2020 Indiana Legislature Update: Environment and Energy

The 2020 Indiana Legislative Session resulted in new laws pertaining to environmental, natural resources, energy, and utility issues. Several of the new laws are summarized below.

SEA 229 [Effective July 1, 2020] – This Act amends the statute that requires a permit from the Indiana Department of Environmental Management ("IDEM") for wetland activity in a state regulated wetland. The amendment creates a new exception for maintenance or reconstruction of a regulated drain in accordance with public standards of design, construction, and maintenance provided the work takes place within the current easement and any reconstruction does not substantially change the characteristics of the drain to perform its designed function. See: IC 13-18-22-1(b)(4). This Act was signed by the Governor on March 25, 2020.

SEA 254 [Effective July 1, 2020] –This Act amends the laws relevant to waste and wastewater utilities in several ways. The Act includes municipally owned utilities that are subject to the jurisdiction of the Indiana Utility Regulatory Commission (“IURC”) in the definition of a water utility that may file a plan for the replacement of customer-owned lead service lines. The Act allows a public water utility or IURC-regulated municipally owned water utility to recover certain costs of replacing customer-owned lead service lines as eligible infrastructure improvements for which a utility's rates and charges may be adjusted. Specific procedures and conditions for the recovery of customer-owned lead service lines costs are outlined in the Act. Finally, the Act establishes a procedure for an IURC-regulated public utility, municipally owned utility, or not-for-profit utility that provides water or wastewater service to the public to seek to recover the cost of certain utility plant or equipment expenditures that are related to compliance with environmental requirements or made for health, safety, or environmental protection purposes. See: IC 8-1-31-13(b), IC 8-1-31.6-4, IC 8-1-31.6-8 through -17. The Act was signed by the Governor on March 21, 2020.
 
SEA 430 [Effective July 1, 2020] – This Act amends the Indiana Code to allow the establishment of "reservoir conservancy districts.” A reservoir conservancy district can only be established under certain conditions, including: (1) the conservancy district must be established for certain purposes; (2) the boundaries must encompass part or all of a reservoir located partly within a consolidated city; and (3) at least 25% of the surface of the reservoir must be owned by a utility governed by a board of directors for utilities of a consolidated city. Reservoir conservancy districts will have all of the powers granted to other conservancy districts with certain exceptions, including: (1) a reservoir conservancy district does not have the power of eminent domain; and (2) the utility owner of the reservoir is exempt from all assessments, taxes, and fees imposed by the reservoir conservancy district, which are capped by the Act. Reservoir conservancy districts are authorized, with certain limitations, to collect fees for the recreational use of watercraft on the reservoir. Moreover, these districts are required to establish rules concerning safety and resource conservation, with these rules being subject to limitations, including that they cannot interfere with state rules or with the use of the reservoir for water supply purposes or discourage uses of the reservoir for activities allowed under the fish and wildlife laws. As part of its duties, the district may also take other actions, like erosion control measures, with authorization from state and federal agencies where necessary. With regard to governance, reservoir conservancy districts will be governed by a board of directors, who must have an operating agreement with the utility that owns the reservoir that describes all works of improvement and maintenance that the reservoir conservancy district proposes to perform. The utility owner of the reservoir is provided certain rights by the Act, including liability restrictions.  See: IC 14-33-9-11, IC 14-33-24, 14-30-31.5. This Act was signed by the Governor on March 21, 2020.
 
SEA 433 [Effective January 1, 2020 (retroactive)] – This amendment restricts the authority of the Department of Natural Resources ("DNR") to remove an abode or residence from a floodway by an action in condemnation. The DNR shall not remove or eliminate an abode or residence if: (1) it was constructed before January 1, 2020; (2) the owner has taken necessary measures to elevate the lowest floor, including the basement, to at least two feet above the 100-year flood elevation within two years after receiving notice from the DNR concerning the abode or residence; and (3) the owner has taken necessary measures to comply with all applicable local, state, and federal floodway regulations. See: IC 14-28-1-23(c). This Act was signed by the Governor on March 18, 2020.

SEA 438 [Effective upon passage or on July 1, 2020, depending on the provision] – This Act changes statutory provisions regarding pesticides, pesticide use, pesticide application, and the definitions of certain terms used in the statute. Notable changes include: (1) for more than one (1) pesticide to be considered the same pesticide, each pesticide product must exhibit the same claims, branding and ingredient statement; (2) the state chemist “may,” instead of “shall,” require the submission of the complete formula of any pesticide product, allowing waiver of the requirement in the case of a federally registered product; (3) the pesticide review board shall establish a working group to review civil penalties; (4) before December 1, 2020, the working group shall make recommendations concerning civil penalties to the board and general assembly; (5) the amendment eliminates certain provisions allowing the state chemist to impose a civil penalty each day for a violation of a continuing nature; and (6) the state chemist shall suspend enforcement of the FY 2019 pesticide enforcement response policy. See: various provisions in IC 15-6-4. This Act was signed by the Governor on March 18, 2020.

HEA 1099 [Effective upon passage] –  This Act requires the Natural Resources Commission (“NRC”) to establish a roster of low head dams (manmade in-channel structures in a watercourse that are capable of generating hazardous recirculating currents that have a vertical drop of 25 feet or less). It also requires DNR to establish warning standards, information on safety, provide contact information, and notify owners of the new requirements. It also requires owners of low head dams to comply with the warning standards established by DNR, inform DNR of ownership changes, maintain insurance, and notify DNR of any breaches. Persons who own at least two (2) low head dams are exempt from certain requirements if the owner previously installed warning signs and maintains and repairs those signs. The Act authorizes DNR to enter upon any land or water to assess low head dams reported as damaged or breached, and requires owners to provide DNR access. Except for inspection, maintenance, or removal, the Act prohibits persons from accessing a low head dam or wading, boating, swimming, or accessing the waters within 50 feet of a low head dam when warning signs are present. The Act also provides that the state is not liable for any death or injury that occurs on or resulting from a low head dam that is not owned by the state. Finally, the Act requires DNR to prepare a report by October 1, 2020 that includes recommendations concerning the creation of a low head dam removal program and further low head dam safety legislation. See: IC 14-27-7.3. This Act was signed by the Governor on March 18, 2020.
 
