(1) Piping installed on or before April 11, 2016 must meet one of
the following:
    (i) Pressurized piping. Underground piping that conveys regulated
substances under pressure must:
    (A) Be equipped with an automatic line leak detector conducted in
accordance with Sec.  280.44(a); and
    (B) Have an annual line tightness test conducted in accordance with
Sec.  280.44(b) or have monthly monitoring conducted in accordance with
Sec.  280.44(c).
    (ii) Suction piping. Underground piping that conveys regulated
substances under suction must either have a line tightness test
conducted at least every 3 years and in accordance with Sec.
280.44(b), or use a monthly monitoring method conducted in accordance
with Sec.  280.44(c). No release detection is required for suction
piping that is designed and constructed to meet the following
standards:
    (A) The below-grade piping operates at less than atmospheric
pressure;
    (B) The below-grade piping is sloped so that the contents of the
pipe will drain back into the storage tank if the suction is released;

    (C) Only one check valve is included in each suction line;
    (D) The check valve is located directly below and as close as
practical to the suction pump; and
    (E) A method is provided that allows compliance with paragraphs
(b)(1)(ii)(B) through (D) of this section to be readily determined.
    (2) Piping installed or replaced after April 11, 2016 must meet one
of the following:
    (i) Pressurized piping must be monitored for releases at least
every 30 days in accordance with Sec.  280.43(g) and be equipped with
an automatic line leak detector in accordance with Sec.  280.44(a)
    (ii) Suction piping must be monitored for releases at least every
30 days in accordance with Sec.  280.43(g). No release detection is
required for suction piping that meets paragraphs (b)(1)(ii)(A) through
(E) of this section.

Sec.  280.42  Requirements for hazardous substance UST systems.

    Owners and operators of hazardous substance UST systems must
provide containment that meets the following requirements and monitor
these systems using Sec.  280.43(g) at least every 30 days:
    (a) Secondary containment systems must be designed, constructed,
and installed to:
    (1) Contain regulated substances leaked from the primary
containment until they are detected and removed;
    (2) Prevent the release of regulated substances to the environment
at any time during the operational life of the UST system; and
    (3) Be checked for evidence of a release at least every 30 days.

    Note to paragraph (a).  The provisions of 40 CFR 265.193,
Containment and Detection of Releases, may be used to comply with
these requirements for tanks installed on or before October 13,
2015.

    (b) Double walled tanks must be designed, constructed, and
installed to:
    (1) Contain a leak from any portion of the inner tank within the
outer wall; and
    (2) Detect the failure of the inner wall.
    (c) External liners (including vaults) must be designed,
constructed, and installed to:
    (1) Contain 100 percent of the capacity of the largest tank within
its boundary;
    (2) Prevent the interference of precipitation or groundwater
intrusion with the ability to contain or detect a release of regulated
substances; and
    (3) Surround the tank completely (i.e., it is capable of preventing
lateral as well as vertical migration of regulated substances).
    (d) Underground piping must be equipped with secondary containment
that satisfies the requirements of this section (e.g., trench liners,
double walled pipe). In addition, underground piping that conveys
regulated substances under pressure must be equipped with an automatic
line leak detector in accordance with Sec.  280.44(a).
    (e) For hazardous substance UST systems installed on or before
October 13, 2015 other methods of release detection may be used if
owners and operators:
    (1) Demonstrate to the implementing agency that an alternate method
can detect a release of the stored substance as effectively as any of
the methods allowed in Sec.  280.43(b) through (i) can detect a release
of petroleum;
    (2) Provide information to the implementing agency on effective
corrective action technologies, health risks, and chemical and physical
properties of the stored substance, and the characteristics of the UST
site; and,
    (3) Obtain approval from the implementing agency to use the
alternate release detection method before the installation and
operation of the new UST system.

Sec.  280.43  Methods of release detection for tanks.

    Each method of release detection for tanks used to meet the
requirements of Sec.  280.41 must be conducted in accordance with the
following:
    (a) Inventory control. Product inventory control (or another test
of equivalent performance) must be conducted monthly to detect a
release of at least 1.0 percent of flow-through plus 130 gallons on a
monthly basis in the following manner:
    (1) Inventory volume measurements for regulated substance inputs,
withdrawals, and the amount still remaining in the tank are recorded
each operating day;
    (2) The equipment used is capable of measuring the level of product
over the full range of the tank's height to the nearest one-eighth of
an inch;
    (3) The regulated substance inputs are reconciled with delivery
receipts by measurement of the tank inventory volume before and after
delivery;
    (4) Deliveries are made through a drop tube that extends to within
one foot of the tank bottom;
    (5) Product dispensing is metered and recorded within the local
standards for meter calibration or an accuracy of 6 cubic inches for
every 5 gallons of product withdrawn; and
    (6) The measurement of any water level in the bottom of the tank is
made to the nearest one-eighth of an inch at least once a month.

    Note to paragraph (a). Practices described in the American
Petroleum Institute Recommended Practice RP 1621, ``Bulk Liquid
Stock Control at Retail Outlets'' may be used, where applicable, as
guidance in meeting the requirements of this paragraph (a).

    (b) Manual tank gauging. Manual tank gauging must meet the
following requirements:
    (1) Tank liquid level measurements are taken at the beginning and
ending of a period using the appropriate minimum duration of test value
in the table below during which no liquid is added to or removed from
the tank;
    (2) Level measurements are based on an average of two consecutive
stick readings at both the beginning and ending of the period;
    (3) The equipment used is capable of measuring the level of product
over the full range of the tank's height to the nearest one-eighth of
an inch;
    (4) A release is suspected and subject to the requirements of
subpart E if the variation between beginning and ending measurements
exceeds the weekly or monthly standards in the following table:

----------------------------------------------------------------------------------------------------------------
                                                                  Weekly standard (one    Monthly standard (four
        Nominal tank capacity         Minimum duration of test           test)                test average)
----------------------------------------------------------------------------------------------------------------
550 gallons or less.................  36 hours................  10 gallons.............  5 gallons
551-1,000 gallons (when tank          44 hours................  9 gallons..............  4 gallons
 diameter is 64 inches).
551-1,000 gallons (when tank          58 hours................  12 gallons.............  6 gallons
 diameter is 48 inches).
551-1,000 gallons (also requires      36 hours................  13 gallons.............  7 gallons
 periodic tank tightness testing).
1,001-2,000 gallons (also requires    36 hours................  26 gallons.............  13 gallons
 periodic tank tightness testing).
----------------------------------------------------------------------------------------------------------------

    (5) Tanks of 550 gallons or less nominal capacity and tanks with a
nominal capacity of 551 to 1,000 gallons that meet the tank diameter
criteria in the table in paragraph (b)(4) of this section may use this
as the sole method of release detection. All other tanks with a nominal
capacity of 551 to 2,000 gallons may use the method in place of
inventory control in Sec.  280.43(a). Tanks of greater than 2,000
gallons nominal capacity may not use this method to meet the
requirements of this subpart.
    (c) Tank tightness testing. Tank tightness testing (or another test
of equivalent performance) must be capable of detecting a 0.1 gallon
per hour leak rate from any portion of the tank that routinely contains
product while accounting for the effects of thermal expansion or
contraction of the product, vapor pockets, tank deformation,
evaporation or condensation, and the location of the water table.
    (d) Automatic tank gauging. Equipment for automatic tank gauging
that tests for the loss of product and conducts inventory control must
meet the following requirements:
    (1) The automatic product level monitor test can detect a 0.2
gallon per hour leak rate from any portion of the tank that routinely
contains product;
    (2) The automatic tank gauging equipment must meet the inventory
control (or other test of equivalent performance) requirements of Sec.
280.43(a); and
    (3) The test must be performed with the system operating in one of
the following modes:
    (i) In-tank static testing conducted at least once every 30 days;
or
    (ii) Continuous in-tank leak detection operating on an
uninterrupted basis or operating within a process that allows the
system to gather incremental measurements to determine the leak status
of the tank at least once every 30 days.
    (e) Vapor monitoring. Testing or monitoring for vapors within the
soil gas of the excavation zone must meet the following requirements:
    (1) The materials used as backfill are sufficiently porous (e.g.,
gravel, sand, crushed rock) to readily allow diffusion of vapors from
releases into the excavation area;
    (2) The stored regulated substance, or a tracer compound placed in
the tank system, is sufficiently volatile (e.g., gasoline) to result in
a vapor level that is detectable by the monitoring devices located in
the excavation zone in the event of a release from the tank;
    (3) The measurement of vapors by the monitoring device is not
rendered inoperative by the groundwater, rainfall, or soil moisture or
other known interferences so that a release could go undetected for
more than 30 days;
    (4) The level of background contamination in the excavation zone
will not interfere with the method used to detect releases from the
tank;
    (5) The vapor monitors are designed and operated to detect any
significant increase in concentration above background of the regulated
substance stored in the tank system, a component or components of that
substance, or a tracer compound placed in the tank system;
    (6) In the UST excavation zone, the site is assessed to ensure
compliance with the requirements in paragraphs (e)(1) through (4) of
this section and to establish the number and positioning of monitoring
wells that will detect releases within the excavation zone from any
portion of the tank that routinely contains product; and
    (7) Monitoring wells are clearly marked and secured to avoid
unauthorized access and tampering.
    (f) Groundwater monitoring. Testing or monitoring for liquids on
the groundwater must meet the following requirements:
    (1) The regulated substance stored is immiscible in water and has a
specific gravity of less than one;
    (2) Groundwater is never more than 20 feet from the ground surface
and the hydraulic conductivity of the soil(s) between the UST system
and the monitoring wells or devices is not less than 0.01 cm/sec (e.g.,
the soil should consist of gravels, coarse to medium sands, coarse
silts or other permeable materials);
    (3) The slotted portion of the monitoring well casing must be
designed to prevent migration of natural soils or filter pack into the
well and to allow entry of regulated substance on the water table into
the well under both high and low groundwater conditions;
    (4) Monitoring wells shall be sealed from the ground surface to the
top of the filter pack;
    (5) Monitoring wells or devices intercept the excavation zone or
are as close to it as is technically feasible;
    (6) The continuous monitoring devices or manual methods used can
detect the presence of at least one-eighth of an inch of free product
on top of the groundwater in the monitoring wells;
    (7) Within and immediately below the UST system excavation zone,
the site is assessed to ensure compliance with the requirements in
paragraphs (f)(1) through (5) of this section and to establish the
number and positioning of monitoring wells or devices that will detect
releases from any portion of the tank that routinely contains product;
and
    (8) Monitoring wells are clearly marked and secured to avoid
unauthorized access and tampering.
    (g) Interstitial monitoring. Interstitial monitoring between the
UST system and a secondary barrier immediately around or beneath it may
be used, but only if the system is designed, constructed, and installed
to detect a leak from any portion of the tank that routinely contains
product and also meets one of the following requirements:
    (1) For double walled UST systems, the sampling or testing method
can detect a leak through the inner wall in any portion of the tank
that routinely contains product;
    (2) For UST systems with a secondary barrier within the excavation
zone, the sampling or testing method used can detect a leak between the
UST system and the secondary barrier;
    (i) The secondary barrier around or beneath the UST system consists
of artificially constructed material that is sufficiently thick and
impermeable (at least 10-6 cm/sec for the regulated
substance stored) to direct a leak to the monitoring point and permit
its detection;
    (ii) The barrier is compatible with the regulated substance stored
so that a leak from the UST system will not cause a deterioration of
the barrier allowing a release to pass through undetected;
    (iii) For cathodically protected tanks, the secondary barrier must
be installed so that it does not interfere with the proper operation of
the cathodic protection system;
    (iv) The groundwater, soil moisture, or rainfall will not render
the testing or sampling method used inoperative so that a release could
go undetected for more than 30 days;
    (v) The site is assessed to ensure that the secondary barrier is
always above the groundwater and not in a 25-year flood plain, unless
the barrier and monitoring designs are for use under such conditions;
and,
    (vi) Monitoring wells are clearly marked and secured to avoid
unauthorized access and tampering.
    (3) For tanks with an internally fitted liner, an automated device
can detect a leak between the inner wall of the tank and the liner, and
the liner is compatible with the substance stored.
    (h) Statistical inventory reconciliation. Release detection methods
based on the application of statistical principles to inventory data
similar to those described in Sec.  280.43(a) must meet the following
requirements:

    (1) Report a quantitative result with a calculated leak rate;
    (2) Be capable of detecting a leak rate of 0.2 gallon per hour or a
release of 150 gallons within 30 days; and
    (3) Use a threshold that does not exceed one-half the minimum
detectible leak rate.
    (i) Other methods. Any other type of release detection method, or
combination of methods, can be used if:
    (1) It can detect a 0.2 gallon per hour leak rate or a release of
150 gallons within a month with a probability of detection of 0.95 and
a probability of false alarm of 0.05; or
    (2) The implementing agency may approve another method if the owner
and operator can demonstrate that the method can detect a release as
effectively as any of the methods allowed in paragraphs (c) through (h)
of this section. In comparing methods, the implementing agency shall
consider the size of release that the method can detect and the
frequency and reliability with which it can be detected. If the method
is approved, the owner and operator must comply with any conditions
imposed by the implementing agency on its use to ensure the protection
of human health and the environment.

