[Code of Federal Regulations]
[Title 40, Volume 24]
[Revised as of July 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 40CFR280.99]

[Page 486-487]
 
                   TITLE 40--PROTECTION OF ENVIRONMENT
 
                           AGENCY (CONTINUED)
 
PART 280--TECHNICAL STANDARDS AND CORRECTIVE ACTION REQUIREMENTS FOR OWNERS AND OPERATORS OF UNDERGROUND STORAGE TANKS (UST)--Table of Contents
 
                   Subpart H--Financial Responsibility
 
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 487]]

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]