The Bottom Line: Business community proposes solutions

by Jacqueline Pitts

In a meeting of the Interim Joint Committee on Natural Resources & Energy on Thursday, Kentucky Chamber Public Affairs Manager John Cox testified on changes needed to permitting requirements and processes to ensure Kentucky remains competitive with other states.

According to federal law, construction projects like housing developments and commercial buildings must obtain permits from the US Army Corps of Engineers. Moreover, if construction of a project disturbs a stream or wetland, the Federal Clean Water Act requires them to get a specific “404 permit” from the Corps of Engineers.

Over the past 10 years, about 450 Kentucky development projects have required Clean Water Act 404 permits, which can take years for companies to obtain. “Permitting processes like this make it increasingly difficult to retain key employers and attract new business to the Commonwealth,” said Cox.

The Wetland and Stream Mitigation Program offered by the Kentucky Department of Fish and Wildlife could be a solution to these issues, said Cox. He also stressed the importance of the “FEE-IN-LIEU-OF” (FILO) to the program to speed up permitting processes.

However, Kentucky’s FILO program is currently experiencing a backlog that could be made more efficient by partnering with the private sector to spend down its balance.

In addition to the Kentucky Chamber’s testimony, George Howard of Restoration Systems testified on the role of mitigation banks in economic development projects.

Currently, 23 Kentucky counties cannot use the FILO program as a result of this backlog. Howard offered the same solution North Carolina adopted when they had the same issue many years ago. He said it would be an easy fix that would require little-to-no legislation.

Howard urged the need to address areas of most backlog, add more employees to assist the program, allow contractors to purchase land rights, and emphasize more involvement from the private sector through what he called a “full delivery system” of contracting in the procurement process.

Cox and Howard stressed the importance of addressing the FILO backlog and expanding access to the program as it puts Kentucky at a competitive disadvantage to neighboring states.

Ensuring viability of the FILO program “will create good-paying jobs, promote economic recovery, improve the wildlife habitat and the environment, and help Kentucky grow,” Cox said.

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