Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

1

PART 280 -- TECHNICAL STANDARDS AND CORRECTIVE ACTION 

REQUIREMENTS FOR OWNERS AND OPERATORS OF UNDERGROUND 

STORAGE TANKS (UST)

Subpart A – Program Scope and Interim Prohibition

Sec.

280.10 Applicability.

280.11 Interim prohibition for deferred UST systems.

280.12 Definitions.

Subpart B – UST Systems: Design, Construction, Installation and Notification

280.20 Performance standards for new UST systems.

280.21 Upgrading of existing UST systems.

280.22 Notification requirements.

Subpart C – General Operating Requirements

280.30 Spill and overfill control.

280.31 Operation and maintenance of corrosion protection.

280.32 Compatibility.

280.33 Repairs allowed.

280.34 Reporting and recordkeeping.

280.35 Periodic testing of spill and overfill prevention equipment.

280.36 Periodic testing of secondary containment.

280.37 Periodic operation and maintenance walkthrough inspections.

Subpart D – Release Detection

280.40 General requirements for all UST systems.

280.41 Requirements for petroleum UST systems. 

280.42 Requirements for hazardous substance UST systems.

280.43 Methods of release detection for tanks.

280.44 Methods of release detection for piping.

280.45 Release detection recordkeeping.

280.46 Alternative methods of release detection for field-constructed tanks.

280.47 Alternative methods of release detection for bulk piping.

Subpart E – Release Reporting, Investigation, and Confirmation

280.50 Reporting of suspected releases.

280.51 Investigation due to off-site impacts.

280.52 Release investigation and confirmation steps.

280.53 Reporting and cleanup of spills and overfills.
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

2

Subpart F – Release Response and Corrective Action for UST Systems Containing 

Petroleum or Hazardous Substances

280.60 General.

280.61 Initial response. 

280.62 Initial abatement measures and site check.

280.63 Initial site characterization. 

280.64 Free product removal. 

280.65 Investigations for soil and ground-water cleanup.

280.66 Corrective action plan.

280.67 Public participation.

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

280.70 Temporary closure.

280.71 Permanent closure and changes-in-service.

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

280.73 Applicability to previously closed UST systems.

280.74 Closure records.

Subpart H – Financial Responsibility

280.90 Applicability.

280.91 Compliance dates.

280.92 Definition of terms.

280.93 Amount and scope of required financial responsibility.

280.94 Allowable mechanisms and combinations of mechanisms.

280.95 Financial test of self-insurance.

280.96 Guarantee.

280.97 Insurance and risk retention group coverage.

280.98 Surety bond.

280.99 Letter of credit.

280.100 Use of state-required mechanism.

280.101 State fund or other state assurance.

280.102 Trust fund.

280.103 Standby trust fund.

280.104 Local government bond rating test.

280.105 Local government financial test.

280.106 Local government guarantee.

280.107 Local government fund.

280.108 Substitution of financial assurance mechanisms by owner or operator.

280.109 Cancellation or nonrenewal by a provider or financial assurance.

280.110 Reporting by owner or operator.

280.111 Recordkeeping.

280.112 Drawing on financial assurance mechanisms.

280.113 Release from the requirements.
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

3

280.114 Bankruptcy or other incapacity of owner or operator or provider of financial assurance. 

280.115 Replenishment of guarantees, letters of credit, or surety bonds.

280.116 Suspension of enforcement. [Reserved]

Subpart I – Lender Liability

280.200 Definitions.

280.210 Participation in management.

280.220 Ownership of an underground storage tank or underground storage tank system or 

facility or property on which an underground storage tank or underground storage tank system is 

located.

