Owners and operators of
regulated underground
storage tanks (USTs) on tribal
lands must comply with
federal UST regulations.
This compliance assistance
brochure highlights best
management practices for
demonstrating financial
responsibility.
Note: This document is a
resource to promote
compliance and does not
replace the federal UST
regulations.
EPA developed this
brochure to help UST
owners and operators in
Indian country comply with
the federal UST regulations.
This brochure is one in a
series of EPA compliance
assistance brochures
designed to help owners and
operators comply with UST
regulations.
Other brochures focus on
spill buckets, overfill
protection, recordkeeping and
notification, insurance, and
tank and piping release
detection.
www.eDa.aov/oust/Dubs
&EPA
Office of Underground Storage Tanks
www.epa.gov/oust
August 2013
EPA-510-F-13-001
Compliance Assistance In
Indian Country
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FINANCIAL RESPONSIBILITY
Financial responsibility (FR) means you must
ensure money will be available to clean up leaks
and pay others for bodily injury or property
damage caused by releases from regulated
petroleum underground storage tanks (LIST) that
you own or operate. You must maintain FR until
your USTs are permanently closed or clean up
(if required) is completed.
How much coverage do you need?
The amount of coverage you need depends on
the:
^ Type of business you operate;
^ Amount of throughput of your tank; and
^ Number of tanks you have.
Type Of UST
Owner And
Operator
Petroleum
producers,
refiners, or
marketers
Nonmarketers
Per Occurrence
Coverage
$1 million
$500,000 -monthly
throughput 10,000
gallons or less
$1 million - monthly
throughput is more
than 10,000 gallons
Aggregate
Coverage
$1 million for
100 or fewer
tanks or
$2 million for
more than 100
tanks
How can you demonstrate FR?
Tribal governments may:
Use a bond rating test
^ Self insure to demonstrate FR by passing
the criteria described at 40 CFR 280.104.
Use a financial test
^ Self insure to demonstrate FR by passing
the criteria described at 40 CFR 280.105.
By using the mechanisms above, you are
expected to be able to pay for corrective action
and third-party compensation obligations.
Obtain governmental guarantee
^ Obtain a guarantee from the local tribal
government or another government with
which you have a substantial relationship ,
using the requirements described at
40 CFR 280.106.
The guarantee must pass the same tests
required for bond rating, financial, and dedicated
fund FR mechanisms.
A standby trust fund may need to be established
when using a guarantee. Money not used is re-
turned to the funding source.
Use a dedicated fund
^ Tribal governments may administer a
dedicated fund if they meet the eligibility
requirements described at 40 CFR 280.107.
Tribal and Private owners and operators may:
Obtain insurance coverage via a policy that:
^ Excludes legal defense costs from the
required amount of coverage;
^ Provides first dollar coverage;
^ Provides a six month extended reporting
period for claims-made policies;
^ Includes an endorsement or certificate
stating coverage amount, purpose, and other
conditions that become part of the policy.
Rely on a state fund
^ Go to www.epa.qov/oust/states/statcon1.htm
and contact the state to determine if there is
a fund and whether you can use it.
Use a financial test
^ Self insure to demonstrate FR by passing the
criteria for one of the financial tests described
at 40 CFR 280.95.
Obtain a corporate guarantee
^ Obtain a guarantee from a business with
which you have a substantial relationship
described at 40 CFR 280.96. The guarantee
provider must pass the same financial test
required for self-insurance.
Obtain a letter of credit
^ Obtain a letter of credit from a financial
institution (like a bank) that guarantees
payment for cleaning up a release or paying
third parties.
Obtain a surety bond
^ Obtain a surety bond guarantee to pay for
clean up or pay for third party damages.
A standby trust fund must be established when
using a corporate guarantee, letter of credit, or
surety bond to show your FR. Money not used is
returned to the funding source.
Can you combine mechanisms?
Yes. You can use several methods to show FR.
However, you cannot combine a financial test of
self-insurance and a corporate guarantee if the
owner or operator and guarantor financial
statements are combined.
Do you need a separate FR document for
each facility?
No. However, you will need to show that your
coverage is for all regulated USTs at all your
facilities.
Do you need to submit FR documents?
You need to submit FR documents:
^ Within 30 days after finding a release; or
^ For failing to obtain required alternate
coverage; or
^ As required by the implementing agency.
What records should you keep?
^ Maintain an updated copy of a certification of
FR signed by the owner or operator and a
witness or notary. Required language for
endorsements and certifications can be found
on pages 10-11 in EPA's Dollars and Sense
at www.epa.qov/oust/pubs/dolsens.pdf. Keep
one of these documents as part of your policy.
^ Keep records of all FR documents on-site or
make them available upon request. A list of
the required documents can be found at
40 CFR 280.111.
For a summary of UST owners' and
operators' financial responsibilities under
federal UST regulations, see EPA's Dollars
and Sense: Financial Responsibility
Requirements for Underground Storage
Tanks at
www.epa.gov/oust/pubs/dollars.htm or order
free copies by calling (800) 490-9198.
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