Sec.  280.44  Methods of release detection for piping.

    Each method of release detection for piping used to meet the
requirements of Sec.  280.41 must be conducted in accordance with the
following:
    (a) Automatic line leak detectors. Methods which alert the operator
to the presence of a leak by restricting or shutting off the flow of
regulated substances through piping or triggering an audible or visual
alarm may be used only if they detect leaks of 3 gallons per hour at 10
pounds per square inch line pressure within 1 hour. An annual test of
the operation of the leak detector must be conducted in accordance with
Sec.  280.40(a)(3).
    (b) Line tightness testing. A periodic test of piping may be
conducted only if it can detect a 0.1 gallon per hour leak rate at one
and one-half times the operating pressure.
    (c) Applicable tank methods. Except as described in Sec.
280.41(a), any of the methods in Sec.  280.43(e) through (i) may be
used if they are designed to detect a release from any portion of the
underground piping that routinely contains regulated substances.

Sec.  280.45  Release detection recordkeeping.

    All UST system owners and operators must maintain records in
accordance with Sec.  280.34 demonstrating compliance with all
applicable requirements of this subpart. These records must include the
following:
    (a) All written performance claims pertaining to any release
detection system used, and the manner in which these claims have been
justified or tested by the equipment manufacturer or installer, must be
maintained for 5 years, or for another reasonable period of time
determined by the implementing agency, from the date of installation.
Not later than October 13, 2018, records of site assessments required
under Sec.  280.43(e)(6) and (f)(7) must be maintained for as long as
the methods are used. Records of site assessments developed after
October 13, 2015 must be signed by a professional engineer or
professional geologist, or equivalent licensed professional with
experience in environmental engineering, hydrogeology, or other
relevant technical discipline acceptable to the implementing agency;
    (b) The results of any sampling, testing, or monitoring must be
maintained for at least one year, or for another reasonable period of
time determined by the implementing agency, except as follows:
    (1) The results of annual operation tests conducted in accordance
with Sec.  280.40(a)(3) must be maintained for three years. At a
minimum, the results must list each component tested, indicate whether
each component tested meets criteria in Sec.  280.40(a)(3) or needs to
have action taken, and describe any action taken to correct an issue;
and
    (2) The results of tank tightness testing conducted in accordance
with Sec.  280.43(c) must be retained until the next test is conducted;
and
    (3) The results of tank tightness testing, line tightness testing,
and vapor monitoring using a tracer compound placed in the tank system
conducted in accordance with Sec.  280.252(d) must be retained until
the next test is conducted; and
    (c) Written documentation of all calibration, maintenance, and
repair of release detection equipment permanently located on-site must
be maintained for at least one year after the servicing work is
completed, or for another reasonable time period determined by the
implementing agency. Any schedules of required calibration and
maintenance provided by the release detection equipment manufacturer
must be retained for five years from the date of installation.

Subpart E--Release Reporting, Investigation, and Confirmation

Sec.  280.50  Reporting of suspected releases.

    Owners and operators of UST systems must report to the implementing
agency within 24 hours, or another reasonable period specified by the
implementing agency, and follow the procedures in Sec.  280.52 for any
of the following conditions:
    (a) The discovery by owners and operators or others of released
regulated substances at the UST site or in the surrounding area (such
as the presence of free product or vapors in soils, basements, sewer
and utility lines, and nearby surface water).
    (b) Unusual operating conditions observed by owners and operators
(such as the erratic behavior of product dispensing equipment, the
sudden loss of product from the UST system, an unexplained presence of
water in the tank, or liquid in the interstitial space of secondarily
contained systems), unless:
    (1) The system equipment or component is found not to be releasing
regulated substances to the environment;
    (2) Any defective system equipment or component is immediately
repaired or replaced; and
    (3) For secondarily contained systems, except as provided for in
Sec.  280.43(g)(2)(iv), any liquid in the interstitial space not used
as part of the interstitial monitoring method (for example, brine
filled) is immediately removed.
    (c) Monitoring results, including investigation of an alarm, from a
release detection method required under Sec. Sec.  280.41 and 280.42
that indicate a release may have occurred unless:
    (1) The monitoring device is found to be defective, and is
immediately repaired, recalibrated or replaced, and additional
monitoring does not confirm the initial result;
    (2) The leak is contained in the secondary containment and:
    (i) Except as provided for in Sec.  280.43(g)(2)(iv), any liquid in
the interstitial space not used as part of the interstitial monitoring
method (for example, brine filled) is immediately removed; and
    (ii) Any defective system equipment or component is immediately
repaired or replaced;
    (3) In the case of inventory control described in Sec.  280.43(a),
a second month of data does not confirm the initial result or the
investigation determines no release has occurred; or
    (4) The alarm was investigated and determined to be a non-release
event

(for example, from a power surge or caused by filling the tank during
release detection testing).

Sec.  280.51  Investigation due to off-site impacts.

    When required by the implementing agency, owners and operators of
UST systems must follow the procedures in Sec.  280.52 to determine if
the UST system is the source of off-site impacts. These impacts include
the discovery of regulated substances (such as the presence of free
product or vapors in soils, basements, sewer and utility lines, and
nearby surface and drinking waters) that has been observed by the
implementing agency or brought to its attention by another party.

Sec.  280.52  Release investigation and confirmation steps.

    Unless corrective action is initiated in accordance with subpart F,
owners and operators must immediately investigate and confirm all
suspected releases of regulated substances requiring reporting under
Sec.  280.50 within 7 days, or another reasonable time period specified
by the implementing agency, using either the following steps or another
procedure approved by the implementing agency:
    (a) System test. Owners and operators must conduct tests (according
to the requirements for tightness testing in Sec. Sec.  280.43(c) and
280.44(b) or, as appropriate, secondary containment testing described
in Sec.  280.33(d)).
    (1) The test must determine whether:
    (i) A leak exists in that portion of the tank that routinely
contains product, or the attached delivery piping; or
    (ii) A breach of either wall of the secondary containment has
occurred.
    (2) If the system test confirms a leak into the interstice or a
release, owners and operators must repair, replace, upgrade, or close
the UST system. In addition, owners and operators must begin corrective
action in accordance with subpart F of this part if the test results
for the system, tank, or delivery piping indicate that a release
exists.
    (3) Further investigation is not required if the test results for
the system, tank, and delivery piping do not indicate that a release
exists and if environmental contamination is not the basis for
suspecting a release.
    (4) Owners and operators must conduct a site check as described in
paragraph (b) of this section if the test results for the system, tank,
and delivery piping do not indicate that a release exists but
environmental contamination is the basis for suspecting a release.
    (b) Site check. Owners and operators must measure for the presence
of a release where contamination is most likely to be present at the
UST site. In selecting sample types, sample locations, and measurement
methods, owners and operators must consider the nature of the stored
substance, the type of initial alarm or cause for suspicion, the type
of backfill, the depth of groundwater, and other factors appropriate
for identifying the presence and source of the release.
    (1) If the test results for the excavation zone or the UST site
indicate that a release has occurred, owners and operators must begin
corrective action in accordance with subpart F of this part;
    (2) If the test results for the excavation zone or the UST site do
not indicate that a release has occurred, further investigation is not
required.

Sec.  280.53  Reporting and cleanup of spills and overfills.

    (a) Owners and operators of UST systems must contain and
immediately clean up a spill or overfill and report to the implementing
agency within 24 hours, or another reasonable time period specified by
the implementing agency, and begin corrective action in accordance with
subpart F of this part in the following cases:
    (1) Spill or overfill of petroleum that results in a release to the
environment that exceeds 25 gallons or another reasonable amount
specified by the implementing agency, or that causes a sheen on nearby
surface water; and
    (2) Spill or overfill of a hazardous substance that results in a
release to the environment that equals or exceeds its reportable
quantity under CERCLA (40 CFR part 302).

    Note to paragraph (a). Pursuant to Sec. Sec.  302.6 and 355.40
of this chapter, a release of a hazardous substance equal to or in
excess of its reportable quantity must also be reported immediately
(rather than within 24 hours) to the National Response Center under
sections 102 and 103 of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 and to appropriate state and
local authorities under Title III of the Superfund Amendments and
Reauthorization Act of 1986.

    (b) Owners and operators of UST systems must contain and
immediately clean up a spill or overfill of petroleum that is less than
25 gallons or another reasonable amount specified by the implementing
agency, and a spill or overfill of a hazardous substance that is less
than the reportable quantity. If cleanup cannot be accomplished within
24 hours, or another reasonable time period established by the
implementing agency, owners and operators must immediately notify the
implementing agency.

Subpart F--Release Response and Corrective Action for UST Systems
Containing Petroleum or Hazardous Substances

Sec.  280.60  General.

    Owners and operators of petroleum or hazardous substance UST
systems must, in response to a confirmed release from the UST system,
comply with the requirements of this subpart except for USTs excluded
under Sec.  280.10(b) and UST systems subject to RCRA Subtitle C
corrective action requirements under section 3004(u) of the Resource
Conservation and Recovery Act, as amended.

Sec.  280.61  Initial response.

    Upon confirmation of a release in accordance with Sec.  280.52 or
after a release from the UST system is identified in any other manner,
owners and operators must perform the following initial response
actions within 24 hours of a release or within another reasonable
period of time determined by the implementing agency:
    (a) Report the release to the implementing agency (e.g., by
telephone or electronic mail);
    (b) Take immediate action to prevent any further release of the
regulated substance into the environment; and
    (c) Identify and mitigate fire, explosion, and vapor hazards.

Sec.  280.62  Initial abatement measures and site check.

    (a) Unless directed to do otherwise by the implementing agency,
owners and operators must perform the following abatement measures:
    (1) Remove as much of the regulated substance from the UST system
as is necessary to prevent further release to the environment;
    (2) Visually inspect any aboveground releases or exposed
belowground releases and prevent further migration of the released
substance into surrounding soils and groundwater;
    (3) Continue to monitor and mitigate any additional fire and safety
hazards posed by vapors or free product that have migrated from the UST
excavation zone and entered into subsurface structures (such as sewers
or basements);
    (4) Remedy hazards posed by contaminated soils that are excavated
or exposed as a result of release confirmation, site investigation,
abatement, or corrective action activities. If these remedies include
treatment or disposal of soils, the owner and operator must comply with
applicable state and local requirements;
    (5) Measure for the presence of a release where contamination is
most

likely to be present at the UST site, unless the presence and source of
the release have been confirmed in accordance with the site check
required by Sec.  280.52(b) or the closure site assessment of Sec.
280.72(a). In selecting sample types, sample locations, and measurement
methods, the owner and operator must consider the nature of the stored
substance, the type of backfill, depth to groundwater and other factors
as appropriate for identifying the presence and source of the release;
and
    (6) Investigate to determine the possible presence of free product,
and begin free product removal as soon as practicable and in accordance
with Sec.  280.64.
    (b) Within 20 days after release confirmation, or within another
reasonable period of time determined by the implementing agency, owners
and operators must submit a report to the implementing agency
summarizing the initial abatement steps taken under paragraph (a) of
this section and any resulting information or data.

