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2019 Indiana Legislative Recap – Environmental Issues 2019 Indiana Legislative Recap – Environmental Issues

2019 Indiana Legislative Recap – Environmental Issues

The 2019 Legislative session included some interesting changes to Indiana’s environmental laws. The following is a recap of some of the bills that affect Indiana’s environmental management laws, regulations, and procedures.

1.      HEA 1258 – Dept. of Homeland Security - Boiler and Pressure Vessels

HEA 1258 reorganizes responsibilities for boilers and pressure vessels in Indiana within the Department of Homeland Security (DHS). The bill removes references to the Boiler and Pressure Vessel Rules Board under IC 22-12-4-1 and places rulemaking authority for boilers and pressure vessels in the hands of the Fire Prevention and Building Safety Commission. It requires consultation with an industry expert to discuss any variance application or update to a boiler or pressure vessel rule or safety standard. IC 22-15-6-2 authorizes DHS’ Division of Fire and Building Safety to not only issue permits and inspector’s licenses, but also to create a program to audit licensed boiler and pressure vessel inspectors and the inspections they complete. The bill also clarifies procedures for obtaining and renewing boiler and pressure vessel operating permits.

2.      HB 1266 – Sediment and Erosion Control

HB 1266 addresses the regulation of sediment and erosion control by MS4 Communities or soil and water conservation districts (collectively “Review Authorities”). The law authorizes Review Authorities to require erosion and sediment control measures at very small, small, or large construction sites and establishes criteria for the review of submitted plans. It provides minimum qualifications for individuals hired to review and make conclusive determinations for submitted construction plans. Under the new law, requirements for small or large construction plans cannot be stricter than those set out in 327 IAC 15-5 or by the general permits issued by the Indiana Department of Environmental Management (IDEM). The general permits issued by IDEM to establish erosion and sediment control requirements for construction sites, to the extent allowed under federal law, must also recognize and be consistent with the new law.

The bill imposes deadlines for Review Authorities to make a preliminary determination whether the construction plan is substantially complete. The relevant timeframes for a preliminary determination are: (1) ten (10) working days for small construction activity sites (land disturbance of at least one but less than five acres) or very small construction activity sites (land disturbance of less than one acre); and (2) fourteen (14) working days for large construction activity sites (land disturbance of at least five acres). If a Review Authority does not meet these preliminary determination deadlines, a project site owner may submit a notice of intent (NOI) letter and begin construction and after forty-eight (48) hours have passed. If a Review Authority determines the plan is not substantially complete and provides timely notice, an NOI may not be submitted until the plan is approved.

If a Review Authority rejects a construction plan, a general permit, or an applicable ordinance, construction must stop. However, the law provides that once an MS4 community makes a conclusive favorable determination and work begins, it generally may not order work to stop on the grounds that the erosion and sediment control measures are not adequate unless the owner is notified in writing of the inadequacies and they are not resolved within seventy-two (72) hours. Any Review Authority may order work to stop if it constitutes a public health hazard. 

3.      HEA 1270 – Kankakee River Basin

HEA 1270 reorganizes the Kankakee River Basin Commission into a nine-member group to be known as the “Kankakee River Basin and Yellow River Basin Development Commission.” Each county in the Kankakee and Yellow River basins (La Porte, Marshall, Porter, Starke, Jasper, Lake, Newton, and St. Joseph) will appoint one member, and the Indiana Department of Natural Resources will appoint the final member. The bill allows the Commission to raise its own funds through an assessment on landowners in the Kankakee River Basin’s eight (8) counties. The Commission’s responsibilities will include developing plans and programs regarding flood control and drainage within the basin.

4.      HEA 1278 – Fees by rule legislation, task force, various environmental matters

HEA 1278 was this year’s environmental “cleanup” or “technical corrections” bill, which usually carries minor updates and technical corrections for matters pertaining to environmental issues. This year’s version included several substantive changes.

