[Code of Federal Regulations] [Title 40, Volume 26] [Revised as of July 1, 2007] From the U.S. Government Printing Office via GPO Access [CITE: 40CFR280.107] [Page 551-553] TITLE 40--PROTECTION OF ENVIRONMENT CHAPTER I--ENVIRONMENTAL PROTECTION AGENCY (CONTINUED) PART 280_TECHNICAL STANDARDS AND CORRECTIVE ACTION REQUIREMENTS FOR OWNERS AND Subpart H_Financial Responsibility Sec. 280.107 Local government fund. A local government owner or operator may satisfy the requirements of Sec. 280.93 by establishing a dedicated fund account that conforms to the requirements of this section. Except as specified in paragraph (b), 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 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 and is funded for the full amount of coverage required under Sec. 280.93, or funded for part of the required amount of coverage and used in combination with other mechanism(s) 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 [[Page 552]] 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 underground storage tanks, and is funded for five times the full amount of coverage required under Sec. 280.93, or funded for part of the required amount of coverage and used in combination with other mechanism(s) that provide the remaining coverage. If the fund is funded for less than five times the amount of coverage required under Sec. 280.93, the amount of financial responsibility demonstrated by the fund may not exceed one- fifth 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 underground storage tanks. A payment is made to the fund once every year for seven years until the fund is fully-funded. This seven year period is hereafter referred to as the ``pay-in- period.'' The amount of each payment must be determined by this formula: [GRAPHIC] [TIFF OMITTED] TR25SE06.012 Where TF is the total required financial assurance for the owner or operator, CF is the current amount in the fund, and Y is the number of years remaining in the pay-in-period, and; (1) The local government owner or operator has available bonding authority, approved through voter referendum (if such 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 underground storage tanks, 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. (d) To demonstrate that it meets the requirements of the local government fund, the chief financial officer of the local government owner or operator and/or guarantor must sign a letter worded exactly 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 ``nonsudden 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 Sec. 280.93, or funded for part of the required amount of coverage and used in combination with other mechanism(s) that provide the remaining coverage.'' or ``The local government fund is funded for ten times the full amount of coverage required under Sec. 280.93, or funded for part of the required amount of coverage and used in combination with other mechanisms(s) that provide the remaining coverage,'' or ``A payment is made to the fund once every year for seven 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 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 [[Page 553]] 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 at close of last fiscal year):_____ [If fund balance is incrementally funded as specified in Sec. 280.107(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 40 CFR 280.107(d) as such regulations were constituted on the date shown immediately below. [Date] [Signature] [Name] [Title] [58 FR 9059, Feb. 18, 1993]