[Title 40 CFR 280]
[Code of Federal Regulations (annual edition) - July 1, 2002 Edition]
[Title 40 - PROTECTION OF ENVIRONMENT]
[Chapter I - ENVIRONMENTAL PROTECTION]
[Subchapter I - SOLID WASTES (CONTINUED)]
[Part 280 - TECHNICAL STANDARDS AND CORRECTIVE ACTION REQUIREMENTS FOR OWNERS AND OPERATORS OF UNDERGROUND STORAGE TANKS (UST)]
[From the U.S. Government Printing Office]
40PROTECTION OF ENVIRONMENT232002-07-012002-07-01falseTECHNICAL STANDARDS AND CORRECTIVE ACTION REQUIREMENTS FOR OWNERS AND OPERATORS OF UNDERGROUND STORAGE TANKS (UST)280PART 280PROTECTION OF ENVIRONMENTENVIRONMENTAL PROTECTIONSOLID WASTES (CONTINUED)
PART 280--TECHNICAL STANDARDS AND CORRECTIVE ACTION REQUIREMENTS FOR OWNERS AND OPERATORS OF UNDERGROUND STORAGE TANKS (UST)--Table of Contents
Subpart A--Program Scope and Interim Prohibition
Sec.
280.10 Applicability.
280.11 Interim prohibition for deferred UST systems.
280.12 Definitions.
Subpart B--UST Systems: Design, Construction, Installation and
Notification
280.20 Performance standards for new UST systems.
280.21 Upgrading of existing UST systems.
280.22 Notification requirements.
Subpart C--General Operating Requirements
280.30 Spill and overfill control.
280.31 Operation and maintenance of corrosion protection.
280.32 Compatibility.
280.33 Repairs allowed.
280.34 Reporting and recordkeeping.
Subpart D--Release Detection
280.40 General requirements for all UST systems.
280.41 Requirements for petroleum UST systems.
280.42 Requirements for hazardous substance UST systems.
280.43 Methods of release detection for tanks.
280.44 Methods of release detection for piping.
280.45 Release detection recordkeeping.
Subpart E--Release Reporting, Investigation, and Confirmation
280.50 Reporting of suspected releases.
280.51 Investigation due to off-site impacts.
280.52 Release investigation and confirmation steps.
280.53 Reporting and cleanup of spills and overfills.
Subpart F--Release Response and Corrective Action for UST Systems
Containing Petroleum or Hazardous Substances
280.60 General.
280.61 Initial response.
280.62 Initial abatement measures and site check.
280.63 Initial site characterization.
280.64 Free product removal.
280.65 Investigations for soil and ground-water cleanup.
280.66 Corrective action plan.
280.67 Public participation.
Subpart G--Out-of-Service UST Systems and Closure
280.70 Temporary closure.
280.71 Permanent closure and changes-in-service.
280.72 Assessing the site at closure or change-in-service.
280.73 Applicability to previously closed UST systems.
280.74 Closure records.
Subpart H--Financial Responsibility
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 Local government bond rating test.
280.105 Local government financial test.
280.106 Local government guarantee.
280.107 Local government fund.
280.108 Substitution of financial assurance mechanisms by owner or
operator.
280.109 Cancellation or nonrenewal by a provider of financial assurance.
280.110 Reporting by owner or operator.
280.111 Recordkeeping.
280.112 Drawing on financial assurance mechanisms.
280.113 Release from the requirements.
280.114 Bankruptcy or other incapacity of owner or operator or provider
of financial assurance.
280.115 Replenishment of guarantees, letters of credit, or surety bonds.
280.116 Suspension of enforcement. [Reserved]
[[Page 462]]
Subpart I--Lender Liability
280.200 Definitions.
280.210 Participation in management.
280.220 Ownership of an underground storage tank or underground storage
tank system or facility or property on which an underground
storage tank or underground storage tank system is located.
280.230 Operating an underground storage tank or underground storage
tank system.
Appendix I to Part 280--Notification for Underground Storage Tanks
(Form)
Appendix II to Part 280--List of Agencies Designated to Receive
Notifications
Appendix III to Part 280--Statement for Shipping Tickets and Invoices
Authority: 42 U.S.C. 6912, 6991, 6991a, 6991b, 6991c, 6991d, 6991e,
6991f, 6991g, 6991h.
Source: 53 FR 37194, Sept. 23, 1988, unless otherwise noted.
Subpart A--Program Scope and Interim Prohibition
Sec. 280.10 Applicability.
(a) The requirements of this part apply to all owners and operators
of an UST system as defined in Sec. 280.12 except as otherwise provided
in paragraphs (b), (c), and (d) of this section. Any UST system listed
in paragraph (c) of this section must meet the requirements of
Sec. 280.11.
(b) The following UST systems are excluded from the requirements of
this part:
(1) Any UST system holding hazardous wastes listed or identified
under Subtitle C of the Solid Waste Disposal Act, or a mixture of such
hazardous waste and other regulated substances.
(2) Any wastewater treatment tank system that is part of a
wastewater treatment facility regulated under section 402 or 307(b) of
the Clean Water Act.
(3) Equipment or machinery that contains regulated substances for
operational purposes such as hydraulic lift tanks and electrical
equipment tanks.
(4) Any UST system whose capacity is 110 gallons or less.
(5) Any UST system that contains a de minimis concentration of
regulated substances.
(6) Any emergency spill or overflow containment UST system that is
expeditiously emptied after use.
(c) Deferrals. Subparts B, C, D, E, and G do not apply to any of the
following types of UST systems:
(1) Wastewater treatment tank systems;
(2) Any UST systems containing radioactive material that are
regulated under the Atomic Energy Act of 1954 (42 U.S.C. 2011 and
following);
(3) Any UST system that is part of an emergency generator system at
nuclear power generation facilities regulated by the Nuclear Regulatory
Commission under 10 CFR part 50, appendix A;
(4) Airport hydrant fuel distribution systems; and
(5) UST systems with field-constructed tanks.
(d) Deferrals. Subpart D does not apply to any UST system that
stores fuel solely for use by emergency power generators.
Sec. 280.11 Interim prohibition for deferred UST systems.
(a) No person may install an UST system listed in Sec. 280.10(c) for
the purpose of storing regulated substances unless the UST system
(whether of single- or double-wall construction):
(1) Will prevent releases due to corrosion or structural failure for
the operational life of the UST system;
(2) Is cathodically protected against corrosion, constructed of
noncorrodible material, steel clad with a noncorrodible material, or
designed in a manner to prevent the release or threatened release of any
stored substance; and
(3) Is constructed or lined with material that is compatible with
the stored substance.
(b) Notwithstanding paragraph (a) of this section, an UST system
without corrosion protection may be installed at a site that is
determined by a corrosion expert not to be corrosive enough to cause it
to have a release due to corrosion during its operating life. Owners and
operators must maintain records that demonstrate compliance with the
requirements of this paragraph for the remaining life of the tank.
Note: The National Association of Corrosion Engineers Standard RP-
02-85, ``Control of External Corrosion on Metallic Buried, Partially
Buried, or Submerged Liquid Storage Systems,'' may be used as guidance
for complying with paragraph (b) of this section.
[[Page 463]]
Sec. 280.12 Definitions.
Aboveground release means any release to the surface of the land or
to surface water. This includes, but is not limited to, releases from
the above-ground portion of an UST system and aboveground releases
associated with overfills and transfer operations as the regulated
substance moves to or from an UST system.
Ancillary equipment means any devices including, but not limited to,
such devices as piping, fittings, flanges, valves, and pumps used to
distribute, meter, or control the flow of regulated substances to and
from an UST.
Belowground release means any release to the subsurface of the land
and to ground water. This includes, but is not limited to, releases from
the belowground portions of an underground storage tank system and
belowground releases associated with overfills and transfer operations
as the regulated substance moves to or from an underground storage tank.
Beneath the surface of the ground means beneath the ground surface
or otherwise covered with earthen materials.
Cathodic protection is a technique to prevent corrosion of a metal
surface by making that surface the cathode of an electrochemical cell.
For example, a tank system can be cathodically protected through the
application of either galvanic anodes or impressed current.
Cathodic protection tester means a person who can demonstrate an
understanding of the principles and measurements of all common types of
cathodic protection systems as applied to buried or submerged metal
piping and tank systems. At a minimum, such persons must have education
and experience in soil resistivity, stray current, structure-to-soil
potential, and component electrical isolation measurements of buried
metal piping and tank systems.
CERCLA means the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended.
Compatible means the ability of two or more substances to maintain
their respective physical and chemical properties upon contact with one
another for the design life of the tank system under conditions likely
to be encountered in the UST.
Connected piping means all underground piping including valves,
elbows, joints, flanges, and flexible connectors attached to a tank
system through which regulated substances flow. For the purpose of
determining how much piping is connected to any individual UST system,
the piping that joins two UST systems should be allocated equally
between them.
Consumptive use with respect to heating oil means consumed on the
premises.
Corrosion expert means a person who, by reason of thorough knowledge
of the physical sciences and the principles of engineering and
mathematics acquired by a professional education and related practical
experience, is qualified to engage in the practice of corrosion control
on buried or submerged metal piping systems and metal tanks. Such a
person must be accredited or certified as being qualified by the
National Association of Corrosion Engineers or be a registered
professional engineer who has certification or licensing that includes
education and experience in corrosion control of buried or submerged
metal piping systems and metal tanks.
Dielectric material means a material that does not conduct direct
electrical current. Dielectric coatings are used to electrically isolate
UST systems from the surrounding soils. Dielectric bushings are used to
electrically isolate portions of the UST system (e.g., tank from
piping).
Electrical equipment means underground equipment that contains
dielectric fluid that is necessary for the operation of equipment such
as transformers and buried electrical cable.
Excavation zone means the volume containing the tank system and
backfill material bounded by the ground surface, walls, and floor of the
pit and trenches into which the UST system is placed at the time of
installation.
Existing tank system means a tank system used to contain an
accumulation of regulated substances or for which installation has
commenced on or before December 22, 1988. Installation is considered to
have commenced if:
[[Page 464]]
(a) The owner or operator has obtained all federal, state, and local
approvals or permits necessary to begin physical construction of the
site or installation of the tank system; and if,
(b)(1) Either a continuous on-site physical construction or
installation program has begun; or,
(2) The owner or operator has entered into contractual obligations--
which cannot be cancelled or modified without substantial loss--for
physical construction at the site or installation of the tank system to
be completed within a reasonable time.
Farm tank is a tank located on a tract of land devoted to the
production of crops or raising animals, including fish, and associated
residences and improvements. A farm tank must be located on the farm
property. ``Farm'' includes fish hatcheries, rangeland and nurseries
with growing operations.
Flow-through process tank is a tank that forms an integral part of a
production process through which there is a steady, variable, recurring,
or intermittent flow of materials during the operation of the process.
Flow-through process tanks do not include tanks used for the storage of
materials prior to their introduction into the production process or for
the storage of finished products or by-products from the production
process.
Free product refers to a regulated substance that is present as a
non-aqueous phase liquid (e.g., liquid not dissolved in water.)
Gathering lines means any pipeline, equipment, facility, or building
used in the transportation of oil or gas during oil or gas production or
gathering operations.
Hazardous substance UST system means an underground storage tank
system that contains a hazardous substance defined in section 101(14) of
the Comprehensive Environmental Response, Compensation and Liability Act
of 1980 (but not including any substance regulated as a hazardous waste
under subtitle C) or any mixture of such substances and petroleum, and
which is not a petroleum UST system.
Heating oil means petroleum that is No. 1, No. 2, No. 4--light, No.
4--heavy, No. 5--light, No. 5--heavy, and No. 6 technical grades of fuel
oil; other residual fuel oils (including Navy Special Fuel Oil and
Bunker C); and other fuels when used as substitutes for one of these
fuel oils. Heating oil is typically used in the operation of heating
equipment, boilers, or furnaces.
Hydraulic lift tank means a tank holding hydraulic fluid for a
closed-loop mechanical system that uses compressed air or hydraulic
fluid to operate lifts, elevators, and other similar devices.
Implementing agency means EPA, or, in the case of a state with a
program approved under section 9004 (or pursuant to a memorandum of
agreement with EPA), the designated state or local agency responsible
for carrying out an approved UST program.
Liquid trap means sumps, well cellars, and other traps used in
association with oil and gas production, gathering, and extraction
operations (including gas production plants), for the purpose of
collecting oil, water, and other liquids. These liquid traps may
temporarily collect liquids for subsequent disposition or reinjection
into a production or pipeline stream, or may collect and separate
liquids from a gas stream.
Maintenance means the normal operational upkeep to prevent an
underground storage tank system from releasing product.
Motor fuel means petroleum or a petroleum-based substance that is
motor gasoline, aviation gasoline, No. 1 or No. 2 diesel fuel, or any
grade of gasohol, and is typically used in the operation of a motor
engine.
New tank system means a tank system that will be used to contain an
accumulation of regulated substances and for which installation has
commenced after December 22, 1988. (See also ``Existing Tank System.'')
Noncommercial purposes with respect to motor fuel means not for
resale.
On the premises where stored with respect to heating oil means UST
systems located on the same property where the stored heating oil is
used.
Operational life refers to the period beginning when installation of
the tank system has commenced until the time the tank system is properly
closed under Subpart G.
[[Page 465]]
Operator means any person in control of, or having responsibility
for, the daily operation of the UST system.
Overfill release is a release that occurs when a tank is filled
beyond its capacity, resulting in a discharge of the regulated substance
to the environment.
Owner means:
(a) In the case of an UST system in use on November 8, 1984, or
brought into use after that date, any person who owns an UST system used
for storage, use, or dispensing of regulated substances; and
(b) In the case of any UST system in use before November 8, 1984,
but no longer in use on that date, any person who owned such UST
immediately before the discontinuation of its use.
Person means an individual, trust, firm, joint stock company,
Federal agency, corporation, state, municipality, commission, political
subdivision of a state, or any interstate body. ``Person'' also includes
a consortium, a joint venture, a commercial entity, and the United
States Government.
Petroleum UST system means an underground storage tank system that
contains petroleum or a mixture of petroleum with de minimis quantities
of other regulated substances. Such systems include those containing
motor fuels, jet fuels, distillate fuel oils, residual fuel oils,
lubricants, petroleum solvents, and used oils.
Pipe or Piping means a hollow cylinder or tubular conduit that is
constructed of non-earthen materials.
Pipeline facilities (including gathering lines) are new and existing
pipe rights-of-way and any associated equipment, facilities, or
buildings.
Regulated substance means:
(a) Any substance defined in section 101(14) of the Comprehensive
Environmental Response, Compensation and Liability Act (CERCLA) of 1980
(but not including any substance regulated as a hazardous waste under
subtitle C), and
(b) Petroleum, including crude oil or any fraction thereof that is
liquid at standard conditions of temperature and pressure (60 degrees
Fahrenheit and 14.7 pounds per square inch absolute).
The term ``regulated substance'' includes but is not limited to
petroleum and petroleum-based substances comprised of a complex blend of
hydrocarbons derived from crude oil though processes of separation,
conversion, upgrading, and finishing, such as motor fuels, jet fuels,
distillate fuel oils, residual fuel oils, lubricants, petroleum
solvents, and used oils.
Release means any spilling, leaking, emitting, discharging,
escaping, leaching or disposing from an UST into ground water, surface
water or subsurface soils.
Release detection means determining whether a release of a regulated
substance has occurred from the UST system into the environment or into
the interstitial space between the UST system and its secondary barrier
or secondary containment around it.
Repair means to restore a tank or UST system component that has
caused a release of product from the UST system.
Residential tank is a tank located on property used primarily for
dwelling purposes.
SARA means the Superfund Amendments and Reauthorization Act of 1986.
Septic tank is a water-tight covered receptacle designed to receive
or process, through liquid separation or biological digestion, the
sewage discharged from a building sewer. The effluent from such
receptacle is distributed for disposal through the soil and settled
solids and scum from the tank are pumped out periodically and hauled to
a treatment facility.
Storm-water or wastewater collection system means piping, pumps,
conduits, and any other equipment necessary to collect and transport the
flow of surface water run-off resulting from precipitation, or domestic,
commercial, or industrial wastewater to and from retention areas or any
areas where treatment is designated to occur. The collection of storm
water and wastewater does not include treatment except where incidental
to conveyance.
Surface impoundment is a natural topographic depression, man-made
excavation, or diked area formed primarily of earthen materials
(although it may be lined with man-made materials) that is not an
injection well.
Tank is a stationary device designed to contain an accumulation of
regulated substances and constructed of
[[Page 466]]
non-earthen materials (e.g., concrete, steel, plastic) that provide
structural support.
Underground area means an underground room, such as a basement,
cellar, shaft or vault, providing enough space for physical inspection
of the exterior of the tank situated on or above the surface of the
floor.
Underground release means any belowground release.
Underground storage tank or UST means any one or combination of
tanks (including underground pipes connected thereto) that is used to
contain an accumulation of regulated substances, and the volume of which
(including the volume of underground pipes connected thereto) is 10
percent or more beneath the surface of the ground. This term does not
include any:
(a) Farm or residential tank of 1,100 gallons or less capacity used
for storing motor fuel for noncommercial purposes;
(b) Tank used for storing heating oil for consumptive use on the
premises where stored;
(c) Septic tank;
(d) Pipeline facility (including gathering lines) regulated under:
(1) The Natural Gas Pipeline Safety Act of 1968 (49 U.S.C. App.
1671, et seq.), or
(2) The Hazardous Liquid Pipeline Safety Act of 1979 (49 U.S.C. App.
2001, et seq.), or
(3) Which is an intrastate pipeline facility regulated under state
laws comparable to the provisions of the law referred to in paragraph
(d)(1) or (d)(2) of this definition;
(e) Surface impoundment, pit, pond, or lagoon;
(f) Storm-water or wastewater collection system;
(g) Flow-through process tank;
(h) Liquid trap or associated gathering lines directly related to
oil or gas production and gathering operations; or
(i) Storage tank situated in an underground area (such as a
basement, cellar, mineworking, drift, shaft, or tunnel) if the storage
tank is situated upon or above the surface of the floor.
The term ``underground storage tank'' or ``UST'' does not include any
pipes connected to any tank which is described in paragraphs (a) through
(i) of this definition.
Upgrade means the addition or retrofit of some systems such as
cathodic protection, lining, or spill and overfill controls to improve
the ability of an underground storage tank system to prevent the release
of product.
UST system or Tank system means an underground storage tank,
connected underground piping, underground ancillary equipment, and
containment system, if any.
Wastewater treatment tank means a tank that is designed to receive
and treat an influent wastewater through physical, chemical, or
biological methods.
Subpart B--UST Systems: Design, Construction, Installation and
Notification
Sec. 280.20 Performance standards for new UST systems.
In order to prevent releases due to structural failure, corrosion,
or spills and overfills for as long as the UST system is used to store
regulated substances, all owners and operators of new UST systems must
meet the following requirements.
(a) Tanks. Each tank must be properly designed and constructed, and
any portion underground that routinely contains product must be
protected from corrosion, in accordance with a code of practice
developed by a nationally recognized association or independent testing
laboratory as specified below:
(1) The tank is constructed of fiberglass-reinforced plastic; or
Note: The following industry codes may be used to comply with
paragraph (a)(1) of this section: Underwriters Laboratories Standard
1316, ``Standard for Glass- Fiber-Reinforced Plastic Underground Storage
Tanks for Petroleum Products''; Underwriter's Laboratories of Canada
CAN4-S615-M83, ``Standard for Reinforced Plastic Underground Tanks for
Petroleum Products''; or American Society of Testing and Materials
Standard D4021-86, ``Standard Specification for Glass-Fiber-Reinforced
Polyester Underground Petroleum Storage Tanks.''
(2) The tank is constructed of steel and cathodically protected in
the following manner:
[[Page 467]]
(i) The tank is coated with a suitable dielectric material;
(ii) Field-installed cathodic protection systems are designed by a
corrosion expert;
(iii) Impressed current systems are designed to allow determination
of current operating status as required in Sec. 280.31(c); and
(iv) Cathodic protection systems are operated and maintained in
accordance with Sec. 280.31 or according to guidelines established by
the implementing agency; or
Note: The following codes and standards may be used to comply with
paragraph (a)(2) of this section:
(A) Steel Tank Institute ``Specification for STI-P3 System of
External Corrosion Protection of Underground Steel Storage Tanks'';
(B) Underwriters Laboratories Standard 1746, ``Corrosion Protection
Systems for Underground Storage Tanks'';
(C) Underwriters Laboratories of Canada CAN4-S603-M85, ``Standard
for Steel Underground Tanks for Flammable and Combustible Liquids,'' and
CAN4-G03.1-M85, ``Standard for Galvanic Corrosion Protection Systems for
Underground Tanks for Flammable and Combustible Liquids,'' and CAN4-
S631-M84, ``Isolating Bushings for Steel Underground Tanks Protected
with Coatings and Galvanic Systems''; or
(D) National Association of Corrosion Engineers Standard RP-02-85,
``Control of External Corrosion on Metallic Buried, Partially Buried, or
Submerged Liquid Storage Systems,'' and Underwriters Laboratories
Standard 58, ``Standard for Steel Underground Tanks for Flammable and
Combustible Liquids.''
(3) The tank is constructed of a steel-fiberglass-reinforced-plastic
composite; or
Note: The following industry codes may be used to comply with
paragraph (a)(3) of this section: Underwriters Laboratories Standard
1746, ``Corrosion Protection Systems for Underground Storage Tanks,'' or
the Association for Composite Tanks ACT-100, ``Specification for the
Fabrication of FRP Clad Underground Storage Tanks.''
(4) The tank is constructed of metal without additional corrosion
protection measures provided that:
(i) The tank is installed at a site that is determined by a
corrosion expert not to be corrosive enough to cause it to have a
release due to corrosion during its operating life; and
(ii) Owners and operators maintain records that demonstrate
compliance with the requirements of paragraphs (a)(4)(i) for the
remaining life of the tank; or
(5) The tank construction and corrosion protection are determined by
the implementing agency to be designed to prevent the release or
threatened release of any stored regulated substance in a manner that is
no less protective of human health and the environment than paragraphs
(a) (1) through (4) of this section.
(b) Piping. The piping that routinely contains regulated substances
and is in contact with the ground must be properly designed,
constructed, and protected from corrosion in accordance with a code of
practice developed by a nationally recognized association or independent
testing laboratory as specified below:
(1) The piping is constructed of fiberglass-reinforced plastic; or
Note: The following codes and standards may be used to comply with
paragraph (b)(1) of this section:
(A) Underwriters Laboratories Subject 971, ``UL Listed Non-Metal
Pipe'';
(B) Underwriters Laboratories Standard 567, ``Pipe Connectors for
Flammable and Combustible and LP Gas'';
(C) Underwriters Laboratories of Canada Guide ULC-107, ``Glass Fiber
Reinforced Plastic Pipe and Fittings for Flammable Liquids''; and
(D) Underwriters Laboratories of Canada Standard CAN 4-S633-M81,
``Flexible Underground Hose Connectors.''
