Allowable Mechanisms and Combinations of Mechanisms

PURPOSE: This rule outlines the methods allowed for demonstrating financial responsibility for releases from petroleum underground storage tanks. (1) Subject to the limitations of sections (2) and (3) of this rule— (A) An owner or operator, including a local government owner or operator, may use any one (1) or combination of the mechanisms listed in 10 CSR 26-3.095–10 CSR 263.103 to demonstrate financial responsibility under 10 CSR 26-3.090–10 CSR 26-3.115 for one (1) or more underground storage tanks (USTs); provided, that the total scope and amounts assured meet the requirements of 10 CSR 26-3.093; and (B) A local government owner or operator may use any one (1) or combination of the mechanisms listed in 10 CSR 26-3.112–10 CSR 26-3.115 to demonstrate financial responsibility under 10 CSR 26-3.090–10 CSR 26-3.115 for one (1) or more USTs; provided, that the total scope and amounts assured meet the requirements of 10 CSR 263.093. (2) An owner or operator may use self-insurance to meet any deductible or co-pay portions of either insurance or risk retention group coverage under 10 CSR 26-3.097 or Petroleum Storage Tank Insurance Fund under 10 CSR 26-3.101; provided, that— (A) The deductible and co-pay amounts do not exceed fifty thousand dollars ($50,000); (B) The owner or operator shall have a letter signed by the chief financial officer worded as specified in 10 CSR 26-3.095(4); and (C) The answer(s) to Form 1, included herein, Alternative I, line 8 or Alternative II, lines 9 and 15 is (are): yes—except that a current rating of the most recent bond issue by Standard and Poor’s of AAA, AA, A, or BBB or Moody’s of Aaa, Aa, A, or Ba may be substituted for the line 15 response. (3) 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. Substance Storage Tanks Wording of Financial Assurance Instruments Form 1—Letter from Chief Financial Officer The following text should be used to comply with the requirements of 10 CSR 26-3.095(4) 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 “sudden accidental releases” and/or “non-sudden 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 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 by the tank identification number provided in the notification submitted pursuant to 10 CSR 26-2.022]. A [insert “financial test” and/or “guarantee”] is also used by this [insert “owner or operator” or “guarantor”] to demonstrate financial responsibility in the following amounts under other EPA regulations or state programs authorized by EPA under 40 CFR parts 271 and 145: Federal Rules Closure (264.143 and 265.143) $ Post-Closure Care (264.145 and 265.145) $ Liability Coverage (264.147 and 265.147) $ Corrective Action (264.101(b)) $ Plugging and Abandonment (144.63) $ Closure $ Post-Closure Care $ Liability 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/her financial statements for the latest completed fiscal year. [Fill in the information for Alternative I if the criteria of 10 CSR 26-3.095(2) are being used to demonstrate compliance with the financial test requirements. Fill in the information for Alternative II if the criteria of 10 CSR 26-3.095(3) 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 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 or guarantee $ 3. Sum of lines one and two $ 4. Total tangible assets $ 5. Total liabilities (if any of the amount reported on line three is included in total liabilities, you may deduct that amount from this line and add that amount to line six) $ 6. Tangible net worth (subtract line five from line four) $ 7. Is line six at least ten (10) million dollars? __Yes __ No 8. Is line six at least ten (10) times line three? __Yes __ No 9. Have financial statements for the latest fiscal year been filed with the Securities and Exchange Commission? __Yes __ No 10. Have financial statements for the latest fiscal year been filed with the Energy Information Administration? __Yes __ No 11. Have financial statements for the latest fiscal year been filed with the Rural Electrification Administration? __Yes __ No 12. Has financial information been provided to Dunn and Bradstreet and has Dunn and Bradstreet provided a financial strength rating of 4A or 5A? (Answer “Yes” only if both criteria have been met.) __Yes __ No Alternative II 1. Amount of annual UST aggregate coverage being assured by a test 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 or guarantee $ 3. Sum of lines one and two $ 4. Total tangible assets $ 5. Total liabilities (if any of the amount reported on line three is included in total liabilities, you may deduct that amount from this line and add that amount to line six) $ 6. Tangible net worth (subtract line five from line four) $ 7. Total assets in the United States (required only if less than ninety percent (90%) of assets are located in the United States) $ 8. Is line six at least ten (10) million dollars? __Yes __ No 9. Is line six at least six (6) times line three? __Yes __ No 10. Are at least ninety percent (90%) of assets located in the United States? (If “No” complete line eleven) __Yes __ No 11. Is line seven at least six (6) times line three? __Yes __ No (Fill in either lines twelve through fifteen or lines sixteen through eighteen) 12. Current assets $ 13. Current liabilities $ 14. Net working capital (subtract line thirteen from line twelve) $ 15. Is line fourteen at least six (6) times line three? __Yes __ No 16. Current bond rating of most recent bond issue 17. Name of rating service ___________________________________________________________ 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? __Yes __ No (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 four through eighteen 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 10 CSR 26-3.095(4) as such rules were constituted on the date shown immediately below.” [Signature] [Name] [Title] [Date] Substance Storage Tanks AUTHORITY: section 319.114, RSMo 2000.* This rule originally filed as 10 CSR 2011.094. Original rule filed Feb. 7, 1991, effective Aug. 30, 1991. Amended: Filed Aug. 3, 1993, effective April 9, 1994. Amended: Filed Jan. 14, 1997, effective Sept. 30, 1997. Moved and amended: Filed April 15, 2011, effective Dec. 30, 2011. *Original authority: 319.114, RSMo 1989.