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l / ? Æ â yIntroduction
Subpart H--Financial Responsibility
Sec.
280.90 Applicability
280.91 Compliance Dates
280.92 Definition of Terms
280.93 Amount and Scope of Required Financial Responsibility
280.94 Allowable Mechanisms and Combinations of Mechanisms
280.95 Financial Test of Self-Insurance
280.96 Guarantee
280.97 Insurance and Risk Retention Group Coverage
280.98 Surety Bond
280.99 Letter of Credit
280.100 Use of State-Required Mechanism
280.101 State Fund or Other State Assurance
280.102 Trust Fund
280.103 Standby Trust Fund
280.104 Substitution of Financial Assurance Mechanisms by Owner or Operator
280.105 Cancellation or Nonrenewal by a Provider of Financial Assurance
Press the PgDn key to see 280.106 -- 280.112
280.106 Reporting by Owner or Operator
280.107 Recordkeeping
280.108 Drawing on Financial Assurance Mechanisms
280.109 Release from the Requirements
280.110 Bankruptcy or Other Incapacity of Owner or Operator or Provider of
Financial Assurance
280.111 Replenishment of Guarantees, Letters of Credit, or Surety Bonds
280.112 Suspension of Enforcement
Press the PgUp key to see 280.90 -- 280.105 0 280.90 Applicability.
ü Applicability Advisor
(Explain 280.90(a)
(a) This subpart applies to owners and operators of all petroleum
underground storage tank (UST) systems except as otherwise provided
in this section.
)Explain 280.90(b)
(b) Owners and operators of petroleum UST systems are subject to
these requirements if they are in operation on or after the date for
compliance established in 280.91.
*Explain 280.90(c)
(c) State and federal government entities whose debts and
liabilities are the debts and liabilities of a state or the United
States are exempt from the requirements of this subpart.
+Explain 280.90(d)
(d) The requirements of this subpart do not apply to owners and
operators of any UST system described in ¢ 280.10(b) or (c).
,Explain 280.90(e)
(e) If the owner and operator of a petroleum underground storage
tank are separate persons, only one person is required to
demonstrate financial responsibility; however, both parties are
liable in event of noncompliance. Regardless of which party
complies, the date set for compliance at a particular facility is
determined by the characteristics of the owner as set forth in
280.91.
e 280.91 Compliance Dates.
à Coverage/Deadlines Advisor
Owners of petroleum underground storage tanks are required to comply
with the requirements of this subpart by the following dates:
(a) All petroleum marketing firms owning 1,000 or more USTs and all
other UST owners that report a tangible net worth of $20 million or
more to the U.S. Securities and Exchange Commission (SEC), Dun and
Bradstreet, the Energy Information Administration, or the Rural
(a) The Director of the implementing agency shall require the
guarantor, surety, or institution issuing a letter of credit to
place the amount of funds stipulated by the Director, up to the
limit of funds provided by the financial assurance mechanism, into
the standby trust if:
lExplain 280.108(a)(1)
(l)(i) The owner or operator fails to establish alternate financial
assurance within 60 days after receiving notice of cancellation of
the guarantee, surety bond, letter of credit, or, as applicable,
other financial assurance mechanism; and
(ii) The Director determines or suspects that a release from an
underground storage tank covered by the mechanism has occurred and
so notifies the owner or operator or the owner or operator has
notified the Director pursuant to Subparts E or F of a release from
an underground storage tank covered by the mechanism; or
(2) The conditions of paragraph (b)(l) or (b)(2)(i) or (b)(2)(ii)
are satisfied.
mExplain 280.108(b)
(b) The Director of the implementing agency may draw on a standby
trust fund when:
(l) The Director makes a final determination that a release has
occurred and immediate or long-term corrective action for the
release is needed, and the owner or operator, after appropriate
notice and opportunity to comply, has not conducted corrective
action as required under 40 CFR Part 280, Subpart F; or
(2) The Director has received either:
(i) Certification from the owner or operator and the third-party
liability claimant(s) and from attorneys representing the owner or
operator and the third-party liability claimant(s) that a third-
party liability claim should be paid. The certification must be
worded as follows, except that instructions in brackets are to be
replaced with the relevant information and the brackets deleted:
Ö ÉCERTIFICATION OF VALID CLAIM
nExplain 280.108(c)
(c) If the Director of the implementing agency determines that the
amount of corrective action costs and third-party liability claims
eligible for payment under paragraph (b) may exceed the balance of
the standby trust fund and the obligation of the provider of
financial assurance, the first priority for payment shall be
corrective action costs necessary to protect human health and the
environment. The Director shall pay third-party liability claims in
the order in which the Director receives certifications under
paragraph (b)(2)(i) and valid court orders under paragraph
(b)(2)(ii).
a X280.109 Release from the Requirements.
:Explain 280.109
An owner or operator is no longer required to maintain financial
responsibility under this subpart for an underground storage tank
after the tank has been properly closed or, if corrective action is
required, after corrective action has been completed and the tank
has been properly closed as required by û40 CFR Part 280, Subpart G.
i 280.110 Bankruptcy or Other Incapacity of Owner or Operator or
Provider of Financial Assurance.
oExplain 280.110(a)
(a) Within 10 days after commencement of a voluntary or involuntary
proceeding under Title 11 (Bankruptcy), U.S. Code, naming an owner
or operator as debtor, the owner or operator must notify the
Director of the implementing agency by certified mail of such
commencement and submit the appropriate forms listed in _280.107(b)
documenting current financial responsibility.
pExplain 280.110(b)
(b) Within 10 days after commencement of a voluntary or involuntary
proceeding under Title 11 (Bankruptcy), U.S. Code, naming a
guarantor providing financial assurance as debtor, such guarantor
must notify the owner or operator by certified mail of such
commencement as required under the terms of the guarantee specified
in `280.96.
qExplain 280.110(c)
$(c) An owner or operator who obtains financial assurance by a
mechanism other than the financial test of self-insurance will be
deemed to be without the required financial assurance in the event
of a bankruptcy or incapacity of its provider of financial
assurance, or a suspension or revocation of the authority of the
provider of financial assurance to issue a guarantee, insurance
policy, risk retention group coverage policy, surety bond, letter of
credit, or state-required mechanism. The owner or operator must
obtain alternate financial assurance as specified in this subpart
within 30 days after receiving notice of such an event. If the
owner or operator does not obtain alternate coverage within 30 days
after such notification, he must notify the Director of the
implementing agency.
rExplain 280.110(d)
(d) Within 30 days after receipt of notification that a state fund
or other state assurance has become incapable of paying for assured
corrective action or third-party compensation costs, the owner or
operator must obtain alternate financial assurance.
n 280.111 Replenishment of Guarantees, Letters of Credit, or Surety
Bonds.
sExplain 280.111(a)
(a) If at any time after a standby trust is funded upon the
instruction of the Director of the implementing agency with funds
drawn from a guarantee, letter of credit, or surety bond, and the
amount in the standby trust is reduced below the full amount of
coverage required, the owner or operator shall by the anniversary
date of the financial mechanism from which the funds were drawn:
(1) Replenish the value of financial assurance to equal the full
amount of coverage required, or
(2) Acquire another financial assurance mechanism for the amount by
which funds in the standby trust have been reduced.
;Explain 280.111(b)
(b) For purposes of this section, the full amount of coverage
required is the amount of coverage to be provided by a280.93 of this
Subpart. If a combination of mechanisms was used to provide the
assurance funds which were drawn upon, replenishment shall occur by
the earliest anniversary date among the mechanisms.
r
280.112 Suspension of Enforcement.
When Reg-in-a-Box was finished January,1989, OUST had not yet
decided what to do about suspension of enforcement.
If you want to know more about this, please call the EPA Hotline
at 1-800-424-9346.
cSMARTREG d
"Accidental release" means any sudden or nonsudden
release of petroleum from an underground storage tank
that results in a need for corrective action and/or
compensation for bodily injury or property damage neither
expected nor intended by the tank owner or operator.
c
"Bodily injury" shall have the meaning given to this term
by applicable state law; however, this term shall not
include those liabilities which, consistent with standard
insurance industry practices, are excluded from coverage
in liability insurance policies for bodily injury.
c
"Controlling interest" means direct ownership
of at least 50 percent of the voting stock of
another entity.
d
"Director of the Implementing Agency" means the EPA
Regional Administrator, or, in the case of a state with a
program approved under Section 9004, the Director of the
designated state or local agency responsible for carrying
out an approved UST program.
c
"Financial reporting year" means the latest consecutive
twelve-month period for which any of the following
reports used to support a financial test is prepared:
(1) a 10K report submitted to the SEC;
(2) an annual report of tangible net worth submitted to
Dun and Bradstreet; or
(3) annual reports submitted to the Energy Information
Administration or the Rural Electrification
Administration.
