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Indiana Department of Environmental Management

IDEM > Compliance > Enforcement > Enforcement: 1998 UST Requirements Enforcement: 1998 UST Requirements

TO:   All Underground Storage Tank Owners/Operators
FROM:   The Indiana Department of Environmental Management
RE:   Enforcement of the 1998 Underground Storage Tank Requirements
DATE:   August 28, 1998

New underground storage tank (UST) regulations go into effect December 22, 1998. Specifically, after December 22, 1998, every UST installed before December 22, 1988 that is not already properly protected against spills, overflows and corrosion must either be upgraded, replaced or properly closed. These requirements are mandated by both federal (40 CFR Part 280) and state (329 IAC 9-2.1-1) law.

Because the December 1998 deadline has been publicized for 10 years, many owners have already invested thousands of dollars to upgrade, replace and/or close their USTs in a timely fashion. As a matter of simple fairness, there will be NO extensions to or delays of the deadline. December 22, 1998 is a real deadline. There will be no "grace period" where violations can be corrected without enforcement action. Every non-compliant UST will be subject to enforcement action, including the assessment of a monetary penalty. For example, if IDEM discovers a facility operating with noncompliant USTs in February 1999, and the facility has plans to upgrade in a few days, that facility will be referred to IDEM's Office of Enforcement.

In order to ensure a level playing field for all owners, IDEM will assess penalties sufficient to remove any incentive to operate in violation. IDEM has authority to assess as much as $10,000 a day for every non-compliant tank. At a minimum, every UST that does not have the proper spill, overfill and corrosion protection in place will be assessed the following:

  • a gravity-based penalty of $6,250;
  • the gravity-based penalty will be increased by 25% for every 90 days the violation
  • continues past the deadline (January to March - 25%; April to June - 50%;
    July to September - 75%; and October to December - 100%);
  • an economic-benefit penalty (the profit made on all product dispensed
    from a non-compliant UST after the deadline, and/or the interest earned on
    money not spent to upgrade).

In addition, penalties could be increased if a noncompliant UST is located near a wellhead protection area or otherwise poses a threat to nearby communities. Finally, failure to comply with these new requirements could jeopardize a particular UST's eligibility for the Excess Liability Fund.

As shown on the enclosed sample penalty calculation worksheet, the application of these rules to a typical gas station with 3 noncompliant USTs, discovered to be operating illegally in July 1999, will result in a total penalty in excess of $40,000. The bottom line:

It will be cheaper to comply with the law rather than to violate it.

IDEM will also implement a comprehensive inspection program to ensure compliance with the upgrade requirements. During the last 9 months, IDEM visited over 4,200 UST facilities to assess the compliance rate with the new requirements. The agency is committed to a forceful and fair UST compliance program. UST owners and the general public can assist in that effort by reporting any noncompliance after December 22, 1998 to IDEM by calling 1-800-452-6027 or 317-308-3064.



SAMPLE PENALTY CALCULATIONS
FOR NON-COMPLIANT UST

Penalties will consist of two components: a gravity-based portion and an economic- benefit portion. The gravity-based portion penalizes the owner/operator for the violation while the economic-benefit portion seeks to recoup any financial gain caused by the violation. The following calculations represent the likely penalties for failure to meet the 1998 upgrade requirements. These calculations assume: a 3-UST facility, with a monthly throughput of 10,000 gallons per UST; the facility continued to operate in violation until July 1999; the facility makes, on average, a 6-cents per gallon profit on all product sold from its USTs; and, lastly, the upgrade cost per UST is $10,000.

Gravity-Based Penalty:

3 USTs x $6,250... ..................................$18,750
50% increase for operating more than
180 days past the deadline.............................$9,375
$28,125

Economic-Benefit Penalty:

Profit earned during period of non-compliance:
3 USTs x 10,000 gallons = 30,000 gallons per month
30,000 gallons x 6 months = 180,000 gallons
180,000 gallons x $.06.......................................................$10,800

Interest earned on money not used to upgrade:

3 USTs x $10,000 = $30,000
$30,000 x 6 months x 8%................................................ $1,182

TOTAL PENALTY...........................................................$40,107