LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
200 W. Washington St., Suite 301
Indianapolis, IN 46204
(317) 233-0696
iga.in.gov
FISCAL IMPACT STATEMENT
LS 7033 NOTE PREPARED: Jan 23, 2024
BILL NUMBER: HB 1383 BILL AMENDED: Jan 18, 2024
SUBJECT: Wetlands.
FIRST AUTHOR: Rep. Morrison BILL STATUS: As Passed House
FIRST SPONSOR: Sen. Niemeyer
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
XDEDICATED
FEDERAL
Summary of Legislation: Wetland Classifications and Permitting: The bill clarifies various wetland
definitions. It eliminates certain wetland rulemaking requirements. It provides that certain wetland activity
requires state authorization.
Compensatory Mitigation: The bill clarifies the compensatory mitigation that must be offered to offset
certain wetland activity.
It makes conforming changes and technical corrections.
Effective Date: July 1, 2024.
Explanation of State Expenditures: Wetland Classifications and Permitting: The bill eliminates the
requirement for rulemaking regarding wetland permitting which would reduce the workload for the
Environmental Rules Boards (ERB). The bill would have an indeterminate impact on the Department of
Environmental Management (IDEM) workload. It allows for wetland general permits and individual permits,
that currently require rules (adopted by the ERB), to be done administratively by IDEM according to
statutory requirements. It also expands the activities authorized by a general permit.
It changes the definition of some state regulated wetlands, which could lower the classification of some Class
III wetlands to Class II wetlands. This could reduce IDEM workload, as some activities in a Class III wetland
that require an individual permit may be exempt from permitting or authorized by a general permit for a Class
II wetland.
HB 1383 1 There is currently a permit exemption for dredge and fill activity in a Class II wetland that is not more than
3/4 acre within the boundary of a municipality. The bill expands the allowable activities but limits the
exemption (to 60% of cumulative acreage) when more than one Class II wetland is present on a tract.
Additionally, state governmental entities may have a reduction in compensatory mitigation expenses for
restoring or replacing wetland areas that are lost due to actions of the state governmental entity, if some
wetland classifications are lowered.
Compensatory Mitigation: The bill may increase workload for Department of Natural Resources (DNR) and
the Natural Resources Foundation, a nonprofit subsidiary corporation of the DNR, as it provides for
additional compensatory mitigation options. The Natural Resources Foundation manages certain aspects of
the in-lieu fee program including the sale of advance credits for those opting to purchase credits in lieu of
performing mitigation. Upon sale of the mitigation credits, the responsibility for mitigation transfers to the
DNR.
The bill would also increase workload and expenditures for the DNR as it requires compensatory mitigation
to be protected with a restrictive covenant with respect to the property. The DNR would need to file
restrictive covenant documents with county recorders and pay document filing fees.
The bill replaces the reference to the U.S. Army Corps of Engineers’ (USACE) approval for its compensatory
mitigation in-lieu fee program, requiring IDEM to approve the program. This may not eliminate the federal
requirement to receive USACE approval for the program.
Explanation of State Revenues: Compensatory Mitigation: The bill may increase revenue to the Natural
Resources Foundation as it provides for additional compensatory mitigation options. The Natural Resources
Foundation receives revenue from the sale of advance credits for those opting to purchase the credits in lieu
of performing the mitigation. The Natural Resources Foundation retains 2% of each credit sale as their
administrative fee. However, lowering the classification of some Class III wetlands to Class II wetlands could
reduce the amount of compensatory mitigation required.
Explanation of Local Expenditures: Wetland Classifications and Permitting: If the bill causes wetlands
to change in class level, then local governmental entities may have a reduction in compensatory mitigation
expenses for restoring or replacing wetland areas that are lost due to actions of the local governmental entity.
Explanation of Local Revenues: Compensatory Mitigation: The bill requires compensatory mitigation to
be protected with a restrictive covenant with respect to the property. County recorders may receive additional
fees for the filing of these restrictive covenants.
State Agencies Affected: Department of Environmental Management; Department of Natural Resources;
Environmental Rules Boards; Natural Resources Foundation.
Local Agencies Affected: Local units; county recorders.
Information Sources:
https://www.in.gov/idem/wetlands/files/state_regulated_guidance_class_determination.pdf;
https://www.in.gov/idem/cleanups/investigation-and-cleanup-programs/institutional-controls/;
https://www.govinfo.gov/content/pkg/FR-2002-01-15/pdf/02-539.pdf;
https://www.epa.gov/sites/default/files/2015-08/documents/in-lieu_fee_mitigation_guidance.pdf;
HB 1383 2 https://www.in.gov/dnr/land-acquisition/stream-and-wetland-mitigation-program/in-lieu-fee-mitigation-pr
ogram-how-it-works/;
https://www.in.gov/idem/wetlands/information-about/state-regulated-wetlands-program/understanding-state-regulate
d-wetland-exemptions/.
Fiscal Analyst: Heather Puletz, 317-234-9484.
HB 1383 3