"Financial reporting year" may thus comprise a fiscal or
a calendar year period.
e
"Legal defense cost" is any expense that an owner or
operator or provider of financial assurance incurs in
defending against claims or actions brought,
(1) by EPA or a state to require corrective action or to
recover the costs of corrective action;
(2) by or on behalf of a third party for bodily injury or
property damage caused by an accidental release; or
(3) by any person to enforce the terms of a financial
assurance mechanism.
n
"Occurrence" means an accident, including continuous or
repeated exposure to conditions, which results in a
release from an underground storage tank.
[Note: This definition is intended to assist in the
understanding of these regulations and is not intended
either to limit the meaning of "occurrence" in a way that
conflicts with standard insurance usage or to prevent the
use of other standard insurance terms in place of
"occurrence."]
n
"Owner or operator," when the owner or operator
are separate parties, refers to the party that
is obtaining or has obtained financial
assurances.
"Petroleum marketing facilities" include all
facilities at which petroleum is produced or
refined and all facilities from which petroleum
is sold or transferred to other petroleum
marketers or to the public.
"Petroleum marketing firms" are all firms
owning petroleum marketing facilities. Firms
owning other types of facilities with USTs as
well as petroleum marketing facilities are
considered to be petroleum marketing firms.
"Property damage" shall have the meaning given this term
by applicable state law. This term shall not include
those liabilities which, consistent with standard
insurance industry practices, are excluded from coverage
in liability insurance policies for property damage.
However, such exclusions for property damage shall not
include corrective action associated with releases
from tanks which are covered by the policy.
n
"Provider of financial assurance" means an entity that
provides financial assurance to an owner or operator of
an underground storage tank through one of the mechanisms
listed in 280.95-280.103, including a guarantor, insurer,
risk retention group, surety, issuer of a letter of
credit, issuer of a state-required mechanism, or a state.
d
"Substantial business relationship" means the extent of a
business relationship necessary under applicable state
law to make a guarantee contract issued incident to that
relationship valid and enforceable. A guarantee contract
is issued "incident to that relationship" if it arises
from and depends on existing economic transactions
between the guarantor and the owner or operator.
n
"Tangible net worth" means the tangible assets that
remain after deducting liabilities; such assets do not
include intangibles such as goodwill and rights to
patents or royalties. For purposes of this definition,
"assets" means all existing and all probable future
economic benefits obtained or controlled by a particular
entity as a result of past transactions.
n
280.90(a)
Subpart H requires proof of financial responsibility
from owners and operators of petroleum USTs identified
in 280.10(a). Select the "Applicability Advisor"
if you believe these requirements might not apply to ìyou.
n
280.90(b)
You must be able to pay to correct damages that releases
from your USTs may cause.
These regulations give you choices of different ways you ìcan meet your financial responsibility for damages caused ìby releases from your USTs.
You must show financial responsibility for your USTs
operating on or after the compliance dates identified in
280.91.
Use the Coverage/Deadlines Advisor in 280.91 to find out ìwhen your deadline is.
n
280.90(c)
State or Federal government agencies do not
have to meet these financial responsibility
requirements. (But they do have to take action
to correct damages caused by releases from
their USTs.)
u
280.90(d)
Most UST owners/operators must meet these requirements,
but some USTs are exempt or excluded from these
requirements.
There are also some USTs which these regulations do ìnot apply to now, but that may be required to meet ìfinancial responsibility requirements in the future.
Use the "Applicability Advisor" module in section ì280.90 to see if these requirements apply to you.
n
280.90(e)
Either the owner or the operator must meet financial
responsibility requirements. Both the owner and the
operator are liable in cases of noncompliance. When you
have to comply depends on how many tanks the owner has
and the owner's net worth.
t
280.93
UST owners or operators must be able to pay the costs
of corrective action and compensate third parties for
leaks from the owners/operators' USTs. There is a
minimum amount you have to be ready to cover for each
release that occurs. There is also a minimum amount you
have to be ready to cover for annual total costs of all
releases at all your tanks.
n
280.93(a)
Minimum coverage for each release is either $1 million or
$500,000 per year:
o If your USTs are used for petroleum marketing or have
a monthly throughput of more than 10,000 gallons your
minimum is $1 million per release.
o If you do not use your USTs for petroleum marketing
and have less than 10,000 gallons of throughput
monthly, your minimum is $500,000 per release.
n
280.93(b)
The minimum total costs you must be ready to
cover are $2 million or $1 million per year:
o If you have more than 100 USTs, your minimum
total coverage is $2 million per year.
o If you have 100 or fewer USTs, your minimum
total coverage is $1 million per year.
o
280 93(c)
When you count your tanks to see how much
insurance you are required to have, you must
count each individual tank as one tank. You
cannot count groups of tanks as one tank.
i
280.93(d)
You can use a combination of financial responsibility
mechanisms to show your financial responsibility if ìthe total amount of coverage equals the "per ìoccurrence" amount you are required to have.
(Use the "Coverage/Deadline Advisor if you don't ìknow.)
o
280.93(e)
A combination of mechanisms can be used to show financial
responsibility if the coverage provided equals the
"aggregate" amount required for the number of tanks
covered.
[For example, if you had 90 tanks covered by one
mechanism, your aggregate would be $1 million. But, if
you used one mechanism to cover 30 tanks and a
combination of mechanisms to cover the remaining 60
tanks, then your aggregate coverage would be $1 million
for the 30 tanks and $1 million for the 60 tanks.]
t
280.93(f)
If you have more than 100 USTs, when you must meet
the aggregate coverage requirement of $2 million
depends on whether you use one or a combination of
financial responsibility mechanisms:
o If you use only one mechanism, comply by the
anniversary of the date on which the financial
responsibility mechanism became effective;
o If you use a combination of mechanisms, comply by
the first-occurring effective anniversary date
of one of the mechanisms.
(Use the "Coverage/Deadlines Advisor" if you need ì more information.)
p
280.93(g)
These coverage amounts ranging from $500,000
to $2 million do not limit the actual amount
for which you could be liable.
c
280.93(h)
These coverage amounts ranging from $500,000
to $2 million do not limit the actual
amount for which you could be liable.
c
280.94(a)
Owners and operators may use any of the mechanisms
identified in 280.95 through 280.103 to show financial
responsibility, with the following two limitations:
o A guarantee or surety bond can be used only in a
State in which the State Attorney General has
written a letter to the UST agency that says these
State mechanisms are legally valid and enforceable.
If EPA has not received such a letter by July 24,
1989, you cannot use a guarantee or surety bond.
o A guarantee can only be combined with self-insurance
if the financial statements of the guarantor are not
consolidated with those of the owner or operator.
w
280.94(b)
Owners and operators may use any of the mechanisms
identified in 280.95 through 280.103 to show financial
responsibility, with the following two limitations:
o A guarantee or surety bond can be used only in a
State in which the State Attorney General has
written a letter to the UST agency that says these
State mechanisms are legally valid and enforceable.
If EPA has not received such a letter by July 24,
1989, you cannot use a guarantee or surety bond.
o A guarantee can only be combined with self-insurance
if the financial statements of the guarantor are not
consolidated with those of the owner or operator.
w
280.94(c)
Owners and operators may use any of the mechanisms
identified in 280.95 through 280.103 to show financial
responsibility, with the following two limitations:
o A guarantee or surety bond can be used only in a
State in which the State Attorney General has
written a letter to the UST agency that says these
State mechanisms are legally valid and enforceable.
If EPA has not received such a letter by July 24,
1989, you cannot use a guarantee or surety bond.
o A guarantee can only be combined with self-insurance
if the financial statements of the guarantor are not
consolidated with those of the owner or operator.
w
280.95
If your firm has a tangible net worth of at least $10
million, you can prove your financial responsibility by
passing one of the financial tests.
Use the "Self-Insurance Advisor" to see if you can pass ìeither of these two tests.
w
280.109
You don't have to meet financial responsibility
requirements after your tank is properly closed
and any corrective action needed has been
completed.
