The task force established to review state actions on wetlands after lawmakers removed and weakened protections for a large majority of them has released its final report, finding several strategies that could help protect the state’s remaining wetlands.

The Indiana Wetlands Task Force was created as part of Senate Enrolled Act 389, a 2021 law introduced by members of the Indiana Builders Association that stripped state protections for more than half of the state’s 800,000 acres of wetlands and weakened the remaining protections.

The 13-member task force was chaired by Will Ditzler, a licensed real estate broker and former chair of the Nature Conservancy in Indiana, and included representatives from fields impacted by the state’s wetland policies, including surveyors, farmers, water district managers, agriculture professors, local government leaders and land developers.

The Task Force was tasked with finding strategies to mitigate costs incurred by builders seeking to develop wetlands; exploring the flood reduction benefits and carbon dioxide storage potential of isolated wetlands; investigating strategies to incentivize the avoidance of isolated wetland impacts during development and their preservation; and finding improvements to the isolated wetland permitting process.

The Task Force held five meetings throughout 2022 to fulfill the law’s directives, resulting several key findings and recommendations for Indiana lawmakers, including:

• The cumulative loss of wetlands, along with climate change-altered precipitation patterns, requires both regulatory and non-regulatory approaches and incentives.

• Indiana needs to focus on its own efforts on state program improvement and address state-level needs instead of relying on federal regulations.

• Changes to federal regulations limited the law’s impact on the loss of isolated wetlands, but SEA 389 provided short-term economic benefit to farmers and developers at the cost of long-term flooding issues.

• State agency problems with staffing and resources have negatively impacted regulatory programs, including wetlands.

‘ISOLATED’ WETLANDS

The state of Indiana has lost about 85% of its original wetlands since Western colonization. According to the Indiana Department of Environmental Management, only 800,000 acres of wetlands remain in the entire state.

“Wetlands offer a number of benefits. You get a lot of unique plant and animal species there, but they’re also great reservoirs for water on the landscape that prevents downstream flooding by retaining water, much like stormwater management ponds do artificially,” said Jacob Hosen, assistant professor of ecology analytics and the internet of things at Purdue University. “They also filter out a lot of things that cause water quality problems downstream — things like harmful algal blooms. They offer a lot of benefits with flood control, preventing pollution from getting into our rivers, streams and lakes, as well as traditional ecological biodiversity benefits.”

All recognized wetlands in Indiana were protected by federal law until 2001, when the U.S. Supreme Court limited the federal government’s jurisdiction over isolated wetlands — those with no apparent surface water connection to perennial rivers, streams, estuaries or the ocean.

Despite their geographic isolation from other waterways, isolated wetlands are hydrologically and biogeochemically connected to downstream waterways, meaning they influence their water quality and other functions.

“A lot of times these so-called isolated wetlands are providing the most benefit, and it’s because, specifically, they are isolated,” Hosen said. “When you talk about losing environmental protections for isolated wetlands, you’re talking about losing protection for most of the wetlands that you would see in Indiana.”

After the 2001 Supreme Court decision, Indiana lawmakers moved to establish state protections for isolated wetlands, resulting in the state’s Isolated Wetlands Law. The law allowed the development of Indiana wetlands as long as the disturbed wetlands were replaced elsewhere or the Indiana Department of Natural Resources was paid to replace them.

The Isolated Wetlands law exempted many isolated wetlands, including those found on agricultural land, residential lawns and irrigation ditches.

The Supreme Court decision in 2006 extended state jurisdiction over wetlands by limiting the reach of federal Clean Water Act protections to wetlands that possessed a “significant nexus” to traditional navigable waterways.

The Trump administration in 2020 finalized a rule that limited the federal Clean Water Act protections to four categories of waterways, limiting federal protection of wetlands to those “adjacent to jurisdictional waters.”

“These water bodies are at risk from a legal protection standpoint, specifically because they don’t have any direct downstream connections to larger water bodies,” Hosen said. “Flood control and prevention only happens because there are pockets on the landscape that hold water. If you connect it downstream, then you’re going to drain that wetland. You lose that flood benefit. You also lose all of the nutrient retention benefits that rely on that long water storage time as well.”

Members of the Indiana Builders Association who also serve as state senators took advantage of the opportunity presented by the Trump rule to introduce Senate Bill 389, a full repeal of the Isolated Wetlands law.

