(A) Purpose.
For the purpose of prescribing rules pursuant to division (B)
of section
3737.882
of the Revised Code, the state fire marshal hereby adopts this rule to
establish financial responsibility requirements for underground storage tank
systems containing petroleum. This rule is adopted by the state fire marshal in
accordance with Chapter 119. of the Revised Code and shall not be considered a
part of the "Ohio Fire Code."
(B) Applicability.
(1) Except as otherwise provided in
paragraphs (B)(2) and (B)(3) of this rule, owners and operators of all
petroleum UST systems within this state shall comply with this rule by the
applicable date established in paragraph (D) of this rule.
(2) Federal government entities whose debts
and liabilities are the debts and liabilities of the United States are exempt
from the requirements of this rule.
(3) The requirements of this rule do not
apply for any of the following petroleum UST systems:
(a) Any UST system holding hazardous wastes
listed or identified under Chapter 3745-51 of the Administrative Code, or a
mixture of such hazardous waste and petroleum;
(b) Any wastewater treatment tank system that
is part of a wastewater treatment facility regulated under section 402 or
307(b) of the Federal Water Pollution Control Act (33 U.S.C.A.
1251 and following
,
as amended at the time of the effective date of this rule);
(c) Equipment or machinery that contains
petroleum for operational purposes such as hydraulic lift tanks and electrical
equipment tanks;
(d) Any petroleum
UST system whose capacity is one hundred ten gallons or less;
(e) Any UST system that contains a de minimis
concentration of petroleum;
(f) Any
emergency spill or overflow petroleum containment UST system that is
expeditiously emptied after use;
(g) Wastewater treatment tank systems
containing petroleum;
(h) Any
petroleum UST systems containing radioactive material that are regulated under
the Atomic Energy Act of 1954 (42 U.S.C.A.
2011 and following
,
as amended at the time of the effective date of this rule);
(i) Any petroleum UST system that is part of
an emergency generator system at nuclear power generation facilities regulated
by the United States nuclear regulatory commission under 10 C.F.R. Part
50, Appendix A
, as amended at the time of the effective
date of this rule.
(C) If the owner and operator of a petroleum
UST system are separate persons, only one of such persons is required to obtain
and demonstrate financial responsibility for that particular petroleum UST
system; however, both persons are liable in event of noncompliance. Regardless
of which person complies, the date for compliance with this rule regarding a
particular petroleum UST system as set forth in paragraph (D) of this rule
shall be determined by the characteristics of the owner.
(D) Compliance date.
Owners and operators of petroleum UST systems shall comply with
the requirements of this rule upon the effective date of this rule.
(E) Definitions.
For the purposes of this rule:
(1) "Accidental release" means any sudden or
nonsudden release of petroleum that was neither expected nor intended by the
owner or operator of the applicable UST system and that results in the need for
corrective action or compensation for bodily injury or property
damage.
(2) "Chief financial
officer", in the case of state or a political subdivision owner or operator,
means the individual with the overall authority and responsibility for the
collection, disbursement, and use of funds by the state or political
subdivision.
(3) "Financial
reporting year" means the latest consecutive twelve-month period for which any
of the following reports used to support a financial test is prepared:
(a) A 10-K report submitted to the United
States securities and exchange commission;
(b) An annual report of tangible net worth
submitted to Dun and Bradstreet;
(c) Annual reports of tangible net worth
submitted to the United States energy information administration, the United
States rural utilities service, or the Ohio department of commerce;
or
(d) A special report by an
independent certified public accountant pursuant to paragraph (L)(4)(c) of this
rule.
"Financial reporting year" may thus comprise a fiscal or a
calendar year period.
(4) "Fund" is the petroleum underground
storage tank financial assurance fund created by division (A) of section
3737.91
of the Revised Code.
(5) "Fund
deductible" is the deductible amount for the fund established pursuant to
division (E) of section
3737.91
of the Revised Code.
(6) "Legal
defense cost" is any expense that an owner or operator or provider of financial
assurance incurs in defending against claims or actions brought by the
following:
(a) United States environmental
protection agency or the state to require corrective action or to recover the
costs of corrective action;
(b) A
third party for bodily injury or property damage caused by an accidental
release or by any person on behalf of such a third party; or
(c) A person to enforce the terms of a
financial assurance mechanism.
(7) "Occurrence" means an accident, including
continuous or repeated exposure to conditions, which results in a release from
a petroleum UST system. As used in this rule, the definition of "occurrence" is
intended to clarify the scope of coverage under this rule and is not intended
either to limit the meaning of "occurrence" in a way that conflicts with
standard insurance usage or to prevent the use of other standard insurance
terms in place of "occurrence".
(8)
"Petroleum marketing facilities" include all facilities at which petroleum is
produced or refined and all facilities from which petroleum is sold or
transferred to other petroleum marketers or to the public.
(9) "Petroleum marketers" are all persons
owning petroleum marketing facilities. Persons owning other types of facilities
with petroleum UST systems as well as petroleum marketing facilities are
considered to be petroleum marketers.
(10) "Property damage" includes, without
limitation, liability for corrective actions associated with releases from
petroleum UST systems.
(11)
"Provider of financial assurance" means a person that provides financial
assurance to an owner or operator of a petroleum UST system through one of the
mechanisms listed in paragraphs (L) to (R) of this rule including a guarantor,
insurer, risk retention group, surety, or issuer of a letter of
credit.
(12) "Reduced fund
deductible" is the reduced deductible amount for the fund established pursuant
to division (F) of section
3737.91
of the Revised Code.
(13)
"Substantial governmental relationship" means the extent of a governmental
relationship necessary under Ohio law to make an added guarantee contract
issued incident to that relationship valid and enforceable. A guarantee
contract is issued "incident to that relationship" if it arises from a clear
commonality of interest in the event of an UST release such as conterminous
boundaries, overlapping constituencies, common groundwater aquifer, or other
relationship other than monetary compensation that provides a motivation for
the guarantor to provide a guarantee.
(14) "Tangible net worth" means the tangible
assets that remain after deducting liabilities; such assets do not include
intangibles such as goodwill and rights to patents or royalties. For purposes
of this definition, "assets" means all existing and all probable future
economic benefits obtained or controlled by a particular person as a result of
past transactions.
(F)
Amount and scope of required financial responsibility.
(1) Owners and operators of petroleum UST
systems shall obtain and demonstrate for each of the petroleum UST systems
within this state which they own or operate financial responsibility both for
taking corrective action and for compensating third parties for bodily injury
and property damage caused by accidental releases from the petroleum UST
systems in the amount of one million dollars per occurrence.