The reference to "40CFR Part 280 Subpart G" ìmeans the closure requirements in Part 280 of ìthese regulations.
280.111(b)
The funding level that you must keep in your
financial assurance mechanisms has to equal the
amounts required in Sec. 280.93. If you use a
combination of mechanisms, they must be
replenished by the renewal date of the one that
is due to be renewed earliest.
280.95(d)
If you think you pass the self-insurance test,
your firm's chief financial officer has to
fill in the Chief Financial Officer's Letter,
sign it, and send it in by 120 days after the
end of your financial year.
t
280.95(e)
If your financial status changes so that you
can no longer pass either financial test, you
have 150 days from the end of your financial
year to get alternative coverage.
t
280.95(f)
Your UST agency can require reports on your
financial condition any time. If these reports
indicate that you could no longer pass either
financial test, you have 30 days to get
alternative coverage.
t
280.95(g)
If you fail the financial test based on year-end
financial statements, your deadline for alternative
coverage is 150 days from the year's end.
If you are notified by your UST agency that you have ìfailed the financial test requirements, your ìdeadline for alternative coverage is 30 days from ìthe date you are notified.
If you cannot get alternative coverage within the ìtime limit, you must notify your UST agency within ì10 days after your deadline for getting alternative ìcoverage.
i
280.96(a)
A guarantee is another way you can meet your
financial assurance requirements. But the
person or firm who backs the guarantee must
have either a controlling interest in your firm
or a formal business relationship to issue your
guarantee. The exact wording that your
guarantee must have is given below.
w
280.96(b)
The backer of your guarantee--the "guarantor"--must pass ìone of the financial tests for self-insurance. And, the ìguarantor's chief financial officer must fill in, sign, ìand submit the Chief Financial Officer's Letter in Sec. ì280.95 within 120 days of the end of the guarantor's ìfinancial year.
If your guarantor fails the financial test, he must ìnotify you by certified mail.
If your UST agency fails your guarantor on the financial ìtest, your guarantor has to tell you within 10 days.
If your guarantor fails the financial test, you have 120 ìdays after you are notified to get alternative coverage.
eREGINBOX - e
280.96(d)
If you use a guarantee to meet these requirements,
you also must have a standby trust fund. When
the person providing your guarantee pays, the money
goes into this standby trust fund. This is
described in more detail in Sec. 280.103.
280.97(a)
Another way you can meet these requirements is to
get liability insurance from an insurance company or
a risk retention group. This insurance can be a
separate policy or an add-on to a policy you already
have (called an "endorsement" by insurance
companies).
REGINBOX .
280.97(c)
Your insurer or risk retention group must be
licensed by at least one state to provide the kind
of insurance you are getting for your tanks.
d
280.98(a)
A surety bond is another way you can meet these
requirements. But the company that issues your
surety bond must be listed as acceptable in the
latest Circular 570 of the U.S. Department of
the Treasury.
d
280.98(b)
Select this to see the exact wording that your
surety bond must have. (Whoever prepares your
surety bond must fill in the blanks and choose the
right words from the choices shown in brackets.)
d
280.98(c)
If you don't pay as guaranteed by your surety
bond, the costs will be paid out of the surety
funds. But the most the surety can pay is the
maximum annual aggregate sums that apply to
you.
d
280.98(d)
If you use a surety bond, you must have a standby
trust fund too. Payments from the surety bond are
deposited into the standby trust fund, from which
the actual cleanup bills are paid.
d
280.99(a)
A letter of credit is another way you can meet
these requirements. Whoever issues your letter
of credit must have the authority to do so in
each State where you might need to use it.
Also, the issuer must be regulated and examined
by a State or Federal agency.
REGINBOX / t
280.99(c)
You must also have a standby trust fund if you
use a letter of credit. Any money paid from
your letter of credit goes into this standby
trust fund.
a
280.99(d)
Whoever issues your letter of credit cannot revoke
it during the time specified in the letter.
The issuer must also agree to renew your letter of
credit automatically for the same term as that
specified originally, unless he tells you at least ì 120 days in advance that he plans not to renew your
letter of credit.
280.100(a)
If your State doesn't have an EPA-approved program
but does require that you prove you can pay for an
UST cleanup, you might be able to use whatever
financial assurance your State requires. But EPA's
Regional Administrator must determine that your
State's requirements are at least equivalent to
these EPA financial assurance requirements.
280.100(b)
The EPA Regional Administrator will evaluate the
financial assurance requirements of unapproved
States based on:
o Certainty of the money being available;
o The amount of money made available; and
o The types of corrective action costs covered.
The Regional Administrator may also consider other
factors in the evaluation.
280.100(c)
You, your State, or others interested can formally
ask the EPA Regional Administrator to approve one or
more of the State's required mechanisms. Of course,
you have to document such a request in detail.
280.100(d)
Even if one group seeks EPA approval of a State
mechanism, all UST owners/operators in the State may
be eligible to use it if approved.
280.100(e)
Until the EPA Regional Administrator tells you whether
or not a particular State's mechanism is approved, EPA
will consider you in compliance with these requirements
if you are using the State's mechanism. If the State's
mechanism is disapproved, then you will have to meet
these requirements in another way.
280.101(a)
If EPA is running the UST program in your State but
your State has a fund or assurance program that EPA
has approved, you may meet these financial assurance
requirements with your State's fund or program.
e
280.101(b)
The EPA Regional Administrator will evaluate the
financial assurance requirements of such States
based on:
o Certainty of the money being available;
o The amount of money made available; and
o The types of corrective action costs covered.
The Regional Administrator may also consider other
factors in the evaluation.
280.101(c)
If EPA is running the UST program in your State, your
State can still have its financial assurance mechanisms
approved by EPA's Regional Administrator. To do so the
State must submit a description of the mechanisms and the
classes of tanks to which they apply to the EPA Regional
Administrator.
Until the Regional Administrator has approved or
disapproved your State's mechanisms, you can use them to
meet these financial assurance requirements.
s
280.101(d)
If you are relying on your State's fund or mechanism to
meet these requirements, your State must send you a
letter or certificate within 60 days after EPA approves
the mechanism.
This letter or certificate has to show how much cost will ìbe covered and the name and address of the UST facility. ìYou have to keep this letter or certificate on file.
r
280.102(a)
You can set up your own trust fund to meet these
requirements. If you do, it must have a real trustee
and must be examined and regulated by the State's agency
or a Federal agency.
This trust fund is different from the standby trust fund
required if you use some other financial assurance
mechanisms. The standby trust fund is like a checking
account into which you put money when you know that
cleanup costs are going to have to be paid. The trust
fund is like a savings account with funds set aside for a
rainy day.
280.95(b)
This section is the OUST test for self-insurance. ìThese criteria are incorporated in the ìSelf-Insurance Advisor, Alternative Test I. a
280.102(c)
Your trust fund must be able to pay the full
amount of coverage required or whatever amount
you have not covered with another approved
mechanism.
a
280.102(d)
If your trust fund has more money than the
amount of coverage required, you can ask your
UST agency to release the excess amount from
your trust fund.
a
280.102(e)
If you have covered part of your required amount
with another approved mechanism, you can ask your
UST agency to release that amount from your trust
fund.
a
280.102(f)
Within 60 days of getting your written request
to release excess money from your trust fund,
your UST agency will tell the trustee how much
excess money to release from your trust fund.
a
280.103(a)
If you use a guarantee, a surety bond, or a letter
of credit to meet these requirements, you must also
have a standby trust fund. This trust fund must
have a real trustee who can spend the money. Also,
the trust fund must be regulated and examined by the
State or a Federal agency. (Whoever prepares your
letter of credit must fill in the blanks and choose
the right words from the choices shown in brackets.)
e
40 CFR Part 281 is OUST's state program approval ìregulations. These are not included in Reg-In-A-Box.
280.103(c)
Your UST agency can tell your trustee to put
unspent, unneeded money from the standby trust
fund back into the financial assurance mechanism
that it came from.
t
280.103(d)
If you use several different mechanisms, each of
which requires a standby trust fund, you can have
one standby trust fund for all of them.
t
280.104(a)
You can use any combination of these approved
financial assurance mechanisms as long as their
combined coverage meets the total amounts and
scope required here.
t
280.104(b)
If you decide to switch from one mechanism to
another, you can cancel the "old" one by
notifying its provider.
t
280.105(a)
If your financial assurance provider decides to cancel or
not renew your financial assurance, he must send you a
termination notice by certified mail.
