9VAC25-590 Petroleum Underground Storage Tank Financial Responsibility Requirements

REGULATIONS

Vol. 29 Iss. 26 - August 26, 2013

TITLE 9. ENVIRONMENT

STATE WATER CONTROL BOARD

Chapter 590

Fast-Track Regulation

Title of Regulation: 9VAC25-590. Petroleum Underground Storage Tank Financial Responsibility Requirements (amending 9VAC25-590-10, 9VAC25-590-170, 9VAC25-590-190, 9VAC25-590-200, Appendix IX; adding 9VAC25-590-105, Appendix XIII).

Statutory Authority: §§ 62.1-44.34:9 and 62.1-44.34:12 of the Code of Virginia; 40 CFR Part 280.

Public Hearing Information: No public hearings are scheduled.

Public Comment Deadline: September 25, 2013.

Effective Date: October 10, 2013.

Agency Contact: Debra Harris, Department of Environmental Quality, 629 East Main Street, P.O. Box 1105, Richmond, VA 23218, telephone [phone], FAX [phone], TTY [phone], or email [e-mail].

Basis: Section 62.1-44.15 of the Code of Virginia provides the legal basis for the regulations in 9VAC25-590 (Petroleum Underground Storage Tank Financial Responsibility Requirements). Specifically, § 62.1-44.34:9 of the Code of Virginia authorizes the State Water Control Board to promulgate such regulations as may be necessary to carry out its powers and duties with regard to underground storage tanks (USTs) in accordance with federal laws and regulations. Further, § 62.1-44.34:12 of the Code of Virginia provides the direct authority to the State Water Control Board to promulgate regulations that conform to the federal UST financial responsibility requirements of 42 USC § 6991b(d) and any regulations adopted thereunder.

Purpose: The rationale for the addition of the certificate of deposit to 9VAC25-590 (Petroleum Underground Storage Tank Financial Responsibility Requirements) is to provide additional flexibility for the owners or operators of USTs when meeting their financial responsibility requirements. This amendment will provide another mechanism for owners and operators of USTs to prove financial responsibility. Currently, many owners and operators that use a letter of credit are required by the bank to collateralize the letter of credit with a certificate of deposit, and these banks charge a fee to establish the letter of credit and an annual maintenance fee to carry it. These fees can be burdensome to individuals and businesses having funds tied up as collateral and not available for business needs. Additionally, the value of the certificate of deposit will also increase over time providing more funds for business needs.

Rationale for Using Fast-Track Process: The proposed amendments are expected to be noncontroversial and therefore justify using the fast-track rulemaking process. The amendments to this regulation will allow owners or operators of USTs to use certificates of deposits to meet their financial responsibility requirements under 9VAC25-590.

Substance: This regulatory action amends 9VAC25-640 to add a certificate of deposit (CD) as an acceptable mechanism to demonstrate financial responsibility for owners and operators of USTs. 9VAC25-590-105 and Appendix XIII are added to this regulation to provide the requirements necessary for owners or operators that choose to use a CD for their financial responsibility requirements. Other sections within the regulation are amended to add CDs to the list of mechanisms that may be used for financial responsibility.

Issues: The public will benefit from these amendments because they ensure that owners or operators of USTs have more options for establishing their financial responsibility for taking corrective action and for compensating third parties for injury or property damage from accidental releases arising from the operation of petroleum USTs. There is no disadvantage to the agency or the Commonwealth that will result from the adoption of these amendments to 9VAC25-590.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. The State Water Control Board (Board) proposes to add a certificate of deposit (CD) as an acceptable mechanism to demonstrate financial responsibility for owners and operators of Petroleum Underground Storage Tanks (USTs). Result of Analysis. The benefits likely exceed the costs for all proposed changes.

Estimated Economic Impact. State Water Control Law (Section 62.1-44.34:12 A) requires that owners and operators of USTs annually demonstrate and maintain evidence of financial responsibility for taking corrective action and for compensating third parties in case of leaks. These regulations specify the financial responsibility requirements for USTs. Under the current regulations, owners and operators may use any one or combination of the following mechanisms to demonstrate financial responsibility: (1) financial test of self-insurance, (2) guarantee, (3) insurance, (4) surety bond, (5) letter of credit, or (6) trust fund. Further details are specified in the regulations. The Board proposes to add a CD to the list acceptable mechanisms.