(2) Owners and operators of petroleum UST
systems shall obtain and demonstrate for each of the petroleum UST systems
within this state which they own or operate financial responsibility for both
taking corrective action and for compensating third parties for bodily injury
and property damage caused by accidental releases from the petroleum UST
systems in at least the following annual aggregate amounts:
(a) For owners or operators of one to one
hundred tanks within this state which comprise petroleum UST systems, one
million dollars; and
(b) For owners
or operators of one hundred one or more tanks within this state which comprise
petroleum UST systems, two million dollars.
(3) The amounts of assurance required under
paragraphs (F)(1) and (F)(2) of this rule exclude legal defense
costs.
(4) The required
per-occurrence and annual aggregate coverage amounts do not in any way limit
the liability of the owner or operator.
(G) The fund.
(1) Owners and operators of petroleum UST
systems shall obtain and demonstrate a valid certificate of coverage in the
fund from the petroleum underground storage tank release compensation board
pursuant to division (D) of section
3737.91
of the Revised Code for each tank within this state comprising a petroleum UST
system.
(2) Owners and operators of
petroleum UST systems within this state shall obtain and demonstrate financial
responsibility for each such petroleum UST system so as to comply with the
deductible coverage requirements described in paragraph (H) of this
rule.
(H) Deductible
coverage requirements.
(1) Subject to the
limitations and requirements of paragraphs (I) and (J) of this rule, and in
addition to participation in the fund, owners and operators of petroleum UST
systems shall obtain and demonstrate financial responsibility for each
petroleum UST system within this state using one of the mechanisms listed in
paragraphs (L) to (V) of this rule in an amount equal to the following
applicable per-occurrence amount:
(a) If the
owner or operator has paid for the year the annual petroleum underground
storage tank financial assurance fee established pursuant to division (B) of
section
3737.91
of the Revised Code for the tanks comprising the petroleum UST system, the fund
deductible; and
(b) If the owner or
operator has paid for the year the additional fee established pursuant to
division (F) of section
3737.91
of the Revised Code for the tanks comprising the petroleum UST system, the
reduced fund deductible.
(2) The financial responsibility required by
this paragraph shall include responsibility both for taking corrective action
and for compensating third parties for bodily injury and property damage caused
by accidental release from petroleum UST systems.
(I) Combination of allowable mechanisms.
(1) Each allowable mechanism described in
paragraphs (L) to (V) of this rule which is used by an owner or operator to
comply with paragraph (H)(1) of this rule shall include responsibility both for
taking corrective action and for compensating third parties for bodily injury
and property damage caused by any accidental release from petroleum UST
systems.
(2) In complying with
paragraph (H)(1) of this rule, owners and operators shall use only one of the
mechanisms described in paragraphs (L) to (V) of this rule for any single
petroleum UST system. A single allowable mechanism may specify more than one
petroleum UST system for which the mechanism provides coverage.
(3) If an owner or operator uses different
allowable mechanisms for different petroleum UST systems within this state to
comply with paragraph (H) of this rule, each such different mechanism shall
comply with paragraph (H) of this rule.
(J) Aggregate amounts for self-insurance,
insurance, and risk retention group coverage.
(1) If an owner or operator uses the
self-insurance mechanism described in paragraph (L) of this rule to comply with
paragraph (H) of this rule for any petroleum UST system within this state, the
owner or operator shall, in computing the financial test described in paragraph
(L) of this rule, use the applicable annual aggregate from the following table:
Number of tanks covered by mechanism:
|
Per occurrence amount*:
|
Annual aggregate:
|
1-6
|
reduced fund deductible
|
reduced fund deductible
|
7-100
|
fund deductible
|
fund deductible
|
101-200
|
fund deductible
|
2 x fund deductible
|
201-300
|
fund deductible
|
3 x fund deductible
|
301 or more
|
fund deductible
|
4 x fund deductible
|
* the per-occurrence amount for the tanks covered required by
paragraph (H) (1) of this rule.
(2) If an owner or operator uses the
insurance or risk retention group coverage described in paragraph (N) of this
rule to comply with paragraph (H) of this rule for any petroleum UST system
within this state, the owner or operator shall obtain and demonstrate such
coverage in at least the applicable annual aggregate amount from the following
table:
Number of tanks covered by mechanism
|
Per occurrence amount*:
|
Annual aggregate:
|
1-6
|
reduced fund deductible
|
2 x reduced fund deductible
|
7-100
|
fund deductible
|
2 x fund deductible
|
101-200
|
fund deductible
|
3 x fund deductible
|
201-300
|
fund deductible
|
4 x fund deductible
|
301 or more
|
fund deductible
|
5 x fund deductible
|
*the per-occurrence amount for the tanks covered required by
paragraph (H) (1) of this rule.
(3) If an owner or operator uses any
mechanism described in paragraph (M) or paragraphs (O) to (R) of this rule to
comply with paragraph (H) of this rule for any petroleum UST system within this
state, the annual aggregate amount of coverage provided by the mechanism shall
be at least equal to the peroccurrence amount for the tanks required by
paragraph (H)(1) of this rule.
(K) New installations or new acquisitions.
(1) If additional tanks comprising petroleum
UST systems are installed, the owner and operator shall obtain and demonstrate
a valid certificate of coverage in the fund from the petroleum underground
storage tank release compensation board pursuant to division (D) of section
3737.91
of the Revised Code for each additional tank prior to introducing petroleum
into the tank. In addition, the owner and operator shall obtain and demonstrate
financial responsibility in compliance with paragraph (H) of this rule for each
additional tank prior to introducing petroleum into the tank.
(2) If additional existing tanks comprising
petroleum UST systems are acquired, the owner and operator shall obtain and
demonstrate a valid certificate of coverage in the fund from the petroleum
underground storage tank release compensation board pursuant to division (D) of
section
3737.91
of the Revised Code for each additional tank prior to bringing the tank into
operation. In addition, the owner and operator shall obtain and demonstrate
financial responsibility in compliance with paragraph (H) of this rule for each
additional tank prior to bringing the tank into operation.
(3) If an owner or operator is using
self-insurance, insurance, or risk retention group coverage to comply with
paragraph (H) of this rule, and if the number of additional tanks comprising
petroleum UST systems within this state installed or acquired results in such a
number of tanks so as to require a greater annual aggregate amount of coverage
pursuant to paragraph (J)(1) or (J)(2) of this rule, the amount of such
additional annual aggregate coverage necessary to comply with paragraph (J)(1)
or (J)(2) of this rule shall be obtained and demonstrated by the owner and
operator by the first-occurring effective date anniversary of the
self-insurance, insurance, or risk retention group coverage used to provide
coverage.
(L) Financial
test of self-insurance.
