ILLINOIS
POLLUTION CONTROL BOARD
July
27, 1989
IN THE MATTER
OF:
UST FINANCIAL ASSURANCE
)
R89-4
USEPA REGULATIONS
(10/26/88)
FINAL
ORDER.
ADOPTED
RULE.
ORDER
OF
THE
BOARD
(by
J.
Anderson):
Pursuant
to
Section
22.4(d)
of
the
Environmental
Protection
Act
(Act),
the Board
is adding
to
the UST underground
storage tank regulations.
Section 22.4 of the Act
governs adoption of
regulations establishing the
RCRA program
in
Illinois.
Section
22.4(d) provides
for quick
adoption of
regulations
which are
“identical
in
substance”
to
federal
regulations.
Section 22.4(d) provides that Title
VII
of the Act
and Section
5 of
the
Administrative Procedure Act
(APA)
shall
not apply.
Because this rulemaking
is
not subject
to Section
5
of the APA,
it
is
not subject
to
first notice
or
to
second notice
review
by the Joint Committee on Administrative Rules
(JCAR).
The
federal UST rules
are
found
at
40 CFR
280.
This
rulemaking
updates
Illinois’ UST
rules
to
correspond with major
federal
anendments
which
appeared
at
53 Fed.
Reg.
43370, October
26,
1988.
The Board proposed these
amendments
on April
6,
1989.
The proposal
appeared
on May
5,
1989,
at
13 Ill. Reg.
6861.
The Board has modified the
proposal
in
response
to public
comment,
as
is
detailed
in the Opinion.
This Order
is
supported by
an Opinion adopted this same day.
The Board
will delay filing the adopted
rules
until
August
28,
1989,
to allow time for
motions for reconsideration
by
the agencies involved
in
the authorization
process.
The complete text
of the adopted
rules
follows.
101—393
—2-
TITLE
35:
ENVIRONMENTAL PROTECTION
SUBTITLE
G:
WASTE
DISPOSAL
CHAPTER
I:
POLLUTION CONTROL BOARD
SUBCHAPTER
d:
UNDERGROUND iNJECTION CONTROL
AND UNDERGROUND STORAGE TANK PROGRAMS
PART 731
UNDERGROUND STORAGE TANKS
SUBPART A:
PROGRAM SCOPE AND INTERIM PROHIBITION
Section
731.101
Definitions and exemptions
(Repealed)
731.102
Interim prohibitions
(Repealed)
731.103
Notification Requirements
(Repealed)
731.110
Applicability
731.111
Interim Prohibition
for Deferred Systems
731.112
Definitions
731.113
Incorporations by Reference
731.114
Implementing Agency
SUBPART
B:
UST SYSTEMS:
DESIGN, CONSTRUCTION,
INSTALLATION AND NOTIFICATION
Section
731.120
Performance Standards
for New Systems
731.121
Upgrading of Existing Systems
731.122
Notification Requirements
SUBPART C:
GENERAL OPERATING REQUIREMENTS
Section
731.130
Spill
and Overfill
Control
731.131
Operation
and Maintenance
of Corrosion Protection
731.132
Compatibility
731.133
Repairs Allowed
731.134
Reporting and Recordkeeping
SUBPART
D:
RELEASE
DETECTION
Section
731.140
General Requirements
for
all Systems
731.141
Petroleum Systems
731.142
Hazardous Substance Systems
731.143
Tanks
731.144
Piping
731.145
Recordkeeping
SUBPART
E:
RELEASE REPORTING,
INVESTIGATION AND CONFIRMATION
Section
731.150
Reporting of Suspected Releases
731.151
Investigation due to Off—site Impacts
731.152
Release Investigation and Confirmation
731.153
Reporting
and Cleanup
of Spills
and Overfills
SUBPART
F:
RELEASE RESPONSE AND CORRECTIVE ACTION
Section
731.160
General
731.161
Initial Response
101—394
—3-
731.162
Initial Abatement Measures
and Site Check
731.163
initial
Site Characterization
731.164
Free
Product
Removal
731.165
Investigations
for
Soil
and
Groundwater
Cleanup
731.166
Corrective Action
Plan
731.167
Public Participation
SUBPART
G:
OUT-OF-SERVICE
SYSTEMS
AND
CLOSURE
Section
731.170
Temporary Closure
731.171
Permanent
Closure
and
Changes-in-Service
731.172
Assessing
Site
at
Closure
or
Change—in—Service
731.173
Previous’y Closed Systems
731.174
Closure Records
SUBPART
H:
FiNANCIAL RESPONSIBILITY
Section
731.190
Applicability
731.191
Compliance Dates
731.192
Definitions
731.193
Amount
and
Scope
of
Required Financial
Responsibility
731.194
Allowable Mechanisms
and Combinations
731.195
Financial
Test of Self-insurance
731.196
Guarantee
731.197
Insurance or Risk Retention Group Coverage
731.198
Surety Bond
731.199
Letter
of Credit
731.202
Trust Fund
731.203
Standby Trust Fund
731.204
Substitution
of Mechanisms
731.205
Cancellation
or Nonrenewal
by Provider
731.206
Reporting
731.207
Recordkeeping
731.208
Drawing on Financial Assurance
731.209
Release
from Financial Assurance Requirement
731.210
Bankruptcy
or other
Incapacity
731.211
Replenishment
731.900
Incorporation
by reference
(Repealed)
731.901
Compliance Date
(Repealed)
Appendix A
Notification Form
AUTHORITY:
Implementing Section 22.4(e)
and authorized
by Section
27
of the
Environmental Protection Act
(Ill. Rev.