Banks charge a fee to establish a letter of credit and an annual maintenance fee to carry it. Additionally, the Department of Environmental Quality (DEQ) has found that many owners and operators of USTs who use a letter of credit are required by the bank to collateralize the letter of credit with a CD. Thus, directly permitting a CD as an acceptable mechanism could save costs for owners and operators who currently use a letter of credit.

According to DEQs 2012 survey of banks in Virginia that currently issue letters of credit to owners and operators, the cost to set up and maintain a new CD will be either no cost or have a very low fee compared to the charge for setting up and maintaining letters of credit. Owners and operators who can afford to put up the full amount of cash required to fund their financial responsibility requirement may not have to pay any origination or annual fees to the bank and they would earn interest on the CD. Many banks currently charge application fees of 1.0% to 1.5% of the total letter of credit amount with a minimum fee of $450 to $500. Additionally, banks charge owners and operators an annual fee of $450 to $500 on the anniversary date of the letter of credit.¹ Letters of credit that are secured with real estate also have additional costs associated with the loan.

If owners and operators switch from a letter of credit to a certificate of deposit mechanism, the total cost savings could be substantial. Since allowing the use of a CD to demonstrate financial responsibility potentially reduces costs for some owners and operators with no apparent reduction in assurance of financial responsibility, the proposed amendment should produce a net benefit.

Businesses and Entities Affected. The proposed amendment potentially affects the approximately 3,000 petroleum underground storage tank owners and operators in the Commonwealth, as well as their banks.²

Localities Particularly Affected. As there are petroleum underground storage tanks throughout the Commonwealth, the proposed amendment does not particularly affect a few specific localities.

Projected Impact on Employment. The proposed amendment will not likely have a large impact on employment.

Effects on the Use and Value of Private Property.

The proposed amendment will likely result in some owners and operators of USTs who currently use another mechanism to demonstrate financial responsibility to switch to using a CD. Those owners and operators who currently use a letter of credit seem particularly likely to switch in that it will very likely lower their costs.

Small Businesses: Costs and Other Effects. The proposed amendment will likely reduce costs for small owners and operators of USTs who currently use a letter of credit to demonstrate financial responsibility.

Small Businesses: Alternative Method that Minimizes Adverse Impact. The proposed amendments do not adversely affect small businesses.

Real Estate Development Costs. The proposed amendment will not significantly affect real estate development costs.

Legal Mandate. The Department of Planning and Budget (DPB) has analyzed the economic impact of this proposed regulation in accordance with § 2.2-4007.04 of the Administrative Process Act and Executive Order Number 14 (10). Section 2.2-4007.04 requires that such economic impact analyses include, but need not be limited to, a determination of the public benefit, the projected number of businesses or other entities to whom the regulation would apply, the identity of any localities and types of businesses or other entities particularly affected, the projected number of persons and employment positions to be affected, the projected costs to affected businesses or entities to implement or comply with the regulation, and the impact on the use and value of private property. Further, if the proposed regulation has an adverse effect on small businesses, § 2.2-4007.04 requires that such economic impact analyses include (i) an identification and estimate of the number of small businesses subject to the regulation; (ii) the projected reporting, recordkeeping, and other administrative costs required for small businesses to comply with the regulation, including the type of professional skills necessary for preparing required reports and other documents; (iii) a statement of the probable effect of the regulation on affected small businesses; and (iv) a description of any less intrusive or less costly alternative methods of achieving the purpose of the regulation. T The analysis presented above represents DPB's best estimate of these economic impacts.

__________________________________________

¹ Data source: Department of Environmental Quality

² Ibid

Agency's Response to Economic Impact Analysis: The State Water Control Board has reviewed the economic impact analysis prepared by the Department of Planning and Budget and has no comment.

