What You Need To Know About Wetland Regulation and Mitigation
- Kevin Kilbane
- Oct 7
- 7 min read
Wetlands grabbed headlines recently due to a developer’s request to fill some wetlands at the Google Data Center site planned on Adams Center Road between Fort Wayne and New Haven.
That request, which the Indiana Department of Environmental Management (IDEM) approved, highlights the complicated regulations governing Indiana’s wetlands and what happens when they are disturbed or destroyed.
Wetlands have some protection because they play a valuable role in the environment: They store flood waters for slow release. They filter out sediment and pollution. They provide plant and wildlife habitat. They also sequester carbon and recharge groundwater aquifers.
However, some farmers and developers may view them as a nuisance that reduces the usable space on their property.
Learning by example
To walk through how wetland regulations work, it may be easiest to use an example. Let’s say you want to develop a 50-acre site th
at contains two 1-acre areas that each hold a small amount of water most of the time. One acre has trees on it and the other has cattails and other wetland plants similar to much of Eagle Marsh.
Before doing any construction work, IDEM recommends on its website, https://www.in.gov/idem/wetlands, that you first have an expert determine if the wetlands are regulated by the federal government or are isolated wetlands governed by Indiana.
Currently, the U.S. government regulates only wetlands adjacent to navigable water bodies and waterways as well as wetlands that are adjacent to water bodies that have a continuous surface connection to navigable waters. If your wetland meets either criteria, you have to get a permit from the U.S. Army Corps of Engineers to drain or fill it.
In our example, we’ll say the two wetlands don’t have any connection to navigable waters. That means they fall under state regulations.
State wetland classifications
For regulation and protection purposes, Indiana divides wetlands into three classes:
• Class I: Degraded or low-value wetlands that normally can be drained or filled without obtaining an IDEM permit.
• Class II: Wetlands of moderate quality or rarity that already have endured some human disturbance. Developers must try to avoid or minimize impact to these wetlands. They also must get an IDEM permit if they want to fill or disturb a Class II wetland.
• Class III: Rare, ecologically important or high-quality wetlands that receive a high level of state protection.
In addition, the size of a wetland factors into its protection, IDEM’s website said. Generally, wetlands of 3/4-acre or smaller within a city and 3/8-acre or smaller outside city limits are exempt from IDEM regulations.
A majority of Indiana’s wetlands fall under the Class I definition, so landowners and developers don’t need state permission to fill or drain them, said Eric Ellingson, president of Earth Source, a local landscape architectural and environmental consulting firm.
Landowners and developers also don’t have to create new wetlands to mitigate, or offset, destroying Class I wetlands, noted Ellingson, who also is president of Earth Source’s sister company, local native landscape restorer Heartland Restoration Services.
On the positive side, Ellingson said most Class III wetlands in Indiana already are protected by government, land trusts or other organizations.
Next steps
When applying to IDEM for permission to destroy or disturb a state-regulated wetland, a landowner or developer normally must demonstrate they tried to avoid impacting the wetland or tried to minimize their impact on it, the IDEM website said. Site plans often can be adjusted to avoid or minimize disturbance to wetlands on a property, the website said.
Many landowners and developers will take that advice because it’s costly if they have to mitigate damage to a wetland, Ellingson said. Residential developments frequently can be reconfigured to avoid disturbing wetlands on the site. Warehousing projects are the most likely to disturb wetlands, Ellingson noted, because the project seeks to place huge expanses of space under one roof.
Replacing the damage
For purposes of our example, let’s say analysis determined the 1-acre forested wetland meets Indiana’s requirements for a Class III wetland. The other 1-acre wetland falls in the Class II category.
The site developer then has to weigh whether it’s feasible financially to seek state permission to fill in or drain the two wetlands because disturbing each wetland will require mitigation to replace the loss of the existing wetlands.
Indiana law says the mitigation work normally must be created in the same watershed area or county as the disturbed wetland. In addition, the higher the class of wetland being destroyed, the greater the amount of mitigation wetland acreage the developer must create. The ratio of original wetland acreage to mitigated wetland acreage also varies based on the type of wetland, such as forested or non-forested.
Ellingson said mitigation ratios for federally regulated wetlands are:
• Forested: 4 acres replacement for 1 acre disturbed
• Scrub/shrub: 3 acres replacement for 1 acre disturbed
• Emergent (mostly wetland plants): 2 acres replacement for 1 acre disturbed
For state-regulated wetlands, mitigation applies only to Class II and Class III wetlands.
Ellingson said the mitigation ratios are:
• Class III wetland: 3 acres of replacement wetland for 1 acre disturbed while using a mitigation bank or the Indiana Department of Natural Resources’ (IDNR) In-Lieu Fee Program. The DNR administers the In-Lieu Fee program, which uses credit payments to the DNR or a non-governmental natural resources organization to fund conservation projects that satisfy buyers’ wetlands mitigation obligations.
• Class II forested wetland: 2 acres replacement wetland for 1 acre disturbed, using a mitigation bank or the IDNR In-Lieu Fee Program; or 2.5 acres replacement for 1 acre disturbed if the landowner or developer creates the mitigation wetland area.