(1) An owner or
operator may satisfy the requirements of paragraph (H) of this rule by passing
a financial test as specified in this paragraph. To pass the financial test of
self-insurance, the owner or operator shall meet the criteria of this paragraph
based on year-end financial statement for the latest completed fiscal
year.
(2) The owner or operator
shall have a tangible net worth of at least ten times the sum of the following:
(a) The applicable annual aggregate required
by paragraph (J)(1) of this rule;
(b) The total of the applicable aggregate
amount required by 40 C. F. R.
280.93 based on the number of USTs located in
states other than Ohio for which a financial test is used to demonstrate
financial responsibility to the United States environmental protection agency
under
40 C.F.R.
280.95 or to another state implementing
agency under a state program approved by the United States environmental
protection agency under 40 C.F.R. Part
281 ;
(c) 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 is used to demonstrate
financial responsibility to the United States environmental protection agency
under 40 C. F. R.
264.101,
264.143,
264.145,
265.143,
265.145,
264.147, and
265.147 or to a state implementing agency under a state program authorized by
the United States environmental protection agency under 40 C.F.R. Part
271
including, without limitation, the Ohio environmental protection agency under
agency 3745 of the Administrative Code; and
(d) The sum of current plugging and
abandonment cost estimates for which a financial test is used to demonstrate
financial responsibility to the United States environmental protection agency
under
40 C.F.R.
144.63 or to a state implementing agency
under a state program authorized by the United States environmental protection
agency under 40 C.F.R. Part
145 including, without limitation, the Ohio
environmental protection agency under agency 3745 of the Administrative Code
and the Ohio department of natural resources under division 1501:9 of the
Administrative Code.
All references in this subparagraph to
federal regulations found in Title 40 of the Code of Federal Regulations are as
those regulations were amended as of the effective date of this
rule.
(3)
The owner or operator shall maintain a letter signed by the chief financial
officer worded as specified in appendix A to this rule.
(4) The owner or operator shall comply with
at least one of the following:
(a) File
financial statements annually with the United States securities and exchange
commission, the United States energy information administration, the United
States rural utilities service, or the Ohio department of commerce;
(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; or
(c) Have an independent certified public
accountant conduct an audit or a review of the fiscal year-end financial
statements of the owner or operator and prepare a special report wherein the
independent certified public accountant states both of the following:
(i) He has compared the data that the letter
form the chief financial officer specifies as having been derived from the
latest year-end financial statements of the owner or operator with the amounts
in such financial statements; and
(ii) In connection with that comparison, no
matters came to his attention which caused him to believe that the specified
data should be adjusted
(5) The owner's or operator's year-end
financial statements, if independently audited, cannot include an adverse
auditor's opinion, a disclaimer of opinion, or a "going concern"
qualification.
(6) To demonstrate
that it meets the financial test under this rule, the chief financial officer
of the owner or operator, shall sign, within one hundred twenty days of the
close of each financial reporting year, as defined by the twelve-month period
for which financial statements used to support the financial test are prepared,
a letter worded exactly as written in appendix A to this rule, except that the
instructions in brackets are to be replaced by the relevant information and the
brackets deleted.
(7) Within one
hundred twenty days of the end of each subsequent financial reporting year,
owners and operators using the self-insurance mechanism shall evaluate whether
they meet the financial test described in this paragraph. If an owner or
operator using the test to provide financial assurance finds that he or she no
longer meets the requirements of the financial test based on the yearend
financial statements, the owner or operator shall obtain and demonstrate
alternative coverage within one hundred fifty days of the end of the year for
which financial statements have been prepared.
(8) The state fire marshal may require
reports of financial condition at any time from the owner or operator. If the
state fire marshal determines, on the basis of such reports or other
information, that the owner or operator no longer meets the financial test
requirements of this paragraph, the owner or operator shall obtain and
demonstrate alternate coverage in compliance with this rule within thirty days
after notification of such a determination by the state fire marshal.
(9) If the owner or operator fails to obtain
alternate assurance within one hundred fifty days of the end of the financial
reporting year after finding that he or she no longer meets the requirements of
the financial test based on the yearend financial statements, or within thirty
days of notification by the state fire marshal that he or she no longer meets
the requirements of the financial test, the owner or operator shall notify the
state fire marshal of such failure within ten days.
(M) Guarantee.
(1) An owner or operator may satisfy the
requirements of paragraph (H) of this rule by obtaining a guarantee that
conforms to the requirements of this paragraph.
(2) The guarantor shall be in compliance with
all applicable sections of Title XXXIX of the Revised Code.
(3) An owner or operator who uses a guarantee
to satisfy the requirements of paragraph (H) of this rule shall establish a
standby trust fund when the guarantee is obtained. Under the terms of the
guarantee, all amounts paid by the guarantor under the guarantee will be
deposited directly into the standby trust fund in accordance with instructions
from the state fire marshal. This standby trust fund shall meet the
requirements specified in paragraph (R) of this rule.
(4) The guarantee shall be worded as written
in appendix B to this rule, except that instructions in brackets are to be
replaced with the relevant information and the brackets deleted.
(5) The owner or operator shall maintain an
original of the guarantee worded as specified in paragraph (M)(4) of this
rule.
(N) Insurance and
risk retention group coverage.
(1) An owner or
operator may satisfy the requirements of paragraph (H) of this rule by
obtaining liability insurance that conforms to the requirements of paragraphs
(N)(2) and (N)(3) of this rule from an insurer or risk retention group in
compliance with Title XXXIX of the Revised Code. Such insurance may be in the
form of a separate insurance policy or an endorsement to an existing insurance
policy.
(2) Each insurance policy
shall be amended by an endorsement worded as specified in the portion of
appendix C to this rule entitled "Endorsement" or evidenced by a certificate of
insurance worded as specified in the portion of appendix C to this rule
entitled "Certificate of Insurance", except that instructions in brackets shall
be replaced with the relevant information and the brackets deleted.
(3) The insurer or risk retention group which
issues a policy shall provide to the state fire marshal copies of all payments
made under the policy within ten days of making payment.
(4) If, after a payment under the policy by
an insurer or risk retention group, the state fire marshal determines that the
annual aggregate remaining under the policy is less than the applicable
per-occurrence amount required under paragraph (H) (1) of this rule for any
tank comprising a petroleum UST system within this state, the owner or operator
shall obtain and demonstrate alternate coverage in compliance with this rule
within thirty days after notification of such a determination by the state fire
marshal.
(5) The owner or operator
shall maintain a copy of either the endorsement or certificate of insurance
worded as specified in paragraph (N)(2) of this rule.
(O) Surety bond.
(1) An owner or operator may satisfy the
requirements of paragraph (H) of this rule by obtaining a surety bond that
conforms to the requirements of paragraphs (O) (2) and (O)(3) of this rule. The
surety company issuing the bond shall be in compliance with all applicable
sections of Title XXXIX of the Revised Code.
