distribution or use of energy. This proposed rule would establish
financial responsibility requirements under CERCLA designed to assure
that owners and operators of facilities provide funds to address CERCLA
liabilities at their sites, and to create incentives for sound
practices that will minimize the likelihood of a need for a future
CERCLA response. The proposed rule is not expected to impact energy
production, distribution, or consumption.

I. National Technology Transfer and Advancement Act (NTTAA)

    This rulemaking does not involve technical standards.

J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations

    EPA believes that this action does not have disproportionately high
and adverse human health or environmental effects on minority
populations, low-income populations and/or indigenous peoples, as
specified in Executive Order 12898 (59 FR 7629, February 16, 1994).
    The documentation for this decision is contained in the Regulatory
Impact Analysis (RIA). A copy of the RIA can be found in the docket for
this rule. As discussed in Section 8 of the RIA, EPA examined whether
the actions being proposed under the proposed rules present
environmental justice concerns for communities surrounding mining
facilities.
    EPA conducted an analysis of demographic characteristics of
populations near hardrock mining and mineral processing facilities to
determine whether the benefits of the proposed rule are differentially
distributed. For this analysis, the agency analyzed national census
population data within one-mile, five-mile, 15-mile, and 25-mile radii
from mining facilities, and compared them with the demographic
characteristics of states and national levels. Of the 221 hardrock
mining/mineral processing facilities in the RIA universe, the total
population within one mile of these sites is approximately 775,000
people, of which 260,000 (34 percent), belong to a minority group. In
addition, 157,000 (21 percent) live below the Federal Poverty Level.
Both of these proportions are roughly comparable to nationwide
benchmarks. Nationally, 37 percent of the population belongs to a
minority group, and 16 percent of the population lives below the
Federal Poverty Level. The analysis also compared the concentrations of
minority groups and people living in poverty to state averages. The
results show that within one-mile radius, 230 (36 percent) census block
groups exceeded the statewide minority average, and 356 (56 percent)
census block groups exceeded their respective statewide poverty levels.
    EPA expects this proposed rule will, when made final, increase the
likelihood that owners and operators will provide funds necessary to
address the CERCLA liabilities at their facilities, thus preventing
owners or operators from shifting the burden of cleanup to

other parties, including the taxpayer. In addition, EPA expects that by
adjusting the amount of financial responsibility to account for
environmentally safer practices, the proposed rule would provide an
incentive for implementation of sound practices at hardrock mining
facilities and thereby decrease the need for future CERCLA actions.
Groups within the proximity of hardrock mining sites are expected to
benefit from the environmental performance improvements, and other
benefits of the rule. This analysis shows that the percentage of
minority and low-income populations in and near hardrock mining sites
are proportionally represented (in some case higher) compared to
national and state averages. This analysis indicates that minority and
low-income communities are expected to benefit as much as any other
group under the proposed rule.

List of Subjects in 40 CFR Part 320

    Environmental protection, Financial responsibility, Hardrock
mining, Hazardous substances.

    Dated: December 1, 2016.
Gina McCarthy,
Administrator.

    For the reasons set forth in the preamble, title 40, chapter I of
the Code of Federal Regulations is proposed to be amended by adding
part 320 to read as follows:

PART 320--FINANCIAL RESPONSIBILITY REQUIREMENTS FOR CERCLA
LIABILITIES

Subpart A--General Facility Requirements
Sec.
320.1 Purpose, scope.
320.2 Applicability.
320.3 Definitions and usage.
320.4 Availability of information; confidential business
information.
320.5 Notification requirement.
320.6 General information submission requirements.
320.7 Requirement for electronic submission of information.
320.8 Recordkeeping requirements.
320.9 Requirements for public notice.
Subpart B--General Financial Responsibility Requirements
320.20 Applicable financial responsibility amounts.
320.21 Procedures for establishing financial responsibility.
320.22 Maintenance of instruments.
320.23 Incapacity of owners or operators, corporate guarantors, or
financial institutions.
320.24 Notification of claims brought against owners, operators, or
guarantors.
320.25 Facility transfer.
320.26 Notification of cessation of operations.
320.27 Release from financial responsibility requirements.
Subpart C--Available Financial Responsibility Instruments.
320.40 Letter of credit.
320.41 Surety bond.
320.42 Insurance.
320.43 [Reserved] (Option 1--Preferred Option).
320.43 Financial test (Option 2).
320.44 [Reserved] (Option 1--Preferred Option).
320.44 Corporate guarantee (Option 2).
320.45 Trust fund.
320.46 Use of multiple financial responsibility instruments.
320.47 Use of a financial instrument for multiple facilities.
320.48 Consolidated form and multiple owners and/or operators.
320.49 [Reserved]
320.50 Wording of the Instruments.
Subpart D--G [Reserved]
Subpart H--Hardrock Mining Facilities
320.60 Applicability
320.61 Timeframes for Compliance
320.62 Definitions
320.63 Determining the Financial Responsibility Amount
320.64 Information Submission and Recordkeeping Requirements
320.65 Third-party Certification.

Subpart A--General Facility Requirements

Sec.  320.1  Purpose and Scope.

    (a) The purpose of this part is to establish requirements under
Sec.  108(b) of the Comprehensive Environmental Response, Compensation,
and Liability Act (CERCLA), 42, U.S.C. 9601, et seq., for current
owners and operators of non-transportation-related facilities to
establish and maintain evidence of financial responsibility.
    (b) The amount of financial responsibility under this part must be
consistent with the degree and duration of risk associated with the
production, transportation, treatment, storage, or disposal of
hazardous substances at their facilities, and must be available to pay
for the response costs, health assessment costs, and natural resource
damages under CERCLA for which the owner and operator are responsible.

Sec.  320.2  Applicability.

    (a) The regulations of this part apply to current owners and
operators of facilities that are authorized to operate, or should be
authorized to operate, on or after the effective date of the rule under
which they become subject to this part. The Federal Government and
States are exempt from the requirements of this part.
    (b) Owners and operators of all facilities within the classes
identified in Table A-1 must comply with the applicable requirements of
subparts A through C of this part.
    (c) Owners and operators of facilities identified in Table A-1 of
this section must also comply with the applicable class-specific
requirements as specified in Table A-1 of this section.
    (d) The requirements of this part apply until EPA releases the
owner and operator from the obligation to maintain financial
responsibility for its facility in accordance with Sec.  300.25 or
Sec.  300.27.

                                                    Table A-1
----------------------------------------------------------------------------------------------------------------
         Facility class(es)                  Effective date            Applicable class-specific  requirements
----------------------------------------------------------------------------------------------------------------
Owners and operators of hardrock      [Date 30 days after date of   Subpart H.
 mining facilities identified in       publication of Final Rule].
 Sec.   320.60(a).
----------------------------------------------------------------------------------------------------------------

Sec.  320.3  Definitions and usage.

    (a) As used in this part, words in the singular include the plural;
words in the plural include the singular; and words in the masculine
gender also include the feminine and neuter genders as the case may
require.
    (b) When used in this part, the following terms have the meanings
given in this paragraph. Terms not defined in this part have the
meaning given by CERCLA or the national Oil and Hazardous Substances
Pollution Contingency Plan, 40 CFR part 300.
    Administrator means the EPA Administrator, or designee thereof.
    Authoriz(-ed)(-ation) to operate means the owner or operator has
obtained permission through a permit, license, or other legally
applicable form of permission to conduct the activities under Federal,
state, or local law, and is irrespective of the level of activity at
the facility that causes the owner and operator to be subject to this
part.
    Current Sec.  108(b) financial responsibility amount means the most

recent amount required to be prepared under Sec.  320.20 of this part.
    Electronic financial responsibility reporting compliance date means
the date that EPA announces in the Federal Register, on or after which
owners and operators are required to file submissions required by this
part in an EPA electronic system, or its successor system.
    Enforceable Document means a document issued under a Federal,
state, tribal, or local governmental authority, to which the owner or
operator is currently subject, and the requirements of which can be
enforced against the owner or operator by the issuing authority. An
enforceable document can be a permit, a settlement, an order, or any
other document that meets the above criteria.
    Parent Corporation means a corporation that directly owns at least
50 percent of the voting stock of the corporation which is the facility
owner or operator; latter corporation is deemed a subsidiary of the
parent corporation.
    Substantial Business Relationship means the extent of a business
relationship necessary under applicable State law to make a guarantee
contract issued incident to that relationship valid and enforceable. A
``substantial business relationship'' must arise from a pattern of
recent or ongoing business transactions, in addition to the guarantee
itself, such that a currently existing business relationship between
the guarantor and the owner or operator is demonstrated to the
satisfaction of the Administrator.

Sec.  320.4  Availability of information; confidential business
information.

    (a) Any information provided to EPA under this part, or required to
be provided to the public by the owner or operator under this part,
will be made available to the public to the extent and in the manner
authorized by the Freedom of Information Act, 5 USC 552, section 104 of
CERCLA, and EPA regulations implementing the Freedom of Information Act
and section 104 of CERCLA, as applicable.
    (b) Any person who submits information to EPA in accordance with
this part, or who is required to provide information to the public
under this part, may assert a claim of business confidentiality
covering part or all of that information by following the procedures
set forth in Sec.  2.203(b). Information covered by such a claim will
be disclosed by EPA, or will be required to be released by the owner or
operator only to the extent, and by means of the procedures, set forth
in part 2, subpart B, of this chapter. However, if no such claim
accompanies the information when it is received by EPA, it may be made
available to the public without further notice to the person submitting
it.
    (c) Assertions of claims of business confidentiality will not be
considered by EPA if the information is covered by a Class
Determination of non-confidentiality.

Sec.  320.5  Notification requirement.

    (a) (1) Each owner and operator that is authorized to operate or
should be authorized to operate on the effective date of the final rule
under which the facility becomes subject to the requirements of this
part must complete the Notification Form in Appendix A of this part,
providing all information requested, and submit it to the Administrator
within thirty days of the effective date of that regulation.
    (2) Owners or operators that become authorized to operate after the
effective date of the final rule that makes their facility subject to
the requirements of this part must submit the notification form
required in paragraph (a)(1) of this section prior to beginning
operations.
    (b) Within thirty days of receiving notification EPA will:
    (1) Provide the owner or operator acknowledgement of receipt of the
notification, and
    (2) If the facility has not received one, assign and provide an EPA
Identification number to the facility.
    (c) Owners and operators must notify EPA of changes at their
facilities by updating their Notification Form, and/or other documents
required under the applicable class-specific subpart, and resubmitting
it to EPA within thirty days of the change.

Sec.  320.6  General information submission requirements.

    Owners and operators must submit information as required by this
part to support financial responsibility requirements including:
    (a) The notification form required in Sec.  320.5;
    (b) Information required under the public involvement requirements
of Sec.  320.9;
    (c) Notifications required under subpart B of this part;
    (d) Demonstration of financial responsibility as required under
subpart C of this part; and
    (e) Information required under class-specific requirements
identified in Table 1 of Sec.  320.1(f) as applicable to the facility.

Sec.  320.7  Requirement for electronic submission of information.

    (a) Information submitted to the Administrator under the
requirements of this part must be submitted in paper format until the
electronic reporting compliance date, defined in Sec.  320.3.
    (b) Electronic submissions that are obtained, completed, and
transmitted in accordance with this section, and used in accordance
with this section, are the legal equivalent of paper submissions
bearing handwritten signatures, and satisfy for all purposes any
requirement in these regulations to obtain, complete, sign, provide,
use, or retain such information.
    (c) Where an electronic signature is required, such signature must
be a legally valid and enforceable signature under applicable EPA and
other Federal requirements pertaining to electronic signatures.
    (d) The Administrator may waive the requirement for electronic
submission under the following conditions:
    (1) General waiver. The Administrator may grant a general waiver
for a renewable period of one year to owners or operators that cannot
comply with the requirement for electronic submission. The owner or
operator must submit a written request for a general waiver to the
Administrator at least thirty days in advance of the date the first
submission that would be subject to the requested general waiver is due
to EPA or, for a renewal, thirty days in advance of the expiration of
the waiver. The request for a general waiver must describe the
conditions(s) in paragraphs (i) through (iv) that prevent electronic
submission of information. The Administrator may grant a general waiver
upon a finding that:
    (i) The owner or operator is unable to gain access to a system
allowing electronic reporting because the owner or operator is located
in an area with insufficient broadband access;
    (ii) Obtaining a system to support electronic submission would
impose an undue cost burden on the owner or operator,
    (iii) The owner or operator's electronic system is incompatible
with the Agency's, or
    (iv) Religious practices of the owner or operator prohibit the use
of necessary technologies.
    (2) Emergency waiver. The Administrator may grant a non-renewable
emergency waiver for an individual submission required under this part
to an owner or operator that would not is unable to comply with the
requirement for electronic submission. The owner or operator must
submit a written request for an emergency waiver

within ten days of the date the submission was due to EPA. The request
for an emergency waiver must describe the condition(s) in paragraphs
(i) through (iii) that prevented the electronic submission of
information and must be accompanied by a paper copy of the information
due. The Administrator may grant an emergency waiver upon a finding
that one of the following events occurred that prevented the electronic
submission of information by the owner or operator:
    (i) A large-scale national disaster (e.g., hurricane);
    (ii) A prolonged electronic reporting system outage; or
    (iii) A prolonged failure of the owner's and operator's computer
system.