Sec.  280.63  Initial site characterization.

    (a) Unless directed to do otherwise by the implementing agency,
owners and operators must assemble information about the site and the
nature of the release, including information gained while confirming
the release or completing the initial abatement measures in Sec. Sec.
280.60 and 280.61. This information must include, but is not
necessarily limited to the following:
    (1) Data on the nature and estimated quantity of release;
    (2) Data from available sources and/or site investigations
concerning the following factors: Surrounding populations, water
quality, use and approximate locations of wells potentially affected by
the release, subsurface soil conditions, locations of subsurface
sewers, climatological conditions, and land use;
    (3) Results of the site check required under Sec.  280.62(a)(5);
and
    (4) Results of the free product investigations required under Sec.
280.62(a)(6), to be used by owners and operators to determine whether
free product must be recovered under Sec.  280.64.
    (b) Within 45 days of release confirmation or another reasonable
period of time determined by the implementing agency, owners and
operators must submit the information collected in compliance with
paragraph (a) of this section to the implementing agency in a manner
that demonstrates its applicability and technical adequacy, or in a
format and according to the schedule required by the implementing
agency.

Sec.  280.64  Free product removal.

    At sites where investigations under Sec.  280.62(a)(6) indicate the
presence of free product, owners and operators must remove free product
to the maximum extent practicable as determined by the implementing
agency while continuing, as necessary, any actions initiated under
Sec. Sec.  280.61 through 280.63, or preparing for actions required
under Sec. Sec.  280.65 through 280.66. In meeting the requirements of
this section, owners and operators must:
    (a) Conduct free product removal in a manner that minimizes the
spread of contamination into previously uncontaminated zones by using
recovery and disposal techniques appropriate to the hydrogeologic
conditions at the site, and that properly treats, discharges or
disposes of recovery byproducts in compliance with applicable local,
state, and federal regulations;
    (b) Use abatement of free product migration as a minimum objective
for the design of the free product removal system;
    (c) Handle any flammable products in a safe and competent manner to
prevent fires or explosions; and
    (d) Unless directed to do otherwise by the implementing agency,
prepare and submit to the implementing agency, within 45 days after
confirming a release, a free product removal report that provides at
least the following information:
    (1) The name of the person(s) responsible for implementing the free
product removal measures;
    (2) The estimated quantity, type, and thickness of free product
observed or measured in wells, boreholes, and excavations;
    (3) The type of free product recovery system used;
    (4) Whether any discharge will take place on-site or off-site
during the recovery operation and where this discharge will be located;
    (5) The type of treatment applied to, and the effluent quality
expected from, any discharge;
    (6) The steps that have been or are being taken to obtain necessary
permits for any discharge; and
    (7) The disposition of the recovered free product.

Sec.  280.65  Investigations for soil and groundwater cleanup.

    (a) In order to determine the full extent and location of soils
contaminated by the release and the presence and concentrations of
dissolved product contamination in the groundwater, owners and
operators must conduct investigations of the release, the release site,
and the surrounding area possibly affected by the release if any of the
following conditions exist:
    (1) There is evidence that groundwater wells have been affected by
the release (e.g., as found during release confirmation or previous
corrective action measures);
    (2) Free product is found to need recovery in compliance with Sec.
280.64;
    (3) There is evidence that contaminated soils may be in contact
with groundwater (e.g., as found during conduct of the initial response
measures or investigations required under Sec. Sec.  280.60 through
280.64); and
    (4) The implementing agency requests an investigation, based on the
potential effects of contaminated soil or groundwater on nearby surface
water and groundwater resources.
    (b) Owners and operators must submit the information collected
under paragraph (a) of this section as soon as practicable or in
accordance with a schedule established by the implementing agency.

Sec.  280.66  Corrective action plan.

    (a) At any point after reviewing the information submitted in
compliance with Sec. Sec.  280.61 through 280.63, the implementing
agency may require owners and operators to submit additional
information or to develop and submit a corrective action plan for
responding to contaminated soils and groundwater. If a plan is
required, owners and operators must submit the plan according to a
schedule and format established by the implementing agency.
Alternatively, owners and operators may, after fulfilling the
requirements of Sec. Sec.  280.61 through 280.63, choose to submit a
corrective action plan for responding to contaminated soil and
groundwater. In either case, owners and operators are responsible for
submitting a plan that provides for adequate protection of human health
and the environment as determined by the implementing agency, and must
modify their plan as necessary to meet this standard.
    (b) The implementing agency will approve the corrective action plan
only after ensuring that implementation of the plan will adequately
protect human health, safety, and the environment. In making this
determination, the implementing agency should consider the following
factors as appropriate:
    (1) The physical and chemical characteristics of the regulated

substance, including its toxicity, persistence, and potential for
migration;
    (2) The hydrogeologic characteristics of the facility and the
surrounding area;
    (3) The proximity, quality, and current and future uses of nearby
surface water and groundwater;
    (4) The potential effects of residual contamination on nearby
surface water and groundwater;
    (5) An exposure assessment; and
    (6) Any information assembled in compliance with this subpart.
    (c) Upon approval of the corrective action plan or as directed by
the implementing agency, owners and operators must implement the plan,
including modifications to the plan made by the implementing agency.
They must monitor, evaluate, and report the results of implementing the
plan in accordance with a schedule and in a format established by the
implementing agency.
    (d) Owners and operators may, in the interest of minimizing
environmental contamination and promoting more effective cleanup, begin
cleanup of soil and groundwater before the corrective action plan is
approved provided that they:
    (1) Notify the implementing agency of their intention to begin
cleanup;
    (2) Comply with any conditions imposed by the implementing agency,
including halting cleanup or mitigating adverse consequences from
cleanup activities; and
    (3) Incorporate these self-initiated cleanup measures in the
corrective action plan that is submitted to the implementing agency for
approval.

Sec.  280.67  Public participation.

    (a) For each confirmed release that requires a corrective action
plan, the implementing agency must provide notice to the public by
means designed to reach those members of the public directly affected
by the release and the planned corrective action. This notice may
include, but is not limited to, public notice in local newspapers,
block advertisements, public service announcements, publication in a
state register, letters to individual households, or personal contacts
by field staff.
    (b) The implementing agency must ensure that site release
information and decisions concerning the corrective action plan are
made available to the public for inspection upon request.
    (c) Before approving a corrective action plan, the implementing
agency may hold a public meeting to consider comments on the proposed
corrective action plan if there is sufficient public interest, or for
any other reason.
    (d) The implementing agency must give public notice that complies
with paragraph (a) of this section if implementation of an approved
corrective action plan does not achieve the established cleanup levels
in the plan and termination of that plan is under consideration by the
implementing agency.

Subpart G--Out-of-Service UST Systems and Closure

Sec.  280.70  Temporary closure.

    (a) When an UST system is temporarily closed, owners and operators
must continue operation and maintenance of corrosion protection in
accordance with Sec.  280.31, and any release detection in accordance
with subparts D and K of this part. Subparts E and F of this part must
be complied with if a release is suspected or confirmed. However,
release detection and release detection operation and maintenance
testing and inspections in subparts C and D of this part are not
required as long as the UST system is empty. The UST system is empty
when all materials have been removed using commonly employed practices
so that no more than 2.5 centimeters (one inch) of residue, or 0.3
percent by weight of the total capacity of the UST system, remain in
the system. In addition, spill and overfill operation and maintenance
testing and inspections in subpart C of this part are not required.
    (b) When an UST system is temporarily closed for 3 months or more,
owners and operators must also comply with the following requirements:
    (1) Leave vent lines open and functioning; and
    (2) Cap and secure all other lines, pumps, manways, and ancillary
equipment.
    (c) When an UST system is temporarily closed for more than 12
months, owners and operators must permanently close the UST system if
it does not meet either performance standards in Sec.  280.20 for new
UST systems or the upgrading requirements in Sec.  280.21, except that
the spill and overfill equipment requirements do not have to be met.
Owners and operators must permanently close the substandard UST systems
at the end of this 12-month period in accordance with Sec. Sec.  280.71
through 280.74, unless the implementing agency provides an extension of
the 12-month temporary closure period. Owners and operators must
complete a site assessment in accordance with Sec.  280.72 before such
an extension can be applied for.

Sec.  280.71  Permanent closure and changes-in-service.

    (a) At least 30 days before beginning either permanent closure or a
change-in-service under paragraphs (b) and (c) of this section, or
within another reasonable time period determined by the implementing
agency, owners and operators must notify the implementing agency of
their intent to permanently close or make the change-in-service, unless
such action is in response to corrective action. The required
assessment of the excavation zone under Sec.  280.72 must be performed
after notifying the implementing agency but before completion of the
permanent closure or a change-in-service.
    (b) To permanently close a tank, owners and operators must empty
and clean it by removing all liquids and accumulated sludges. All tanks
taken out of service permanently must: be removed from the ground,
filled with an inert solid material, or closed in place in a manner
approved by the implementing agency.
    (c) Continued use of an UST system to store a non-regulated
substance is considered a change-in-service. Before a change-in-
service, owners and operators must empty and clean the tank by removing
all liquid and accumulated sludge and conduct a site assessment in
accordance with Sec.  280.72.

    Note to Sec.  280.71.  The following cleaning and closure
procedures may be used to comply with this section:
    (A) American Petroleum Institute Recommended Practice RP 1604,
``Closure of Underground Petroleum Storage Tanks'';
    (B) American Petroleum Institute Standard 2015, ``Safe Entry and
Cleaning of Petroleum Storage Tanks, Planning and Managing Tank
Entry From Decommissioning Through Recommissioning'';
    (C) American Petroleum Institute Recommended Practice 2016,
``Guidelines and Procedures for Entering and Cleaning Petroleum
Storage Tanks'';
    (D) American Petroleum Institute Recommended Practice RP 1631,
``Interior Lining and Periodic Inspection of Underground Storage
Tanks,'' may be used as guidance for compliance with this section;
    (E) National Fire Protection Association Standard 326,
``Standard for the Safeguarding of Tanks and Containers for Entry,
Cleaning, or Repair''; and
    (F) National Institute for Occupational Safety and Health
Publication 80-106, ``Criteria for a Recommended Standard . . .
Working in Confined Space'' may be used as guidance for conducting
safe closure procedures at some hazardous substance tanks.

Sec.  280.72  Assessing the site at closure or change-in-service.

    (a) Before permanent closure or a change-in-service is completed,
owners

and operators must measure for the presence of a release where
contamination is most likely to be present at the UST site. In
selecting sample types, sample locations, and measurement methods,
owners and operators must consider the method of closure, the nature of
the stored substance, the type of backfill, the depth to groundwater,
and other factors appropriate for identifying the presence of a
release. The requirements of this section are satisfied if one of the
external release detection methods allowed in Sec.  280.43(e) and (f)
is operating in accordance with the requirements in Sec.  280.43 at the
time of closure, and indicates no release has occurred.
    (b) If contaminated soils, contaminated groundwater, or free
product as a liquid or vapor is discovered under paragraph (a) of this
section, or by any other manner, owners and operators must begin
corrective action in accordance with subpart F of this part.

Sec.  280.73  Applicability to previously closed UST systems.

    When directed by the implementing agency, the owner and operator of
an UST system permanently closed before December 22, 1988 must assess
the excavation zone and close the UST system in accordance with this
subpart if releases from the UST may, in the judgment of the
implementing agency, pose a current or potential threat to human health
and the environment.

