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Indiana Financial Assurance Board Unanimously Adopts Significant Excess Liability Trust Fund Rule Revisions


On November 18, 2010, the Indiana Financial Assurance Board (“FAB”) unanimously adopted significant revisions to the rules set forth under 328 IAC 1 concerning access to and reimbursement from the Excess Liability Trust Fund (“ELTF”) (the “ELTF Rules”). The revisions approved in November 2010 are the first significant revisions of the ELTF Rules since July 2004. According to the Indiana Department of Environmental Management (“IDEM”), the revisions to the ELTF Rules are intended to benefit underground storage tank system owners and operators through the adjustment of provisions related to eligibility for reimbursement from the ELTF, the scope and amount of properly reimbursable costs, and clarifications and additions of several definitions.

The following are the major revisions of the ELTF Rules approved by the FAB:

  • Amendment of the ELTF access provisions set forth under 328 IAC 1-3-1 to require that a “Fund Qualifying Occurrence” must have taken place prior to a site being eligible for reimbursement from the ELTF. In addition, the revisions include a new definition (new provision 328 IAC 1-1-6.5) defining the term “Fund Qualifying Occurrence” as:
    an incident that is the result of a release of product from a registered UST system and dispensing components, except the nozzle and hose connecting the nozzle to the pump. The incident must:

    (1) be directly attributable to a registered UST system; and
    (2) have been assigned an IDEM incident number;

    and the owner or operator must have submitted an initial site characterization (ISC) to the department.

  • Amendment of the definition of “Substantial Compliance” set forth under 328 IAC 1-1-9 to:
    1. Require that the substantial compliance requirements must be satisfied when a release is first suspected by the owner, operator or agent of the owner or operator of a UST system. This is in contrast to the current ELTF Rule that provides substantial compliance requirements must be satisfied when a release is first discovered or confirmed. The revised ELTF Rule defines “suspected” as meaning “that the owner, operator or agent of the owner or operator identified one (1) or more of the following:
      1. there was a loss of product.
      2. product odors.
      3. visual indicators of product.
      4. UST system alarms are triggered.
      5. soil discoloration.
    2. Require that a minimum of 50% of tank registration fees have been paid.
    3. Increase the amount of time within which a release must be reported to IDEM under the Indiana Spill Rule, 329 IAC 9-4-4, from seven to 14 days.
  • Addition of a provisions to 328 IAC 1-3-1 regarding access to the ELTF that (1) set a limit on the time period within which all claims must be submitted for reimbursement after a qualifying occurrence is granted a No Further Action status (new provisions 328 IAC 1-3-1(c) and (d)); (2) establish a prohibition on reimbursements for costs incurred as a result of “acts or omissions on the part of a contractor, owner or operator that result in damage to a UST system, dispensing components or exacerbation of an existing release” (new provision 328 IAC 1-3-1(g)); and (3) establishes a limitation under which “only an owner, operator, or authorized agent may request the status of their tank fee payments and resulting potential percentage of fund eligibility” (new provision 328 IAC 1-3-1(h)).
  • Addition of a provision to 328 IAC 1-3-3 (new provision 328 IAC 1-3-3(a)(2)) reducing ELTF reimbursement eligibility for delays in the submission of an ISC to IDEM. Under this new provision, an ISC must be submitted to IDEM within 60 days after reporting a release and if an ISC is not submitted within the 60-day deadline, ELTF reimbursement eligibility will be reduced (1) by 5% on the 91st day after the release was reported and (2) by an additional 5% for every 6 month period that passes without submission of the required ISC to IDEM.
  • Addition of a provision to 328 IAC 1-3-3 (new provision 328 IAC 1-3-3(a)(5)) under which ELTF reimbursement eligibility will be reduced by 5% if an owner or operator fails to demonstrate that it took required steps to obtain the results of investigations conducted by third parties on the owner’s or operator’s site. Under this new provision, the owner or operator must either request the results from the third party within 45 days via certified mail or must include a provision in an access agreement requiring the third party to provide the results of the investigation within 45 days of sample collection. Where the sample results are sought through certified mail, an additional 5% eligibility reduction will be incurred for every 6 months that passes prior to the request being sent to the third party.
  • Simplification of the penalty calculations set forth under 328 IAC 1-3-3(f)(2) for failure to pay required tank fees.
  • Revision of the reimbursable costs provisions set forth under 328 IAC 1-3-5 including significant revisions of the reimbursable cost schedules associated with site characterization activities (i.e., soil sampling and monitoring well installation), sample analyses, corrective action technologies, and personnel rates. In addition, the revisions to 328 IAC 1-3-5 include a provision for the annual adjustment of reimbursable personnel rates based upon the product price index.
  • Revision of the list of costs that are not reimbursable under ELTF, 328 IAC 1-3-5(g), to include contractor or subcontractor costs associated with the review of environmental work or documents, budgeting, and changing contractors.
  • Revision of the personnel classification activity descriptions provided under 328 IAC 1-3-5(f).
  • Addition of a provision under 328 IAC 1-3-5 (new provision 328 IAC 1-3-5(g) specifying that the following attorney costs are reimbursable under ELTF: (1) attorney communication to IDEM regarding remediation activities, preparation of restrictive covenants and access negotiations; and (2) fees not exceeding $1,000 for environmental restrictive covenant preparation and access negotiation. However, this new provision specifically indicates that ELTF will not reimburse attorney fees for reviewing consultant reports.

According to IDEM personnel, the ELTF Rule revisions are currently in the process of being reviewed and approved by the Indiana Attorney General and the Governor. If approved, the ELTF Rule revisions will become effective 30 days after IDEM files the revisions with the Indiana Register. Additional information regarding the revisions of 328 IAC 1 as well as information regarding the effective date of the revised rules may be obtained by contacting Lynn West, Rules Development Branch, Office of Legal Counsel at (317) 232-3593.

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