Summary of New Indiana Wetlands Law Signed by Governor Holcomb

On April 29, 2021, Governor Eric Holcomb signed Senate Enrolled Act 389 (“SEA 389”), which makes significant changes to Indiana’s Isolated Wetlands Program as well as lesser changes to the 401 Water Quality Certification Program. SEA 389 received strong support during the legislative process having passed the Indiana Senate (29-19), passed the Indiana House (58-40), and received a concurrence vote in the Senate (31-19) on April 14, 2021.

SEA 389 does the following:

Exempts the development of cropland that has been used for agricultural purposes for the five years immediately preceding development (or 10 years if the U.S. Army Corps of Engineers has confirmed that the site contains no jurisdictional waters) from isolated wetlands permit requirements.
Exempts all Class I wetlands from state regulation. Class I wetlands are isolated wetlands that have been previously disturbed by human activity or that support only minimal wildlife, aquatic habitat, or hydrologic function.
Exempts Class II wetlands that are not more than 3/8ths of an acre (0.375) from regulation. Class II wetlands are isolated wetlands that support moderate habitat or hydrologic functions but are without the presence of, or habitat for, rare, threatened, or endangered species. If multiple Class II wetlands are found on a tract, additional restrictions apply.
Exempts dredge and fill activities in a Class II wetland not more than 3/4ths of an acre that are located within a municipality.
Codifies that the maintenance of field tile within a Class II or III wetland shall be authorized by a general permit.
Codifies that wetland activity in an ephemeral stream does not require a permit unless one is required under the federal Clean Water Act (“CWA”). An ephemeral stream means surface water flowing or pooling only in direct response to precipitation such as rain or snowfall.
Codifies an “in lieu fee” program for compensatory mitigation in situations where impacts upon Class II or Class III wetlands are necessary.
Reduces IDEM’s statutory deadline for issuing or denying an Isolated Wetlands Permit from 120 to 90 days.
Reduces IDEM’s statutory deadline for processing a Section 401 application from 120 to 90 days. Failure to decide within 90 days constitutes waiver of certification. However, the new law requires applicants to contact the agency to request a “pre-coordination” meeting 30 days before applying.
Establishes a 14-member “Indiana Wetlands Task Force” that will study Indiana’s wetlands and provide a report to the Indiana General Assembly by November 1, 2022. In particular, the task force will research and develop recommendations on: (1) reducing the costs incurred by builders in complying with wetlands regulations; (2) the food reduction benefits of isolated wetlands; (3) the role of isolated wetlands in storing carbon dioxide; (4) strategies to avoid isolated wetland impact during development; (5) strategies to incentivize the preservation of existing isolated wetlands; (6) improvements to the isolated wetlands permitting process; (7) review and recommend improvements to mitigation ratios; and (8) review and recommend improvements to the current “in lieu of” compensatory mitigation program.

The Indiana Builders Association has supported the legislation stating, “SEA 389 strikes a balance between reasonable regulations on property owners with isolated wetlands on their property and protecting the environment.” The association also indicated that the new law will make housing more affordable by reducing the cost of development. “Regulations at the federal, state, and local level now account for roughly 25% of the cost of a house. This is not sticks or bricks, but government regulations, such as Indiana’s isolated wetlands program, pushing the price of housing up to levels that are becoming out of reach for many Hoosiers.”

It is important to keep in mind that SEA 389 will not impact the federal regulation of wetlands in Indiana. Property owners will still be required to comply with CWA Section 404 as it relates to federally jurisdictional wetlands. In addition a CWA Section 401 certification is still required from IDEM demonstrating that the proposed filling of jurisdictional wetlands will not degrade or otherwise violate the state’s water quality standards.

The new law is available on the Indiana General Assembly website at: http://iga.in.gov/legislative/2021/bills/senate/389#document-f33557a9.

If you have questions about SEA 389 or other environmental regulations, contact Lauren Baldwin, Don Snemis or the Environmental attorney with whom you most frequently work.

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.