Summary:

The amendments to 9VAC25-640 (Petroleum Underground Storage Tank Financial Responsibility Requirements) (i) add a certificate of deposit (CD) as an acceptable mechanism to demonstrate financial responsibility for owners or operators of underground storage tanks (USTs) and (ii) provide requirements necessary for owners or operators that choose to use a CD for their financial responsibility requirements. Since the UST program is federal and the State Water Control Board must have federal Environmental Protection Agency (EPA) approval to administer it, the addition of the CD as a mechanism may have to be approved by EPA, as it is not in the federal regulation.

9VAC25-590-10. Definitions.

The following words and terms when used in this chapter shall have the following meanings unless the context clearly indicates otherwise:

"Accidental release" means any sudden or nonsudden release of petroleum from an underground storage tank that results in a need for corrective action or compensation for bodily injury or property damage, or both, neither expected nor intended by the tank owner or operator.

"Annual aggregate" means the maximum financial responsibility requirement that an owner or operator is required to demonstrate annually.

"Board" means the State Water Control Board.

"Bodily injury" means the death or injury of any person incident to an accidental release from a petroleum underground storage tank; but not including any death, disablement, or injuries covered by workers' compensation, disability benefits or unemployment compensation law or other similar law. Bodily injury may include payment of medical, hospital, surgical, and funeral expenses arising out of the death or injury of any person. 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.

"Controlling interest" means direct ownership of at least 50% of the voting stock of another entity.

"Corrective action" means all actions necessary to abate, contain and cleanup a release from an underground storage tank to mitigate the public health or environmental threat from such releases and to rehabilitate state waters in accordance with Parts V (9VAC25-580-190 et seq.) and VI (9VAC25-580-230 et seq.) of 9VAC25 Chapter 580, Underground Storage Tanks: Technical Standards and Corrective Action Requirements. The term does not include those actions normally associated with closure or change in service as set out in Part VII (9VAC25-580-320 et seq.) of 9VAC25 Chapter 580 or the replacement of an underground storage tank.

"Facility" means any development or installation within the Commonwealth that deals in, stores or handles oil, and includes a pipeline.

"Financial reporting year" means the latest consecutive 12-month period for which any of the following reports used to support a financial test is prepared: (i) a 10 K report submitted to the U.S. Securities and Exchange Commission (SEC); (ii) an annual report of tangible net worth submitted to Dun and Bradstreet; (iii) annual reports submitted to the Energy Information Administration or the Rural Utilities Service; or (iv) a year-end financial statement authorized under 9VAC25-590-60 B or C of this chapter. "Financial reporting year" may thus comprise a fiscal or calendar year period.

"Gallons of petroleum pumped" means either the amount pumped into or the amount pumped out of a petroleum underground storage tank.

"Group self-insurance pool" or "pool" means a pool organized by two or more owners and/or operators of underground storage tanks for the purpose of forming a group self-insurance pool in order to demonstrate financial responsibility as required by § 62.1-44.34:12 of the Code of Virginia.

"Legal defense cost" is any expense that an owner or operator or provider of financial assurance incurs in defending against claims or actions brought (i) by the federal government or the board to require corrective action or to recover the costs of corrective action, or to collect civil penalties under federal or state law or to assert any claim on behalf of the Virginia Petroleum Storage Tank Fund; (ii) by or on behalf of a third party for bodily injury or property damage caused by an accidental release; or (iii) by any person to enforce the terms of a financial assurance mechanism.

"Local government" means a municipality, county, town, commission, separately chartered and operated special district, school board, political subdivision of a state, or other special purpose government which provides essential services.

"Member" means an owner or operator of an underground storage tank who has entered into a member agreement and thereby becomes a member of a group self-insurance pool.

"Member agreement" means the written agreement executed between each member and the pool, which sets forth the conditions of membership in the pool, the obligations, if any, of each member to the other members, and the terms, coverages, limits, and deductibles of the pool plan.

"Occurrence" means an accident, including continuous or repeated exposure to conditions, which results in a release from an underground storage tank.

NOTE: This definition is intended to assist in the understanding of this chapter 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."

"Operator" means any person in control of, or having responsibility for, the daily operation of the UST system.

