A provision buried in HB1368 significantly raises the financial stakes for businesses that operate carbon storage or pipeline equipment in Indiana.
Most Indiana auto service owners don't realize that a provision in HB1368 could affect their business if they operate any equipment related to carbon sequestration or storage. The bill, which takes effect July 1, 2026, more than doubles the daily civil penalty for first-time violations—and adds criminal penalties for intentional breaches.
Here's what changed and why it matters to your operation.
Under Indiana's carbon sequestration article, the daily civil penalty for a first violation has jumped from $1,000 to $2,500 per day, effective July 1, 2026. That's a 150 percent increase on a single violation.
But there's more. The bill also introduces a new Class A misdemeanor for any knowing or intentional violation of the carbon sequestration rules. A Class A misdemeanor carries a minimum penalty of $5,000 per day—meaning intentional or reckless non-compliance exposes a business to far steeper daily costs than a simple civil violation.
For a small operation that falls out of compliance for even a week, the financial exposure is substantial: $17,500 for a civil violation alone, or $35,000 minimum for a knowing violation.
This provision applies to any business that operates carbon storage equipment, pipelines, or related infrastructure under Indiana's carbon sequestration regulations. If your auto service operates or maintains any such equipment—or if you're considering adding carbon-related services—you need to understand these new penalties.
Even if you don't directly operate storage or pipeline infrastructure, if you service equipment used in carbon sequestration operations, staying current on compliance requirements protects your customers and your reputation.
Review your current operations against Indiana's carbon sequestration article requirements. If you operate any regulated equipment, audit your compliance procedures before July 1, 2026. The difference between a civil penalty and a criminal misdemeanor often hinges on whether a violation was knowing or intentional—so documentation of good-faith compliance efforts matters.
If you're unsure whether your equipment falls under these rules, contact the Indiana Department of Environmental Management or consult with a compliance advisor. It's far cheaper to clarify now than to face penalties later.
The provision appears in Section 77 on Page 45 of HB1368. The effective date is July 1, 2026, giving you roughly 18 months to prepare.
Source: HB1368, Section 77, Page 45; effective July 1, 2026.