[1999 OEA 45, page 45 begins]
OFFICIAL SHORT CITATION NAME: When referring to 1999 OEA 45, cite this case as
Sunman Waterworks, 1999 OEA 45.
water main exemptions
repeal by implication
permit by rule
Petitioner: John L. Kellerman, Esq.: Greenman, Kellerman & Koepcke
IDEM: Janice Lengel, Esq.
September 28, 1999
FURTHER CASE ACTIVITY:
[1999 OEA 45, page 46 begins]
STATE OF INDIANA ) BEFORE THE INDIANA OFFICE OF
) SS: ENVIRONMENTAL ADJUDICATION
COUNTY OF MARION )
IN THE MATTER OF: )
OBJECTION TO THE DENIAL OF )
PERMIT APPROVAL ) CAUSE NO. 98-W-J-2177
SUNMAN WATERWORKS )
FINAL ORDER AFFIRMING RECOMMENDED ORDER
This constitutes notice that on August 16, 1999, the Administrative Law Judge (AU) issued a Recommended Order in the above-captioned matter. On August 30, 1999, Respondent, the Indiana Department of Environmental Management (IDEM), by counsel, filed objections to the Recommended Order. The Chief Administrative Law Judge, as the Ultimate Authority for final decisions by IDEM, being duly advised, now finds the following:
1. IDEM asserts the water main exemptions contained in 327 IAC 8-3-2 were repealed when Indiana Code § 13-18-16-1 was amended and the exemptions were removed from its provisions.
2. 329 IAC 8-3-2 relies upon Ind. Code §13-18-16-8 and Ind. Code §13-14-8-7 as its authority for the exemptions. At no time was Ind. Code § 13-18-16-1 cited as authority for the water main exemptions.
3. In 1988, neither the statute nor the rules contained exemptions for water main extensions. See Ind. Code § 13-7-14-1 and 410 IAC 6.2-5-1. In 1989, IDEM adopted rules that contained the exemptions. The statute, however, did not contain the exemptions. The first time the exemptions appeared in statute was in 1991. If IDEM’s analysis is followed to its logical conclusion, then IDEM had no authority to exempt water main exemptions from the years 1989 to 1991. Obviously, IDEM did not believe its authority was derived from Ind. Code § 13-18-16-1 (previously Ind. Code § 13-7-14-1) and, therefore, was duly authorized to exempt certain water main extensions.
4. The above analysis lends further support to the AU’s conclusion that the statute and the rule are not in conflict. The exemptions in 327 IAC 8-3-2 continued until IDEM adopted its permit-by-rule for water main extensions. At no time did the rule over-reach or expand the authority IDEM was granted by law. Until now, IDEM has consistently based its authority to exempt on the general grant of authority to promulgate rules regarding public water supplies. None of IDEM’s arguments support its apparent change in policy now.
[1999 OEA 45, page 47 begins]
5. In addition, repeal by implication is not favored in the law. Osborne v. State, 439, N.E.2d 677, 682 (Ind.Ct.App. 1982), citing Mims v. Commercial Credit Corporation, 307 N.E.2d 867, 868 (Ind. 1974). This is especially true when the statute and the rule can be read in harmony so as to give effect to each. Thus, the AU correctly concluded that the Indiana Legislature is presumed to have knowledge of the laws in effect when it passes or amends a statute. If the legislature meant to repeal the exemptions in the rule, it could have easily and explicitly done so.
6. Furthermore, the instant case appears to be an isolated one. Now that IDEM has promulgated its permit-by-rule, there is little reason to believe the flood gates would be opened and copious numbers of water main extensions would go unregulated.
The Chief Administrative Law Judge finds that the Recommended Order should be and hereby is AFFIRMED and is incorporated herein by reference.
You are further notified that pursuant to provisions of Indiana Code §4-21.5-7-5, the Office of Environmental Adjudication serves as the Ultimate Authority in administrative review of decisions of the Commissioner of the Indiana Department of Environmental Management. This is a Final Order subject to Judicial Review consistent with applicable provisions of IC 4-21.5. Pursuant to IC 4-21.5-5-5, a Petition for Judicial Review of this Final Order is timely only if it is filed with a civil court of competent jurisdiction within thirty (30) days after the date this notice is served.
IT IS SO ORDERED in Indianapolis, Indiana this 28th day of September 1999.