280.30 Operating an underground storage tank or underground storage tank system.

Subpart J – Operator Training

280.240 General requirement for all UST systems.

280.241 Designation of operators. 

280.242 Requirements for operator training.

280.243 Timing of operator training.

280.244 Retraining.

280.245 Documentation.

Appendices to Part 280

Appendix I to Part 280 – Notification for Underground Storage Tanks (Form)

Appendix II to Part 280 – Notification of Ownership Change for Underground Storage Tanks

(Form)

Appendix III to Part 280 – Statement for Shipping Tickets and Invoices 

Authority: 42 USC 6912, 6991, 6991(a), 6991(b), 6991(c), 6991(d), 6991(e), 6991(f), 6991(g), 

6991(h), 6991(i).
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

4

Subpart A -- Program Scope and Interim Prohibition

§ 280.10 Applicability.

(a) The requirements of this part apply to all owners and operators of an UST system as 

defined in § 280.12 except as otherwise provided in paragraphs (b) and (c) of this section.

(1) Previously deferred UST systems. UST systems previously deferred from subparts B, 

C, D, E, G and H (airport hydrant fuel distribution systems, UST systems with field-constructed 

tanks, and wastewater treatment tank systems) and UST systems previously deferred from 

subpart D (UST systems that store fuel solely for use by emergency power generators) must 

begin meeting the requirements of this part as follows: 

(i) UST systems installed on or before [effective date of rule] must meet the schedule in 

the following table.

Type Of UST System Subpart Or Section Effective Date

UST systems that store fuel 

solely for use by emergency

power generators

D [1 Year after effective date of 

rule]

Airport hydrant fuel 

distribution systems; UST 

systems with field-constructed 

tanks; and wastewater 

treatment tank systems

B (except § 280.22) and C [3 Years after effective date of 

rule]

D See the phase in schedule in § 

280.40(c)

§ 280.22 of subpart B, E, G 

and H

[effective date of rule]

(ii) UST systems installed after [effective date of rule] must meet all requirements at 

installation. 

 (2) Any UST system listed in paragraph (c) of this section must meet the requirements of § 

280.11.

(b) The following UST systems are excluded from the requirements of this part:

(1) Any UST system holding hazardous wastes listed or identified under Subtitle C of the 

Solid Waste Disposal Act, or a mixture of such hazardous waste and other regulated substances.

(2) Any wastewater treatment tank system that is part of a wastewater treatment facility 

regulated under Section 402 or 307(b) of the Clean Water Act.

(3) Equipment or machinery that contains regulated substances for operational purposes 

such as hydraulic lift tanks and electrical equipment tanks.

(4) Any UST system whose capacity is 110 gallons or less.
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

5

(5) Any UST system that contains a de minimis concentration of regulated substances.

(6) Any emergency spill or overflow containment UST system that is expeditiously

emptied after use.

(c) Deferrals. Subparts B, C, D, E, and G of this part do not apply to:

(1) Aboveground tanks associated with:

(i) Airport hydrant fuel distribution systems; and 

(ii) UST systems with field-constructed tanks;

(2) Any UST systems containing radioactive material that are regulated under the Atomic 

Energy Act of 1954 (42 USC 2011 and following); and

(3) Any UST system that is part of an emergency generator system at nuclear power 

generation facilities regulated by the Nuclear Regulatory Commission under 10 CFR part 50.

§ 280.11 Interim prohibition for deferred UST systems.

(a) No person may install an UST system listed in § 280.10(c) for the purpose of storing 

regulated substances unless the UST system (whether of single- or double-wall construction):

(1) Will prevent releases due to corrosion or structural failure for the operational life of 

the UST system;

(2) Is cathodically protected against corrosion, constructed of noncorrodible material, 

steel clad with a noncorrodible material, or designed in a manner to prevent the release or 

threatened release of any stored substance; and

(3) Is constructed or lined with material that is compatible with the stored substance.

(b) Notwithstanding paragraph (a) of this section, an UST system without corrosion 

protection may be installed at a site that is determined by a corrosion expert not to be corrosive 

enough to cause it to have a release due to corrosion during its operating life. Owners and 

operators must maintain records that demonstrate compliance with the requirements of this 

paragraph for the remaining life of the tank.