Stat.
1987, ch.
111
1/2,
pars.
1022.4(e) and
1027).
SOURCE:
Adopted
in P86—i
at
10
Ill.
Peg.
14175, effective August
12, 1986;
amended
in P86-28
at
11
Ill. Peg.
6220,
effective
March
24,
1987;
amended
in
R88-27
at
13
Ill.
Peg.
9519,
effective June
12,
1989;
amended
in R89-4 at
13
Ill. Peg.
,
effective
SUBPART
H:
FINANCIAL RESPONSIBILITY
Section 731.190
Applicability
101~395
-4-
~j
This Subpart
applies to owners and operators of all petroleum UST
systems except
as otherwise provided
in this Section.
~j
Owners
and operators of petroleum IJST systems are subject to these
requirements
if they are
in operation
on
or
after the date for
compliance established
in Section 731.191.
~j
State
and
federal government entities whose debts and liabilities
are
the debts
and liabilities
of the State
or the United States
are
exempt
from the requirements
of this Subpart.
~fl_
The requirements
of this Subpart
do
not
apply to owners
and operators
of any UST system described
in Section 731.110(b)
or
(c).
~
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 Section
731.191.
(Source:
Added
at
13 Ill.
Reg.
,
effective
Section 731.191
Compliance Dates
Owners
of petroleum underground
storage tanks
are required to comply with the
requirements of this Subpart
by
the following dates:
~j
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:
imme~~.
~J
All
petroleum marketing firms
owning 100 through 999 USTs:
October
26,
1989.
~j
All petroleum marketing
firms owning
13 through
99 USTs
at more than
one
facility:
April
26,
1990.
~ft
All
petroleum UST owners not described
in subsections
(a),
(b)
or
(c), including units
of
local
government:
October
26,
1990.
(Source:
Added
at
13 Ill.
Reg.
,
effective
)
Section
731.192
Definitions
When used
in this Subpart,
the following terms
have the meanings~~~y~n
below:
“Accidental
release”
means any
sudden
or nonsudden
release
of
petroleum from
an
underground
storage tank that results
in
a need for
corrective action or
compensation for
bodily
injury
or propej~~
damage neither expected
nor intended by the tank owner
or operator.
101—396
—5—
“Bodily
injury”
means
bodily
injury,
sickness
or
disease
sustained
by
a
person, including death
resulting from any of these
at
any
time.
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.
BOARD
NOTE:
Derived
from
40
CFR
280.92,
as
adopted
at
53
Fed.
Reg.
43370,
October
26,
1988,
modified
to
insert the Insurance Services
Office
definition.
“Controlling interest” means direct ownership of
at least
50 percent
of
the
voting
stock
of
~nother
entity.
“Director
of
the
Implementing
Agency”.
See
Section
731.114.
“Environmental
damage”
means
the
injurious
presence
in
or
upon
land,
the atmosphere
or any watercourse
or
body of water
of solid,
liquid,
gaseous
or thermal
contaminants, irritants
or
pollutants.
BOARD NOTE:
This term is
used
in the definition
of
“poll jtion
i nci dent”.
“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
10—K
report
submitted
to
the
Securities
Exchange
Commission;
An annual
report
of
tangible net worth submitted to Dun
and
Bradstreet;
or
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,
By
USEPA
or
the
State
to
require
corrective
action
or
to
recover
the
costs
of corrective
action;
By or
on
behalf
of
a third
party
for
bodily
injury
or
property
damage caused
by
an accidental
release;
or
By any person
to enforce the terms
of
a financial assurance
mecha
ii
ism.
“Occurrence”
means
an
accident,
including
continuous
or
repeated
101—397
-6-
exposure to conditions, which
results
in
a
release from an
underground storage tank.
BOARD NOTE:
This definition
is
intended to assist
in the
understanding of these regulations and
is
not intended either
to
Timit the meaning of ~occurrence”
in
a way that conflT?ts 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 persons,
refers
to the
person that
is
obtaining or has obtained financial
assurance.
“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.
“Pollution incident” means emission, discharge,
release or escape
of
pollutants
into or
upon land,
the atmosphere
or any watercourse
or
body of water,
provided that such emission, discharge,
release
or
escape results
in
“environmental damage”.
The entirety
of any such
emission, discharge,
release
or escape
shall
be deemed
to
be one
“pollution incident”.
