Bill seeks to prevent federal takeover of Indiana air pollution program

Indiana’s air pollution permitting program is low on money, edging toward violation of the federal Clean Air Act—and a potential U.S. Environmental Protection Agency takeover. And it’s because air pollution is decreasing.

Lawmakers hope to head EPA action off with a bill allowing the state agency responsible to raise its fees. But Senate Bill 155 could get pushback from colleagues who want more oversight over agencies, not less, and those who want to lower, not raise, taxes and fees.

“You’re increasing the fees and the cost of it for the people that are in business, and that’s going to be the hard sell here,” said Sen. Rick Niemeyer, R-Lowell, the bill’s author.

“But the other part of it is that members of the committee and other senators don’t want the federal government taking over this program,” Niemeyer told the Capital Chronicle.

Niemeyer also chairs the Senate Environmental Affairs Committee, which will take on the bill.

Emissions down, revenues down

Congress amended the 1963 Clean Air Act in 1990 to create a national air operating permitting program called the Title V. States typically run their own, Indiana included.

The Indiana Department of Environmental Management approves permits for large polluting businesses that say how much, and which, pollutants they’re allowed to emit. The program is supposed to be self-sufficient—Indiana’s runs off emission-based fees.

But air pollution has gotten better, and revenue has dropped.

“This is an ironic-type thing because emissions are going down,” Niemeyer said. “It’s working. It’s working!”

“Some 30 or 40 years ago, there was this acid rain problem, because facilities that burned coal, including many of our power plants, released sulfur dioxide to the air,” said Indra Frank of the Hoosier Environmental Council. “That acid rain was damaging forests and waterways that were downwind. And that problem is virtually gone at this point.”

The national average of sulfur dioxide—which also eats at critical infrastructure — decreased a whopping 94% between 1980 and 2021, according to the EPA.

That’s just one example.

“This is assuredly to the benefit of the environment and public health,” IDEM spokesman Barry Sneed told the Capital Chronicle in an email. “However, with an emissions-based fee structure, the agency is at a disadvantage when it comes to sufficiently funding our permit program.”

Multi-million-dollar deficit projected

That’s because IDEM is locked into its fees under a 2019 law: an increase only once every five years, and capped at a 10% bump. That year, IDEM secured its first fee increase in more than a decade, according to WBOI: a 27% rise.

Senate Bill 155 would exempt IDEM’s Title V program from those restrictions, letting the agency’s board change fees as often as needed, and by as much as needed.

Without that power, Sneed said IDEM has had to temporarily reduce spending and leave some positions vacant to keep running the program’s activities: permitting, compliance, enforcement, and some air modeling and monitoring.

“Despite these challenges, we have continuously been able to maintain our permit quality and timeliness and complete all required source inspections,” Sneed said.

But he warned: “This likely is not sustainable long-term.”

Without change, IDEM expects a $3 million deficit in fiscal year 2024 alone, according to Sneed.

Consequences approach

The EPA sent the agency a letter in October, which the Indiana Capital Chronicle obtained.

It threatened that if the agency didn’t find more funding, the EPA could issue a notice of deficiency, implement a “stringent” performance plan, engage in “increased” and EPA-led enforcement at the Indiana companies that emit pollutants, and even take over permitting responsibilities for some of those companies.

EPA Region 5 spokeswoman Shayla Powell said it’s not common for the agency to issue warning letters for fees, since it typically identifies problems in routine evaluations.

But, she said, “Where fee deficiencies pose a serious concern for the sustainability of a title V program, it becomes necessary.”

Powell said the EPA “rarely” escalates past a warning letter because the agency works with its state counterpart to fix the problem, and because the decision is “entirely case-specific and … dependent on a number of factors.”

Possible skepticism

But some lawmakers want to rein agencies and fees in, not give them the power to raise their own fees.

An interim study committee this fall made a series of recommendations — one set uncontroversial, the other approved on party lines —  that some lawmakers said would increase legislative oversight of “unelected bureaucrats.”

Others said the recommendations, if made into law, would strip subject-matter experts of some power in writing complex regulations — and turn it over to lawmakers.

Niemeyer said he expected debate in committee about the power his bill would give IDEM. He also said he was meeting with other groups uneasy with the prospect of a fee increase, like manufacturers, to work on “guardrails” for the bill.

“The trouble is if you do a fee increase, it’s across the board,” Niemeyer said. “… The bigger companies can absorb this a lot easier than the smaller companies. That’s what we’re looking at: how big the increase is going to be.”

Any changes would get voted on as amendments to the version of the bill he filed.

“You’d have … some ability in there to say no or question [a fee increase],” he said.

Frank, of the Hoosier Environmental Council, said she wanted the program kept in Hoosier hands—which means fully funding it.

“I think as a state, we do better if we maintain our own air program,” she said. “… And I think Indiana’s permit-holders—the industries that need these air permits—would much rather deal with IDEM than deal with EPA.”

Uncertain future

It’s unclear what the EPA would do if lawmakers fail to pass legislation this session.

“The EPA is encouraged that IDEM is taking action to address title V fee concerns and the EPA is supportive of state agencies proactively identifying and developing solutions for fee deficiencies,” Powell said.

But she said it wasn’t possible to “make a determination” on the future of Indiana’s program if that effort fails.

And she noted that, while the program has to be self-sufficient, IDEM can charge fees on more than just emissions.

Indiana isn’t the only state struggling to fund its program: the EPA’s Office of the Inspector General said in a report this month that a “lack of consistent oversight and persistent Title V fee challenges may undermine Title V program implementation.”

The EPA is now tackling that by working on best practices and other solutions, according to Powell.

As for Indiana, Niemeyer said he was confident his colleagues would support the bill.

“I think it has enough merit,” he said. “Maybe somebody’ll have a better idea, but it’s pretty apparent right now what the solution is. It’s just: do you have the will to do it?”

The Indiana Capital Chronicle is an independent, not-for-profit news organization that covers state government, policy and elections.