(2) The piping is constructed of steel and cathodically protected in
the following manner:
(i) The piping is coated with a suitable dielectric material;
(ii) Field-installed cathodic protection systems are designed by a
corrosion expert;
(iii) Impressed current systems are designed to allow determination
of current operating status as required in Sec. 280.31(c); and
(iv) Cathodic protection systems are operated and maintained in
accordance with Sec. 280.31 or guidelines established by the
implementing agency; or
Note: The following codes and standards may be used to comply with
paragraph (b)(2) of this section:
(A) National Fire Protection Association Standard 30, ``Flammable
and Combustible Liquids Code'';
[[Page 468]]
(B) American Petroleum Institute Publication 1615, ``Installation of
Underground Petroleum Storage Systems'';
(C) American Petroleum Institute Publication 1632, ``Cathodic
Protection of Underground Petroleum Storage Tanks and Piping Systems'';
and
(D) National Association of Corrosion Engineers Standard RP-01-69,
``Control of External Corrosion on Submerged Metallic Piping Systems.''
(3) The piping is constructed of metal without additional corrosion
protection measures provided that:
(i) The piping is installed at a site that is determined by a
corrosion expert to not be corrosive enough to cause it to have a
release due to corrosion during its operating life; and
(ii) Owners and operators maintain records that demonstrate
compliance with the requirements of paragraph (b)(3)(i) of this section
for the remaining life of the piping; or
Note: National Fire Protection Association Standard 30, ``Flammable
and Combustible Liquids Code''; and National Association of Corrosion
Engineers Standard RP-01-69, ``Control of External Corrosion on
Submerged Metallic Piping Systems,'' may be used to comply with
paragraph (b)(3) of this section.
(4) The piping construction and corrosion protection are determined
by the implementing agency to be designed to prevent the release or
threatened release of any stored regulated substance in a manner that is
no less protective of human health and the environment than the
requirements in paragraphs (b) (1) through (3) of this section.
(c) Spill and overfill prevention equipment. (1) Except as provided
in paragraph (c)(2) of this section, to prevent spilling and overfilling
associated with product transfer to the UST system, owners and operators
must use the following spill and overfill prevention equipment:
(i) Spill prevention equipment that will prevent release of product
to the environment when the transfer hose is detached from the fill pipe
(for example, a spill catchment basin); and
(ii) Overfill prevention equipment that will:
(A) Automatically shut off flow into the tank when the tank is no
more than 95 percent full; or
(B) Alert the transfer operator when the tank is no more than 90
percent full by restricting the flow into the tank or triggering a high-
level alarm; or
(C) Restrict flow 30 minutes prior to overfilling, alert the
operator with a high level alarm one minute before overfilling, or
automatically shut off flow into the tank so that none of the fittings
located on top of the tank are exposed to product due to overfilling.
(2) Owners and operators are not required to use the spill and
overfill prevention equipment specified in paragraph (c)(1) of this
section if:
(i) Alternative equipment is used that is determined by the
implementing agency to be no less protective of human health and the
environment than the equipment specified in paragraph (c)(1) (i) or (ii)
of this section; or
(ii) The UST system is filled by transfers of no more than 25
gallons at one time.
(d) Installation. All tanks and piping must be properly installed in
accordance with a code of practice developed by a nationally recognized
association or independent testing laboratory and in accordance with the
manufacturer's instructions.
Note: Tank and piping system installation practices and procedures
described in the following codes may be used to comply with the
requirements of paragraph (d) of this section:
(i) American Petroleum Institute Publication 1615, ``Installation of
Underground Petroleum Storage System''; or
(ii) Petroleum Equipment Institute Publication RP100, ``Recommended
Practices for Installation of Underground Liquid Storage Systems''; or
(iii) American National Standards Institute Standard B31.3,
``Petroleum Refinery Piping,'' and American National Standards Institute
Standard B31.4 ``Liquid Petroleum Transportation Piping System.''
(e) Certification of installation. All owners and operators must
ensure that one or more of the following methods of certification,
testing, or inspection is used to demonstrate compliance with paragraph
(d) of this section by providing a certification of compliance on the
UST notification form in accordance with Sec. 280.22.
(1) The installer has been certified by the tank and piping
manufacturers; or
[[Page 469]]
(2) The installer has been certified or licensed by the implementing
agency; or
(3) The installation has been inspected and certified by a
registered professional engineer with education and experience in UST
system installation; or
(4) The installation has been inspected and approved by the
implementing agency; or
(5) All work listed in the manufacturer's installation checklists
has been completed; or
(6) The owner and operator have complied with another method for
ensuring compliance with paragraph (d) of this section that is
determined by the implementing agency to be no less protective of human
health and the environment.
[53 FR 37194, Sept. 23, 1988, as amended at 56 FR 38344, Aug. 13, 1991]
Sec. 280.21 Upgrading of existing UST systems.
(a) Alternatives allowed. Not later than December 22, 1998, all
existing UST systems must comply with one of the following requirements:
(1) New UST system performance standards under Sec. 280.20;
(2) The upgrading requirements in paragraphs (b) through (d) of this
section; or
(3) Closure requirements under subpart G of this part, including
applicable requirements for corrective action under subpart F.
(b) Tank upgrading requirements. Steel tanks must be upgraded to
meet one of the following requirements in accordance with a code of
practice developed by a nationally recognized association or independent
testing laboratory:
(1) Interior lining. A tank may be upgraded by internal lining if:
(i) The lining is installed in accordance with the requirements of
Sec. 280.33, and
(ii) Within 10 years after lining, and every 5 years thereafter, the
lined tank is internally inspected and found to be structurally sound
with the lining still performing in accordance with original design
specifications.
(2) Cathodic protection. A tank may be upgraded by cathodic
protection if the cathodic protection system meets the requirements of
Sec. 280.20(a)(2) (ii), (iii), and (iv) and the integrity of the tank is
ensured using one of the following methods:
(i) The tank is internally inspected and assessed to ensure that the
tank is structurally sound and free of corrosion holes prior to
installing the cathodic protection system; or
(ii) The tank has been installed for less than 10 years and is
monitored monthly for releases in accordance with Sec. 280.43 (d)
through (h); or
(iii) The tank has been installed for less than 10 years and is
assessed for corrosion holes by conducting two (2) tightness tests that
meet the requirements of Sec. 280.43(c). The first tightness test must
be conducted prior to installing the cathodic protection system. The
second tightness test must be conducted between three (3) and six (6)
months following the first operation of the cathodic protection system;
or
(iv) The tank is assessed for corrosion holes by a method that is
determined by the implementing agency to prevent releases in a manner
that is no less protective of human health and the environment than
paragraphs (b)(2) (i) through (iii) of this section.
(3) Internal lining combined with cathodic protection. A tank may be
upgraded by both internal lining and cathodic protection if:
(i) The lining is installed in accordance with the requirements of
Sec. 280.33; and
(ii) The cathodic protection system meets the requirements of
Sec. 280.20(a)(2) (ii), (iii), and (iv).
Note: The following codes and standards may be used to comply with
this section:
(A) American Petroleum Institute Publication 1631, ``Recommended
Practice for the Interior Lining of Existing Steel Underground Storage
Tanks'';
(B) National Leak Prevention Association Standard 631, ``Spill
Prevention, Minimum 10 Year Life Extension of Existing Steel Underground
Tanks by Lining Without the Addition of Cathodic Protection'';
(C) National Association of Corrosion Engineers Standard RP-02-85,
``Control of External Corrosion on Metallic Buried, Partially Buried, or
Submerged Liquid Storage Systems''; and
(D) American Petroleum Institute Publication 1632, ``Cathodic
Protection of Underground Petroleum Storage Tanks and Piping Systems.''
[[Page 470]]
(c) Piping upgrading requirements. Metal piping that routinely
contains regulated substances and is in contact with the ground must be
cathodically protected in accordance with a code of practice developed
by a nationally recognized association or independent testing laboratory
and must meet the requirements of Sec. 280.20(b)(2) (ii), (iii), and
(iv).
Note: The codes and standards listed in the note following
Sec. 280.20(b)(2) may be used to comply with this requirement.
(d) Spill and overfill prevention equipment. To prevent spilling and
overfilling associated with product transfer to the UST system, all
existing UST systems must comply with new UST system spill and overfill
prevention equipment requirements specified in Sec. 280.20(c).
Sec. 280.22 Notification requirements.
(a) Any owner who brings an underground storage tank system into use
after May 8, 1986, must within 30 days of bringing such tank into use,
submit, in the form prescribed in appendix I of this part, a notice of
existence of such tank system to the state or local agency or department
designated in appendix II of this part to receive such notice.
Note: Owners and operators of UST systems that were in the ground on
or after May 8, 1986, unless taken out of operation on or before January
1, 1974, were required to notify the designated state or local agency in
accordance with the Hazardous and Solid Waste Amendments of 1984, Pub.
L. 98-616, on a form published by EPA on November 8, 1985 (50 FR 46602)
unless notice was given pursuant to section 103(c) of CERCLA. Owners and
operators who have not complied with the notification requirements may
use portions I through VI of the notification form contained in appendix
I of this part.
(b) In states where state law, regulations, or procedures require
owners to use forms that differ from those set forth in appendix I of
this part to fulfill the requirements of this section, the state forms
may be submitted in lieu of the forms set forth in Appendix I of this
part. If a state requires that its form be used in lieu of the form
presented in this regulation, such form must meet the requirements of
section 9002.
(c) Owners required to submit notices under paragraph (a) of this
section must provide notices to the appropriate agencies or departments
identified in appendix II of this part for each tank they own. Owners
may provide notice for several tanks using one notification form, but
owners who own tanks located at more than one place of operation must
file a separate notification form for each separate place of operation.
(d) Notices required to be submitted under paragraph (a) of this
section must provide all of the information in sections I through VI of
the prescribed form (or appropriate state form) for each tank for which
notice must be given. Notices for tanks installed after December 22,
1988 must also provide all of the information in section VII of the
prescribed form (or appropriate state form) for each tank for which
notice must be given.
(e) All owners and operators of new UST systems must certify in the
notification form compliance with the following requirements:
(1) Installation of tanks and piping under Sec. 280.20(e);
(2) Cathodic protection of steel tanks and piping under Sec. 280.20
(a) and (b);
(3) Financial responsibility under subpart H of this part; and
(4) Release detection under Secs. 280.41 and 280.42.
(f) All owners and operators of new UST systems must ensure that the
installer certifies in the notification form that the methods used to
install the tanks and piping complies with the requirements in
Sec. 280.20(d).
(g) Beginning October 24, 1988, any person who sells a tank intended
to be used as an underground storage tank must notify the purchaser of
such tank of the owner's notification obligations under paragraph (a) of
this section. The form provided in appendix III of this part may be used
to comply with this requirement.
[[Page 471]]
Subpart C--General Operating Requirements
Sec. 280.30 Spill and overfill control.
(a) Owners and operators must ensure that releases due to spilling
or overfilling do not occur. The owner and operator must ensure that the
volume available in the tank is greater than the volume of product to be
transferred to the tank before the transfer is made and that the
transfer operation is monitored constantly to prevent overfilling and
spilling.
Note: The transfer procedures described in National Fire Protection
Association Publication 385 may be used to comply with paragraph (a) of
this section. Further guidance on spill and overfill prevention appears
in American Petroleum Institute Publication 1621, ``Recommended Practice
for Bulk Liquid Stock Control at Retail Outlets,'' and National Fire
Protection Association Standard 30, ``Flammable and Combustible Liquids
Code.''
(b) The owner and operator must report, investigate, and clean up
any spills and overfills in accordance with Sec. 280.53.
Sec. 280.31 Operation and maintenance of corrosion protection.
All owners and operators of steel UST systems with corrosion
protection must comply with the following requirements to ensure that
releases due to corrosion are prevented for as long as the UST system is
used to store regulated substances:
(a) All corrosion protection systems must be operated and maintained
to continuously provide corrosion protection to the metal components of
that portion of the tank and piping that routinely contain regulated
substances and are in contact with the ground.
(b) All UST systems equipped with cathodic protection systems must
be inspected for proper operation by a qualified cathodic protection
tester in accordance with the following requirements:
(1) Frequency. All cathodic protection systems must be tested within
6 months of installation and at least every 3 years thereafter or
according to another reasonable time frame established by the
implementing agency; and
(2) Inspection criteria. The criteria that are used to determine
that cathodic protection is adequate as required by this section must be
in accordance with a code of practice developed by a nationally
recognized association.
Note: National Association of Corrosion Engineers Standard RP-02-85,
``Control of External Corrosion on Metallic Buried, Partially Buried, or
Submerged Liquid Storage Systems,'' may be used to comply with paragraph
(b)(2) of this section.
(c) UST systems with impressed current cathodic protection systems
must also be inspected every 60 days to ensure the equipment is running
properly.
(d) For UST systems using cathodic protection, records of the
operation of the cathodic protection must be maintained (in accordance
with Sec. 280.34) to demonstrate compliance with the performance
standards in this section. These records must provide the following:
(1) The results of the last three inspections required in paragraph
(c) of this section; and
(2) The results of testing from the last two inspections required in
paragraph (b) of this section.
Sec. 280.32 Compatibility.
Owners and operators must use an UST system made of or lined with
materials that are compatible with the substance stored in the UST
system.
Note: Owners and operators storing alcohol blends may use the
following codes to comply with the requirements of this section:
(a) American Petroleum Institute Publication 1626, ``Storing and
Handling Ethanol and Gasoline-Ethanol Blends at Distribution Terminals
and Service Stations''; and
(b) American Petroleum Institute Publication 1627, ``Storage and
Handling of Gasoline-Methanol/Cosolvent Blends at Distribution Terminals
and Service Stations.''
Sec. 280.33 Repairs allowed.
Owners and operators of UST systems must ensure that repairs will
prevent releases due to structural failure or corrosion as long as the
UST system is used to store regulated substances. The repairs must meet
the following requirements:
(a) Repairs to UST systems must be properly conducted in accordance
with
[[Page 472]]
a code of practice developed by a nationally recognized association or
an independent testing laboratory.
Note: The following codes and standards may be used to comply with
paragraph (a) of this section: National Fire Protection Association
Standard 30, ``Flammable and Combustible Liquids Code''; American
Petroleum Institute Publication 2200, ``Repairing Crude Oil, Liquified
Petroleum Gas, and Product Pipelines''; American Petroleum Institute
Publication 1631, ``Recommended Practice for the Interior Lining of
Existing Steel Underground Storage Tanks''; and National Leak Prevention
Association Standard 631, ``Spill Prevention, Minimum 10 Year Life
Extension of Existing Steel Underground Tanks by Lining Without the
Addition of Cathodic Protection.''
(b) Repairs to fiberglass-reinforced plastic tanks may be made by
the manufacturer's authorized representatives or in accordance with a
code of practice developed by a nationally recognized association or an
independent testing laboratory.
(c) Metal pipe sections and fittings that have released product as a
result of corrosion or other damage must be replaced. Fiberglass pipes
and fittings may be repaired in accordance with the manufacturer's
specifications.
(d) Repaired tanks and piping must be tightness tested in accordance
with Sec. 280.43(c) and Sec. 280.44(b) within 30 days following the date
of the completion of the repair except as provided in paragraphs (d) (1)
through (3), of this section:
(1) The repaired tank is internally inspected in accordance with a
code of practice developed by a nationally recognized association or an
independent testing laboratory; or
(2) The repaired portion of the UST system is monitored monthly for
releases in accordance with a method specified in Sec. 280.43 (d)
through (h); or
(3) Another test method is used that is determined by the
implementing agency to be no less protective of human health and the
environment than those listed above.
(e) Within 6 months following the repair of any cathodically
protected UST system, the cathodic protection system must be tested in
accordance with Sec. 280.31 (b) and (c) to ensure that it is operating
properly.
(f) UST system owners and operators must maintain records of each
repair for the remaining operating life of the UST system that
demonstrate compliance with the requirements of this section.
Sec. 280.34 Reporting and recordkeeping.
Owners and operators of UST systems must cooperate fully with
inspections, monitoring and testing conducted by the implementing
agency, as well as requests for document submission, testing, and
monitoring by the owner or operator pursuant to section 9005 of Subtitle
I of the Resource Conservation and Recovery Act, as amended.
(a) Reporting. Owners and operators must submit the following
information to the implementing agency:
(1) Notification for all UST systems (Sec. 280.22), which includes
certification of installation for new UST systems (Sec. 280.20(e)),
(2) Reports of all releases including suspected releases
(Sec. 280.50), spills and overfills (Sec. 280.53), and confirmed
releases (Sec. 280.61);
(3) Corrective actions planned or taken including initial abatement
measures (Sec. 280.62), initial site characterization (Sec. 280.63),
free product removal (Sec. 280.64), investigation of soil and ground-
water cleanup (Sec. 280.65), and corrective action plan (Sec. 280.66);
and
(4) A notification before permanent closure or change-in-service
(Sec. 280.71).
(b) Recordkeeping. Owners and operators must maintain the following
information:
(1) A corrosion expert's analysis of site corrosion potential if
corrosion protection equipment is not used (Sec. 280.20(a)(4);
Sec. 280.20(b)(3)).
(2) Documentation of operation of corrosion protection equipment
(Sec. 280.31);
(3) Documentation of UST system repairs (Sec. 280.33(f));
(4) Recent compliance with release detection requirements
(Sec. 280.45); and
(5) Results of the site investigation conducted at permanent closure
(Sec. 280.74).
(c) Availability and Maintenance of Records. Owners and operators
must keep the records required either:
(1) At the UST site and immediately available for inspection by the
implementing agency; or
[[Page 473]]
(2) At a readily available alternative site and be provided for
inspection to the implementing agency upon request.
(3) In the case of permanent closure records required under
Sec. 280.74, owners and operators are also provided with the additional
alternative of mailing closure records to the implementing agency if
they cannot be kept at the site or an alternative site as indicated
above.
Subpart D--Release Detection
Sec. 280.40 General requirements for all UST systems.
(a) Owners and operators of new and existing UST systems must
provide a method, or combination of methods, of release detection that:
(1) Can detect a release from any portion of the tank and the
connected underground piping that routinely contains product;
(2) Is installed, calibrated, operated, and maintained in accordance
with the manufacturer's instructions, including routine maintenance and
service checks for operability or running condition; and
(3) Meets the performance requirements in Sec. 280.43 or 280.44,
with any performance claims and their manner of determination described
in writing by the equipment manufacturer or installer. In addition,
methods used after the date shown in the following table corresponding
with the specified method except for methods permanently installed prior
to that date, must be capable of detecting the leak rate or quantity
specified for that method in the corresponding section of the rule (also
shown in the table) with a probability of detection (Pd) of 0.95 and a
probability of false alarm (Pfa) of 0.05.
------------------------------------------------------------------------
Date after which Pd/Pfa
Method Section must be demonstrated
------------------------------------------------------------------------
Manual Tank Gauging........... 280.43(b) December 22, 1990.
Tank Tightness Testing........ 280.43(c) December 22, 1990.
Automatic Tank Gauging........ 280.43(d) December 22, 1990.
Automatic Line Leak Detectors. 280.44(a) September 22, 1991.
Line Tightness Testing........ 280.44(b) December 22, 1990.
------------------------------------------------------------------------
(b) When a release detection method operated in accordance with the
performance standards in Sec. 280.43 and Sec. 280.44 indicates a release
may have occurred, owners and operators must notify the implementing
agency in accordance with subpart E.
(c) Owners and operators of all UST systems must comply with the
release detection requirements of this subpart by December 22 of the
year listed in the following table:
Schedule for Phase-in of Release Detection
------------------------------------------------------------------------
Year when release detection is required
(by December 22 of the year indicated)
Year system was installed ------------------------------------------
1989 1990 1991 1992 1993
------------------------------------------------------------------------
Before 1965 or date unknown.. RD P
1965-69...................... ....... P/RD
1970-74...................... ....... P RD
1975-79...................... ....... P ....... RD
1980-88...................... ....... P ....... ...... RD
New tanks (after December 22) immediately upon installation.
------------------------------------------------------------------------
P=Must begin release detection for all pressurized piping as defined in
Sec. 280.41(b)(1).
RD=Must begin release detection for tanks and suction piping in
accordance with Sec. 280.41(a), Sec. 280.41(b)(2), and Sec. 280.42.
(d) Any existing UST system that cannot apply a method of release
detection that complies with the requirements of this subpart must
complete the closure procedures in subpart G by the date on which
release detection is required for that UST system under paragraph (c) of
this section.
[53 FR 37194, Sept. 23, 1988, as amended at 55 FR 17753, Apr. 27, 1990;
55 FR 23738, June 12, 1990; 56 FR 26, Jan. 2, 1991]
Sec. 280.41 Requirements for petroleum UST systems.
Owners and operators of petroleum UST systems must provide release
detection for tanks and piping as follows:
(a) Tanks. Tanks must be monitored at least every 30 days for
releases using one of the methods listed in Sec. 280.43 (d) through (h)
except that:
(1) UST systems that meet the performance standards in Sec. 280.20
or Sec. 280.21, and the monthly inventory control requirements in
Sec. 280.43 (a) or (b), may use tank tightness testing (conducted in
accordance with Sec. 280.43(c)) at least every 5 years until
[[Page 474]]
December 22, 1998, or until 10 years after the tank is installed or
upgraded under Sec. 280.21(b), whichever is later;
(2) UST systems that do not meet the performance standards in
Sec. 280.20 or Sec. 280.21 may use monthly inventory controls (conducted
in accordance with Sec. 280.43(a) or (b)) and annual tank tightness
testing (conducted in accordance with Sec. 280.43(c)) until December 22,
1998 when the tank must be upgraded under Sec. 280.21 or permanently
closed under Sec. 280.71; and
(3) Tanks with capacity of 550 gallons or less may use weekly tank
gauging (conducted in accordance with Sec. 280.43(b)).
(b) Piping. Underground piping that routinely contains regulated
substances must be monitored for releases in a manner that meets one of
the following requirements:
(1) Pressurized piping. Underground piping that conveys regulated
substances under pressure must:
(i) Be equipped with an automatic line leak detector conducted in
accordance with Sec. 280.44(a); and
(ii) Have an annual line tightness test conducted in accordance with
Sec. 280.44(b) or have monthly monitoring conducted in accordance with
Sec. 280.44(c).