Sec.  320.8  Recordkeeping requirements.

    (a) The owner or operator must develop a facility record that
contains information related to its compliance with the financial
responsibility requirements under this part.
    (b) The facility record must include, at a minimum, the information
that must be submitted to EPA under Sec.  320.6(a), as applicable, and
all notifications received from EPA related to the financial
responsibility obligations of the facility.

Sec.  320.9  Requirements for public notice.

[PROPOSED REGULATORY TEXT FOR APPROACH 1]
    (a) Within sixty days of the date it becomes subject to the
requirements of this part, the owner or operator must establish and
maintain a website titled ``CERCLA Section 108(b) Financial
Responsibility Information' and submit to EPA the URL of a location on
its company Web site where it will make information available to the
public.
    (b) Within thirty days of receiving the URL, EPA will post on its
website notice to the public that the facility is subject to Sec.
108(b) requirements, and provide the public the facility name, EPA ID,
and the URL.
    (c) Beginning ninety days after the effective date of the final
rule under which the facility becomes subject to the requirements of
this part, the owner or operator must make information available to the
public on its company website at the URL provided to EPA. The initial
posting must include at least the information required under paragraph
(d)(1).
    (d) The information on the website must include, at a minimum:
    (1) The current name and contact information for a person that will
provide the public information about the facility's financial
responsibility requirement under CERCLA Sec.  108(b);
    (2) Information the owner or operator is required to submit, or has
submitted, to EPA under this part so long as that information is not
successfully claimed as Confidential Business Information under 40 CFR
2.203(b).
    (3) Notifications from EPA to the owner or operator.
    (e) The owner or operator must assure that the information is
readily available to the public by placing it in a prominent position
on the company's website, and by assuring that public access is not
obstructed by complex or overly burdensome access processes, passwords,
or other information requirements.
    (f) The owner or operator must update the website with new
information including information submitted to EPA in compliance with
this part. Information submitted to EPA must be posted on the owner or
operator's website within thirty days of submitting it to EPA.
[PROPOSED REGULATORY TEXT FOR APPROACH 2]
    (a) EPA will provide the public information related to facilities
subject to financial responsibility requirements under this part. That
information may include, at a minimum:
    (1) The current name and contact information for a person that can
provide the public information about the facility's financial
responsibility requirement under this part;
    (2) Information the owner or operator is required to submit, or has
submitted, to EPA under this part so long as that information is not
successfully claimed as Confidential Business Information under 40 CFR
2.203(b).
    (3) Notifications from EPA to the owner or operator.

Subpart B--General Financial Responsibility Requirements

Sec.  320.20  Applicable financial responsibility amounts.

    Owners and operators must calculate a current amount of financial
responsibility at their facilities in accordance with the requirements
of this section, and in accordance with applicable class-specific
subparts identified in Sec.  320.1(f) Table 1.

Sec.  320.21  Procedures for establishing financial responsibility.

    Owners and operators must submit evidence of financial
responsibility and supporting information to EPA in accordance with the
requirements of this section, and in accordance with applicable class-
specific subparts identified in Sec.  320.2 Table 1.

Sec.  320.22  Maintenance of instruments.

    (a) An owner or operator must recalculate the financial
responsibility level three years after the date the owner or operator
is first required to submit the full amount of financial responsibility
under Sec.  320.61, every three years thereafter, and within sixty days
after every successful claim against a CERCLA Sec.  108(b) financial
responsibility instrument. The recalculation must use the most current
facility information available. The owner or operator must submit the
revised financial responsibility amount to EPA, along with supporting
documentation.
    (b) If the resulting amount of financial responsibility required is
greater than the amount of financial responsibility provided by the
current CERCLA Sec.  108(b) financial responsibility instrument(s), the
owner or operator must submit evidence of the increased value of the
instrument(s) within sixty days of the recalculation.
    (c) If the resulting amount of financial responsibility required is
less than the amount of financial responsibility provided by the
current CERCLA Sec.  108(b) financial responsibility instrument(s), the
owner and operator may submit a written request to the Administrator to
lower the required financial responsibility amount at the facility. The
request must include updated information to support the revised
financial responsibility amount. The amount of financial responsibility
required at the facility may be reduced to the recalculated amount only
with written approval by the Administrator.

Sec.  320.23  Incapacity of owners or operators, corporate guarantors,
or financial institutions.

[PROPOSED REGULATORY TEXT FOR OPTION 1 (Preferred Option)]
    (a) An owner or operator must notify the Regional Administrator by
certified mail of the commencement of a voluntary or involuntary
proceeding under Title 11 (Bankruptcy), U.S. Code, naming the owner or
operator as debtor, within ten days after commencement of the
proceeding.
    (b) An owner or operator who demonstrates financial responsibility
under this part by obtaining a trust fund, surety bond, letter of
credit, or insurance policy will be deemed to be without the required
financial responsibility in the event of bankruptcy of the trustee or
issuing institution, or a suspension or revocation of the authority of
the trustee

institution to act as trustee or of the institution issuing the surety
bond, letter of credit, or insurance policy to issue such instruments.
The owner or operator must provide other evidence of financial
responsibility within sixty days after such an event.
[PROPOSED REGULATORY TEXT FOR OPTION 2]
    (a) An owner or operator must notify the Administrator by certified
mail of the commencement of a voluntary or involuntary proceeding under
Title 11 (Bankruptcy), U.S. Code, naming the owner or operator as
debtor, within ten days after commencement of the proceeding. A
corporate guarantor of a corporate guarantee as specified in Sec.
320.44, if named as a debtor, must make such a notification, as
required under the terms of the corporate guarantee (Sec.  320.50(f)).
    (b) An owner or operator who demonstrates financial responsibility
under this part by obtaining a trust fund, surety bond, letter of
credit, or insurance policy will be deemed to be without the required
financial responsibility in the event of bankruptcy of the trustee or
issuing institution, or a suspension or revocation of the authority of
the trustee institution to act as trustee or of the institution issuing
the surety bond, letter of credit, or insurance policy to issue such
instruments. The owner or operator must provide other evidence of
financial responsibility within sixty days after such an event.

Sec.  320.24  Notification of claims brought against owners, operators,
or guarantors.

    An owner or operator subject to this part must notify the
Administrator by certified mail of the filing of any claim pursuant to
CERCLA naming the owner or operator or the owner or operator's
guarantor, as defendant, within ten days after commencement of the
proceeding. Such notification shall include a copy of any papers filed
by the claimant with a court, or other information allowing the
Administrator to identify the court, case name and number, and parties.

Sec.  320.25  Facility transfer.

    (a) If a facility, or a portion of a facility, subject to the
requirements of this part is sold or otherwise transferred to another
owner, or if the operation of a facility is transferred to another
operator, the previous owner or operator must maintain financial
responsibility for the facility, or transferred portion of the
facility, in accordance with this part, until the Administrator
releases the previous owner or operator from the obligation to maintain
financial responsibility under paragraph (b) of this section.
    (b) Any new owner or operator of a facility must provide evidence
of financial responsibility as required in this part for the facility
or portion of the facility prior to assuming ownership or operation.
Upon the new owner or operator's demonstration of financial
responsibility in accordance with this part, the Administrator will
provide notice to the prior owner and operator that they are no longer
required to provide evidence of financial responsibility in accordance
with this part.

Sec.  320.26  Notification of cessation of operations.

    The owner or operator must notify the Administrator thirty days
prior to:
    (1) The date the facility is no longer authorized to operate, or
    (2) The date the owner or operator is required under another
applicable regulatory program to notify the relevant regulatory
authority that the facility is ceasing operations, whichever is
earlier.

Sec.  320.27  Release from financial responsibility requirements.

    (a) The owner or operator may petition to be released from its
obligations under this part by submitting a request to the
Administrator, which must include evidence demonstrating that the
degree and duration of risk associated with the production,
transportation, treatment, storage and disposal of hazardous substances
is minimal. Upon receiving such request, the Administrator will
evaluate facility information, including the information submitted by
the owner or operator, regarding the degree and duration of risk
associated with the production, transportation, treatment, storage, and
disposal of hazardous substances at the facility, and make a
determination regarding the owner's or operator's request.
    (1) If the Administrator determines that the degree and duration of
risk associated with the production, transportation, treatment,
storage, and disposal of hazardous substances at the facility is
minimal, and that the facility should therefore be released from the
requirements of this part, the Administrator will post the draft
decision on the EPA website, provide the public opportunity to comment
on the decision, and post the Agency's final decision, and response to
comments received, on the EPA website.
    (2) If the Administrator determines (either initially or following
consideration of public comment during the procedures described in
paragraph (a)(1) of this section), that the degree and duration of risk
associated with the production, transportation, treatment, storage, and
disposal of hazardous substances is not minimal, the Administrator will
not release the owner or operator from the requirement to maintain
financial responsibility in accordance with this part. The
Administrator will provide notice of the Agency's final decision, and
response to comments received, and will provide the owner or operator a
detailed written statement explaining the decision.
    (3) An owner or operator that petitions the Administrator under the
procedures in this section and does not obtain a release from
requirements under this part may submit a petition for a renewed
determination under this section only if the owner or operator can
provide additional, relevant information, not previously considered by
the Administrator, demonstrating that there is minimal risk associated
with the production, transportation, treatment, storage, and disposal
of hazardous substances at the facility.
    (b) [Reserved].

Subpart C--Available Financial Responsibility Instruments

[PROPOSED REGULATORY TEXT FOR OPTION 1 (Preferred Option)]
    Owners and operators may demonstrate financial responsibility using
one or a combination of the financial responsibility instruments
provide in Sec. Sec.  320.40 through 320.43.
[PROPOSED REGULATORY TEXT FOR OPTION 2]
    Owners and operators may demonstrate financial responsibility using
one or a combination of the financial responsibility instruments
provide in Sec. Sec.  320.40 through 320.45.

Sec.  320.40  Letter of Credit.

    (a) An owner or operator may satisfy the requirements of this part
by obtaining an irrevocable standby letter of credit which conforms to
the requirements of this section and is issued by an institution which
has the authority to issue letters of credit and whose letter of credit
operations are regulated and examined by a Federal or state agency.
    (b) The wording of the letter of credit must be identical to the
wording specified in Sec.  320.50(b). The letter of credit must either
be issued in favor of:
    (1) The trustee of a trust fund established by an agreement worded
identical to the language in Sec.  320.50(a) and must authorize the
trustee to make draws on the letter of credit to

