Owners and operators of
regulated underground
storage tanks (USTs) on tribal
lands must comply with the
federal UST regulation.
This compliance assistance
brochure highlights tips for
demonstrating financial
responsibility.
Note: This document is a
resource to promote
compliance and does not
replace the federal UST
regulation.
This brochure is one in a
series of EPA compliance
assistance brochures
designed to help owners and
operators in Indian country
comply with the federal UST
regulation.
Other brochures focus on
implementation, compatibility,
spill buckets, overfill
protection, recordkeeping and
notification, insurance, and
tank and piping release
detection.
Inspect
oEPA
Office of Underground Storage Tanks
www.epa.gov/ust
July 2018
EPA-510-F-18-003
Compliance Assistance In
Indian Country

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FINANCIAL RESPONSIBILITY
Financial responsibility (FR) means you must
ensure money will be available to pay for clean-
up costs, bodily injury, and property damages
caused by releases from regulated underground
storage tanks (UST) that you own or operate.
You must maintain FR until your USTs are per-
manently closed or cleanup 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
Per Occurrence
Coverage
Aggregate
Coverage
Petroleum
producers,
refiners, or
marketers
$1 million
$1 million for
100 or fewer
tanks
or
$2 million for
more than 100
tanks
Nonmarketers
$500,000 - monthly
throughput 10,000
gallons or less
or
$1 million - monthly
throughput is more
than 10,000 gallons
How can you demonstrate FR?
Tribal governments can:
Use a bond rating test
Self insure to demonstrate FR by passing
the criteria described in 40 CFR 280.104.
Use a financial test
Self insure to demonstrate FR by passing
the criteria described in 40 CFR 280.105.
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 in
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. Unspent money is
returned to the funding source.
Use a dedicated fund
Tribal governments may administer a
dedicated fund if they meet the eligibility
requirements described in 40 CFR 280.107.
Tribal and private owners and operators can:
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; and
Includes an endorsement or certificate that
becomes part of the policy stating coverage
amount, purpose, and other conditions.
Rely on a state fund
Go to https://www.epa.gov/ust/underground-
storaae-tank-ust-contacts 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
in 40 CFR 280.95.
Obtain a corporate guarantee
Obtain a guarantee from a business with
which you have a substantial relationship
described in 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 that guarantees payment for clean
up or third-party damages.
Obtain a surety bond
Obtain a surety bond that guarantees pay-
ment for clean up or 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. Unspent money 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's financial
statements are combined.
Do you need a separate FR document for
each facility?
No. However, you will need to show that all regu-
lated USTs at all your facilities are covered.
Do you need to submit FR documents?
Yes. 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. The required wording can
be found on page 13 in EPA's Dollars And
Sense: Financial Responsibility Requirements
for Underground Storage Tanks.
Keep records of all FR documents on-site or
make them available upon request. A list of
the required documents can be found in
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 or order free copies by
calling (800) 490-9198.	

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