The bill was pared down as it made its way through both houses of the Indiana Legislature. Gov. Eric Holcomb signed into law SEA 389, which resulted in a full repeal of protections for all 425,000 acres of Class I wetlands in the state and a weakening of protections for 250,000 acres of Class II wetlands. The bill also established the Indiana Wetlands Task Force.

About four months after SEA 389 was signed into law, a federal judge struck down the Trump rule that enabled the law.

THE TASK FORCE REPORT

Despite the task force’s five meetings, a crucial member, housing industry representative Jeff Thomas, did not attend and did not provide any input.

“This left our task force without a critical industry voice from a special interest group who was one of the driving forces behind the legislation that created the wetlands task force,” the report stated.

The Task Force was eventually able to get input from the Indiana Builders Association to use in the report.

One of the main findings in the report is that a series of federal happenings, including the repeal of the Trump rule and the changing of presidential administrations, blunted the negative impact of SEA 389 on the state’s wetlands.

“The practical implications of SEA 389 were subsequently impacted by changes to federal regulation, limiting the impact of the bill on the loss of isolated wetlands from a mitigation ratios and exemptions standpoint,” the report states. “The exception to this is with the larger exemptions for low-quality isolated wetlands of smaller acreage in active agricultural landscapes. This has reduced mitigation and increased the loss of these wetlands which although of lower ecological value, still contribute to water storage capacity on the landscape. This change has provided short-term economic benefit to farmers and developers at the cost of long-term flooding issues.”

Using research from Purdue University and Indiana University Purdue University Indianapolis, the report also entered into the legislative record the science behind isolated wetland flood reduction benefits and carbon dioxide storage and the high cost to local governments of replacing their natural functions.

Hosen’s research on the role of isolated wetlands in storing carbon was presented to task force members at a March meeting.

“One of the things that the task force highlighted is that the traditional metrics that we have, like biodiversity, don't always predict how well a wetland functions. And, so, sometimes you can have a low-quality wetland that actually provides a lot of flood control benefits, a lot of water quality benefits, but it's hard to tell just from looking at that wetland if it's doing that,” Hosen said.

In addressing how to mitigate the costs of developing wetlands incurred by builders, the Task Force found that state and local communities should incentivize preservation and avoidance of existing wetlands by providing state and local tax benefits, cost offsets and other incentives.

The Task Force members also agreed that state lawmakers could also help save wetlands and their functions by additional investment in funding voluntary conservation programs that assist landowners, funding the updating of a statewide wetland map, using the President Benjamin Harrison Conservation Trust Fund or other funding sources to purchase large wetland systems or conservation easement, and helping local governments identify wetlands and accounting for their benefits.

The Task Force also calls for improvements to the state isolated wetlands permitting process, including creating a general permit for projects with minimal impacts that do not require mitigation, developing an online portal for wetland application submittals and expanding wetland mitigation banking options to allow for a lower mitigation ratio for impacts.

IDEM should also consider adding an additional class to the current three-class wetland classification system to account for the lowest quality wetlands, the Task Force suggested. The new class, potentially called Class 0, would exclude wetlands that have very little functions and values from the Class I category.

The Task Force also urged the state to avoid aligning with the U.S. Army Corps of Engineers’ classification system, which the Task Force said does not require qualitative assessments of wetlands and decides wetland type based on dominant vegetative type present.

“The Wetlands Task Force does not recommend aligning the Indiana Isolated Wetland Classification System with the United States Army Corps of Engineers nomenclature because knowing both the type of a wetland and the functions of a wetland are important in terms of how it should be regulated and mitigated. Wetlands with higher functions should be more strongly regulated than wetlands with lower functions, and the United States Army Corps of Engineers classification system does not consider this in the evaluation of regulated wetlands,” the report states.

The report also recommends the state review its mitigation ratios, the amount of mitigation that needs to be done to replace the function of the disturbed wetlands, and review the “in lieu of” compensatory mitigation program to reduce costs and improve its transparency.

Hosen said he hopes the report encourages more science-based legislation.

“[The report] really highlights how difficult it is to write laws for environmental issues, because our knowledge is constantly changing,” Hosen said. “I think we're finding a lot of great stuff out about how we can find win-wins. I think that was a great thing about the report, as well, as they really highlighted places where the environment’s protected, consumers are protected and, ultimately, there are benefits to builders and other folks as well.”