(2) The surety bond shall be worded as
written in appendix D to this rule, except that instructions in brackets shall
be replaced with the relevant information and the brackets deleted.
(3) Under the terms of the bond, the surety
will become liable on the bond obligation when the owner or operator fails to
perform as guaranteed by the bond. In all cases, the surety's liability is
limited to the per-occurrence and annual aggregate penal sums.
(4) The owner or operator who uses a surety
bond to satisfy the requirements of paragraph (H) of this rule shall establish
a standby trust fund when the surety bond is acquired. Under the terms of the
bond, all amounts paid by the surety under the bond shall be deposited directly
into the standby trust fund in accordance with instructions from the state fire
marshal under paragraphs (AA) (1) to (AA)(3) of this rule. This standby trust
fund shall meet the requirements specified in paragraph (H) of this
rule.
(5) The owner or operator
shall maintain an original of the surety bond worded as specified in paragraph
(O)(2) of this rule.
(P)
Letter of credit.
(1) An owner or operator may
satisfy the requirements of paragraph (H) of this rule by obtaining an
irrevocable standby letter of credit that conforms to the requirements of
paragraph (P)(2) of this rule. The issuing institution shall be an entity that
has the authority to issue letters of credit in the state of Ohio and whose
letter-of-credit operations are regulated and examined by a federal or state
agency.
(2) The letter of credit
shall be worded as written in appendix E to this rule, except that instructions
in brackets are to be replaced with the relevant information and the brackets
deleted.
(3) An owner or operator
who uses a letter of credit to satisfy the requirements of paragraph (H) of
this rule shall 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 state fire marshal shall be deposited by the issuing
institution directly into the standby trust fund in accordance with
instructions from the state fire marshal under paragraphs (AA)(1) to (AA)(3) of
this rule. This standby trust fund shall meet the requirements specified in
paragraph (H) of this rule.
(4) The
letter of credit shall be irrevocable with a term specified by the issuing
institution. The letter of credit shall provide that credit be automatically
renewed for the same term as the original term, unless, at least one hundred
twenty 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 one hundred
twenty days will begin on the date when the owner or operator receives the
notice, as evidenced by the return receipt.
(5) The owner or operator shall maintain an
original of the letter of credit worded as specified in paragraph (P)(2) of
this rule.
(Q) Trust
fund.
(1) An owner or operator may satisfy the
requirements of paragraph (H) of this rule by establishing a trust fund that
conforms to the requirements of this paragraph. The trustee shall be an entity
that has the authority to act as a trustee and whose trust operations are
regulated and examined by a federal agency, the Ohio department of commerce, or
an agency of the state in which the fund is established.
(2) The wording of the trust agreement shall
be identical to the wording specified in appendix F to this rule, and must be
accompanied by a formal certification of acknowledgement as specified in
appendix G to this rule.
(3) The
trust fund, when established, shall be funded for the applicable full required
amount of coverage specified in paragraph (H)(1) of this rule.
(4) If the value of the trust fund is greater
than the applicable required amount of coverage specified in paragraph (H)(1)
of this rule, the owner or operator may submit a written request to the state
fire marshal for release of the excess if such a release is not provided for
under the terms of the trust agreement.
(5) If other financial assurance as specified
in paragraph (W) of this rule is substituted for all of the trust fund, the
owner or operator may submit a written request to the state fire marshal for
release of the excess.
(6) Within
sixty days after receiving a request from the owner or operator for release of
funds as specified in paragraph (Q)(4) or (Q)(5) of this rule, the state fire
marshal shall instruct the trustee to release to the owner or operator such
funds as the state fire marshal specifies in writing.
(7) The owner or operator shall maintain an
original of the trust agreement and certification worded as specified in
paragraph (Q)(2) of this rule.
(R) Standby trust fund.
(1) An owner or operator using any one of the
mechanisms authorized by paragraph (M), (O), (P), or (U) of this rule shall
establish a standby trust fund when the mechanism is acquired. The trustee of
the standby trust fund shall be an entity that has the authority to act as a
trustee and whose trust operations are regulated and examined by a federal
agency, the Ohio department of commerce, or an agency of the state in which the
fund is established.
(2) The
standby trust agreement, or trust agreement, shall be worded as written in
appendix F to this rule, except that instructions in brackets are to be
replaced with the relevant information and the brackets deleted.
(3) The standby trust agreement or trust
agreement shall be accompanied by a formal certification of acknowledgement
worded as written in appendix G to this rule.
(4) The state fire marshal may instruct the
trustee to refund the balance of the standby trust fund or trust fund to the
provider of financial assurance if the state fire marshal 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 or trust fund was established.
(5) An owner or operator may establish one
trust fund as the depository mechanism for all funds assured in compliance with
this rule.
(6) The owner or
operator shall maintain an original of the standby trust agreement and
certification worded as specified in paragraphs (R)(2) and (R)(3) of this
rule.
(S) State or
political subdivision bond rating test.
(1)
Only the state or a political subdivision owner or operator may use the state
or political subdivision bond rating test established in this paragraph to
satisfy the requirements of paragraph (H) of this rule.
(2) The state or a general purpose political
subdivision owner or operator, or the state or a political subdivision serving
as a guarantor may satisfy the requirements of paragraph (H) of this rule by
having a currently outstanding issue or issues of general obligation bonds of
one million dollars or more, excluding refunded obligations, with a Moody's
rating of Aaa, Aa, A or Baa, or a "Standard & Poor's" rating of AAA, AA, A,
or BBB. Where the state or political subdivision has multiple outstanding
issues, or where the state or political subdivision's bonds are rated by both
Moody's and "Standard & Poor's," the lowest rating shall be used to
determine eligibility. Bonds that are backed by credit enhancement other than
municipal bond insurance shall not be considered in determining the amount of
applicable bonds outstanding.
(3) A
political subdivision owner or operator, or political subdivision serving as a
guarantor that is not a general purpose political subdivision and does not have
the legal authority to issue general obligation bonds may satisfy the
requirements of paragraph (H) of this rule by having a currently outstanding
issue or issues of revenue bonds of one million dollars or more, excluding
refunded issues, and by also having a Moody's rating of Aaa, Aa, A, or Baa, or
a "Standard & Poor's" rating of AAA, AA, A, or BBB as the lowest rating for
any rated revenue bond issued by the political subdivision. Where bonds are
rated by both Moody's and "Standard & Poor's," the lower rating for each
bond shall be used to determine eligibility. Bonds that are backed by credit
enhancement shall not be considered in determining the amount of applicable
bonds outstanding.
