[Code of Federal Regulations]
[Title 40, Volume 25]
[Revised as of July 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 40CFR280.103]

[Page 490-494]
 
                   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. 280.103  Standby trust fund.

    (a) An owner or operator using any one of the mechanisms authorized 
by Sec. Sec. 280.96, 280.98, or 280.99 must establish a standby trust 
fund when the mechanism is acquired. The trustee of the standby trust 
fund must be an entity that has the authority to act as a trustee and 
whose trust operations are regulated and examined by a Federal agency or 
an agency of the state in which the fund is established.
    (b)(1) The standby trust agreement, or trust agreement, must be 
worded as follows, except that instructions in brackets are to be 
replaced with the relevant information and the brackets deleted:

[[Page 491]]

                             Trust Agreement

    Trust agreement, the ``Agreement,'' entered into as of [date] by and 
between [name of the owner or operator], a [name of state] [insert 
``corporation,'' ``partnership,'' ``association,'' or 
``proprietorship''], the ``Grantor,'' and [name of corporate trustee], 
[insert ``Incorporated in the state of ------'' or ``a national bank''], 
the ``Trustee.''
    Whereas, the United States Environmental Protection Agency, ``EPA,'' 
an agency of the United States Government, has established certain 
regulations applicable to the Grantor, requiring that an owner or 
operator of an underground storage tank shall provide assurance that 
funds will be available when needed for corrective action and third-
party compensation for bodily injury and property damage caused by 
sudden and nonsudden accidental releases arising from the operation of 
the underground storage tank. The attached Schedule A lists the number 
of tanks at each facility and the name(s) and address(es) of the 
facility(ies) where the tanks are located that are covered by the 
standpoint trust agreement.
    [Whereas, the Grantor has elected to establish [insert either ``a 
guarantee,'' ``surety bond,'' or ``letter of credit''] to provide all or 
part of such financial assurance for the underground storage tanks 
identified herein and is required to establish a standby trust fund able 
to accept payments from the instrument (This paragraph is only 
applicable to the standby trust agreement.)];
    Whereas, the Grantor, acting through its duly authorized officers, 
has selected the Trustee to be the trustee under this agreement, and the 
Trustee is willing to act as trustee;
    Now, therefore, the Grantor and the Trustee agree as follows:

                         Section 1. Definitions

    As used in this Agreement:
    (a) The term ``Grantor'' means the owner or operator who enters into 
this Agreement and any successors or assigns of the Grantor.
    (b) The term ``Trustee'' means the Trustee who enters into this 
Agreement and any successor Trustee.

     Section 2. Identification of the Financial Assurance Mechanism

    This Agreement pertains to the [identify the financial assurance 
mechanism, either a guarantee, surety bond, or letter of credit, from 
which the standby trust fund is established to receive payments (This 
paragraph is only applicable to the standby trust agreement.)].

                    Section 3. Establishment of Fund

    The Grantor and the Trustee hereby establish a trust fund, the 
``Fund,'' for the benefit of [implementing agency]. The Grantor and the 
Trustee intend that no third party have access to the Fund except as 
herein provided. [The Fund is established initially as a standby to 
receive payments and shall not consist of any property.] Payments made 
by the provider of financial assurance pursuant to [the Director of the 
implementing agency's] instruction are transferred to the Trustee and 
are referred to as the Fund, together with all earnings and profits 
thereon, less any payments or distributions made by the Trustee pursuant 
to this Agreement. The Fund shall be held by the Trustee, IN TRUST, as 
hereinafter provided. The Trustee shall not be responsible nor shall it 
undertake any responsibility for the amount or adequacy of, nor any duty 
to collect from the Grantor as provider of financial assurance, any 
payments necessary to discharge any liability of the Grantor established 
by [the state implementing agency]

    Section 4. Payment for [``Corrective Action'' and/or Third-Party 
                           Liability Claims'']

    The Trustee shall make payments from the Fund as [the Director of 
the implementing agency] shall direct, in writing, to provide for the 
payment of the costs of [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 tanks 
covered by the financial assurance mechanism identified in this 
Agreement.
    The Fund may not be drawn upon 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.
    The Trustee shall reimburse the Grantor, or other persons as 
specified by [the Director], from the Fund for corrective action 
expenditures and/or third-party liability claims in such amounts as [the 
Director]

[[Page 492]]

shall direct in writing. In addition, the Trustee shall refund to the 
Grantor such amounts as [the Director] specifies in writing. Upon 
refund, such funds shall no longer constitute part of the Fund as 
defined herein.

                 Section 5. Payments Comprising the Fund

    Payments made to the Trustee for the Fund shall consist of cash and 
securities acceptable to the Trustee.