(2) Suction piping. Underground piping that conveys regulated
substances under suction must either have a line tightness test
conducted at least every 3 years and in accordance with Sec. 280.44(b),
or use a monthly monitoring method conduct in accordance with
Sec. 280.44(c). No release detection is required for suction piping that
is designed and constructed to meet the following standards:
(i) The below-grade piping operates at less than atmospheric
pressure;
(ii) The below-grade piping is sloped so that the contents of the
pipe will drain back into the storage tank if the suction is released;
(iii) Only one check valve is included in each suction line;
(iv) The check valve is located directly below and as close as
practical to the suction pump; and
(v) A method is provided that allows compliance with paragraphs
(b)(2) (ii)-(iv) of this section to be readily determined.
Sec. 280.42 Requirements for hazardous substance UST systems.
Owners and operators of hazardous substance UST systems must provide
release detection that meets the following requirements:
(a) Release detection at existing UST systems must meet the
requirements for petroleum UST systems in Sec. 280.41. By December 22,
1998, all existing hazardous substance UST systems must meet the release
detection requirements for new systems in paragraph (b) of this section.
(b) Release detection at new hazardous substance UST systems must
meet the following requirements:
(1) Secondary containment systems must be designed, constructed and
installed to:
(i) Contain regulated substances released from the tank system until
they are detected and removed;
(ii) Prevent the release of regulated substances to the environment
at any time during the operational life of the UST system; and
(iii) Be checked for evidence of a release at least every 30 days.
Note.-- The provisions of 40 CFR 265.193, Containment and Detection
of Releases, may be used to comply with these requirements.
(2) Double-walled tanks must be designed, constructed, and installed
to:
(i) Contain a release from any portion of the inner tank within the
outer wall; and
(ii) Detect the failure of the inner wall.
(3) External liners (including vaults) must be designed,
constructed, and installed to:
(i) Contain 100 percent of the capacity of the largest tank within
its boundary;
(ii) Prevent the interference of precipitation or ground-water
intrusion with the ability to contain or detect a release of regulated
substances; and
(iii) Surround the tank completely (i.e., it is capable of
preventing lateral as well as vertical migration of regulated
substances).
(4) Underground piping must be equipped with secondary containment
that satisfies the requirements of paragraph (b)(1) of this section
(e.g., trench liners, jacketing of double-walled pipe). In addition,
underground piping that
[[Page 475]]
conveys regulated substances under pressure must be equipped with an
automatic line leak detector in accordance with Sec. 280.44(a).
(5) Other methods of release detection may be used if owners and
operators:
(i) Demonstrate to the implementing agency that an alternate method
can detect a release of the stored substance as effectively as any of
the methods allowed in Secs. 280.43(b) through (h) can detect a release
of petroleum;
(ii) Provide information to the implementing agency on effective
corrective action technologies, health risks, and chemical and physical
properties of the stored substance, and the characteristics of the UST
site; and,
(iii) Obtain approval from the implementing agency to use the
alternate release detection method before the installation and operation
of the new UST system.
Sec. 280.43 Methods of release detection for tanks.
Each method of release detection for tanks used to meet the
requirements of Sec. 280.41 must be conducted in accordance with the
following:
(a) Inventory control. Product inventory control (or another test of
equivalent performance) must be conducted monthly to detect a release of
at least 1.0 percent of flow-through plus 130 gallons on a monthly basis
in the following manner:
(1) Inventory volume measurements for regulated substance inputs,
withdrawals, and the amount still remaining in the tank are recorded
each operating day;
(2) The equipment used is capable of measuring the level of product
over the full range of the tank's height to the nearest one-eighth of an
inch;
(3) The regulated substance inputs are reconciled with delivery
receipts by measurement of the tank inventory volume before and after
delivery;
(4) Deliveries are made through a drop tube that extends to within
one foot of the tank bottom;
(5) Product dispensing is metered and recorded within the local
standards for meter calibration or an accuracy of 6 cubic inches for
every 5 gallons of product withdrawn; and
(6) The measurement of any water level in the bottom of the tank is
made to the nearest one-eighth of an inch at least once a month.
Note: Practices described in the American Petroleum Institute
Publication 1621, ``Recommended Practice for Bulk Liquid Stock Control
at Retail Outlets,'' may be used, where applicable, as guidance in
meeting the requirements of this paragraph.
(b) Manual tank gauging. Manual tank gauging must meet the following
requirements:
(1) Tank liquid level measurements are taken at the beginning and
ending of a period of at least 36 hours during which no liquid is added
to or removed from the tank;
(2) Level measurements are based on an average of two consecutive
stick readings at both the beginning and ending of the period;
(3) The equipment used is capable of measuring the level of product
over the full range of the tank's height to the nearest one-eighth of an
inch;
(4) A leak is suspected and subject to the requirements of subpart E
if the variation between beginning and ending measurements exceeds the
weekly or monthly standards in the following table:
------------------------------------------------------------------------
Monthly standard
Nominal tank capacity Weekly standard (average of four
(one test) tests)
------------------------------------------------------------------------
550 gallons or less............. 10 gallons........ 5 gallons.
551-1,000 gallons............... 13 gallons........ 7 gallons.
1,001-2,000 gallons............. 26 gallons........ 13 gallons.
------------------------------------------------------------------------
(5) Only tanks of 550 gallons or less nominal capacity may use this
as the sole method of release detection. Tanks of 551 to 2,000 gallons
may use the method in place of manual inventory control in
Sec. 280.43(a). Tanks of greater than 2,000 gallons nominal capacity may
not use this method to meet the requirements of this subpart.
(c) Tank tightness testing. Tank tightness testing (or another test
of equivalent performance) must be capable of detecting a 0.1 gallon per
hour leak rate from any portion of the tank that routinely contains
product while accounting for the effects of thermal expansion or
contraction of the product,
[[Page 476]]
vapor pockets, tank deformation, evaporation or condensation, and the
location of the water table.
(d) Automatic tank gauging. Equipment for automatic tank gauging
that tests for the loss of product and conducts inventory control must
meet the following requirements:
(1) The automatic product level monitor test can detect a 0.2 gallon
per hour leak rate from any portion of the tank that routinely contains
product; and
(2) Inventory control (or another test of equivalent performance) is
conducted in accordance with the requirements of Sec. 280.43(a).
(e) Vapor monitoring. Testing or monitoring for vapors within the
soil gas of the excavation zone must meet the following requirements:
(1) The materials used as backfill are sufficiently porous (e.g.,
gravel, sand, crushed rock) to readily allow diffusion of vapors from
releases into the excavation area;
(2) The stored regulated substance, or a tracer compound placed in
the tank system, is sufficiently volatile (e.g., gasoline) to result in
a vapor level that is detectable by the monitoring devices located in
the excavation zone in the event of a release from the tank;
(3) The measurement of vapors by the monitoring device is not
rendered inoperative by the ground water, rainfall, or soil moisture or
other known interferences so that a release could go undetected for more
than 30 days;
(4) The level of background contamination in the excavation zone
will not interfere with the method used to detect releases from the
tank;
(5) The vapor monitors are designed and operated to detect any
significant increase in concentration above background of the regulated
substance stored in the tank system, a component or components of that
substance, or a tracer compound placed in the tank system;
(6) In the UST excavation zone, the site is assessed to ensure
compliance with the requirements in paragraphs (e) (1) through (4) of
this section and to establish the number and positioning of monitoring
wells that will detect releases within the excavation zone from any
portion of the tank that routinely contains product; and
(7) Monitoring wells are clearly marked and secured to avoid
unauthorized access and tampering.
(f) Ground-water monitoring. Testing or monitoring for liquids on
the ground water must meet the following requirements:
(1) The regulated substance stored is immiscible in water and has a
specific gravity of less than one;
(2) Ground water is never more than 20 feet from the ground surface
and the hydraulic conductivity of the soil(s) between the UST system and
the monitoring wells or devices is not less than 0.01 cm/sec (e.g., the
soil should consist of gravels, coarse to medium sands, coarse silts or
other permeable materials);
(3) The slotted portion of the monitoring well casing must be
designed to prevent migration of natural soils or filter pack into the
well and to allow entry of regulated substance on the water table into
the well under both high and low ground-water conditions;
(4) Monitoring wells shall be sealed from the ground surface to the
top of the filter pack;
(5) Monitoring wells or devices intercept the excavation zone or are
as close to it as is technically feasible;
(6) The continuous monitoring devices or manual methods used can
detect the presence of at least one-eighth of an inch of free product on
top of the ground water in the monitoring wells;
(7) Within and immediately below the UST system excavation zone, the
site is assessed to ensure compliance with the requirements in
paragraphs (f) (1) through (5) of this section and to establish the
number and positioning of monitoring wells or devices that will detect
releases from any portion of the tank that routinely contains product;
and
(8) Monitoring wells are clearly marked and secured to avoid
unauthorized access and tampering.
(g) Interstitial monitoring. Interstitial monitoring between the UST
system and a secondary barrier immediately around or beneath it may be
used, but only if the system is designed, constructed and installed to
detect a leak
[[Page 477]]
from any portion of the tank that routinely contains product and also
meets one of the following requirements:
(1) For double-walled UST systems, the sampling or testing method
can detect a release through the inner wall in any portion of the tank
that routinely contains product;
Note: The provisions outlined in the Steel Tank Institute's
``Standard for Dual Wall Underground Storage Tanks'' may be used as
guidance for aspects of the design and construction of underground steel
double-walled tanks.
(2) For UST systems with a secondary barrier within the excavation
zone, the sampling or testing method used can detect a release between
the UST system and the secondary barrier;
(i) The secondary barrier around or beneath the UST system consists
of artificially constructed material that is sufficiently thick and
impermeable (at least 10-6 cm/sec for the regulated substance
stored) to direct a release to the monitoring point and permit its
detection;
(ii) The barrier is compatible with the regulated substance stored
so that a release from the UST system will not cause a deterioration of
the barrier allowing a release to pass through undetected;
(iii) For cathodically protected tanks, the secondary barrier must
be installed so that it does not interfere with the proper operation of
the cathodic protection system;
(iv) The ground water, soil moisture, or rainfall will not render
the testing or sampling method used inoperative so that a release could
go undetected for more than 30 days;
(v) The site is assessed to ensure that the secondary barrier is
always above the ground water and not in a 25-year flood plain, unless
the barrier and monitoring designs are for use under such conditions;
and,
(vi) Monitoring wells are clearly marked and secured to avoid
unauthorized access and tampering.
(3) For tanks with an internally fitted liner, an automated device
can detect a release between the inner wall of the tank and the liner,
and the liner is compatible with the substance stored.
(h) Other methods. Any other type of release detection method, or
combination of methods, can be used if:
(1) It can detect a 0.2 gallon per hour leak rate or a release of
150 gallons within a month with a probability of detection of 0.95 and a
probability of false alarm of 0.05; or
(2) The implementing agency may approve another method if the owner
and operator can demonstrate that the method can detect a release as
effectively as any of the methods allowed in paragraphs (c) through (h)
of this section. In comparing methods, the implementing agency shall
consider the size of release that the method can detect and the
frequency and reliability with which it can be detected. If the method
is approved, the owner and operator must comply with any conditions
imposed by the implementing agency on its use to ensure the protection
of human health and the environment.
Sec. 280.44 Methods of release detection for piping.
Each method of release detection for piping used to meet the
requirements of Sec. 280.41 must be conducted in accordance with the
following:
(a) Automatic line leak detectors. Methods which alert the operator
to the presence of a leak by restricting or shutting off the flow of
regulated substances through piping or triggering an audible or visual
alarm may be used only if they detect leaks of 3 gallons per hour at 10
pounds per square inch line pressure within 1 hour. An annual test of
the operation of the leak detector must be conducted in accordance with
the manufacturer's requirements.
(b) Line tightness testing. A periodic test of piping may be
conducted only if it can detect a 0.1 gallon per hour leak rate at one
and one-half times the operating pressure.
(c) Applicable tank methods. Any of the methods in Sec. 280.43 (e)
through (h) may be used if they are designed to detect a release from
any portion of the underground piping that routinely contains regulated
substances.
Sec. 280.45 Release detection recordkeeping.
All UST system owners and operators must maintain records in
accordance
[[Page 478]]
with Sec. 280.34 demonstrating compliance with all applicable
requirements of this subpart. These records must include the following:
(a) All written performance claims pertaining to any release
detection system used, and the manner in which these claims have been
justified or tested by the equipment manufacturer or installer, must be
maintained for 5 years, or for another reasonable period of time
determined by the implementing agency, from the date of installation;
(b) The results of any sampling, testing, or monitoring must be
maintained for at least 1 year, or for another reasonable period of time
determined by the implementing agency, except that the results of tank
tightness testing conducted in accordance with Sec. 280.43(c) must be
retained until the next test is conducted; and
(c) Written documentation of all calibration, maintenance, and
repair of release detection equipment permanently located on-site must
be maintained for at least one year after the servicing work is
completed, or for another reasonable time period determined by the
implementing agency. Any schedules of required calibration and
maintenance provided by the release detection equipment manufacturer
must be retained for 5 years from the date of installation.
Subpart E--Release Reporting, Investigation, and Confirmation
Sec. 280.50 Reporting of suspected releases.
Owners and operators of UST systems must report to the implementing
agency within 24 hours, or another reasonable time period specified by
the implementing agency, and follow the procedures in Sec. 280.52 for
any of the following conditions:
(a) The discovery by owners and operators or others of released
regulated substances at the UST site or in the surrounding area (such as
the presence of free product or vapors in soils, basements, sewer and
utility lines, and nearby surface water).
(b) Unusual operating conditions observed by owners and operators
(such as the erratic behavior of product dispensing equipment, the
sudden loss of product from the UST system, or an unexplained presence
of water in the tank), unless system equipment is found to be defective
but not leaking, and is immediately repaired or replaced; and,
(c) Monitoring results from a release detection method required
under Sec. 280.41 and Sec. 280.42 that indicate a release may have
occurred unless:
(1) The monitoring device is found to be defective, and is
immediately repaired, recalibrated or replaced, and additional
monitoring does not confirm the initial result; or
(2) In the case of inventory control, a second month of data does
not confirm the initial result.
Sec. 280.51 Investigation due to off-site impacts.
When required by the implementing agency, owners and operators of
UST systems must follow the procedures in Sec. 280.52 to determine if
the UST system is the source of off-site impacts. These impacts include
the discovery of regulated substances (such as the presence of free
product or vapors in soils, basements, sewer and utility lines, and
nearby surface and drinking waters) that has been observed by the
implementing agency or brought to its attention by another party.
Sec. 280.52 Release investigation and confirmation steps.
Unless corrective action is initiated in accordance with subpart F,
owners and operators must immediately investigate and confirm all
suspected releases of regulated substances requiring reporting under
Sec. 280.50 within 7 days, or another reasonable time period specified
by the implementing agency, using either the following steps or another
procedure approved by the implementing agency:
(a) System test. Owners and operators must conduct tests (according
to the requirements for tightness testing in Sec. 280.43(c) and
Sec. 280.44(b)) that determine whether a leak exists in that portion of
the tank that routinely contains product, or the attached delivery
piping, or both.
(1) Owners and operators must repair, replace or upgrade the UST
system,
[[Page 479]]
and begin corrective action in accordance with subpart F if the test
results for the system, tank, or delivery piping indicate that a leak
exists.
(2) Further investigation is not required if the test results for
the system, tank, and delivery piping do not indicate that a leak exists
and if environmental contamination is not the basis for suspecting a
release.
(3) Owners and operators must conduct a site check as described in
paragraph (b) of this section if the test results for the system, tank,
and delivery piping do not indicate that a leak exists but environmental
contamination is the basis for suspecting a release.
(b) Site check. Owners and operators must measure for the presence
of a release where contamination is most likely to be present at the UST
site. In selecting sample types, sample locations, and measurement
methods, owners and operators must consider the nature of the stored
substance, the type of initial alarm or cause for suspicion, the type of
backfill, the depth of ground water, and other factors appropriate for
identifying the presence and source of the release.
(1) If the test results for the excavation zone or the UST site
indicate that a release has occurred, owners and operators must begin
corrective action in accordance with subpart F;
(2) If the test results for the excavation zone or the UST site do
not indicate that a release has occurred, further investigation is not
required.
Sec. 280.53 Reporting and cleanup of spills and overfills.
(a) Owners and operators of UST systems must contain and immediately
clean up a spill or overfill and report to the implementing agency
within 24 hours, or another reasonable time period specified by the
implementing agency, and begin corrective action in accordance with
subpart F in the following cases:
(1) Spill or overfill of petroleum that results in a release to the
environment that exceeds 25 gallons or another reasonable amount
specified by the implementing agency, or that causes a sheen on nearby
surface water; and
(2) Spill or overfill of a hazardous substance that results in a
release to the environment that equals or exceeds its reportable
quantity under CERCLA (40 CFR part 302).
(b) Owners and operators of UST systems must contain and immediately
clean up a spill or overfill of petroleum that is less than 25 gallons
or another reasonable amount specified by the implementing agency, and a
spill or overfill of a hazardous substance that is less than the
reportable quantity. If cleanup cannot be accomplished within 24 hours,
or another reasonable time period established by the implementing
agency, owners and operators must immediately notify the implementing
agency.
Note: Pursuant to Secs. 302.6 and 355.40, a release of a hazardous
substance equal to or in excess of its reportable quantity must also be
reported immediately (rather than within 24 hours) to the National
Response Center under sections 102 and 103 of the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 and to
appropriate state and local authorities under Title III of the Superfund
Amendments and Reauthorization Act of 1986.
Subpart F--Release Response and Corrective Action for UST Systems
Containing Petroleum or Hazardous Substances
Sec. 280.60 General.
Owners and operators of petroleum or hazardous substance UST systems
must, in response to a confirmed release from the UST system, comply
with the requirements of this subpart except for USTs excluded under
Sec. 280.10(b) and UST systems subject to RCRA Subtitle C corrective
action requirements under section 3004(u) of the Resource Conservation
and Recovery Act, as amended.
Sec. 280.61 Initial response.
Upon confirmation of a release in accordance with Sec. 280.52 or
after a release from the UST system is identified in any other manner,
owners and operators must perform the following initial response actions
within 24 hours of a release or within another reasonable period of time
determined by the implementing agency:
(a) Report the release to the implementing agency (e.g., by
telephone or electronic mail);
[[Page 480]]
(b) Take immediate action to prevent any further release of the
regulated substance into the environment; and
(c) Identify and mitigate fire, explosion, and vapor hazards.
Sec. 280.62 Initial abatement measures and site check.
(a) Unless directed to do otherwise by the implementing agency,
owners and operators must perform the following abatement measures:
(1) Remove as much of the regulated substance from the UST system as
is necessary to prevent further release to the environment;
(2) Visually inspect any aboveground releases or exposed belowground
releases and prevent further migration of the released substance into
surrounding soils and ground water;
(3) Continue to monitor and mitigate any additional fire and safety
hazards posed by vapors or free product that have migrated from the UST
excavation zone and entered into subsurface structures (such as sewers
or basements);
(4) Remedy hazards posed by contaminated soils that are excavated or
exposed as a result of release confirmation, site investigation,
abatement, or corrective action activities. If these remedies include
treatment or disposal of soils, the owner and operator must comply with
applicable State and local requirements;
(5) Measure for the presence of a release where contamination is
most likely to be present at the UST site, unless the presence and
source of the release have been confirmed in accordance with the site
check required by Sec. 280.52(b) or the closure site assessment of
Sec. 280.72(a). In selecting sample types, sample locations, and
measurement methods, the owner and operator must consider the nature of
the stored substance, the type of backfill, depth to ground water and
other factors as appropriate for identifying the presence and source of
the release; and
(6) Investigate to determine the possible presence of free product,
and begin free product removal as soon as practicable and in accordance
with Sec. 280.64.
(b) Within 20 days after release confirmation, or within another
reasonable period of time determined by the implementing agency, owners
and operators must submit a report to the implementing agency
summarizing the initial abatement steps taken under paragraph (a) of
this section and any resulting information or data.
Sec. 280.63 Initial site characterization.
(a) Unless directed to do otherwise by the implementing agency,
owners and operators must assemble information about the site and the
nature of the release, including information gained while confirming the
release or completing the initial abatement measures in Secs. 280.60 and
280.61. This information must include, but is not necessarily limited to
the following:
(1) Data on the nature and estimated quantity of release;
(2) Data from available sources and/or site investigations
concerning the following factors: surrounding populations, water
quality, use and approximate locations of wells potentially affected by
the release, subsurface soil conditions, locations of subsurface sewers,
climatological conditions, and land use;
(3) Results of the site check required under Sec. 280.62(a)(5); and
(4) Results of the free product investigations required under
Sec. 280.62(a)(6), to be used by owners and operators to determine
whether free product must be recovered under Sec. 280.64.
(b) Within 45 days of release confirmation or another reasonable
period of time determined by the implementing agency, owners and
operators must submit the information collected in compliance with
paragraph (a) of this section to the implementing agency in a manner
that demonstrates its applicability and technical adequacy, or in a
format and according to the schedule required by the implementing
agency.
Sec. 280.64 Free product removal.
At sites where investigations under Sec. 280.62(a)(6) indicate the
presence of free product, owners and operators must remove free product
to the maximum extent practicable as determined by the implementing
agency while continuing, as necessary, any actions initiated under
Secs. 280.61 through 280.63, or
[[Page 481]]
preparing for actions required under Secs. 280.65 through 280.66. In
meeting the requirements of this section, owners and operators must:
(a) Conduct free product removal in a manner that minimizes the
spread of contamination into previously uncontaminated zones by using
recovery and disposal techniques appropriate to the hydrogeologic
conditions at the site, and that properly treats, discharges or disposes
of recovery byproducts in compliance with applicable local, State and
Federal regulations;
(b) Use abatement of free product migration as a minimum objective
for the design of the free product removal system;
(c) Handle any flammable products in a safe and competent manner to
prevent fires or explosions; and
(d) Unless directed to do otherwise by the implementing agency,
prepare and submit to the implementing agency, within 45 days after
confirming a release, a free product removal report that provides at
least the following information:
(1) The name of the person(s) responsible for implementing the free
product removal measures;
(2) The estimated quantity, type, and thickness of free product
observed or measured in wells, boreholes, and excavations;
(3) The type of free product recovery system used;
(4) Whether any discharge will take place on-site or off-site during
the recovery operation and where this discharge will be located;
(5) The type of treatment applied to, and the effluent quality
expected from, any discharge;
(6) The steps that have been or are being taken to obtain necessary
permits for any discharge; and
(7) The disposition of the recovered free product.
Sec. 280.65 Investigations for soil and ground-water cleanup.