Most notably, the bill authorizes the Environmental Rules Board (“ERB”) to increase fees imposed by Indiana’s environmental management laws. Current fees established by statute will now be treated as minimum amounts the ERB can adjust. However, the ERB can only change fee amounts once every five (5) years, and no increase can exceed 10%.

In addition to granting the ERB general authority to increase fees, HEA 1278 requires the ERB to increase certain fees before January 1, 2022. Fees for confined feeding operations; NPDES discharge permits; annual operation fees for public drinking water systems; and permit, annual operation, and disposal fees related to solid and hazardous waste are all subject to increases. These fees must be set at whatever rates are necessary to generate an additional $3.2 million in fee revenue. In addition, the ERB must increase fees for the Title V air permit program in an amount sufficient to generate an additional $2 million in fees for that program. The mandatory fee increases are not subject to the general 10% cap on fee increases.

The bill also clarifies that money in the Environmental Management Permit Operation Fund may only be used to pay for the direct and indirect cost of operating the NPDES program, the solid waste program, the hazardous waste program, and the safe drinking water program, including the preparation of rules, handling of permits, and implementing and enforcing permit provisions. Further, it provides that Title V fees must be deposited into the Title V operating permit program trust fund.

Further, the bill allows IDEM to collect fees via electronic fund transfer. It also expands the ERB by one (1) member, to twelve (12). The new member must be a representative of the residential or commercial construction industry.

HEA 1278 also creates the “21st Century Energy Policy Development Task Force” consisting of fifteen (15) members appointed by the Governor and the leaders of the Indiana Senate and House of Representatives. The role of the Task Force is to examine: (a) Indiana’s electric generation portfolios; (b) how changes in those portfolios will impact the reliability, resilience, and affordability of Indiana’s electric utility service, and (c) whether state regulators have sufficient authority and flexibility to consider the impact of these changes while protecting ratepayers. The Task Force is required to submit a report by December 1, 2020.

Further, the bill directs the Indiana Utility Regulatory Commission (IURC) to conduct a comprehensive study of the near- and long-term statewide impacts of transitions in the fuel sources used to generate electricity and new and emerging technologies for generating electricity upon Indiana’s electric generation capacity, reliability, resilience, and cost. The IURC’s report will be due no later than July 1, 2020.

Finally, HEA 1278 includes a few changes to the Excess Liability Trust Fund (“ELTF”) laws. These new amendments require IDEM to act on an ELTF claim within forty-five (45) days of submission. Within that timeframe, IDEM must issue an approval, a denial, or a rejection. A rejection is allowed when a correction, clarification, or additional information is needed. The new law requires IDEM to issue a written explanation for any denial or rejection.

5.      HEA 1406 – Water Infrastructure

HEA 1406 amends the Water Infrastructure Assistance Program created in 2018. It clarifies that the Indiana Finance Authority (IFA) may use the water infrastructure assistance fund to make loans or provide financial assistance for water or wastewater infrastructure projects. Applicants must have and maintain an approved asset management plan during the life of the loan. IFA must establish a system for prioritizing projects eligible for loans and grants.

6.      HEA 1486 – New Sewage Treatment and Disposal Technology

HEA 1486 addresses the use and approval of new septic technology within the state. It requires the Indiana State Department of Health (ISDH) to establish a technical review panel consisting of individuals who hold positions or have qualifications relevant to onsite sewage systems or who represent organizations that deal with onsite sewage systems. The panel is required to decide whether "technology new to Indiana" (TNI), which is a method or process of sewage treatment or sewage treatment equipment that is not recognized by ISDH, should be approved for general use in Indiana. 

Review by the panel will be initiated by an application process. In response to an application, the panel will decide whether a TNI: (1) is approved for general use in Indiana; (2) is approved for use in Indiana with certain conditions; (3) is approved for use in Indiana on a project-by-project basis; or (4) is not approved for use in Indiana. The panel must inform the applicant of its initial or final decision within ninety (90) days. The law establishes approval criteria and requires approval if: (1) the TNI has been certified as meeting the NSF/ANSI 40 Standard; (2) a proposed Indiana design and installation manual for the TNI is submitted with the permit application; and (3) the panel certifies that the proposed Indiana design and installation manual meets the vertical and horizontal separation, sizing, and soil loading criteria of ISDH.