A guarantee or a surety bond can't be terminated until ì120 days after you receive the notice of termination sent ìby certified mail.
Insurance, risk retention group, or State-fund assurance
can't be terminated until 60 days after you receive the
notice of termination sent by certified mail.
Your certified mail receipt is your proof, so save it if ìyou get a termination notice.
280.105(b)
You have 60 days to get alternative coverage if your
financial assurance is terminated for any reason
besides incapacity of the provider. If you can't
get another provider of financial assurance within
60 days you have to notify your State UST agency and
document the details of the coverage that was
terminated.
t
280.106(a)(1)
You must submit documentation that you meet
financial responsibility requirements 30 days
after a release is reported.
n
280.106(a)(2)
If your financial assurance is terminated because
the provider has gone broke, failed the financial
test, lost authority to provide financial assurance,
or is otherwise unable to provide the assurance, you
have to notify your State UST agency.
t
280.106(b)
You have to certify that you meet these financial
responsibility requirements on the form that you
must submit to your UST agency when you install a
new tank.
280.106(c)
Your State UST agency can require that you submit
proof that you meet these financial responsibility
requirements--or other information related to your
compliance with them--at any time.
280.107(a)
You must keep records of your financial assurance
mechanisms until your tank is properly closed and/or
any necessary corrective action is completed.
You have to keep these records either at the tank site
or at your place of business. If you keep your
records off the tank site, you must provide them if
your UST agency asks for them.
tDTAFIN c
280.108(a)(1)
Your UST agency can require that money be put into your
standby trust fund if:
o You can't get alternative coverage within 60 days
after your coverage is terminated or
o Your UST agency finds or suspects a release at your
tank site.
t
280.108(b)
Your UST agency may pay claims with money from your
standby trust fund if:
o A release has occurred at your tank site, corrective
action is required, you've had a chance to comply, and
you've not taken the required corrective action; or if
o The UST agency has received either a Certification of
Valid Claim or an unsatisfied court judgment against
you for damage caused by your tank release.
o
280.108(c)
If corrective action costs and third-party claims
are more than the amount of your financial assurance
o Corrective action costs get paid first and
o Third-party claims are paid in the order in which
your UST agency receives them.
t
280.110(a)
If you begin bankruptcy proceedings, you have to notify
your UST agency and document your current UST financial
responsibility mechanisms within 10 days.
y
280.110(b)
If your provider of financial assurance begins
bankruptcy proceedings, your provider must
notify you by certified mail.
y
280.110(c)
If your provider of financial assurance begins
bankruptcy proceedings, loses its authority, or
becomes unable to provide coverage, you have 30 days
after receiving notice to get alternative coverage.
If you can't get alternative coverage within 30
days, you must notify your UST agency.
t
280.110(d)
If a State fund or other State assurance mechanism
becomes incapable of paying, you have 30 days to get
alternative financial assurance.
a
280.111(a)
Funds that are taken out of a financial assurance
mechanism and put into the standby trust fund must
[If "No," please attach a report from an independent certified
public accountant certifying that there are no material differences
between the data as reported in lines 4-18 above and the financial
statements for the latest fiscal year.]
[For both Alternative I and Alternative II complete the
certification with this statement.]
I hereby certify that the wording of this letter is identical to the
wording specified in 40 CFR Part 280.95(d) as such regulations were
constituted on the date shown immediately below.
[Signature]
[Name]
[Title]
[Date]
a ÇGUARANTEE
Guarantee made this [date] by [name of guaranteeing entity], a
business entity organized under the laws of the state of [name of
state], herein referred to as guarantor, to [the state implementing
agency] and to any and all third parties, and obligees, on behalf of
[owner or operator] of [business address].
Recitals.
(1) Guarantor meets or exceeds the financial test criteria of 40
CFR 280.95(b) or (c) and (d) and agrees to comply with the
requirements for guarantors as specified in 40 CFR 280.96(b).
(2) [Owner or operator] owns or operates the following underground
storage tank(s) covered by this guarantee: [List the number of
tanks at each facility and the name(s) and address(es) of the
facility(ies) where the tanks are located. If more than one
instrument is used to assure different tanks at any one facility,
for each tank covered by this instrument, list the tank
identification number provided in the notification submitted
pursuant to 40 CFR 280.22 or the corresponding state requirement,
and the name and address of the facility.] This guarantee satisfies
40 CFR Part 280, Subpart H requirements for assuring funding for
[insert: "taking corrective action" and/or "compensating third
parties for bodily injury and property damage caused by" either
"sudden accidental releases" or "nonsudden accidental releases" or
"accidental releases"; if coverage is different for different tanks
or locations, indicate the type of coverage applicable to each tank
or location] arising from operating the above-identified underground
storage tank(s) in the amount of [insert dollar amount] per
occurrence and [insert dollar amount] annual aggregate.
(3) [Insert appropriate phrase: "On behalf of our subsidiary" (if
guarantor is corporate parent of the owner or operator); "On behalf
of our affiliate" (if guarantor is a related firm of the owner or
operator); or "Incident to our business relationship with" (if
guarantor is providing the guarantee as an incident to a substantial
business relationship with owner or operator)] [owner or operator],
guarantor guarantees to [implementing agency] and to any and all
third parties that:
In the event that [owner or operator] fails to provide alternate
coverage within 60 days after receipt of a notice of cancellation of
this guarantee and the [Director of the implementing agency] has
determined or suspects that a release has occurred at an underground
storage tank covered by this guarantee, the guarantor, upon
instructions from the [Director], shall fund a standby trust fund in
accordance with the provisions of 40 CFR 280.108, in an amount not
to exceed the coverage limits specified above.
In the event that the [Director] determines that [owner or operator]
has failed to perform corrective action for releases arising out of
the operation of the above-identified tank(s) in accordance with 40
CFR Part 280, Subpart F, the guarantor upon written instructions
from the [Director] shall fund a standby trust in accordance with
the provisions of 40 CFR 280.108, in an amount not to exceed the
coverage limits specified above.
If [owner or operator] fails to satisfy a judgment or award based on
a determination of liability for bodily injury or property damage to
third parties caused by ["sudden" and/or "nonsudden"] accidental
releases arising from the operation of the above-identified tank(s),
or fails to pay an amount agreed to in settlement of a claim arising
from or alleged to arise from such injury or damage, the guarantor,
upon written instructions from the [Director], shall fund a standby
trust in accordance with the provisions of 40 CFR 280.108 to satisfy
such judgment(s), award(s), or settlement agreement(s) up to the
limits of coverage specified above.
(4) Guarantor agrees that if, at the end of any fiscal year before
cancellation of this guarantee, the guarantor fails to meet the
financial test criteria of 40 CFR 280.95(b) or (c) and (d),
guarantor shall send within 120 days of such failure, by certified
mail, notice to [owner or operator]. The guarantee will terminate
120 days from the date of receipt of the notice by [owner or
operator], as evidenced by the return receipt.
(5) Guarantor agrees to notify [owner or operator] by certified
mail of a voluntary or involuntary proceeding under Title 11
(Bankruptcy), U.S. Code, naming guarantor as debtor, within
10 days after commencement of the proceeding.
(6) Guarantor agrees to remain bound under this guarantee
notwithstanding any modification or alteration of any obligation of
[owner or operator] pursuant to 40 CFR Part 280.
(7) Guarantor agrees to remain bound under this guarantee for so
long as [owner or operator] must comply with the applicable
financial responsibility requirements of 40 CFR Part 280, Subpart H
for the above-identified tank(s), except that guarantor may cancel
this guarantee by sending notice by certified mail to [owner or
operator], such cancellation to become effective no earlier than 120
days after receipt of such notice by [owner or operator], as
evidenced by the return receipt.
(8) The guarantor's obligation does not apply to any of the
following:
(a) Any obligation of [insert owner or operator] under a workers'
compensation, disability benefits, or unemployment compensation law
or other similar law; (b) Bodily injury to an employee of [insert
owner or operator] arising from, and in the course of, employment by
[insert owner or operator]; (c) Bodily injury or property damage
arising from the ownership, maintenance, use, or entrustment to
others of any aircraft, motor vehicle, or watercraft; (d) Property
damage to any property owned, rented, loaned to, in the care,
custody, or control of, or occupied by [insert owner or operator]
that is not the direct result of a release from a petroleum
underground storage tank; (e) Bodily damage or property damage for
which [insert owner or operator] is obligated to pay damages by
reason of the assumption of liability in a contract or agreement
other than a contract or agreement entered into to meet the
requirements of 40 CFR 280.93.
