N.Y. Comp. Codes R. & Regs. Tit. 6 §§ 613-8.7

Current through Register Vol. 46, No. 45, November 2, 2024

Section 613-8.7 - Use and maintenance of financial assurance mechanisms

(a)Drawing on financial assurance mechanisms.

(1) Except as specified in paragraph (4) of this subdivision, the Commissioner of the Department will require the guarantor, surety, or institution issuing a letter of credit to place the amount of funds stipulated by the Commissioner, up to the limit of funds provided by the financial assurance mechanism, into the standby trust if:

(i)

(a) the tank system 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, as applicable, other financial assurance mechanism; and

(b) the Commissioner determines or suspects that a leak from an underground storage tank covered by the mechanism has occurred and so notifies the tank system owner or operator, or the tank system owner or operator has notified the Commissioner pursuant to subdivision 2.4(e), section 5.4, or Subpart 7 of this Part, of a leak from an underground storage tank covered by the mechanism; or

(ii) the conditions of subparagraph (2)(i), or clause (2)(ii)(a) or (b) of this subdivision are satisfied.

(2) The Commissioner of the Department may draw on a standby trust fund when:

(i) the Commissioner makes a final determination that a release has occurred and immediate or long-term corrective action for the release is needed, and the tank system owner or operator, after appropriate notice and opportunity to comply, has not conducted corrective action as required under Subpart 7 of this Part; or

(ii) the Commissioner has received one of the following:

(a) Certification from the tank system owner or operator and the third-party liability claimant(s) and from attorneys representing the tank system owner or operator and the third-party liability claimant(s) that a third-party liability claim should be paid. The certification must be worded as follows, except that the instructions in brackets must be replaced with the relevant information and the brackets deleted:

Certification of Valid Claim

The undersigned, as principals and as legal representatives of [insert: owner or operator] and [insert: name and address of third-party claimant], hereby certify that the claim of bodily injury [and/or] property damage caused by an accidental release arising from operating [owner's or operator"s] underground storage tank should be paid in the amount of $[___].

[Signatures]

[Tank system owner or operator]

[Attorney for tank system owner or operator]

(Notary)

Date

[Signatures]

Claimant(s)

Attorney(s) for Claimant(s)

(Notary)

Date

(b) A valid final court order establishing a judgment against the tank system 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 Subpart and the Commissioner determines that the tank system owner or operator has not satisfied the judgment.

(3) If the Commissioner of the Department determines that the amount of corrective action costs and third-party liability claims eligible for payment under paragraph (b) of this section may exceed the balance of the standby trust fund and the obligation of the provider of financial assurance, the first priority for payment will be corrective action costs necessary to protect human health and the environment. The Commissioner will pay third-party liability claims in the order in which the Commissioner receives certifications under clause (2)(ii)(a) of this subdivision, and valid court orders under clause (2)(ii)(b) of this subdivision.

(4) A governmental entity acting as guarantor under subparagraph 8.4(d)(10)(v) of this Subpart, and the local government guarantee without standby trust must make payments as directed by the Commissioner under the circumstances described in paragraphs (1), (2), and (3) of this subdivision.

(b)Release from the requirements. A tank system owner or operator is no longer required to maintain financial responsibility under this Subpart for an underground storage tank after the tank has been permanently closed or, if corrective action is required, after corrective action has been completed and the tank has been permanently closed, in accordance with subdivision 2.6(b) or section 5.6 of this Part.

(c)Bankruptcy or other incapacity of tank system owner or operator, or provider of financial assurance.

(1) Within ten days after commencement of a voluntary or involuntary proceeding under Title 11 (Bankruptcy), U.S. Code, naming a tank system owner or operator as debtor, the tank system owner or operator must notify the Commissioner of the Department by certified mail of such commencement and submit the appropriate forms listed under subdivision 8.6(b) of this Subpart documenting current financial responsibility.

(2) Within ten 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 must notify the tank system owner or operator by certified mail of such commencement as required under the terms of the guarantee specified in paragraph 8.4(d)(2) of this Subpart.

(3) Within ten days after commencement of a voluntary or involuntary proceeding under Title 11 (Bankruptcy), U.S. Code, naming a local government tank system owner or operator as debtor, the local government tank system owner or operator must notify the Commissioner of the Department by certified mail of such commencement and submit the appropriate forms listed under subdivision 8.6(b) of this Subpart documenting current financial responsibility.

(4) Within ten 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 must notify the local government tank system owner or operator by certified mail of such commencement as required under the terms of the guarantee specified in 8.4(d)(10).

(5) A tank system owner or operator who 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, risk retention group coverage policy, surety bond, letter of credit, or state-required mechanism. The tank system owner or operator must obtain alternate financial assurance as specified in this Subpart within 30 days after receiving notice of such an event. If the tank system owner or operator does not obtain alternate coverage within 30 days after such notification, they must notify the Commissioner of the Department.

(6) Within 30 days after receipt of notification that a state fund or other state assurance has become incapable of paying for assured corrective action or third-party compensation costs, the tank system owner or operator must obtain alternate financial assurance.

(d)Replenishment of guarantees, letters of credit, or surety bonds.

(1) If at any time after a standby trust is funded upon the instruction of the Commissioner of the Department with funds drawn from a guarantee, local government guarantee with standby trust, letter of credit, or surety bond, and the amount in the standby trust is reduced below the full amount of coverage required, the tank system owner or operator must, by the anniversary date of the financial mechanism from which the funds were drawn:

(i) replenish the value of financial assurance to equal the full amount of coverage required; or

(ii) acquire another financial assurance mechanism for the amount by which funds in the standby trust have been reduced.

(2) For purposes of this subdivision, the full amount of coverage required is the amount of coverage to be provided by section 8.3 of this Subpart. If a combination of mechanisms was used to provide the assurance funds which were drawn upon, replenishment must occur by the earliest anniversary date among the mechanisms.

N.Y. Comp. Codes R. & Regs. Tit. 6 §§ 613-8.7

Adopted New York State Register July 19, 2023/Volume XLV Issue 29, eff. 10/17/2023