to avoid or minimize impacts.
• If possible, develop alignments that avoid or minimize significant impacts to streams, wetlands, and other WOTUS.
• If roadway plans change after a permit has been issued, the PM must contact the DEA Permits Coordinator as soon as possible because the USACE may need to review and approve the modifications.

When analyzing alternatives early in project development, the Project Development Branch Manager (PDM) requests assistance from the DEA (either district staff who handle permitting or the permits manager) to determine permitting requirements. The project team estimates impacts to each stream/wetland and describes anticipated construction activity. The PDM submits this information to DEA. Once the project team selects a preferred alternative, the PM and project team collaborate with a DEA subject-matter expert (SME) to assess impacts to WOTUS and identify:

• Potential opportunities to further avoid or minimize impacts
• Mitigation needs (e.g., additional right of way [ROW])
• Appropriate compensatory mitigation (e.g., onsite, offsite, in-lieu fees, mitigation bank credits)

The PM submits to DEA (1) roadway plans and (2) a Water Related Impacts Summary. They must also include a detailed mitigation plan if the project will require an Individual Permit.

.The USACE requires detailed assessments of stream and wetlands impacted by a project before it will issue a Section 404 permit. Evaluations may require site visits that are attended by KYTC stakeholders (e.g., DEA SME, the PM and project team), the USACE project manager, and Kentucky Division of Water project manager. Because applying for a Section 401 Water Quality Certification (see Section 3.5) requires a site visit, this visit should occur in tandem with a site visit undertaken as part of the Section 404 process.

KYTC funds two USACE staff in the Louisville District who handle permitting for the Cabinet. DEA permitting SMEs contact these staff early in project development to coordinate permitting processes.

Before KYTC can apply for a Section 404 permit, the PM must submit the following materials to the DEA Permits Coordinator or SME developing the permit application:

• Discussion of the project purpose and an analysis of the alternatives evaluated
  • Documentation for projects that lack an environmental document (i.e., state-funded projects) should describe the environmental impacts for each alternative and justify the chosen alignment.
• If impacts cannot be avoided, a discussion of how impacts will be minimized or mitigated.
  • Mitigation options include stream or wetland mitigation credits or paying an ILF (in-lieu mitigation fee) to the Kentucky Department of Fish and Wildlife Resources or PRM (permittee responsible mitigation – offsite. KYTC does not use onsite habitat restoration.
    • If no mitigation bank or ILF is available, early coordination with the mitigation coordinator should begin for alternative solution (e.g., PRM).
  • Permit drawings, including the plan view, typical cross sections, stream profile, rock line soundings, and a vicinity map.
  • An estimate of impacts below the ordinary high-water elevation (the line below which the USACE has jurisdiction).
  • Plan set.

Often, a DEA SME prepares permit applications. However, applications may also be completed by the District Environmental Coordinator (DEC), environmental consultant, or member of the project team. Once the USACE approves a permit, a DEA SME notifies the project team and other KYTC stakeholders. The amount of time a permit remains valid ranges from 2 to 5 years. If construction impacts authorized by a permit are not complete by the time the permit expires, a DEA SME requests a permit renewal from the USACE. If the project scope changes after the USACE approves a permit and those changes will result in different impacts to WOTUS, a DEA SME submits a revised permit application after speaking with the project team about the type and extent of impacts.

3.1 Below Notification Requirements (BNR)

Projects that qualify for a BNR determination are those that impact ≤ 300 feet of stream or ≤ 0.1 acres of wetland. Some examples include the installation of new culverts, expansion of existing culverts, bridge work, and safety improvement projects.

The Cabinet does not report BNR determinations to the USACE. The DEA SME prepares the BNR determination and submits materials to the PM. Notes are placed into the project file and contract documents to justify why impacts are below the notification threshold. Contract documents must include the following materials to explain the BNR determination:

• Narrative summary of impacts
• General conditions that apply for the issuance of a Nationwide Permit

The project’s administrative records should preserve the following materials:

• Evidence a Section 7 consultation has been completed
• Evidence a Section 106 consultation has been completed
• Other items the DEA SME deems necessary

If a project produces multiple BNR impacts, the USACE may determine the project’s cumulative impacts exceed the notification threshold and therefore require a permit.

3.2 Nationwide Permit (NWP)

NWP applications are typically prepared by a DEA SME. Materials that help the DEA SME develop an application include detailed project plans, USGS topographic maps, GIS and aerial photographs. Once the application is complete, the DEA SME submits it to the USACE. Following issuance of a NWP, the DEA SME notifies the PM, project team and Division of Construction Procurement. If construction impacts authorized by the permit are not complete by the time the current NWP expires and a new one is authorized, the DEA SME requests a permit renewal from the USACE.

Although the USACE issues 52 NWPs, only five are routinely used by the Cabinet. Boxes 1 – 5 describe the scope of NWPs most commonly obtained by KYTC, what each permit does and does not authorize, requirements or conditions the Cabinet must abide by, and notification requirements. Some activities require that KYTC notify the USACE district engineer before starting work.

PMs need to understand the requirement for and conditions under which each NWP is issued as this knowledge can strengthen their onsite monitoring of project activities and contractors.