(a) In order to determine the full extent and location of soils
contaminated by the release and the presence and concentrations of
dissolved product contamination in the ground water, owners and
operators must conduct investigations of the release, the release site,
and the surrounding area possibly affected by the release if any of the
following conditions exist:
(1) There is evidence that ground-water wells have been affected by
the release (e.g., as found during release confirmation or previous
corrective action measures);
(2) Free product is found to need recovery in compliance with
Sec. 280.64;
(3) There is evidence that contaminated soils may be in contact with
ground water (e.g., as found during conduct of the initial response
measures or investigations required under Secs. 280.60 through 280.64);
and
(4) The implementing agency requests an investigation, based on the
potential effects of contaminated soil or ground water on nearby surface
water and ground-water resources.
(b) Owners and operators must submit the information collected under
paragraph (a) of this section as soon as practicable or in accordance
with a schedule established by the implementing agency.
Sec. 280.66 Corrective action plan.
(a) At any point after reviewing the information submitted in
compliance with Secs. 280.61 through 280.63, the implementing agency may
require owners and operators to submit additional information or to
develop and submit a corrective action plan for responding to
contaminated soils and ground water. If a plan is required, owners and
operators must submit the plan according to a schedule and format
established by the implementing agency. Alternatively, owners and
operators may, after fulfilling the requirements of Secs. 280.61 through
280.63, choose to submit a corrective action plan for responding to
contaminated soil and ground water. In either case, owners and operators
are responsible for submitting a plan that provides for adequate
protection of human health and the environment as determined by the
implementing agency, and must modify their plan as necessary to meet
this standard.
(b) The implementing agency will approve the corrective action plan
only after ensuring that implementation of the plan will adequately
protect human health, safety, and the environment. In
[[Page 482]]
making this determination, the implementing agency should consider the
following factors as appropriate:
(1) The physical and chemical characteristics of the regulated
substance, including its toxicity, persistence, and potential for
migration;
(2) The hydrogeologic characteristics of the facility and the
surrounding area;
(3) The proximity, quality, and current and future uses of nearby
surface water and ground water;
(4) The potential effects of residual contamination on nearby
surface water and ground water;
(5) An exposure assessment; and
(6) Any information assembled in compliance with this subpart.
(c) Upon approval of the corrective action plan or as directed by
the implementing agency, owners and operators must implement the plan,
including modifications to the plan made by the implementing agency.
They must monitor, evaluate, and report the results of implementing the
plan in accordance with a schedule and in a format established by the
implementing agency.
(d) Owners and operators may, in the interest of minimizing
environmental contamination and promoting more effective cleanup, begin
cleanup of soil and ground water before the corrective action plan is
approved provided that they:
(1) Notify the implementing agency of their intention to begin
cleanup;
(2) Comply with any conditions imposed by the implementing agency,
including halting cleanup or mitigating adverse consequences from
cleanup activities; and
(3) Incorporate these self-initiated cleanup measures in the
corrective action plan that is submitted to the implementing agency for
approval.
Sec. 280.67 Public participation.
(a) For each confirmed release that requires a corrective action
plan, the implementing agency must provide notice to the public by means
designed to reach those members of the public directly affected by the
release and the planned corrective action. This notice may include, but
is not limited to, public notice in local newspapers, block
advertisements, public service announcements, publication in a state
register, letters to individual households, or personal contacts by
field staff.
(b) The implementing agency must ensure that site release
information and decisions concerning the corrective action plan are made
available to the public for inspection upon request.
(c) Before approving a corrective action plan, the implementing
agency may hold a public meeting to consider comments on the proposed
corrective action plan if there is sufficient public interest, or for
any other reason.
(d) The implementing agency must give public notice that complies
with paragraph (a) of this section if implementation of an approved
corrective action plan does not achieve the established cleanup levels
in the plan and termination of that plan is under consideration by the
implementing agency.
Subpart G--Out-of-Service UST Systems and Closure
Sec. 280.70 Temporary closure.
(a) When an UST system is temporarily closed, owners and operators
must continue operation and maintenance of corrosion protection in
accordance with Sec. 280.31, and any release detection in accordance
with subpart D. Subparts E and F must be complied with if a release is
suspected or confirmed. However, release detection is not required as
long as the UST system is empty. The UST system is empty when all
materials have been removed using commonly employed practices so that no
more than 2.5 centimeters (one inch) of residue, or 0.3 percent by
weight of the total capacity of the UST system, remain in the system.
(b) When an UST system is temporarily closed for 3 months or more,
owners and operators must also comply with the following requirements:
(1) Leave vent lines open and functioning; and
(2) Cap and secure all other lines, pumps, manways, and ancillary
equipment.
(c) When an UST system is temporarily closed for more than 12
months, owners and operators must permanently close the UST system if it
does
[[Page 483]]
not meet either performance standards in Sec. 280.20 for new UST systems
or the upgrading requirements in Sec. 280.21, except that the spill and
overfill equipment requirements do not have to be met. Owners and
operators must permanently close the substandard UST systems at the end
of this 12-month period in accordance with Secs. 280.71-280.74, unless
the implementing agency provides an extension of the 12-month temporary
closure period. Owners and operators must complete a site assessment in
accordance with Sec. 280.72 before such an extension can be applied for.
Sec. 280.71 Permanent closure and changes-in-service.
(a) At least 30 days before beginning either permanent closure or a
change-in-service under paragraphs (b) and (c) of this section, or
within another reasonable time period determined by the implementing
agency, owners and operators must notify the implementing agency of
their intent to permanently close or make the change-in-service, unless
such action is in response to corrective action. The required assessment
of the excavation zone under Sec. 280.72 must be performed after
notifying the implementing agency but before completion of the permanent
closure or a change-in-service.
(b) To permanently close a tank, owners and operators must empty and
clean it by removing all liquids and accumulated sludges. All tanks
taken out of service permanently must also be either removed from the
ground or filled with an inert solid material.
(c) Continued use of an UST system to store a non-regulated
substance is considered a change-in-service. Before a change-in-service,
owners and operators must empty and clean the tank by removing all
liquid and accumulated sludge and conduct a site assessment in
accordance with Sec. 280.72.
Note: The following cleaning and closure procedures may be used to
comply with this section:
(A) American Petroleum Institute Recommended Practice 1604,
``Removal and Disposal of Used Underground Petroleum Storage Tanks'';
(B) American Petroleum Institute Publication 2015, ``Cleaning
Petroleum Storage Tanks'';
(C) American Petroleum Institute Recommended Practice 1631,
``Interior Lining of Underground Storage Tanks,'' may be used as
guidance for compliance with this section; and
(D) The National Institute for Occupational Safety and Health
``Criteria for a Recommended Standard * * * Working in Confined Space''
may be used as guidance for conducting safe closure procedures at some
hazardous substance tanks.
Sec. 280.72 Assessing the site at closure or change-in-service.
(a) Before permanent closure or a change-in-service is completed,
owners and operators must measure for the presence of a release where
contamination is most likely to be present at the UST site. In selecting
sample types, sample locations, and measurement methods, owners and
operators must consider the method of closure, the nature of the stored
substance, the type of backfill, the depth to ground water, and other
factors appropriate for identifying the presence of a release. The
requirements of this section are satisfied if one of the external
release detection methods allowed in Sec. 280.43 (e) and (f) is
operating in accordance with the requirements in Sec. 280.43 at the time
of closure, and indicates no release has occurred.
(b) If contaminated soils, contaminated ground water, or free
product as a liquid or vapor is discovered under paragraph (a) of this
section, or by any other manner, owners and operators must begin
corrective action in accordance with subpart F.
Sec. 280.73 Applicability to previously closed UST systems.
When directed by the implementing agency, the owner and operator of
an UST system permanently closed before December 22, 1988 must assess
the excavation zone and close the UST system in accordance with this
subpart if releases from the UST may, in the judgment of the
implementing agency, pose a current or potential threat to human health
and the environment.
Sec. 280.74 Closure records.
Owners and operators must maintain records in accordance with
Sec. 280.34 that are capable of demonstrating compliance with closure
requirements under
[[Page 484]]
this subpart. The results of the excavation zone assessment required in
Sec. 280.72 must be maintained for at least 3 years after completion of
permanent closure or change-in-service in one of the following ways:
(a) By the owners and operators who took the UST system out of
service;
(b) By the current owners and operators of the UST system site; or
(c) By mailing these records to the implementing agency if they
cannot be maintained at the closed facility.
Subpart H--Financial Responsibility
Source: 53 FR 43370, Oct. 26, 1988, unless otherwise noted.
Sec. 280.90 Applicability.
(a) This subpart applies to owners and operators of all petroleum
underground storage tank (UST) systems except as otherwise provided in
this section.
(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 Sec. 280.91.
(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.
(d) The requirements of this subpart do not apply to owners and
operators of any UST system described in Sec. 280.10 (b) or (c).
(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 Sec. 280.91.
Sec. 280.91 Compliance dates.
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
Electrification Administration; January 24, 1989, except that compliance
with Sec. 280.94(b) is required by: July 24, 1989.
(b) All petroleum marketing firms owning 100-999 USTs; October 26,
1989.
(c) All petroleum marketing firms owning 13-99 USTs at more than one
facility; April 26, 1991.
(d) All petroleum UST owners not described in paragraphs (a), (b),
or (c) of this section, excluding local government entities; December
31, 1993.
(e) All local government entities (including Indian tribes) not
included in paragraph (f) of this section; February 18, 1994.
(f) Indian tribes that own USTs on Indian lands which meet the
applicable technical requirements of this part; December 31, 1998.
[53 FR 43370, Oct. 26, 1988, as amended at 54 FR 5452, Feb. 3, 1989; 55
FR 18567, May 2, 1990; 55 FR 46025, Oct. 31, 1990; 56 FR 66373, Dec. 23,
1991; 59 FR 9607, Feb. 28, 1994]
Sec. 280.92 Definition of terms.
When used in this subpart, the following terms shall have the
meanings given below:
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.
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.
Chief Financial Officer, in the case of local government owners and
operators, means the individual with the overall authority and
responsibility for the collection, disbursement, and use of funds by the
local government.
[[Page 485]]
Controlling interest means direct ownership of at least 50 percent
of the voting stock of another entity.
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.
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 10-K 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.
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.
Local government shall have the meaning given this term by
applicable state law and includes Indian tribes. The term is generally
intended to include: (1) Counties, municipalities, townships, separately
chartered and operated special districts (including local government
public transit systems and redevelopment authorities), and independent
school districts authorized as governmental bodies by state charter or
constitution; and (2) Special districts and independent school districts
established by counties, municipalities, townships, and other general
purpose governments to provide essential services.
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.''
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.
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 Secs. 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.
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.
Substantial governmental relationship means the extent of a
governmental relationship necessary under applicable state law to make
an added guarantee
[[Page 486]]
contract issued incident to that relationship valid and enforceable. A
guarantee contract is issued ``incident to that relationship'' if it
arises from a clear commonality of interest in the event of an UST
release such as coterminous boundaries, overlapping constituencies,
common ground-water aquifer, or other relationship other than monetary
compensation that provides a motivation for the guarantor to provide a
guarantee.
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.
Termination under Sec. 280.97(b)(1) and Sec. 280.97(b)(2) means only
those changes that could result in a gap in coverage as where the
insured has not obtained substitute coverage or has obtained substitute
coverage with a different retroactive date than the retroactive date of
the original policy.
[53 FR 43370, Oct. 26, 1988, as amended at 54 FR 47081, Nov. 9, 1989; 58
FR 9050, Feb. 18, 1993]
Sec. 280.93 Amount and scope of required financial responsibility.
(a) Owners or operators of petroleum underground storage tanks must
demonstrate financial responsibility for taking corrective action and
for compensating third parties for bodily injury and property damage
caused by accidental releases arising from the operation of petroleum
underground storage tanks in at least the following per-occurrence
amounts:
(1) For owners or operators of petroleum underground storage tanks
that are located at petroleum marketing facilities, or that handle an
average of more than 10,000 gallons of petroleum per month based on
annual throughput for the previous calendar year; $1 million.
(2) For all other owners or operators of petroleum underground
storage tanks; $500,000.
(b) Owners or operators of petroleum underground storage tanks must
demonstrate financial responsibility for taking corrective action and
for compensating third parties for bodily injury and property damage
caused by accidental releases arising from the operation of petroleum
underground storage tanks in at least the following annual aggregate
amounts:
(1) For owners or operators of 1 to 100 petroleum underground
storage tanks, $1 million; and
(2) For owners or operators of 101 or more petroleum underground
storage tanks, $2 million.
(c) For the purposes of paragraphs (b) and (f) of this section,
only, ``a petroleum underground storage tank'' means a single
containment unit and does not mean combinations of single containment
units.
(d) Except as provided in paragraph (e) of this section, if the
owner or operator uses separate mechanisms or separate combinations of
mechanisms to demonstrate financial responsibility for:
(1) Taking corrective action;
(2) Compensating third parties for bodily injury and property damage
caused by sudden accidental releases; or
(3) Compensating third parties for bodily injury and property damage
caused by nonsudden accidental releases, the amount of assurance
provided by each mechanism or combination of mechanisms must be in the
full amount specified in paragraphs (a) and (b) of this section.
(e) If an owner or operator uses separate mechanisms or separate
combinations of mechanisms to demonstrate financial responsibility for
different petroleum underground storage tanks, the annual aggregate
required shall be based on the number of tanks covered by each such
separate mechanism or combination of mechanisms.
(f) Owners or operators shall review the amount of aggregate
assurance provided whenever additional petroleum underground storage
tanks are acquired or installed. If the number of petroleum underground
storage tanks for which assurance must be provided exceeds 100, the
owner or operator shall demonstrate financial responsibility in
[[Page 487]]
the amount of at least $2 million of annual aggregate assurance by the
anniversary of the date on which the mechanism demonstrating financial
responsibility became effective. If assurance is being demonstrated by a
combination of mechanisms, the owner or operator shall demonstrate
financial responsibility in the amount of at least $2 million of annual
aggregate assurance by the first-occurring effective date anniversary of
any one of the mechanisms combined (other than a financial test or
guarantee) to provide assurance.
(g) The amounts of assurance required under this section exclude
legal defense costs.
(h) The required per-occurrence and annual aggregate coverage
amounts do not in any way limit the liability of the owner or operator.
Sec. 280.94 Allowable mechanisms and combinations of mechanisms.
(a) Subject to the limitations of paragraphs (b) and (c) of this
section,
(1) An owner or operator, including a local government owner or
operator, may use any one or combination of the mechanisms listed in
Secs. 280.95 through 280.103 to demonstrate financial responsibility
under this subpart for one or more underground storage tanks, and
(2) A local government owner or operator may use any one or
combination of the mechanisms listed in Secs. 280.104 through 280.107 to
demonstrate financial responsibility under this subpart for one or more
underground storage tanks.
(b) An owner or operator may use a guarantee under Sec. 280.96 or
surety bond under Sec. 280.98 to establish financial responsibility only
if the Attorney(s) General of the state(s) in which the underground
storage tanks are located has (have) submitted a written statement to
the implementing agency that a guarantee or surety bond executed as
described in this section is a legally valid and enforceable obligation
in that state.
(c) An owner or operator may use self-insurance in combination with
a guarantee only if, for the purpose of meeting the requirements of the
financial test under this rule, the financial statements of the owner or
operator are not consolidated with the financial statements of the
guarantor.
[53 FR 43370, Oct. 26, 1988, as amended at 58 FR 9051, Feb. 18, 1993]
Sec. 280.95 Financial test of self-insurance.
(a) An owner or operator, and/or guarantor, may satisfy the
requirements of Sec. 280.93 by passing a financial test as specified in
this section. To pass the financial test of self-insurance, the owner or
operator, and/or guarantor must meet the criteria of paragraph (b) or
(c) of this section based on year-end financial statements for the
latest completed fiscal year.
(b)(1) The owner or operator, and/or guarantor, must have a tangible
net worth of at least ten times:
(i) The total of the applicable aggregate amount required by
Sec. 280.93, based on the number of underground storage tanks for which
a financial test is used to demonstrate financial responsibility to EPA
under this section or to a state implementing agency under a state
program approved by EPA under 40 CFR part 281;
(ii) The sum of the corrective action cost estimates, the current
closure and post-closure care cost estimates, and amount of liability
coverage for which a financial test is used to demonstrate financial
responsibility to EPA under 40 CFR 264.101, 264.143, 264.145, 265.143,
165.145, 264.147, and 265.147 or to a state implementing agency under a
state program authorized by EPA under 40 CFR part 271; and
(iii) The sum of current plugging and abandonment cost estimates for
which a financial test is used to demonstrate financial responsibility
to EPA under 40 CFR 144.63 or to a state implementing agency under a
state program authorized by EPA under 40 CFR part 145.
(2) The owner or operator, and/or guarantor, must have a tangible
net worth of at least $10 million.
(3) The owner or operator, and/or guarantor, must have a letter
signed by the chief financial officer worded as specified in paragraph
(d) of this section.
(4) The owner or operator, and/or guarantor, must either:
[[Page 488]]
(i) File financial statements annually with the U.S. Securities and
Exchange Commission, the Energy Information Administration, or the Rural
Electrification Administration; or
(ii) Report annually the firm's tangible net worth to Dun and
Bradstreet, and Dun and Bradstreet must have assigned the firm a
financial strength rating of 4A or 5A.
(5) The firm's year-end financial statements, if independently
audited, cannot include an adverse auditor's opinion, a disclaimer of
opinion, or a ``going concern'' qualification.
(c)(1) The owner or operator, and/or guarantor must meet the
financial test requirements of 40 CFR 264.147(f)(1), substituting the
appropriate amounts specified in Sec. 280.93 (b)(1) and (b)(2) for the
``amount of liability coverage'' each time specified in that section.
(2) The fiscal year-end financial statements of the owner or
operator, and/or guarantor, must be examined by an independent certified
public accountant and be accompanied by the accountant's report of the
examination.
(3) The firm's year-end financial statements cannot include an
adverse auditor's opinion, a disclaimer of opinion, or a ``going
concern'' qualification.
(4) The owner or operator, and/or guarantor, must have a letter
signed by the chief financial officer, worded as specified in paragraph
(d) of this section.
(5) If the financial statements of the owner or operator, and/or
guarantor, are not submitted annually to the U.S. Securities and
Exchange Commission, the Energy Information Administration or the Rural
Electrification Administration, the owner or operator, and/or guarantor,
must obtain a special report by an independent certified public
accountant stating that:
(i) He has compared the data that the letter form the chief
financial officer specifies as having been derived from the latest year-
end financial statements of the owner or operator, and/or guarantor,
with the amounts in such financial statements; and
(ii) In connection with that comparison, no matters came to his
attention which caused him to believe that the specified data should be
adjusted.
(d) To demonstrate that it meets the financial test under paragraph
(b) or (c) of this section, the chief financial officer of the owner or
operator, or guarantor, must sign, within 120 days of the close of each
financial reporting year, as defined by the twelve-month period for
which financial statements used to support the financial test are
prepared, a letter worded exactly as follows, except that the
instructions in brackets are to be replaced by the relevant information
and the brackets deleted:
Letter from Chief Financial Officer
I am the chief financial officer of [insert: name and address of the
owner or operator, or guarantor]. This letter is in support of the use
of [insert: ``the financial test of self-insurance,'' and/or
``guarantee''] to demonstrate financial responsibility for [insert:
``taking corrective action'' and/or ``compensating third parties for
bodily injury and property damage''] caused by [insert: ``suddent
accidential releases'' and/or ``nonsudden accidential releases''] in the
amount of at least [insert: dollar amount] per occurrence and [insert:
dollar amount] annual aggregate arising from operating (an) underground
storage tank(s).
Underground storage tanks at the following facilities are assured by
this financial test or a financial test under an authorized State
program by this [insert: ``owner or operator,'' and/or ``guarantor'']:
[List for each facility: the name and address of the facility where
tanks assured by this financial test are located, and whether tanks are
assured by this financial test or a financial test under a State program
approved under 40 CFR part 281. If separate mechanisms or combinations
of mechanisms are being used to assure any of the tanks at this
facility, list each tank assured by this financial test or a financial
test under a State program authorized under 40 CFR part 281 by the tank
identification number provided in the notification submitted pursuant to
40 CFR 280.22 or the corresponding State requirements.]
A [insert: ``financial test,'' and/or ``guarantee''] is also used by
this [insert: ``owner or operator,'' or ``guarantor''] to demonstrate
evidence of financial responsibility in the following amounts under
other EPA regulations or state programs authorized by EPA under 40 CFR
parts 271 and 145:
EPA Regulations Amount
Closure (Secs. 264.143 and 265.143).................... $--------
Post-Closure Care (Secs. 264.145 and 265.145).......... $--------
Liability Coverage (Secs. 264.147 and 265.147)......... $--------
Corrective Action (Secs. 264.101(b))................... $--------
[[Page 489]]
Plugging and Abandonment (Sec. 144.63)................. $--------
Closure................................................. $--------
Post-Closure Care....................................... $--------
Liabilitly Coverage..................................... $--------
Corrective Action....................................... $--------
Plugging and Abandonment................................ $--------
Total............................................... $--------
This [insert: ``owner or operator,'' or ``guarantor''] has not
received an adverse opinion, a disclaimer of opinion, or a ``going
concern'' qualification from an independent auditor on his financial
statements for the latest completed fiscal year.
[Fill in the information for Alternative I if the criteria of
paragraph (b) of Sec. 280.95 are being used to demonstrate compliance
with the financial test requirements. Fill in the information for
Alternative II if the criteria of paragraph (c) of Sec. 280.95 are being
used to demonstrate compliance with the financial test requirements.]
Alternative I
1. Amount of annual UST aggregate coverage being $--------
assured by a financial test, and/or guarantee
2. Amount of corrective action, closure and post- $--------
closure care costs, liability coverage, and
plugging and abandonment costs covered by a
financial test, and/or guarantee
3. Sum of lines 1 and 2 $--------
4. Total tangible assets $--------
5. Total liabilities [if any of the amount $--------
reported on line 3 is included in total
liabilities, you may deduct that amount from
this line and add that amount to line 6]
6. Tangible net worth [subtract line 5 from line $--------
4]
Yes No
7. Is line 6 at least $10 million? ---- --
8. Is line 6 at least 10 times line 3? ---- --
9. Have financial statements for the latest fiscal ---- --
year been filed with the Securities and
Exchange Commission?
10. Have financial statements for the latest fiscal ---- --
year been filed with the Energy Information
Administration?
11. Have financial statements for the lastest ---- --
fiscal year been filed with the Rural
Electrification Administration?
12. Has financial information been provided to Dun ---- --
and Bradstreet, and has Dun and Bradstreet
provided a financial strength rating of 4A or
5A? [Answer ``Yes'' only if both criteria have
been met.]