For residential applications of TNI, the law provides that a local health board may approve site specific plans within thirty (30) days under certain conditions. These include: (1) the TNI meets certain industry standards; (2) the proposed design and installation manual meets the vertical and horizontal separation, sizing, and soil loading criteria of ISDH; and (3) a registered Indiana professional engineer prepares site specific plans for the use of the TNI in a residential or commercial application.

7.      SEA 4 – Water and Wastewater utilities and runoff

SEA 4 establishes a “Storm Water Task Force” consisting of elven (11) members appointed by the Governor and the leaders of the Indiana Senate and House of Representatives. The role of the task force is vague. The statute merely indicates that it “shall study issues related to storm water management systems” and issue a report no later than December 1, 2019.

The bill also provides that IFA will coordinate the executive branch activities related to the state’s water programs, including advising state agencies and political subdivisions as to water and wastewater services and disseminating information. 

SEA 4 directs IFA to divide the state into study areas for purposes of studying Indiana’s drinking water systems. To create these study areas, IFA is to consider the watersheds in which they are located, available water sources, and any other relevant factor. IFA must hold annual meetings with the officers and employees of the utilities located in each study area to set expectations, provide training, and conduct communications. The utilities must set priorities, establish future meeting agendas, promote cooperation and mutual assistance, facilitate upgrades, protect public health, provide prudent management, and project water demand for the next twenty-five (25) years. By March 1, 2021, and every two years thereafter, IFA and the utilities of each study area must file a report summarizing their activities. The bill also requires water utilities to audit their waste distribution systems in 2020 and every two years thereafter to determine the causes of water loss within the system, called “non-revenue water” by the statute. These reports must be submitted to IFA.  Participating in these activities is a prerequisite to funding under the drinking water revolving loan program and the water infrastructure assistance program.

8.      SEA 193 – Water and sewer

SEA 193 modifies the requirements for sewer and water connections. The law adds new term definitions, including a definition of what constitutes a “qualified inspector” with respect to onsite sewage systems. It also authorizes a municipality that owns or operates a sewer system to which a connection is made to waive the requirement that the property owner must release his or her right to remonstrate against pending or future annexations by the municipality. The law provides that if a property owner provides a written determination that the owner's existing sewage disposal system or water service lines are failing, the local government may not prohibit the property owner from installing a sewer line or water service line: 1) in or through a public right-of-way owned or controlled by the unit; and (2) for the purpose of connecting the owner's property to a sewer system or water utility system. The law provides some exceptions or exclusions from regulation for the Indiana Department of Transportation (INDOT).

9.      SEA 375 – Solid waste management district fees

SEA 375 amends the solid waste management district law and the local government law to provide that, after June 30, 2019, a unit of local government may not enact an ordinance requiring a solid waste hauler or a hauler of recyclable materials to collect solid waste management fees and remit the fees to the board of a solid waste management district or a unit of local government.

10.      SEA 442 – Underground Carbon Dioxide storage

SEA 442 amends Indiana law to declare that the underground storage of carbon dioxide (CO2) is a public use and service and allows such storage pursuant to the terms of a Class VI well permit from the United States Environmental Protection Agency (EPA) as an alternative to releasing the CO2 into the air. The statute removes restrictions as to the source of the CO2 to be stored underground. The law does not apply to extractable mineral resources and creates rights that are subordinate to rights pertaining to oil, gas, and coal reserves. The statute also authorizes a carbon sequestration pilot project for CO2 injections, related to a proposed ammonia plant in Terre Haute, for which the operator is to be designated by the director of the Department of Natural Resources (DNR). 

SEA 442 also sets out a process for the state to gain ownership  from the operator of the pilot project of any CO2 stored underground, as well as ownership of any related underground strata and formations. Finally, the law recommends the formation of an interim study committee to study the geologic storage of CO2.

For more information, contact Don Snemis, Freedom Smith or another member of our Environmental Group.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.
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