Current through Reg. 50, No. 13; March 28, 2025
(a) An
owner, operator, and/or guarantor, may satisfy the requirements of §
37.815 of this title (relating to
Amount and Scope of Required Financial Assurance) by passing a financial test
as specified in this section. To pass the financial test of self-insurance, the
owner, operator, and/or guarantor must meet the criteria of subsections (b) or
(c) of this section based on year-end financial statements for the latest
completed fiscal year.
(b) The
owner, operator, and/or guarantor must meet the requirements of this subsection
referred to as Alternative 1. The owner, operator, and/or guarantor must:
(1) have a tangible net worth of at least ten
times:
(A) the total of the applicable
aggregate amount required by §
37.815 of this title based on the
number of underground storage tanks for which a financial test is used to
demonstrate financial assurance to the agency 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 assurance to the agency under Chapter 335 of this title (relating to
Industrial Solid Waste and Municipal Hazardous Waste), 40 Code of Federal
Regulations (CFR) Parts 264, 265, or state equivalent;
(C) the sum of current plugging and
abandonment cost estimates for which a financial test is used to demonstrate
financial assurance to the agency under Chapter 331 of this title (relating to
Underground Injection Control), 40 CFR Part 144 or state equivalent;
(D) the sum of municipal solid waste cost
estimates for which a financial test is used to demonstrate financial assurance
to the agency under Chapter 330 (relating to Municipal Solid Waste), 40 CFR
Part 258 or state equivalent;
(E)
the sum of current polychlorinated biphenyl (PCB) cost estimates for which a
financial test is used to demonstrate financial assurance to the EPA under 40
CFR Part 761 ; and
(F) the sum of
additional financial assurance obligations not identified in subparagraphs (A)
- (E) of this paragraph and for which a financial test or other form of
self-insurance is used to meet financial assurance obligations under the
commission or other federal or state environmental regulations;
(2) have a tangible net worth of
at least $10 million;
(3) have a
letter signed by the chief financial officer as specified in subsection (d) of
this section;
(4) either:
(A) file financial statements annually with
the United States Securities and Exchange Commission (SEC), the Energy
Information Administration, or the Rural Electrification Administration;
or
(B) 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;
(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) The owner, operator, and/or guarantor
must meet the requirements of this subsection referred to as Alternative 2.
(1) The owner, operator, and/or guarantor
must meet the financial test requirements of §
37.541(a) and (b)
of this title (relating to Financial Test for Liability), substituting the
appropriate amounts specified in §
37.815(b)(1) and
(2) of this title for the "amount of
liability coverage" each time specified in that section.
(2) 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.
(A) The firm's year-end
financial statements cannot include an adverse auditor's opinion, a disclaimer
of opinion, or a "going concern" qualification.
(B) The owner, operator, and/or guarantor,
must have a letter signed by the chief financial officer as specified in
subsection (d) of this section.
(3) If the financial statements of the owner,
operator, and/or guarantor, are not submitted annually to the SEC, the Energy
Information Administration or the Rural Electrification Administration, the
owner, operator, and/or guarantor, must obtain a special report by an
independent certified public accountant stating that:
(A) the accountant has compared the data
which the letter from the chief financial officer specifies as having been
derived from the independently audited, year-end financial statements for the
latest fiscal year with the amounts in such financial statements; and
(B) in connection with that procedure:
(i) such amounts were found to be in
agreement; or
(ii) no matters came
to the attention of the independent certified public accountant which indicated
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, 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 parentheses are to be replaced by the relevant information and
the parentheses deleted.
Attached
Graphic
(e) 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
year-end financial statements, the owner or operator must obtain alternative
coverage within 150 days of the end of the year for which financial statements
have been prepared.
(f) The agency
may require reports of financial condition at any time from the owner,
operator, and/or guarantor. If the agency finds, on the basis of these reports
or other information, that the owner, operator, and/or guarantor, no longer
meets the financial test requirements of subsections (b) or (c) and (d) of this
section, the owner or operator must obtain alternative coverage within 30 days
after notification of this finding.
(g) If the owner or operator fails to obtain
alternate financial assurance within 150 days of finding that he or she no
longer meets the requirements of the financial test based on the year-end
financial statements, or within 30 days of notification by the executive
director that he or she no longer meets the requirements of the financial test,
the owner or operator must notify the executive director of this failure within
ten days.
