Petroleum Tank Release Compensation Board Equipment Policy

Effective: September 1995
Executive Director: Jean Riley

The Owner is responsible for determining whether it is more cost effective to purchase or lease equipment. If the estimated cost of leasing exceeds the purchase price, the Board will normally consider purchase of equipment to be more cost effective. When purchased remediation equipment is useful after its role at a specific site, the Owner has three options for the equipment. The Owner must notify the Board staff on the option chosen prior to releasing the equipment. If the Owner does not notify the Board or sells the equipment and retains full value they will reduce the amount eligible for reimbursement from the Fund on their site. This can result in the owner owing money to the Fund or additional reimbursements being withheld. The options available to the owner are as follows:

  1. The owner may use the equipment on another site, which the owner owns, or for the owner's own purpose.
  2. The owner may donate the equipment to the State of Montana.  The State will then sell the equipment using Surplus Property Bureau.  The proceeds of the sale will return to the State.
  3. The owner may sell the equipment to another person for fair market value.  The owner will donate a portion of the sale (see donation calculations) to the state.  The owner should contact legal counsel to determine their liability, if any, upon selling the equipment.

Donation Calculations

When the Owner sells a piece of equipment the owner is recovering funds which originated partly or wholly from the Fund. Therefore, the owner must donate the following portions of the sale back to the Board.  The Board will assist the Owner in sale of the equipment, with regard to potential purchasers or user of the equipment. The Formulas for donating proceeds to the Fund are on the following page:

NOTE: The Board requests the owner/operator to complete the equipment acknowledgement form located near the bottom of this policy.

The Board staff is available to assist with any of the calculations.

If the eligible costs have not exceeded the 50%
co-payment amount.
(The eligible amount claimed is under $35,000 for commercial tanks
or under $10,000 for heating oil & non-commercial tanks)

The owner will donate 45% of the proceeds of the equipment
sale back to the Board. The owner may retain 55%
of the proceeds.

Board portion = 45% of proceeds from sale
Owner portion = 55% of proceeds from sale

Example:  If the owner's eligible costs were $30,000, the co-payment
amount was $35,000, and the proceeds of the equipment
salewere $7,000. The Owner would donate $3,150
to the Board and could retain $3,850.

 

If the eligible costs have exceeded the 50% co-payment amount.
(The eligible amount claimed is over $35,000 for commercial tanks or over $10,000 for heating oil & non-commercial tanks.)

The owner will donate 95% of the proceeds of the equipment sale
back to the Board. The owner may retain 5% of the proceeds.

Board portion = 95% of proceeds from sale
Owner portion = 5% of proceeds from sale

Example:  If the owner's eligible costs were $100,000, the co-payment
amount was $35,000, and the proceeds of the equipment
sale were $7,000. The Owner would donate $6,650
to the Board and could retain $350.

 

If the proceeds of the sale reduce the eligible costs
under the co-payment amount.
($35,000 or $10,000 depending on program)

The following calculation will be used to determine the amount
that the owner will donate to the Board and the
amount the owner may retain.

E = Eligible costs
C = Co-payment amount ($35,000 or $10,000)
P = Proceeds from sale 
Board portion = (E - C) + 5% [P - 5% P - (E - C)]
Owner portion = 5% P + 5% [P - 5% P - (E - C)]

Example:  If the owner's eligible costs were $40,000, the co-payment
amount was $35,000, and the proceeds of the equipment
sale were $7,000.  The Owner would donate $5,825
to the Board and could retain $1,175.

Equipment Policy Acknowledgement

Please complete the Equipment Policy Acknowledgment form and return to:

Petroleum Tank Release Compensation Board
PO Box 200902
Helena, MT  59620