(4) The state or
a political subdivision owner or operator, or the state or a political
subdivision serving as a guarantor shall maintain a copy of its bond rating
published within the last twelve months by Moody's or "Standard &
Poor's."
(5) To demonstrate that it
meets the state or political subdivision bond rating test set forth in this
paragraph, the chief financial officer of the state or a general purpose
political subdivision owner or operator, or the chief financial officer of the
state or a political subdivision service as a guarantor shall sign a letter
worded exactly as written in appendix H to this rule, except that the
instructions in square brackets are to be replaced by the relevant information
and the square brackets deleted.
(6) To demonstrate that it meets the state or
political subdivision bond rating test set forth in this paragraph, the chief
financial officer of a political subdivision owner or operator, or a political
subdivision serving as a guarantor other than a general purpose political
subdivision shall sign a letter worded exactly as written in appendix I to this
rule, except that the instructions in square brackets are to be replaced by the
relevant information and the square brackets deleted.
(7) The state fire marshal may require
reports of financial condition at any time from the state or a political
subdivision owner or operator, or the state or a political subdivision serving
as a guarantor. If the state fire marshal determines, on the basis of such
reports or other information, that the state of a political subdivision owner
or operator, or the state or a political subdivision serving as a guarantor, no
longer meets the state or political subdivision bond rating test requirements
of this paragraph, the state or a political subdivision owner or operator shall
obtain alternative coverage within thirty days after notification of such
finding.
(8) If the state or a
political subdivision owner or operator using this bond rating test to provide
financial assurance finds that it no longer meets the state or political
subdivision bond rating test requirements, the state or a political subdivision
owner or operator shall obtain alternative coverage within one hundred fifty
days of the change in status.
(T) State or political subdivision financial
test.
(1) The state or a political subdivision
owner or operator may satisfy the requirements of paragraph (H) of this rule by
passing the state or political subdivision financial test specified in this
paragraph. To be eligible to use the state or political subdivision financial
test, the state or a political subdivision owner or operator shall have the
ability and authority to asses and levy taxes or to freely establish fees and
charges. To pass the state or political subdivision financial test, the state
or political subdivision owner or operator shall meet the criteria established
in paragraphs (T)(2)(b) and (T)(2)(c) of this rule based on year-end financial
statements for the latest completed fiscal year.
(2)
(a) The
state or a political subdivision owner or operator shall have the following
information available, as shown in the year-end financial statement for the
latest completed fiscal year:
(i) Total
revenues: consists of the sum of general fund operating and nonoperating
revenues including net state or local taxes (as applicable), licenses and
permits, fines and forfeitures, revenues from use of money and property,
charges for services, investment earnings, sales (property, publications,
etc.), intergovernmental revenues (restricted and unrestricted), and total
revenues from all other governmental funds including enterprises, debt service,
capital projects, and special revenues, but excluding revenues to funds held in
a trust or agency capacity. For purposes of this state or political subdivision
financial test, the calculation of total revenues shall exclude all transfers
between funds under the direct control of the state or political subdivision
using the state or political subdivision financial test (interfund transfers),
liquidation of investments, and issuance of debt.
(ii) Total expenditures: consists of the sum
of general fund operating and non-operating expenditures including public
safety, public utilities, transportation, public works, environmental
protection, cultural and recreational, community development, revenue sharing,
employee benefits and compensation, office management, planning and zoning,
capital projects, interest payments on debt, payments for retirement of debt
principal, and total expenditures from all other governmental funds including
enterprise, debt service, capital projects, and special revenues. For purposes
of this state or political subdivision financial test, the calculation of total
expenditures shall exclude all transfers between funds under the direct control
of the state or political subdivision using this state or political subdivision
financial test (interfund transfers).
(iii) Local revenues: consists of total
revenues (as defined in paragraph (T)(2)(a)(i) of this rule) minus the sum of
all transfers from other governmental entities, including all monies received
from federal, state, or local government sources.
(iv) Debt service: consists of the sum of all
interest and principal payments on all long-term credit obligations and all
interestbearing short-term credit obligations. Includes interest and principal
payments on general obligation bonds, revenue bonds, notes, mortgages,
judgments, and interest bearing warrants. Excludes payments on non-interest
bearing short-term obligations, interfund obligations, amounts owed in a trust
or agency capacity, and advances and contingent loans from other
governments.
(v) Total funds:
consists of the sum of cash and investment securities from all funds, including
general, enterprise, debt service, capital projects, and special revenue funds,
but excluding employee retirement funds, at the end of the state's or political
subdivision's financial reporting year. Includes federal securities, federal
agency securities, state and political subdivision securities, and other
securities such as bonds, notes and mortgages. For the purpose of this state or
political subdivision financial test, the calculation of total funds shall
exclude agency funds, private funds, private trust funds, accounts receivable,
value of real property, and other nonsecurity assets.
(vi) Population: consists of the number of
people in the area served by the state or political subdivision.
(b) The state's or political
subdivision's year-end financial statements, if independently audited, cannot
include an adverse auditor's opinion or a disclaimer of opinion. The state or
political subdivision cannot have outstanding issues of general obligation or
revenue bonds that are rated as less than investment grade.
(c) The state or political subdivision owner
or operator shall have a letter signed by the chief financial officer worded as
specified in paragraph (T)(3) of this rule.
(3) To demonstrate that it meets the state or
political subdivision financial test contained in this paragraph, the chief
financial officer of the state or political subdivision owner or operator,
shall sign, within one hundred twenty days of the close of each financial
reporting year, as defined by the twelve-month period for which financial
statements used to support this state or political subdivision financial test
are prepared, a letter worded exactly as written in appendix J to this rule,
except that the instructions in the square brackets are to be replaced by the
relevant information and the square brackets deleted.
(4) If the state or a political subdivision
owner or operator using this state or political subdivision financial test to
provide financial assurance finds that it no longer meets the requirements of
the state or political subdivision financial test based on the year-end
financial statements, the state or political subdivision owner or operator
shall obtain alternative coverage within one hundred fifty days of the end of
the year for which financial statements have been prepared.
(5) The state fire marshal may require
reports of financial condition at any time from the state or political
subdivision owner or operator. If the state fire marshal determines, on the
basis of such reports or other information, that the state of a political
subdivision owner or operator no longer meets the state or political
subdivision financial test requirements of this paragraph, the state or
political subdivision owner or operator shall obtain alternative coverage
within thirty days after notification of such finding.
(6) If the state or political subdivision
owner or operator fails to obtain alternate assurance within one hundred fifty
days of finding that it no longer meets the requirements of the state or
political subdivision financial test based on the year-end financial statements
or within thirty days of notification by the state fire marshal that it no
longer meets the requirements of this state or political subdivision financial
test, the state or political subdivision owner or operator shall notify the
state fire marshal of such failure within ten days.