"Owner" means:

1. In the case of an UST system in use on November 8, 1984, or brought into use after that date, any person who owns an UST system used for storage, use, or dispensing of regulated substances; and

2. In the case of any UST system in use before November 8, 1984, but no longer in use on that date, any person who owned such UST immediately before the discontinuation of its use.

The term "owner" shall not include any person, who, without participating in the management of an underground storage tank or being otherwise engaged in petroleum production, refining, and marketing, holds indicia of ownership primarily to protect the holder's security interest in the tank.

"Owner" or "operator," when the owner or operator are separate parties, refers to the person who that is obtaining or has obtained financial assurances.

"Person" means an individual, trust, firm, joint stock company, corporation, including a government corporation, partnership, association, any state or agency thereof, municipality, county, town, commission, political subdivision of a state, any interstate body, consortium, joint venture, commercial entity, the government of the United States or any unit or agency thereof.

"Petroleum" means petroleum, including crude oil or any fraction thereof, that is liquid at standard conditions of temperature and pressure (60°F and 14.7 pounds per square inch absolute).

"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.

"Petroleum marketing firms" means all firms owning petroleum marketing facilities. Firms owning other types of facilities with USTs as well as petroleum marketing facilities are considered to be petroleum marketing firms.

"Pool plan" means the plan of self-insurance offered by the pool to its members as specifically designated in the member agreement.

"Property damage" means the loss or destruction of, or damage to, the property of any third party including any loss, damage or expense incident to an accidental release from a petroleum underground storage tank. 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 a person that provides financial assurance to an owner or operator of an underground storage tank through one of the mechanisms listed in 9VAC25-590-60 through 9VAC25-590-110 and 9VAC25-590-250, including a guarantor, insurer, group self-insurance pool, surety, or issuer of a letter of credit or certificate of deposit.

"Release" means any spilling, leaking, emitting, discharging, escaping, leaching or disposing from an UST into ground water, surface water, or upon lands, subsurface soils or storm drain systems.

"Responsible person" means any person who is an owner or operator of an underground storage tank at the time the release is reported to the board.

"Substantial business relationship" means the extent of a business relationship necessary under Virginia 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.

"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 Appendix III and Appendix IV 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.

"Underground storage tank" or "UST" means any one or combination of tanks (including underground pipes connected thereto) that is used to contain an accumulation of regulated substances, and the volume of which (including the volume of underground pipes connected thereto) is 10% or more beneath the surface of the ground. This term does not include any:

1. Farm or residential tank of 1,100 gallons or less capacity used for storing motor fuel for noncommercial purposes;

2. Tank used for storing heating oil for consumption on the premises where stored;

3. Septic tank;

4. Pipeline facility (including gathering lines) regulated under:

a. The Natural Gas Pipeline Safety Act of 1968 (49 USC App. 1671, et seq.),

b. The Hazardous Liquid Pipeline Safety Act of 1979 (49 USC App. 2001, et seq.), or

c. Which is an intrastate pipeline facility regulated under state laws comparable to the provisions of the law referred to in subdivision 4 a or 4 b of this definition;

5. Surface impoundment, pit, pond, or lagoon;

6. Stormwater or wastewater collection system;

7. Flow-through process tank;

8. Liquid trap or associated gathering lines directly related to oil or gas production and gathering operations; or

9. Storage tank situated in an underground area (such as a basement, cellar, mineworking, drift, shaft, or tunnel) if the storage tank is situated upon or above the surface of the floor.

The term "underground storage tank" or "UST" does not include any pipes connected to any tank which is described in subdivisions 1 through 9 of this definition.

"UST system" or "tank system" means an underground storage tank, connected underground piping, underground ancillary equipment, and containment system, if any.

"9VAC25-580" means the Underground Storage Tanks: Technical Standards and Corrective Action Requirements regulation promulgated by the board.

9VAC25-590-105. Certificate of deposit.