administer the claims process for CERCLA response costs, health
assessment costs, and natural resource damages in accordance with the
terms of the trust agreement; or
    (2) Any and all third-party CERCLA claimants and must provide for
payment directly to claimants for CERCLA response costs, health
assessment costs, and natural resource damages.
    (c) If the letter of credit is issued in favor of the trustee of a
trust fund, the owner or operator must submit a certified copy of the
letter of credit to the Administrator and submit the original letter of
credit to the trustee authorized to make draws on the letter of credit.
An acknowledgment of the receipt of the letter of credit from the
trustee must be submitted by the owner or operator to the
Administrator.
    (d) If the letter of credit is issued in the favor of any and all
third-party CERCLA claimants, the owner or operator must submit the
originally signed letter of credit to the Administrator.
    (e) An owner or operator who uses a letter of credit to satisfy the
requirements of this part must also establish a trust fund and update
Schedule A of the trust agreement within sixty days after a change in
the amount of CERCLA Sec.  108(b) financial responsibility. This trust
fund must meet the requirements of the trust fund specified in Sec.
320.45, except that:
    (1) An originally signed duplicate of the trust agreement must be
submitted to the Administrator with the original or the certified copy
of the letter of credit; and
    (2) Unless the trust fund is funded pursuant to the requirements of
this part, including by holding the letter of credit as specified in
this section, the following are not required by these regulations:
    (i) Payments into the trust fund as specified in Sec.  320.45;
    (ii) Annual valuations as required by the trust agreement; and
    (iii) Notices of payment as required by the trust agreement.
    (f) The letter of credit must be irrevocable and issued for a
period of at least one year. The letter of credit must provide that the
expiration date will be automatically extended for a period of at least
one year unless, at least 120 days before the current expiration date,
the issuing institution notifies both the owner or operator, the trust
fund trustee (if the letter is issued in favor of the trustee), and the
Administrator by certified mail of a decision not to extend the
expiration date. Under the terms of the letter of credit, the 120 days
will begin on the date when the owner or operator, the trust fund
trustee (if applicable), and the Administrator have received the
notice, as evidenced by the return receipts. If the issuing institution
timely notifies the owner or operator, the trustee, and the
Administrator, and the owner or operator fails to submit and obtain the
Administrator's approval of alternate financial responsibility within
ninety days of the receipt of such notice, the Administrator is
authorized to draw on the letter of credit as specified in paragraphs
(k) and (l) of this section.
    (g) The letter of credit must be issued in an amount at least equal
to the current required CERCLA Sec.  108(b) financial responsibility
amount, except as provided in Sec.  320.46.
    (h) Whenever the required amount of CERCLA Sec.  108(b) financial
responsibility increases to an amount greater than the credit, the
owner or operator, within sixty days after the increase, must either
cause the credit to be increased to an amount at least equal to the
CERCLA Sec.  108(b) financial responsibility amount and submit evidence
of such increase to the Administrator and the trust fund trustee (if
the letter is issued in favor of the trustee), or obtain other
financial responsibility as specified in this part to cover the
increase. Whenever the required amount of CERCLA Sec.  108(b) financial
responsibility decreases, the credit may be reduced to the amount of
the current required CERCLA Sec.  108(b) financial responsibility
amount following written approval by the Administrator.
    (i) If the letter of credit is issued in favor of the trust fund
trustee, parties may make claims against the trust fund in accordance
with the terms of the trust agreement in order to receive payment from
the letter of credit.
    (j) If the letter of credit provides for direct payment, claimants
may make claims as follows:
    (1) Any party that obtains a final judgment from a Federal court
awarding CERCLA response costs, health assessment costs, and/or natural
resource damages associated with the facility against any of the
current owners or operators may make a claim against the letter of
credit. The party may only make a claim after the thirtieth day after
the judgement and if they have not recovered or been paid the funds
from any other source.
    (2) The Administrator or other authorized Federal agency may make a
claim against the letter of credit for payment if payment has not been
made as required by a CERCLA settlement associated with the facility
between a current owner or operator and EPA or another Federal agency.
    (3) The Administrator or another authorized Federal agency may make
a claim against the letter of credit requesting payment into a trust
fund established pursuant to a CERCLA unilateral administrative order
issued to a current owner or operator if performance at the facility as
required by the order has not occurred. The Administrator or another
Federal agency may only make the claim against the letter of credit if
the owner or operator has provided a written statement that the letter
of credit may be used to assure the performance of the work required in
the order.
    (k) If the owner or operator does not establish alternate financial
responsibility as specified in this part and obtain written approval of
such alternate financial responsibility from the Administrator within
ninety days after receipt by the owner or operator, the trust fund
trustee (if the letter is issued in favor of the trustee), and the
Administrator of a notice from the issuing institution that it has
decided not to extend the letter of credit beyond the current
expiration date:
    (1) The Administrator will draw on the letter of credit if the
letter of credit is issued in favor of any and all third party CERCLA
claimants; or
    (2) If the letter of credit is issued in favor of the trust fund
trustee, the Administrator will inform the trustee of the trust fund
that the owner or operator did not establish alternate financial
responsibility and obtain written approval of such alternate financial
responsibility within ninety days. In accordance with the terms of the
trust agreement, this notice will prompt the trustee to draw on the
letter of credit and deposit any unused portion of the letter of credit
into the trust fund.
    (l) The Administrator may delay the drawing or the notification to
the trustee of the trust fund that the owner or operator did not
establish alternate financial responsibility and obtain written
approval of such alternate financial responsibility within ninety days
if the issuing institution grants an extension of the term of the
credit. During the last thirty days of any such extension the
Administrator will draw on the letter of credit or notify the trustee
of the trust fund that the owner or operator did not establish
alternate financial responsibility and obtain written approval of such
alternate financial responsibility if the owner or operator has still
failed to provide alternate financial responsibility as specified in
this section and obtain

written approval of such financial responsibility from the
Administrator.
    (m) The Administrator will return the letter of credit to the
issuing institution for termination or agree to the termination of the
trust holding the letter of credit when:
    (1) An owner or operator substitutes alternate financial assurance
as specified in this part; or,
    (2) The Administrator releases the owner or operator from the
requirements of this part in accordance with Sec.  320.27.

Sec.  320.41   Surety bond.

    (a) An owner or operator may satisfy the requirements of this part
by obtaining a surety bond which conforms to the requirements of this
paragraph and submitting the originally signed bond to the
Administrator.
    (b) The surety company issuing the bond must, at a minimum, be
among those listed as acceptable sureties on Federal bonds in Circular
570 of the U.S. Department of the Treasury.
    (c) The wording of the surety bond must be identical to the wording
specified in Sec.  320.50(c).
    (d) A surety bond may be used to satisfy the requirements of this
section only if the Attorneys General or Insurance Commissioners of:
    (1) The state in which the surety is incorporated, and
    (2) Each state in which a facility covered by the surety bond is
located have submitted a written statement to EPA that a surety bond
executed as described in this section and Sec.  320.50(c) of this part
is a legally valid and enforceable obligation in that state.
    (e) The surety bond may be issued by multiple sureties provided
that each is liable for its individual vertical percentage share of the
total penal sum of the bond.
    (f) An owner or operator who uses a surety bond to satisfy the
requirements of this part must also establish a standby trust fund and
update Schedule A of the trust agreement within sixty days after a
change in the amount of CERCLA Sec.  108(b) financial responsibility.
This standby trust fund must meet the requirements specified in Sec.
320.45, except that:
    (1) An originally signed duplicate of the trust agreement must be
submitted to the Administrator with the surety bond; and
    (2) Until the standby trust fund is funded pursuant to the
requirements of this section, the following are not required by these
regulations:
    (i) Payments into the trust fund as specified in Sec.  320.45;
    (ii) Annual valuations as required by the trust agreement; and
    (iii) Notices of nonpayment as required by the trust agreement.
    (g) The surety bond must guarantee that the owner or operator will:
    (1) Make payments or ensure that payments are made for CERCLA
response costs, health assessment costs, and/or natural resource
damages associated with the facility as required in a final court
judgment from a Federal court against any current owner or operator
within thirty days to the party or parties obtaining the judgment;
    (2) Make payments or ensure payments are made as required in a
CERCLA settlement associated with the facility between any of the
current owners and operators at the facility and EPA or another Federal
agency;
    (3) Perform or ensure the performance of the work required at the
facility by a CERCLA unilateral administrative order issued to any of
the current owners or operators by EPA or by another Federal agency for
which the owner or operator provides a written statement allowing for
the bond to assure performance of the work; and
    (4) Provide alternate financial responsibility as specified in this
part or ensure that alternate financial responsibility as specified in
this part is provided for facilities covered by the bond, and obtain
the Administrator's written approval or ensure the Administrator's
written approval is obtained of the financial responsibility provided,
within ninety days after receipt by both the owner or operator and the
Administrator of a notice of cancellation of the bond from the surety.
    (h) Under the terms of the surety bond, the surety will become
liable on the bond obligation when the owner or operator fails to
perform as guaranteed by the bond and must make payment in accordance
with the direction of the claimant and the terms of the bond. Provided,
however, the liability of the surety will be limited to the penal sum
of the bond plus the amount of any investigation or legal defense fees
incurred by the surety.
    (i) The penal sum of the bond must be in an amount at least equal
to the required current CERCLA Sec.  108(b) financial responsibility
amount, except as provided in Sec.  320.46.
    (j) Whenever the required amount of CERCLA Sec.  108(b) financial
responsibility increases to an amount greater than the penal sum, the
owner or operator, within sixty days after the increase, must either
cause the penal sum to be increased to an amount at least equal to the
CERCLA Sec.  108(b) financial responsibility amount and submit evidence
of such increase to the Administrator, or obtain other financial
assurance as specified in this section to cover the increase. Whenever
the required amount of CERCLA Sec.  108(b) financial responsibility
decreases, the penal sum may be reduced to the amount of the current
required CERCLA Sec.  108(b) financial responsibility amount following
written approval by the Administrator.
    (k) Under the terms of the bond, the surety may cancel the bond by
sending notice of cancellation by certified mail to the owner or
operator and to the Administrator. Cancellation may not occur, however,
during the 120 days beginning on the date of receipt of the notice of
cancellation by both the owner or operator and the Administrator, as
evidenced by the return receipts.
    (l) The owner or operator may terminate the bond if the
Administrator has given prior written authorization based on his
receipt of evidence of alternate financial responsibility as specified
in this part or the Administrator releases the owner or operator from
the requirements of this part in accordance with Sec.  320.27.

Sec.  320.42  Insurance.

    (a) An owner or operator may satisfy the requirements of this part
by obtaining insurance for CERCLA response costs, health assessment
costs, and natural resource damages that conforms to the requirements
of this section. Each insurance policy must be amended by the
attachment of a CERCLA Sec.  108(b) endorsement as worded in Sec.
320.50(d).
    (b) At a minimum, the insurer must be licensed to transact the
business of insurance, or eligible to provide insurance as an excess or
surplus lines insurer, in one or more states.
    (c) The owner or operator must submit a signed duplicate original
of the CERCLA Sec.  108(b) financial responsibility endorsement to the
Administrator, or regional delegees of the Administrator as applicable
if the endorsement covers facilities located in multiple regions. The
endorsement must provide coverage effective when required by the
compliance schedule in Sec.  320.2.
    (d) The owner or operator may obtain insurance from up to four
insurers to demonstrate CERCLA Sec.  108(b) financial responsibility.
If the owner operator obtained insurance from multiple insurers, an
endorsement from each insurer must be submitted and must provide that a
claimant may make a claim against each of the insurers providing
evidence of financial responsibility for the insurer's proportional
share of the CERCLA