Note to paragraphs (a) and (b): The following codes of practice may be used as guidance 

for complying with this section:

(A) NACE International Recommended Practice RP 0285, "Corrosion Control of 

Underground Storage Systems by Cathodic Protection”;
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

6

(B) NACE International Standard Practice SP 0169, “Control of External Corrosion on 

Underground or Submerged Metallic Piping Systems”; 

(C) American Petroleum Institute Recommended Practice 1632, "Cathodic Protection of 

Underground Petroleum Storage Tanks and Piping Systems"; or 

(D) Steel Tank Institute Recommended Practice R892, “Recommended Practice for 

Corrosion Protection of Underground Piping Networks Associated with Liquid Petroleum 

Storage and Dispensing Systems”.

§ 280.12 Definitions.

Aboveground release means any release to the surface of the land or to surface water. This 

includes, but is not limited to, releases from the above-ground portion of an UST system and 

aboveground releases associated with overfills and transfer operations as the regulated substance 

moves to or from an UST system.

Airport hydrant fuel distribution system means an UST system that is a combination of one 

or more tanks directly connected to underground hydrant piping used to fuel aircraft. These 

systems do not have a dispenser at the end of the piping run, but rather have a hydrant (fill 

stand). If an aboveground storage tank (AST) is feeding an intermediary tank or tanks, this 

definition does not include the AST, but does include all underground piping entering and 

leaving the intermediary tank(s) and the intermediary tank(s). Intermediary tanks are those tanks 

directly connected to the hydrant piping.

Ancillary equipment means any devices including, but not limited to, such devices as 

piping, fittings, flanges, valves, and pumps used to distribute, meter, or control the flow of 

regulated substances to and from an UST.

Belowground release means any release to the subsurface of the land and to ground water. 

This includes, but is not limited to, releases from the belowground portions of an underground 

storage tank system and belowground releases associated with overfills and transfer operations as 

the regulated substance moves to or from an underground storage tank.

Beneath the surface of the ground means beneath the ground surface or otherwise covered 

with earthen materials.

Cathodic protection is a technique to prevent corrosion of a metal surface by making that 

surface the cathode of an electrochemical cell. For example, a tank system can be cathodically 

protected through the application of either galvanic anodes or impressed current.

Cathodic protection tester means a person who can demonstrate an understanding of the 

principles and measurements of all common types of cathodic protection systems as applied to 

buried or submerged metal piping and tank systems. At a minimum, such persons must have 

education and experience in soil resistivity, stray current, structure-to-soil potential, and 

component electrical isolation measurements of buried metal piping and tank systems.
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

7

CERCLA means the Comprehensive Environmental Response, Compensation, and 

Liability Act of 1980, as amended.

Class A operator means the individual who has primary responsibility to operate and 

maintain the UST system in accordance with applicable requirements established by the 

implementing agency. The Class A operator typically manages resources and personnel, such as 

establishing work assignments, to achieve and maintain compliance with regulatory

requirements. 

Class B operator means the individual who has day-to-day responsibility for implementing 

applicable regulatory requirements established by the implementing agency. The Class B 

operator typically implements in-field aspects of operation, maintenance, and associated 

recordkeeping for the UST system. 

Class C operator means the employee responsible for initially addressing emergencies 

presented by a spill or release from an UST system. The Class C operator typically controls or 

monitors the dispensing or sale of regulated substances. 

Compatible means the ability of two or more substances to maintain their respective 

physical and chemical properties upon contact with one another for the design life of the tank 

system under conditions likely to be encountered in the UST.

Connected piping means all underground piping including valves, elbows, joints, flanges, 

and flexible connectors attached to a tank system through which regulated substances flow. For 

the purpose of determining how much piping is connected to any individual UST system, the 

piping that joins two UST systems should be allocated equally between them.

