Environmental law update: faster permitting, a wetlands ruling and good news for brown field buyers. (Environment).

Regulating air, water and waste, and determining who will pay for cleanups. Those are the topics that have consumed the environmental agenda for some 20 years. While the growing pains that followed passage of major initiatives are mostly a thing of the past, there's still an annual tweaking that goes on at the Statehouse, and there's still a nagging concern that never goes away: the permitting process can he as slow as molasses.

"The longer it takes, the less desirable it is to he in Indiana," Frank Deveau, head of the environmental practice group of Sommer & Barnard, Indianapolis, says of the permitting process. If it takes two months to get a permit in another state versus 12 months in Indiana, "you're inclined to go with the shorter period if everything else is equal."

Most of the permitting Deveau refers to surrounds air emissions. "IDEM is generally conscientious," he says. "They recognize it's a big deal." But one obstacle to expediency is EPA's Region V office. "We thought that when Bush became president they would be more reasonable, but it's a huge organization." Changes haven't filtered down to regional offices yet.

FASTER PERMITTING

Updating water discharge permits is also a problem, says Kari Lewis, associate in the environmental law department of Barnes & Thornburg's Indianapolis office. An answer may be the passage of House Enrolled Act 1329 in the 2002 regular session of the General Assembly, amending an existing law to jumpstart the permitting process under the National Pollutant Discharge Elimination System. Through lack of action, IDEM has allowed more than 100 permits to expire in the state, some for 10 years, says Lewis.

When a water discharge permit expires it is administratively extended, so initially there was no demand for expeditious renewal because many businesses were happy with their old permit and concerned that a new one might be more stringent. "But now, it's hindering their ability to make changes," says Lewis. "You can't keep delaying projects. The reason this was passed was several facilities in the state were saying, 'Hey, something's got to give.'"

"A number of years ago we adopted water quality standards that were fairly strict," says Lew Beck-with, partner with Baker & Daniels Indianapolis, who practices primarily in environmental law and OSHA areas. "We patted ourselves on the back" at the time, he says, but the delays and uncertainties surrounding permits will ultimately impact businesses that discharge directly into waterways and municipalities with sewage-treatment plants that accept industrial discharges and are operating under expired permits. "By adopting strong water quality standards, we now must back them up and put them into permits."

The recent legislation mirrors existing law for getting new facilities off the ground quickly by allowing those seeking permits to write their own permit or hire a consultant to do it and submit it to IDEM for approval or denial within specified timeframes. It also requires IDEM to make annual reports to the Environmental Quality Service Council (EQSC), a statutory committee comprised of lawmakers state agency heads and lay members, on the number and status of permits that have been administratively extended.

While the business community wants to keep IDEM's feet to the fire in permitting, it favors the slow deliberate approach to new regulation and it's won over lawmakers--at least for the moment. "We've been noticing an interesting new trend" in the General Assembly, says Lewis. "More and more bills, rather than the norm of establishing policy and asking IDEM to move forward, are asking the agency to stop doing something."

WETLANDS RULING

In what he calls a "major, major, change," Deveau says the U.S. Supreme Court ruled on January 2001 that isolated wetlands were not within the federal government's jurisdiction. Therefore, the Army Corps of Engineers no longer had the authority to regulate every puddle or potential puddle--a boon for landowners and developers, he says. It was up to the states to regulate or not regulate.

One hand giveth, the other taketh away. IDEM determined that it already had the general authority to regulate isolated wetlands and required permits for dredging or filling. As a result, says Deveau, a suit was filed in the Marion County Environmental Court, and it was found that IDEM did not have the authority to regulate without promulgating a specific rule. In a circuitous set of circumstances, he says IDEM tried to tag new wetlands rules on long-pending water quality rules, over the objections of officials from 70 counties who believed they would slow development.

Enter the legislature to referee. House Enrolled Act 1306 directs the EQSC to study wetlands issues during the 2002 interim, and prohibits IDEM from adopting or enforcing administrative rules concerning wetlands issues until the council has completed its study.

In a similar vein, Senate Enrolled Act 259 gives businesses a reprieve from questionable new reporting requirements for low levels of hazardous air pollutant emissions, says Lewis. "There was no immediate use for the information," which takes considerable time and expense to develop. The law delays any IDEM enforcement until the EQSC reviews the issues and makes a final report.

GOOD NEWS FOR BROWNFIELD BUYERS

It's becoming increasingly viable to put old and abandoned contaminated properties--brownfields--back in business and back on the tax rolls as businesses and local communities become more savvy in putting deals together. Making the difference is a combination of government assistance, private funding and successful recoveries against prior owners and their insurers.

It's also easier since Congress passed an amendment to the Super-fund statute last year giving purchasers of contaminated property a much better opportunity to prove the "innocent purchaser's defense." "They're in a pretty good position, as long as they didn't contribute to it," says Beckwith. Under the prior provisions, if the buyer was aware of the contamination, that was probably enough to lose the defense.

"It's the first time in 20 years a buyer cannot automatically be subject to Superfund liability," says Deveau, and he's had trouble convincing some fellow lawyers that the amendment's for real. "It's such a dramatic change, nobody believes it."