Alternative II
1. Amount of annual UST aggregate coverage being $--------
assured by a test, and/or guarantee
2. Amount of corrective action, closure and post- $--------
closure care costs, liability coverage, and
plugging and abandonment costs covered by a
financial test, and/or guarantee
3. Sum of lines 1 and 2 $--------
4. Total tangible assets $--------
5. Total liabilities [if any of the amount $--------
reported on line 3 is included in total
liabilities, you may deduct that amount from
this line and add that amount to line 6]
6. Tangible net worth [subtract line 5 from line $--------
4]
7. Total assets in the U.S. [required only if less $--------
than 90 percent of assets are located in the
U.S.]
Yes No
8. Is line 6 at least $10 million? $---- --
9. Is line 6 at least 6 times line 3? ---- --
10. Are at least 90 percent of assets located in ---- --
the U.S.? [If ``No,'' complete line 11.]
11. Is line 7 at least 6 times line 3? ---- --
[Fill in either lines 12-15 or lines 16-18:]
12. Current assets $--------
13. Current liabilities --------
14. Net working capital [subtract line 13 from line ----------
12]
Yes No
15. Is line 14 at least 6 times line 3? ---- --
16. Current bond rating of most recent bond issue ---- --
17. Name of rating service ---- --
[[Page 490]]
18. Date of maturity of bond ---- --
19. Have financial statements for the latest fiscal ---- --
year been filed with the SEC, the Energy
Information Administration, or the Rural
Electrification Administration?
[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]
(e) If an owner or operator using the test to provide financial
assurance finds that he or she no longer meets the requirements of the
financial test based on the year-end financial statements, the owner or
operator must obtain alternative coverage within 150 days of the end of
the year for which financial statements have been prepared.
(f) The Director of the implementing agency may require reports of
financial condition at any time from the owner or operator, and/or
guarantor. If the Director finds, on the basis of such reports or other
information, that the owner or operator, and/or guarantor, no longer
meets the financial test requirements of Sec. 280.95(b) or (c) and (d),
the owner or operator must obtain alternate coverage within 30 days
after notification of such a finding.
(g) If the owner or operator fails to obtain alternate assurance
within 150 days of finding that he or she no longer meets the
requirements of the financial test based on the year-end financial
statements, or within 30 days of notification by the Director of the
implementing agency that he or she no longer meets the requirements of
the financial test, the owner or operator must notify the Director of
such failure within 10 days.
Sec. 280.96 Guarantee.
(a) An owner or operator may satisfy the requirements of Sec. 280.93
by obtaining a guarantee that conforms to the requirements of this
section. The guarantor must be:
(1) A firm that (i) possesses a controlling interest in the owner or
operator; (ii) possesses a controlling interest in a firm described
under paragraph (a)(1)(i) of this section; or, (iii) is controlled
through stock ownership by a common parent firm that possesses a
controlling interest in the owner or operator; or,
(2) A firm engaged in a substantial business relationship with the
owner or operator and issuing the guarantee as an act incident to that
business relationship.
(b) Within 120 days of the close of each financial reporting year
the guarantor must demonstrate that it meets the financial test criteria
of Sec. 280.95 based on year-end financial statements for the latest
completed financial reporting year by completing the letter from the
chief financial officer described in Sec. 280.95(d) and must deliver the
letter to the owner or operator. If the guarantor fails to meet the
requirements of the financial test at the end of any financial reporting
year, within 120 days of the end of that financial reporting year the
guarantor shall send by certified mail, before cancellation or
nonrenewal of the guarantee, notice to the owner or operator. If the
Director of the implementing agency notifies the guarantor that he no
longer meets the requirements of the financial test of Sec. 280.95 (b)
or (c) and (d), the guarantor must notify the owner or operator within
10 days of receiving such notification from the Director. In both cases,
the guarantee will terminate no less than 120 days after the date the
owner or operator receives the notification, as evidenced by the return
receipt. The owner or operator must obtain alternative coverage as
specified in Sec. 280.110(c).
[[Page 491]]
(c) The guarantee must be worded as follows, except that
instructions in brackets are to be replaced with the relevant
information and the brackets deleted:
Guarantee
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 alternative
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''] accidential
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:
[[Page 492]]
(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, loaded 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:
________________________________________________________________________
(d) An owner or operator who uses a guarantee to satisfy the
requirements of Sec. 280.93 must establish a standby trust fund when the
guarantee is obtained. Under the terms of the guarantee, all amounts
paid by the guarantor under the guarantee will be deposited directly
into the standby trust fund in accordance with instructions from the
Director of the implementing agency under Sec. 280.108. This standby
trust fund must meet the requirements specified in Sec. 280.103.
Sec. 280.97 Insurance and risk retention group coverage.
(a) An owner or operator may satisfy the requirements of Sec. 290.93
by obtaining liability insurance that conforms to the requirements of
this section from a qualified insurer or risk retention group. Such
insurance may be in the form of a separate insurance policy or an
endorsement to an existing insurance policy.
(b) Each insurance policy must be amended by an endorsement worded
as specified in paragraph (b)(1) of this section, or evidenced by a
certificate of insurance worded as specified in paragraph (b)(2) of this
section, except that instructions in brackets must be replaced with the
relevant information and the brackets deleted:
(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''; in accordance with and subject to the limits of
liability, exclusions, conditions, and other terms of the policy; 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.
[[Page 493]]
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, which are subject to a separate limit under the policy. 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''], except for non-payment of premium or
misrepresentation by the insured, 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. Cancellation for non-payment
of premium or misrepresentation by the insured will be effective only
upon written notice and only after expiration of a minimum of 10 days
after a copy of such written notice is received by the insured.
[Insert for claims-made policies:
e. The insurance covers claims otherwise covered by the policy that
are reported to the [``Insurer'' or ``Group''] within six months of the
effective date of cancellation or non-renewal of the policy except where
the new or renewed policy has the same retroactive date or a retroactive
date earlier than that of the prior policy, and which arise out of any
covered occurrence that commenced after the policy retroactive date, if
applicable, and prior to such policy renewal or termination date. Claims
reported during such extended reporting period are subject to the terms,
conditions, limits, including limits of liability, and exclusions of the
policy.]
I hereby certify that the wording of this instrument is identical to
the wording in 40 CFR 280.97(b)(1) 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]
(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:
1. [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''; in accordance with and subject to the limits of
liability, exclusions, conditions,
[[Page 494]]
and other terms of the policy; 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, which are subject to a separate limit under the policy. 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''], except for non-payment of premium or
misrepresentation by the insured, 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. Cancellation for non-payment
of premium or misrepresentation by the insured will be effective only
upon written notice and only after expiration of a minimum of 10 days
after a copy of such written notice is received by the insured.
[Insert for claims-made policies:
e. The insurance covers claims otherwise covered by the policy that
are reported to the [``Insurer'' or ``Group''] within six months of the
effective date of cancellation or non-renewal of the policy except where
the new or renewed policy has the same retroactive date or a retroactive
date earlier than that of the prior policy, and which arise out of any
covered occurrence that commenced after the policy retroactive date, if
applicable, and prior to such policy renewal or termination date. Claims
reported during such extended reporting period are subject to the terms,
conditions, limits, including limits of liability, and exclusions 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]
(c) Each insurance policy must be issued by an insurer or a risk
retention group that, at a minimum, 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.
[53 FR 43370, Oct. 26, 1988, as amended at 54 FR 47081, Nov. 9, 1989]
Sec. 280.98 Surety bond.
(a) An owner or operator may satisfy the requirements of Sec. 280.93
by obtaining a surety bond that conforms to the requirements of this
section. The surety company issuing the bond must be among those listed
as acceptable sureties on federal bonds in the latest Circular 570 of
the U.S. Department of the Treasury.
(b) The surety bond must be worded as follows, except that
instructions in brackets must be replaced with the relevant information
and the brackets deleted:
Performance 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
[[Page 495]]
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) indentified 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
[[Page 496]]
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)]
[Names(s)]
[Title(s)]
[Corporate seal]
Corporate Surety(ies)
[Name and address]
[State of Incorporation: ----------
[Liability limit: $----------
[Signature(s)]
[Names(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: $----------
(c) Under the terms of the bond, the surety will become liable on
the bond obligation when the owner or operator fails to perform as
guaranteed by the bond. In all cases, the surety's liability is limited
to the per-occurrence and annual aggregate penal sums.
(d) The owner or operator who uses a surety bond to satisfy the
requirements of Sec. 280.93 must establish a standby trust fund when the
surety bond is acquired. Under the terms of the bond, all amounts paid
by the surety under the bond will be deposited directly into the standby
trust fund in accordance with instructions from the Director under
Sec. 280.108. This standby trust fund must meet the requirements
specified in Sec. 280.103.
Sec. 280.99 Letter of credit.
(a) An owner or operator may satisfy the requirements of Sec. 280.93
by obtaining an irrevocable standby letter of credit that conforms to
the requirements of this section. The issuing institution must be an
entity that has the authority to issue letters of credit in each state
where used and whose letter-of-credit operations are regulated and
examined by a federal or state agency.
(b) The letter of credit must be worded as follows, except that
instructions in brackets are to be replaced with the relevant
information and the brackets deleted:
Irrevocable Standby Letter of Credit
[Name and address of issuing institution]
[Name and address of Director(s) of state implementing agency(ies)]
Dear Sir or Madam: We hereby establish our Irrevocable Standby
Letter of Credit No. ------ in your favor, at the request and for the
account of [owner or operator name] of [address] up to the aggregate
amount of [in words] U.S. dollars ($[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 persuant 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
[[Page 497]]
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 curent 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 and
copyrighted by the International Chamber of Commerce,'' or ``the Uniform
Commercial Code''].
(c) An owner or operator who uses a letter of credit to satisfy the
requirements of Sec. 280.93 must also establish a standby trust fund
when the letter of credit is acquired. Under the terms of the letter of
credit, all amounts paid pursuant to a draft by the Director of the
implementing agency will be deposited by the issuing institution
directly into the standby trust fund in accordance with instructions
from the Director under Sec. 280.108. This standby trust fund must meet
the requirements specified in Sec. 280.103.
(d) The letter of credit must be irrevocable with a term specified
by the issuing institution. The letter of credit must provide that
credit be automatically renewed for the same term as the original term,
unless, at least 120 days before the current expiration date, the
issuing institution notifies the owner or operator by certified mail of
its decision not to renew the letter of credit. Under the terms of the
letter of credit, the 120 days will begin on the date when the owner or
operator receives the notice, as evidenced by the return receipt.
[53 FR 37194, Sept. 23, 1988, as amended at 59 FR 29960, June 10, 1994]
Sec. 280.100 Use of state-required mechanism.
(a) For underground storage tanks located in a state that does not
have an approved program, and where the state requires owners or
operators of underground storage tanks to demonstrate financial
responsibility for taking corrective action and/or for compensating
third parties for bodily injury and property damage, an owner or
operator may use a state-required financial mechanism to meet the
requirements of Sec. 280.93 if the Regional Administrator determines
that the state mechanism is at least equivalent to the financial
mechanisms specified in this subpart.
(b) The Regional Administrator will evaluate the equivalency of a
state-required mechanism principally in terms of: certainty of the
availability of funds for taking corrective action and/or for
compensating third parties; the amount of funds that will be made
[[Page 498]]
available; and the types of costs covered. The Regional Administrator
may also consider other factors as is necessary.
(c) The state, an owner or operator, or any other interested party
may submit to the Regional Administrator a written petition requesting
that one or more of the state-required mechanisms be considered
acceptable for meeting the requirements of Sec. 280.93. The submission
must include copies of the appropriate state statutory and regulatory
requirements and must show the amount of funds for corrective action
and/or for compensating third parties assured by the mechanism(s). The
Regional Administrator may require the petitioner to submit additional
information as is deemed necessary to make this determination.
(d) Any petition under this section may be submitted on behalf of
all of the state's underground storage tank owners and operators.
(e) The Regional Administrator will notify the petitioner of his
determination regarding the mechanism's acceptability in lieu of
financial mechanisms specified in this subpart. Pending this
determination, the owners and operators using such mechanisms will be
deemed to be in compliance with the requirements of Sec. 280.93 for
underground storage tanks located in the state for the amounts and types
of costs covered by such mechanisms.
[53 FR 43370, Oct. 26, 1988; 53 FR 51274, Dec. 21, 1988]
Sec. 280.101 State fund or other state assurance.
(a) An owner or operator may satisfy the requirements of Sec. 280.93
for underground storage tanks located in a state, where EPA is
administering the requirements of this subpart, which assures that
monies will be available from a state fund or state assurance program to
cover costs up to the limits specified in Sec. 280.93 or otherwise
assures that such costs will be paid if the Regional Administrator
determines that the state's assurance is at least equivalent to the
financial mechanisms specified in this subpart.
(b) The Regional Administrator will evaluate the equivalency of a
state fund or other state assurance principally in terms of: Certainty
of the availability of funds for taking corrective action and/or for
compensating third parties; the amount of funds that will be made
available; and the types of costs covered. The Regional Administrator
may also consider other factors as is necessary.
(c) The state must submit to the Regional Administrator a
description of the state fund or other state assurance to be supplied as
financial assurance, along with a list of the classes of underground
storage tanks to which the funds may be applied. The Regional
Administrator may require the state to submit additional information as
is deemed necessary to make a determination regarding the acceptability
of the state fund or other state assurance. Pending the determination by
the Regional Administrator, the owner or operator of a covered class of
USTs will be deemed to be in compliance with the requirements of
Sec. 280.93 for the amounts and types of costs covered by the state fund
or other state assurance.
(d) The Regional Administrator will notify the state of his
determination regarding the acceptability of the state's fund or other
assurance in lieu of financial mechanisms specified in this subpart.
Within 60 days after the Regional Administrator notifies a state that a
state fund or other state assurance is acceptable, the state must
provide to each owner or operator for which it is assuming financial
responsibility a letter or certificate describing the nature of the
state's assumption of responsibility. The letter or certificate from the
state must include, or have attached to it, the following information:
the facility's name and address and the amount of funds for corrective
action and/or for compensating third parties that is assured by the
state. The owner or operator must maintain this letter or certificate on
file as proof of financial responsibility in accordance with
Sec. 280.107(b)(5).
Sec. 280.102 Trust fund.
(a) An owner or operator may satisfy the requirements of Sec. 280.93
by establishing a trust fund that conforms to the requirements of this
section. The trustee must be an entity that has the authority to act as
a trustee and whose
[[Page 499]]
trust operations are regulated and examined by a federal agency or an
agency of the state in which the fund is established.
(b) The wording of the trust agreement must be identical to the
wording specified in Sec. 280.103(b)(1), and must be accompanied by a
formal certification of acknowledgement as specified in
Sec. 280.103(b)(2).
(c) The trust fund, when established, must be funded for the full
required amount of coverage, or funded for part of the required amount
of coverage and used in combination with other mechanism(s) that provide
the remaining required coverage.
(d) If the value of the trust fund is greater than the required
amount of coverage, the owner or operator may submit a written request
to the Director of the implementing agency for release of the excess.
(e) If other financial assurance as specified in this subpart is
substituted for all or part of the trust fund, the owner or operator may
submit a written request to the Director of the implementing agency for
release of the excess.
(f) Within 60 days after receiving a request from the owner or
operator for release of funds as specified in paragraph (d) or (e) of
this section, the Director of the implementing agency will instruct the
trustee to release to the owner or operator such funds as the Director
specifies in writing.
Sec. 280.103 Standby trust fund.
(a) An owner or operator using any one of the mechanisms authorized
by Secs. 280.96, 280.98, or 280.99 must establish a standby trust fund
when the mechanism is acquired. The trustee of the standby trust fund
must be an entity that has the authority to act as a trustee and whose
trust operations are regulated and examined by a Federal agency or an
agency of the state in which the fund is established.
(b)(1) The standby trust agreement, or trust agreement, must be
worded as follows, except that instructions in brackets are to be
replaced with the relevant information and the brackets deleted:
Trust 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. The attached Schedule A lists the number
of tanks at each facility and the name(s) and address(es) of the
facility(ies) where the tanks are located that are covered by the
standpoint 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
[[Page 500]]
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
[[Page 501]]
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
[[Page 502]]
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]
[Signature of Witness]
[Name of the Witness]
[Title]
[Seal]
(2) The standby trust agreement, or trust agreement must be
accompanied by a formal certification of acknowledgement 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]
(c) The Director of the implementing agency will instruct the
trustee to refund the balance of the standby trust fund to the provider
of financial assurance if the Director determines that no additional
corrective action costs or third-party liability claims will occur as a
result of a release covered by the financial assurance mechanism for
which the standby trust fund was established.
(d) An owner or operator may establish one trust fund as the
depository mechanism for all funds assured in compliance with this rule.
[53 FR 43370, Oct. 26, 1988; 53 FR 51274, Dec. 21, 1988]
Sec. 280.104 Local government bond rating test.
(a) A general purpose local government owner or operator and/or
local government serving as a guarantor
[[Page 503]]
may satisfy the requirements of Sec. 280.93 by having a currently
outstanding issue or issues of general obligation bonds of $1 million or
more, excluding refunded obligations, with a Moody's rating of Aaa, Aa,
A, or Baa, or a Standard & Poor's rating of AAA, AA, A, or BBB. Where a
local government has multiple outstanding issues, or where a local
government's bonds are rated by both Moody's and Standard and Poor's,
the lowest rating must be used to determine eligibility. Bonds that are
backed by credit enhancement other than municipal bond insurance may not
be considered in determining the amount of applicable bonds outstanding.
(b) A local government owner or operator or local government serving
as a guarantor that is not a general-purpose local government and does
not have the legal authority to issue general obligation bonds may
satisfy the requirements of Sec. 280.93 by having a currently
outstanding issue or issues of revenue bonds of $1 million or more,
excluding refunded issues and by also having a Moody's rating of Aaa, A,
A, or Baa, or a Standard & Poor's rating of AAA, AA, A, or BBB as the
lowest rating for any rated revenue bond issued by the local government.
Where bonds are rated by both Moody's and Standard & Poor's, the lower
rating for each bond must be used to determine eligibility. Bonds that
are backed by credit enhancement may not be considered in determining
the amount of applicable bonds outstanding.
(c) The local government owner or operator and/or guarantor must
maintain a copy of its bond rating published within the last 12 months
by Moody's or Standard & Poor's.
(d) To demonstrate that it meets the local government bond rating
test, the chief financial officer of a general purpose local government
owner or operator and/or guarantor must sign a letter worded exactly as
follows, except that the instructions in brackets are to be replaced by
the relevant information and the brackets deleted:
Letter from Chief Financial Officer
I am the chief financial officer of [insert: name and address of
local government owner or operator, or guarantor]. This letter is in
support of the use of the bond rating test to demonstrate financial
responsibility for [insert: ``taking corrective action'' and/or
``compensating third parties for bodily injury and property damage'']
caused by [insert: ``sudden accidental releases'' and/or ``nonsudden
accidental releases''] in the amount of at least [insert: dollar amount]
per occurrence and [insert: dollar amount] annual aggregate arising from
operating (an) underground storage tank(s).
Underground storage tanks at the following facilities are assured by
this bond rating test: [List for each facility: the name and address of
the facility where tanks are assured by the bond rating test].
The details of the issue date, maturity, outstanding amount, bond
rating, and bond rating agency of all outstanding bond issues that are
being used by [name of local government owner or operator, or guarantor]
to demonstrate financial responsibility are as follows: [complete table]
----------------------------------------------------------------------------------------------------------------
Issue date Maturity date Outstanding amount Bond rating Rating agency
----------------------------------------------------------------------------------------------------------------
[Moody's or
Standard &
Poor's]
----------------------------------------------------------------------------------------------------------------
The total outstanding obligation of [insert amount], excluding
refunded bond issues, exceeds the minimum amount of $1 million. All
outstanding general obligation bonds issued by this government that have
been rated by Moody's or Standard & Poor's are rated as at least
investment grade (Moody's Baa or Standard & Poor's BBB) based on the
most recent ratings published within the last 12 months. Neither rating
service has provided notification within the last 12 months of
downgrading of bond ratings below investment grade or of withdrawal of
bond rating other than for repayment of outstanding bond issues.
I hereby certify that the wording of this letter is identical to the
wording specified in 40 CFR Part 280.104(d) as such regulations were
constituted on the date shown immediately below.
[Date]__________________________________________________________________
[Signature]_____________________________________________________________
[Name]__________________________________________________________________
[Title]_________________________________________________________________
(e) To demonstrate that it meets the local government bond rating
test, the
[[Page 504]]
chief financial officer of local government owner or operator and/or
guarantor other than a general purpose government must sign a letter
worded exactly as follows, except that the instructions in brackets are
to be replaced by the relevant information and the brackets deleted:
Letter from Chief Financial Officer
I am the chief financial officer of [insert: name and address of
local government owner or operator, or guarantor]. This letter is in
support of the use of the bond rating test to demonstrate financial
responsibility for [insert: ``taking corrective action'' and/or
``compensating third parties for bodily injury and property damage'']
caused by [insert : ``sudden accidental releases'' and/or ``nonsudden
accidental releases''] in the amount of at least [insert: dollar amount]
per occurrence and [insert: dollar amount] annual aggregate arising from
operating (an) underground storage tank(s). This local government is not
organized to provide general governmental services and does not have the
legal authority under state law or constitutional provisions to issue
general obligation debt.
Underground storage tanks at the following facilities are assured by
this bond rating test: [List for each facility: the name and address of
the facility where tanks are assured by the bond rating test].
The details of the issue date, maturity, outstanding amount, bond
rating, and bond rating agency of all outstanding revenue bond issues
that are being used by [name of local government owner or operator, or
guarantor] to demonstrate financial responsibility are as follows:
[complete table]
----------------------------------------------------------------------------------------------------------------
Issue date Maturity date Outstanding amount Bond rating Rating agency
----------------------------------------------------------------------------------------------------------------
[Moody's or
Standard &
Poor's]
----------------------------------------------------------------------------------------------------------------
The total outstanding obligation of [insert amount], excluding
refunded bond issues, exceeds the minimum amount of $1 million. All
outstanding revenue bonds issued by this government that have been rated
by Moody's or Standard & Poor's are rated as at least investment grade
(Moody's Baa or Standard & Poor's BBB) based on the most recent ratings
published within the last 12 months. The revenue bonds listed are not
backed by third-party credit enhancement or are insured by a municipal
bond insurance company. Neither rating service has provided notification
within the last 12 months of downgrading of bond ratings below
investment grade or of withdrawal of bond rating other than for
repayment of outstanding bond issues.
I hereby certify that the wording of this letter is identical to the
wording specified in 40 CFR part 280.104(e) as such regulations were
constituted on the date shown immediately below.