(U) Political subdivision guarantee.
(1) The political subdivision owner or
operator may satisfy the requirements of paragraph (H) of this rule by
obtaining a guarantee that conforms to the requirements of this paragraph. The
guarantor must be either the state in which the political subdivision owner or
operator is located or a political subdivision having a substantial
governmental relationship with the political subdivision owner or operator and
issuing the guarantee as an act incident to that relationship. A political
subdivision acting as the guarantor must:
(a)
Demonstrate that it meets the state or political subdivision bond rating tests
requirements of paragraph (S) of this rule and deliver a copy of the applicable
chief financial officer's letter as contained in paragraph (S)(5) or (S)(6) of
this rule to the political subdivision owner or operator;
(b) Demonstrate that it meets the state or
political subdivision financial test requirements of paragraph (T) of this rule
and deliver a copy of the chief financial officer's letter as contained in
paragraph (T)(3) of this rule to the political subdivision owner or operator;
or
(c) Demonstrate that it meets
the state or political subdivision fund requirements of paragraph (V) of this
rule and deliver a copy of the chief financial officer's letter as contained in
paragraph (V)(2) of this rule to the political subdivision owner or
operator.
(2) If the
political subdivision guarantor is unable to demonstrate financial assurance
under paragraph (S), (T), or (V) of this rule, at the end of the financial
reporting year, the political subdivision guarantor shall send by certified
mail, before cancellation or non-renewal of the guarantee, notice to the
political subdivision owner or operator. The guarantee will terminate no less
than one hundred twenty days after the date the political subdivision owner or
operator receives the notification, as evidenced by the return receipt. The
political subdivision owner or operator shall obtain alternative coverage as
specified in paragraph (CC)(3) of this rule.
(3) The guarantee agreement shall be worded
as specified in paragraphs (U)(4)(a) and (U)(4)(b) or (U)(5)(a) and (U)(5)(b)
of this rule, depending on which of the following alternative guarantee
agreements is selected:
(a) If, in the default
or incapacity of the political subdivision owner or operator, the guarantor
guarantees to fund a standby trust as directed by the state fire marshal, the
guarantee shall be worded as specified in paragraph (U) (4)(a) or (U)(4)(b) of
this rule; or
(b) If, in the
default or incapacity of the political subdivision owner or operator, the
guarantor guarantees to make payments as directed by the state fire marshal for
taking corrective action or compensating third parties for bodily injury and
property damage, the guarantee shall be worded as specified in paragraph
(U)(5)(a) or (U)(5)(b) of this rule.
(4)
(a) If
the guarantor is the state, the political subdivision guarantee with standby
trust shall be worded exactly as written in appendix K to this rule, except
that the instructions in the square brackets are to be replaced with the
relevant information and the square brackets deleted.
(b) If the guarantor is a political
subdivision, the political subdivision guarantee with standby trust must be
worded exactly as written in appendix L to this rule, except that instructions
in the square brackets are to be replaced with the relevant information and the
square brackets deleted
(5)
(a) If
the guarantor is the state, the political subdivision guarantee without standby
trust must be worded exactly as written in appendix M to this rule, except that
the instructions in the square brackets are to be replaced with the relevant
information and the square brackets deleted.
(b) If the guarantor is a political
subdivision, the political subdivision guarantee without standby trust must be
worded exactly as written in appendix N to this rule, except that instructions
in the square brackets are to be replaced with the relevant information and the
square brackets deleted.
(V) State or political subdivision fund
(1) The state or political subdivision owner
or operator may satisfy the requirements of paragraph (H) of this rule by
establishing a dedicated fund account that conforms to the requirements of this
paragraph. Except as specified in paragraph (V)(1)(b) of this rule, 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 state or political subdivision
statute, chapter, 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 USTs and is funded
for the amount of coverage required by paragraph (H)(1) of this rule;
(b) The fund is dedicated by state
constitutional provision, or state or political subdivision statute, charter,
ordinance, or order as a contingency fund for general emergencies, including
taking corrective action and compensating third parties for bodily injury and
property damage caused by accidental release arising from the operation of
petroleum USTs, and is funded for five times the amount of coverage required by
paragraph (H)(1) of this rule; or
(c) The fund is dedicated by state
constitutional provision, or state or political subdivision 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 USTs. A payment is made to the
fund once every year for seven years until this fund is fully funded. This
seven year period is hereafter referred to as the "pay-in-period." The amount
of each payment shall be determined by this formula:
[TF - CF]/ Y
Where TF is the total required financial assurance for the
state or political subdivision owner or operation, CF is the current amount in
the fund, and Y is the number of years remaining in the pay-in-period,
and
(i) The state or political
subdivision 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 USTs; or
(ii) The state or political subdivision owner
or operation has a letter signed by the Ohio attorney general stating that the
use of the bonding authority will not increase the state's or political
subdivision's debt beyond the legal debt ceilings established by the applicable
state laws. The letter must also state that prior voter approval is not
necessary before use of the bonding authority.
(2) To demonstrate that it meets the
requirements of the state or political subdivision fund, the chief financial
officer of the state or political subdivision owner or operator, or the state
or political subdivision serving as a guarantor shall sign a letter worded
exactly as written in appendix O to this rule, except that the instructions in
the square brackets are to be replaced by the relevant information and the
square brackets deleted.
(W) Substitution of financial assurance
mechanisms by owner or operator.
(1) An owner
or operator may substitute any alternate financial assurance mechanism
described in paragraphs (L) to (V) of this rule as specified in this paragraph,
provided that at all times he or she maintains an effective financial assurance
mechanism that satisfies the requirements of paragraphs (H) and (J) of this
rule.
(2) After obtaining alternate
financial assurance as specified in paragraph (W)(1) of this rule, an owner or
operator may cancel a financial assurance mechanism by providing notice to the
provider of financial assurance.
(X) Cancellation or nonrenewal by a provider
of financial assurance.
(1) Except as
otherwise provided in this paragraph, a provider of financial assurance may
cancel or fail to renew an assurance mechanism by sending a notice of
termination by certified mail to the owner or operator.
(a) Termination of a political subdivision
guarantee, guarantee, a surety bond, or a letter of credit shall not occur
until one hundred twenty days after the date on which the owner or operator
receives the notice of termination, as evidenced by the return
receipt.
(b) Termination of
insurance, risk retention group coverage, or the fund coverage except for
non-payment or misrepresentation by the insured, shall not occur until sixty
days after the date on which the owner or operator receives the notice of
termination, as evidenced by the return receipt. Termination for non-payment of
premium or fee or misrepresentation by the insured shall not occur until a
minimum of ten days after the date on which the owner or operator receives the
notice of termination, as evidenced by the return receipt.
