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 7044 NOTE PREPARED: Jan 9, 2024
BILL NUMBER: HB 1403 BILL AMENDED:
SUBJECT: Determining Existence and Class of Wetlands.
FIRST AUTHOR: Rep. Boy BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
DEDICATED
FEDERAL
Summary of Legislation: This bill amends the definition of Class I wetland to provide that, to be
categorized as a Class I wetland, a wetland must be determined by a hydrologist to possess no significant
hydrologic function. It defines "hydrologic function" as the capacity of a wetland to store floodwaters by
spreading water out over a large, flat area, which decreases runoff velocity, reduces flood peaks, and
distributes stormflows over longer time periods. It provides that a wetland that meets the other conditions
of the definition of "Class I wetland" but is not determined by a hydrologist to possess no significant
hydrologic function is a Class II wetland.
This bill also provides that, for purposes of the law on state regulated wetlands, the existence of a wetland
and the wetland class of a wetland shall be determined through use of: (1) the National Wetlands Inventory
produced by the United States Fish and Wildlife Service and made available by the Department of
Environmental Management on the Internet for public use; and (2) the soil data and other information
available through the Web Soil Survey website operated by the Natural Resources Conservation Service of
the United States Department of Agriculture.
Effective Date: July 1, 2024.
Explanation of State Expenditures: This bill modifies the definitions for class I and class II wetlands in
the state. It also requires that the existence of a wetland and the class of a wetland be determined through
Indiana Code, as well as both the National Wetlands Inventory and soil data available through the Web Soil
Survey website operated by the US Department of Agriculture. These provisions may impact the overall
number of wetlands, and may result in changes to the class of wetlands.
HB 1403 1 Impacts to wetlands may require state regulated wetland permits from the Indiana Department of
Environmental Management (IDEM). The IDEM must review state wetland permits and applications for
Section 401 Water Quality Certifications (for certain proposed projects occurring on a state wetland).
If this bill results in fewer wetlands or causes wetlands to change in class level, then the IDEM may be
required to review fewer applications for permits and certifications related to wetlands. 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. Conversely, the IDEM may need
to create and disperse guidance to assist regulators and wetland consultants in determining a wetland's class.
Additional Information: When a project is planned in Indiana that will impact a wetland, stream, river, lake,
or other water of the US, the IDEM must issue a Section 401 Water Quality Certification, which is a required
component of a federal permit and must be issued before a federal permit or license can be granted.
If a wetland is determined not to be waters of the U.S., then it is considered to be waters of the state. State
regulated wetlands (those wetlands not regulated under the federal Clean Water Act) are regulated under
Indiana's regulated wetlands law.
Explanation of State Revenues:
Explanation of Local Expenditures: If the bill causes a change in the number of wetlands or 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:
State Agencies Affected: Indiana Department of Environmental Management.
Local Agencies Affected: Local governmental entities.
Information Sources:
https://www.in.gov/idem/wetlands/information-about/section-401-water-quality-certification.
Fiscal Analyst: Jason Barrett, 317-232-9809.
HB 1403 2