“Pollutants” means
any solid,
liquid, gaseous
or thermal
irritant
or contaminant, including smoke,
vapor,
soot,
fumes,
acids, alkalis, chemicals and waste.
“Waste”
includes
materials to
be
recycled, reconditioned or reclaimed.
Tne term
“pollution incident” includes
an
“accidental
release” or
an
curren cc
BOARD NOTE:
This definition
is used
in the definition
of “property
damage.
“Property
damage”
means
Physical
injury
to, destruction of
or
contamination
of
tangible
property,
including
all
resulting loss of use
of that
property;
or
Loss
of
use
of
tangible
property
that
is
not physically injured,
destroyed or
contaminated,
but
has been evacuated, withdrawn
from use
or. rendered inaccessible because
of
a
“pollution
mci dent”.
This term does
not include those liabilities which, consistent with
standard insurance industry practices,
are excluded from covej~gein
liability insurance policies
for property damage.
However,
such
exclusions_for
property
damage
do
not
include corrective action
associated with releases from tanks which are covered
by the policy.
101—398
—7—
BOARD
NOTE:
Derived from 40 CFR
280.92,
as adopted
at
53 Fed. Peg.
43370,
October 26,
1988, modified to
insert the Insurance Services
Office
definition.
“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
Section
731.195
through
731.203,
including
a guarantor,
insurer,
risk retention
group,
surety
or issuer
of
a letter
of credit.
“Substantial
business
relationship”
means
that
one
business
entity
has
an
ownership onterest
in another.
“Tangible
net worth”
means the tangible assets that
remain after
deducting liabilities;
such assets
do
not include
intangibles
such
as
~çpdwilland
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.
“Unit
of
local
government”
is
as defined
in the Illinois Constitution
of
1970,
Art. VII, Section
1.
(Source:
Added
at
13
Ill.
Peg.
,
effective
Section
731.193
Amount
and
Scope
of
Required
Financial
Responsibility
Owners
or operators
of petroleum underground storage tanks
shall
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:
fl
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.
~J
Owners
or operators of petroleum underground
storage tanks
shall
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:
~j
For owners
or operators
of
1
to
100 petroleum
underground
storage tanks:
$1 million;
and
101—399
-8-
~j
For owners
or operators of
101
or more petroleum underground
storage tanks:
$2 million.
~j
For the purposes of subsections
(b)
and
(f)
only,
a
“petroleum
underground stora9e
tank” means
a single containment
unit
and does
not mean combinations
of single containment units.
~,j
Except
as provided
in
subsection
(e),
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 subsection
(a)
and
(b).
,~j
If
an owner
or operator uses separate mechanisms
or separate
combinations of meclianisms
to demonstrate financial
responsibility
for different petroleum underground
storage tanks,
the annual
~ggregaterequired must be based
on the number
of
tanks
covered by
each such separate mechanism or combination
of mechanisms.
fl
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
responsibilty
in the
amount
of
at
least
$2 million
of annual ag9~9ateassurance by the
first-occurr1~effectiye
dateanniversarjo~neofl~
mechanisms combined
(other than
a
financial
test or guarantee)
to
provide
assurance.
The amounts
of assurance required under this Section exclude legal
defense costs.
~
The required per-occurrence and annual
aggregate coverage amounts
do
not
in any way limit
the liability of the owner
or
operator.
(Source:
Added at
13
Ill.
Reg.
,
effective
)
Section
731.194
Allowable Mechanisms
and Combinations
j~J
Subject
to
the
limitations
of subsections
(b) an~Jj~nowner_or
~peratormay use any one
or combination
of
the mechanisms
listed
in
Sections
731.195 through
731.203 to demonstrate
financial
responsibility under this Subpart for one
or more undegro~tor’~e
tanks.
~çj
An owner or operator may
use self—insurance
in combination with
101—400
—9-
guarantee
only
if,
for
the
purpose
of
meeting
the
requirements
of
the
financial
test
under
this
Subpart,
the
financial
statements
of
the
owner
or
operator
are
not
consolidated
with
the
financial
statements
of
the
guarantor.
(Source:
Added
at
13
III.
Rey.
,
effective
)
Section
731.195
Financial
Test
of
Self-insurance
~j_
An owner
or operator,
or guarantor, ma~satisfy
the
requirements
of
Section 731.193
by passing
a
financial
test
as specified
in this
Section.
To pass
the financial
test of self-insurance,
the owner
or
operator,
or guarantor,
shall
meet the criteria of subsection
(b) or
~c)based
on
year—end
financial statements
for the
latest completed
fiscal
year.
b)
Financial
Test
~j
The
owner
or operator,
or guarantor,
shall
have
a
tangible
net
worth
of
at
least
ten times:
A)
The total
of the appjicable aggregate amount
required by
Section 731.193, based
on the number
of underground storage
tanks
for which
a
financial
test
is used to demonstrate
financial
responsibility for UST
systems
to USEPA pursuant
to
40
CFR
280,
to
the
Fire
Marshal
pursuant
to
this
Part
or
to implementing agencies of UST programs
in other
states
authorized
by USEPApursuant to
40 CFR 281
B)
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
for
hazardous
waste facilities to USEPA pursuant
to
40 CFR 264 or
265,
to
the Agency
pursuant to
35
Ill.
