Indiana’s Historic Environmental Legislation Signed into Law by Governor Holcomb
After more than a year of extensive planning, drafting, negotiating and testifying, PSRB’s Chris Braun is pleased to report Governor Eric Holcomb has signed into law Senate Bill 246! Starting July 1, 2023, this historic legislation will provide expanded eligibility under Indiana’s Underground Storage Tank Excess Liability Trust Fund (“ELTF”) to make available tens of millions of dollars annually for additional UST and AST cleanups and the replacement of old, deteriorating UST systems with new state-of-the-art UST systems. SB 246 is the first of its kind legislation in the United States, which places Indiana and its expanded ELTF program at the forefront in the United States for AST cleanup funding and compliance cost funding for UST system removal and replacement.
We drafted Senate Bill 246 to secure expansion of eligibility under the ELTF, which will assist UST and AST owners and operators. The ELTF currently enjoys a healthy account balance of $165M+. In addition, the ELTF has an annual structural surplus of $25M to $30M per year as it receives between $40M to $45M per year in revenue and is paying between $10M to $14M in claims.
Summary of the key provisions:
- Indiana currently has more than 1700 UST systems that are more than 25 years old. Often catastrophic releases from these old systems can cost $500k to $1M plus to investigate and cleanup;
- Instead of being only reactive and addressing post-release cleanups, under SB 246 we will be environmentally proactive as ELTF will pay for 50% of the costs of decommissioning and replacing older UST systems that are at risk of deterioration and leakage;
- IDEM determines that removal is necessary to protect human health and the environment, considering the condition of the tank, including age, level of deterioration, and obsolescence of the tank;
- $10M each fiscal year for claims submitted by applicants who own 12 or fewer petroleum USTs;
- $7.5M each fiscal year for claims submitted by applicants who own more than 12 but fewer than 100 petroleum USTs; and,
- $2.5M each fiscal year for claims submitted by applicants who own more than 100 petroleum USTSs
- While property owner pays 50% of the costs the net result is a significant increase in the value of the property and operating business
- Expands the definition of eligible tanks to include aboveground storage tanks that are involved in the bulk storage and distribution of motor fuel to retailers, as well as aboveground petroleum storage tanks at airports;
- Re-opens ELTF funding for previously ELTF-eligible sites that had achieved NFA status and still contain residual petroleum contamination when those sites are permanently decommissioned as a UST/AST facility for potential non-petroleum related redevelopment;
- Amended language from SB 389 requires that a UST owner or operator must prepare for IDEM’s review an initial site characterization for a site with a reported petroleum release, which ISC IDEM must review before proceeding with an environmental restrictive covenant or granting a No Further Action determination for the site;
- Allows UST owners and operators, in consultation with their environmental consultants, to request a waiver and provide an alternative procedure or report in lieu of a full-blown ISC; and
- Allows subsequent owners of a UST/AST property with an ERC to be eligible for reimbursement of remediation and other eligible expenses from the ELTF.