Sec.  280.74  Closure records.

    Owners and operators must maintain records in accordance with Sec.
280.34 that are capable of demonstrating compliance with closure
requirements under this subpart. The results of the excavation zone
assessment required in Sec.  280.72 must be maintained for at least
three years after completion of permanent closure or change-in-service
in one of the following ways:
    (a) By the owners and operators who took the UST system out of
service;
    (b) By the current owners and operators of the UST system site; or
    (c) By mailing these records to the implementing agency if they
cannot be maintained at the closed facility.

Subpart H--Financial Responsibility

Sec.  280.90  Applicability.

    (a) This subpart applies to owners and operators of all petroleum
underground storage tank (UST) systems except as otherwise provided in
this section.
    (b) Owners and operators of petroleum UST systems are subject to
these requirements in accordance with Sec.  280.91.
    (c) State and Federal government entities whose debts and
liabilities are the debts and liabilities of a state or the United
States are exempt from the requirements of this subpart.
    (d) The requirements of this subpart do not apply to owners and
operators of any UST system described in Sec.  280.10(b), (c)(1),
(c)(3), or (c)(4).
    (e) If the owner and operator of a petroleum underground storage
tank are separate persons, only one person is required to demonstrate
financial responsibility; however, both parties are liable in event of
noncompliance.

Sec.  280.91  Compliance dates.

    Owners of petroleum underground storage tanks must comply with the
requirements of this subpart. Previously deferred UST systems must
comply with the requirements of this subpart according to the schedule
in Sec.  280.251(a).

Sec.  280.92  Definition of terms.

    When used in this subpart, the following terms shall have the
meanings given below:
    Accidental release means any sudden or nonsudden release of
petroleum arising from operating an underground storage tank that
results in a need for corrective action and/or compensation for bodily
injury or property damage neither expected nor intended by the tank
owner or operator.
    Bodily injury shall have the meaning given to this term by
applicable state law; however, this term shall not include those
liabilities which, consistent with standard insurance industry
practices, are excluded from coverage in liability insurance policies
for bodily injury.
    Chief Financial Officer, in the case of local government owners and
operators, means the individual with the overall authority and
responsibility for the collection, disbursement, and use of funds by
the local government.
    Controlling interest means direct ownership of at least 50 percent
of the voting stock of another entity.
    Director of the Implementing Agency means the EPA Regional
Administrator, or, in the case of a state with a program approved under
section 9004, the Director of the designated state or local agency
responsible for carrying out an approved UST program.
    Financial reporting year means the latest consecutive twelve-month
period for which any of the following reports used to support a
financial test is prepared:
    (1) A 10-K report submitted to the SEC;
    (2) An annual report of tangible net worth submitted to Dun and
Bradstreet; or
    (3) Annual reports submitted to the Energy Information
Administration or the Rural Utilities Service.
    Note to the definition of Financial reporting year. ``Financial
reporting year'' may thus comprise a fiscal or a calendar year period.
    Legal defense cost is any expense that an owner or operator or
provider of financial assurance incurs in defending against claims or
actions brought:
    (1) By EPA or a state to require corrective action or to recover
the costs of corrective action;
    (2) By or on behalf of a third party for bodily injury or property
damage caused by an accidental release; or
    (3) By any person to enforce the terms of a financial assurance
mechanism.
    Local government shall have the meaning given this term by
applicable state law and includes Indian tribes. The term is generally
intended to include:
    (1) Counties, municipalities, townships, separately chartered and
operated special districts (including local government public transit
systems and redevelopment authorities), and independent school
districts authorized as governmental bodies by state charter or
constitution; and
    (2) Special districts and independent school districts established
by counties, municipalities, townships, and other general purpose
governments to provide essential services.
    Occurrence means an accident, including continuous or repeated
exposure to conditions, which results in a release from an underground
storage tank.
    Note to the definition of Occurrence. This definition is intended
to assist in the understanding of these regulations and is not intended
either to limit the meaning of ``occurrence'' in a way that conflicts
with standard insurance usage or to prevent the use of other standard
insurance terms in place of ``occurrence.''
    Owner or operator, when the owner or operator are separate parties,
refers to the party that is obtaining or has obtained financial
assurances.
    Petroleum marketing facilities include all facilities at which
petroleum is produced or refined and all facilities from which
petroleum is sold or transferred to other petroleum marketers or to the
public.
    Property damage shall have the meaning given this term by
applicable state law. This term shall not include those liabilities
which, consistent with standard insurance industry practices,

are excluded from coverage in liability insurance policies for property
damage. However, such exclusions for property damage shall not include
corrective action associated with releases from tanks which are covered
by the policy.
    Provider of financial assurance means an entity that provides
financial assurance to an owner or operator of an underground storage
tank through one of the mechanisms listed in Sec. Sec.  280.95 through
280.107, including a guarantor, insurer, risk retention group, surety,
issuer of a letter of credit, issuer of a state-required mechanism, or
a state.
    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
guarantee contract is issued ``incident to that relationship'' if it
arises from and depends on existing economic transactions between the
guarantor and the owner or operator.
    Substantial governmental relationship means the extent of a
governmental relationship necessary under applicable state law to make
an added guarantee contract issued incident to that relationship valid
and enforceable. A guarantee contract is issued ``incident to that
relationship'' if it arises from a clear commonality of interest in the
event of an UST release such as coterminous boundaries, overlapping
constituencies, common groundwater aquifer, or other relationship other
than monetary compensation that provides a motivation for the guarantor
to provide a guarantee.
    Tangible net worth means the tangible assets that remain after
deducting liabilities; such assets do not include intangibles such as
goodwill and rights to patents or royalties. For purposes of this
definition, ``assets'' means all existing and all probable future
economic benefits obtained or controlled by a particular entity as a
result of past transactions.
    Termination under Sec.  280.97(b)(1) and (2) means only those
changes that could result in a gap in coverage as where the insured has
not obtained substitute coverage or has obtained substitute coverage
with a different retroactive date than the retroactive date of the
original policy.

Sec.  280.93  Amount and scope of required financial responsibility.

    (a) Owners or operators of petroleum underground storage tanks must
demonstrate financial responsibility for taking corrective action and
for compensating third parties for bodily injury and property damage
caused by accidental releases arising from the operation of petroleum
underground storage tanks in at least the following per-occurrence
amounts:
    (1) For owners or operators of petroleum underground storage tanks
that are located at petroleum marketing facilities, or that handle an
average of more than 10,000 gallons of petroleum per month based on
annual throughput for the previous calendar year; $1 million.
    (2) For all other owners or operators of petroleum underground
storage tanks; $500,000.
    (b) Owners or operators of petroleum underground storage tanks must
demonstrate financial responsibility for taking corrective action and
for compensating third parties for bodily injury and property damage
caused by accidental releases arising from the operation of petroleum
underground storage tanks in at least the following annual aggregate
amounts:
    (1) For owners or operators of 1 to 100 petroleum underground
storage tanks, $1 million; and
    (2) For owners or operators of 101 or more petroleum underground
storage tanks, $2 million.
    (c) For the purposes of paragraphs (b) and (f) of this section,
only, ``a petroleum underground storage tank'' means a single
containment unit and does not mean combinations of single containment
units.
    (d) Except as provided in paragraph (e) of this section, if the
owner or operator uses separate mechanisms or separate combinations of
mechanisms to demonstrate financial responsibility for:
    (1) Taking corrective action;
    (2) Compensating third parties for bodily injury and property
damage caused by sudden accidental releases; or
    (3) Compensating third parties for bodily injury and property
damage caused by nonsudden accidental releases, the amount of assurance
provided by each mechanism or combination of mechanisms must be in the
full amount specified in paragraphs (a) and (b) of this section.
    (e) If an owner or operator uses separate mechanisms or separate
combinations of mechanisms to demonstrate financial responsibility for
different petroleum underground storage tanks, the annual aggregate
required shall be based on the number of tanks covered by each such
separate mechanism or combination of mechanisms.
    (f) Owners or operators shall review the amount of aggregate
assurance provided whenever additional petroleum underground storage
tanks are acquired or installed. If the number of petroleum underground
storage tanks for which assurance must be provided exceeds 100, the
owner or operator shall demonstrate financial responsibility in the
amount of at least $2 million of annual aggregate assurance by the
anniversary of the date on which the mechanism demonstrating financial
responsibility became effective. If assurance is being demonstrated by
a combination of mechanisms, the owner or operator shall demonstrate
financial responsibility in the amount of at least $2 million of annual
aggregate assurance by the first-occurring effective date anniversary
of any one of the mechanisms combined (other than a financial test or
guarantee) to provide assurance.
    (g) The amounts of assurance required under this section exclude
legal defense costs.
    (h) The required per-occurrence and annual aggregate coverage
amounts do not in any way limit the liability of the owner or operator.

Sec.  280.94  Allowable mechanisms and combinations of mechanisms.

    (a) Subject to the limitations of paragraphs (b) and (c) of this
section:
    (1) An owner or operator, including a local government owner or
operator, may use any one or combination of the mechanisms listed in
Sec. Sec.  280.95 through 280.103 to demonstrate financial
responsibility under this subpart for one or more underground storage
tanks; and
    (2) A local government owner or operator may use any one or
combination of the mechanisms listed in Sec. Sec.  280.104 through
280.107 to demonstrate financial responsibility under this subpart for
one or more underground storage tanks.
    (b) An owner or operator may use a guarantee under Sec.  280.96 or
surety bond under Sec.  280.98 to establish financial responsibility
only if the Attorney(s) General of the state(s) in which the
underground storage tanks are located has (have) submitted a written
statement to the implementing agency that a guarantee or surety bond
executed as described in this section is a legally valid and
enforceable obligation in that state.
    (c) An owner or operator may use self-insurance in combination with
a guarantee only if, for the purpose of meeting the requirements of the
financial test under this rule, the financial statements of the owner
or operator are not consolidated with the financial statements of the
guarantor.

Sec.  280.95  Financial test of self-insurance.