Consumptive use with respect to heating oil means consumed on the premises.

Corrosion expert means a person who, by reason of thorough knowledge of the physical 

sciences and the principles of engineering and mathematics acquired by a professional education 

and related practical experience, is qualified to engage in the practice of corrosion control on 

buried or submerged metal piping systems and metal tanks. Such a person must be accredited or 

certified as being qualified by the National Association of Corrosion Engineers or be a registered 

professional engineer who has certification or licensing that includes education and experience in 

corrosion control of buried or submerged metal piping systems and metal tanks.

Dielectric material means a material that does not conduct direct electrical current. 

Dielectric coatings are used to electrically isolate UST systems from the surrounding soils. 

Dielectric bushings are used to electrically isolate portions of the UST system (e.g., tank from 

piping).

Dispenser system means equipment located aboveground that meters the amount of 

regulated substances transferred to a point of use outside the UST system, such as a motor 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

8

vehicle. This system includes the equipment necessary to connect the dispenser to the 

underground storage tank system. 

Electrical equipment means underground equipment that contains dielectric fluid that is 

necessary for the operation of equipment such as transformers and buried electrical cable.

Excavation zone means the volume containing the tank system and backfill material 

bounded by the ground surface, walls, and floor of the pit and trenches into which the UST 

system is placed at the time of installation. 

Existing tank system means a tank system used to contain an accumulation of regulated 

substances or for which installation has commenced on or before December 22, 1988. 

Installation is considered to have commenced if: 

(a) the owner or operator has obtained all federal, state, and local approvals or permits 

necessary to begin physical construction of the site or installation of the tank system; and if, 

(b)(1) either a continuous on-site physical construction or installation program has begun; 

or,

(2) the owner or operator has entered into contractual obligations--which cannot be 

cancelled or modified without substantial loss--for physical construction at the site or installation 

of the tank system to be completed within a reasonable time. 

Farm tank is a tank located on a tract of land devoted to the production of crops or raising 

animals, including fish, and associated residences and improvements. A farm tank must be 

located on the farm property. Farm includes fish hatcheries, rangeland and nurseries with 

growing operations.

Flow-through process tank is a tank that forms an integral part of a production process 

through which there is a steady, variable, recurring, or intermittent flow of materials during the 

operation of the process. Flow-through process tanks do not include tanks used for the storage of 

materials prior to their introduction into the production process or for the storage of finished 

products or by-products from the production process.

Free product refers to a regulated substance that is present as a nonaqueous phase liquid 

(e.g., liquid not dissolved in water.) 

Gathering lines means any pipeline, equipment, facility, or building used in the 

transportation of oil or gas during oil or gas production or gathering operations.

Hazardous substance UST system means an underground storage tank system that contains 

a hazardous substance defined in section 101(14) of the Comprehensive Environmental 

Response, Compensation and Liability Act of 1980 (but not including any substance regulated as 

a hazardous waste under subtitle C) or any mixture of such substances and petroleum, and which 

is not a petroleum UST system. 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

9

Heating oil means petroleum that is No. 1, No. 2, No. 4--light, No. 4--heavy, No. 5--light, 

No. 5--heavy, and No. 6 technical grades of fuel oil; other residual fuel oils (including Navy

Special Fuel Oil and Bunker C); and other fuels when used as substitutes for one of these fuel 

oils. Heating oil is typically used in the operation of heating equipment, boilers, or furnaces.

Hydraulic lift tank means a tank holding hydraulic fluid for a closed-loop mechanical 

system that uses compressed air or hydraulic fluid to operate lifts, elevators, and other similar 

devices.

Implementing agency means EPA, or, in the case of a state with a program approved under 

section 9004 (or pursuant to a memorandum of agreement with EPA), the designated state or 

local agency responsible for carrying out an approved UST program.

