Ariz. Admin. Code § R18-12-305 - Financial Test of Self-insurance
A. Owners, operators, or guarantors may
satisfy the requirements of
R18-12-303 by passing a financial
test as specified in this Section. To pass the financial test of
self-insurance, owners, operators, or guarantors shall meet the criteria of
either subsection (B) or (C) based on year-end financial statements for the
latest completed fiscal year.
B. In
order to pass a financial test of self-insurance under this subsection, owners,
operators, or guarantors shall meet all of the following requirements:
1. Have a tangible net worth of at least 10
times all of the following:
a. The total of
the applicable aggregate amount required by
R18-12-303, based on the number of
underground storage tanks for which a financial test of self-insurance is used
to demonstrate financial responsibility;
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 of self-insurance is used to
demonstrate financial responsibility under
R18-8-264 or
R18-8-265;
c. The sum of current plugging and
abandonment cost estimates for which a financial test of self-insurance is used
to demonstrate financial responsibility to EPA under
40 CFR
144.63, amended as of October 13, 2015, or to
a state implementing agency under a state program authorized by EPA under 40
CFR part 145.
2. Have a
tangible net worth of at least $10 million,
3. Have a letter signed by the chief
financial officer worded as specified in subsection (D),
4. Do either one of the following:
a. File financial statements annually with
the U.S. Securities and Exchange Commission, the Energy Information
Administration, or the Rural Electrification Administration.
b. Report annually the firm's tangible net
worth to Dun and Bradstreet, and Dun and Bradstreet shall have assigned the
firm a financial strength rating of 4A or 5A.
5. The firm's year-end financial statements,
if independently audited, cannot include an adverse auditor's opinion, a
disclaimer of opinion, or a "going concern" qualification.
C. In order to pass a financial test of
self-insurance under this subsection, owners, operators, or guarantors shall
meet all of the following requirements:
1.
Owners, operators, or guarantors shall meet the financial test requirements of
40 CFR
264.147(f)(1), amended as of
October 13, 2015, substituting the appropriate amount specified in either
R18-12-303(B)(1) or (2) for the "amount of liability coverage" each time
specified in
40 CFR
264.147(f)(1);
2. The fiscal year-end financial statements
of owners, operators, or guarantors shall be examined by an independent
certified public accountant and be accompanied by the accountant's report of
the examination;
3. The firm's
year-end financial statements cannot include an adverse auditor's opinion, a
disclaimer of opinion, or a "going concern" qualification;
4. Owners, operators, or guarantors shall
have a letter signed by the chief financial officer, worded as specified in
subsection (D);
5. If the financial
statements of owners, operators, or guarantors are not submitted annually to
the U.S. Securities and Exchange Commission, the Energy Information
Administration or the Rural Electrification Administration, owners, operators,
or guarantors shall obtain a special report by an independent certified public
accountant stating all of the following:
a.
The accountant has compared the data that the letter from the chief financial
officer specifies as having been derived from the latest year-end financial
statements of owners, operators, or guarantors, with the amounts in such
financial statements.
b. In
connection with the comparison under subsection (C)(5)(a), no matters came to
the accountant's attention which caused the accountant to believe that the
specified data should be adjusted.
D. To demonstrate that it meets the financial
test under subsection (B) or (C), the chief financial officer of owners,
operators, or guarantors, shall sign, within 120 days of the close of each
financial reporting year, as defined by the 12-month period for which financial
statements used to support the financial test are prepared, a letter worded
exactly as provided in
40 CFR
280.95(d), amended as of
October 13, 2015, except that the instructions in brackets are to be replaced
by the relevant information and the brackets deleted.
E. If owners and operators, using a financial
test of self-insurance for financial responsibility find that they no longer
meet the requirements of the financial test based on the year-end financial
statements, owners and operators shall obtain alternative coverage within 150
days of the end of the financial reporting year for which financial statements
have been prepared.
F. The Director
may require reports of financial condition at any time from owners, operators,
or guarantors. If the Director finds, on the basis of such reports or other
information, that owners, operators, or guarantors, no longer meet the
financial test requirements, owners and operators shall obtain alternate
coverage within 30 days after notification of such a finding.
G. If owners and operators fail to obtain
alternate assurance within 150 days of finding that they no longer meet the
requirements of the financial test based on the year-end financial statements,
or within 30 days of notification by the Director that they no longer meet the
requirements of the financial test, owners and operators shall notify the
Director of such failure within 10 days.
H. Owners and operators may use
self-insurance in combination with a guarantee only if, for the purpose of
meeting the requirements of the financial test under this Section, the
financial statements of the owner or operator are not consolidated with the
financial statements of the guarantor.
Notes
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