Adm.
Code 724 or
725 or
to
other state agencies authorized
by USEPA to administer
hazardous waste programs pursuant to
40 CFR
271.
ci
The
sum
of
current
pluggin~and abandonment
cost
estimates
for
which
a
financial
test
is
used
to
demonstrate
financial
responsibility for
underground
injection
wells
to
USEPA
pursuant
to
40 CFR
144,
to the Agency pursuant
to
35
Ill.
Adm.
Code
704,
to
the
Department
of
Mines
and
Minerals
pursuant
to
62
Ill.
Adm.
Code
240
or
to
other
state
agencies
authorized
to
administer
underground
injection
control
programs
pursuant
to
40
CFR
145.
The
owner
or
operator,
or
guarantor,
shall
have
a
tangible
net
worth
of
at
least
$10
million.
3)
The
owner
or operator,
or guarantor,
shall
have
a
letter
signed
~bythe chief financial
officer worded
as
specified
in subsection
(d).
101—401
-10-
The owner or operator~or guarantor,
shall either:
~j
File financial
statements annually with the U.S. Securities
and Exchange Comission,
the Energy Information
Administration or the Rural
Electrification Admiaistrati~j
or
~j
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.
The firm’s year-end financial
statements,
if independently
audited,
cannot
include
an adverse auditor’s opinion,
a
ffTsclaimer
of opinion
or
a
“going concern” qualification.
RCRA Financial Test
The owner
or operator,
or guarantor shall
meet
the financial
test requirements
of
35
Ill.
Adm. Code 724.247(~JflJ
~ibstitutingthe appropriate
amounts specified
in Section
7~L193(b)(1)and
(b)(2)
for the ~‘amount
of liability coverag~~
~E1f time specified
in the Section.
The
fiscal year-end financial statements
of the
owner
or
operator,
or
guarantor, must be examined by
an
l~~endent
certified public
accountant
and be accompanied
by the
accountant’s report of the examination.
The firm’s year-end financial statements
cannot
include
an
~dverseauditor’s opinion,
a disclaimer
of opinion,
or
a
Z~ic~F~T~qualification.
4)
The
o9U~9f,5h~1h~V~dej
the chief financial
officer, worded
as
sp~ci
fled
in
a
If the
financial
statements
of
the
owner
or
operato~’,or
are not submitted annually to the U.S. Securities
and
Exchange Con~iission, the Energy Information Administration or
the Rural
Electrification Administration,
the owner oro~~tor,
~rantor,
shall
obtain
a specfal
report
by ~
certified pub1icaccountantstatin~j
The accountant has compared the data that the
letter from
~he chief
financial officer specifies as having been
a~FTvedfrom the latest year-end financial
statements
of
Ei~owneror operator, or
guarantor, with the amounts
Th
~Th
financial
statements;
and
in
connection
with
that
comparison,
no
matters
came
to
the
6unta~’sattention which caused him to believe
fFiat
the
~
adjusted.
101—402
—11—
ii.
The Board incorporates
by reference 40 CFR 280.95(d)
as adopted
at
53 Fed.
Peg. 43370, October
26,
1988.
This
Section
incorporates
no
future editions
or amendments.
2)
The Fire Marshal
shall
promulgate forms based on the
forms
in
40
CFR 280.95(d), with
such changes
as are necessary under Illinois
law.
3)
The owner
or operator shall
use such forms
if available;
otherwise, the owner
or operator
shall
use the form
in
40 CFR
280.95(d), except
that instructions
in
brackets must
be
replaced
with
the
relevant information
and the brackets deleted.
4)
To demonstrate that
it
meets the financial test under subsection
(b) or
(c), the
chief financial
officer
of
the owner
or
operator,
or
guarantor,
shall
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
as provided
in
subsection
(d)(3).
e)
If
an
owner
or
operator usin~the test to provide
financial
assurance
finds that the
owner
or operator no longer meets the requirements of
the financial test based
on the year-end
financial statements,
the
owner
or operator
shall
obtain
alternative
coverage
within
150 days
of the end
of the year for which financial
statements have been
prepared.
fj
The
Fire Marshal may
require reports
of financial condition
at
any
time from the
owner
or operator,
or
guarantor.
If the Fire Marshal
finds,
on the
basis
of such reports
or other
information,
that
the
owner
or operator,
or
guarantor,
no
longer meets the financial test
requirements
of subsection
(b) or
(c)
and
(d),
the owner
or operator
shall
obtain
alternate coverage within
30 days after notification
of
such
a finding.