(9) Guarantor expressly waives notice of acceptance of this
guarantee by [the implementing agency], by any or all third parties,
or by [owner or operator].
I hereby certify that the wording of this guarantee is identical to
the wording specified in 40 CFR 280.96(c) as such regulations were
constituted on the effective date shown immediately below.
Effective date:
[Name of guarantor] [Authorized signature for guarantor] [Name of
person signing] [Title of person signing]
Signature of witness or notary:
a 2 ü(1) ENDORSEMENT
Name: [name of each covered location]
Address: [address of each covered location]
Policy Number:
Period of Coverage: [current policy period]
Name of [Insurer or Risk Retention Group]:
Address of [Insurer or Risk Retention Group]:
Name of Insured:
Address of Insured:
Endorsement:
1. This endorsement certifies that the policy to which the
endorsement is attached provides liability insurance covering the
following underground storage tanks:
[List the number of tanks at each facility and the name(s) and
address(es) of the facility(ies) where the tanks are located. If
more than one instrument is used to assure different tanks at any
one facility, for each tank covered by this instrument, list the
tank identification number provided in the notification submitted
pursuant to 40 CFR 280.22, or the corresponding state requirement,
and the name and address of the facility.]
for [insert: "taking corrective action" and/or "compensating third
parties for bodily injury and property damage caused by" either
"sudden accidental releases" or "nonsudden accidental releases" or
"accidental releases"; if coverage is different for different tanks
or locations, indicate the type of coverage applicable to each tank
or location] arising from operating the underground storage tank(s)
identified above.
The limits of liability are [insert the dollar amount of the "each
occurrence" and "annual aggregate" limits of the Insurer's or
Group's liability; if the amount of coverage is different for
different types of coverage or for different underground storage
tanks or locations, indicate the amount of coverage for each type of
coverage and/or for each underground storage tank or location],
exclusive of legal defense costs. This coverage is provided under
[policy number]. The effective date of said policy is [date].
2. The insurance afforded with respect to such occurrences is
subject to all of the terms and conditions of the policy; provided,
however, that any provisions inconsistent with subsections (a)
through (e) of this Paragraph 2 are hereby amended to conform with
subsections (a) through (e):
a. Bankruptcy or insolvency of the insured shall not relieve the
["Insurer" or "Group"] of its obligations under the policy to which
this endorsement is attached.
b. The ["Insurer" or "Group"] is liable for the payment of amounts
within any deductible applicable to the policy to the provider of
corrective action or a damaged third-party, with a right of
reimbursement by the insured for any such payment made by the
["Insurer" or "Group"]. This provision does not apply with respect
to that amount of any deductible for which coverage is demonstrated
under another mechanism or combination of mechanisms as specified in
40 CFR 280.95-280.102.
c. Whenever requested by [a Director of an implementing agency],
the ["Insurer" or "Group"] agrees to furnish to [the Director] a
signed duplicate original of the policy and all endorsements.
d. Cancellation or any other termination of the insurance by the
["Insurer" or "Group"] will be effective only upon written notice
and only after the expiration of 60 days after a copy of such
written notice is received by the insured.
[Insert for claims-made policies:
e. The insurance covers claims for any occurrence that commenced during the
term of the policy that is discovered and reported to the ["Insurer" or
"Group"] within six months of the effective date of the cancellation or
termination of the policy.]
I hereby certify that the wording of this instrument is identical to
the wording in 40 CFR 280.97(b)(l) and that the ["Insurer" or
"Group"] is ["licensed to transact the business of insurance or
eligible to provide insurance as an excess or surplus lines insurer
in one or more states"].
[Signature of authorized representative of Insurer or Risk Retention
Group] [Name of person signing] [Title of person signing],
Authorized Representative of [name of Insurer or Risk Retention
Group] [Address of Representative]
4(2 CERTIFICATE OF INSURANCE
Name: [name of each covered location]
Address: [address of each covered location]
Policy Number:
Endorsement (if applicable):
Period of Coverage: [current policy period]
Name of [Insurer or Risk Retention Group]:
Address of [Insurer or Risk Retention Group]:
Name of Insured:
Address of Insured:
Certification:
. [Name of Insurer or Risk Retention Group], [the "Insurer" or
"Group"], as identified above, hereby certifies that it has issued
liability insurance covering the following underground storage
tank(s):
[List the number of tanks at each facility and the name(s) and
address(es) of the facility(ies) where the tanks are located. If
more than one instrument is used to assure different tanks at any
one facility, for each tank covered by this instrument, list the
tank identification number provided in the notification submitted
pursuant to 40 CFR 280.22, or the corresponding state requirement,
and the name and address of the facility.]
for [insert: "taking corrective action" and/or "compensating third
parties for bodily injury and property damage caused by" either
"sudden accidental releases" or "nonsudden accidental releases" or
"accidental releases"; if coverage is different for different tanks
or locations, indicate the type of coverage applicable to each tank
or location] arising from operating the underground storage tank(s)
identified above.
The limits of liability are [insert the dollar amount of the "each
occurrence" and "annual aggregate" limits of the Insurer's or
Group's liability; if the amount of coverage is different for
different types of coverage or for different underground storage
tanks or locations, indicate the amount of coverage for each type of
coverage and/or for each underground storage tank or location],
exclusive of legal defense costs. This coverage is provided under
[policy number]. The effective date of said policy is [date].
2. The ["Insurer" or "Group"] further certifies the following with
respect to the insurance described in Paragraph 1:
a. Bankruptcy or insolvency of the insured shall not relieve the
["Insurer" or "Group"] of its obligations under the policy to which
this certificate applies.
b. The ["Insurer" or "Group"] is liable for the payment of amounts
within any deductible applicable to the policy to the provider of
corrective action or a damaged third-party, with a right of
reimbursement by the insured for any such payment made by the
["Insurer" or "Group"]. This provision does not apply with respect
to that amount of any deductible for which coverage is demonstrated
under another mechanism or combination of mechanisms as specified in
40 CFR 280.95-280.102.
c. Whenever requested by [a Director of an implementing agency],
the ["Insurer" or "Group"] agrees to furnish to [the Director] a
signed duplicate original of the policy and all endorsements.
d. Cancellation or any other termination of the insurance by the
["Insurer" or "Group"] will be effective only upon written notice
and only after the expiration of 60 days after a copy of such
written notice is received by the insured.
[Insert for claims-made policies: e. The insurance covers claims
for any occurrence that commenced during the term of the policy that
is discovered and reported to the ["Insurer" or "Group"] within six
months of the effective date of the cancellation or other
termination of the policy.]
I hereby certify that the wording of this instrument is identical to
the wording in 40 CFR 280.97(b)(2) and that the ["Insurer" or
"Group"] is ["licensed to transact the business of insurance, or
eligible to provide insurance as an excess or surplus lines insurer,
in one or more states"].
[Signature of authorized representative of Insurer]
[Type name]
[Title], Authorized Representative of [name of Insurer or Risk
Retention Group]
[Address of Representative]
t éPERFORMANCE BOND
Date bond executed:
Period of coverage:
Principal: [legal name and business address of owner or operator]
Type of organization: [insert "individual," "joint venture,"
"partnership," or "corporation"]
State of incorporation (if applicable):
Surety(ies): [name(s) and business address(es)]
Scope of Coverage: [List the number of tanks at each facility and
the name(s) and address(es) of the facility(ies) where the tanks are
located. If more than one instrument is used to assure different
tanks at any one facility, for each tank covered by this instrument,
list the tank identification number provided in the notification
submitted pursuant to 40 CFR 280.22, or the corresponding state
requirement, and the name and address of the facility. List the
coverage guaranteed by the bond: "taking corrective action" and/or
"compensating third parties for bodily injury and property damage
caused by" either "sudden accidental releases" or "nonsudden
accidental releases" or "accidental releases" "arising from
operating the underground storage tank"].