A. An owner or operator may satisfy the requirements of 9VAC25-590-40, wholly or in part, by assigning all rights, title, and interest of a certificate of deposit to the State Water Control Board, Commonwealth of Virginia. The owner or operator shall maintain the certificate of deposit until the requirements of 9VAC25-590-180 are met. The original assignment and the certificate of deposit, if applicable, must be submitted to the board to prove that the certificate of deposit has been obtained and meets the requirements of this section. A copy of the certificate of deposit shall be maintained at the underground storage tank site or the owner's or operator's place of work located in Virginia. The issuing institution shall be a bank or other financial institution whose deposits are insured by the Federal Deposit Insurance Corporation (FDIC) and whose operations are regulated and examined by the Commonwealth of Virginia, by a federal agency, or by an agency of another state.

B. The owner or operator shall be entitled to demand, receive, and recover the interest and income from the certificate of deposit as it becomes due and payable as long as the market value of the certificate of deposit plus any other mechanisms used continue to at least equal the amount of financial responsibility the owner or operator is required to demonstrate under 9VAC25-590-40.

C. In the event of failure of the owner or operator to comply with the requirements of 9VAC25-590-140, the board shall cash the certificate of deposit.

D. Payments made under the terms of the certificate of deposit will be deposited by the issuing institution directly into the Virginia Petroleum Storage Tank Fund. Payments from the fund shall be approved by the board.

E. The wording of the assignment shall be identical to the wording specified in Appendix XIII.

9VAC25-590-170. Drawing on financial assurance mechanism.

A. Except as specified in subsection D of this section, the board may require the guarantor, surety, or institution issuing a letter of credit or certificate of deposit to pay to the board an amount up to the limit of funds provided by the financial assurance mechanism if:

1. a. The owner or operator fails to establish alternate financial assurance within 60 days after receiving notice of cancellation of the guarantee, surety bond, letter of credit, or certificate of deposit; or

2. The conditions of subsection B of this section are satisfied.

B. The board shall deposit the financial assurance funds forfeited pursuant to subsection A of this section into the Virginia Petroleum Storage Tank Fund. The board may use the financial responsibility funds obtained pursuant to subsection A of this section to conduct corrective action or to pay a third party claim when:

1. The board makes a final determination that a release has occurred and immediate or long-term corrective action for the release is needed, and the owner or operator, after appropriate notice and opportunity to comply, has not conducted corrective action as required under Part VI (9VAC25-580-230 et seq.); or

2. The board has received either:

a. Certification from the owner or operator and the third party liability claimant or claimants and from attorneys representing the owner or operator and the third party liability claimant or claimants that a third party liability claim should be paid. The certification shall be worded identically as specified in Appendix X, except that instructions in brackets are to be replaced with the relevant information and the brackets deleted; or

b. A valid final court order establishing a judgment against the owner or operator for bodily injury or property damage caused by an accidental release from an underground storage tank covered by financial assurance under this chapter and the board determines that the owner or operator has not satisfied the judgment.

C. If the board determines that the amount of corrective action costs and third party liability claims eligible for payment under subsection B of this section may exceed the obligation of the provider of financial assurance, the first priority for payment shall be corrective action costs necessary to protect human health and the environment. The board shall direct payment of the financial responsibility funds for third party liability claims in the order in which the board receives certifications under subdivision B 2 a of this section and valid court orders under subdivision B 2 b of this section.

D. A local government acting as guarantor under 40 CFR 280.106(e) (1997) (as incorporated by reference in 9VAC25-590-250), the local government guarantee without standby trust, shall make payments as directed by the board under the circumstances described in subsection A, B or C of this section.

9VAC25-590-190. Bankruptcy or other incapacity of owner, operator or provider of financial assurance.

A. Within 10 days after commencement of a voluntary or involuntary proceeding under Title 11 (Bankruptcy), U.S. Code, naming an owner or operator as debtor, the owner or operator shall notify the board by certified mail of such commencement and submit the appropriate forms listed in 9VAC25-590-160 B documenting current financial responsibility.

B. Within 10 days after commencement of a voluntary or involuntary proceeding under Title 11 (Bankruptcy), U.S. Code, naming a guarantor providing financial assurance as debtor, such guarantor shall notify the owner or operator and the board by certified mail of such commencement as required under the terms of the guarantee specified in 9VAC25-590-70.