Sec.  108(b) financial responsibility up to the face value of the
policy.
    (e) The insurance policy must provide coverage for third-party
CERCLA claims against all current owners and operators at the facility
as required by this part.
    (f) An owner or operator who uses insurance to satisfy the
requirements of this part must also establish a standby trust fund and
update Schedule A of the trust agreement within sixty days after a
change in the amount of CERCLA Sec.  108(b) financial responsibility.
This standby trust fund must meet the requirements of the trust fund
specified in Sec.  320.45, except that:
    (1) An originally signed duplicate of the trust agreement must be
submitted to the Administrator with the endorsement; and
    (2) Unless the standby trust fund is funded pursuant to the
requirements of this part, the following are not required by these
regulations:
    (i) Payments into the trust fund as specified in Sec.  320.45;
    (ii) Annual valuations as required by the trust agreement; and
    (ii) Notices of payment as required by the trust agreement.
    (g) The insurance must provide first dollar coverage irrespective
of any deductibles or self-insured retention both of which must be paid
by the insurer with a right of reimbursement from the insured. The
policy must be issued for a face amount at least equal to the required
current CERCLA Sec.  108(b) financial responsibility amount, except as
provided in Sec.  320.46, Sec.  320.1(g)(1) and paragraph (d) of this
section. The term ``face amount'' means the total amount the insurer is
obligated to pay under the policy as required by this section, without
sub-limits except for those that specify facility specific amounts of
coverage, exclusive of legal defense and investigation costs, and must
be segregated and independent from other coverage provided for by the
policy that is outside the scope of paragraphs (h), (i), (j), and (l)
of this section. Actual payments by the insurer will not change the
face amount, although the insurer's future liability will be lowered by
the amount of the payments.
    (h) The policy must provide for the payment awarded in final court
judgments from a Federal court against any of the current owners and
operators for CERCLA response costs, health assessment costs, and/or
natural resource damages associated with the facility to the party
obtaining the judgment should such payment not be made within thirty
days.
    (i) The policy must provide for payment as required by a CERCLA
settlement associated with the facility between any of the current
owners or operators at the facility and EPA or another Federal
government agency should payment as required by the settlement not be
made.
    (j) The policy must also provide for payment into a trust fund
established pursuant to a CERCLA unilateral administrative order issued
to any of the current owners or operators at the facility by EPA or
another Federal agency in instances where performance at the facility
as required by the order does not occur. The owner or operator must
have provided a written statement allowing the insurance policy be used
to assure performance of the work required in the order.
    (k) The endorsement must provide that cancellation, failure to
renew, or any other termination of the insurance by the insurer will be
effective only upon written notice to the owner operator and the
Administrator by certified mail and only after the expiration of 120
days beginning with the date of receipt of the notice by both the
Administrator and the owner or operator, as evidenced by the return
receipts. Such automatic renewal of the policy must, at a minimum,
provide the insured with the option of renewal at the face amount of
the expiring policy.
    (l) The endorsement must specify that in instances where the owner
or operator fails to obtain alternate financial responsibility and
obtain written approval of such alternate financial responsibility from
the Administrator within ninety days after receipt by both the owner or
operator and the Administrator of a notice from the insurer that it has
decided to cancel, not renew or otherwise terminate the insurance
policy the insurer will be liable up to the face value of the policy
for payment into the standby trust following notification by the
Administrator.
    (m) The endorsement must also provide that in the case of a release
or threatened release of (a) hazardous substance(s) from a facility
covered by the policy, the insurer acknowledges that any claim
authorized by section 107 or section 111 of CERCLA may be asserted
directly against the insurer as provided by CERCLA Sec.  108(c)(2).
Further, the endorsement must state that the insurer consents to suit
with respect to these claims subject to the limitations in section
108(d) of CERCLA.
    (n) The owner or operator must maintain the insurance in full force
and effect until the Administrator consents to termination of the
insurance by the owner or operator as specified in paragraph (p) of
this section.
    (o) Whenever the required CERCLA Sec.  108(b) financial
responsibility amount increases to an amount greater than the face
amount of the policy, the owner or operator, within sixty days after
the increase, must either cause the face amount of the policy to be
increased to an amount at least equal to the required amount and submit
evidence of such increase to the Administrator, or obtain other
financial responsibility as specified in this section to cover the
increase. Whenever the amount of required CERCLA Sec.  108(b) financial
responsibility decreases, the face amount may be reduced to the amount
of the current required CERCLA Sec.  108(b) amount following written
approval by the Administrator.
    (p) The Administrator will give written consent to the owner or
operator that he or she may terminate the insurance policy when:
    (1) An owner or operator substitutes alternate financial
responsibility as specified in this part; or
    (2) The Administrator releases the owner or operator from the
requirements of this section in accordance with Sec.  320.27.
[PROPOSED REGULATORY TEXT FOR Sec.  320.43 OPTION 1 (Preferred Option)]

Sec.  320.43  [Reserved]

[PROPOSED REGULATORY TEXT FOR Sec.  320.43 OPTION 2]

Sec.  320.43  Financial Test.

    (a) An owner or operator may satisfy the requirements of this
section, up to the amount specified in this section, by demonstrating
that it passes a financial test.
    (1) To cover up to the full amount of financial responsibility
required at its facility, the owner or operator must have:
    (i) At least one-long term credit rating of AAA, AA+, AA, AA-, A+,
A or A- as issued by Standard and Poor's (S&P), or an equivalent as
issued by another Nationally Recognized Statistical Rating Organization
(NRSRO);
    (ii) Tangible net worth at least six times the amount of
environmental obligations, including guarantees, covered by a financial
test or guarantee, including this financial test and the corporate
guarantee in Sec.  320.44; and
    (ii) Assets located in the United States amounting to either at
least ninety percent of total assets; or at least six times the amount
of financial responsibility obligations covered by a financial test or
guarantee, including this financial test and the corporate guarantee in
Sec.  320.44; and
    (2) To cover up to one half of the value of the financial
responsibility

amount specified in this section, the owner or operator must have:
    (i) At least one-long term credit rating of BBB+ or BBB as issued
by S&P, or the equivalents as issued by another NRSRO;
    (ii) Tangible net worth at least six times the financial
responsibility obligations covered by a financial test or guarantee,
including this financial test and the corporate guarantee in Sec.
320.44; and
    (ii) Assets located in the United States amounting to either at
least ninety percent of the firm's total assets or at least six times
the amount of financial responsibility obligations covered by a
financial test or guarantee, including this financial test and the
corporate guarantee in Sec.  320.44.
    (b) To demonstrate that it satisfies this financial test, an owner
or operator must post on its website, include in its facility record,
and annually submit all of the following:
    (1) A letter to the Administrator signed by its chief financial
officer (CFO) as worded in Sec.  320.50(e).
    (2) A special report of procedures and findings from an independent
certified public accountant (CPA) resulting from an agreed-upon
procedures engagement in accordance with the American Institute of
Certified Public Accountants' (AICPA) Statement on Standards for
Attestation Engagements (SSAE) and Related Attestation Interpretations,
AT section 201--Agreed Upon Procedures Engagements, or any future
superseding standards set by AICPA or any superseding body. The report
would be required to describe the procedures performed and related
findings as to whether or not there were differences or discrepancies
identified between the financial information in the owner's or
operator's CFO's letter and the owner's or operator's most recent
audited annual financial statements. Where differences or discrepancies
were found in the comparison of the owner's or operator's CFO's letter
and the owner's or operator's most recent audited annual financial
statements, the report of procedures and findings would reconcile any
differences or discrepancies.
    (3) A copy of the owner's or operators' most recent independently
audited annual financial statements prepared in accordance with an
accounting standard deemed acceptable by the SEC.
    (c) An owner or operator of a facility must submit the three items
specified in paragraph (b) of this section to the Administrator within
sixty days of the date on which the CERCLA financial responsibility
amount is first established.
    (d) After the initial submission of the items specified in
paragraph (b) of this section, the owner or operator must send annually
updated information to the Administrator within sixty days after the
close of each succeeding fiscal year. This information must consist of
the three items specified in paragraph (b) of this section.
    (e) An owner or operator who no longer meets the requirements of
paragraph (a) of this section for any portion of his CERCLA financial
responsibility requirement must send notice of the intent to establish
an alternate financial responsibility instrument as specified in this
section to the Administrator to cover the portion of the obligations
that can no longer be covered by the financial test. This notice must
be sent by certified mail within thirty days. The owner operator must
then obtain alternate financial responsibility for the entire amount of
required coverage as specified in paragraph (a) of this section. The
owner or operator must submit evidence of coverage to the Administrator
within 120 days of no longer meeting the requirements.
    (f) The Administrator may, based on a reasonable belief that the
owner or operator may no longer meet the requirements of paragraph (a)
of this section for any portion of the CERCLA financial responsibility
obligation, require reports of financial condition at any time from the
owner or operator in addition to those specified in paragraph (b) of
this section. If the Administrator finds, on the basis of such reports
or other information, that the owner or operator no longer meets the
requirements of paragraph (a) of this section for any portion of the
CERCLA liability financial responsibility obligation, the owner or
operator must provide alternate financial responsibility as specified
in this section within thirty days after notification of such a
finding.
    (g) The Administrator may disallow use of this test on the basis of
qualifications of opinion given in the independent certified public
accountant's report in the agreed upon procedures engagement or the
audited financial statements. An adverse opinion or disclaimer of
opinion in either report will result in disallowance of the test. The
Administrator will evaluate other qualifications on an individual
basis. The owner or operator must provide alternate evidence of
financial responsibility within thirty days after notification of the
disallowance.
    (h) The owner or operator is no longer required to submit the items
specified in paragraph (b) of this section when:
    (1) An owner or operator substitutes alternate financial
responsibility as specified in this section; or
    (2) The Administrator releases the owner or operator from the
requirements of this section in accordance with Sec.  320.27.
[PROPOSED REGULATORY TEXT FOR Sec.  320.44 OPTION 1 (Preferred Option)]

Sec.  320.44  [Reserved]

[PROPOSED REGULATORY TEXT FOR Sec.  320.44 OPTION 2]

Sec.  320.44  Corporate guarantee.

    (a) An owner or operator may meet the requirements of this part by
obtaining a written guarantee, hereinafter referred to as
``guarantee.''
    (b) The guarantor must be the direct or higher-tier parent
corporation of the owner or operator, a firm whose parent corporation
is also the parent corporation of the owner or operator, or a firm with
a ``substantial business relationship'' with the owner or operator. The
guarantor must meet the requirements for owners or operators in Sec.
320.43 (a) through (g) and must comply with the terms of the guarantee.
    (c) The wording of the guarantee must be identical to the wording
specified in the Corporate Guarantee at Sec.  320.50(f) of this part. A
certified copy of the guarantee must accompany the items sent to the
Administrator as specified in Sec.  320.43(b). One of these items must
be the letter from the guarantor's chief financial officer. If the
guarantor's parent corporation is also the parent corporation of the
owner or operator, this letter must describe the value received in
consideration of the guarantee. If the guarantor is a firm with a
``substantial business relationship'' with the owner or operator, this
letter must describe this ``substantial business relationship'' and the
value received in consideration of the guarantee.
    (d) The terms of the guarantee must provide that:
    (1) In the event that payment for CERCLA response costs, health
assessment costs, and/or natural resource damages associated with the
facility required in a final court judgment from a Federal court
against one of the current owners or operators is not made within
thirty days, the guarantor shall do so;
    (2) In the event payment is not made as required in a CERCLA
settlement associated with the facility between a current owner or
operator and EPA or another Federal government agency, the guarantor
shall do so;

    (3) In the event that performance at a facility covered by the
guarantee does not occur as required under a CERCLA unilateral
administrative order issued to a current owner or operator by EPA or
another Federal agency and for which the owner or operator provides a
written statement allowing the guarantee to serve as financial
responsibility assuring the work in the order, the guarantor shall make
payment into a trust fund established pursuant to the order;
    (4) The corporate guarantee will remain in force unless the
guarantor sends notice of termination by certified mail to the owner or
operator and to the Administrator. Termination may not occur, however,
unless and until the owner or operator obtains, and the Administrator
approves alternate financial responsibility complying with the
requirements of this part; and
    (5) If the owner or operator fails to provide alternate financial
responsibility as specified in this part and obtain the written
approval of such alternate financial responsibility from the
Administrator within ninety days after receipt by both the owner or
operator and the Administrator of a notice of termination of the
corporate guarantee from the guarantor, the guarantor will provide such
alternative financial responsibility, in accordance with the
requirements of this part, in the name of the owner or operator.
    (e) The guarantee must provide for payment as described in this
section up to the required amount of the CERCLA Sec.  108(b) financial
responsibility covered by the guarantee.
    (f) In the case of a corporation incorporated in the United States,
a guarantee may be used to satisfy the requirements of this part only
if the Attorneys General or Insurance Commissioners of:
    (1) The state in which the guarantor is incorporated, and
    (2) Each state in which a facility covered by the guarantee is
located have submitted a written statement to EPA that a guarantee
executed as described in this section and Sec.  320.50(f) is a legally
valid and enforceable obligation in that state.
    (g) In the case of a guarantee provided by a corporation
incorporated outside the United States, a guarantee may be used to
satisfy the requirements of this part only if:
    (1) The non-U.S. corporation has identified a registered agent for
service of process in each state in which a facility covered by the
guarantee is located and in the state in which it has its principal
place of business; and
    (2) The Attorney General or Insurance commissioner of each state in
which a facility covered by this guarantee is located and the state in
which the guarantor corporation has its principal place of business has
submitted a written statement to EPA that a guarantee executed as
described in this section and Sec.  320.50(f) is a legally valid and
enforceable obligation in that state.

Sec.  320.45  Trust fund.