Penal sums of bond.. :
Per occurrence...... $
Annual aggregate.... $
Surety's bond number :
Know All Persons by These Presents, that we, the Principal and
Surety(ies), hereto are firmly bound to [the implementing agency],
in the above penal sums for the payment of which we bind ourselves,
our heirs, executors, administrators, successors, and assigns
jointly and severally; provided that, where the Surety(ies) are
corporations acting as co-sureties, we, the Sureties, bind ourselves
in such sums jointly and severally only for the purpose of allowing
a joint action or actions against any or all of us, and for all
other purposes each Surety binds itself, jointly and severally with
the Principal, for the payment of such sums only as is set forth
opposite the name of such Surety, but if no limit of liability is
indicated, the limit of liability shall be the full amount of the
penal sums.
Whereas said Principal is required under Subtitle I of the Resource
Conservation and Recovery Act (RCRA), as amended, to provide
financial assurance for [insert: "taking corrective action" and/or
"compensating third parties for bodily injury and property damage
caused by" either "sudden accidental releases" or "nonsudden
accidental releases" or "accidental releases"; if coverage is
different for different tanks or locations, indicate the type of
coverage applicable to each tank or location] arising from operating
the underground storage tanks identified above, and
Whereas said Principal shall establish a standby trust fund as is
required when a surety bond is used to provide such financial
assurance;
Now, therefore, the conditions of the obligation are such that if
the Principal shall faithfully ["take corrective action, in
accordance with 40 CFR Part 280, Subpart F and the Director of the
state implementing agency's instructions for," and/or "compensate
injured third parties for bodily injury and property damage caused
by" either "sudden" or "nonsudden" or "sudden and nonsudden"]
accidental releases arising from operating the tank(s) identified
above, or if the Principal shall provide alternate financial
assurance, as specified in 40 CFR Part 280, Subpart H, within 120
days after the date the notice of cancellation is received by the
Principal from the Surety(ies), then this obligation shall be null
and void; otherwise it is to remain in full force and effect.
Such obligation does not apply to any of the following:
(a) Any obligation of [insert owner or operator] under a workers'
compensation, disability benefits, or unemployment compensation law
or other similar law;
(b) Bodily injury to an employee of [insert owner or operator] arising from,
and in the course of, employment by [insert owner or operator];
(c) Bodily injury or property damage arising from the ownership, maintenance,
use, or entrustment to others of any aircraft, motor vehicle, or
watercraft;
(d) Property damage to any property owned, rented, loaned to, in the care,
custody, or control of, or occupied by [insert owner or operator]
that is not the direct result of a release from a petroleum
underground storage tank;
(e) Bodily injury or property damage for which [insert owner or operator] is
obligated to pay damages by reason of the assumption of liability in a
contract or agreement other than a contract or agreement entered into to
meet the requirements of 40 CFR 280.93.
The Surety(ies) shall become liable on this bond obligation only
when the Principal has failed to fulfill the conditions described
above.
Upon notification by [the Director of the implementing agency] that
the Principal has failed to ["take corrective action, in accordance
with 40 CFR Part 280, Subpart F and the Director's instructions,"
and/or "compensate injured third parties"] as guaranteed by this
bond, the Surety(ies) shall either perform ["corrective action in
accordance with 40 CFR Part 280 and the Director's instructions,"
and/or "third-party liability compensation"] or place funds in an
amount up to the annual aggregate penal sum into the standby trust
fund as directed by [the Regional Administrator or the Director]
under 40 CFR 280.108.
Upon notification by [the Director] that the Principal has failed to
provide alternate financial assurance within 60 days after the date
the notice of cancellation is received by the Principal from the
Surety(ies) and that [the Director] has determined or suspects that
a release has occurred, the Surety(ies) shall place funds in an
amount not exceeding the annual aggregate penal sum into the standby
trust fund as directed by [the Director] under 40 CFR 280.108.
The Surety(ies) hereby waive(s) notification of amendments to
applicable laws, statutes, rules, and regulations and agrees that no
such amendment shall in any way alleviate its (their) obligation on
this bond.
The liability of the Surety(ies) shall not be discharged by any
payment or succession of payments hereunder, unless and until such
payment or payments shall amount in the annual aggregate to the
penal sum shown on the face of the bond, but in no event shall the
obligation of the Surety(ies) hereunder exceed the amount of said
annual aggregate penal sum.
The Surety(ies) may cancel the bond by sending notice of
cancellation by certified mail to the Principal, provided, however,
that cancellation shall not occur during the 120 days beginning on
the date of receipt of the notice of cancellation by the Principal,
as evidenced by the return receipt.
The Principal may terminate this bond by sending written notice to
the Surety(ies).
In Witness Thereof, the Principal and Surety(ies) have executed this
Bond and have affixed their seals on the date set forth above.
The persons whose signatures appear below hereby certify that they
are authorized to execute this surety bond on behalf of the
Principal and Surety(ies) and that the wording of this surety bond
is identical to the wording specified in 40 CFR 280.98(b) as such
regulations were constituted on the date this bond was executed.
PRINCIPAL
[Signature(s)]
[Name(s)]
[Title(s)]
[Corporate seal]
CORPORATE SURETY(IES)
[Name and address]
State of Incorporation:
Liability limit: $
[Signature(s)]
[Name(s) and title(s)]
[Corporate seal]
[For every co-surety, provide signature(s), corporate seal, and
other information in the same manner as for Surety above.]
Bond premium: $
a âIRREVOCABLE STANDBY LETTER OF CREDIT
[Name and address of issuing institution]
[Name and address of Director(s) of state implementing agency(ies)]
Dear Sir or Madam: We hereby establish our Irrevocable Standby
Letter of Credit No. in your favor, at the request and for the
account of [owner or operator name] of [address] up to the aggregate
amount of [in words] U.S. dollars ($[insert dollar amount]),
available upon presentation [insert, if more than one Director of a
state implementing agency is a beneficiary, "by any one of you"] of
(1) your sight draft, bearing reference to this letter of credit,
No. , and
(2) your signed statement reading as follows: "I certify that the
amount of the draft is payable pursuant to regulations issued under
authority of Subtitle I of the Resource Conservation and Recovery
Act of 1976, as amended."
This letter of credit may be drawn on to cover [insert: "taking
corrective action" and/or "compensating third parties for bodily
injury and property damage caused by" either "sudden accidental
releases" or "nonsudden accidental releases" or "accidental
releases"] arising from operating the underground storage tank(s)
identified below in the amount of [in words] $[insert dollar amount]
per occurrence and [in words] $[insert dollar amount] annual
aggregate:
[List the number of tanks at each facility and the name(s) and
address(es) of the facility(ies) where the tanks are located. If
more than one instrument is used to assure different tanks at any
one facility, for each tank covered by this instrument, list the
tank identification number provided in the notification submitted
pursuant to 40 CFR 280.22, or the corresponding state requirement,
and the name and address of the facility.]
The letter of credit may not be drawn on to cover any of the
following:
(a) Any obligation of [insert owner or operator] under a workers'
compensation, disability benefits, or unemployment compensation law
or other similar law;
(b) Bodily injury to an employee of [insert owner or operator] arising from,
and in the course of, employment by [insert owner or operator];
(c) Bodily injury or property damage arising from the ownership, maintenance,
use, or entrustment to others of any aircraft, motor vehicle, or
watercraft;
(d) Property damage to any property owned, rented, loaned to, in the care,
custody, or control of, or occupied by [insert owner or operator]
that is not the direct result of a release from a petroleum
underground storage tank;
(e) Bodily injury or property damage for which [insert owner or operator] is
obligated to pay damages by reason of the assumption of liability in a
contract or agreement other than a contract or agreement entered into to
meet the requirements of 40 CFR 280.93.
This letter of credit is effective as of [date] and shall expire on
[date], but such expiration date shall be automatically extended for
a period of [at least the length of the original term] on
[expiration date] and on each successive expiration date, unless, at
least 120 days before the current expiration date, we notify [owner
or operator] by certified mail that we have decided not to extend
this letter of credit beyond the current expiration date. In the
event that [owner or operator] is so notified, any unused portion of
the credit shall be available upon presentation of your sight draft
for 120 days after the date of receipt by [owner or operator], as
shown on the signed return receipt.
Whenever this letter of credit is drawn on under and in compliance
with the terms of this credit, we shall duly honor such draft upon
presentation to us, and we shall deposit the amount of the draft
directly into the standby trust fund of [owner or operator] in
accordance with your instructions.
We certify that the wording of this letter of credit is identical to
the wording specified in 40 CFR 280.99(b) as such regulations were
constituted on the date shown immediately below.