(2) If a provider of financial responsibility
cancels or fails to renew for reasons other than non-payment of premium or fee
or misrepresentation by the insured, or the incapacity of the provider as
specified in paragraph (Y)(1)(b) of this rule, the owner and operator shall
obtain alternate coverage as specified in this rule within sixty days after
receipt of the notice of termination. If the owner and operator fail to obtain
alternate coverage within sixty days after receipt of the notice of
termination, the owner and operator shall immediately notify the state fire
marshal of such failure and submit:
(a) The
name and address of the provider of financial assurance;
(b) The effective date of termination;
and
(c) The evidence of the
financial assistance mechanism subject to the termination maintained in
accordance with paragraph (Z)(2) of this rule.
(Y) Reporting by owner and operator.
(1) Owners and operators shall submit the
appropriate forms listed in paragraph (Z) (2) of this rule documenting current
evidence of financial responsibility to the state fire marshal:
(a) Within thirty days after the owner or
operator identifies a release from a UST required to be reported under section
3737.88
or
3737.882
of the Revised Code or this chapter of the Administrative Code.
(b) If the owner and operator fail to obtain
alternate coverage as required by this rule, within thirty days after the owner
or operator receives notice of:
(i)
Commencement of a voluntary or involuntary proceeding under Title 11
(bankruptcy), U. S. Code, naming a provider of financial assurance as a
debtor;
(ii) Suspension or
revocation of the authority of a provider of financial assurance to issue a
financial assurance mechanism;
(iii) Failure of a guarantor to meet the
requirements of the financial test; or
(iv) Other incapacity of a provider of
financial assurance.
(c)
As required by paragraphs (L)(8), (X)(2), and (CC)(5) of this rule.
(2) Owners and operators shall
certify compliance with the financial responsibility requirements of this rule
when notifying the state fire marshal of the installation of a new UST under
paragraph (C) of rule
1301:7-9-04
of the Administrative Code.
(3)
Owners and operators shall certify compliance with the financial responsibility
requirements of this rule when notifying the state fire marshal of the
operation of a previously deferred UST under paragraph (D) of rule
1301:7-9-04
of the Administrative Code.
(4) The
state fire marshal may require an owner or operator to submit evidence of
financial assurance as described in paragraph (Z)(2) of this rule or other
information relevant to compliance with this rule at any
time.
(Z) Recordkeeping.
(1) Owners and operators shall maintain
copies of all financial assurance mechanisms and related documents used to
demonstrate financial responsibility under this rule for a UST until released
from the requirements of this rule under paragraph (BB) of this rule. Owners
and operators shall maintain such evidence at the UST site or the owner's or
operator's place of business. Records maintained offsite shall be made
available within twenty-four hours upon request of the state fire
marshal.
(2) Owners and operators
shall maintain the following types of evidence of financial responsibility:
(a) Owners and operators using an assurance
mechanism specified in paragraphs (L) to (V) of this rule shall maintain a copy
of the instrument worded as specified.
(b) Owners and operators using a financial
test, or a state or political subdivision financial test or a political
subdivision guarantee supported by the state or political subdivision financial
test shall maintain a copy of the chief financial officer's letter based on
year-end financial statements for the most recent completed financial reporting
year and, if applicable, a copy of the special report prepared by an
independent certified public accountant. Such evidence shall be on file no
later than one hundred twenty days after the close of the financial reporting
year.
(c) Owners and operators
using a guarantee, surety bond, or letter of credit shall maintain a copy of
the signed standby trust fund agreement and copies of any amendments to the
agreement
(d) A political
subdivision owner or operator using a political subdivision guarantee under
paragraph (U)(4)(a) or (U)(4)(b) of this rule shall maintain a copy of the
signed standby trust fund agreement and copies of any amendments to the
agreement.
(e) A state or political
subdivision owner or operator using the state or political subdivision bond
rating test under paragraph (S) of this rule shall maintain a copy of its bond
rating published within the last twelve months by Moody's or "Standard &
Poor's."
(f) A political
subdivision owner or operator using the political subdivision guarantee under
paragraph (U) of this rule, where the guarantor's demonstration of financial
responsibility relies on the state or political subdivision bond rating test
under paragraph (S) of this rule shall maintain a copy of the guarantor's bond
rating published within the last twelve months by Moody's or "Standard &
Poor's."
(g) Owners and operators
using an insurance policy or risk retention group coverage shall maintain a
copy of the signed insurance policy or risk retention group coverage policy,
with the endorsement or certificate of insurance and any amendments to the
agreements.
(h) Owners and
operators shall maintain on file a copy of the current certificate of coverage
under the fund.
(i) A state of
political subdivision owner or operator using a state or political subdivision
fund under paragraph (V) of this rule shall maintain the following documents:
(i) A copy of the state constitutional
provision or state or political subdivision statute, charter, ordinance, or
order dedicating the fund, and
(ii)
Year-end financial statements for the most recent completed financial reporting
year showing the amount in the fund. If the fund is established under paragraph
(V)(1)(c) of this rule using incremental funding backed by bonding authority,
the financial statements shall show the previous year's balance, the amount of
funding during the year, and the closing balance in the fund.
(iii) If the fund is established under
paragraph (V)(1)(c) of this rule using incremental funding backed by bonding
authority, the state or political subdivision owner or operator shall also
maintain documentation of the required bonding authority, including either the
results of the voter referendum (under paragraph (V)(1)(c)(i) of this rule), or
attestation by the Ohio attorney general as specified under paragraph
(V)(1)(c)(ii) of this rule.
(j) A political subdivision owner or operator
using the political subdivision guarantee supported by the state or political
subdivision fund shall maintain a copy of the guarantor's year-end financial
statements for the most recent completed financial reporting year showing the
amount of the fund.
(k) An owner or
operator using an assurance mechanism specified in paragraphs (L) to (V) of
this rule shall maintain an updated copy of a certification of financial
responsibility worded as written in appendix P to this rule, except that
instructions in the square brackets are to be replaced with the relevant
information and the square brackets deleted. Owners and operators shall update
this certification whenever the financial assurance mechanism used to
demonstrate financial responsibility changes.
(AA) Drawing on financial assurance
mechanisms.
(1) Except as specified in
paragraph (AA)(4) of this rule, upon direction from the state fire marshal, the
guarantor, surety, or institution issuing a letter of credit shall place the
amount of funds stipulated by the state fire marshal, up to the limit of funds
provided by the financial assurance mechanism, into the standby trust if:
(a)
(i) The
owner and operator fail to establish alternate financial assurance within sixty
days after receiving notice of cancellation of the guarantee, surety bond,
letter of credit, or, as applicable, other financial assurance mechanism;
and
(ii) The state fire marshal
determines or suspects that a release from a UST covered by the mechanism has
occurred and so notifies the owner or operator or the owner or operator has
notified the state fire marshal pursuant to section
3737.88
or
3737.882
of the Revised Code or this chapter of the Administrative Code of a confirmed
or suspected release from a UST covered by the mechanism;
or
(b) Any of the
conditions contained in paragraph (AA)(2) of this rule are
satisfied.
