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Monday, March 27, 2006

Ind. Decisions - Office of Environmental Adjudication issues ruling on the UST Excess Liability Trust Fund

In an advisory today, Barnes & Thornburg writes about:

[A] recent administrative decision which could (positively) affect eligibility for reimbursement from the Excess Liability Trust Fund ("ELTF" or "Fund").

The General Assembly established the Fund to help owners and operators of USTs satisfy financial assurance obligations and pay for corrective action at eligible sites. The Administrator of the Fund denied our client's request for reimbursement because they were allegedly not in "substantial compliance" with the spill reporting rules. An Environmental Law Judge ("ELJ") recently issued an Order granting our client's motion for summary judgment and declaring that they are eligible for reimbursement from the Fund. The ELJ determined that certain regulatory eligibility requirements conflicted with the underlying statute and were invalid. The ELTF statute requires only substantial compliance with specific rules promulgated under the UST Statute. The ELJ determined that (i) our client substantially complied with the spill reporting rule and (ii) fully complied with every other applicable regulation.

This is an important victory for owners or operators of USTs because IDEM has denied requests for reimbursement at many other sites on the same basis. The exact number of those other sites is unknown. Given the potential multi-million dollar impact to the Fund, the Administrator has indicated that it will likely appeal the ELJ's Order.

Here is the March 15, 2006 ruling: In re Speedway Superamerica. Some quotes from page 5:
11. To the extent that IDEM contends that 328 IAC 1-3-3(a)(2) establishes a separate requirement of total compliance with the spill reporting rules under 329 IAC, the IDEM has overstepped the boundaries of its enabling legislation, IC 13-23-8-4. This statute requires only substantial compliance with the regulations adopted under IC 13-23 and the IDEM may not enlarge upon this grant of authority from the legislature by requiring complete compliance with the spill reporting rules.[1]

12. The Petitioner argues that the IDEM cannot require compliance of any degree with 327 IAC 2-6.1 as a prerequisite for ELTF eligibility. Under the plain meaning of IC 13-23-8-4(a)(1), substantial compliance with only those rules adopted under IC 13-7-20 (currently IC 13-23) is required for ELTF reimbursement. 327 IAC 2-6.1 (the “Spill Rule”) was adopted by the Water Pollution Control Board under the water pollution control laws (IC 13-18). As such, any rule under 328 IAC that attempts to require compliance with the Spill Rule as a condition for ELTF eligibility is invalid and the IDEM may not condition eligibility for ELTF reimbursement upon the owner or operator’s compliance with this rule. [2]
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1] It should be noted that amendments to this rule now requires only that the tank owner or operator demonstrate that it was “in substantial compliance with the spill reporting rule or law applicable at the time the release is discovered.”
2] Obviously, the IDEM may still, under its general enforcement authority, enforce the Spill Rule and require corrective action or the payment of a penalty if the owner or operator violates the rule.

Posted by Marcia Oddi on March 27, 2006 03:05 PM
Posted to Ind. Adm. Bd. Decisions