    (a) An owner or operator, and/or guarantor, may satisfy the
requirements

of Sec.  280.93 by passing a financial test as specified in this
section. To pass the financial test of self-insurance, the owner or
operator, and/or guarantor must meet the criteria of paragraph (b) or
(c) of this section based on year-end financial statements for the
latest completed fiscal year.
    (b)(1) The owner or operator, and/or guarantor, must have a
tangible net worth of at least ten times:
    (i) The total of the applicable aggregate amount required by Sec.
280.93, based on the number of underground storage tanks for which a
financial test is used to demonstrate financial responsibility to EPA
under this section or to a state implementing agency under a state
program approved by EPA under 40 CFR part 281;
    (ii) The sum of the corrective action cost estimates, the current
closure and post-closure care cost estimates, and amount of liability
coverage for which a financial test is used to demonstrate financial
responsibility to EPA under 40 CFR 264.101, 264.143, 264.145, 265.143,
265.145, 264.147, and 265.147 or to a state implementing agency under a
state program authorized by EPA under 40 CFR part 271; and
    (iii) The sum of current plugging and abandonment cost estimates
for which a financial test is used to demonstrate financial
responsibility to EPA under 40 CFR 144.63 or to a state implementing
agency under a state program authorized by EPA under 40 CFR part 145.
    (2) The owner or operator, and/or guarantor, must have a tangible
net worth of at least $10 million.
    (3) The owner or operator, and/or guarantor, must have a letter
signed by the chief financial officer worded as specified in paragraph
(d) of this section.
    (4) The owner or operator, and/or guarantor, must either:
    (i) File financial statements annually with the U.S. Securities and
Exchange Commission, the Energy Information Administration, or the
Rural Utilities Service; or
    (ii) Report annually the firm's tangible net worth to Dun and
Bradstreet, and Dun and Bradstreet must have assigned the firm a
financial strength rating of 4A or 5A.
    (5) The firm's year-end financial statements, if independently
audited, cannot include an adverse auditor's opinion, a disclaimer of
opinion, or a ``going concern'' qualification.
    (c)(1) The owner or operator, and/or guarantor must meet the
financial test requirements of 40 CFR 264.147(f)(1), substituting the
appropriate amounts specified in Sec.  280.93(b)(1) and (2) for the
``amount of liability coverage'' each time specified in that section.
    (2) The fiscal year-end financial statements of the owner or
operator, and/or guarantor, must be examined by an independent
certified public accountant and be accompanied by the accountant's
report of the examination.
    (3) The firm's year-end financial statements cannot include an
adverse auditor's opinion, a disclaimer of opinion, or a ``going
concern'' qualification.
    (4) The owner or operator, and/or guarantor, must have a letter
signed by the chief financial officer, worded as specified in paragraph
(d) of this section.
    (5) If the financial statements of the owner or operator, and/or
guarantor, are not submitted annually to the U.S. Securities and
Exchange Commission, the Energy Information Administration or the Rural
Utilities Service, the owner or operator, and/or guarantor, must obtain
a special report by an independent certified public accountant stating
that:
    (i) He has compared the data that the letter from the chief
financial officer specifies as having been derived from the latest
year-end financial statements of the owner or operator, and/or
guarantor, with the amounts in such financial statements; and
    (ii) In connection with that comparison, no matters came to his
attention which caused him to believe that the specified data should be
adjusted.
    (d) To demonstrate that it meets the financial test under paragraph
(b) or (c) of this section, the chief financial officer of the owner or
operator, or guarantor, must sign, within 120 days of the close of each
financial reporting year, as defined by the twelve-month period for
which financial statements used to support the financial test are
prepared, a letter worded exactly as follows, except that the
instructions in brackets are to be replaced by the relevant information
and the brackets deleted:
Letter From Chief Financial Officer
    I am the chief financial officer of [insert: name and address of
the owner or operator, or guarantor]. This letter is in support of the
use of [insert: ``the financial test of self-insurance,'' and/or
``guarantee''] to demonstrate financial responsibility for [insert:
``taking corrective action'' and/or ``compensating third parties for
bodily injury and property damage''] caused by [insert: ``sudden
accidental releases'' or ``nonsudden accidental releases'' or
``accidental releases''] in the amount of at least [insert: dollar
amount] per occurrence and [insert: dollar amount] annual aggregate
arising from operating (an) underground storage tank(s).
    Underground storage tanks at the following facilities are assured
by this financial test or a financial test under an authorized State
program by this [insert: ``owner or operator,'' and/or ``guarantor'']:
[List for each facility: the name and address of the facility where
tanks assured by this financial test are located, and whether tanks are
assured by this financial test or a financial test under a State
program approved under 40 CFR part 281. If separate mechanisms or
combinations of mechanisms are being used to assure any of the tanks at
this facility, list each tank assured by this financial test or a
financial test under a State program authorized under 40 CFR part 281
by the tank identification number provided in the notification
submitted pursuant to 40 CFR 280.22 or the corresponding State
requirements.]
    A [insert: ``financial test,'' and/or ``guarantee''] is also used
by this [insert: ``owner or operator,'' or ``guarantor''] to
demonstrate evidence of financial responsibility in the following
amounts under other EPA regulations or state programs authorized by EPA
under 40 CFR parts 271 and 145:

                       EPA Regulations                           Amount

Closure (Sec.  Sec.   264.143 and 265.143)...................        $__
Post-Closure Care (Sec.  Sec.   264.145 and 265.145).........        $__
Liability Coverage (Sec.  Sec.   264.147 and 265.147)........        $__
Corrective Action (Sec.   264.101(b))........................        $__
Plugging and Abandonment (Sec.   144.63).....................        $__
Closure......................................................        $__
Post-Closure Care............................................        $__
Liability Coverage...........................................        $__
Corrective Action............................................        $__
Plugging and Abandonment.....................................        $__
    Total....................................................        $__

    This [insert: ``owner or operator,'' or ``guarantor''] has not
received an adverse opinion, a disclaimer of opinion, or a ``going
concern'' qualification from an independent auditor on his financial
statements for the latest completed fiscal year.
    [Fill in the information for Alternative I if the criteria of
paragraph (b) of Sec.  280.95 are being used to demonstrate compliance
with the financial test requirements. Fill in the information for
Alternative II if the criteria of paragraph (c) of Sec.  280.95 are
being used to demonstrate compliance with the financial test
requirements.]

                        Alternative I

1. Amount of annual UST aggregate coverage being assured by a        $__
 financial test, and/or guarantee............................
2. Amount of corrective action, closure and post-closure care        $__
 costs, liability coverage, and plugging and abandonment
 costs covered by a financial test, and/or guarantee.........
3. Sum of lines 1 and 2......................................        $__
4. Total tangible assets.....................................        $__
5. Total liabilities [if any of the amount reported on line 3        $__
 is included in total liabilities, you may deduct that amount
 from this line and add that amount to line 6]...............
6. Tangible net worth [subtract line 5 from line 4]..........        $__

                                                                  Yes No
7. Is line 6 at least $10 million?...........................        _ _
8. Is line 6 at least 10 times line 3?.......................        _ _
9. Have financial statements for the latest fiscal year been         _ _
 filed with the Securities and Exchange Commission?..........
10. Have financial statements for the latest fiscal year been        _ _
 filed with the Energy Information Administration?...........
11. Have financial statements for the latest fiscal year been        _ _
 filed with the Rural Utilities Service?.....................
12. Has financial information been provided to Dun and         .........
 Bradstreet, and has Dun and Bradstreet provided a financial
 strength rating of 4A or 5A? [Answer ``Yes'' only if both
 criteria have been met.]....................................
                        Alternative II
1. Amount of annual UST aggregate coverage being assured by a        $__
 test, and/or guarantee......................................
2. Amount of corrective action, closure and post-closure care        $__
 costs, liability coverage, and plugging and abandonment
 costs covered by a financial test, and/or guarantee.........
3. Sum of lines 1 and 2......................................        $__
4. Total tangible assets.....................................        $__
5. Total liabilities [if any of the amount reported on line 3        $__
 is included in total liabilities, you may deduct that amount
 from this line and add that amount to line 6]...............
6. Tangible net worth [subtract line 5 from line 4]..........        $__
7. Total assets in the U.S. [required only if less than 90           $__
 percent of assets are located in the U.S.]..................

                                                                  Yes No
8. Is line 6 at least $10 million?...........................        _ _
                                                                     _ _
9. Is line 6 at least 6 times line 3?........................        _ _
10. Are at least 90 percent of assets located in the U.S.?           _ _
 [If ``No,'' complete line 11.]..............................
11. Is line 7 at least 6 times line 3? [Fill in either lines         _ _
 12-15 or lines 16-18:]......................................
                                                                  Yes No
12. Current assets...........................................        $__
13. Current liabilities......................................        $__
14. Net working capital [subtract line 13 from line 12]......        $__

                                                                  Yes No
15. Is line 14 at least 6 times line 3?......................        _ _
16. Current bond rating of most recent bond issue............        _ _
17. Name of rating service...................................        _ _
18. Date of maturity of bond.................................        _ _
19. Have financial statements for the latest fiscal year been        _ _
 filed with the SEC, the Energy Information Administration,
 or the Rural Utilities Service?.............................

    [If ``No,'' please attach a report from an independent certified
public accountant certifying that there are no material differences
between the data as reported in lines 4-18 above and the financial
statements for the latest fiscal year.]
    [For both Alternative I and Alternative II complete the
certification with this statement.]
    I hereby certify that the wording of this letter is identical to
the wording specified in 40 CFR 280.95(d) as such regulations were
constituted on the date shown immediately below.

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

    (e) If an owner or operator using the test to provide financial
assurance finds that he or she no longer meets the requirements of the
financial test based on the year-end financial statements, the owner or
operator must obtain alternative coverage within 150 days of the end of
the year for which financial statements have been prepared.
    (f) The Director of the implementing agency may require reports of
financial condition at any time from the owner or operator, and/or
guarantor. If the Director finds, on the basis of such reports or other
information, that the owner or operator, and/or guarantor, no longer
meets the financial test requirements of Sec.  280.95(b) or (c) and
(d), the owner or operator must obtain alternate coverage within 30
days after notification of such a finding.
    (g) If the owner or operator fails to obtain alternate assurance
within 150 days of finding that he or she no longer meets the
requirements of the financial test based on the year-end financial
statements, or within 30 days of notification by the Director of the
implementing agency that he or she no longer meets the requirements of
the financial test, the owner or operator must notify the Director of
such failure within 10 days.

Sec.  280.96  Guarantee.

    (a) An owner or operator may satisfy the requirements of Sec.
280.93 by obtaining a guarantee that conforms to the requirements of
this section. The guarantor must be:
    (1) A firm that:
    (i) Possesses a controlling interest in the owner or operator;
    (ii) Possesses a controlling interest in a firm described under
paragraph (a)(1)(i) of this section; or,
    (iii) Is controlled through stock ownership by a common parent firm
that possesses a controlling interest in the owner or operator; or,
    (2) A firm engaged in a substantial business relationship with the
owner or operator and issuing the guarantee as an act incident to that
business relationship.
    (b) Within 120 days of the close of each financial reporting year
the guarantor must demonstrate that it meets the financial test
criteria of Sec.  280.95 based on year-end financial statements for the
latest completed financial reporting year by completing the letter from
the chief financial officer described in Sec.  280.95(d) and must
deliver the letter to the owner or operator. If the guarantor fails to
meet the requirements of the financial test at the end of any financial
reporting year, within 120 days of the end of that financial reporting
year the guarantor shall send by certified mail, before cancellation or
nonrenewal of the guarantee, notice to the owner or operator. If the
Director of the implementing agency notifies the guarantor that he no
longer meets the requirements of the financial test of Sec.  280.95(b)
or (c) and (d), the guarantor must notify the owner or operator within
10 days of receiving such notification from the Director. In both
cases, the guarantee will terminate no less than 120 days after the
date the owner or operator receives the notification, as evidenced by
the return receipt. The owner or operator must obtain alternative
coverage as specified in Sec.  280.114(e).
    (c) The guarantee must be worded as follows, except that
instructions in brackets are to be replaced with the relevant
information and the brackets deleted:

