Definitions (financial responsibility)

When used in sections 33.1-24-08-80 through 33.1-24-08-106, the following terms have the meanings given below: 1. "Accidental release" means any sudden or nonsudden release of petroleum arising from operating an underground storage tank that results in a need for corrective action or compensation for bodily injury or property damage, or both, neither expected nor intended by the tank owner or operator. 2. "Bodily injury" has the meaning given to this term by applicable state law; however, this term does not include those liabilities which, consistent with standard insurance industry practices, are excluded from coverage in liability insurance policies for bodily injury. 3. "Chief financial officer", in the case of local government owners and operators, means the individual with overall authority and responsibility for the collection, disbursement, and use of funds by the local government. 4. "Controlling interest" means direct ownership of at least fifty percent of the voting stock of another entity. 5. "Department" means the North Dakota department of environmental quality. 6. "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: a. A 10-K report submitted to the securities and exchange commission; b. An annual report of tangible net worth submitted to dun and bradstreet; or c. Annual reports submitted to the energy information administration or the rural utilities service. "Financial reporting year" may thus comprise a fiscal-year or a calendar-year period. 7. "Legal defense cost" is any expense that an owner or operator or provider of financial assurance incurs in defending against claims or actions brought: a. By the environmental protection agency or a state to require corrective action or to recover the costs of corrective action; b. By or on behalf of a third party for bodily injury or property damage caused by an accidental release; or c. By any person to enforce the terms of a financial assurance mechanism. 8. "Local government" has the meaning given this term by applicable state law. The term is generally intended to include: a. 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 b. Special districts and independent school districts established by counties, municipalities, townships, and other general purpose governments to provide essential services. 9. "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 rules 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". 10. "Owner or operator", when the owner or operator are separate parties, refers to the party that is obtaining or has obtained financial assurances. 11. "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. 12. "Property damage" has the meaning given this term by applicable state law. This term does 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. 13. "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 sections 33.1-24-08-85 through 33.1-24-08-97, including a guarantor, insurer, risk retention group, surety, issuer of a letter of credit, issuer of a state-required mechanism, or a state. 14. "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. 15. "Substantial governmental relationship" means the extent of a governmental relationship necessary under applicable state law to make an added guarantee contract issued incident to that relationship valid and enforceable. A guarantee contract is insured incident to that relationship if it arises from a clear commonality of interest in the event of an underground storage tank 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. 16. "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. 17. "Termination" under subdivisions a and b of subsection 2 of section 33.1-24-08-87 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.