~gj
If the owner or
operator fails
to obtain alternate assurance within
150 days
of finding that
the owner
or operator no longer meets the
requirements
of
the financial
test based
on the year-end financial
statements,
or within
30 days of notification
by the Fire Marshal
that the owner
or operator
no longer meets the
requirements
of the
financial
test,
the owner
or operator shall
notify the Fire Marshal
of
such failure within
10
days.
(Source:
Added
at
13
Ill.
Peg.
,
effective
Section
731.196
Guarantee
~j
An
owner
or
operator
may satisfy the requirements
of Section 731.193
by obtaining
a guarantee that conforms
to the requirements
of this
Section.
The guarantor shall
have
an ownership interest
in
the owner
or operator.
10
1—403
—12—
ial.
Within 120 days after the close
of each financial
reporting year the
guarantor shall
demonstrate that
it meets the
financial
test criteria
of Section 731.195 based
on year—end
financial
statements for the
~Fatest
completed financial
reporting year by completing the letter
from the chief
financial officer described
in Section 731.195(d)
and
~Tialldeliver the letter to the owner
or. operator.
If the guarantor
fails to meet
the requirements
of the financial test
at
the end of
a~yfinancial
reporting year,
within
120 days of the end
of that
Tinancial
reporting year the guarantor shall
send
by certified mail,
before cancellation or nonrenewal
of the guarantee,
notice to the
owner
or operator.
If the Fire Marshal notifies
the guarantor that
the guarantor no
longer meets the requirements
of the financial test
of Section 731.195(b)
or
(c)
and
(d),
the ~uarantorshall
notify the
owner
or operator within
10 days
of
receiving such notification from
the Fire Marshal.
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
pperator
shall
obtain alternative coverage as
specified
in Section
731.210(c).
c)
Forms.
~J
The Board
incorporates
by
reference 40 CFR 280.96(c) as
adopted
at
53 Fed.
Reg.
43370, October
26,
1988.
This Section
incorporates
no
future editions
or amendments.
~j
The Fire Marshal
shall
promulgate forms
based
on
the
forms
in
40
CFR 280.96(c), with such changes
as are necessary under illinois
law.
3)
The owner
or operator shall
use such forms
if available;
otherwise, the owner
or operator shall
use the form in
40 CFR
280.96(c), except
that instructions
in
brackets must be
replaced
with
the relevant information
and the_brackets
deleted.
d)
An
owner
or 2jerator who uses
a guarantee to
satisfy the re~yireflents
of
Section
731.193
shall
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 bed~positeddirectly
into the standby trust
fund
in accordance with instruction from the
Fire Marshal
under Section
731.208.
This standby trust
fund must
meet
the requirements
specified in Section
731.203.
~I
Additional
requirements
for guarantors.
~ft
The guarantor shall
have
a registered agent pursuant
to Section
5.05 of
the. Business Corporation Act
of 1983
(Ill.
Rev._Stat.
1987,
ch.
32,
par.
5.05 or Section
105.05
of
the General ~otFor
Profit Corporation AcT
6Ill.R
Stat.
193/,
ch.
3?,
par.
105.05.
2)
The guarantor shall
execute the guarantee
in
Illinois.
The
guarantee
shall
be
accompanied
by
a
letter signed
by the
guarantor which states that:
101—404
—13—
~j
The guarantee was signed
in Illinois by
an authorized agent
of the guarantor
B)
The
guarantee
is
governed by
Illinois
law;
and,
çJ
The
name and address
of
the
guarantor’s
registered
agent
for service
of process.
(Source:
Ac~edat
13 Ill.
Reg.
,
effective
Section
731.197
Insurance or Risk Retention Group Coverage
~j
An
owner
or operator may satisfy the requirements
of Section 731.193
~y~obtainingliability insurance that conforms to the requirements
of
this Section from
a qualified insurer or
risk retention group.
Such
insurance must
be
in the form of
a
separate insurance policy
or
an
endorsement
to
an existing insurance poli~j~~
b)
Forms.
fl
The Board
incorporates
by
reference 40 CFR 280.97(b)
as adopted
at
53 Fed. Peg.
43370, October
26,
1988.
This Section
incorporates
no future editions
or
amendments.
2)
The Fire Flarshal
shall
promulgate forms
based
on the forms
in
40
CFR 280.97(b),
with such changes
as are necessary under Illinois
law.
3)
Each insurance policy must
be amended
by
an endorsement,
or
evidenced by
a certificate
of
insurance.
The
owner
or operator
shall
use
the forms
specified
in subsection
(b)(2),
if
available;
otherwise, the
owner
or operator shall
use the
forms
in
40 CFR 280.97(b),
except that instructions
in
brackets must
be
replaced with the
relevant information and the brackets
deleted.
~j
Each insurance policy must
be
issued
by
an
insurer
or
a
risk
retention group which
is licensed
by the Illinois Department
of
Insurance.
(Source:
Added
at
13 Ill.
Reg.
,
effective
Section
731.198
Surety Bond
a)
An
owner
or operator may satisfj the requirements
of Section 731.193
~~ining
a
surety bond that conforms to the requirements
of this
Section.
