Local Government Fund

PURPOSE: This rule describes the requirements for use of a local government fund for demonstrating financial responsibility. (1) A local government owner or operator may satisfy the requirements of 10 CSR 263.093 by establishing a dedicated fund account that conforms to the requirements of this rule. Except as specified in subsection (1)(B) of this rule, 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 (1) 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 (USTs) and is funded for the full amount of coverage required under 10 CSR 26-3.093, or funded for part of the required amount of coverage and used in combination with other mechanisms 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 USTs and is funded for five (5) times the full amount of coverage required under 10 CSR 26-3.093, or funded for part of the required amount of coverage and used in combination with other mechanisms that provide the remaining coverage. If the fund is funded for less than five (5) times the amount of coverage required under 10 CSR 26-3.093, the amount of financial responsibility demonstrated by the fund may not exceed one-fifth (1/5) 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 USTs. A payment is made to the fund once every year for seven (7) years until the fund is fullyfunded. This seven (7)-year period is referred to as the pay-in-period. The amount of each payment shall be determined by this formula— TF - CF Y where— TF = the total required financial assurance for the owner or operator; CF = the current amount in the fund; and Y = the number of years remaining in the pay-in-period. 1. The local government owner or operator has available bonding authority, approved through voter referendum (if this 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 USTs; or 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. (2) To demonstrate that it meets the requirements of the local government fund, the chief financial officer of the local government owner or operator, guarantor, or both, shall sign a letter worded exactly as specified in Form 18, included herein. Substance Storage Tanks Form 18—Local Government Fund The following text should be used to comply with the requirements of 10 CSR 26-3.115(1)(D) 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 “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 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 10 CSR 26-3.093, or funded for part of the required amount of coverage and used in combination with other mechanisms that provide the remaining coverage,” or “The local government fund is funded for ten (10) times the full amount of coverage required under 10 CSR 26-3.093, or funded for part of the required amount of coverage and used in combination with other mechanisms that provide the remaining coverage,” or “A payment is made to the fund once every year for seven (7) 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 (7) 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 of close of last fiscal year): [If fund balance is incrementally funded as specified in 10 CSR 26-3.107(1)(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 10 CSR 26-3.115(2) as the regulations were constituted on the date shown immediately below. [Signature] [Name] [Title] [Date] AUTHORITY: section 319.114, RSMo 2000.* This rule originally filed as 10 CSR 2011.115. Original rule filed Aug. 3, 1993, effective April 9, 1994. Moved and amended: Filed April 15, 2011, effective Dec. 30, 2011. *Original authority: 319.114, RSMo 1989. Substance Storage Tanks