• Class II emergent wetland: 1.5 acres replacement wetland for 1 acre disturbed, using a mitigation bank or the IDNR In-Lieu Fee Program; or 2 acres replacement for 1 acre disturbed if the landowner or developer creates the mitigation wetland area.
In our example, if the developer chose to destroy the existing wetlands on the site, he or she would have to replace the losses by buying credits for 3 acres of Class III wetland in a mitigation bank or through the DNR’s In-Lieu Fee Program. The developer also would have to replace the destroyed Class II wetland by buying credits for 1.5 acres in a mitigation bank or the DNR’s In-Lieu Fee Program, or the developer could seek state permission to preserve 2 acres of existing wetland area or to construct 2 acres of replacement wetlands.
Using a mitigation bank or the In-Lieu Fee Program have become popular choices for developers. However, the state DNR is so far behind in building mitigation projects in some watersheds that landowners and developers temporarily can’t use the In-Lieu Fee program in those watersheds, Ellingson said. One problem has been that the state didn’t factor land acquisition costs into its project planning process, he added.
Mitigation options
Mitigation can take three forms, which are available to a landowner/developer in this order, Ellingson said:
• Paying for the number of mitigation bank or In-Lieu Fee program credits needed to compensate for the wetlands being disturbed or destroyed.
• Preserving an existing wetland, which often involves clearing it of invasive species and providing other enhancements.
• Constructing a new wetland to replace what was disturbed or destroyed.
Federal and state governments typically want landowners and developers to use a mitigation bank as their first option, said Ellingson, whose companies assist clients with wetlands mitigation.
Indiana had 14 state-approved mitigation banks operating in 2024, the Indiana DNR said in its wetlands and stream mitigation annual report issued in spring 2025. The report said the state also sets the price of mitigation bank and In-Lieu Fee Program credits. Those credits currently cost $80,000 per acre for mitigation bank use in northeast Indiana’s Maumee River and Upper Wabash River regions, the report said. The In-Lieu Fee Program cost would be similar because the program often buys acreage in mitigation banks.
Currently, one state-approved mitigation bank, The Openings (https://openingsmitigationbank.com), exists in the Fort Wayne area. Earth Source and Heartland Restoration Services planned and built The Openings by restoring a historic wetland near Huntertown in northwest Allen County. Land that had been drained and farmed now contains wet prairie areas and forested and scrub-shrub wetland areas.
After The Openings sells all of its mitigation bank credit acres and fulfills all site management requirements, Ellingson said the wetlands preserve area will be donated to a land trust with an endowment to maintain it.
Seeking positive results
Ellingson believes wetlands preservation projects like The Openings have great value. With Indiana’s hot, dry weather in recent summers, many wetlands have dried down to where they no longer look like wetlands, he said.
“If we can preserve them, things are a pendulum,” he explained. “So they’ll be there when we need them when it starts to get wet again. Preservation is a great tool because, well, the other part of it is you can’t really count on government protecting everything, at the state or federal level.”
However, people may question whether a constructed mitigation bank wetland can provide the same wildlife, plant and other benefits as a natural wetland.
“I’ll say yes and no,” Ellingson said.
“We look at a lot of natural wetlands that are just totally accidental,” he said.
“Most of the forested wetlands we have today were cattail marshes,” he explained. “They were open water, but we drained them. … And what came back? Trees. And now we look at those as being the best thing in the world. No, that’s a succession because we impacted that area and now we have trees.”
Another example, he said, would be a farm field on historically wetland ground that was left idle through placement in a conservation reserve program. If a drain tile breaks and isn’t repaired, a wetland likely will form there.
“It’s more the organisms that are in the soil that make the biggest difference,” he said of creating a healthy wetland. “They happen over time, even in a constructed site.”
Learn more
WHAT: The Hoosier Environmental Council and Ancilla Domini Sisters will host “Wetland Wonders: Value of Indiana’s Wetlands.” The day includes speakers with expertise in wetlands preservation, restoration and management and a tour of the restored Ancilla wetland.
WHEN: 9 a.m.-4 p.m. Oct. 21
WHERE: Lindenwood Retreat & Conference Center, 9601 Union Road, Donaldson, Indiana, near Plymouth.
COST: $75 per person, or $30 per student. More information, speaker bios and registration at https://www.hecweb.org/wetland-wonders-conference.
By the numbers
In Indiana, wetlands frequently have been drained or filled in with soil. The Indiana Department of Environmental Management (IDEM) estimates Indiana had 5.6 million acres of wetlands in the late 1700s, which covered about 24% of the state. The agency said Indiana now has about 813,000 acres of wetlands covering about 3.5% of the state, or a loss of about 85%.
Check the regs
To explore federal and state regulations in more detail, try these links:
• Federal: U.S. Environmental Protection Agency: https://www.epa.gov/cwa-404/clean-water-laws-regulations-and-executive-orders-related-section-404
• Indiana Code: Title 13, Article 18, Chapter 22 (IC 13-18-22):
• IDEM’s FAQ on wetlands regulations:
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