Wayne E. Penrod,
Chief Administrative Law Judge
[1999 OEA 45, page 48 begins]
RECOMMENDED ORDER GRANTING PETITIONER’S MOTION
FOR SUMMARY JUDGMENT
I. Statement of the Case
On December 22, 1998, Petitioner, the Town of Sunman, filed a Petition for Administrative Review of the Indiana Department of Environmental Management’s (IDEM) denial of a water main extension permit. On April 9, 1999 a pre-hearing conference was held wherein the parties were ordered to file dispositive motions. On May 26, 1999, IDEM filed a dispositive motion and on May 28, 1999 Petitioner filed a dispositive motion. JDEM filed a Response on June 25, 1999 and Petitioner filed a Reply on July 12, 1999. On July 23, 1999, IDEM filed a Motion for Default alleging, among other things, that Petitioner failed to abide by the April 9, 1999 Order Regarding Scheduling. On July 29, 1999, IDEM filed a Motion to Strike Petitioner’s Reply because it was, in effect, a Response to IDEM’s Motion for Summary Judgment, and on July 30, 1999, IDEM filed a Motion for Leave to File Reply to Town of Sunman’s Reply to IDEM’s Motion for Summary Judgment.
The issue in this case is whether the Town of Sunman was required to obtain a construction permit for its water main extension.
III. Undisputed Facts
The Administrative Law Judge finds that the parties have stipulated there are no genuine issues of material fact in dispute.
The Town of Sunman (the Town) contends that it does not have to obtain a construction permit for its water main extension. The Town asserts that its water main extension was less than 2,500 feet and resulted in less than a 5% increase in users, and, therefore, qualified for an exemption under 327 IAC 8-3-2. Furthermore, nothing in the statute requires the Town to obtain a permit before construction was completed.
IDEM argues, on the other hand, that when the statute was recodified and amended, the Indiana legislature intended that the exemptions would no longer apply. Thus, the Town was under a duty to receive a permit before beginning construction. In addition, when a rule conflicts with a statute, then the statutory provision must prevail and the rule is, in effect, repealed.
For the following reasons, the Town’s Motion for Summary Judgment must be granted because the statute specifically did not repeal the exemptions pertaining to water main extensions and, thus, it remained in effect until IDEM promulgated new rules for water main extensions.
[1999 OEA 45, page 49 begins]
A. Applicable Statutes
The Environmental Management Act underwent simultaneous repeal and recodification in 1996. The applicable statutory provision in this case is Indiana Code §13-18-6-1. In 1996, after repeal and recodification, Ind. Code § 13-18-1 6-1 provided:
(a) Plans and specifications for the construction, installation, or modification pertaining to:
(4) storage; or
(5) major distribution mains;
of a public water supply must be submitted to the commissioner for approval. . . .
(b) For the purposes of this chapter, a water main extension that:
(1) constitutes an increase of less than five percent (5%) in the number of customers; or
(2) is less than two thousand five hundred (2,500) feet in length;
is not considered a major distribution main under subsection (a) and does not require a permit from the commissioner.
(c) Construction, installation, or modification of a public water supply may not begin until the commissioner has approved plans and specifications submitted to the commissioner under subsection (a).
In 1997, the legislature changed the 1996 version to:
(a) A permit is required for the construction, installation, or modification of:
(3) equipment; or
of a public water supply, including water distribution systems.
(b) Plans and specifications for the construction, installation, or modification of sources, facilities, equipment, or devices of a public water supply must be submitted to the commissioner with a permit application.
(c) Unless otherwise provided in rules adopted under section 8(b) of this chapter, plans and specifications must be submitted to the commissioner with the permit application for water distribution systems.
(d) Construction, installation, or modification of a public water supply may not begin until the commissioner has issued a permit under subsection (a).
[1999 OEA 45, page 50 begins]
The 1997 version of Ind. Code § 13-18-16-1 is the version of the law today. Section 8 of Ind. Code § 13-18-16 states in relevant part:
(a) The board shall adopt rules under IC 4-22-2 and IC 13-14-9 establishing requirements for the issuance of permits to control public water supplies, including the following:
(1) Permits for the construction, installation, or modification of facilities, equipment, or devices for any public water supply.
(2) Permits for the operation of sources, facilities, equipment, or devices for any public water supply.
(b) The board shall adopt a permit by rule for water main extensions (as defined in 327 IAC 8-3-1) to satisfy the permit requirement in section 1(a) of this chapter.