                      Section 6. Trustee Management

    The Trustee shall invest and reinvest the principal and income of 
the Fund and keep the Fund invested as a single fund, without 
distinction between principal and income, in accordance with general 
investment policies and guidelines which the Grantor may communicate in 
writing to the Trustee from time to time, subject, however, to the 
provisions of this Section. In investing, reinvesting, exchanging, 
selling, and managing the Fund, the Trustee shall discharge his duties 
with respect to the trust fund solely in the interest of the 
beneficiaries and with the care, skill, prudence, and diligence under 
the circumstances then prevailing which persons of prudence, acting in a 
like capacity and familiar with such matters, would use in the conduct 
of an enterprise of a like character and with like aims; except that:
    (i) Securities or other obligations of the Grantor, or any other 
owner or operator of the tanks, or any of their affiliates as defined in 
the Investment Company Act of 1940, as amended, 15 U.S.C. 80a-2(a), 
shall not be acquired or held, unless they are securities or other 
obligations of the federal or a state government;
    (ii) The Trustee is authorized to invest the Fund in time or demand 
deposits of the Trustee, to the extent insured by an agency of the 
federal or state government; and
    (iii) The Trustee is authorized to hold cash awaiting investment or 
distribution uninvested for a reasonable time and without liability for 
the payment of interest thereon.

                  Section 7. Commingling and Investment

    The Trustee is expressly authorized in its discretion:
    (a) To transfer from time to time any or all of the assets of the 
Fund to any common, commingled, or collective trust fund created by the 
Trustee in which the Fund is eligible to participate, subject to all of 
the provisions thereof, to be commingled with the assets of other trusts 
participating therein; and
    (b) To purchase shares in any investment company registered under 
the Investment Company Act of 1940, 15 U.S.C. 80a-1 et seq., including 
one which may be created, managed, underwritten, or to which investment 
advice is rendered or the shares of which are sold by the Trustee. The 
Trustee may vote such shares in its discretion.

                  Section 8. Express Powers of Trustee

    Without in any way limiting the powers and discretions conferred 
upon the Trustee by the other provisions of this Agreement or by law, 
the Trustee is expressly authorized and empowered:
    (a) To sell, exchange, convey, transfer, or otherwise dispose of any 
property held by it, by public or private sale. No person dealing with 
the Trustee shall be bound to see to the application of the purchase 
money or to inquire into the validity or expediency of any such sale or 
other disposition;
    (b) To make, execute, acknowledge, and deliver any and all documents 
of transfer and conveyance and any and all other instruments that may be 
necessary or appropriate to carry out the powers herein granted;
    (c) To register any securities held in the Fund in its own name or 
in the name of a nominee and to hold any security in bearer form or in 
book entry, or to combine certificates representing such securities with 
certificates of the same issue held by the Trustee in other fiduciary 
capacities, or to deposit or arrange for the deposit of such securities 
in a qualified central depository even though, when so deposited, such 
securities may be merged and held in bulk in the name of the nominee of 
such depository with other securities deposited therein by another 
person, or to deposit or arrange for the deposit of any securities 
issued by the United States Government, or any agency or instrumentality 
thereof, with a Federal Reserve bank, but the books and records of the 
Trustee shall at all times show that all such securities are part of the 
Fund;
    (d) To deposit any cash in the Fund in interest-bearing accounts 
maintained or savings certificates issued by the Trustee, in its 
separate corporate capacity, or in any other banking institution 
affiliated with the Trustee, to the extent insured by an agency of the 
federal or state government; and
    (e) To compromise or otherwise adjust all claims in favor of or 
against the Fund.

                      Section 9. Taxes and Expenses

    All taxes of any kind that may be assessed or levied against or in 
respect of the Fund and all brokerage commissions incurred by the Fund 
shall be paid from the Fund. All other expenses incurred by the Trustee 
in connection with the administration of this Trust, including fees for 
legal services rendered to the Trustee, the compensation of the Trustee 
to the extent not paid directly by the Grantor, and all other proper 
charges and disbursements of the Trustee shall be paid from the Fund.

[[Page 493]]

                      Section 10. Advice of Counsel

    The Trustee may from time to time consult with counsel, who may be 
counsel to the Grantor, with respect to any questions arising as to the 
construction of this Agreement or any action to be taken hereunder. The 
Trustee shall be fully protected, to the extent permitted by law, in 
acting upon the advice of counsel.

                    Section 11. Trustee Compensation

    The Trustee shall be entitled to reasonable compensation for its 
services as agreed upon in writing from time to time with the Grantor.

                      Section 12. Successor Trustee

    The Trustee may resign or the Grantor may replace the Trustee, but 
such resignation or replacement shall not be effective until the Grantor 
has appointed a successor trustee and this successor accepts the 
appointment. The successor trustee shall have the same powers and duties 
as those conferred upon the Trustee hereunder. Upon the successor 
trustee's acceptance of the appointment, the Trustee shall assign, 
transfer, and pay over to the successor trustee the funds and properties 
then constituting the Fund. If for any reason the Grantor cannot or does 
not act in the event of the resignation of the Trustee, the Trustee may 
apply to a court of competent jurisdiction for the appointment of a 
successor trustee or for instructions. The successor trustee shall 
specify the date on which it assumes administration of the trust in 
writing sent to the Grantor and the present Trustee by certified mail 10 
days before such change becomes effective. Any expenses incurred by the 
Trustee as a result of any of the acts contemplated by this Section 
shall be paid as provided in Section 9.