     Guarantee
    Guarantee made this [date] by [name of guaranteeing entity], a
business entity organized under the laws of the state of [name of
state], herein referred to as guarantor, to [the state implementing
agency] and to any and all third parties, and obligees, on behalf of
[owner or operator] of [business address].
     Recitals.
    (1) Guarantor meets or exceeds the financial test criteria of 40
CFR 280.95(b) or (c) and (d) and agrees to comply with the requirements
for guarantors as specified in 40 CFR 280.96(b).
    (2) [Owner or operator] owns or operates the following underground
storage tank(s) covered by this guarantee: [List the number of tanks at
each facility and the name(s) and address(es) of the facility(ies)
where the tanks are located. If more than one instrument is used to
assure different tanks at any one facility, for each tank covered by
this instrument, list the tank identification number provided in the
notification submitted pursuant to 40 CFR 280.22 or the corresponding
state requirement, and the name and address of the facility.] This
guarantee satisfies 40 CFR part 280, subpart H requirements for
assuring funding for [insert: ``taking corrective action'' and/or
``compensating third parties for bodily injury and property damage
caused by'' either ``sudden accidental releases'' or ``nonsudden
accidental releases'' or ``accidental releases''; if coverage is
different for different tanks or locations, indicate the type of
coverage applicable to each tank or location] arising from operating
the above-identified underground storage tank(s) in the amount of
[insert dollar amount] per occurrence and [insert dollar amount] annual
aggregate.
    (3) [Insert appropriate phrase: ``On behalf of our subsidiary'' (if
guarantor is corporate parent of the owner or operator); ``On behalf of
our affiliate'' (if guarantor is a related firm of the owner or
operator); or ``Incident to our business relationship with'' (if
guarantor is providing the guarantee as an incident to a substantial
business relationship with owner or operator)] [owner or operator],
guarantor guarantees to [implementing agency] and to any and all third
parties that:
    In the event that [owner or operator] fails to provide alternative
coverage within 60 days after receipt of a notice of cancellation of
this guarantee and the [Director of the implementing agency] has
determined or suspects that a release has occurred at an underground
storage tank covered by this guarantee, the guarantor, upon
instructions from the [Director], shall fund a standby trust fund in
accordance with the provisions of 40 CFR 280.112, in an amount not to
exceed the coverage limits specified above.
    In the event that the [Director] determines that [owner or
operator] has failed to perform corrective action for releases arising
out of the operation of the above-identified tank(s) in accordance with
40 CFR part 280, subpart F, the guarantor upon written instructions
from the [Director] shall fund a standby trust in accordance with the
provisions of 40 CFR 280.112, in an amount not to exceed the coverage
limits specified above.
    If [owner or operator] fails to satisfy a judgment or award based
on a determination of liability for bodily injury or property damage to
third parties caused by [``sudden'' and/or ``nonsudden''] accidental
releases arising from the operation of the above-identified tank(s), or
fails to pay an amount agreed to in settlement of a claim arising from
or alleged to arise from such injury or damage, the guarantor, upon
written instructions from the [Director], shall fund a standby trust in
accordance with the provisions of 40 CFR 280.112 to satisfy such
judgment(s), award(s), or settlement agreement(s) up to the limits of
coverage specified above.
    (4) Guarantor agrees that if, at the end of any fiscal year before
cancellation of this guarantee, the guarantor fails to meet the
financial test criteria of 40 CFR 280.95(b) or (c) and (d), guarantor
shall send within 120 days of such failure, by certified mail, notice
to [owner or operator]. The guarantee will terminate 120 days from the
date of receipt of the notice by [owner or operator], as evidenced by
the return receipt.
    (5) Guarantor agrees to notify [owner or operator] by certified
mail of a voluntary or involuntary proceeding under Title 11
(Bankruptcy), U.S. Code naming guarantor as debtor, within 10 days
after commencement of the proceeding.
    (6) Guarantor agrees to remain bound under this guarantee
notwithstanding any modification or alteration of any obligation of
[owner or operator] pursuant to 40 CFR part 280.
    (7) Guarantor agrees to remain bound under this guarantee for so
long as [owner or operator] must comply with the applicable financial
responsibility requirements of 40 CFR part 280, subpart H for the
above-identified tank(s), except that guarantor may cancel this
guarantee by sending notice by certified mail to [owner or operator],
such cancellation to become effective no earlier than 120 days after
receipt of such notice by [owner or operator], as evidenced by the
return receipt.
    (8) The guarantor's obligation does not apply to any of the
following:
    (a) Any obligation of [insert owner or operator] under a workers'
compensation, disability benefits, or unemployment compensation law or
other similar law;
    (b) Bodily injury to an employee of [insert owner or operator]
arising from, and in the course of, employment by [insert owner or
operator];
    (c) Bodily injury or property damage arising from the ownership,
maintenance, use, or entrustment to others of any aircraft, motor
vehicle, or watercraft;
    (d) Property damage to any property owned, rented, loaded to, in
the care, custody, or control of, or occupied by [insert owner or
operator] that is not the direct result of a release from a petroleum
underground storage tank;
    (e) Bodily damage or property damage for which [insert owner or
operator] is obligated to pay damages by reason of the assumption of
liability in a contract or agreement other than a contract or agreement
entered into to meet the requirements of 40 CFR 280.93.
    (9) Guarantor expressly waives notice of acceptance of this
guarantee by [the implementing agency], by any or all third parties, or
by [owner or operator].
    I hereby certify that the wording of this guarantee is identical to
the wording specified in 40 CFR 280.96(c) as such regulations were
constituted on the effective date shown immediately below.

Effective date:____________

[Name of guarantor]

[Authorized signature for guarantor]

[Name of person signing]

[Title of person signing]
-----------------------------------------------------------------------

Signature of witness or notary:

    (d) An owner or operator who uses a guarantee to satisfy the
requirements of Sec.  280.93 must establish a standby trust fund when
the guarantee is obtained. Under the terms of the guarantee, all
amounts paid by the guarantor under the guarantee will be deposited
directly into the standby trust fund in accordance with instructions
from the Director of the implementing agency under Sec.  280.112. This
standby trust fund must meet the requirements specified in Sec.
280.103.

Sec.  280.97  Insurance and risk retention group coverage.

    (a) An owner or operator may satisfy the requirements of Sec.
280.93 by obtaining liability insurance that conforms to the
requirements of this section from a qualified insurer or risk

retention group. Such insurance may be in the form of a separate
insurance policy or an endorsement to an existing insurance policy.
    (b) Each insurance policy must be amended by an endorsement worded
as specified in paragraph (b)(1) of this section, or evidenced by a
certificate of insurance worded as specified in paragraph (b)(2) of
this section, except that instructions in brackets must be replaced
with the relevant information and the brackets deleted:

    (1) Endorsement.

Name: [name of each covered location]
-----------------------------------------------------------------------
-----------------------------------------------------------------------

Address: [address of each covered location]
-----------------------------------------------------------------------
-----------------------------------------------------------------------

Policy Number:
-----------------------------------------------------------------------
-----------------------------------------------------------------------

Period of Coverage: [current policy period]
-----------------------------------------------------------------------
-----------------------------------------------------------------------

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

Address of [Insurer or Risk Retention Group]:
-----------------------------------------------------------------------
-----------------------------------------------------------------------

Name of Insured:
-----------------------------------------------------------------------
-----------------------------------------------------------------------

Address of Insured:
-----------------------------------------------------------------------
-----------------------------------------------------------------------

     Endorsement:

    1. This endorsement certifies that the policy to which the
endorsement is attached provides liability insurance covering the
following underground storage tanks:
    [List the number of tanks at each facility and the name(s) and
address(es) of the facility(ies) where the tanks are located. If more
than one instrument is used to assure different tanks at any one
facility, for each tank covered by this instrument, list the tank
identification number provided in the notification submitted pursuant
to 40 CFR 280.22, or the corresponding state requirement, and the name
and address of the facility.] for [insert: ``taking corrective action''
and/or ``compensating third parties for bodily injury and property
damage caused by'' either ``sudden accidental releases'' or ``nonsudden
accidental releases'' or ``accidental releases''; in accordance with
and subject to the limits of liability, exclusions, conditions, and
other terms of the policy; if coverage is different for different tanks
or locations, indicate the type of coverage applicable to each tank or
location] arising from operating the underground storage tank(s)
identified above.
    The limits of liability are [insert the dollar amount of the ``each
Occurrence'' and ``annual aggregate'' limits of the Insurer's or
Group's liability; if the amount of coverage is different for different
types of coverage or for different underground storage tanks or
locations, indicate the amount of coverage for each type of coverage
and/or for each underground storage tank or location], exclusive of
legal defense costs, which are subject to a separate limit under the
policy. This coverage is provided under [policy number]. The effective
date of said policy is [date].
    2. The insurance afforded with respect to such occurrences is
subject to all of the terms and conditions of the policy; provided,
however, that any provisions inconsistent with subsections (a) through
(e) of this Paragraph 2 are hereby amended to conform with subsections
(a) through (e);
    a. Bankruptcy or insolvency of the insured shall not relieve the
[``Insurer'' or ``Group''] of its obligations under the policy to which
this endorsement is attached.
    b. The [``Insurer'' or ``Group''] is liable for the payment of
amounts within any deductible applicable to the policy to the provider
of corrective action or a damaged third-party, with a right of
reimbursement by the insured for any such payment made by the
[``Insurer'' or ``Group'']. This provision does not apply with respect
to that amount of any deductible for which coverage is demonstrated
under another mechanism or combination of mechanisms as specified in 40
CFR 280.95-280.102 and 280.104-280.107.
    c. Whenever requested by [a Director of an implementing agency],
the [``Insurer'' or ``Group''] agrees to furnish to [the Director] a
signed duplicate original of the policy and all endorsements.
    d. Cancellation or any other termination of the insurance by the
[``Insurer'' or ``Group''], except for non-payment of premium or
misrepresentation by the insured, will be effective only upon written
notice and only after the expiration of 60 days after a copy of such
written notice is received by the insured. Cancellation for non-payment
of premium or misrepresentation by the insured will be effective only
upon written notice and only after expiration of a minimum of 10 days
after a copy of such written notice is received by the insured.

[Insert for claims-made policies:
    e. The insurance covers claims otherwise covered by the policy that
are reported to the [``Insurer'' or ``Group''] within six months of the
effective date of cancellation or non-renewal of the policy except
where the new or renewed policy has the same retroactive date or a
retroactive date earlier than that of the prior policy, and which arise
out of any covered occurrence that commenced after the policy
retroactive date, if applicable, and prior to such policy renewal or
termination date. Claims reported during such extended reporting period
are subject to the terms, conditions, limits, including limits of
liability, and exclusions of the policy.]
    I hereby certify that the wording of this instrument is identical
to the wording in 40 CFR 280.97(b)(1) and that the [``Insurer'' or
``Group''] 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 or Risk Retention
Group]
[Name of person signing]
[Title of person signing], Authorized Representative of [name of
Insurer or Risk Retention Group]

[Address of Representative]

    (2) Certificate of Insurance.

Name: [name of each covered location]
-----------------------------------------------------------------------
-----------------------------------------------------------------------

Address: [address of each covered location]
-----------------------------------------------------------------------
-----------------------------------------------------------------------

Policy Number:
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Endorsement (if applicable):
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Period of Coverage: [current policy period]
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Name of [Insurer or Risk Retention Group]:
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Address of [Insurer or Risk Retention Group]:
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Name of Insured:
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Address of Insured:
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------

     Certification:

    1. [Name of Insurer or Risk Retention Group], [the ``Insurer'' or
``Group''], as identified above, hereby certifies that it

has issued liability insurance covering the following underground
storage tank(s):
    [List the number of tanks at each facility and the name(s) and
address(es) of the facility(ies) where the tanks are located. If more
than one instrument is used to assure different tanks at any one
facility, for each tank covered by this instrument, list the tank
identification number provided in the notification submitted pursuant
to 40 CFR 280.22, or the corresponding state requirement, and the name
and address of the facility.] for [insert: ``taking corrective action''
and/or ``compensating third parties for bodily injury and property
damage caused by'' either ``sudden accidental releases'' or ``nonsudden
accidental releases'' or ``accidental releases''; in accordance with
and subject to the limits of liability, exclusions, conditions, and
other terms of the policy; if coverage is different for different tanks
or locations, indicate the type of coverage applicable to each tank or
location] arising from operating the underground storage tank(s)
identified above.
    The limits of liability are [insert the dollar amount of the ``each
occurrence'' and ``annual aggregate'' limits of the Insurer's or
Group's liability; if the amount of coverage is different for different
types of coverage or for different underground storage tanks or
locations, indicate the amount of coverage for each type of coverage
and/or for each underground storage tank or location], exclusive of
legal defense costs, which are subject to a separate limit under the
policy. This coverage is provided under [policy number]. The effective
date of said policy is [date].
    2. The [``Insurer'' or ``Group''] further certifies the following
with respect to the insurance described in Paragraph 1:
    a. Bankruptcy or insolvency of the insured shall not relieve the
[``Insurer'' or ``Group''] of its obligations under the policy to which
this certificate applies.
    b. The [``Insurer'' or ``Group''] is liable for the payment of
amounts within any deductible applicable to the policy to the provider
of corrective action or a damaged third-party, with a right of
reimbursement by the insured for any such payment made by the
[``Insurer'' or ``Group'']. This provision does not apply with respect
to that amount of any deductible for which coverage is demonstrated
under another mechanism or combination of mechanisms as specified in 40
CFR 280.95-280.102 and 280.104-280.107.
    c. Whenever requested by [a Director of an implementing agency],
the [``Insurer'' or ``Group''] agrees to furnish to [the Director] a
signed duplicate original of the policy and all endorsements.
    d. Cancellation or any other termination of the insurance by the
[``Insurer'' or ``Group''], except for non-payment of premium or
misrepresentation by the insured, will be effective only upon written
notice and only after the expiration of 60 days after a copy of such
written notice is received by the insured. Cancellation for non-payment
of premium or misrepresentation by the insured will be effective only
upon written notice and only after expiration of a minimum of 10 days
after a copy of such written notice is received by the insured.
    [Insert for claims-made policies]:
    e. The insurance covers claims otherwise covered by the policy that
are reported to the [``Insurer'' or ``Group''] within six months of the
effective date of cancellation or non-renewal of the policy except
where the new or renewed policy has the same retroactive date or a
retroactive date earlier than that of the prior policy, and which arise
out of any covered occurrence that commenced after the policy
retroactive date, if applicable, and prior to such policy renewal or
termination date. Claims reported during such extended reporting period
are subject to the terms, conditions, limits, including limits of
liability, and exclusions of the policy.]
    I hereby certify that the wording of this instrument is identical
to the wording in 40 CFR 280.97(b)(2) and that the [``Insurer'' or
``Group''] 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 or Risk
Retention Group]
[Address of Representative]

    (c) Each insurance policy must be issued by an insurer or a risk
retention group that, at a minimum, 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.