C. Within 10 days after commencement of a voluntary or involuntary proceeding under Title 11 (Bankruptcy), U.S. Code, naming a local government owner or operator as debtor, the local government owner or operator shall notify the board by certified mail of such commencement and submit the appropriate forms listed in 9VAC25-590-160 B documenting current financial responsibility.

D. Within 10 days after commencement of a voluntary or involuntary proceeding under Title 11 (Bankruptcy), U.S. Code, naming a guarantor providing a local government financial assurance as debtor, such guarantor shall notify the local government owner or operator and the board by certified mail of such commencement as required under the terms of the guarantee specified in 40 CFR 280.106 (1997) (as incorporated by reference in 9VAC25-590-250).

E. An owner or operator who that obtains financial assurance by a mechanism other than the financial test of self-insurance will be deemed to be without the required financial assurance in the event of a bankruptcy or incapacity of its provider of financial assurance, or a suspension or revocation of the authority of the provider of financial assurance to issue a guarantee, insurance policy, group self-insurance pool plan, surety bond, or letter of credit, or certificate of deposit. The owner or operator shall obtain alternate financial assurance as specified in this regulation within 30 days after receiving notice of such an event. If the owner or operator does not obtain alternate coverage within 30 days after such notification, he shall immediately notify the board in writing.

F. Within 30 days after receipt of written notification that the Virginia Petroleum Storage Tank Fund has become incapable of covering assured corrective action or third party compensation costs, the owner or operator shall obtain alternate financial assurance in accordance with 9VAC25-590-40.

9VAC25-590-200. Replenishment of guarantees, letters of credit, certificates of deposit, or surety bonds.

A. If at any time a letter of credit, certificate of deposit, surety bond, or guarantee is drawn upon by instruction of the board and the board has expended all or part of the funds for corrective action or to pay a third party liability claim(s), the owner or operator by the anniversary date of the financial assurance mechanism shall:

1. Replenish the value of the financial assurance mechanism to equal the full amount of coverage required; or

2. Acquire another financial assurance mechanism for the amount by which the face value of the letter of credit, certificate of deposit, surety bond, or guarantee has been reduced.

B. For purposes of this section, the full amount of coverage required is the amount of coverage to be provided by 9VAC25-590-40. If a combination of mechanisms was used to provide the assurance funds which were drawn upon, replenishment shall occur by the earliest anniversary date among the mechanisms.

APPENDIX IX. CERTIFICATION OF FINANCIAL RESPONSIBILITY.

[Note: The instructions in brackets are to be replaced by the relevant information and the brackets deleted.]

[Owner or operator] hereby certifies that it is in compliance with the requirements of 9VAC25-590 (Petroleum Underground Storage Tank Financial Requirements Regulation).

The financial assurance mechanism[s] used to demonstrate financial responsibility under 9VAC25-590 is [are] as follows:

Indicate type of Mechanism (Note: the Fund may not be used as the sole mechanism):

____ Virginia Petroleum Storage Tank Fund ("the Fund")

____ Letter from Chief Financial Officer

____ Guarantee

____ Insurance Endorsement or Certificate

____ Letter of Credit

____ Certificate of Deposit

____ Surety Bond

____ Trust Fund

Name of Issuer (for mechanism other than the Fund): ______________________________

Mechanism Number (if applicable):_____________________

Demonstration amount for mechanism other than the Fund:

$______________ corrective action per occurrence

$______________ third party liability per occurrence

$______________ annual aggregate

The Virginia Petroleum Storage Tank Fund demonstrates amounts for corrective action per occurrence, third party liability per occurrence, and annual aggregate, in excess of the amounts demonstrated by the "mechanism other than the Fund" up to one million dollars. In the event that the owner/operator owns/operates in excess of 100 USTs in the Commonwealth of Virginia, the Fund demonstrates up to an annual aggregate of two million dollars.

Mechanisms' effective period of coverage: _______________ to _______________

(If you are using either the Financial Test or the Guarantee, please indicate the current financial reporting year, e.g., 1/01/02—12/31/02, if you use the calendar year as your financial reporting year, or other dates if you operate under a different fiscal year. If you are using a Letter of Credit, a Certificate of Deposit, a Surety Bond, or an Insurance Policy, please indicate the annually renewable term of the applicable mechanism.)