    (a) An owner operator may satisfy the requirements of this section
by establishing a trust fund that conforms to the requirements of this
paragraph, and submitting an originally signed duplicate of the trust
agreement to the Administrator. The trustee must be an entity which has
the authority to act as a trustee and whose trust operations are
regulated and examined by a Federal or state agency.
    (b) The wording of the trust agreement must be identical to the
wording specified in Sec.  320.50(a)(1), and the trust agreement must
be accompanied by a formal certification of acknowledgment (for
example, see Sec.  320.50(a)(2)). Schedule A of the trust agreement
must be updated within sixty days after a change in the amount of Sec.
108(b) financial responsibility.
    (c) Payments into the trust fund must be made so that the value of
the trust fund is at least as great as the required CERCLA Sec.  108(b)
financial responsibility amount required under Sec.  320.20. The trust
must be fully funded within four years of the owner operator being
subject to the regulations. This funding amount may include the value
of any letters of credit held by the trust in accordance with Sec.
320.40. Receipt from the trustee for these payments must be submitted
by the owner or operator to the Administrator.
    (d) Whenever the required financial responsibility amount
increases, the owner operator must compare the new amount with the
trustee's most recent annual valuation of the trust fund. If the value
of the fund is less than the new amount, the owner or operator, within
sixty days after the change in the required Sec.  108(b) financial
responsibility amount, must either deposit an amount into the fund so
that its value after this deposit at least equals the required Sec.
108(b) financial responsibility amount, or obtain other financial
assurance as specified in this section to cover the increase.
    (e) If the value of the trust fund is greater than the required
financial responsibility amount, the owner or operator may submit a
written request to the Administrator for release of the amount of in
excess of the required CERCLA Sec.  108(b) financial responsibility
amount.
    (f) If the owner or operator substitutes other financial
responsibility as specified in this section for all or part of the
trust fund, it may submit a written request to the Administrator for
release of the amount in excess of the required amount of CERCLA Sec.
108(b) financial responsibility.
    (g) Within sixty days after receiving a request from the owner
operator for release of funds as specified in paragraph (e) or
paragraph (f) of this section, the Administrator will notify the
trustee that the trust fund contains amounts in excess of the required
amount. Following this notification, the trustee may release the excess
funds in accordance with the terms of the trust agreement.
    (h) The trust, up to the value of funds held including letters of
credit held in accordance with Sec.  320.40, is required to provide for
payment:
    (1) To parties that obtain a final court judgment from a Federal
court against any of the current owners or operators at the facility
for awarding CERCLA response costs, health assessment costs, and/or
natural resource damages associated with a facility covered by the
trust agreement should payment not occur as required by the judgment
within thirty days.
    (2) As required in a CERCLA settlement associated with the facility
between a current owner or operator and EPA or another Federal agency
if payment is not otherwise made.
    (3) Into a trust fund established pursuant to a CERCLA unilateral
administrative order issued to one of the current owners or operators
by EPA or another Federal agency in the event the work is not performed
at the facility as required by the order. The Administrator or other
Federal agency shall only make such a claim if the owner or operator
provides written consent for the financial responsibility instrument to
assure the obligations under the unilateral administrative order.
    (i) The Administrator will agree to the termination of the trust
when:
    (1) The owner operator substitutes alternate financial assurance as
specified in this section; or
    (2) The Administrator releases the owner or operator from the
requirements of this section in accordance with Sec.  320.27.

Sec.  320.46  Use of multiple financial responsibility instruments.

    (a) An owner or operator may satisfy the requirements of this part
by establishing more than one financial instrument per facility.

    (b) The instruments must be as specified in Sec. Sec.  320.40
through 320.45, respectively, except that it is the combination of
instruments, rather than the single instrument, which must demonstrate
financial responsibility for an amount at least equal to the required
CERCLA Sec.  108(b) financial responsibility amount.
    (c) An owner or operator using a trust fund in combination with a
surety bond, letter of credit or insurance policy, including a trust
fund holding a letter of credit, may use the trust fund as the standby
trust fund for the other instruments.
    (d) A single standby trust fund may be established for two or more
instruments. A claimant may make a claim against any of the instruments
used to provide evidence of financial responsibility.

Sec.  320.47  Use of a financial instrument for multiple facilities.

    (a) An owner or operator may use a financial responsibility
instrument specified in this part to meet the requirements of this
section for more than one facility.
    (b) Evidence of financial responsibility submitted to the
Administrator must include for each facility, the EPA Identification
Number, name, address, and the amount of funds for Sec.  108(b)
financial responsibility assured by the instrument.
    (c) If the facilities covered by the instrument are in more than
one Region, identical evidence of financial responsibility must be
submitted to and maintained with the regional delegees of the
Administrator, as applicable, of all such Regions.
    (d) The amount of funds available through the instrument must be no
less than the sum of funds that would be available if a separate
instrument had been established and maintained for each facility.

Sec.  320.48  Consolidated form and multiple owners and/or operators.

    (a) Where a facility is owned or operated by more than one person,
evidence of financial responsibility covering the facility may be
established and maintained by one of the owners or operators, or, in
consolidated form, by or on behalf of two or more owners or operators.
    (b) When evidence of financial responsibility is established in a
consolidated form, the proportional share of the cost of demonstrating
the financial responsibility for each participant shall be shown in a
separate letter to the Administrator.
    (c) The evidence shall be accompanied by a statement authorizing
the owner or operator submitting the evidence of financial
responsibility to act for and on behalf of each participant in
submitting and maintaining the evidence of financial responsibility.

Sec.  320.49  [Reserved]

Sec.  320.50  Wording of the instruments.

    (a)(1) A trust agreement for a trust fund, as specified 40 CFR
320.45 must be worded as follows, except that instructions in brackets
are to be replaced with the relevant information and the brackets
deleted.
TRUST AGREEMENT
EPA contact information:
[Insert Name, Phone Number, Mailing Address of EPA and Point of
Contact(s)]
Account Number: [insert account number]

    Trust Agreement (the ``Agreement'') is entered into as of [insert
date] by and between [insert name of owner(s)/operator(s)], a business
[insert relevant entity (corporation, partnership, association,
proprietorship, etc.)], (the ``Grantor'') and [insert name of corporate
trustee], [insert ``incorporated in the state of [name of state]'' or
``a national bank''] (the ``Trustee'').
    Whereas, the United States Environmental Protection Agency
(``EPA'') has established regulations applicable to the Grantor
requiring that an owner or operator of a facility subject to the
regulations demonstrate financial responsibility as proof that funds
will be available when needed for payment of CERCLA response costs,
health assessment costs, and natural resource damages at the facility.
    Whereas, the Grantor has elected to establish a trust to provide
all or part of such financial responsibility and/or to receive the
proceeds from a letter of credit to assure all or part of such
financial responsibility for the facilities identified herein.
    Whereas, the Grantor, acting through its duly authorized officers,
has selected the Trustee to be the trustee under this agreement, and
the Trustee is willing to act as trustee,
    Now, therefore, the Grantor and the Trustee agree as follows:
    Section 1. Definitions as used in this Agreement.
    a) ``Grantor'' means the owner or operator who enters into this
Agreement and any successors or assigns of the Grantor.
    b) ``Trustee'' means the Trustee who enters into this Agreement and
any successor Trustee.
    Section 2. Identification of Facilities and Financial
Responsibility Amounts. This Agreement pertains to the facilities and
CERCLA 108(b) financial responsibility amounts identified on attached
Schedule A [on Schedule A, for each facility list the EPA
Identification Number, name, address, current owners and operators, and
the current financial responsibility amount, and portions thereof, for
which financial responsibility is being demonstrated by this
Agreement.]
    Section 3. Establishment of Fund. The Grantor and the Trustee
hereby establish a trust fund (the ``Fund'') for the benefit of any and
all parties with valid third-party CERCLA claims against the Grantor or
other current owners and operators arising from the operation of the
facilities covered by this Agreement. The Grantor and Trustee do not
intend for the Trustee to qualify as a ``guarantor'' as that term is
used in CERCLA sections 101(13) and 108(c)(2), and therefore intend
that the Trustee will not be subject to a direct action by Trustee's
agreement to act as Trustee for the Fund. The Grantor and Trustee
intend for the Fund to qualify as a ``guarantor'' as that term is used
in CERCLA sections 101(13) and 108(c)(2), and therefore intend that
only the Fund will be subject to any direct action brought pursuant to
CERCLA section 108(c)(2). The Fund is established initially as
consisting of property, which are acceptable to the Trustee, described
in Schedule B attached hereto. Such property, along with any other
monies and/or property subsequently transferred to the Trustee,
together with all earnings and profits thereon, less any payments or
distributions made by the Trustee pursuant to this Agreement, are
referred to herein collectively as the Fund. The Fund shall be held by
the Trustee, IN TRUST, as hereinafter provided. The Trustee shall not
be responsible nor shall it undertake any responsibility for the amount
or adequacy of, nor any duty to collect from the Grantor, any payments
necessary to discharge any liabilities of the Grantor under CERCLA.
    Section 4. Payments from the Fund. The Trustee shall make payments
from the Fund to parties with valid CERCLA claims against the Grantor
or other current owners or operators at the facility(-ies). To make
these payments, the Trustee shall draw on any letters of credit
described in Schedule B and/or make payments from the funds held by the
Fund described in Schedule B. The Trustee shall make payment from the
Fund for valid third-party CERCLA claims only up to the lesser of: (1)
The value of the valid third-party CERCLA claim; or (2) the amount of
CERCLA 108(b) financial responsibility provided

for the facility(ies) associated with the claim provided by the Fund as
identified in Schedule A.
    The Trustee shall satisfy valid unpaid CERCLA claims by making
payments on a first come first served basis from the Fund only upon
receipt of one or more of the following documents and only in amounts
up to the values specified in the document(s):
    (i) A final court judgment dated at least 30 days earlier from a
Federal court, in favor of the claimant, awarding CERCLA response
costs, health assessment costs, and/or natural resource damages
associated with a facility covered by this Agreement against the
Grantor or any of the current owners or operators at a facility covered
by this agreement;
    (ii) A written signed statement from the EPA Administrator or
another Federal government agency requesting payment from the Fund on
the grounds that payment has not been made as required by a CERCLA
settlement associated with a facility covered by this Agreement and
with any of the current owners or operators; or
    (iii) A written signed statement from the EPA Administrator or
other Federal government agency requesting payment from the Fund into a
trust fund established pursuant to a CERCLA unilateral administrative
order on the grounds that performance at a facility covered by this
Agreement has not occurred as required by a CERCLA unilateral
administrative order issued to a current owner or operator that
references this trust agreement.
    In addition to one of the documents listed above, all claimants
must also present the following:
    A signed statement from the claimant certifying that these amounts
have not been recovered or paid from any other source, including, but
not limited to, the owners or operators, insurance, judgments,
agreements, and other financial responsibility instruments.
    In the event of simultaneous valid claims that exceed the value of
the Fund, the Trustee shall pay the claimants a pro rata share of their
claim determined by the size of each valid claim.
    In addition to the payment instructions above, in the case of a
release or threatened release from a facility covered by the Agreement,
any claim authorized by section 107 or 111 of CERCLA may be asserted
directly against the Fund as provided by CERCLA section 108(c)(2)
subject to the limitations in CERCLA section 108(d). The Fund shall be
entitled to all rights and defenses provided to guarantors by CERCLA
section 108(c). The Fund is available for paying and defending claims
in these instances.
    In addition, if notified by the EPA Administrator that the trust
fund contains amounts in excess of the required CERCLA 108(b) financial
responsibility amount, the Trustee shall refund to the Grantor such
amounts in excess of the required CERCLA 108(b) financial
responsibility amount.
    Section 5. Payments Comprising the Fund. Payments made to the
Trustee for the Fund shall consist of cash or securities acceptable to
the Trustee and/or a standby letter of credit as specified in 40 CFR
320.50(b). In the event of receipt of a notice of a decision not to
extend the expiration date of a letter of credit from an institution
issuing a letter of credit held by the Fund, the Trustee shall draw on
the letter of credit prior to expiration occurring and deposit any
unused portion of the credit into the Fund if the EPA Administrator
informs the Trustee that the owner operator did not establish alternate
financial responsibility and obtain written approval of such alternate
financial responsibility from the EPA Administrator within the time
frame provided by 40 CFR 320.40(k) and (l).
    Section 6. Trustee Management. The Trustee shall invest and
reinvest the principal and income of the Fund and keep the Fund
invested as a single fund, without distinction between principal and
income, in accordance with the Grantor's disclosures communicated in
writing to the Trustee from time to time of the names of all current
owners and operators and their affiliates including issuers of
securities or other obligations, subject, however, to the provisions of
this Section. In investing, reinvesting, exchanging, selling, and
managing the Fund, the Trustee shall discharge its duties with respect
to the trust fund with undivided loyalty and solely in the interest of
the beneficiaries and with the reasonable care, skill, and caution of a
prudent investor, in light of the purposes, terms, distribution
requirements, and other circumstances of the trust; except that:
    (i) Securities or other obligations of the Grantor, or any other
current owner or operator of the facilities, or any of their affiliates
as defined in the Investment Company Act of 1940, as amended, 15 U.S.C.
80a-2(a), shall not be acquired or held, unless they are securities or
other obligations of the Federal or a state government;
    (ii) The Trustee is authorized to invest the Fund in time or demand
deposits of the Trustee, to the extent insured by an agency of the
Federal or state government;
    (iii) The Trustee is authorized to hold and draw upon standby
letters of credit specified as in 40 CFR 320.50(b); and
    (iv) The Trustee is authorized to hold cash awaiting investment or
distribution un-invested for a reasonable time and without liability
for the payment of interest thereon.
    Section 7. Common and Collective Investment Practices. The Trustee
is expressly authorized in its discretion:
    (a) To transfer from time to time any or all of the assets of the
Fund to any common or collective trust fund created by the Trustee in
which the Fund is eligible to participate, subject to all of the
provisions thereof, to be jointly invested with the assets of other
trusts participating therein; and
    (b) To purchase shares in any investment company registered under
the Investment Company Act of 1940, 15 U.S.C. 80a-1 et seq., including
one which may be created, managed, underwritten, or to which investment
advice is rendered or the shares of which are sold by the Trustee. The
Trustee may vote such shares in its discretion.
    Section 8. Express Powers of Trustee. Without in any way limiting
the powers and discretions conferred upon the Trustee by the other
provisions of this Agreement or by law, the Trustee is expressly
authorized and empowered:
    (a) To sell, exchange, convey, transfer, or otherwise dispose of
any property held by it, by public or private sale. No person dealing
with the Trustee shall be bound to see to the application of the
purchase money or to inquire into the validity or expediency of any
such sale or other disposition;
    (b) To hold and draw upon standby letters of credit that are worded
as specified in 40 CFR 320.50(b);
    (c) To make, execute, acknowledge, and deliver any and all
documents of transfer and conveyance and any and all other instruments
that may be necessary or appropriate to carry out the powers herein
granted;
    (d) To register any securities held in the Fund in its own name or
in the name of a nominee and to hold any security in bearer form or in
book entry, or to combine certificates representing such securities
with certificates of the same issue held by the Trustee in other
fiduciary capacities, or to deposit or arrange for the deposit of such
securities in a qualified central depositary even though, when so
deposited, such securities may be merged and held in bulk in the name
of the nominee of such depositary with other securities deposited
therein by another person, or to deposit or arrange for the deposit of
any securities issued by the United