(2) The state
fire marshal may draw on a standby trust fund or trust fund when:
(a) The state fire marshal makes a final
determination that a release is suspected or has occurred and corrective action
for the release is needed, and the owner or operator, after appropriate notice
and opportunity to comply, has not conducted corrective action as required
under sections
3737.88
and
3737.882
of the Revised Code and this chapter of the Administrative Code; or
(b) The state fire marshal has received
either:
(i) Certification from the owner or
operator and the third-party liability claimant(s) and from attorneys
representing the owner or operator and the third-party liability claimant(s)
that a third-party liability claim should be paid. The certification must be
worded as written in appendix Q to this rule, except that instructions in
square brackets are to be replaced with the relevant information and the square
brackets deleted; or
(ii) a valid
final court order establishing a judgment against the owner or operator for
bodily injury or property damage caused by an accidental release from an
underground storage tank covered by financial assurance under this rule and the
state fire marshal determines that the owner or operator has not satisfied the
judgment.
(3)
If the state fire marshal determines that the amount of corrective action costs
and third-party liability claims eligible for payment under paragraph (AA)(2)
of this rule may exceed the balance of the trust fund or the standby trust fund
and the obligation of the provider of financial assurance, the first priority
for payment shall be corrective action costs necessary to protect human health
and the environment. The state fire marshal shall pay third-party liability
claims in the order in which the state fire marshal receives certification
under paragraph (AA)(2)(b)(i) of this rule, and valid court orders under
paragraph (AA)(2)(b) (ii) of this rule.
(4) A state or political subdivision acting
as a guarantor under paragraphs (U)(5)(a) to (U)(5)(b) of this rule, shall make
payments as directed by the state fire marshal under the circumstances set
forth in paragraphs (AA)(1) to (AA)(3) of this rule.
(BB) Release from the requirements.
Owners and operators are no longer required to maintain
financial responsibility under this rule for a petroleum UST system after the
UST system has been properly closed as required by this chapter of the
Administrative Code or, if corrective action is required, after corrective
action has been completed in compliance with sections
3737.88
and
3737.882
of the Revised Code and this chapter of the Administrative Code and the
petroleum UST system has been properly closed as required by this chapter of
the Administrative Code.
(CC) Bankruptcy or other incapacity of owner
or operator or provider of financial assurance and non-payment of premium or
fee or misrepresentation by the insured.
(1)
Within ten days after commencement of a voluntary or involuntary proceeding
under Title 11 (bankruptcy), U.S. Code, naming an owner or operator as debtor,
the owner or operator shall notify the state fire marshal by certified mail of
such commencement and submit the appropriate forms listed in paragraph (Z)(2)
of this rule documenting current financial responsibility.
(2) Within ten days after commencement of a
voluntary or involuntary proceeding under Title 11 (bankruptcy), U. S. Code,
naming a guarantor providing financial assurance as debtor, such guarantor
shall notify the owner and operator by certified mail of such commencement as
required under the terms of the guarantee specified in paragraph (M)(4) of this
rule.
(3) Within ten days after
commencement of a voluntary or involuntary proceeding under Title 11
(bankruptcy), U.S. Code, naming a state or political subdivision owner or
operator as debtor, the state or political subdivision owner or operator shall
notify the state fire marshal by certified mail of such commencement and submit
the appropriate forms listed in paragraph (Z)(2) of this rule documenting
current financial responsibility.
(4) Within ten days after commencement of a
voluntary or involuntary proceeding under Title 11 (bankruptcy), U.S. Code,
naming a guarantor providing a state or political subdivision financial
assurance as debtor, such guarantor shall notify the state or political
subdivision owner or operator by certified mail of such commencement as
required under the terms of the guarantee specified in paragraphs (U)(4)(a) to
(U)(5)(b) of this rule.
(5) Owners
and operators who obtain financial assurance by a mechanism other than the
financial test of self-insurance will be deemed to be without the required
financial assurance in the event of a bankruptcy or incapacity of its provider
of financial assurance, or a suspension or revocation of the authority of the
provider of financial assurance to issue a guarantee, insurance policy, risk
retention group coverage policy, surety bond, letter of credit, or a
certificate of coverage under the fund established in section
3737.91
of the Revised Code. The owner and operator shall obtain alternate financial
assurance as specified in this rule within thirty days after receiving notice
of such an event. If the owner and operator do not obtain alternate coverage
within thirty days after such notification, they shall notify the state fire
marshal of such failure.
(6) Within
thirty days after receipt of notification that the fund has become incapable of
paying for assured corrective action or third-party compensation costs, the
owner and operator shall obtain alternate financial assurance.
(7) Within ten days after receipt of
notification of termination of insurance, risk retention group coverage, or the
fund coverage because of non-payment of premium or fee or misrepresentation by
the insured, the owner and operator shall obtain alternate financial
assurance.
(DD)
Replenishment of financial assurance mechanisms.
(1) If at any time a standby trust is funded
upon the instruction of the state fire marshal with funds drawn from a
guarantee, political subdivision guarantee with standby trust, letter of
credit, or surety bond, the owner and operator shall within thirty days of
being so notified by the state fire marshal:
(a) Replenish the value of financial
assurance to equal the full amount of coverage required, or
(b) Acquire another financial assurance
mechanism described in paragraphs (L) to (V) of this rule for an amount equal
to the full amount of coverage required.
(2) For purposes of this paragraph, the full
amount of coverage required is the amount of coverage to be provided by
paragraphs (H) and (J) of this rule.
(3) If at any time during the policy period
the amount of aggregate remaining under an insurance or risk retention group
policy is reduced below either the reduced fund deductible or fund deductible,
whichever is applicable, the owner and operator shall within thirty days of
being so notified by the state fire marshal
(a) Replenish the value of financial
assurance to equal the applicable policy period aggregate under paragraph
(J)(2) of this rule, or
(b) Acquire
another financial assurance mechanism described in paragraphs (L) to (V) of
this rule for an amount equal to the full amount of coverage
required.
(4) If at any
time a trust agreement balance established pursuant to paragraph (Q) of this
rule is reduced below the full amount of coverage required, the owner and
operator shall within thirty days of being so notified by the state fire
marshal:
(a) Replenish the value of the trust
agreement to equal the full amount of coverage required, or