[Date]__________________________________________________________________
[Signature]_____________________________________________________________
[Name]__________________________________________________________________
[Title]_________________________________________________________________
(f) The Director of the implementing agency may require reports of
financial condition at any time from the local government owner or
operator, and/or local government guarantor. If the Director finds, on
the basis of such reports or other information, that the local
government owner or operator, and/or guarantor, no longer meets the
local government bond rating test requirements of Sec. 280.104, the
local government owner or operator must obtain alternative coverage
within 30 days after notification of such a finding.
(g) If a local government owner or operator using the bond rating
test to provide financial assurance finds that it no longer meets the
bond rating test requirements, the local government owner or operator
must obtain alternative coverage within 150 days of the change in
status.
[58 FR 9053, Feb. 18, 1993]
Sec. 280.105 Local government financial test.
(a) A local government owner or operator may satisfy the
requirements of Sec. 280.93 by passing the financial test specified in
this section. To be eligible to use the financial test, the local
government owner or operator must have the ability and authority to
assess and levy taxes or to freely establish fees and charges. To pass
the local government financial test, the owner or operator must meet the
criteria of paragraphs (b)(2) and (b)(3) of this section based on year-
end financial statements for the latest completed fiscal year.
[[Page 505]]
(b)(1) The local government owner or operator must have the
following information available, as shown in the year-end financial
statements for the latest completed fiscal year:
(i) Total revenues: Consists of the sum of general fund operating
and non-operating revenues including net local taxes, licenses and
permits, fines and forfeitures, revenues from use of money and property,
charges for services, investment earnings, sales (property,
publications, etc.), intergovernmental revenues (restricted and
unrestricted), and total revenues from all other governmental funds
including enterprise, debt service, capital projects, and special
revenues, but excluding revenues to funds held in a trust or agency
capacity. For purposes of this test, the calculation of total revenues
shall exclude all transfers between funds under the direct control of
the local government using the financial test (interfund transfers),
liquidation of investments, and issuance of debt.
(ii) Total expenditures: Consists of the sum of general fund
operating and non-operating expenditures including public safety, public
utilities, transportation, public works, environmental protection,
cultural and recreational, community development, revenue sharing,
employee benefits and compensation, office management, planning and
zoning, capital projects, interest payments on debt, payments for
retirement of debt principal, and total expenditures from all other
governmental funds including enterprise, debt service, capital projects,
and special revenues. For purposes of this test, the calculation of
total expenditures shall exclude all transfers between funds under the
direct control of the local government using the financial test
(interfund transfers).
(iii) Local revenues: Consists of total revenues (as defined in
paragraph (b)(1)(i) of this section) minus the sum of all transfers from
other governmental entities, including all monies received from Federal,
state, or local government sources.
(iv) Debt service: Consists of the sum of all interest and principal
payments on all long-term credit obligations and all interest-bearing
short-term credit obligations. Includes interest and principal payments
on general obligation bonds, revenue bonds, notes, mortgages, judgments,
and interest bearing warrants. Excludes payments on non-interest-bearing
short-term obligations, interfund obligations, amounts owed in a trust
or agency capacity, and advances and contingent loans from other
governments.
(v) Total funds: Consists of the sum of cash and investment
securities from all funds, including general, enterprise, debt service,
capital projects, and special revenue funds, but excluding employee
retirement funds, at the end of the local government's financial
reporting year. Includes Federal securities, Federal agency securities,
state and local government securities, and other securities such as
bonds, notes and mortgages. For purposes of this test, the calculation
of total funds shall exclude agency funds, private trust funds, accounts
receivable, value of real property, and other non-security assets.
(vi) Population consists of the number of people in the area served
by the local government.
(2) The local government's year-end financial statements, if
independently audited, cannot include an adverse auditor's opinion or a
disclaimer of opinion. The local government cannot have outstanding
issues of general obligation or revenue bonds that are rated as less
than investment grade.
(3) The local government owner or operator must have a letter signed
by the chief financial officer worded as specified in paragraph (c) of
this section.
(c) To demonstrate that it meets the financial test under paragraph
(b) of this section, the chief financial officer of the local government
owner or operator, must sign, within 120 days of the close of each
financial reporting year, as defined by the twelve-month period for
which financial statements used to support the financial test are
prepared, a letter worded exactly as follows, except that the
instructions in brackets are to be replaced by the relevant information
and the brackets deleted:
Letter From Chief Financial Officer
I am the chief financial officer of [insert: name and address of the
owner or operator]. This letter is in support of the use of the
[[Page 506]]
local government financial test to demonstrate financial responsibility
for [insert: ``taking corrective action'' and/or ``compensating third
parties for bodily injury and property damage''] caused by [insert:
``sudden accidental releases'' and/or ``nonsudden accidental releases'']
in the amount of at least [insert: dollar amount] per occurrence and
[insert: dollar amount] annual aggregate arising from operating [an]
underground storage tank[s].
Underground storage tanks at the following facilities are assured by
this financial test [List for each facility: the name and address of the
facility where tanks assured by this financial test are located. If
separate mechanisms or combinations of mechanisms are being used to
assure any of the tanks at this facility, list each tank assured by this
financial test by the tank identification number provided in the
notification submitted pursuant to 40 CFR Part 280.22 or the
corresponding state requirements.]
This owner or operator has not received an adverse opinion, or a
disclaimer of opinion from an independent auditor on its financial
statements for the latest completed fiscal year. Any outstanding issues
of general obligation or revenue bonds, if rated, have a Moody's rating
of Aaa, Aa, A, or Baa or a Standard and Poor's rating of AAA, AA, A, or
BBB; if rated by both firms, the bonds have a Moody's rating of Aaa, Aa,
A, or Baa and a Standard and Poor's rating of AAA, AA, A, or BBB.
Worksheet for Municipal Financial Test
Part I: Basic Information
1. Total Revenues
a. Revenues (dollars) ------------
Value of revenues excludes liquidation of investments and issuance
of debt. Value includes all general fund operating and non-operating
revenues, as well as all revenues from all other governmental funds
including enterprise, debt service, capital projects, and special
revenues, but excluding revenues to funds held in a trust or agency
capacity.
b. Subtract interfund transfers (dollars)------------
c. Total Revenues (dollars)------------
2. Total Expenditures
a. Expenditures (dollars) ------------
Value consists of the sum of general fund operating and non-
operating expenditures including interest payments on debt, payments for
retirement of debt principal, and total expenditures from all other
governmental funds including enterprise, debt service, capital projects,
and special revenues.
b. Subtract interfund transfers (dollars)------------
c. Total Expenditures (dollars)------------
3. Local Revenues
a. Total Revenues (from 1c) (dollars) ------------
b. Subtract total intergovernmental transfers (dollars)------------
c. Local Revenues (dollars)------------
4. Debt Service
a. Interest and fiscal charges (dollars)------------
b. Add debt retirement (dollars)------------
c. Total Debt Service (dollars)------------
5. Total Funds (Dollars)------------
(Sum of amounts held as cash and investment securities from all funds,
excluding amounts held for employee retirement funds, agency
funds, and trust funds)
6. Population (Persons)------------
Part II: Application of Test
7. Total Revenues to Population
a. Total Revenues (from 1c)------------
b. Population (from 6)------------
c. Divide 7a by 7b ------------
d. Subtract 417------------
e. Divide by 5,212------------
f. Multiply by 4.095------------
8. Total Expenses to Population
a. Total Expenses (from 2c)------------
b. Population (from 6)------------
c. Divide 8a by 8b ------------
d. Subtract 524 ------------
e. Divide by 5,401------------
f. Multiply by 4.095------------
9. Local Revenues to Total Revenues
a. Local Revenues (from 3c)------------
b. Total Revenues (from 1c)------------
c. Divide 9a by 9b ------------
d. Subtract .695------------
e. Divide by .205------------
f. Multiply by 2.840 ------------
10. Debt Service to Population
a. Debt Service (from 4d) ------------
b. Population (from 6)------------
c. Divide 10a by 10b ------------
d. Subtract 51 ------------
e. Divide by 1,038------------
f. Multiply by -1.866------------
11. Debt Service to Total Revenues
a. Debt Service (from 4d)------------
b. Total Revenues (from 1c)------------
c. Divide 11a by 11b ------------
d. Subtract .068 ------------
e. Divide by .259 ------------
f. Multiply by -3.533 ------------
[[Page 507]]
12. Total Revenues to Total Expenses
a. Total Revenues (from 1c)------------
b. Total Expenses (from 2c)------------
c. Divide 12a by 12b------------
d. Subtract .910 ------------
e. Divide by .899 ------------
f. Multiply by 3.458 ------------
13. Funds Balance to Total Revenues
a. Total Funds (from 5) ------------
b. Total Revenues (from 1c)------------
c. Divide 13a by 13b ------------
d. Subtract .891 ------------
e. Divide by 9.156------------
f. Multiply by 3.270 ------------
14. Funds Balance to Total Expenses
a. Total Funds (from 5)------------
b. Total Expenses (from 2c)------------
c. Divide 14a by 14b------------
d. Subtract .866 ------------
e. Divide by 6.409 ------------
f. Multiply by 3.270 ------------
15. Total Funds to Population ------------
a. Total Funds (from 5) ------------
b. Population (from 6)------------
c. Divide 15a by 15b ------------
d. Subtract 270 ------------
e. Divide by 4,548 ------------
f. Multiply by 1.866 ------------
16. Add 7f + 8f + 9f + 10f + 11f + 12f + 13f + 14f + 15f + 4.937--------
----
I hereby certify that the financial index shown on line 16 of the
worksheet is greater than zero and that the wording of this letter is
identical to the wording specified in 40 CFR part 280.105(c) as such
regulations were constituted on the date shown immediately below.
[Date]
[Signature]
[Name]
[Title]
(d) If a local government owner or operator using the test to
provide financial assurance finds that it no longer meets the
requirements of the financial test based on the year-end financial
statements, the owner or operator must obtain alternative coverage
within 150 days of the end of the year for which financial statements
have been prepared.
(e) The Director of the implementing agency may require reports of
financial condition at any time from the local government owner or
operator. If the Director finds, on the basis of such reports or other
information, that the local government owner or operator no longer meets
the financial test requirements of Sec. 280.105 (b) and (c), the owner
or operator must obtain alternate coverage within 30 days after
notification of such a finding.
(f) If the local government owner or operator fails to obtain
alternate assurance within 150 days of finding that it no longer meets
the requirements of the financial test based on the year-end financial
statements or within 30 days of notification by the Director of the
implementing agency that it no longer meets the requirements of the
financial test, the owner or operator must notify the Director of such
failure within 10 days.
[58 FR 9054, Feb. 18, 1993]
Sec. 280.106 Local government guarantee.
(a) A local government owner or operator may satisfy the
requirements of Sec. 280.93 by obtaining a guarantee that conforms to
the requirements of this section. The guarantor must be either the state
in which the local government owner or operator is located or a local
government having a ``substantial governmental relationship'' with the
owner and operator and issuing the guarantee as an act incident to that
relationship. A local government acting as the guarantor must:
(1) demonstrate that it meets the bond rating test requirement of
Sec. 280.104 and deliver a copy of the chief financial officer's letter
as contained in Sec. 280.104(c) to the local government owner or
operator; or
(2) demonstrate that it meets the worksheet test requirements of
Sec. 280.105 and deliver a copy of the chief financial officer's letter
as contained in Sec. 280.105(c) to the local government owner or
operator; or
(3) demonstrate that it meets the local government fund requirements
of Sec. 280.107(a), Sec. 280.107(b), or Sec. 280.107(c) and deliver a
copy of the chief financial officer's letter as contained in
Sec. 280.107 to the local government owner or operator.
(b) If the local government guarantor is unable to demonstrate
financial assurance under any of Secs. 280.104, 280.105, 280.107(a),
280.107(b), or 280.107(c), at the end of the financial reporting year,
the guarantor shall send by certified mail, before cancellation or non-
renewal of
[[Page 508]]
the guarantee, notice to the owner or operator. The guarantee will
terminate no less than 120 days after the date the owner or operator
receives the notification, as evidenced by the return receipt. The owner
or operator must obtain alternative coverage as specified in
Sec. 280.114(c).
(c) The guarantee agreement must be worded as specified in paragraph
(d) or (e) of this section, depending on which of the following
alternative guarantee arrangements is selected:
(1) If, in the default or incapacity of the owner or operator, the
guarantor guarantees to fund a standby trust as directed by the Director
of the implementing agency, the guarantee shall be worded as specified
in paragraph (d) of this section.
(2) If, in the default or incapacity of the owner or operator, the
guarantor guarantees to make payments as directed by the Director of the
implementing agency for taking corrective action or compensating third
parties for bodily injury and property damage, the guarantee shall be
worded as specified in paragraph (e) of this section.
(d) If the guarantor is a state, the local government guarantee with
standby trust must be worded exactly as follows, except that
instructions in brackets are to be replaced with relevant information
and the brackets deleted:
Local Government Guarantee With Standby Trust Made by a State
Guarantee made this [date] by [name of state], herein referred to as
guarantor, to [the state implementing agency] and to any and all third
parties, and obliges, on behalf of [local government owner or operator].
Recitals
(1) Guarantor is a state.
(2) [Local government 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 part
280 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) Guarantor guarantees to [implementing agency] and to any and all
third parties that:
In the event that [local government owner or operator] fails to
provide alternative 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 part 280.112, in an amount not
to exceed the coverage limits specified above.
In the event that the [Director] determines that [local government
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 fund in
accordance with the provisions of 40 CFR part 280.112, 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 part 280.112 to satisfy such
judgment(s), award(s), or settlement agreement(s) up to the limits of
coverage specified above.
(4) 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.
(5) 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.
[[Page 509]]
(6) Guarantor agrees to remain bound under this guarantee for so
long as [local government 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.
(7) The guarantor's obligation does not apply to any of the
following:
(a) Any obligation of [local government 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: local government owner
or operator] arising from, and in the course of, employment by [insert:
local government 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, loaded to, in the
care, custody, or control of, or occupied by [insert: local government
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 part 280.93.
(8) Guarantor expressly waives notice of acceptance of this
guarantee by [the implementing agency], by any or all third parties, or
by [local government owner or operator],
I hereby certify that the wording of this guarantee is identical to
the wording specified in 40 CFR part 280.106(d) 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:
If the guarantor is a local government, the local government
guarantee with standby trust must be worded exactly as follows, except
that instructions in brackets are to be replaced with relevant
information and the brackets deleted:
Local Government Guarantee With Standby Trust Made by a Local Government
Guarantee made this [date] by [name of guaranteeing entity], a local
government organized under the laws of [name of state], herein referred
to as guarantor, to [the state implementing agency] and to any and all
third parties, and obliges, on behalf of [local government owner or
operator].
Recitals
(1) Guarantor meets or exceeds [select one: the local government
bond rating test requirements of 40 CFR part 280.104, the local
government financial test requirements of 40 CFR part 280.105, or the
local government fund under 40 CFR part 280.107(a), 280.107(b), or
280.107(c)].
(2) [Local government 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 part
280 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) Incident to our substantial governmental relationship with
[local government owner or operator], guarantor guarantees to
[implementing agency] and to any and all third parties that:
In the event that [local government owner or operator] fails to
provide alternative 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 part 280.112, in an amount not
to exceed the coverage limits specified above.
In the event that the [Director] determines that [local government
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 fund in
accordance with the provisions of 40 CFR part
[[Page 510]]
280.112, 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 part 280.112 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 or exceed
the requirements of the financial responsibility mechanism specified in
paragraph (1), guarantor shall send within 120 days of such failure, by
certified mail, notice to [local government 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 [local government 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 [local government 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: local government owner
or operator] arising from, and in the course of, employment by [insert:
local government 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: local government
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 part 280.93.
(9) Guarantor expressly waives notice of acceptance of this
guarantee by [the implementing agency], by any or all third parties, or
by [local government owner or operator].
I hereby certify that the wording of this guarantee is identical to
the wording specified in 40 CFR part 280.106(d) 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:
________________________________________________________________________
(e) If the guarantor is a state, the local government guarantee
without standby trust must be worded exactly as follows, except that
instructions in brackets are to be replaced with relevant information
and the brackets deleted:
Local Government Guarantee Without Standby Trust Made by a State
Guarantee made this [date] by [name of state], herein referred to as
guarantor, to [the state implementing agency] and to any and all third
parties, and obliges, on behalf of [local government owner or operator].
Recitals
(1) Guarantor is a state.
(2) [Local government 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 part
280 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
[[Page 511]]
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) Guarantor guarantees to [implementing agency] and to any and all
third parties and obliges that:
In the event that [local government owner or operator] fails to
provide alternative 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
written instructions from the [Director] shall make funds available to
pay for corrective actions and compensate third parties for bodily
injury and property damage in an amount not to exceed the coverage
limits specified above.
In the event that the [Director] determines that [local government
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 make funds available to pay for
corrective actions 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 make funds available to
compensate third parties for bodily injury and property damage in an
amount not to exceed the coverage limits specified above.
(4) 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.
(5) 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.
(6) Guarantor agrees to remain bound under this guarantee for so
long as [local government 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. If notified of a probable release, the guarantor
agrees to remain bound to the terms of this guarantee for all charges
arising from the release, up to the coverage limits specified above,
notwithstanding the cancellation of the guarantee with respect to future
releases.
(7) The guarantor's obligation does not apply to any of the
following:
(a) Any obligation of [local government 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 local government owner
or operator] arising from, and in the course of, employment by [insert:
local government 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, loaded to, in the
care, custody, or control of, or occupied by [insert: local government
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 part 280.93.
(8) Guarantor expressly waives notice of acceptance of this
guarantee by [the implementing agency], by any or all third parties, or
by [local government owner or operator].
I hereby certify that the wording of this guarantee is identical to
the wording specified in 40 CFR part 280.106(e) 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:
If the guarantor is a local government, the local government
guarantee without standby trust must be worded exactly as follows,
except that instructions in brackets are to be replaced with relevant
information and the brackets deleted:
Local Government Guarantee Without Standby Trust Made by a Local
Government
Guarantee made this [date] by [name of guaranteeing entity], a local
government organized under the laws of [name of state], herein referred
to as guarantor, to [the state implementing agency] and to any and all
[[Page 512]]
third parties, and obliges, on behalf of [local government owner or
operator].
Recitals
(1) Guarantor meets or exceeds [select one: the local government
bond rating test requirements of 40 CFR part 280.104, the local
government financial test requirements of 40 part CFR 280.105, the local
government fund under 40 CFR part 280.107(a), 280.107(b), or 280.107(c).
(2) [Local government 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 part
280 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) Incident to our substantial governmental relationship with
[local government owner or operator], guarantor guarantees to
[implementing agency] and to any and all third parties and obliges that:
In the event that [local government owner or operator] fails to
provide alternative 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
written instructions from the [Director] shall make funds available to
pay for corrective actions and compensate third parties for bodily
injury and property damage in an amount not to exceed the coverage
limits specified above.
In the event that the [Director] determines that [local government
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 make funds available to pay for
corrective actions 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 make funds available to
compensate third parties for bodily injury and property damage in an
amount not to exceed the coverage limits specified above.
(4) Guarantor agrees that if at the end of any fiscal year before
cancellation of this guarantee, the guarantor fails to meet or exceed
the requirements of the financial responsibility mechanism specified in
paragraph (1), guarantor shall send within 120 days of such failure, by
certified mail, notice to [local government 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 [local government 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. If notified of a probable release, the guarantor
agrees to remain bound to the terms of this guarantee for all charges
arising from the release, up to the coverage limits specified above,
notwithstanding the cancellation of the guarantee with respect to future
releases.
(8) The guarantor's obligation does not apply to any of the
following:
(a) Any obligation of [local government 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: local government owner
or operator] arising from, and in the course of, employment by [insert:
local government owner or operator];
(c) Bodily injury or property damage arising from the ownership,
maintenance, use, or
[[Page 513]]
entrustment to others of any aircraft, motor vehicle, or watercraft;
(d) Property damage to any property owned, rented, loaded to, in the
care, custody, or control of, or occupied by [insert: local government
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 part 280.93.
(9) Guarantor expressly waives notice of acceptance of this
guarantee by [the implementing agency], by any or all third parties, or
by [local government owner or operator],
I hereby certify that the wording of this guarantee is identical to
the wording specified in 40 CFR part 280.106(e) 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:
[58 FR 9056, Feb. 18, 1993]
Sec. 280.107 Local government fund.
A local government owner or operator may satisfy the requirements of
Sec. 280.93 by establishing a dedicated fund account that conforms to
the requirements of this section. Except as specified in paragraph (b),
a dedicated fund may not be commingled with other funds or otherwise
used in normal operations. A dedicated fund will be considered eligible
if it meets one of the following requirements:
(a) The fund is dedicated by state constitutional provision, or
local government statute, charter, ordinance, or order to pay for taking
corrective action and for compensating third parties for bodily injury
and property damage caused by accidental releases arising from the
operation of petroleum underground storage tanks and is funded for the
full amount of coverage required under Sec. 280.93, or funded for part
of the required amount of coverage and used in combination with other
mechanism(s) that provide the remaining coverage; or
(b) The fund is dedicated by state constitutional provision, or
local government statute, charter, ordinance, or order as a contingency
fund for general emergencies, including taking corrective action and
compensating third parties for bodily injury and property damage caused
by accidental releases arising from the operation of petroleum
underground storage tanks, and is funded for five times the full amount
of coverage required under Sec. 280.93, or funded for part of the
required amount of coverage and used in combination with other
mechanism(s) that provide the remaining coverage. If the fund is funded
for less than five times the amount of coverage required under
Sec. 280.93, the amount of financial responsibility demonstrated by the
fund may not exceed one-fifth the amount in the fund; or
(c) The fund is dedicated by state constitutional provision, or
local government statute, charter, ordinance or order to pay for taking
corrective action and for compensating third parties for bodily injury
and property damage caused by accidental releases arising from the
operation of petroleum underground storage tanks. A payment is made to
the fund once every year for seven years until the fund is fully-funded.
This seven year period is hereafter referred to as the ``pay-in-
period.'' The amount of each payment must be determined by this formula:
TF-CF
-------------
Y
------------------------------------------------------------------------
Where TF is the total required financial assurance for the owner or
operator, CF is the current amount in the fund, and Y is the number of
years remaining in the pay-in-period, and;
(1) The local government owner or operator has available bonding
authority, approved through voter referendum (if such approval is
necessary prior to the issuance of bonds), for an amount equal to the
difference between the required amount of coverage and the amount held
in the dedicated fund. This bonding authority shall be available for
taking corrective action and for compensating third parties for bodily
injury and property damage caused by accidental releases arising from
the operation of petroleum underground storage tanks, or
[[Page 514]]
(2) The local government owner or operator has a letter signed by
the appropriate state attorney general stating that the use of the
bonding authority will not increase the local government's debt beyond
the legal debt ceilings established by the relevant state laws. The
letter must also state that prior voter approval is not necessary before
use of the bonding authority.