The
surety company issuing the
bond shall
be
licensed by
the Illinois Department
of
Insurance.
b)
Forms.
~
The Board
incorporates
by
reference 40 CFR 280.98(b)
as adopted
at
53 Fed. Reg.
43370, October
26,
1988.
This Section
101—405
—14-
incorporates no
future editions or amendments.
~j
The Fire Marshal
shall
promulgate forms based
on the
forms
in
40
CFR 280.98(b), with such changes
as are necessary under Illinois
law.
~j
The owner
or operator shall
use such forms
if available;
otherwise, the owner or operator shall
use the form
in
40 CFR
280.98(b), except that instructions
in brackets must
be replaced
with the relevant information and the brackets deleted.
~
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.
~J
The
owner
or
operator
who
uses
a
surety
bond
to
satisfy the
requirements
of Section
731.193 must establish
a
standby trust
fund
when the
surety bond
is
acquired.
Under the terms
of the bo~Li1T
amounts
paid by the surety under the bond will
be deposited diectly
into the standby trust
fund
in accordance with instructions from the
Fire Marshal under Section 731.208.
This standby_trust fund must
meet the requirements
specified
in Section 731.203.
(Source:
Added
at
13
Ill.
Reg.
,
effective
)
Section
731.199
Letter
of Credit
~
An owner
or operator may satisfy the requirements
of Section 731.193
by obtaining an
irrevocable
standby letter
of credit
that
conforms
to
the
requirements
of this Section.
The issuing institution
shall
be
an
entity with authority to
issue
letters
of credit
and whose
letter
~f credit
operations are regulated by the_Illinois Commissioner
of
Banks and Trust Com~anie
S.
b)
Forms.
fl
The Board
incorporates
by
reference 40 CFR 280.99(b) as adopted
at
53 Fed.
Peg.
43370, October
26,
1988.
Tnis Section
incorporates
no future
editions or amendments.
~
The Fire Marshal
shall
promulgate
forms based on the forms
in
40
CFR 280.99(b), with such changes
as
are necessary under Illinois
law.
~j
The owner
or
operator
shall
use
such forms
if available;
otherwise, •the owner
or operator
shall
use
the form
in
40 CFR
280.99(b),
except
that
instructions
in
brackets
must
to
replaced
with the
relevant
information
and the brackets
deleted.
~J
An owner
or operator who uses
a letter
of
credit
to satisfy the
requirements
of Section 731.193 shall
also establish astand’~trust
fund when the
letter
of credit
is acquired.
Under tF~terms
of the
letter
of credit,
all
amounts
paid pursuant to
a draft
by
the Fire
101—406
—15—
Marshal
shall
be
deposited
by the issuing institution directly into
the standby trust fund
in accordance with instructions from the Fire
Marsnal under Section
731.208.
This standby trust
fund must meet the
~~ne~ss?ecified
in Section
731.203.
d)
The
letter
of credit must be irrevocable with
a
term specified by the
issuin~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 wilj_~~gJ~_~n
the_date when
the
owner
or operator receives
the
notice,
as evidenced by the
return
(Source:
Added
at
13
Ill.
Reg.
,
effective
Section
731.202
Trust Fund
~J,
An owner
or qperator ma
satisfy the requirements
of Section 731.193
by
establishing
a
trust
fund
that conforms
to the requirements
of
this
Section.
The
trustee
shall
be
an
entity
which
has
authority
to
act
as
trustee
and
whose
trust
operati5~ are
regulated
arid
examined
~yJJie
Illinois
Commissioner
of
Banks
and
Trust
Companies,
or who
complies~ith the
Corporate
Fiduciary
Act.
(Ill.
Rev.
Stat.
1987,
ch.17, pars.
1551-let seq.~
b)
The
wording
of
the
trust
agreement
must
be
identical
to
the
wording
specified
in
Section
731.203(b),
and
must
be
accompanied
by
a
formal
certification of
acknowled_g_ement
as specified
in Section
731.2~TB)7In addition, the owner or operator and trustee
shall
agree
that
Illinois
law
governs
the
trust.
~
The
trust
fund,
when
established,
must
be
funded
for
the
full
required amount
of coverage,
or funded
for p~tof the required
amount
of
coverage
and
used
in
combination
with other mechanisms
that
provide the remaining required coverage.
~
If the value
of
the trust
fund
is
greater than the ~~uired amount
of
covera~_~he
owner
or operator may submit
a written request
to the
Fire
Marshal
for
release
of
the
excess.
~J
If
other
financial
assurance as specified
in
this Subpart
is
substituted
for
all
or
part
of
the
trust
fun~i,the
owner
or
operator
may
submit
a
written
req~uestto
the
Fire
Marshal
for
release
of
the
excess.
fl
Within
60
days
after
receiving
a
request
fron
the
owner
or
operator
frelease
of
funds ~~ecified
in
subsection
(d)
or
(e),
the
Fire
Marshal
shall
instruct
the
trustee
to
release
to
the
owner
or
ope~~or
such
funds
as
the
Fire
Marsnal
specifies
in
writing.
