Current through Register Vol. 35, No. 6, March 26, 2024
A. An owner or operator, or guarantor, may
satisfy the requirements of 20.5.117.1703 NMAC by passing a financial test as
specified in this section. To pass the financial test of self-insurance, the
owner or operator, or guarantor, shall meet the criteria of Subsection B or C
of this section based on year-end financial statements for the latest completed
fiscal year.
B. Criteria for option
one.
(1) The owner or operator, or guarantor,
shall have a tangible net worth of at least 10 times:
(a) the total of the applicable aggregate
amounts required by 20.5.117.1703 NMAC based on the number of storage tanks for
which a financial test is used to demonstrate financial responsibility to the
department under this section;
(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 is used to demonstrate financial responsibility to EPA under
40
CFR 264.101, Sections
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 EPA under
40 CFR Part 271; and
(c) 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 Sections
144.63 or to a state implementing agency
under a state program authorized by EPA under 40 CFR Part
145.
(2) The owner or
operator, or guarantor, shall have a tangible net worth of at least
$10,000,000.
(3) The owner or
operator, or guarantor, shall have a letter signed by the chief financial
officer worded as specified in 20.5.117.1755 NMAC.
(4) The owner or operator, or guarantor,
shall either:
(a) file financial statements
annually with the United States securities and exchange commission, the energy
information administration, or the rural utilities service; or
(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. Criteria for option two.
(1) The owner or operator, or guarantor,
shall meet the financial test requirements of
40 CFR Section
264.147(f)(1), substituting
the appropriate amounts specified in Paragraphs (1) and (2) of Subsection B of
20.5.117.1703 NMAC for the "amount of liability coverage" each time specified
in that section.
(2) The fiscal
year-end financial statements of the owner or operator, or guarantor, 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)
The owner or operator, or guarantor, shall have a letter signed by the chief
financial officer, worded as specified in 20.5.117.1755 NMAC.
(5) If the financial statements of the owner
or operator, or guarantor, are not submitted annually to the United States
securities and exchange commission, the energy information administration or
the rural utilities service, the owner or operator, or guarantor, shall obtain
a special report by an independent certified public accountant stating that:
(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 the owner or operator, or
guarantor, with the amounts in such financial statements; and
(b) in connection with that comparison, 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 of this section, the chief financial
officer of the owner or operator, or guarantor, 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 shown in 20.5.117.1755 NMAC.
E. If owners or operators using the test to
provide financial assurance finds that they no longer meet the requirements of
the financial test based on the year-end financial statements, the owner or
operator shall obtain alternative coverage within 150 days of the end of the
year for which financial statements have been prepared.
F. The secretary may require reports of
financial condition at any time from the owner or operator, or guarantor. If
the secretary finds, on the basis of such reports or other information, that
the owner or operator, or guarantor, no longer meets the financial test
requirements of Subsections B or C and D of 20.5.117.1705 NMAC, the owner or
operator shall obtain alternate coverage within 30 days after notification of
such a finding.
G. If owners or
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
secretary that they no longer meet the requirements of the financial test, the
owner or operator shall notify the secretary of such failure within 10
days.