3.3 Letter of Permission (LOP)

A LOP issued by the USACE in 2007 (revised 2010) authorizes temporary and permanent fills associated with the construction, expansion, modification, or improvement of public roads or transportation projects when activities exceed limits imposed by NWPs. It is KYTC’s preferred method for accelerating permitting when project impacts exceed thresholds for a NWP. The following types of project work may be authorized under the LOP:

• Impacts to a single stream that are ≥ 500 linear feet.
• Impacts to a single stream or wetland that are ≥ 50 acres.
• Cumulative impacts to streams or wetlands that are ≥ 50 acres.
• Total impacts to WOTUS must be < 7 acres.
• Project elicits no controversy.
• Dredged or fill material will not be discharged near a public drinking water supply intake.

The DEA SME and the USACE project manager coordinate a LOP pre-application meeting that brings together the project team and external stakeholders to address options for avoiding, minimizing, or mitigating project impacts. Projects authorized under the LOP typically require mitigation because the amount of area impacted will exceed the Section 404 mitigation thresholds:

• Filling > 0.10 acres of WOTUS
• Impacts to ephemeral, perennial or intermittent streams > 300 linear feet
• Work that causes more than minimal effects

If construction impacts authorized by a permit are not complete within five years, the DEA SME requests a permit renewal from the USACE.

3.4 Individual Permit (IP)

The Cabinet must obtain an IP if project impacts exceed those allowed under a NWP and are not authorized under the LOP (i.e., a project will impact > 7 acres of WOTUS, affect a drinking water supply, or if the USACE views the project as controversial). If authorized construction impacts are not complete within five years, the DEA SME requests a permit renewal from the USACE.

3.5 Section 401 Certification

Before the USACE issues a Section 404 permit, KYTC must obtain a Section 401 Water Quality Certification (WQC) from the Kentucky Division of Water that verifies activities authorized by the permit will not violate Kentucky’s water quality standards. As noted previously, a site visit is mandatory when applying for a WQC. Like Section 404 permits, a DEA SME typically gathers information required for a WQC and prepares the application.

If a project qualifies for a Section 404 NWP and its impacts on waters of the Commonwealth are below specified thresholds, an Individual WQC may be unnecessary. Mitigation is required for an Individual WQC if any of the following conditions are met:

• Impacts to a single stream that are > 300 linear feet
• Impacts to a single wetland that are ≥ 1 acre
• Cumulative impacts as determined by the Kentucky Department of Water
• Impacts to a water with the designated use of OSRW (outstanding state resource waters), ONRW (outstanding national resource waters) or those waters categorized as exceptional waters under the antidegradation policy.

Water Quality Certifications require construction to begin within five years from date of issue. If construction does not begin in that timeframe, the certification is void and a request for renewal or submission of application must be made per DOW’s determination.

In accordance with the Compensatory Mitigation for Unavoidable Losses of Aquatic Resources Final Rule (33 CFR Part 332), if project impacts cannot be avoided or minimized, KYTC must compensate for impacts through mitigation. Different forms of mitigation can be used. In order of preference under 33 CFR Part 332, these are mitigation banks, in-lieu fees, and permittee responsible mitigation (PRM). Currently, the Cabinet relies entirely on mitigation banks and in-lieu fees. The USACE Louisville District does not authorize onsite mitigation, however, it does authorize offsite PRM as appropriate. The HKP Article Stream and Wetland Mitigation for Waters of the U.S. provides more information on calculating compensatory mitigation.

Stream Mitigation Requirements

The USACE and the Kentucky Division of Water require compensatory mitigation if an individual impact results in the loss of more than 300 linear feet of or greater than 0.10 acres of ephemeral, perennial or intermittent streams. The USACE requires mitigation if an individual impact results in the loss of at least 0.50 acres of ephemeral streams.

Wetland Mitigation Requirements

The USACE requires compensatory mitigation if project impacts result in the loss of at least 0.10 acre of wetland.

4.1 Paying for and Calculating Required Mitigation

All compensatory mitigation is paid for using project funds. While PMs are not responsible for calculating and reporting the number of stream or wetland mitigation credits needed to offset losses, having a basic knowledge of the process is useful for comparing the potential costs associated with different alternatives. The Louisville USACE office has developed Excel spreadsheets that contain stream mitigation and wetland mitigation calculators that are used to determine the number of credits needed to offset project impacts under the in-lieu fee program. For streams, the method of calculation that should be used is contingent on what part of the state a project is located in. Adjusted Mitigation Units (AMUs) are used in central and western Kentucky, and in the eastern part of the state the Eastern Kentucky Stream Assessment Protocol (EKSAP) is used.

AASHTO Practitioner’s Handbook: Applying the Section 404(B)(1) Guidelines in Transportation Project Decision-Making — Offers a good primer on taking a proactive and integrative approach to Section 404 permitting.

KYTC Highway Design Guidance Manual — HD-500 reviews permitting requirements.

KYTC Environmental Analysis Guidance Manual — EA-1100 provides in-depth treatments of different Section 404 permits.

Kentucky Department of Fish & Wildlife Stream Team Program — Provides information on Kentucky’s in-lieu fee program, including current data on the cost of stream and wetland mitigation credits.

Full text of 2021 USACE Nationwide Permits — NWP 3, NWP 13, NWP 14, NWP 15, NWP 33.

USACE – Louisville Office Mitigation and Monitoring — Includes documents related to USACE’s final mitigation rule, monitoring requirements, stream and wetland assessment protocols, and guidance on restoration. Mostly, this site links to external source.