(d) To demonstrate that it meets the requirements of the local
government fund, the chief financial officer of the local government
owner or operator and/or guarantor must sign a letter worded exactly as
follows, except that the instructions in brackets are to be replaced by
the relevant information and the brackets deleted:
Letter from Chief Financial Officer
I am the chief financial officer of [insert: name and address of
local government owner or operator, or guarantor]. This letter is in
support of the use of the local government fund mechanism to demonstrate
financial responsibility for [insert: ``taking corrective action'' and/
or ``compensating third parties for bodily injury and property damage'']
caused by [insert: ``sudden accidental releases'' and/or ``nonsudden
accidental releases''] in the amount of at least [insert: dollar amount]
per occurrence and [insert: dollar amount] annual aggregate arising from
operating (an) underground storage tank(s).
Underground storage tanks at the following facilities are assured by
this local government fund mechanism: [List for each facility: the name
and address of the facility where tanks are assured by the local
government fund].
[Insert: ``The local government fund is funded for the full amount
of coverage required under Sec. 280.93, or funded for part of the
required amount of coverage and used in combination with other
mechanism(s) that provide the remaining coverage.'' or ``The local
government fund is funded for ten times the full amount of coverage
required under Sec. 280.93, or funded for part of the required amount of
coverage and used in combination with other mechanisms(s) that provide
the remaining coverage,'' or ``A payment is made to the fund once every
year for seven years until the fund is fully-funded and [name of local
government owner or operator] has available bonding authority, approved
through voter referendum, of an amount equal to the difference between
the required amount of coverage and the amount held in the dedicated
fund'' or ``A payment is made to the fund once every year for seven
years until the fund is fully-funded and I have attached a letter signed
by the State Attorney General stating that (1) the use of the bonding
authority will not increase the local government's debt beyond the legal
debt ceilings established by the relevant state laws and (2) that prior
voter approval is not necessary before use of the bonding authority''].
The details of the local government fund are as follows:
Amount in Fund (market value of fund at close of last fiscal year):_____
[If fund balance is incrementally funded as specified in
Sec. 280.107(c), insert:
Amount added to fund in the most recently completed fiscal year:________
Number of years remaining in the pay-in period: --------]
A copy of the state constitutional provision, or local government
statute, charter, ordinance or order dedicating the fund is attached.
I hereby certify that the wording of this letter is identical to the
wording specified in 40 CFR 280.107(d) as such regulations were
constituted on the date shown immediately below.
[Date]
[Signature]
[Name]
[Title]
[58 FR 9059, Feb. 18, 1993]
Sec. 280.108 Substitution of financial assurance mechanisms by owner or operator.
(a) An owner or operator may substitute any alternate financial
assurance mechanisms as specified in this subpart, provided that at all
times he maintains an effective financial assurance mechanism or
combination of mechanisms that satisfies the requirements of
Sec. 280.93.
(b) After obtaining alternate financial assurance as specified in
this subpart, an owner or operator may cancel a financial assurance
mechanism by providing notice to the provider of financial assurance.
[53 FR 43370, Oct. 26, 1988. Redesignated at 58 FR 9051, Feb. 18, 1993]
Sec. 280.109 Cancellation or nonrenewal by a provider of financial assurance.
(a) Except as otherwise provided, a provider of financial assurance
may cancel or fail to renew an assurance mechanism by sending a notice
of termination by certified mail to the owner or operator.
[[Page 515]]
(1) Termination of a local government guarantee, a guarantee, a
surety bond, or a letter of credit may not occur until 120 days after
the date on which the owner or operator receives the notice of
termination, as evidenced by the return receipt.
(2) Termination of insurance or risk retention coverage, except for
non-payment or misrepresentation by the insured, or state-funded
assurance may not occur until 60 days after the date on which the owner
or operator receives the notice of termination, as evidenced by the
return receipt. Termination for non-payment of premium or
misrepresentation by the insured may not occur until a minimum of 10
days after the date on which the owner or operator receives the notice
of termination, as evidenced by the return receipt.
(b) If a provider of financial responsibility cancels or fails to
renew for reasons other than incapacity of the provider as specified in
Sec. 280.114, the owner or operator must obtain alternate coverage as
specified in this section within 60 days after receipt of the notice of
termination. If the owner or operator fails to obtain alternate coverage
within 60 days after receipt of the notice of termination, the owner or
operator must notify the Director of the implementing agency of such
failure and submit:
(1) The name and address of the provider of financial assurance;
(2) The effective date of termination; and
(3) The evidence of the financial assistance mechanism subject to
the termination maintained in accordance with Sec. 280.107(b).
[58 FR 9051, Feb. 18, 1993]
Sec. 280.110 Reporting by owner or operator.
(a) An owner or operator must submit the appropriate forms listed in
Sec. 280.111(b) documenting current evidence of financial responsibility
to the Director of the implementing agency:
(1) Within 30 days after the owner or operator identifies a release
from an underground storage tank required to be reported under
Sec. 280.53 or Sec. 280.61;
(2) If the owner or operator fails to obtain alternate coverage as
required by this subpart, within 30 days after the owner or operator
receives notice of:
(i) Commencement of a voluntary or involuntary proceeding under
Title 11 (Bankruptcy), U.S. Code, naming a provider of financial
assurance as a debtor,
(ii) Suspension or revocation of the authority of a provider of
financial assurance to issue a financial assurance mechanism,
(iii) Failure of a guarantor to meet the requirements of the
financial test,
(iv) Other incapacity of a provider of financial assurance; or
(3) As required by Sec. 280.95(g) and Sec. 280.109(b).
(b) An owner or operator must certify compliance with the financial
responsibility requirements of this part as specified in the new tank
notification form when notifying the appropriate state or local agency
of the installation of a new underground storage tank under Sec. 280.22.
(c) The Director of the Implementing Agency may require an owner or
operator to submit evidence of financial assurance as described in
Sec. 280.111(b) or other information relevant to compliance with this
subpart at any time.
[58 FR 9051, Feb. 18, 1993]
Sec. 280.111 Recordkeeping.
(a) Owners or operators must maintain evidence of all financial
assurance mechanisms used to demonstrate financial responsibility under
this subpart for an underground storage tank until released from the
requirements of this subpart under Sec. 208.113. An owner or operator
must maintain such evidence at the underground storage tank site or the
owner's or operator's place of work. Records maintained off-site must be
made available upon request of the implementing agency.
(b) An owner or operator must maintain the following types of
evidence of financial responsibility:
(1) An owner or operator using an assurance mechanism specified in
Secs. 280.95 through 280.100 or Sec. 280.102 or Secs. 280.104 through
280.107 must maintain a copy of the instrument worded as specified.
(2) An owner or operator using a financial test or guarantee, or a
local government financial test or a local
[[Page 516]]
government guarantee supported by the local government financial test
must maintain a copy of the chief financial officer's letter based on
year-end financial statements for the most recent completed financial
reporting year. Such evidence must be on file no later than 120 days
after the close of the financial reporting year.
(3) An owner or operator using a guarantee, surety bond, or letter
of credit must maintain a copy of the signed standby trust fund
agreement and copies of any amendments to the agreement.
(4) A local government owner or operator using a local government
guarantee under Sec. 280.106(d) must maintain a copy of the signed
standby trust fund agreement and copies of any amendments to the
agreement.
(5) A local government owner or operator using the local government
bond rating test under Sec. 280.104 must maintain a copy of its bond
rating published within the last twelve months by Moody's or Standard &
Poor's.
(6) A local government owner or operator using the local government
guarantee under Sec. 280.106, where the guarantor's demonstration of
financial responsibility relies on the bond rating test under
Sec. 280.104 must maintain a copy of the guarantor's bond rating
published within the last twelve months by Moody's or Standard & Poor's.
(7) An owner or operator using an insurance policy or risk retention
group coverage must maintain a copy of the signed insurance policy or
risk retention group coverage policy, with the endorsement or
certificate of insurance and any amendments to the agreements.
(8) An owner or operator covered by a state fund or other state
assurance must maintain on file a copy of any evidence of coverage
supplied by or required by the state under Sec. 280.101(d).
(9) An owner or operator using a local government fund under
Sec. 280.107 must maintain the following documents:
(i) A copy of the state constitutional provision or local government
statute, charter, ordinance, or order dedicating the fund, and
(ii) Year-end financial statements for the most recent completed
financial reporting year showing the amount in the fund. If the fund is
established under Sec. 280.107(a)(3) using incremental funding backed by
bonding authority, the financial statements must show the previous
year's balance, the amount of funding during the year, and the closing
balance in the fund.
(iii) If the fund is established under Sec. 280.107(a)(3) using
incremental funding backed by bonding authority, the owner or operator
must also maintain documentation of the required bonding authority,
including either the results of a voter referendum (under
Sec. 280.107(a)(3)(i)), or attestation by the State Attorney General as
specified under Sec. 280.107(a)(3)(ii).
(10) A local government owner or operator using the local government
guarantee supported by the local government fund must maintain a copy of
the guarantor's year-end financial statements for the most recent
completed financial reporting year showing the amount of the fund.
(11)(i) An owner or operator using an assurance mechanism specified
in Secs. 280.95 through 280.107 must maintain an updated copy of a
certification of financial responsibility worded as follows, except that
instructions in brackets are to be replaced with the relevant
information and the brackets deleted:
Certification 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]
[[Page 517]]
[Signature of witness or notary]
[Name of witness or notary]
[Date]
(ii) The owner or operator must update this certification whenever
the financial assurance mechanism(s) used to demonstrate financial
responsibility change(s).
[58 FR 9051, Feb. 18, 1993]
Sec. 280.112 Drawing on financial assurance mechanisms.
(a) Except as specified in paragraph (d) of this section, 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:
(1)(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)(1) or (b)(2) (i) or (ii) of this
section are satisfied.
(b) The Director of the implementing agency may draw on a standby
trust fund when:
(1) 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:
Certification 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
[Signatures]
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.
(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) of this section 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) of this
section, and valid court orders under paragraph (b)(2)(ii) of this
section.
(d) A governmental entity acting as guarantor under Sec. 280.106(e),
the local government guarantee without standby trust, shall make
payments as directed
[[Page 518]]
by the Director under the circumstances described in Sec. 280.112 (a),
(b), and (c).
[58 FR 9052, Feb. 18, 1993]
Sec. 280.113 Release from the requirements.
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 40 CFR part 280, subpart G.
[53 FR 43370, Oct. 26, 1988. Redesignated at 58 FR 9051, Feb. 18, 1993]
Sec. 280.114 Bankruptcy or other incapacity of owner or operator or provider of financial assurance.
(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 Sec. 280.111(b) documenting
current financial responsibility.
(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 Sec. 280.96.
(c) Within 10 days after commencement of a voluntary or involuntary
proceeding under Title 11 (Bankruptcy), U.S. Code, naming a local
government owner or operator as debtor, the local government owner or
operator must notify the Director of the implementing agency by
certified mail of such commencement and submit the appropriate forms
listed in Sec. 280.111(b) documenting current financial responsibility.
(d) Within 10 days after commencement of a voluntary or involuntary
proceeding under Title 11 (Bankruptcy), U.S. Code, naming a guarantor
providing a local government financial assurance as debtor, such
guarantor must notify the local government owner or operator by
certified mail of such commencement as required under the terms of the
guarantee specified in Sec. 280.106.
(e) 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.
(f) 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.
[58 FR 9053, Feb. 18, 1993]
Sec. 280.115 Replenishment of guarantees, letters of credit, or surety bonds.
(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, local government guarantee with standby trust, 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.
[[Page 519]]
(b) For purposes of this section, the full amount of coverage
required is the amount of coverage to be provided by Sec. 280.93 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.
[58 FR 9053, Feb. 18, 1993]
Sec. 280.116 Suspension of enforcement. [Reserved]
Subpart I--Lender Liability
Source: 60 FR 46711, Sept. 7, 1995, unless otherwise noted.
Sec. 280.200 Definitions.
(a) UST technical standards, as used in this subpart, refers to the
UST preventative and operating requirements under 40 CFR part 280,
subparts B, C, D, G, and Sec. 280.50 of subpart E.
(b) Petroleum production, refining, and marketing.
(1) Petroleum production means the production of crude oil or other
forms of petroleum (as defined in Sec. 280.12) as well as the production
of petroleum products from purchased materials.
(2) Petroleum refining means the cracking, distillation, separation,
conversion, upgrading, and finishing of refined petroleum or petroleum
products.
(3) Petroleum marketing means the distribution, transfer, or sale of
petroleum or petroleum products for wholesale or retail purposes.
(c) Indicia of ownership means evidence of a secured interest,
evidence of an interest in a security interest, or evidence of an
interest in real or personal property securing a loan or other
obligation, including any legal or equitable title or deed to real or
personal property acquired through or incident to foreclosure. Evidence
of such interests include, but are not limited to, mortgages, deeds of
trust, liens, surety bonds and guarantees of obligations, title held
pursuant to a lease financing transaction in which the lessor does not
select initially the leased property (hereinafter ``lease financing
transaction''), and legal or equitable title obtained pursuant to
foreclosure. Evidence of such interests also includes assignments,
pledges, or other rights to or other forms of encumbrance against
property that are held primarily to protect a security interest. A
person is not required to hold title or a security interest in order to
maintain indicia of ownership.
(d) A holder is a person who, upon the effective date of this
regulation or in the future, maintains indicia of ownership (as defined
in Sec. 280.200(c)) primarily to protect a security interest (as defined
in Sec. 280.200(f)(1)) in a petroleum UST or UST system or facility or
property on which a petroleum UST or UST system is located. A holder
includes the initial holder (such as a loan originator); any subsequent
holder (such as a successor-in-interest or subsequent purchaser of the
security interest on the secondary market); a guarantor of an
obligation, surety, or any other person who holds ownership indicia
primarily to protect a security interest; or a receiver or other person
who acts on behalf or for the benefit of a holder.
(e) A borrower, debtor, or obligor is a person whose UST or UST
system or facility or property on which the UST or UST system is located
is encumbered by a security interest. These terms may be used
interchangeably.
(f) Primarily to protect a security interest means that the holder's
indicia of ownership are held primarily for the purpose of securing
payment or performance of an obligation.
(1) Security interest means an interest in a petroleum UST or UST
system or in the facility or property on which a petroleum UST or UST
system is located, created or established for the purpose of securing a
loan or other obligation. Security interests include but are not limited
to mortgages, deeds of trusts, liens, and title pursuant to lease
financing transactions. Security interests may also arise from
transactions such as sale and leasebacks, conditional sales, installment
sales, trust receipt transactions, certain assignments, factoring
agreements, accounts receivable financing arrangements, and
consignments, if the transaction creates or establishes an interest in
an UST or UST system or in the facility or property on which the UST
[[Page 520]]
or UST system is located, for the purpose of securing a loan or other
obligation.
(2) Primarily to protect a security interest, as used in this
subpart, does not include indicia of ownership held primarily for
investment purposes, nor ownership indicia held primarily for purposes
other than as protection for a security interest. A holder may have
other, secondary reasons for maintaining indicia of ownership, but the
primary reason why any ownership indicia are held must be as protection
for a security interest.
(g) Operation means, for purposes of this subpart, the use, storage,
filling, or dispensing of petroleum contained in an UST or UST system.
Sec. 280.210 Participation in management.
The term ``participating in the management of an UST or UST system''
means that, subsequent to the effective date of this subpart, December
6, 1995, the holder is engaging in decisionmaking control of, or
activities related to, operation of the UST or UST system, as defined
herein.
(a) Actions that are participation in management.
(1) Participation in the management of an UST or UST system means,
for purposes of this subpart, actual participation by the holder in the
management or control of decisionmaking related to the operation of an
UST or UST system. Participation in management does not include the mere
capacity or ability to influence or the unexercised right to control UST
or UST system operations. A holder is participating in the management of
the UST or UST system only if the holder either:
(i) Exercises decisionmaking control over the operational (as
opposed to financial or administrative) aspects of the UST or UST
system, such that the holder has undertaken responsibility for all or
substantially all of the management of the UST or UST system; or
(ii) Exercises control at a level comparable to that of a manager of
the borrower's enterprise, such that the holder has assumed or
manifested responsibility for the overall management of the enterprise
encompassing the day-to-day decisionmaking of the enterprise with
respect to all, or substantially all, of the operational (as opposed to
financial or administrative) aspects of the enterprise.
(2) Operational aspects of the enterprise relate to the use,
storage, filling, or dispensing of petroleum contained in an UST or UST
system, and include functions such as that of a facility or plant
manager, operations manager, chief operating officer, or chief executive
officer. Financial or administrative aspects include functions such as
that of a credit manager, accounts payable/receivable manager, personnel
manager, controller, chief financial officer, or similar functions.
Operational aspects of the enterprise do not include the financial or
administrative aspects of the enterprise, or actions associated with
environmental compliance, or actions undertaken voluntarily to protect
the environment in accordance with applicable requirements in 40 CFR
part 280 or applicable state requirements in those states that have been
delegated authority by EPA to administer the UST program pursuant to 42
USC 6991c and 40 CFR part 281.
(b) Actions that are not participation in management pre-
foreclosure.
(1) Actions at the inception of the loan or other transaction. No
act or omission prior to the time that indicia of ownership are held
primarily to protect a security interest constitutes evidence of
participation in management within the meaning of this subpart. A
prospective holder who undertakes or requires an environmental
investigation (which could include a site assessment, inspection, and/or
audit) of the UST or UST system or facility or property on which the UST
or UST system is located (in which indicia of ownership are to be held),
or requires a prospective borrower to clean up contamination from the
UST or UST system or to comply or come into compliance (whether prior or
subsequent to the time that indicia of ownership are held primarily to
protect a security interest) with any applicable law or regulation, is
not by such action considered to be participating in the management of
the UST or UST system or facility or property on which the UST or UST
system is located.
[[Page 521]]
(2) Loan policing and work out. Actions that are consistent with
holding ownership indicia primarily to protect a security interest do
not constitute participation in management for purposes of this subpart.
The authority for the holder to take such actions may, but need not, be
contained in contractual or other documents specifying requirements for
financial, environmental, and other warranties, covenants, conditions,
representations or promises from the borrower. Loan policing and work
out activities cover and include all such activities up to foreclosure,
exclusive of any activities that constitute participation in management.
(i) Policing the security interest or loan.
(A) A holder who engages in policing activities prior to foreclosure
will remain within the exemption provided that the holder does not
together with other actions participate in the management of the UST or
UST system as provided in Sec. 280.210(a). Such policing actions
include, but are not limited to, requiring the borrower to clean up
contamination from the UST or UST system during the term of the security
interest; requiring the borrower to comply or come into compliance with
applicable federal, state, and local environmental and other laws,
rules, and regulations during the term of the security interest;
securing or exercising authority to monitor or inspect the UST or UST
system or facility or property on which the UST or UST system is located
(including on-site inspections) in which indicia of ownership are
maintained, or the borrower's business or financial condition during the
term of the security interest; or taking other actions to adequately
police the loan or security interest (such as requiring a borrower to
comply with any warranties, covenants, conditions, representations, or
promises from the borrower).
(B) Policing activities also include undertaking by the holder of
UST environmental compliance actions and voluntary environmental actions
taken in compliance with 40 CFR part 280, provided that the holder does
not otherwise participate in the management or daily operation of the
UST or UST system as provided in Sec. 280.210(a) and Sec. 280.230. Such
allowable actions include, but are not limited to, release detection and
release reporting, release response and corrective action, temporary or
permanent closure of an UST or UST system, UST upgrading or replacement,
and maintenance of corrosion protection. A holder who undertakes these
actions must do so in compliance with the applicable requirements in 40
CFR part 280 or applicable state requirements in those states that have
been delegated authority by EPA to administer the UST program pursuant
to 42 U.S.C. 6991c and 40 CFR part 281. A holder may directly oversee
these environmental compliance actions and voluntary environmental
actions, and directly hire contractors to perform the work, and is not
by such action considered to be participating in the management of the
UST or UST system.
(ii) Loan work out. A holder who engages in work out activities
prior to foreclosure will remain within the exemption provided that the
holder does not together with other actions participate in the
management of the UST or UST system as provided in Sec. 280.210(a). For
purposes of this rule, ``work out'' refers to those actions by which a
holder, at any time prior to foreclosure, seeks to prevent, cure, or
mitigate a default by the borrower or obligor; or to preserve, or
prevent the diminution of, the value of the security. Work out
activities include, but are not limited to, restructuring or
renegotiating the terms of the security interest; requiring payment of
additional rent or interest; exercising forbearance; requiring or
exercising rights pursuant to an assignment of accounts or other amounts
owing to an obligor; requiring or exercising rights pursuant to an
escrow agreement pertaining to amounts owing to an obligor; providing
specific or general financial or other advice, suggestions, counseling,
or guidance; and exercising any right or remedy the holder is entitled
to by law or under any warranties, covenants, conditions,
representations, or promises from the borrower.
(c) Foreclosure on an UST or UST system or facility or property on
which an UST or UST system is located, and
[[Page 522]]
participation in management activities post-foreclosure.
(1) Foreclosure. (i) Indicia of ownership that are held primarily to
protect a security interest include legal or equitable title or deed to
real or personal property acquired through or incident to foreclosure.
For purposes of this subpart, the term ``foreclosure'' means that legal,
marketable or equitable title or deed has been issued, approved, and
recorded, and that the holder has obtained access to the UST, UST
system, UST facility, and property on which the UST or UST system is
located, provided that the holder acted diligently to acquire marketable
title or deed and to gain access to the UST, UST system, UST facility,
and property on which the UST or UST system is located. The indicia of
ownership held after foreclosure continue to be maintained primarily as
protection for a security interest provided that the holder undertakes
to sell, re-lease an UST or UST system or facility or property on which
the UST or UST system is located, held pursuant to a lease financing
transaction (whether by a new lease financing transaction or
substitution of the lessee), or otherwise divest itself of the UST or
UST system or facility or property on which the UST or UST system is
located, in a reasonably expeditious manner, using whatever commercially
reasonable means are relevant or appropriate with respect to the UST or
UST system or facility or property on which the UST or UST system is
located, taking all facts and circumstances into consideration, and
provided that the holder does not participate in management (as defined
in Sec. 280.210(a)) prior to or after foreclosure.
(ii) For purposes of establishing that a holder is seeking to sell,
re-lease pursuant to a lease financing transaction (whether by a new
lease financing transaction or substitution of the lessee), or divest in
a reasonably expeditious manner an UST or UST system or facility or
property on which the UST or UST system is located, the holder may use
whatever commercially reasonable means as are relevant or appropriate
with respect to the UST or UST system or facility or property on which
the UST or UST system is located, or may employ the means specified in
Sec. 280.210(c)(2). A holder that outbids, rejects, or fails to act upon
a written bona fide, firm offer of fair consideration for the UST or UST
system or facility or property on which the UST or UST system is
located, as provided in Sec. 280.210(c)(2), is not considered to hold
indicia of ownership primarily to protect a security interest.