Do(es) mechanism(s) cover(s): 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? ____ Yes ____ No

If "No," specify in the following space the items the mechanism covers:

[Signature of owner or operator]

[Name of owner or operator] [Title] [Date]

[Signature of notary]

[Name of notary] [Date] My Commission expires:

APPENDIX XIII. ASSIGNMENT OF CERTIFICATE OF DEPOSIT ACCOUNT.

[Note: The instructions in brackets are to be replaced by the relevant information and the brackets deleted.]

[Name and Address of Bank]

City _______________________ ____________, 20__

___ FOR VALUE RECEIVED, the undersigned assigns all right, title, and interest to the State Water Control Board, Commonwealth of Virginia, and its successors and assigns the State Water Control Board the principal amount of the instrument, including all moneys deposited now or in the future to that instrument, indicated below:

__If checked here, this assignment includes all interest now and hereafter accrued.

Certificate of Deposit Account No. _____________________

This assignment is given as security to the State Water Control Board in the amount of _______________________ Dollars [$_____________].

Continuing Assignment. This assignment shall continue to remain in effect for all subsequent terms of the automatically renewable certificate of deposit.

Assignment of Document. The undersigned also assigns any certificate or other document evidencing ownership to the State Water Control Board.

Additional Security. This assignment shall secure the payment of any financial obligation of the [name of owner/operator] to the State Water Control Board for "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] corrective action per occurrence, [in words] $[insert dollar amount] third party liability 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 9VAC25-580-70 ("Notification requirements" of the Underground Storage Tanks: Technical Standards and Corrective Action Requirements), and the name and address of the facility.]

The certificate of deposit 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 9VAC25-590-40 ("Amount and scope of financial responsibility requirement" of the Virginia Petroleum Underground Storage Tank Financial Responsibility Requirements).

Application of Funds. The undersigned agrees that all or any part of the funds of the indicated account or instrument may be applied to the payment of any and all financial responsibility obligations of [name of owner/operator] to the State Water Control Board for "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) at the [facility name and address]. The undersigned authorizes the State Water Control Board to withdraw any principal amount on deposit in the indicated account or instrument including any interest, if indicated, and to apply it in the State Water Control Board's discretion to fund "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) at the [facility name] or in the event of [owner or operator's] failure to comply with the Petroleum Underground Storage Tank Financial Responsibility Requirements, 9VAC25-590. The undersigned agrees that the State Water Control Board may withdraw any principal and/or interest from the indicated account or instrument without demand or notice. [The undersigned] agrees to assume any and all loss of penalty due to federal regulations concerning the early withdrawal of funds. Any partial withdrawal of principal or interest shall not release this assignment.

The party or parties to this Assignment set their hand or seals, or if corporate, has caused this assignment to be signed in its corporate name by its duly authorized officers and its seal to be affixed by authority of its Board of Directors the day and year above written.

The party or parties to this Assignment also certify that the wording of this Assignment is identical to the wording specified in Appendix XIII of 9VAC25-590 as such regulations were constituted on the date this Assignment was executed.

		SEAL
[Owner/Operator signature]
[print Owner or Operator's name]		[Date]
		SEAL
[Owner/Operator signature]
[print Owner or Operator's name]		[Date]

THE FOLLOWING SECTION IS TO BE COMPLETED BY THE BRANCH OR LENDING OFFICE:

The signature(s) as shown above compare correctly with the name(s) as shown on record as owner(s) of the Certificate of Deposit indicated above. The above assignment has been properly recorded by placing a hold in the amount of $ _______________________ for the benefit of the State Water Control Board, Commonwealth of Virginia.

__ If checked here, the accrued interest on the Certificate of Deposit indicated above has been maintained to capitalize versus being mailed by check or transferred to a deposit account.

[Signature]		[Date]
[print name]
[Title]
Mailing address of branch or lending office
Area code and telephone number of branch or lending office

VA.R. Doc. No. R13-3471; Filed August 7, 2013, 8:27 a.m.