(1) An
owner or
operator, and/or guarantor,
may satisfy the requirements of rule
567-136.4 (455B) by passing a
financial test as specified in this rule. To pass the financial test of
self-insurance, the
owner or
operator, and/or guarantor must meet the criteria
of subrule 136.6(2) or 136.6(3) based on year-end financial statements for the
latest completed fiscal year.
(2)
Financial test alternative I.
a. The
owner or
operator, and/or guarantor, must have a
tangible net worth of at least ten
times:
(1) The total of the applicable
aggregate amount required by rule
567-136.4 (455B), based on the
number of underground storage tanks for which a financial test is used to
demonstrate financial responsibility to the Iowa department of natural
resources under this rule.
(2) The
sum of the corrective action cost estimates, the current closure and
postclosure care cost estimates, and amount of liability coverage for which a
financial test is used to demonstrate financial responsibility to EPA under 40
CFR Parts
264.101, 264.143, 264.145, 264.147, 265.143, 265.145, and 265.147 or
to a state implementing agency under a state program authorized by EPA under 40
CFR Part
271 ; and
(3) The sum of
current plugging and abandonment cost estimates for which a financial test is
used to demonstrate financial responsibility to EPA under 40 CFR Part
144.63 or
to a state implementing agency under a state program authorized by EPA under 40
CFR Part
145.
b. The
owner or operator, and/or guarantor, must have a tangible net worth of at least
$10 million.
c. The owner or
operator, and/or guarantor, must have a letter signed by the chief financial
officer worded as specified in subrule 136.6(4).
d. The
owner or
operator, and/or guarantor,
must either:
(1) File financial statements
annually with the U.S. Securities and Exchange Commission, the Energy
Information Administration, or the Rural Utilities Service; or
(2) 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.
e. 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.
(3) Financial test alternative II.
a. The
owner or
operator, and/or guarantor
must meet the financial test requirements of
40 CFR
264.147(f)(1) substituting
the appropriate amounts specified in 136.4(2), paragraphs
"a"
and
"b," for the "amount of liability coverage" each time
specified in that section.
b. The
owner, operator, or guarantor must have a tangible net worth of at least $10
million.
c. The owner, operator, or
guarantor must have a tangible net worth of at least six times the amount of
the applicable UST aggregate.
d. At
least 90 percent of the total assets of the
owner,
operator, or guarantor must
be U.S. assets, or U.S. assets at least six times the amount of the applicable
UST aggregate, and either:
(1) Net working
capital at least six times the applicable UST aggregate; or
(2) A current bond rating for the most recent
bond issue of AAA, AA, A or BBB as issued by Standard &Poor's, or Aaa, Aa,
A or Baa as issued by Moody's.
e. The fiscal year-end financial statements
of the owner or operator, and/or guarantor, must be examined by an independent
certified public accountant and be accompanied by the accountant's report of
the examination.
f. The firm's
year-end financial statements cannot include an adverse auditor's opinion, a
disclaimer of opinion, or a "going concern" qualification.
g. The owner or operator, and/or guarantor,
must have a letter signed by the chief financial officer, worded as specified
in subrule 136.6(4).
h. If the
financial statements of the
owner or
operator, and/or guarantor, are not
submitted annually to the U.S. Securities and Exchange Commission, the Energy
Information Administration or the Rural Utilities Service, the
owner or
operator, and/or guarantor, must obtain a special report by an independent
certified public accountant stating that:
(1)
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 the owner or operator, and/or guarantor, with the amounts in such
financial statements; and
(2) In
connection with that comparison, no matters came to the accountant's attention
which caused the belief that the specified data should be adjusted.
(4) To demonstrate that
it meets the financial test under subrule 136.6(2) or 136.6(3), the
chief
financial officer of the
owner or
operator, and/or guarantor, must 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 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 the owner or operator, or guarantor]. This letter is in support of the use
of [insert: "the financial test of self-insurance," and/or "guarantee"] 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" or "nonsudden accidental
releases" or "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 financial test by this [insert: "owner or operator," and/or
"guarantor"]: [List for each facility: the name and address of the facility
where tanks assured by this financial test are located and whether tanks are
assured by this financial test. If separate mechanisms or combinations of
mechanisms are being used to assure any of the tanks at this facility, list
each tank assured by this financial test by the tank identification number
provided in the notification submitted pursuant to subrule 135.3(3)].
A [insert: "financial test," and/or "guarantee"] is also used
by this [insert: "owner or operator," or "guarantor"] to demonstrate evidence
of financial responsibility in the following amounts under other EPA
regulations or state programs authorized by EPA under 40 CFR Parts 271 and
145:
|
EPA Regulation:
|
Amount
|
|
Closure (§§264.143
and265.143)........................
|
$_______
|
|
Postclosure Care (§§264.145 and 265.145)
.................
|
$_______
|
|
Liability Coverage (§§264.147
and265.147)................
|
$_______
|
|
Corrective Action
(§264.101(b)).........................
|
$_______
|
|
Plugging and Abandonment (§144.63)
....................
|
$_______
|
|
Authorized State Programs:
|
|
|
Closure
..........................................
|
$_______
|
|
Postclosure Care
....................................
|
$_______
|
|
Liability Coverage
..................................
|
$_______
|
|
Corrective Action
...................................
|
$_______
|
|
Plugging and Abandonment
............................
|
$_______
|
|
TOTAL.............
|
$_______
|
This [insert: "owner or operator," or "guarantor"] has not
received an adverse opinion, a disclaimer of opinion, or a "going concern"
qualification from an independent auditor on financial statements for the
latest completed fiscal year.