Sec.  280.98  Surety bond.

    (a) An owner or operator may satisfy the requirements of Sec.
280.93 by obtaining a surety bond that conforms to the requirements of
this section. The surety company issuing the bond must be among those
listed as acceptable sureties on federal bonds in the latest Circular
570 of the U.S. Department of the Treasury.
    (b) The surety bond must be worded as follows, except that
instructions in brackets must be replaced with the relevant information
and the brackets deleted:
Performance Bond
Date bond executed:
-----------------------------------------------------------------------

Period of coverage:
-----------------------------------------------------------------------

Principal: [legal name and business address of owner or operator]
-----------------------------------------------------------------------

Type of organization: [insert ``individual,'' ``joint venture,''
``partnership,'' or ``corporation'']
-----------------------------------------------------------------------

State of incorporation (if applicable):
-----------------------------------------------------------------------

Surety(ies): [name(s) and business address(es)]
-----------------------------------------------------------------------

Scope of Coverage: [List the number of tanks at each facility and the
name(s) and address(es) of the facility(ies) where the tanks are
located. If more than one instrument is used to assure different tanks
at any one facility, for each tank covered by this instrument, list the
tank identification number provided in the notification submitted
pursuant to 40 CFR 280.22, or the corresponding state requirement, and
the name and address of the facility. List the coverage guaranteed by
the bond: ``taking corrective action'' and/or ``compensating third
parties for bodily injury and property damage caused by'' either
``sudden accidental releases'' or ``nonsudden accidental releases'' or
``accidental releases'' ``arising from operating the underground
storage Tank''].

    Penal sums of bond:

Per occurrence $
-----------------------------------------------------------------------

Annual aggregate $
-----------------------------------------------------------------------

Surety's bond number:
-----------------------------------------------------------------------

    Know All Persons by These Presents, that we, the Principal and
Surety(ies), hereto are firmly bound to [the implementing agency], in
the above penal sums 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 sums 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 sums
only as is set forth opposite the name of such Surety, but if no limit
of liability is indicated, the limit of liability shall be the full
amount of the penal sums.
    Whereas said Principal is required under Subtitle I of the Solid
Waste Disposal Act, as amended, to provide financial assurance for
[insert: ``taking corrective action'' and/or ``compensating third
parties for bodily injury and property damage caused by'' either
``sudden accidental releases'' or ``nonsudden accidental releases'' or
``accidental releases''; if coverage is different for different tanks
or locations, indicate the type of coverage applicable to each tank or
location] arising from operating the underground storage tanks
identified above, and
    Whereas said Principal shall establish a standby trust fund as is
required when a surety bond is used to provide such financial
assurance;
    Now, therefore, the conditions of the obligation are such that if
the Principal shall faithfully [``take corrective action, in accordance
with 40 CFR part 280, subpart F and the Director of the state
implementing agency's instructions for,'' and/or ``compensate injured
third parties for bodily injury and property damage caused by'' either
``sudden accidental releases'' or ``nonsudden accidental releases'' or
``accidental releases''] arising from operating the tank(s) identified
above, or if the Principal shall provide alternate financial assurance,
as specified in 40 CFR part 280, subpart H, within 120 days after the
date the notice of cancellation is received by the Principal from the
Surety(ies), then this obligation shall be null and void; otherwise it
is to remain in full force and effect.
    Such obligation does not apply to any of the following:
    (a) Any obligation of [insert owner or operator] under a workers'
compensation, disability benefits, or unemployment compensation law or
other similar law;
    (b) Bodily injury to an employee of [insert owner or operator]
arising from, and in the course of, employment by [insert owner or
operator];
    (c) Bodily injury or property damage arising from the ownership,
maintenance, use, or entrustment to others of any aircraft, motor
vehicle, or watercraft;
    (d) Property damage to any property owned, rented, loaned to, in
the care, custody, or control of, or occupied by [insert owner or
operator] that is not the direct result of a release from a petroleum
underground storage tank;
    (e) Bodily injury or property damage for which [insert owner or
operator] is obligated to pay damages by reason of the assumption of
liability in a contract or agreement other than a contract or agreement
entered into to meet the requirements of 40 CFR 280.93.
    The Surety(ies) shall become liable on this bond obligation only
when the Principal has failed to fulfill the conditions described
above.
    Upon notification by [the Director of the implementing agency] that
the Principal has failed to [``take corrective action, in accordance
with 40 CFR part 280, subpart F and the Director's instructions,'' and/
or ``compensate injured third parties''] as guaranteed by this bond,
the Surety(ies) shall either perform [``corrective action in accordance
with 40 CFR part 280 and the Director's instructions,'' and/or ``third-
party liability compensation''] or place funds in an amount up to the
annual aggregate penal sum into the standby trust fund as directed by
[the Regional Administrator or the Director] under 40 CFR 280.112.
    Upon notification by [the Director] that the Principal has failed
to provide alternate financial assurance within 60 days after the date
the notice of cancellation is received by the Principal from the
Surety(ies) and that [the Director] has determined or suspects that a
release has occurred, the Surety(ies) shall place funds in an amount
not exceeding the annual aggregate penal sum into the standby trust
fund as directed by [the Director] under 40 CFR 280.112.
    The Surety(ies) hereby waive(s) notification of amendments to
applicable laws, statutes, rules, and regulations and agrees that no
such amendment shall in any way alleviate its (their) obligation on
this bond.
    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 annual aggregate to the penal
sum shown on the face of the bond, but in no event shall the obligation
of the Surety(ies) hereunder exceed the amount of said annual aggregate
penal sum.
    The Surety(ies) may cancel the bond by sending notice of
cancellation by certified mail to the Principal, 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, as
evidenced by the return receipt.
    The Principal may terminate this bond by sending written notice to
the Surety(ies).
    In Witness Thereof, 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 280.98(b) as such regulations were
constituted on the date this bond was executed.
Principal
[Signature(s)]
[Names(s)]
[Title(s)]
[Corporate seal]
Corporate Surety(ies)
[Name and address]
[State of Incorporation: ____]
[Liability limit: $ ____]
[Signature(s)]
[Names(s) and title(s)]
[Corporate seal]

    [For every co-surety, provide signature(s), corporate seal, and
other information in the same manner as for Surety above.]

Bond premium: $ ____

    (c) Under the terms of the bond, the surety will become liable on
the bond obligation when the owner or operator fails to perform as
guaranteed by the bond. In all cases, the surety's liability is limited
to the per-occurrence and annual aggregate penal sums.
    (d) The owner or operator who uses a surety bond to satisfy the
requirements of Sec.  280.93 must establish a standby trust fund when
the surety bond is acquired. Under the terms of the bond, all amounts
paid by the surety under the bond will be deposited directly into the
standby trust fund in accordance with instructions from the Director
under Sec.  280.112. This standby trust fund must meet the requirements
specified in Sec.  280.103.

Sec.  280.99  Letter of credit.

    (a) An owner or operator may satisfy the requirements of Sec.
280.93 by obtaining an irrevocable standby letter of credit that
conforms to the requirements of this section. The issuing institution
must be an entity that has the authority to issue letters of credit in
each state where used and whose letter-of-credit operations are
regulated and examined by a federal or state agency.
    (b) The letter of credit 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
[Name and address of issuing institution]
[Name and address of Director(s) of state implementing agency(ies)]

    Dear Sir or Madam: We hereby establish our Irrevocable Standby
Letter of Credit No. __ in your favor, at the request and for the
account of [owner or operator name] of [address] up to the aggregate
amount of [in words] U.S. dollars ($[insert dollar amount]), available
upon presentation [insert, if more than one Director of a state
implementing agency is a beneficiary, ``by any one of you''] of
    (1) your sight draft, bearing reference to this letter of credit,
No. __ and
    (2) your signed statement reading as follows: ``I certify that the
amount of the draft is payable pursuant to regulations issued under
authority of Subtitle I of the Solid Waste Disposal Act, as amended.''
    This letter of credit may be drawn on to cover [insert: ``taking
corrective action'' and/or ``compensating third parties for bodily
injury and property damage caused by'' either ``sudden accidental
releases'' or ``nonsudden accidental releases'' or ``accidental
releases''] arising from operating the underground storage tank(s)
identified below in the amount of [in words] $[insert dollar amount]
per occurrence and [in words] $[insert dollar amount] annual aggregate:
    [List the number of tanks at each facility and the name(s) and
address(es) of the facility(ies) where the tanks are located. If more
than one instrument is used to assure different tanks at any one
facility, for each tank covered by this instrument, list the tank
identification number provided in the notification submitted pursuant
to 40 CFR 280.22, or the corresponding state requirement, and the name
and address of the facility.]
    The letter of credit may not be drawn on to cover any of the
following:
    (a) Any obligation of [insert owner or operator] under a workers'
compensation, disability benefits, or unemployment compensation law or
other similar law;
    (b) Bodily injury to an employee of [insert owner or operator]
arising from, and in the course of, employment by [insert owner or
operator];
    (c) Bodily injury or property damage arising from the ownership,
maintenance, use, or entrustment to others of any aircraft, motor
vehicle, or watercraft;
    (d) Property damage to any property owned, rented, loaned to, in
the care, custody, or control of, or occupied by [insert owner or
operator] that is not the direct result of a release from a petroleum
underground storage tank;
    (e) Bodily injury or property damage for which [insert owner or
operator] is obligated to pay damages by reason of the assumption of
liability in a contract or agreement other than a contract or agreement
entered into to meet the requirements of 40 CFR 280.93.
    This letter of credit is effective as of [date] and shall expire on
[date], but such expiration date shall be automatically extended for a
period of [at least the length of the original term] on [expiration
date] and on each successive expiration date, unless, at least 120 days
before the current expiration date, we notify [owner or operator] by
certified mail that we have decided not to extend this letter of credit
beyond the current expiration date. In the event that [owner or
operator] is so notified, any unused portion of the credit shall be
available upon presentation of your sight draft for 120 days after the
date of receipt by [owner or operator], as shown on the signed return
receipt.
    Whenever this letter of credit is drawn on under and in compliance
with the terms of this credit, we shall duly honor such draft upon
presentation to us, and we shall deposit the amount of the draft
directly into the standby trust fund of [owner or operator] in
accordance with your instructions.
    We certify that the wording of this letter of credit is identical
to the wording specified in 40 CFR 280.99(b) as such regulations were
constituted on the date shown immediately below.