As of the time the Town constructed its water main extension, the following rule was in effect:
(a) No person shall cause or allow the construction, installation, or modification of any facility, equipment, or device for any public water supply without having a valid construction permit issued therefore by the commissioner, except as allowed in subsection (b).
(b) Construction permits shall not be required for the following:
(1) Water main extensions of less than two thousand five hundred (2,500) feet in length.
(2) Water main extensions which constitute an increase of less than five percent (5%) of the number of existing customers.
(3) Noncommunities and nontransient noncommunities with water supply service populations under five hundred (500) persons.
(4) Replacement of equipment of similar design and capacity, none of which will change adversely the plant operation, its hydraulic design or waste products, or the distribution system design, operation, or capacity.
327 IAC 8-3-2.
IDEM correctly points out that in the event of a conflict between a statute and a rule, the statute prevails. What must be determined first, however, is whether the statute and rule in this case are in conflict. Generally speaking, when two statutes cover the same subject matter, they are to be read in pari materia –construed together so as to produce a harmonious system. While this case does not concern two statutes, the concept of in pari materia is still instructive.
[1999 OEA 45, page 51 begins]
B. Exemptions Remained in Effect
In 1996, the legislature repealed Ind. Code § 13-7 and enacted provisions like Ind. Code § 13-18-16 et seq. The 1996 version of 13-18-16-1 provided for an exemption to obtaining a permit for a water main extension. At the same time, 326 IAC 8-3-2 also had an exemption for obtaining a permit for a water main extension. In 1997, the legislature removed the statutory exemptions and required IDEM to promulgate a permit-by-rule for water main extensions. IDEM’s permit-by-rule for water main extensions became effective June 1, 1999. The Town, however, began its water main construction in September 1998. The rule in effect at that time provided a permit exemption for water main extensions less than 2,500 feet and resulting in less than a 5% increase in customers. IDEM does not argue the fact that the Town would meet the exemption but asserts the exemptions were repealed when the statute was amended in 1997. If true, it would mean water main extensions would be treated like any other water distribution system, which runs counter to the legislature’s intent in past and current laws. “Where legislative intendment requires that prior legislation remain in force until the administrative body has enacted substitute regulations, a repeal of the old rules and regulations takes place only at the time the new administrative regulations go into effect.” Thus, the exemptions in 326 IAC 8-3-2 remained in effect for water main extensions until IDEM promulgated a new rule. Since the legislature is presumed to have knowledge of other laws when it enacts a statute, it could have easily repealed 326 IAC 8-3-2 if it wished to do so. By not expressly repealing the exemptions contained in the rule, the legislature intended that the exemptions continue until IDEM promulgated its permit-by-rule for water main extensions.
V. Conclusions of Law
The Administrative Law Judge concludes as a matter of law, based on the foregoing Undisputed Facts and Discussion, that the exemption for obtaining a water main extension permit was in effect at the time the Town of Sunman completed its water main extension.
[1999 OEA 45, page 52 begins]
VI. Recommended Order
The Administrative Law Judge recommends that the Town of Sunman’s Motion for Summary Judgment be GRANTED, that IDEM’s Motion for Summary Judgment be DENIED and that no permit be required for the Town of Sunman’s water main extension.
VII. Appeal Rights
You are hereby notified that pursuant to §4-21.5-3-29, you have the right to appeal the Recommended Order of the Administrative Law Judge. In order to do so, you must object in a writing that does the following:
(1) specifies which portions of the Recommended Order you object to;
(2) specifies which portions of the administrative record supports the objection(s); and
(3) is filed with the ultimate authority responsible for reviewing the order within fifteen (15) days. Objections should be sent to:
Wayne E. Penrod, Chief Administrative Law Judge
Office of Environmental Adjudication
150 West Market Street, Suite 618
Indianapolis , IN 46204
A final order disposing of the case or an order remanding the case to the administrative law judge for further proceedings shall be issued within sixty (60) days after the latter of:
(1) the date that the order was issued under §4-21.5-3-27;
(2) the receipt of briefs; or
(3) the close of oral argument;
unless the period is waived or extended with the written consent of all parties or for good cause shown.
IT IS SO ORDERED in Indianapolis, Indiana this day 16th day of August, 1999.
Linda C. Lasley,
Administrative Law Judge
[1999 OEA 45: end of decision]
IDEM’s Motion for Summary Judgment, p. 3.
Medical Disposal Services. Inc. v. Indiana Department of Environmental
Management, 669 N.E.2d 1054, 1059 (Ind.Ct.App. 1996).