(2) Holding foreclosed property for disposition and liquidation. A
holder, who does not participate in management prior to or after
foreclosure, may sell, re-lease, pursuant to a lease financing
transaction (whether by a new lease financing transaction or
substitution of the lessee), an UST or UST system or facility or
property on which the UST or UST system is located, liquidate, wind up
operations, and take measures, prior to sale or other disposition, to
preserve, protect, or prepare the secured UST or UST system or facility
or property on which the UST or UST system is located. A holder may also
arrange for an existing or new operator to continue or initiate
operation of the UST or UST system. The holder may conduct these
activities without voiding the security interest exemption, subject to
the requirements of this subpart.
(i) A holder establishes that the ownership indicia maintained after
foreclosure continue to be held primarily to protect a security interest
by, within 12 months following foreclosure, listing the UST or UST
system or the facility or property on which the UST or UST system is
located, with a broker, dealer, or agent who deals with the type of
property in question, or by advertising the UST or UST system or
facility or property on which the UST or UST system is located, as being
for sale or disposition on at least a monthly basis in either a real
estate publication or a trade or other publication suitable for the UST
or UST system or facility or property on which the UST or UST system is
located, or a newspaper of general circulation (defined as one with a
circulation over 10,000, or one suitable under any applicable federal,
state, or local rules of court for publication required by court order
or rules of civil procedure) covering the location of the UST or UST
system or
[[Page 523]]
facility or property on which the UST or UST system is located. For
purposes of this provision, the 12-month period begins to run from
December 6, 1995 or from the date that the marketable title or deed has
been issued, approved and recorded, and the holder has obtained access
to the UST, UST system, UST facility and property on which the UST or
UST system is located, whichever is later, provided that the holder
acted diligently to acquire marketable title or deed and to obtain
access to the UST, UST system, UST facility and property on which the
UST or UST system is located. If the holder fails to act diligently to
acquire marketable title or deed or to gain access to the UST or UST
system, the 12-month period begins to run from December 6, 1995 or from
the date on which the holder first acquires either title to or
possession of the secured UST or UST system, or facility or property on
which the UST or UST system is located, whichever is later.
(ii) A holder that outbids, rejects, or fails to act upon an offer
of fair consideration for the UST or UST system or the facility or
property on which the UST or UST system is located, establishes by such
outbidding, rejection, or failure to act, that the ownership indicia in
the secured UST or UST system or facility or property on which the UST
or UST system is located are not held primarily to protect the security
interest, unless the holder is required, in order to avoid liability
under federal or state law, to make a higher bid, to obtain a higher
offer, or to seek or obtain an offer in a different manner.
(A) Fair consideration, in the case of a holder maintaining indicia
of ownership primarily to protect a senior security interest in the UST
or UST system or facility or property on which the UST or UST system is
located, is the value of the security interest as defined in this
section. The value of the security interest includes all debt and costs
incurred by the security interest holder, and is calculated as an amount
equal to or in excess of the sum of the outstanding principal (or
comparable amount in the case of a lease that constitutes a security
interest) owed to the holder immediately preceding the acquisition of
full title (or possession in the case of a lease financing transaction)
pursuant to foreclosure, plus any unpaid interest, rent, or penalties
(whether arising before or after foreclosure). The value of the security
interest also includes all reasonable and necessary costs, fees, or
other charges incurred by the holder incident to work out, foreclosure,
retention, preserving, protecting, and preparing, prior to sale, the UST
or UST system or facility or property on which the UST or UST system is
located, re-lease, pursuant to a lease financing transaction (whether by
a new lease financing transaction or substitution of the lessee), of an
UST or UST system or facility or property on which the UST or UST system
is located, or other disposition. The value of the security interest
also includes environmental investigation costs (which could include a
site assessment, inspection, and/or audit of the UST or UST system or
facility or property on which the UST or UST system is located), and
corrective action costs incurred under Secs. 280.51 through 280.67 or
any other costs incurred as a result of reasonable efforts to comply
with any other applicable federal, state or local law or regulation;
less any amounts received by the holder in connection with any partial
disposition of the property and any amounts paid by the borrower (if not
already applied to the borrower's obligations) subsequent to the
acquisition of full title (or possession in the case of a lease
financing transaction) pursuant to foreclosure. In the case of a holder
maintaining indicia of ownership primarily to protect a junior security
interest, fair consideration is the value of all outstanding higher
priority security interests plus the value of the security interest held
by the junior holder, each calculated as set forth in this paragraph.
(B) Outbids, rejects, or fails to act upon an offer of fair
consideration means that the holder outbids, rejects, or fails to act
upon within 90 days of receipt, a written, bona fide, firm offer of fair
consideration for the UST or UST system or facility or property on which
the UST or UST system is located received at any time after six months
following foreclosure, as defined in Sec. 280.210(c). A ``written, bona
[[Page 524]]
fide, firm offer'' means a legally enforceable, commercially reasonable,
cash offer solely for the foreclosed UST or UST system or facility or
property on which the UST or UST system is located, including all
material terms of the transaction, from a ready, willing, and able
purchaser who demonstrates to the holder's satisfaction the ability to
perform. For purposes of this provision, the six-month period begins to
run from December 6, 1995 or from the date that marketable title or deed
has been issued, approved and recorded to the holder, and the holder has
obtained access to the UST, UST system, UST facility and property on
which the UST or UST system is located, whichever is later, provided
that the holder was acting diligently to acquire marketable title or
deed and to obtain access to the UST or UST system, UST facility and
property on which the UST or UST system is located. If the holder fails
to act diligently to acquire marketable title or deed or to gain access
to the UST or UST system, the six-month period begins to run from
December 6, 1995 or from the date on which the holder first acquires
either title to or possession of the secured UST or UST system, or
facility or property on which the UST or UST system is located,
whichever is later.
(3) Actions that are not participation in management post-
foreclosure. A holder is not considered to be participating in the
management of an UST or UST system or facility or property on which the
UST or UST system is located when undertaking actions under 40 CFR part
280, provided that the holder does not otherwise participate in the
management or daily operation of the UST or UST system as provided in
Sec. 280.210(a) and Sec. 280.230. Such allowable actions include, but
are not limited to, release detection and release reporting, release
response and corrective action, temporary or permanent closure of an UST
or UST system, UST upgrading or replacement, and maintenance of
corrosion protection. A holder who undertakes these actions must do so
in compliance with the applicable requirements in 40 CFR part 280 or
applicable state requirements in those states that have been delegated
authority by EPA to administer the UST program pursuant to 42 U.S.C.
6991c and 40 CFR part 281. A holder may directly oversee these
environmental compliance actions and voluntary environmental actions,
and directly hire contractors to perform the work, and is not by such
action considered to be participating in the management of the UST or
UST system.
Sec. 280.220 Ownership of an underground storage tank or underground storage tank system or facility or property on which an underground storage tank or
underground storage tank system is located.
Ownership of an UST or UST system or facility or property on which
an UST or UST system is located. A holder is not an ``owner'' of a
petroleum UST or UST system or facility or property on which a petroleum
UST or UST system is located for purposes of compliance with the UST
technical standards as defined in Sec. 280.200(a), the UST corrective
action requirements under Secs. 280.51 through 280.67, and the UST
financial responsibility requirements under Secs. 280.90 through
280.111, provided the person:
(a) Does not participate in the management of the UST or UST system
as defined in Sec. 280.210; and
(b) Does not engage in petroleum production, refining, and marketing
as defined in Sec. 280.200(b).
Sec. 280.230 Operating an underground storage tank or underground storage tank system.
(a) Operating an UST or UST system prior to foreclosure. A holder,
prior to foreclosure, as defined in Sec. 280.210(c), is not an
``operator'' of a petroleum UST or UST system for purposes of compliance
with the UST technical standards as defined in Sec. 280.200(a), the UST
corrective action requirements under Secs. 280.51 through 280.67, and
the UST financial responsibility requirements under Secs. 280.90 through
280.111, provided that, after December 6, 1995, the holder is not in
control of or does not have responsibility for the daily operation of
the UST or UST system.
(b) Operating an UST or UST system after foreclosure. The following
provisions apply to a holder who, through foreclosure, as defined in
Sec. 280.210(c),
[[Page 525]]
acquires a petroleum UST or UST system or facility or property on which
a petroleum UST or UST system is located.
(1) A holder is not an ``operator'' of a petroleum UST or UST system
for purposes of compliance with 40 CFR part 280 if there is an operator,
other than the holder, who is in control of or has responsibility for
the daily operation of the UST or UST system, and who can be held
responsible for compliance with applicable requirements of 40 CFR part
280 or applicable state requirements in those states that have been
delegated authority by EPA to administer the UST program pursuant to 42
U.S.C. 6991c and 40 CFR part 281.
(2) If another operator does not exist, as provided for under
paragraph (b)(1) of this section, a holder is not an ``operator'' of the
UST or UST system, for purposes of compliance with the UST technical
standards as defined in Sec. 280.200(a), the UST corrective action
requirements under Secs. 280.51 through 280.67, and the UST financial
responsibility requirements under Secs. 280.90 through 280.111, provided
that the holder:
(i) Empties all of its known USTs and UST systems within 60 calendar
days after foreclosure or within 60 calendar days after December 6,
1995, whichever is later, or another reasonable time period specified by
the implementing agency, so that no more than 2.5 centimeters (one inch)
of residue, or 0.3 percent by weight of the total capacity of the UST
system, remains in the system; leaves vent lines open and functioning;
and caps and secures all other lines, pumps, manways, and ancillary
equipment; and
(ii) Empties those USTs and UST systems that are discovered after
foreclosure within 60 calendar days after discovery or within 60
calendar days after December 6, 1995, whichever is later, or another
reasonable time period specified by the implementing agency, so that no
more than 2.5 centimeters (one inch) of residue, or 0.3 percent by
weight of the total capacity of the UST system, remains in the system;
leaves vent lines open and functioning; and caps and secures all other
lines, pumps, manways, and ancillary equipment.
(3) If another operator does not exist, as provided for under
paragraph (b)(1) of this section, in addition to satisfying the
conditions under paragraph (b)(2) of this section, the holder must
either:
(i) Permanently close the UST or UST system in accordance with
Secs. 280.71 through 280.74, except Sec. 280.72(b); or
(ii) Temporarily close the UST or UST system in accordance with the
following applicable provisions of Sec. 280.70:
(A) Continue operation and maintenance of corrosion protection in
accordance with Sec. 280.31;
(B) Report suspected releases to the implementing agency; and
(C) Conduct a site assessment in accordance with Sec. 280.72(a) if
the UST system is temporarily closed for more than 12 months and the UST
system does not meet either the performance standards in Sec. 280.20 for
new UST systems or the upgrading requirements in Sec. 280.21, except
that the spill and overfill equipment requirements do not have to be
met. The holder must report any suspected releases to the implementing
agency. For purposes of this provision, the 12-month period begins to
run from December 6, 1995 or from the date on which the UST system is
emptied and secured under paragraph (b)(2) of this section, whichever is
later.
(4) The UST system can remain in temporary closure until a
subsequent purchaser has acquired marketable title to the UST or UST
system or facility or property on which the UST or UST system is
located. Once a subsequent purchaser acquires marketable title to the
UST or UST system or facility or property on which the UST or UST system
is located, the purchaser must decide whether to operate or close the
UST or UST system in accordance with applicable requirements in 40 CFR
part 280 or applicable state requirements in those states that have been
delegated authority by EPA to administer the UST program pursuant to 42
U.S.C. 6991c and 40 CFR part 281.
[[Page 526]]
Appendix I to Part 280--Notification for Underground Storage
Tanks (Form)
[GRAPHIC] [TIFF OMITTED] TC06NO91.024
[[Page 527]]
[GRAPHIC] [TIFF OMITTED] TC01AU92.048
[[Page 528]]
[GRAPHIC] [TIFF OMITTED] TC01AU92.049
Appendix II to Part 280--List of Agencies Designated To Receive
Notifications
Alabama (EPA Form), Alabama Department of Environmental Management,
Ground Water Section/Water Division, 1751 Congressman W.L. Dickinson
Drive, Montgomery, Alabama 36130, 205/271-7823
Alaska (EPA Form), Department of Environmental Conservation, Box 0,
Juneau, Alaska 99811-1800, 970/465-2653
[[Page 529]]
American Samoa (EPA Form), Executive Secretary, Environmental Quality
Commission, Office of the Governor, American Samoan Government, Pago
Pago, American Samoa 96799; Attention: UST Notification
Arizona (EPA Form), Attention: UST Coordinator, Arizona Department of
Environmental Quality, Environmental Health Services, 2005 N. Central,
Phoenix, Arizona 85004
Arkansas (EPA Form), Arkansas Department of Pollution Control and
Ecology, P.O. Box 9583, Little Rock, Arkansas 72219, 501/562-7444
California (State Form), Executive Director, State Water Resources
Control Board, P.O. Box 100, Sacramento, California 95801, 916/445-1533
Co1orado (EPA Form), Section Chief, Colorado Department of Health, Waste
Management Division, Underground Tank Program, 4210 East 11th Avenue,
Denver, Colorado 80220, 303/320-8333
Connecticut (State Form), Hazardous Materials Management Unit,
Department of Environmental Protection, State Office Building, 165
Capitol Avenue, Hartford, Connecticut 06106
Delaware (State Form), Division of Air and Waste Management, Department
of Natural Resources and Environmental Control, P.O. Box 1401, 89 Kings
Highway, Dover, Delaware 19903, 302/726-5409
District of Columbia (EPA Form), Attention: UST Notification Form,
Department of Consumer and Regulatory Affairs, Pesticides and Hazardous
Waste Management Branch, Room 114, 5010 Overlook Avenue SW., Washington,
DC 20032
Florida (State Form), Florida Department of Environmental Regulation,
Solid Waste Section, Twin Towers Office Building, 2600 Blair Stone Road,
Tallahassee, Florida 32399, 904/487-4398
Georgia (EPA Form), Georgia Department of Natural Resources,
Environmental Protection Division, Underground Storage Tank Program,
3420 Norman Berry Drive, 7th Floor, Hapeville, Georgia 30354, 404/656-
7404
Guam (State Form), Administrator, Guam Environmental Protection Agency,
P.O. Box 2999, Agana, Guam 96910, Overseas Operator (Commercial call
646-8863)
Hawaii (EPA Form), Administrator, Hazardous Waste Program, 645
Halekauwila Street, Honolulu, Hawaii 96813, 808/548-2270
Idaho (EPA Form), Underground Storage Tank Coordinator, Water Quality
Bureau, Division of Environmental Quality, Idaho Department of Health
and Welfare, 450 W. State Street, Boise, Idaho 83720, 208/334-4251
Illinois (EPA Form), Underground Storage Tank Coordinator, Division of
Fire Prevention, Office of State Fire Marshal, 3150 Executive Park
Drive, Springfield, Illinois 62703-4599
Indiana (EPA Form), Underground Storage Tank Program, Office of
Environmental Response, Indiana Department of Environmental Management,
105 South Meridian Street, Indianapolis, Indiana 46225
Iowa (State Form), UST Coordinator, Iowa Department of Natural
Resources, Henry A. Wallace Building, 900 East Grand, Des Moines, Iowa
50219, 512/281-8135
Kansas (EPA Form), Kansas Department of Health and Environment, Forbes
Field, Building 740, Topeka, Kansas 66620, 913/296-1594
Kentucky (State Form), Department of Environmental Protection, Hazardous
Waste Branch, Fort Boone Plaza, Building 2, 18 Reilly Road,
Frankfort, Kentucky 40601, 501/564-6716
Louisiana (State Form), Secretary, Louisiana Department of Environmental
Quality, P.O. Box 44066, Baton Rouge, Louisiana 70804, 501/342-1265
Maine (State Form), Attention: Underground Tanks Program, Bureau of Oil
and Hazardous Material Control, Department of Environmental Protection,
State House--Station 17, Augusta, Maine 04333
Maryland (EPA Form), Science and Health Advisory Group, Office of
Environmental Programs, 201 West Preston Street, Baltimore, Maryland
21201
Massachusetts (EPA Form), UST Registry, Department of Public Safety,
1010 Commonwealth Avenue, Boston, Massachusetts 02215, 617/566-4500
Michigan (EPA Form), Michigan Department of State Police, Fire Marshal
Division, General Office Building, 7150 Harris Drive, Lansing, Michigan
48913
Minnesota (State Form), Underground Storage Tank Program, Division of
Solid and Hazardous Wastes, Minnesota Pollution Control Agency, 520 West
Lafayette Road, St. Paul, Minnesota 55155
Mississippi (State Form), Department of Natural Resources, Bureau of
Pollution Control, Underground Storage Tank Section, P.O. Box 10385,
Jackson, Mississippi 39209, 601/961-5171
Missouri (EPA Form), UST Coordinator, Missouri Department of Natural
Resources, P.O. Box 176, Jefferson City, Missouri 65102, 314/751-7428
Montana (EPA Form), Solid and Hazardous Waste Bureau, Department of
Health and Environmental Science, Cogswell Bldg., Room B-201, Helena,
Montana 59620
Nebraska (EPA Form), Nebraska State Fire Marshal, P.O. Box 94677,
Lincoln, Nebraska 68509-4677, 402/471-9465
Nevada (EPA Form), Attention: UST Coordinator, Division of Environmental
Protection, Department of Conservation and Natural Resources, Capitol
Complex 201 S. Fall Street, Carson City, Nevada 89710, 800/992-0900,
Ext. 4670, 702/885-4670
[[Page 530]]
New Hampshire (EPA Form), NH Dept. of Environmental Services, Water
Supply and Pollution Control Division, Hazen Drive, P.O. Box 95,
Concord, New Hampshire 03301, Attention: UST Registration
New Jersey (State Form), Underground Storage Tank Coordinator,
Department of Environmental Protection, Division of Water Resources (CN-
029), Trenton, New Jersey 08625, 609/292-0424
New Mexico (EPA Form), New Mexico Environmental Improvement Division,
Groundwater/Hazardous Waste Bureau, P.O. Box 968, Santa Fe, New Mexico
37504, 505/827-2933
New York (EPA Form), Bulk Storage Section, Division of Water, Department
of Environmental Conservation, 50 Wolf Road, Room 326, Albany, New York
12233-0001, 518/457-4351
North Carolina (EPA Form), Division of Environmental Management, Ground-
Water Operations Branch, Department of Natural Resources and Community
Development, P.O. Box 27687, Raleigh, North Carolina 27611, 919/733-3221
North Dakota (State Form), Division of Hazardous Management and Special
Studies, North Dakota Department of Health, Box 5520, Bismarck, North
Dakota 58502-5520
Northern Mariana Islands (EPA Form), Chief, Division of Environmental
Quality, P.O. Box 1304, Commonwealth of Northern Mariana Islands,
Saipan, CM 96950, Cable Address: Gov. NMI Saipan, Overseas Operator:
6984
Ohio (State Form), State Fire Marshal's Office, Department of Commerce,
8895 E. Main Street, Reynoldsburg, Ohio 43068, State Hotline: 800/282-
1927
Oklahoma (EPA Form), Underground Storage Tank Program, Oklahoma
Corporation Comm., Jim Thorpe Building, Oklahoma City, Oklahoma 73105
Oregon (State Form), Underground Storage Tank Program, Hazardous and
Solid Waste Division, Department of Environmental Quality, 811 S.W.
Sixth Avenue, Portland, Oregon 98204, 503/229-5788
Pennsylvania (EPA Form), PA Department of Environmental Resources,
Bureau of Water Quality Management, Ground Water Unit, 9th Floor Fulton
Building, P.O. Box 2063, Harrisburg, Pennsylvania 17120
Puerto Rico (EPA Form), Director, Water Quality Control Area,
Environmental Quality Board, Commonwealth of Puerto Rico, Santurce,
Puerto Rico, 809/725-0717
Rhode Island (EPA Form), UST Registration, Department of Environmental
Management, 83 Park Street, Providence, Rhode Island 02903, 401/277-2234
South Carolina (State Form), Ground-Water Protection Division, South
Carolina Department of Health and Environmental Control, 2600 Bull
Street, Columbia, South Carolina 29201, 803/758-5213
South Dakota (EPA Form), Office of Water Quality, Department of Water
and Natural Resources, Joe Foss Building, Pierre, South Dakota 57501,
Tennessee (EPA Form), Tennessee Department of Health and Environment,
Division of Superfund Underground Storage Tank Section, 150 Ninth
Avenue, North, Nashville, Tennessee 37219-5404, 615/741-0690
Texas (EPA Form), Underground Storage Tank Program, Texas Water
Commission, P.O. Box 13087, Austin, Texas 78711
Utah (EPA Form), Division of Envirormental Health, P.O. Box 45500, Salt
Lake City, Utah 84145-0500
Vermont (State Form), Underground Storage Tank Program, Vermont AEC/
Waste Management Division, State Office Building, Montpelier, Vermont
05602, 802/828-3395
Virginia (EPA Form), Virginia Water Control Board, P.O. Box 11143,
Richmond, Virginia 23230-1143, 804/257-6685
Virgin Islands (EPA Form), 205(J) Coordinator, Division of Natural
Resources Management, 14 F Building 111, Watergut Homes, Christianstead,
St. Croix, Virgin Islands 00820
Washington (State Form), Underground Storage Tank Notification, Solid
and Hazardous Waste Program, Department of Ecology, M/S PV-11, Olympia,
Washington 98504-8711, 206/459-6316
West Virginia (EPA Form), Attention: UST Notification, Solid and
Hazardous Waste, Ground Water Branch, West Virginia Department of
Natural Resources, 1201 Greenbriar Street, Charleston, West Virginia
25311
Wisconsin (State Form), Bureau of Petroleum Inspection, P.O. Box 7969,
Madison, Wisconsin 53707, 608/266-7605
Wyoming (EPA Form), Water Quality Division, Department of Environmental
Quality, Herschler Building, 4th Floor West, 122 West 25th Street,
Cheyenne, Wyoming 82002, 307/777-7781.
Appendix III to Part 280--Statement for Shipping Tickets and Invoices
Note.-- A Federal law (the Resource Conservation and Recovery Act
(RCRA), as amended (Pub. L. 98-616)) requires owners of certain
underground storage tanks to notify designated State or local agencies
by May 8, 1986, of the existence of their tanks. Notifications for tanks
brought into use after May 8, 1986, must be made within 30 days. Consult
EPA's regulations, issued on November 8, 1985 (40 CFR part 280) to
determine if you are affected by this law.
[[Page 531]]