[Signature(s) and title(s) of official(s) of issuing institution]
[Date]

    This credit is subject to [insert ``the most recent edition of the
Uniform Customs and Practice for Documentary Credits, published and
copyrighted by the International Chamber of Commerce,'' or ``the
Uniform Commercial Code''].
    (c) An owner or operator who uses a letter of credit to satisfy the
requirements of Sec.  280.93 must also establish a standby trust fund
when the letter of credit is acquired. Under the terms of the letter of
credit, all amounts paid pursuant to a draft by the Director of the
implementing agency will be deposited by the issuing institution
directly into the standby trust fund in accordance with instructions
from the Director under Sec.  280.112. This standby trust fund must
meet the requirements specified in Sec.  280.103.
    (d) The letter of credit must be irrevocable with a term specified
by the issuing institution. The letter of credit must provide that
credit be automatically renewed for the same term as the original term,
unless, at least 120 days before the current expiration date, the
issuing institution notifies the owner or operator by certified mail of
its decision not to renew the letter of credit. Under the terms of the
letter of credit, the 120 days will begin on the date when the owner or
operator receives the notice, as evidenced by the return receipt.

Sec.  280.100  Use of state-required mechanism.

    (a) For underground storage tanks located in a state that does not
have an approved program, and where the state requires owners or
operators of underground storage tanks to demonstrate financial
responsibility for taking corrective action and/or for compensating
third parties for bodily injury and property damage, an owner or
operator may use a state-required financial mechanism to meet the
requirements of Sec.  280.93 if the Regional Administrator determines
that the state mechanism is at least equivalent to the financial
mechanisms specified in this subpart.
    (b) The Regional Administrator will evaluate the equivalency of a
state-required mechanism principally in terms of: certainty of the
availability of funds for taking corrective action and/or for
compensating third parties; the amount of funds that will be made
available; and the types of costs covered. The Regional Administrator
may also consider other factors as is necessary.
    (c) The state, an owner or operator, or any other interested party
may submit to the Regional Administrator a written petition requesting
that one or more of the state-required mechanisms be considered
acceptable for meeting the requirements of Sec.  280.93. The submission
must include copies of the appropriate state statutory and regulatory
requirements and must show the amount of funds for corrective action
and/or for compensating third parties assured by the mechanism(s). The
Regional Administrator may require the petitioner to submit additional
information as is deemed necessary to make this determination.
    (d) Any petition under this section may be submitted on behalf of
all of the state's underground storage tank owners and operators.
    (e) The Regional Administrator will notify the petitioner of his
determination regarding the mechanism's acceptability in lieu of
financial mechanisms specified in this

subpart. Pending this determination, the owners and operators using
such mechanisms will be deemed to be in compliance with the
requirements of Sec.  280.93 for underground storage tanks located in
the state for the amounts and types of costs covered by such
mechanisms.

Sec.  280.101  State fund or other state assurance.

    (a) An owner or operator may satisfy the requirements of Sec.
280.93 for underground storage tanks located in a state, where EPA is
administering the requirements of this subpart, which assures that
monies will be available from a state fund or state assurance program
to cover costs up to the limits specified in Sec.  280.93 or otherwise
assures that such costs will be paid if the Regional Administrator
determines that the state's assurance is at least equivalent to the
financial mechanisms specified in this subpart.
    (b) The Regional Administrator will evaluate the equivalency of a
state fund or other state assurance principally in terms of: Certainty
of the availability of funds for taking corrective action and/or for
compensating third parties; the amount of funds that will be made
available; and the types of costs covered. The Regional Administrator
may also consider other factors as is necessary.
    (c) The state must submit to the Regional Administrator a
description of the state fund or other state assurance to be supplied
as financial assurance, along with a list of the classes of underground
storage tanks to which the funds may be applied. The Regional
Administrator may require the state to submit additional information as
is deemed necessary to make a determination regarding the acceptability
of the state fund or other state assurance. Pending the determination
by the Regional Administrator, the owner or operator of a covered class
of USTs will be deemed to be in compliance with the requirements of
Sec.  280.93 for the amounts and types of costs covered by the state
fund or other state assurance.
    (d) The Regional Administrator will notify the state of his
determination regarding the acceptability of the state's fund or other
assurance in lieu of financial mechanisms specified in this subpart.
Within 60 days after the Regional Administrator notifies a state that a
state fund or other state assurance is acceptable, the state must
provide to each owner or operator for which it is assuming financial
responsibility a letter or certificate describing the nature of the
state's assumption of responsibility. The letter or certificate from
the state must include, or have attached to it, the following
information: the facility's name and address and the amount of funds
for corrective action and/or for compensating third parties that is
assured by the state. The owner or operator must maintain this letter
or certificate on file as proof of financial responsibility in
accordance with Sec.  280.111(b)(8).

Sec.  280.102  Trust fund.

    (a) An owner or operator may satisfy the requirements of Sec.
280.93 by establishing a trust fund that conforms to the requirements
of this section. The trustee must be an entity that has the authority
to act as a trustee and whose trust operations are regulated and
examined by a federal agency or an agency of the state in which the
fund is established.
    (b) The wording of the trust agreement must be identical to the
wording specified in Sec.  280.103(b)(1), and must be accompanied by a
formal certification of acknowledgement as specified in Sec.
280.103(b)(2).
    (c) The trust fund, when established, must be funded for the full
required amount of coverage, or funded for part of the required amount
of coverage and used in combination with other mechanism(s) that
provide the remaining required coverage.
    (d) If the value of the trust fund is greater than the required
amount of coverage, the owner or operator may submit a written request
to the Director of the implementing agency for release of the excess.
    (e) If other financial assurance as specified in this subpart is
substituted for all or part of the trust fund, the owner or operator
may submit a written request to the Director of the implementing agency
for release of the excess.
    (f) Within 60 days after receiving a request from the owner or
operator for release of funds as specified in paragraph (d) or (e) of
this section, the Director of the implementing agency will instruct the
trustee to release to the owner or operator such funds as the Director
specifies in writing.

Sec.  280.103  Standby trust fund.

    (a) An owner or operator using any one of the mechanisms authorized
by Sec. Sec.  280.96, 280.98, or 280.99 must establish a standby trust
fund when the mechanism is acquired. The trustee of the standby trust
fund must be an entity that has the authority to act as a trustee and
whose trust operations are regulated and examined by a Federal agency
or an agency of the state in which the fund is established.
    (b)(1) The standby trust agreement, or trust agreement, must be
worded as follows, except that instructions in brackets are to be
replaced with the relevant information and the brackets deleted:
Trust Agreement
    Trust agreement, the ``Agreement,'' entered into as of [date] by
and between [name of the owner or operator], a [name of state] [insert
``corporation,'' ``partnership,'' ``association,'' or
``proprietorship''], the ``Grantor,'' and [name of corporate trustee],
[insert ``Incorporated in the state of ___ '' or ``a national bank''],
the ``Trustee.''
    Whereas, the United States Environmental Protection Agency,
``EPA,'' an agency of the United States Government, has established
certain regulations applicable to the Grantor, requiring that an owner
or operator of an underground storage tank shall provide assurance that
funds will be available when needed for corrective action and third-
party compensation for bodily injury and property damage caused by
sudden and nonsudden accidental releases arising from the operation of
the underground storage tank. The attached Schedule A lists the number
of tanks at each facility and the name(s) and address(es) of the
facility(ies) where the tanks are located that are covered by the
[insert ``standby'' where trust agreement is standby trust agreement]
trust agreement.
    [Whereas, the Grantor has elected to establish [insert either ``a
guarantee,'' ``surety bond,'' or ``letter of credit''] to provide all
or part of such financial assurance for the underground storage tanks
identified herein and is required to establish a standby trust fund
able to accept payments from the instrument (This paragraph is only
applicable to the standby trust agreement.)];
    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) The term ``Grantor'' means the owner or operator who enters
into this Agreement and any successors or assigns of the Grantor.
    (b) The term ``Trustee'' means the Trustee who enters into this
Agreement and any successor Trustee.

Section 2. Identification of the Financial Assurance Mechanism
    This Agreement pertains to the [identify the financial assurance
mechanism, either a guarantee, surety bond, or letter of credit, from
which the standby trust fund is established to receive payments (This
paragraph is only applicable to the standby trust agreement.)].
Section 3. Establishment of Fund
    The Grantor and the Trustee hereby establish a trust fund, the
``Fund,'' for the benefit of [implementing agency]. The Grantor and the
Trustee intend that no third party have access to the Fund except as
herein provided. [The Fund is established initially as a standby to
receive payments and shall not consist of any property.] Payments made
by the provider of financial assurance pursuant to [the Director of the
implementing agency's] instruction are transferred to the Trustee and
are referred to as the Fund, together with all earnings and profits
thereon, less any payments or distributions made by the Trustee
pursuant to this Agreement. 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 as provider of financial
assurance, any payments necessary to discharge any liability of the
Grantor established by [the state implementing agency]
Section 4. Payment for [``Corrective Action'' and/or ``Third-Party
Liability Claims'']
    The Trustee shall make payments from the Fund as [the Director of
the implementing agency] shall direct, in writing, to provide for the
payment of the costs of [insert: ``taking corrective action'' and/or
``compensating third parties for bodily injury and property damage
caused by'' either ``sudden accidental releases'' or ``nonsudden
accidental Releases'' or ``accidental releases''] arising from
operating the tanks covered by the financial assurance mechanism
identified in this Agreement.
    The Fund may not be drawn upon to cover any of the following:
    (a) Any obligation of [insert owner or operator] under a workers'
compensation, disability benefits, or unemployment compensation law or
other similar law;
    (b) Bodily injury to an employee of [insert owner or operator]
arising from, and in the course of employment by [insert owner or
operator];
    (c) Bodily injury or property damage arising from the ownership,
maintenance, use, or entrustment to others of any aircraft, motor
vehicle, or watercraft;
    (d) Property damage to any property owned, rented, loaned to, in
the care, custody, or control of, or occupied by [insert owner or
operator] that is not the direct result of a release from a petroleum
underground storage tank;
    (e) Bodily injury or property damage for which [insert owner or
operator] is obligated to pay damages by reason of the assumption of
liability in a contract or agreement other than a contract or agreement
entered into to meet the requirements of 40 CFR 280.93.
    The Trustee shall reimburse the Grantor, or other persons as
specified by [the Director], from the Fund for corrective action
expenditures and/or third-party liability claims in such amounts as
[the Director] shall direct in writing. In addition, the Trustee shall
refund to the Grantor such amounts as [the Director] specifies in
writing. Upon refund, such funds shall no longer constitute part of the
Fund as defined herein.
Section 5. Payments Comprising the Fund
    Payments made to the Trustee for the Fund shall consist of cash and
securities acceptable to the Trustee.
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 general
investment policies and guidelines which the Grantor may communicate in
writing to the Trustee from time to time, subject, however, to the
provisions of this Section. In investing, reinvesting, exchanging,
selling, and managing the Fund, the Trustee shall discharge his duties
with respect to the trust fund solely in the interest of the
beneficiaries and with the care, skill, prudence, and diligence under
the circumstances then prevailing which persons of prudence, acting in
a like capacity and familiar with such matters, would use in the
conduct of an enterprise of a like character and with like aims; except
that:
    (i) Securities or other obligations of the Grantor, or any other
owner or operator of the tanks, 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; and
    (iii) The Trustee is authorized to hold cash awaiting investment or
distribution uninvested for a reasonable time and without liability for
the payment of interest thereon.
Section 7. Commingling and Investment
    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, commingled, 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 commingled 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 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;
    (c) 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 depository even though, when so
deposited, such securities may be merged and held in bulk in the name
of the nominee of such depository with other securities deposited
therein by another person, or

to deposit or arrange for the deposit of any securities issued by the