(Source:
Added
at
13
Ill.
Peg.
,
effective
10
1—407
-16-
Section 731.203
Standby Trust Fund
~j
An owner or operator using any one of
the machanisms authorized by
Sections 731.196,
731.198 or 731.199
shall establish a standby trust
fund when the mechanism is
acquired.
The trustee
of the standby
trust fund shall
be an entity that has the authority to act
as
a
trustee and whose trust
operations are regulated
and examined
by the
Illinois Comissioner
of Banks and Trust Companies,
or who complies
with the Corporate Fiduciary Act.
(Ill.
Rev.
Stat.
1987,
ch.
17,
pars. 15~1—1et seq.)
j~j
Forms.
fl
The Board
incorporates
by
reference 40 CFR 280.103(b)
as
adopted
at
53 Fed. Peg. 43370, October 26,
1988.
This Section
incorporates
no
future editions or
amendments.
~
The Fire Marshal
shall
promulgate
forms based
on
the forms
in
40
CFR 280.103(b), with such changes
as
are necessary under
Illinois
law.
~j
The owner or operator shall
use such forms
if available;
otherwi~e,the owner
or operator
shall
use the form
in
40 CFR
280.103(b),
except that instructions
in brackets must be
replaced with the
relevant information and the brackets deleted.
jj
In addition,
the owner
or operator and trustee shall
agree that
illinois
law governs the
trust.
~j
The Fire Marshal
shall
instruct the trustee
to
refund the balance
of
the standby trust
fund to the provider of financial
assurance if the
Fire Marshal determines that no additional
corrective action costs
or
~1:PY
liability claims will occur
as
a
result
of
a
release
covered
by
the
financial
assurance
mecheni
sm
for which the stendby
trust
fund was
established.
~j
An
owner
or
operator
may
establish
one
trust
fund
as
the
dopes it~y
mechanism for all
funds assured
in compliance with this Subpart.
(Source:
Added
at
13
Ill.
Peg.
,
effective
Section 731.204
Substitution of Mechanisms
~
An
owner
or
operator may substitute any alternate financial
assurance
mechanisms
as
specified
in this Subpart, provided that at
all
times
the
owner
or operator maintains an effective financial assurance
mechanism or combination
of mechanisms tnat
satisfies the
~pquirements
of Section
731.193.
~j
After obtaining alternate financial assurance as
speci
lied
in
this
~y~2art,
an
owner
or operator may cancel
a financial
assurance
mechanism
by
providing
notice
to
the
provider
of
financial
~ssuranc&~.
(Source:
Added
at
13
Ill.
Reg.
,
effective
101—408
—17—
Section 731.205
Cancellation or Nonrenewal
by Provider
~j
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.
jj
Termination
of
a
guarantee,
a
surety bond or
a letter
of credit
must
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;
or
2)
Termination
of
insurance or risk retention group coverage must
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.
b)
If
a provider of financial
responsibility cancels
or fails
to
renew
for
reasons
other
than
incapacity
of
the
provider
as
specified
in
Section
731.206,
the
owner
or
operator
shall
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
shall
notify the
Fire riarshal
of
such failure and submit:
fl
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 Section
731.207(b).
(Source:
Added
at
13
Ill.
Peg.
,
effective
)
Section 731.206
Reporting
~j
The owner
or operator shall
deposit with the Fire Marshal
an
on
gi nal
,
or
a signed
dupl
i cate on
gi nal
,
of any
requi red financial
assurance document.
The owner
or operator shall
deposit
the document
within
14
days after the date on which
on which the operator receives
the document.
~
An owner
or operator
shall
certify compliance with
the
financial
responsibility requirements
of this Part
as specified
in
the new
tank
notification
form
when
notifying
the
Fire
Marshal
of
the
installation
of
a
new
underground
storage
tank
under
Section
731.122.
(Source:
Added
at
13
Ill.
Reg.
,
effective
Section 731.207
Recordkeeping
An owner
or operator who deposits
the
required financial
assurance documents
101—409
-18-
with the Fire Marshal pursuant to Section 731.206
is
not otherwise required
to
maintain copies
of the documents or the certificate, which would
be req~ired
pursuant
to
40 CFR 280.107, adopted
at
53 Fed. Reg. 43357, October
26,
1988._
(Source:
Added
at
13 Ill. Reg.
,
effective
)
Section 731.208
Drawing on Financial Assurance
~j
The Fire Marshal
shall
require the guarantor, surety or
institution
issuing
a letter
of credit
to
place the amount
of
funds stipulated by
the Fire marshal
up
to the
limit
of
funds
provided by the financial
assurance mechanism,
into the standby trust
if:
fl
Both:
~J
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
~~sman~
~j
The Fire Marshal
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 ESDA pursuant to Subpart
E
or
Fof
a release from an underground
storage tank covered
by the
mechanism;
or
~j
The conditions
of
subsections
(b)(1)
or
(b)(2)(A)
or
(B) are
satisfied.