[Signature(s) and title(s) of official(s) of issuing institution]
[Date]
This credit is subject to [insert "the most recent edition of the
Uniform Customs and Practice for Documentary Credits, published by
the International Chamber of Commerce," or "the Uniform Commercial
Code"].
àTRUST AGREEMENT
Trust agreement, the "Agreement," entered into as of [date] by and
between [name of the owner or operator], a [name of state] [insert
"corporation," "partnership," "association," or "proprietorship"],
the "Grantor," and [name of corporate trustee], [insert
"Incorporated in the state of " or "a national bank"], the
"Trustee."
[Whereas, the United States Environmental Protection Agency, "EPA,"
an agency of the United States Government, has established certain
regulations applicable to the Grantor, requiring that an owner or
operator of an underground storage tank shall provide assurance that
funds will be available when needed for corrective action and third-
party compensation for bodily injury and property damage caused by
sudden and nonsudden accidental releases arising from the operation
of the underground storage tank (This paragraph is only applicable
to the standby trust agreement.)];
[Whereas, the Grantor has elected to establish [insert either "a
guarantee," "surety bond," or "letter of credit"] to provide all or
part of such financial assurance for the underground storage tanks
identified herein and is required to establish a standby trust fund
able to accept payments from the instrument (This paragraph is only
applicable to the standby trust agreement.)];
Whereas, the Grantor, acting through its duly authorized officers,
has selected the Trustee to be the trustee under this agreement, and
the Trustee is willing to act as trustee;
Now, therefore, the Grantor and the Trustee agree as follows:
Section 1. Definitions.
As used in this Agreement:
(a) The term "Grantor" means the owner or operator who enters into
this Agreement and any successors or assigns of the Grantor.
(b) The term "Trustee" means the Trustee who enters into this
Agreement and any successor Trustee.
Section 2. Identification of the Financial Assurance Mechanism.
This Agreement pertains to the [identify the financial assurance
mechanism, either a guarantee, surety bond, or letter of credit,
from which the standby trust fund is established to receive payments
(This paragraph is only applicable to the standby trust agreement.)].
Section 3. Establishment of Fund.
The Grantor and the Trustee hereby establish a trust fund, the "Fund,"
for the benefit of [implementing agency]. The Grantor and the Trustee
intend that no third party have access to the Fund except as herein
provided. [The Fund is established initially as a standby to receive
payments and shall not consist of any property.] Payments made by the
provider of financial assurance pursuant to [the Director of the
implementing agency's] instruction are transferred to the Trustee and
are referred to as the Fund, together with all earnings and profits
thereon, less any payments or distributions made by the Trustee
pursuant to this Agreement. The Fund shall be held by the Trustee,
IN TRUST, as hereinafter provided. The Trustee shall not be
responsible nor shall it undertake any responsibility for the amount
or adequacy of, nor any duty to collect from the Grantor as provider
of financial assurance, any payments necessary to discharge any
liability of the Grantor established by [the state implementing
agency].
Section 4. Payment for ["Corrective Action" and/or "Third-Party
Liability Claims"].
The Trustee shall make payments from the Fund as [the Director of the
implementing agency] shall direct, in writing, to provide for the payment
of the costs of [insert: "taking corrective action" and/or "compensating
third parties for bodily injury and property damage caused by" either
"sudden accidental releases" or "nonsudden accidental releases" or
"accidental releases"] arising from operating the tanks covered by
the financial assurance mechanism identified in this Agreement.
The Fund may not be drawn upon to cover any of the following:
(a) Any obligation of [insert owner or operator] under a workers'
compensation, disability benefits, or unemployment compensation law
or other similar law;
(b) Bodily injury to an employee of [insert owner or operator]
arising from, and in the course of, employment by [insert owner or
operator];
(c) Bodily injury or property damage arising from the ownership,
maintenance, use, or entrustment to others of any aircraft, motor
vehicle, or watercraft;
(d) Property damage to any property owned, rented, loaned to, in the
care, custody, or control of, or occupied by [insert owner or
operator] that is not the direct result of a release from a
petroleum underground storage tank;
(e) Bodily injury or property damage for which [insert owner or
operator] is obligated to pay damages by reason of the assumption of
liability in a contract or agreement other than a contract or
agreement entered into to meet the requirements of 40 CFR 280.93.
The Trustee shall reimburse the Grantor, or other persons as
specified by [the Director], from the Fund for corrective action
expenditures and/or third-party liability claims in such amounts as
[the Director] shall direct in writing. In addition, the Trustee
shall refund to the Grantor such amounts as [the Director] specifies
in writing. Upon refund, such funds shall no longer constitute part
of the Fund as defined herein.
Section 5. Payments Comprising the Fund.
Payments made to the Trustee for the Fund shall consist of cash and
securities acceptable to the Trustee.
Section 6. Trustee Management.
The Trustee shall invest and reinvest the principal and income of the
Fund and keep the Fund invested as a single fund, without distinction
between principal and income, in accordance with general investment
policies and guidelines which the Grantor may communicate in writing
to the Trustee from time to time, subject, however, to the provisions of
this Section. In investing, reinvesting, exchanging, selling, and
managing the Fund, the Trustee shall discharge his duties with
respect to the trust fund solely in the interest of the
beneficiaries and with the care, skill, prudence, and diligence
under the circumstances then prevailing which persons of prudence,
acting in a like capacity and familiar with such matters, would use
in the conduct of an enterprise of a like character and with like
aims; except that:
(i) Securities or other obligations of the Grantor, or any other
owner or operator of the tanks, or any of their affiliates as
defined in the Investment Company Act of 1940, as amended, 15 U.S.C.
80a-2(a), shall not be acquired or held, unless they are securities
or other obligations of the federal or a state government;
(ii) The Trustee is authorized to invest the Fund in time or demand
deposits of the Trustee, to the extent insured by an agency of the
federal or state government; and
(iii) The Trustee is authorized to hold cash awaiting investment or
distribution uninvested for a reasonable time and without liability
for the payment of interest thereon.
Section 7. Commingling and Investment.
The Trustee is expressly authorized in its discretion:
(a) To transfer from time to time any or all of the assets of the
Fund to any common, commingled, or collective trust fund created by
the Trustee in which the Fund is eligible to participate, subject to
all of the provisions thereof, to be commingled with the assets of
other trusts participating therein; and
(b) To purchase shares in any investment company registered under
the Investment Company Act of 1940, 15 U.S.C. 80a-1 et seq.,
including one which may be created, managed, underwritten, or to
which investment advice is rendered or the shares of which are sold
by the Trustee. The Trustee may vote such shares in its discretion.
Section 8. Express Powers of Trustee.
Without in any way limiting the powers and discretions conferred upon
the Trustee by the other provisions of this Agreement or by law, the
Trustee is expressly authorized and empowered:
(a) To sell, exchange, convey, transfer, or otherwise dispose of
any property held by it, by public or private sale. No person
dealing with the Trustee shall be bound to see to the application of
the purchase money or to inquire into the validity or expediency of
any such sale or other disposition;
(b) To make, execute, acknowledge, and deliver any and all
documents of transfer and conveyance and any and all other
instruments that may be necessary or appropriate to carry out the
powers herein granted;
(c) To register any securities held in the Fund in its own name or
in the name of a nominee and to hold any security in bearer form or
in book entry, or to combine certificates representing such
securities with certificates of the same issue held by the Trustee
in other fiduciary capacities, or to deposit or arrange for the
deposit of such securities in a qualified central depository even
though, when so deposited, such securities may be merged and held in
bulk in the name of the nominee of such depository with other
securities deposited therein by another person, or to deposit or
arrange for the deposit of any securities issued by the United
States Government, or any agency or instrumentality thereof, with a
Federal Reserve bank, but the books and records of the Trustee shall
at all times show that all such securities are part of the Fund;
(d) To deposit any cash in the Fund in interest-bearing accounts
maintained or savings certificates issued by the Trustee, in its
separate corporate capacity, or in any other banking institution
affiliated with the Trustee, to the extent insured by an agency of
the federal or state government; and
(e) To compromise or otherwise adjust all claims in favor of or
against the Fund.
Section 9. Taxes and Expenses.