                 Section 13. Instructions to the Trustee

    All orders, requests, and instructions by the Grantor to the Trustee 
shall be in writing, signed by such persons as are designated in the 
attached Schedule B or such other designees as the Grantor may designate 
by amendment to Schedule B. The Trustee shall be fully protected in 
acting without inquiry in accordance with the Grantor's orders, 
requests, and instructions. All orders, requests, and instructions by 
[the Director of the implementing agency] to the Trustee shall be in 
writing, signed by [the Director], and the Trustee shall act and shall 
be fully protected in acting in accordance with such orders, requests, 
and instructions. The Trustee shall have the right to assume, in the 
absence of written notice to the contrary, that no event constituting a 
change or a termination of the authority of any person to act on behalf 
of the Grantor or [the director] hereunder has occurred. The Trustee 
shall have no duty to act in the absence of such orders, requests, and 
instructions from the Grantor and/or [the Director], except as provided 
for herein.

                   Section 14. Amendment of Agreement

    This Agreement may be amended by an instrument in writing executed 
by the Grantor and the Trustee, or by the Trustee and [the Director of 
the implementing agency] if the Grantor ceases to exist.

               Section 15. Irrevocability and Termination

    Subject to the right of the parties to amend this Agreement as 
provided in Section 14, this Trust shall be irrevocable and shall 
continue until terminated at the written direction of the Grantor and 
the Trustee, or by the Trustee and [the Director of the implementing 
agency], if the Grantor ceases to exist. Upon termination of the Trust, 
all remaining trust property, less final trust administration expenses, 
shall be delivered to the Grantor.

                Section 16. Immunity and Indemnification

    The Trustee shall not incur personal liability of any nature in 
connection with any act or omission, made in good faith, in the 
administration of this Trust, or in carrying out any directions by the 
Grantor or [the Director of the implementing agency] issued in 
accordance with this Agreement. The Trustee shall be indemnified and 
saved harmless by the Grantor, from and against any personal liability 
to which the Trustee may be subjected by reason of any act or conduct in 
its official capacity, including all expenses reasonably incurred in its 
defense in the event the Grantor fails to provide such defense.

                        Section 17. Choice of Law

    This Agreement shall be administered, construed, and enforced 
according to the laws of the state of [insert name of state], or the 
Comptroller of the Currency in the case of National Association banks.

                       Section 18. Interpretation

    As used in this Agreement, words in the singular include the plural 
and words in the plural include the singular. The descriptive headings 
for each section of this Agreement shall not affect the interpretation 
or the legal efficacy of this Agreement.
    In Witness whereof the parties have caused this Agreement to be 
executed by their respective officers duly authorized and their 
corporate seals (if applicable) to be hereunto affixed and attested as 
of the date first above written. The parties below certify that the 
wording of this Agreement is identical to the wording specified in 40 
CFR 280.103(b)(1) as

[[Page 494]]

such regulations were constituted on the date written above.

[Signature of Grantor]
[Name of the Grantor]
[Title]

Attest:
    [Signature of Trustee]
    [Name of the Trustee]
    [Title]
    [Seal]
    [Signature of Witness]
    [Name of the Witness]
    [Title]
    [Seal]

    (2) The standby trust agreement, or trust agreement must be 
accompanied by a formal certification of acknowledgement similar to the 
following. State requirements may differ on the proper content of this 
acknowledgment.

State of________________________________________________________________

County of_______________________________________________________________

    On this [date], before me personally came [owner or operator] to me 
known, who, being by me duly sworn, did depose and say that she/he 
resides at [address], that she/he is [title] of [corporation], the 
corporation described in and which executed the above instrument; that 
she/he knows the seal of said corporation; that the seal affixed to such 
instrument is such corporate seal; that it was so affixed by order of 
the Board of Directors of said corporation; and that she/he signed her/
his name thereto by like order.

[Signature of Notary Public]
    [Name of Notary Public]

    (c) The Director of the implementing agency will instruct the 
trustee to refund the balance of the standby trust fund to the provider 
of financial assurance if the Director determines that no additional 
corrective action costs or third-party liability claims will occur as a 
result of a release covered by the financial assurance mechanism for 
which the standby trust fund was established.
    (d) An owner or operator may establish one trust fund as the 
depository mechanism for all funds assured in compliance with this rule.

[53 FR 43370, Oct. 26, 1988; 53 FR 51274, Dec. 21, 1988]