States Government, or any agency or instrumentality thereof, with a
Federal Reserve bank, but the books and records of the Trustee shall at
all times show that all such securities are part of the Fund;
    (e) To deposit any cash in the Fund in interest-bearing accounts
maintained or savings certificates issued by the Trustee, in its
separate corporate capacity, or in any other banking institution
affiliated with the Trustee, to the extent insured by an agency of the
Federal or state government;
    (f) To compromise or otherwise adjust all claims in favor of or
against the Fund.
    Section 9. Taxes and Expenses. All taxes of any kind that may be
assessed or levied against or in respect of the Fund and all brokerage
commissions incurred by the Fund shall be paid from the Fund. All other
expenses shall be paid directly by the Grantor. All other expenses
incurred by the Trustee in connection with the administration of this
Trust including fees for legal services rendered to the Trustee, the
compensation of the Trustee, and all other proper charges and
disbursements of the Trustee not paid directly by the Grantor shall be
paid from the Fund.
    Section 10. Annual Valuation. The Trustee shall annually, at least
30 days prior to the anniversary date of establishment of the Fund,
furnish to the Grantor and to the appropriate EPA Administrator a
statement confirming the value of the Trust including the value of any
funds held by the Trust and of any letters of credit held by the Trust.
Any letters of credit shall be valued at the face amount less the value
of any draws. Any securities in the Fund shall be valued at market
value as of no more than sixty days prior to the anniversary date of
establishment of the Fund. The failure of the Grantor to object in
writing to the Trustee within 90 days after the statement has been
furnished to the Grantor and the EPA Administrator shall constitute a
conclusively binding assent by the Grantor barring the Grantor from
asserting any claim or liability against the Trustee with respect to
matters disclosed in the statement.
    Section 11. Advice of Counsel. The Trustee may from time to time
consult with counsel, who may be counsel to the Grantor, with respect
to any question arising as to the construction of this Agreement or any
action to be taken hereunder. The Trustee shall be fully protected, to
the extent permitted by law, in acting upon the advice of counsel.
    Section 12. Trustee Compensation. The Trustee shall be entitled to
reasonable compensation for its services as agreed upon in writing from
time to time with the Grantor.
    Section 13. Successor Trustee. The Trustee may resign or the
Grantor may replace the Trustee, but such resignation or replacement
shall not be effective until the Grantor has appointed a successor
trustee and this successor accepts the appointment. The successor
trustee shall have the same powers and duties as those conferred upon
the Trustee hereunder. Upon the successor trustee's acceptance of the
appointment, the Trustee shall assign, transfer, and pay over to the
successor trustee the funds and properties then constituting the Fund.
If for any reason the Grantor cannot or does not act in the event of
the resignation of the Trustee, the Trustee may apply to a court of
competent jurisdiction for the appointment of a successor trustee or
for instructions. The successor trustee shall specify the date on which
it assumes administration of the trust in a writing sent to the
Grantor, the EPA Administrator, and the present Trustee by certified
mail 10 days before such change becomes effective. Any expenses
incurred by the Trustee as a result of any of the acts contemplated by
this Section shall be paid as provided in Section 9.
    Section 14. Instructions to the Trustee. All orders, requests, and
instructions to the Trustee shall be in writing, signed by such persons
as are designated in the attached Exhibit A or such other designees as
the Grantor may designate by amendment to Exhibit A. The Trustee shall
be fully protected in acting without inquiry in accordance with the
Grantor's orders, requests, and instructions. All orders, requests, and
instructions by the EPA Administrator to the Trustee shall be in
writing, signed by the EPA Administrator, or designee thereof, and the
Trustee shall act and shall be fully protected in acting in accordance
with such orders, requests, and instructions. The Trustee shall have
the right to assume, in the absence of written notice to the contrary,
that no event constituting a change or a termination of the authority
of any person to act on behalf of the Grantor or EPA hereunder has
occurred. The Trustee shall have no duty to act in the absence of such
orders, requests, and instructions from the Grantor and/or EPA, except
as provided for herein.
    Section 15. Notices of Payment. If a payment for CERCLA response
costs, health assessment costs, and/or natural resource damages is made
under Section 4 of this trust, the Trustee shall notify the Grantor of
such payments and the amounts thereof within five (5) working days. If
the Grantor ceases to exist, such notice shall be provided to the EPA
Administrator. Further, the Trustee shall notify the EPA Administrator
of all claims against the Fund resulting from a direct action under
CERCLA section 108(c).
    Section 16. Amendment of Agreement. This Agreement may be amended
by an instrument in writing executed by the Grantor, the Trustee, and
the EPA Administrator, or by the Trustee and the EPA Administrator if
the Grantor ceases to exist.
    Section 17. Irrevocability and Termination. Subject to the right of
the parties to amend this Agreement as provided in Section 16, this
Trust shall be irrevocable and shall continue until terminated at the
written agreement of the Grantor, the Trustee, and the EPA
Administrator, or by the Trustee and the EPA Administrator, if the
Grantor ceases to exist. Upon termination of the Trust, all remaining
trust property, less final trust administration expenses, shall be paid
to the Grantor.
    Section 18. Immunity and Indemnification. The Trustee shall not
incur personal liability of any nature in connection with any act or
omission, made in good faith, in the administration of this Trust, or
in carrying out any directions by the Grantor or the EPA Administrator
issued in accordance with this Agreement. The Trustee shall be
indemnified and saved harmless by the Grantor or from the Trust Fund,
or both, from and against any personal liability to which the Trustee
may be subjected by reason of any act or conduct in its official
capacity, including all expenses reasonably incurred in its defense in
the event the Grantor fails to provide such defense. EPA does not
indemnify either the Grantor or the Trustee due to the restrictions
imposed by the Anti-Deficiency Act, 31 U.S.C. 1341.
    Section 19. Choice of Law. This Agreement shall be administered,
construed, and enforced according to the laws of the state of [enter
name of state].
    Section 20. Interpretation. As used in this Agreement, words in the
singular include the plural and words in the plural include the
singular. The descriptive headings for each section of this Agreement
shall not affect the interpretation or the legal efficacy of this
Agreement.
    In Witness Whereof the parties have caused this Agreement to be
executed by their respective officers duly authorized and their
corporate seals to be hereunto affixed and attested as of the date
first above written. The parties below certify that the wording of this
Agreement is identical to the wording

specified in 40 CFR 320.50(a) as such regulations were constituted on
the date first above written.

-----------------------------------------------------------------------
[Signature of Grantor

-----------------------------------------------------------------------
[Printed Name of Grantor]

[Title]
Attest:
[Title]
[Seal]

-----------------------------------------------------------------------
[Signature of Trustee]

-----------------------------------------------------------------------
[Printed Name of Trustee Official]

-----------------------------------------------------------------------
[Mailing Address, Telephone Number, Email of Trustee Official]

Attest:
[Title]
[Seal]

    (2) The following is an example of the certification of
acknowledgement which must accompany the trust agreement for a trust
fund as specified in 40 CFR 320.45 of this chapter. State requirements
may differ on the proper content of this acknowledgement.

State of---------------------------------------------------------------

County of--------------------------------------------------------------

    On this [date], before me personally came [owner or operator] to me
known, who, being by me duly sworn, did depose and say that she/he
resides at [address], that she/he is [title] of [corporation], the
corporation described in and which executed the above instrument; that
she/he knows the seal of said corporation; that the seal affixed to
such instrument is such corporate seal; that it was so affixed by order
of the Board of Directors of said corporation, and that she/he signed
her/his name thereto by like order.

[Signature of Notary Public]-------------------------------------------

    (b) A letter of credit, as specified in 40 CFR 320.40 of this
chapter, must be worded as follows, except that instructions in
brackets are to be replaced with the relevant information and the
brackets deleted:
Irrevocable Standby Letter of Credit
IRREVOCABLE STANDBY LETTER OF CREDIT NUMBER: [insert number]
ISSUER: [insert name and address of issuing institution]
ISSUANCE DATE: [insert date]
MAXIMUM AMOUNT: $[insert dollar amount]
APPLICANT:
[Insert name of Owner or Operator of Facility]
[Insert contact person(s), title(s), and contact information (address,
phone, email, etc.)]
FACILITY:
[Insert EPA Identification number(s), name(s), address(es) and CERCLA
108(b) financial responsibility amount(s) covered by the letter of
credit for facility(ies) to be covered by this instrument]
TO:
[If the letter of credit is established in favor of any and all third-
party CERCLA claimants insert: ``Administrator(s)
Region(s) [region numbers]
U.S. Environmental Protection Agency (EPA)
[Insert name and mailing address of Administrator or designee(s)]''
Or,
If letter of credit is established in favor of a trust fund trustee
insert the name and mailing address of trustee]
Dear Sir or Madam:

    We hereby establish our Irrevocable Standby Letter of Credit No.
[insert number] in the favor of [insert either ``any and all third-
party CERCLA claimants'' or the name of trustee of the trust fund that
will hold the letter of credit], at the request and for the account of
[insert name of Owner or Operator of Facility] (the ``Applicant''), in
the amount of $[insert amount] (the ``Maximum Amount'') for the [insert
name(s) and address(es) of the facility(ies) to be covered by this
instrument] (the ``Facility''). The letter of credit is established to
assure payment for the current owners or operators' CERCLA response
costs, health assessment costs, and/or natural resource damages
associated with the facilities covered by this letter. Payment shall be
made up to amounts provided above for each facility and not to exceed
in total the Maximum Amount, upon presentation of:
    [If letter of credit is established in favor of a trust fund
trustee insert: ``A demand for payment from [name of trust fund
trustee] bearing reference to this letter of credit number No. [insert
number]
    If letter of credit is issued in favor of any and all third-party
CERCLA claimants insert: ``A demand for payment bearing reference to
this letter of credit number No. [insert number]; and
    A final court judgment dated at least 30 days earlier from a
Federal court, in favor of the claimant, awarding CERCLA response
costs, health assessment costs, and/or natural resource damages
associated with a facility covered by the letter of credit against any
of the current owners or operators at a facility covered by the letter
of credit accompanied by a certification from the claimant that reads
as follows: `I hereby certify that the amount of the demand is payable
pursuant to regulations issued under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 as amended.'; or
    A certification from the EPA Administrator or another Federal
agency that reads as follows: `I hereby certify that the amount of the
demand is payable pursuant to regulations issued under the
Comprehensive Environmental Response, Compensation and Liability Act of
1980 as amended.''']
    This letter of credit is effective as of [date] and shall expire on
[date at least one year later], but such expiration date shall be
automatically extended for a period of [at least one year] on [date at
least one year later as specified above] and on each successive
expiration date, unless, at least 120 days before the current
expiration date, we notify [If letter of credit is issued in favor of a
trust fund trustee insert: ``[name of trustee],'' ] the EPA
Administrator and the Applicant by certified mail that we have decided
not to extend this letter of credit beyond the current expiration date.
In the event of such notification, any unused portion of the credit
shall be paid into the accompanying trust fund issued by [insert name
of issuing institution of trust fund] with account number [insert
account number of the trust fund] upon presentation by [If issued in
favor of any and all third-party CERCLA claimants enter ``the EPA
Administrator''; if issued in favor of a trust fund trustee insert name
of trustee] of a demand for payment compliant with the terms above
within 120 days after the date of receipt of such notification by both
you and [owner's or operator's name], as shown on the signed return
receipts.
    Whenever this letter of credit is drawn on under and in compliance
with the terms of this credit, we shall duly honor such demand upon
presentation to us and shall pay as directed by claimant or the
trustee.
    [Insert if letter of credit is issued in favor of any and all
third-party CERCLA claimants: ``In the case of a release or threatened
release of (a) hazardous substance(s) from a facility covered by the
letter of credit, we acknowledge that any claim authorized by section
107 or 111 of CERCLA may be asserted directly against us as provided by
CERCLA section 108(c)(2). We consent to suit with respect to these
claims subject to the limitations in CERCLA section 108(d). We
acknowledge that we are entitled to all rights and defenses provided to
guarantors by CERCLA section 108(c). We will provide notice of