[Fill in the information for Alternative I if the criteria of
subrule 136.6(2) are being used to demonstrate compliance with the financial
test requirements. Fill in the information of Alternative II if the criteria of
subrule 136.6(3) are being used to demonstrate compliance with the financial
test requirements.]
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ALTERNATIVE I
|
|
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1. Amount of annual UST aggregate coverage being
assured by a financial test, and/or guarantee.........................
|
$_______
|
|
2. Amount of corrective action, closure and
postclosure care costs, liability coverage, and plugging and abandonment costs
covered by a financial test, and/or guarantee........................
|
$_______
|
|
3. Sum of lines 1 and
2.................................
|
$_______
|
|
4. Total tangible assets
.................................
|
$_______
|
|
5. Total liabilities [if any of the amount reported
on line 3 is included in total liabilities, you may deduct that amount from
this line and add that amount to line 6].............................
|
$_______
|
|
6. Tangible net worth [subtract line 5 from line
4]..............
|
$_______
Yes No
|
|
7. Is line 6 at least $10
million?...........................
|
___
___
|
|
8. Is line 6 at least 10 times line 3?
........................
|
___
___
|
|
9. Have financial statements for the latest fiscal
year been filed with the Securities and Exchange Commission?
.................
|
___
___
|
|
10. Have financial statements for the latest fiscal
year been filed with the Energy Information Administration?
..................
|
___
___
|
|
11. Have financial statements for the latest fiscal
year been filed with the Rural Utilities Service?
............................
|
___
___
|
|
12. Has financial information been provided to Dun
and Bradstreet, and has Dun and Bradstreet provided a financial strength rating
of 4A or 5A? [Answer "Yes" only if both criteria have been met.].....
|
___
___
|
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ALTERNATIVE II
|
|
|
1. Amount of annual UST aggregate coverage being
assured by a financial test, and/or guarantee.........................
|
$_______
|
|
2. Amount of corrective action, closure and
postclosure care costs, liability coverage, and plugging and abandonment costs
covered by a financial test, and/or guarantee........................
|
$_______
|
|
3. Sum of lines 1 and
2.................................
|
$_______
|
|
4. Total tangible assets
.................................
|
$_______
|
|
5. Total liabilities [if any of the amount reported
on line 3 is included in total liabilities, you may deduct that amount from
this line and add that amount to line 6].............................
|
$_______
|
|
6. Tangible net worth [subtract line 5 from line
4]..............
|
$_______
|
|
7. Total assets in the U.S. [required only if less
than 90 percent of assets are located in the U.S.]
...............................
|
$_______
|
|
8. Is line 6 at least $10
million?...........................
|
___
___
|
|
9. Is line 6 at least 6 times line 3?
.........................
|
___
___
|
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10. Are at least 90 percent of assets located in the
U.S.? [If "No," complete line 11.]..................................
|
___
___
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11. Is line 7 at least 6 times line 3? [Fill in
either lines 12-15 or lines 16-18.]..................
|
|
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12. Current assets
.....................................
|
$_______
|
|
13. Current liabilities
...................................
|
$_______
|
|
14. Net working capital [subtract line 13 from line
12] ...........
|
$_______
|
|
15. Is line 14 at least 6 times line 3?
........................
|
|
|
16. Current bond rating of most recent bond issue
..............
|
___
|
|
17. Name of rating service
...............................
|
___
|
|
18. Date of maturity of
bond..............................
|
___
|
|
19. Have financial statements for the latest fiscal
year been filed with the SEC, the Energy Information Administration, or the
Rural Utilities Service?.........................................
|
___
___
|
[If "No," please attach a report from an independent
certified public accountant certifying that there are no material differences
between the data as reported in lines 4-18 above and the financial statements
for the latest fiscal year.]
[For both Alternative I and Alternative II complete the
certification with this statement.]
I hereby certify that the wording of this letter is identical
to the wording specified in subrule 136.6(4) as such regulations were
constituted on the date shown immediately below.
[Signature]
[Name]
[Title]
[Date]
(5)
If an owner or operator using the test to provide financial assurance finds
that the requirements of the financial test based on the year-end financial
statements are no longer being met, the owner or operator must obtain
alternative coverage within 150 days of the end of the year for which financial
statements have been prepared.
(6)
The director may require reports of financial condition at any time from the
owner or operator, and/or guarantor. If the director finds, on the basis of
such reports or other information, that the owner or operator, and/or
guarantor, no longer meets the financial test requirements of subrule 136.6(2)
or 136.6(3) or 136.6(4), the owner or operator must obtain alternate coverage
within 30 days after notification of such a finding.
(7) If the owner or operator fails to obtain
alternate assurance within 150 days of finding that the requirements of the
financial test based on the year-end financial statements are no longer being
met, or within 30 days of notification by the director that the requirements of
the financial test are no longer being met, the owner or operator must notify
the director of such failure within 10 days.