All taxes of any kind that may be assessed or levied against or in
respect of the Fund and all brokerage commissions incurred by the Fund
shall be paid from the Fund. All other expenses incurred by the Trustee
in connection with the administration of this Trust, including fees for
legal services rendered to the Trustee, the compensation of the Trustee
to the extent not paid directly by the Grantor, and all other proper
charges and disbursements of the Trustee shall be paid from the
Fund.
Section 10. Advice of Counsel.
The Trustee may from time to time consult with counsel, who may be
counsel to the Grantor, with respect to any questions arising as to
the construction of this Agreement or any action to be taken hereunder.
The Trustee shall be fully protected, to the extent permitted by law,
in acting upon the advice of counsel.
Section 11. Trustee Compensation.
The Trustee shall be entitled to reasonable compensation for its services
as agreed upon in writing from time to time with the Grantor.
Section 12. Successor Trustee.
The Trustee may resign or the Grantor may replace the Trustee, but
such resignation or replacement shall not be effective until the
Grantor has appointed a successor trustee and this successor accepts
the appointment. The successor trustee shall have the same powers and
duties as those conferred upon the Trustee hereunder. Upon the successor
trustee's acceptance of the appointment, the Trustee shall assign,
transfer, and pay over to the successor trustee the funds and properties
then constituting the Fund. If for any reason the Grantor cannot or does
not act in the event of the resignation of the Trustee, the Trustee may
apply to a court of competent jurisdiction for the appointment of a
successor trustee or for instructions. The successor trustee shall
specify the date on which it assumes administration of the trust in
writing sent to the Grantor and the present Trustee by certified
mail 10 days before such change becomes effective. Any expenses
incurred by the Trustee as a result of any of the acts contemplated
by this Section shall be paid as provided in Section 9.
Section 13. Instructions to the Trustee.
All orders, requests, and instructions by the Grantor to the Trustee
shall be in writing, signed by such persons as are designated in the
attached Schedule B or such other designees as the Grantor may
designate by amendment to Schedule B. The Trustee shall be fully
protected in acting without inquiry in accordance with the Grantor's
orders, requests, and instructions. All orders, requests, and
instructions by [the Director of the implementing agency] to the
Trustee shall be in writing, signed by [the Director], and the Trustee
shall act and shall be fully protected in acting in accordance with
such orders, requests, and instructions. The Trustee shall have the
right to assume, in the absence of written notice to the contrary, that
no event constituting a change or a termination of the authority of any
person to act on behalf of the Grantor or [the Director] hereunder
has occurred. The Trustee shall have no duty to act in the absence
of such orders, requests, and instructions from the Grantor and/or
[the Director], except as provided for herein.
Section 14. Amendment of Agreement.
This Agreement may be amended by an instrument in writing executed
by the Grantor and the Trustee, or by the Trustee and [the Director
of the implementing agency] if the Grantor ceases to exist.
Section 15. Irrevocability and Termination.
Subject to the right of the parties to amend this Agreement as provided
in Section 14, this Trust shall be irrevocable and shall continue until
terminated at the written direction of the Grantor and the Trustee,
or by the Trustee and [the Director of the implementing agency], if the
Grantor ceases to exist. Upon termination of the Trust, all
remaining trust property, less final trust administration expenses,
shall be delivered to the Grantor.
Section 16. Immunity and Indemnification.
The Trustee shall not incur personal liability of any nature in
connection with any act or omission, made in good faith, in the
administration of this Trust, or in carrying out any directions
by the Grantor or [the Director of the implementing agency] issued
in accordance with this Agreement. The Trustee shall be indemnified
and saved harmless by the Grantor, from and against any personal
liability to which the Trustee may be subjected by reason of any act
or conduct in its official capacity, including all expenses reasonably
incurred in its defense in the event the Grantor fails to provide such
defense.
Section 17. Choice of Law.
This Agreement shall be administered, construed, and enforced according
to the laws of the state of [insert name of state], or the Comptroller
of the Currency in the case of National Association banks.
Section 18. Interpretation.
As used in this Agreement, words in the singular include the plural
and words in the plural include the singular. The descriptive headings
for each section of this Agreement shall not affect the interpretation
or the legal efficacy of this Agreement.
In Witness whereof the parties have caused this Agreement to be
executed by their respective officers duly authorized and their
corporate seals (if applicable) to be hereunto affixed and attested
as of the date first above written. The parties below certify that
the wording of this Agreement is identical to the wording specified
in 40 CFR 280.103(b)(1) as such regulations were constituted on the
date written above.
[Signature of Grantor]
[Name of the Grantor]
[Title]
Attest:
[Signature of Trustee]
[Name of the Trustee]
[Title]
[Seal]
Attest:
[Signature of Witness]
[Name of Witness]
[Title]
[Seal]
iRULE * RULE + RULE ,
These cross-references refer to items from RCRA's ìhazardous waste management regulations that you have ìto figure into your Tangible Net Worth when you use ìAlternative Test I for self-insurance. (See the ìSelf-Insurance Advisor).
The regulations cross-referenced are not included in ìReg-In-A-Box. l
These cross-references refer to items from EPA's ìunderground injection well regulations that you have ìto figure into your Tangible Net Worth when you use ìAlternative Test I for Self-Insurance. (See the ìSelf-Insurance Advisor).
These regulations are not contained in Reg-In-A-Box. l
280.95(c)
These are the criteria used in Alternative Test II ìfor Self-Insurance. (See the Self-Insurance ìAdvisor). a
This cross-reference refers to the financial test for ìself-insurance under RCRA's hazardous waste ìmanagement regulations.
This is Alternative Test II in the Self-Insurance ìAdvisor.
(The text of these regulations is not included in ìReg-In-A-Box.) l
40 CFR Part 280, Subpart G means...
OUST's tank closure regulations in Sec. 280.74 ìof these rules. L î ìCERTIFICATION OF ACKNOWLEDGEMENT
(2) The standby trust agreement must be accompanied by a formal
certification of acknowledgment similar to the following. State
requirements may differ on the proper content of this
acknowledgment.
State of
County of
On this [date], before me personally came [owner or operator] to me
known, who, being by me duly sworn, did depose and say that she/he
resides at [address], that she/he is [title] of [corporation], the
corporation described in and which executed the above instrument;
that she/he knows the seal of said corporation; that the seal
affixed to such instrument is such corporate seal; that it was so
affixed by order of the Board of Directors of said corporation; and
that she/he signed her/his name thereto by like order.
[Signature of Notary Public]
[Name of Notary Public]
o ÅCERTIFICATION OF FINANCIAL RESPONSIBILITY
[Owner or operator] hereby certifies that it is in compliance with
the requirements of Subpart H of 40 CFR Part 280.
The financial assurance mechanism[s] used to demonstrate financial
responsibility under Subpart H of 40 CFR Part 280 is[are] as
follows:
[For each mechanism, list the type of mechanism, name of issuer,
mechanism number (if applicable), amount of coverage, effective
period of coverage and whether the mechanism covers "taking
corrective action" and/or "compensating third parties for bodily
injury and property damage caused by" either "sudden accidental
releases" or "nonsudden accidental releases" or "accidental
releases."]
[Signature of owner or operator]
[Name of owner or operator]
[Title]
[Date]
[Signature of witness or notary]
[Name of witness or notary]
[Date]
The owner or operator must update this certification whenever the
financial assurance mechanism(s) used to demonstrate financial
responsibility change(s).
(The information requirements in this section have been approved by
the Office of Management and Budget and assigned OMB control number
2050-0066.)
e ÉCERTIFICATION OF VALID CLAIM
The undersigned, as principals and as legal representatives of
[insert owner or operator] and [insert name and address of third-
party claimant], hereby certify that the claim of bodily injury
[and/or] property damage caused by an accidental release arising
from operating [owner's or operator's] underground storage tank
should be paid in the amount of $[ ].
[Signatures]
Owner or Operator
Attorney for Owner or Operator
(Notary) Date
[Signature(s)]
Claimant(s)
Attorney(s) for Claimant(s)
(Notary) Date
or (ii) A valid final court order establishing a judgment against
the owner or operator for bodily injury or property damage caused by
an accidental release from an underground storage tank covered by
financial assurance under this subpart and the Director determines
that the owner or operator has not satisfied the judgment.
r
280.102(b)
You must use the exact wording of the trust ìagreement and the certification of ìacknowledgement as published in these ìregulations. The regulation provides these in ì"fill-in-the-blank" format. Have your ìattorney take care of this for you. eREGINBOX 9 n
