On March 13, 2024, Gov. Eric Holcomb signed and passed House Bill 1003 (HB1003), authored by Rep. Gregory Steuerwald (R-Avon). HB1003 eliminates the Office of Environmental Adjudication (OEA) and transfers administrative law proceedings to the Office of Administrative Law Proceedings (OALP), making OALP the “ultimate authority” for administrative proceedings under its jurisdiction. However, OALP is not the “ultimate authority,” as amended in Indiana Code 4-15-10.5-12(c), if: (1) a particular agency or agency action is exempted under Indiana law; or (2) an agency is required by federal mandate, as a condition of federal funding, to conduct or render a final order in an adjudication. This means that OALP will now make decisions involving administrative appeals from actions taken by the Indiana Department of Environmental Management (IDEM). Consolidation of OEA into OALP was made to streamline government resources for more efficient administrative proceedings.
Concerns, however, have been expressed about preserving environmental expertise during the transition from OEA into OALP. These concerns have been addressed through amendment of Indiana Code 4-21.5-3-9(b) & (c) by requiring OALP administrative law judges who receive cases relating to adjudication of air pollution control laws, water pollution control laws, environmental management laws, or solid waste and hazardous waste management laws to meet the following criteria: (1) be a citizen of Indiana; (2) be an attorney in good standing admitted to practice in Indiana; (3) have at least 5 years of experience practicing environmental or administrative law; (4) be independent of the agency involved in the review; (5) meet the qualifications specific to environmental law as determined by OALP’s training program; and (6) be one of the three ALJs in OALP proceedings designated to hear environmental matters.
HB1003 includes other notable changes. First, the bill amends Indiana Code 4-21.5-5-11 to add Section (b) writing that “court[s] shall decide all questions of law, including any interpretation of a federal or state constitutional provision, state statute, or agency rule, without deference to any previous interpretation made by the agency.” This means the court no longer has to yield to an agency’s interpretation of its own rules if that interpretation is reasonable. Second, Indiana Code 4-21.5-5-14(d)(5) was amended to change the burden of proof needed before an agency’s decision can be overturned by the court. The burden is changed from “substantial evidence” to “a preponderance of the evidence” standard, making it easier for agency actions to be challenged. Lastly, Indiana Code 4-21.5-3-27.5(b) was added to include fee-shifting provisions. This section requires the court to order the agency to pay the other party's attorney’s fees if that party prevails before an administrative law judge, the agency was the one to initiate the judicial review, and if the court ruled in favor of that party.
Some have raised issues about eliminating deference to agency interpretations, preferring that courts give deference where warranted. Others view HB1003 as a necessary measure to prevent Indiana’s governmental agencies from abusing their power and to ensure judges do not improperly defer to agency interpretations.
The transition is scheduled to take effect on July 1, 2024. HB1003 will require all pending proceedings in OEA to be transferred to OALP after July 1. Until OALP adopts or amends rules regarding environmental matters, the OEA will continue to follow and implement the rules under Section 315 of the Indiana Administrative Code.
The full text of HB1003 and amendments can be viewed here.
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