any such resulting claims and payments to the EPA Administrator.'']
    This credit is subject to [insert the most recent edition of either
the Uniform Customs and Practice for Documentary Credits or
International Standby Practices published and copyrighted by the
International Chamber of Commerce.]
    We certify that the wording of this letter of credit is identical
to the wording specified in 40 CFR 320.50(b) as such regulations were
constituted on the date shown immediately below. [Signature(s) and
title(s) of official(s) of issuing institution] [Date].
    (c) A surety bond, as specified in 40 CFR 320.41 of this chapter,
must be worded as follows, except that instructions in brackets are to
be replaced with the relevant information and the brackets deleted:

EPA contact information:
U.S. Environmental Protection Agency
[Insert Name, Phone Number, Mailing Address of the Administrator and
Points of Contact]

-----------------------------------------------------------------------

Surety Bond No. [Insert number]
Date bond executed: [Insert date]
Parties [Insert name and address of owner or operator], Principal,
incorporated in [Insert state of incorporation] of [Insert city and
state of principal place of business] and [Insert name and address of
surety company(ies)], Surety Company(ies), of [Insert surety(ies) place
of business].
EPA Identification Number, name, address, and CERCLA 108(b) financial
responsibility amount, specifying the portion covered by this bond, for
each facility guaranteed by this bond:

-----------------------------------------------------------------------

Total penal sum of bond:-----------------------------------------------

    Purpose: This is an agreement between the Surety(ies) and the
Principal under which the Principal and Surety(ies) hereto are firmly
bound to any and all third-party CERCLA claimants , in the above penal
sum plus the amount of any investigation or legal defense fees incurred
by Surety(ies) for the payment of which we bind ourselves, our heirs,
executors, administrators, successors and assigns jointly and
severally; provided that, where the Surety(ies) are corporations acting
as co-sureties, we, the Sureties, bind ourselves in such sum ``jointly
and severally'' only for the purpose of allowing a joint action or
actions against any or all of us, and for all other purposes each
Surety binds itself, jointly and severally with the Principal, for the
payment of such percentage of the total penal sum only as is set forth
opposite the name of each Surety plus the amount of any investigation
or legal defense fees incurred by Surety, but if no limit of liability
is indicated, the limit of liability shall be the total penal sum of
the bond plus the amount of any investigation or legal defense fees
incurred by Surety. We agree to be responsible for the following:
    (1) the satisfaction of valid third-party CERCLA claims against the
Principal or the other current owners and operators for CERCLA response
costs, health assessment costs, and natural resource damages associated
with the facility(ies) covered by this bond in the sums prescribed
herein; and
    (2) the guarantee that the Principal or other current owners and
operators shall obtain alternate financial responsibility as specified
in subpart C of 40 CFR 320 for the facility(ies) covered by this bond
and obtain written approval of that financial responsibility provided
within 90 days of receipt by the EPA Administrator and the Principal of
a notice of cancellation of the bond from the Surety(ies).
    The aforementioned responsibilities are subject to the governing
provisions and the following conditions. Any provision in this bond
conflicting with the following governing provisions or conditions shall
be deemed deleted herefrom and provisions conforming to such governing
provisions or condition shall be deemed incorporated herein.
    Governing Provisions:
    (1) the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended.
    (2) Rules and regulations of the U.S. Environmental Protection
Agency (EPA), particularly 40 CFR part 320.
    Conditions:
    (1) The Principal and all the current owners and operators at the
facility(ies) covered by this bond are subject to the applicable
governing provisions that require the Principal and all the current
owners and operators to have and maintain CERCLA Sec.  108(b) financial
responsibility to cover CERCLA response costs, health assessment costs,
and natural resource damage claims.
    (2) This bond assures that the Principal will ensure that at
facilities covered by this bond: (a) payments will be made as required
by final court judgments from a Federal court against a current owner
or operator for CERCLA response costs, health assessment costs, and/or
natural resource damages within 30 days; (b) payments will be made when
required by a CERCLA settlement with a current owner or operator; (c)
work will be performed as required in CERCLA unilateral administrative
orders issued to a current owner or operator for which the owner or
operator has provided a written statement allowing the bond to assure
the performance of the work in the order; and (d) CERCLA 108(b)
financial responsibility coverage will be maintained as described in
condition 1.
    (3) If the Principal fails to perform as described above the
Surety(ies) becomes liable on this bond obligation.
    (4) The Surety(ies) shall satisfy a valid claim for CERCLA response
costs, health assessment costs, and/or natural resource damages only
upon the receipt of one of the following documents plus the additional
signed statement specified below:
    (a) A final court judgment dated at least 30 days earlier from a
Federal court, in favor of the claimant, awarding CERCLA response
costs, health assessment costs, and/or natural resource damages
associated with a facility covered by this bond against the Principal
or any of the current owners or operators at a facility covered by this
bond;
    (b) A written signed statement from the EPA Administrator or
another Federal government agency requesting payment from the
Surety(ies) on the grounds that payment has not been made as required
by a CERCLA settlement associated with a facility covered by this bond
and with any of the current owners or operators; or
    (c) A written signed statement from the EPA Administrator or other
Federal government agency requesting payment from the Surety(ies) into
a trust fund established pursuant to a CERCLA unilateral administrative
order on the grounds that performance at a facility covered by this
bond has not occurred as required by a CERCLA unilateral administrative
order issued to a current owner or operator.
AND
    A signed statement from the claimant certifying that these amounts
have not been recovered or paid from any other source, including, but
not limited to, the owner operator, insurance, judgments, agreements,
and other financial responsibility instruments.
    (5) In addition to condition 4, in the case of a release or
threatened release of (a) hazardous substance(s) from a facility
covered by the bond, the Surety(ies) acknowledge that any claim
authorized by section 107 or 111 of CERCLA may be asserted directly
against the Surety(ies) as provided by CERCLA section 108(c)(2). The
Surety(ies) consent(s) to suit with respect to these claims subject to
the limitations in CERCLA section 108(d). The Surety(ies) shall be
entitled to all

rights and defenses provided to guarantors by CERLCA section 108(c).
The Surety(ies) will provide notice of any such resulting claims and
payments to the EPA Administrator.
    (6) If upon notice of cancellation by the Surety(ies) the Principal
fails to obtain replacement CERCLA financial responsibility consistent
with subpart C of 40 CFR 320 and written approval of the EPA
Administrator of that replacement financial responsibility within 90
days of receipt of said notice by the EPA Administrator and the
Principal the Surety(ies) shall become liable on this bond and shall
make payment into the standby trust fund as directed by the EPA
Administrator.
    (7) The liability of the Surety(ies) shall not be discharged by any
payment or succession of payments hereunder, unless and until such
payment or payments shall amount in the aggregate to the penal sum of
the bond. In no event shall the obligation of the Surety(ies) hereunder
exceed the amount of said penal sum plus the amount of any
investigation or legal defense fees.
    (8) The Surety(ies) may cancel the bond by sending notice of
cancellation by certified mail to the Principal and the EPA
Administrator, provided, however, that cancellation shall not occur
during the 120 days beginning on the date of receipt of the notice of
cancellation by the Principal and the EPA Administrator, as evidenced
by the return receipt.
    (9) The Principal may terminate this bond by sending written notice
to the Surety(ies), provided however, that no such notice shall become
effective until the Surety(ies) receive(s) written authorization for
termination of the bond by the EPA Administrator.
    (10) The Surety(ies) hereby waive(s) notification of amendments to
applicable laws, statutes, rules and regulations and agree(s) that no
such amendment shall in any way alleviate its (their) obligation on
this bond.
    (11) This bond is effective from [insert date] (12:01 a.m.,
standard time, at the address of the Principal as stated herein) and
shall continue in force until cancelled or terminated as described
above.
    In Witness Whereof, the Principal and Surety(ies) have executed
this Bond and have affixed their seals on the date set forth above.
    The persons whose signatures appear below hereby certify that they
are authorized to execute this surety bond on behalf of the Principal
and Surety(ies) and that the wording of this surety bond is identical
to the wording specified in 40 CFR 320.50(c), as such regulations were
constituted on the date this bond was executed.

PRINCIPAL
[Signature(s)]
[Name(s)]
[Name, Telephone Number, Email of Representative]
[Title(s)]
[Corporate Seal]
CORPORATE SURETY[IES]
[Name and address]
State of incorporation:___
Liability Limit: %___
[Signature(s)]
[Name(s) and title(s)]
[Corporate seal]
[For every co-surety, provide signature(s), corporate seal, liability
limit and other information in the same manner as for Surety above.]
Bond premium: $___

    (d) A CERCLA Sec.  108(b) insurance endorsement as required in 40
CFR 320.42 must be worded as follows, except that instructions in
brackets are to be replaced with the relevant information and the
brackets deleted:
CERCLA Sec.  108(b) Financial Responsibility Endorsement
EPA contact information:
[Insert Name, Phone Number, Mailing Address of EPA Administrator and
Points of Contact]

    1. This endorsement certifies that the policy to which the
endorsement is attached provides liability insurance covering CERCLA
response costs, health assessment costs, and natural resource damages
in connection with the insured's obligation to demonstrate financial
responsibility under 40 CFR 320. The coverage applies at [list EPA
Identification Number, name, address, total CERCLA 108(b) financial
responsibility amount for each facility] for CERCLA response costs,
health assessment costs, and natural resource damages at a covered
facility. The limits of liability are [insert the dollar amount(s) of
the limits and the percentage share of the Insurer's liability for each
covered facility], exclusive of legal defense and investigation costs.
    2. The insurance afforded with respect to such facilities is
subject to all of the terms and conditions of the policy; provided,
however, that any provision, exclusion, definition, condition,
retroactive date, clause, defense, or other term of the policy
inconsistent with 40 CFR 320.42, or subsections (a) through (f) of this
Paragraph 2 are hereby amended to conform with 40 CFR 320.42 and
subsections (a) through (f) below:
    (a) The Insurer will make payment only for third-party CERCLA
claims as defined in section 101 of CERCLA; the insurance coverage is
not available for payments to the insured. The Insurer will make:
    i. payments awarded in final court judgments from a Federal court
against any of the current owners and operators for CERCLA response
costs, health assessment costs, and/or natural resource damages
associated with a facility covered by the policy to the party obtaining
the judgment should such payments not otherwise be made within 30 days.
    ii. payments as required by a CERCLA settlement associated with a
facility covered by the policy between EPA or another Federal
government agency and any of the current owners and operators should
such payments not occur.
    iii. payments in instances where performance does not occur at a
facility covered by the policy as required by a CERCLA unilateral
administrative order issued by EPA or another Federal agency for which
the owner or operator has provided a written statement that the policy
be used to assure performance of the work required in the order.
    iv. payment into a standby trust in instances where the owner or
operator fails to obtain alternate financial responsibility and obtain
written approval of such alternate financial responsibility from the
EPA Administrator within 90 days after receipt by both the insured and
the EPA Administrator of a notice from the insurer that it has decided
to cancel, terminate or fail to renew the insurance policy beyond the
current expiration date as provided for in paragraph (f) below.
    (b) In addition to the payment condition in subsection (a), in the
case of a release or threatened release of (a) hazardous substance(s)
from a facility covered by the policy, the insurer acknowledges that
any claim authorized by section 107 or section 111 of CERCLA may be
asserted directly against the insurer as provided by section 108(c)(2)
of CERCLA. Insurer consents to suit with respect to these claims
subject to the limitations in section 108(d) of CERCLA. The Insurer
will be entitled to all rights and defenses provided to guarantors by
section 108(c) of CERCLA. Insurer will provide notice of any such
resulting claims and payments to the EPA Administrator.
    (c) Bankruptcy or insolvency of the insured shall not relieve the
Insurer of its obligations under the policy to which this endorsement
is attached.
    (d) The Insurer is liable for the payment of amounts within any

deductible or self-insured retention applicable to the policy, with a
right of reimbursement by the insured for any such payment made by the
Insurer.
    (e) Whenever requested by the Administrator of the U.S.
Environmental Protection Agency (EPA), the Insurer agrees to furnish to
the EPA Administrator a signed duplicate original of the policy and all
endorsements.
    (f) Cancellation, failure to renew or any other termination of the
insurance by the insurer will be effective only upon written notice to
the owner operator and the EPA Administrator by certified mail and only
after the expiration of 120 days beginning with the date of receipt of
the notice by both the Administrator and the owner or operator, as
evidenced by the return receipts.
    Attached to and forming part of policy No. __ issued by [name of
Insurer], herein called the Insurer, of [address of Insurer] to [name
of insured] of [address] this___ day of___, 20__. The effective date of
said policy is___ day of ___, 20__.
    I hereby certify that the wording of this endorsement is identical
to the wording specified in 40 CFR 320.50(d) as such regulation was
constituted on the date first above written, and that the Insurer is
licensed to transact the business of insurance, or eligible to provide
insurance as an excess or surplus lines insurer, in one or more states.