~J
The Fire Marshal
shall
draw on
a standby trust
fund when:
1)
The Fire Marshal
makes
a
final
determination that
a
rd ease
has
occurred
and
immediate or long—term corrective action
for the
F~Tha~isi~eded~
and
the
owner
or
operator,
afte~pp~priate
notice
and opportunity
to
comply,
has
not conducted corrective
action
as
required under Subpart
F;
or
~
The Fire Marshal
has
received either:
~ft
Certification from the owner
or operator and third-party
liability claimant and from attorneys
representing the
owner
or operator
and the third-party liability claimant
that
a third-party
liability claim should
be paid.
The
Board
incorporates
by
reference 40 CFR 280.1O8(b)(2)(i)a~
adopte.d
at
53 Fed.
Reg. 43370, October
26,
1988.
This
Section
ihcorporates
no
future
editions
or
amendijients.
The
certification
must
be
worded
as
provided
in
40
CFR
280.1O8(b)(~flT),except that instructions
in brackets are
to be
replaced with the relevant information
and the
brackets deleted.
Or,
~J
A
valid final
court
order establishing
a judgment against
101—410
-19—
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
Fire
Marshal
determines
that
the
owner
or
operator
has
not
satisfied
the
judgment.
~ci
If
the
Fire
Marshal
determines
that
the
amount
of
corrective action costs and third—party
liability claims
eligible_for
payment
under
subsection
(b)
may
exceed
the
balance
of
the
standby
trust
fund
and
the
obligation
of
the
a~yJder of
financial
assurance,
the
first
priority
for
payment must be corrective action
costs
necessary to
protect
human health
and
the environment.
The Fire Marshal
shall pay third-p~~y
lia~ilityclaimsin the
order
in
which
the
Fire
Marshal
recei yes
certi Ii cati ons
under
subsection
(b)(2)~AD, and
valid
court
orders
under
subsection
~h)(2~(3).
(Source:
Added
at
13
Ill.
Peg.
,
effective
Section
731.209
Release from Financial
Assurance
Requirement
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
dnd
the tank has
been properly closed
as
required
by
Subpart
0.
(Source:
Added
at
13
ill.
Peg.
,
effective
Section 731.210
Bankruptcy
or
other Incapacity
Within
10
days
after
commencement
of
a
voluntary
or
involuntary
proceeding
under
11
U.S.C.
(Bankruptcy),
naming
an
owner
or
operator
as debtor,
the owner
or operator shall
notify the Fire Marshal
by
certified
mail
of
such
comniencemerit
and
submit
the
appropriate
forms
listed
in
Section
731.207(b)
documenting current
financial
responsibility.
b)
Within
10
days
after
commencement
of
a voluntary or
involuntary
proceeding
under
11
U.S.C
cBankruptcy), naming
a
guarantor providing
financial
assurance
as
debtor,
such guarantor
shall
notify the owner
or operator
by certified nail
of such commencement
as
required under
the terms of the guarantee specified
in Section
731.196.
c)
An owner
or operator who obtains
financial
assurance by
a mechanism
other than the financial
test
of self—insurance will
be deemed
to
be
without the
required
financial
assurance
in
the event
of
a
bankruptcy
or incapacity
of
its
provider of financial
assurance,
or
a
suspension
or
revocation
of the authority
of
the provider of
financial
assurance
to
issue
a
guarantee, insurance policy,
risk retention
group coverage
policy,
surety
bond or
letter
of credit.
The
owner
or
operator
shall
obtain_alternate_financial
assurance
as
specified
in
this Subpart
within
30
days after
receiving notice
of
such an event.
If the owner
101—411
-20—
or operator does not
obtain
alternate coverage within
30 days after
such notification, the owner or operator shall
notify the Fire
Marshal.
(Source:
Added
at
13 Ill. Reg.
,
effective
)
Section 731.211
Replenishment
~j
If
at
any time after
a standby trust
is
funded upon the instruction
of the
Fire Marshal with funds drawn from
a guarantee, letter of
credit
or
surety bond,
and the amount
in the standby trust
is
reduced
below the full
amount
of coverage required, the owner
or operator
shall
by the anniversary date of the financial mechanism from which
the funds were drawn:
~fl
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.
b)
For purposes of this Section, the full
amount
of coverage
to
be
provided by Section 731.193.
If
a combination
of mechanisms was
used
to
provide the assurance
funds which were drawn upon,
replenishment
must occur
by the earliest anniversary date among the mechanisms.
(Source:
Added at
13
Ill.
Peg.
,
effective
IT
IS
SO ORDERED
I, Dorothy
M.
Gurin,
Clerk of the
Illinois Pollution Control~oard,hereby
certify that
the above Order was adopted
on the ~27~?~dayof
~
1 989, by
a vote of
c~
~.
/
Dorothy
M. ~
Clerk
Illinois Pollution Control
Board
10 1—412