HEA 1189 [Effective July 1, 2020] – This Act prohibits the use of Class B firefighting foam containing PFAS for training purposes. PFAS is any chemical in a class of fluorinated organic chemicals, including perfluoroalkyl and polyfluoroalkyl substances. The Act also prohibits the use of Class B firefighting for testing purposes unless the testing facility has implemented appropriate measures to prevent releases of the firefighting foam to the environment. See: IC 36-8-10.7. The Act was signed by the Governor on March 11, 2020.
 
HEA 1265 [Effective July 1, 2020] – A new section was added to the statute concerning health and water in school buildings. It provides that the drinking water in each school building shall be tested before January 1, 2023 to determine whether the level of lead in drinking water equals or exceeds fifteen (15) parts per billion (ppb). This testing requirement is satisfied if the school building: (1) was tested during the lead sampling program conducted in 2017 and 2018; (2) is tested in 2019 and 2020; or (3) has otherwise been tested at least once since 2016. After calendar year 2022, the drinking water in every school building located in Lake County shall be tested at least once every two (2) years. If any drinking water tests detect lead at a level equal or greater to the action level, the school must take action to reduce lead levels to less than fifteen (15) ppb.  Schools must seek state and federal grant money available for lead sampling and testing, including money available from the Indiana Finance Authority. See: IC 16-41-21.1-3. HEA 1265 was signed by the Governor on March 18, 2020.

HEA 1309 [Effective upon passage] –  This Act revises references to federal regulations relating to variances from water quality standards in the Great Lakes drainage basin and clarifies the requirements for variances from those standards. It also eliminates the requirement that IDEM administer a certification examination for operators of water treatment plants, water distribution systems, and wastewater treatment plants, and instead allows IDEM to authorize third parties to administer the exam. See: IC 13-14-89 and IC 13-18-11-4. This Act was signed by the Governor on March 18, 2020.

HEA 1334 [Effective July 1, 2020] – This Act provides the Indiana Department of Health (“IDH”) with emergency rulemaking authority to amend provisions in the administrative rules concerning radon. In particular, the Act requires IDH to amend its administrative rules concerning the certification and standards requirements applicable to radon testing, mitigation, and laboratory analysis before December 31, 2021, to more appropriately reflect the standards set by the U.S. Environmental Protection Agency. The provisions added by the bill expire July 1, 2022, by which time the new administrative rules required by the Act should be in place. See: IC 16-41-38-2.5. This Act was signed by the Governor on March 11, 2020.
 
HEA 1403 [Effective upon passage] – This Act adds a definition of "used tire" for purposes of laws governing waste tires and requires the Environmental Rules Board to adopt rules regarding reporting requirements for the transportation of used tires and clarifies the law regarding financial assurance for operators of waste tire storage sites. See: IC 13-11-2-243.5 and IC 13-20-13-11. This Act was signed by the Governor on March 11, 2020.

HEA 1414: [Effective upon passage] – This Act adds sections 11 and 12 to IC 8-1-8.5, which governs electric utility integrated resource planning and certification of the construction of new plants. New Section 11 provides that a public utility that owns and operates a reliable capacity electric generation resource shall operate and maintain the unit using good utility practices and in a manner reasonably intended to support the availability of the unit for dispatch and for providing reliable service to customers of the public utility. A public utility is prohibited from terminating a power agreement with a “legacy generation resource” in which the public utility has an ownership interest, unless the public utility provides the IURC with at least three (3) years advance notice of the termination. A public utility may recover the reasonable costs incurred under the power agreement, which costs shall be determined by the IURC. A public utility may not retire, sell, or transfer a reliable capacity resource with a capacity exceeding 80 megawatts before May 1, 2021, unless: (1) the public utility first provides written notice to the IURC; and (2) the IURC conducts a public hearing concerning the reasonableness of the planned retirement.  The IURC must conduct the hearing and issue its analysis and conclusions within 120 days of receiving notice. If the planned retirement, sale, or transfer was included in the preferred portfolio of the utility’s integrated resources plan, the utility may proceed with the planned retirement, sale, or transfer after the IURC issues its analysis and conclusions.  If not, the utility may not proceed with the planned retirement, sale, or transfer until at least six (6) months have elapsed from the date of the IURC’s receipt of the utility's written notice. Section 11 expires May 1, 2021. Section 12 provides that in awarding high value workforce ready credit-bearing grants, the Commission for Higher Education, in conjunction with the Department of Workforce Development, shall give priority to displaced coal workers. See: IC 8-1-8.5-11, 12. This Act was signed by the Governor on March 21, 2020.

Environmental, natural resources, energy, and utility laws are a complex system of interrelated state and federal statutes, regulations, rules, guidelines, administrative rulings and judicial decisions designed to promote public health, encourage safe practices, preserve the environment, conserve natural resources, ensure access to affordable energy and promote economic growth. These rules and regulations constantly change and evolve. Ice Miller’s team of environmental and energy lawyers provide a broad range of services to clients affected by these laws.

If you have any questions about these new laws, please contact Don Snemis, Steven Krohne, Freedom Smith or Amy Berg.

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.