[Signature of Authorized Representative of Insurer]
[Type name]
[Title], Authorized Representative of [name of Insurer]
[Address, Phone Number, Email of Representative]
[PROPOSED REGULATORY TEXT FOR PARAGRAPHS (e) and (f)--Option 2 only]
    (e) A letter from the chief financial officer, as specified in
Sec.  320.43, must be worded as follows, except that instructions in
brackets are to be replaced with the relevant information and the
brackets deleted:
FINANCIAL TEST
Letter from Chief Financial Officer
    [Address to EPA Administrator or Regional delegees for every Region
in which facilities for which financial responsibility is to be
demonstrated through the corporate financial test are located.]
    I am the Chief Financial Officer (``CFO'') of [insert name and
address of firm] (``firm''). This letter is in support of this firm's
use of the financial test to demonstrate Financial Responsibility for
CERCLA 108(b) as specified in 40 CFR part 320.43.
    [Fill out paragraphs 1-4, below, and provide supporting
documentation, when required as specified below. If your firm has no
facilities that belong in a particular paragraph, write ``None'' in the
space indicated.]
    1. This firm is the owner or operator of the facilities, listed
below, for which Financial Responsibility is demonstrated through the
financial test specified in 40 CFR part 320.43. The current CERCLA
Sec.  108(b) Financial Responsibility amount and the amount covered by
the financial test are provided for each listed facility:
    [For each facility, identify: Facility name; Address; EPA
Identification Number; CERCLA Sec.  108(b) financial responsibility
amount; and amount covered by financial test]
    2. This firm guarantees, through the guarantee specified in 40 CFR
part 320.44, financial responsibility of the following facilities owned
or operated by the guaranteed party. The current CERCLA Sec.  108(b)
financial responsibility amount so guaranteed are shown for each listed
facility:
    [For each facility, identify: Facility name; Address; EPA
Identification Number; CERCLA Sec.  108(b) financial responsibility
amount; and amount covered by financial test]
    The firm identified above is: [insert one or more: (1) The direct
or higher-tier parent corporation of the owner or operator; (2) owned
by the same parent corporation as the parent corporation of the owner
or operator, and receiving the following value in consideration of this
guarantee ___ [insert description of value received] ; or (3) engaged
in the following substantial business relationship with the owner or
operator ___ [insert characterization of relationship] , and receiving
the following value in consideration of this guarantee___ [insert
description of value received]].
    [Attach a written description of the business relationship or a
copy of the contract establishing such relationship to this letter].
    3. The firm, as owner or operator or guarantor, is using a
financial test to secure the environmental obligations of the
facilities listed below for which financial responsibility is required.
These obligations include, but are not limited to: current cost
estimates for corrective action, closure, post-closure care, and
amounts required for third-party liability for hazardous waste
treatment, storage and disposal facilities under 40 CFR 264.101,
264.142, 264.144, 264.147, 265.142, 265.144 and 265.147 and as required
by order under section 3008(h) of RCRA, 42 U.S.C. 6928(h); cost
estimates for municipal solid waste landfill units under 40 CFR 258.71,
258.72 and 258.73; current plugging and abandonment cost estimates for
underground injection control facilities under 40 CFR 144.62; cost
estimates for underground storage tanks under 40 CFR 280.93; cost
estimates for facilities storing polychlorinated biphenyls under 40 CFR
761.65; cost estimates for underground injection control class VI
facilities for corrective action under 40 CFR 146.84, for injection
well plugging under 40 CFR 146.92, for post injection facility care and
facility closure under 40 CFR 146.93, and emergency and remedial
response under 40 CFR 146.94; any financial responsibility required
under any CERCLA settlement or order; and any other environmental
obligation assured through a financial test or guarantee, excluding
those costs represented in paragraphs 1 and 2 listed above. The cost
estimates by obligation are provided for each listed facility:
    [For each facility, identify: Facility name; Address; EPA
Identification Number (if any); and amount covered by financial test]
    4. The total of all such environmental obligations the firm is
covering with a financial test or for which it issued a corporate
guarantee for the listed facilities in paragraphs 1-3 above [sum of the
portion covered by the financial test in paragraph 1 plus the sums in
paragraphs 2 and 3] is $ [insert amount], as of___ [insert date].
    5. The firm [insert ``is required'' or ``is not required''] to file
a Form 10-K or 20-F with the Securities Exchange Commission (SEC) for
the latest fiscal year.
    6. The fiscal year of the firm ends on [month, day]. The figures
for the following items marked with asterisk are derived from this
firm's independently audited, year-end financial statements for the
latest completed fiscal year, ended [date].
    7. The firm has received a qualified or adverse accountant's
opinion for the latest completed fiscal year ended [insert date] ___
(Yes/ No) ___
    8. The firm represents that as of the latest completed fiscal year-
end [insert date] ___, the Assets located in the United States in the
amount of $___ amount to at least 90% of the firm's total assets. (Yes/
No) ___
    Test Worksheet:
    1. The total of all environmental obligations the firm is covering
with a financial test or for which it issued a

corporate guarantee [enter the sum from paragraph 4 above] ___.
    2. The firm represents that it holds the following long term credit
ratings: [list all ratings and their dates that apply including but not
limited to Long-Term Issuer Credit Ratings from Standard and Poor's,
Long-Term Corporate Family Ratings from Moody's Investor Services,
Long-Term Issuer Default Ratings from Fitch Ratings, and any other
long-term credit rating from a Nationally Recognized Statistical Rating
Organization (NRSRO)]
    *3. Tangible Net Worth $___
    4. Is line 3 at least 6 times line 1? (Yes/No) ___
    *5. Total assets in U.S. [required only if the answer in paragraph
8 above is ``No''] $___
    6. Is line 5 at least 6 times line 1? (Yes/No) ___
    I hereby certify that the information included in this letter,
including all attachments and exhibits, is true and accurate. I further
certify that the wording of this letter is identical to the wording
specified in 40 CFR 320.50(e) as such regulations were constituted on
the date shown immediately below.

[Signature]------------------------------------------------------------
[Name]-----------------------------------------------------------------
[Title]----------------------------------------------------------------
[Date]-----------------------------------------------------------------

    (f) A corporate guarantee, as specified in Sec.  320.44 must be
worded as follows, except that instructions in brackets are to be
replaced with the relevant information and the brackets deleted:
Corporate Guarantee for CERCLA 108(b) Financial Responsibility
    Guarantee made this [date] by [name of guaranteeing entity], a
business corporation organized under the laws of [if incorporated
within the United States insert ``the State of ___'' and insert name of
state; if incorporated outside the United States insert the name of the
country in which incorporated, the principal place of business within
the United States, and the name and address of the registered agent in
the state of the principal place of business], herein referred to as
guarantor. This guarantee is made on behalf of the [owner or operator]
of [business address], which is [one of the following: ``our
subsidiary''; ``a subsidiary of [name and address of common parent
corporation], of which guarantor is a subsidiary''; or ``an entity with
which guarantor has a substantial business relationship, as defined in
40 CFR 320.3'' to any and all third-party CERCLA claimants.
Recitals
    1. Guarantor meets or exceeds the financial test criteria and
agrees to comply with the reporting requirements for guarantors as
specified in 40 CFR 320.44 and will report the full amount of CERCLA
108(b) financial responsibility for which it is eligible to cover as
determined by the financial test criteria at 40 CFR 320.43 for each
facility covered by the guarantee in the letter from its chief
financial officer.
    2. [Owner or operator] owns or operates the following facilities
subject to CERCLA 108(b) financial responsibility requirements covered
by this guarantee: [List for each facility: EPA Identification Number,
name, address and if guarantor is incorporated outside the United
States list the name and address of the guarantor's registered agent in
each state.]
    3. For value received from [owner or operator], and up to the most
current Sec.  108(b) financial responsibility amount required at each
facility covered by the guarantee as identified in paragraph 2 of the
guarantor's most recent CFO letter submission required under 40 CFR
320.44, and exclusive of any legal defense costs incurred by the
guarantor, guarantor guarantees to any and all third-party CERCLA
claimants that:
    a) in the event that payment for CERCLA response costs, health
assessment costs, and/or natural resource damages associated with a
facility identified above as required in a final court judgment from a
Federal court against one of the current owners or operators is not
made within 30 days, the guarantor shall do so;
    b) in the event payment is not made as required in a CERCLA
settlement associated with a facility identified above between a
current owner or operator and EPA or another Federal government agency,
the guarantor shall do so; and
    c) in the event that performance at a facility covered by the
guarantee does not occur as required under a CERCLA unilateral
administrative order issued to a current owner or operator by EPA or
another Federal agency and for which the owner or operator provides a
written statement allowing the guarantee to serve as financial
responsibility assuring the work in the order, the guarantor shall make
payment into a trust fund established pursuant to the order.
    4. The guarantor shall satisfy a third-party CERCLA claim only on
receipt of one of the following documents plus the additional signed
statement specified below:
    (a) A final court judgment dated at least 30 days earlier from a
Federal court, in favor of the claimant, awarding CERCLA response
costs, health assessment costs, and/or natural resource damages
associated with a facility covered by this guarantee against any of the
current owners or operators at a facility covered by this guarantee;
    (b) A written signed statement from an EPA Administrator or another
Federal government agency requesting payment from the Guarantor on the
grounds that payment has not been made as required by a CERCLA
settlement associated with a facility covered by this guarantee and
with any of the current owners or operators; or
    (c) A written signed statement from the EPA Administrator or other
Federal government agency requesting payment from the Guarantor into a
trust fund established pursuant to a CERCLA unilateral administrative
order on the grounds that performance at a facility covered by this
guarantee has not occurred as required by a CERCLA administrative order
issued to a current owner or operator.
AND
    A signed statement from the claimant certifying that these amounts
have not been recovered or paid from any other source, including, but
not limited to, the owner operator, insurance, judgments, agreements,
and other financial responsibility instruments.
    5. In addition to the payment provisions in paragraph 4 of this
agreement, in the case of a release or threatened release of (a)
hazardous substance(s) from a facility covered by the guarantee,
guarantor acknowledges that any claim authorized by section 107 or 111
of CERCLA may be asserted directly against the guarantor as provided by
CERCLA section 108(c). Guarantor consents to suit with respect to these
claims subject to the limitations in CERCLA section 108(d). Guarantor
will be entitled to all defenses provided to guarantors by CERCLA
section 108(c). Guarantor agrees to provide notice of any such
resulting claims and payments to the EPA Administrator.
    6. The guarantor agrees that if, at any time before the termination
of this guarantee, the guarantor fails to meet the financial test
criteria, guarantor shall send within 90 days, by certified mail,
notice to the EPA Administrator and to [owner or operator] of its
intent to provide alternate financial responsibility as specified in
subpart C of 40 CFR part 320 in the name of [owner or operator]. Within