Liquid trap means sumps, well cellars, and other traps used in association with oil and gas 

production, gathering, and extraction operations (including gas production plants), for the 

purpose of collecting oil, water, and other liquids. These liquid traps may temporarily collect 

liquids for subsequent disposition or reinjection into a production or pipeline stream, or may

collect and separate liquids from a gas stream. 

Maintenance means the normal operational upkeep to prevent an underground storage tank 

system from releasing product. 

Motor fuel means petroleum or a petroleum-based substance that is typically used in the 

operation of a motor engine, such as motor gasoline, aviation gasoline, No. 1 or No. 2 diesel fuel, 

or any blend containing one or more of these substances (for example: motor gasoline blended 

with alcohol). 

New tank system means a tank system that will be used to contain an accumulation of 

regulated substances and for which installation has commenced after December 22, 1988. (See 

also Existing Tank System.)

Noncommercial purposes with respect to motor fuel means not for resale.

On the premises where stored with respect to heating oil means UST systems located on 

the same property where the stored heating oil is used.

Operational life refers to the period beginning when installation of the tank system has 

commenced until the time the tank system is properly closed under subpart G.

Operator means any person in control of, or having responsibility for, the daily operation 

of the UST system.

Overfill release is a release that occurs when a tank is filled beyond its capacity, resulting 

in a discharge of the regulated substance to the environment.
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

10

Owner means: (a) 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 (b) 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.

Person means an individual, trust, firm, joint stock company, federal agency, corporation, 

state, municipality, commission, political subdivision of a state, or any interstate body. "Person" 

also includes a consortium, a joint venture, a commercial entity, and the United States 

Government.

Petroleum UST system means an underground storage tank system that contains petroleum 

or a mixture of petroleum with de minimis quantities of other regulated substances. Such 

systems include those containing motor fuels, jet fuels, distillate fuel oils, residual fuel oils, 

lubricants, petroleum solvents, and used oils.

Pipe or Piping means a hollow cylinder or tubular conduit that is constructed of nonearthen materials.

Pipeline facilities (including gathering lines) are new and existing pipe rights-of-way and 

any associated equipment, facilities, or buildings. 

Regulated substance means 

(a) any substance defined in section 101(14) of the Comprehensive Environmental 

Response, Compensation and Liability Act (CERCLA) of 1980 (but not including any substance 

regulated as a hazardous waste under subtitle C), and 

(b) petroleum, including crude oil or any fraction thereof that is liquid at standard 

conditions of temperature and pressure (60 degrees Fahrenheit and 14.7 pounds per square inch 

absolute). The term "regulated substance" includes but is not limited to petroleum and 

petroleum-based substances comprised of a complex blend of hydrocarbons, such as motor fuels, 

jet fuels, distillate fuel oils, residual fuel oils, lubricants, petroleum solvents, and used oils.

Release means any spilling, leaking, emitting, discharging, escaping, leaching or disposing 

from an UST into ground water, surface water or subsurface soils.

Release detection means determining whether a release of a regulated substance has 

occurred from the UST system into the environment or into the interstitial space between the 

UST system and its secondary barrier or secondary containment around it.

Repair means to restore a tank, pipe, spill prevention equipment, overfill prevention 

equipment, corrosion protection equipment, release detection equipment or other UST system 

component that has caused a release or a suspected release of product from the UST system or 

has failed to function properly. 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

11

Replaced means

(a) for a tank - to remove a tank and install another tank.

(b) for piping - to remove 50 percent or more of piping and install other piping, excluding 

connectors, connected to a single tank. For tanks with multiple piping runs, this definition 

applies independently to each piping run.

Residential tank is a tank located on property used primarily for dwelling purposes.

SARA means the Superfund Amendments and Reauthorization Act of 1986. 

Secondary containment or Secondarily contained means a release prevention and release 

detection system for a tank and/or piping. These systems have an inner and outer barrier with an 

interstitial space that is monitored for leaks.

Septic tank is a water-tight covered receptacle designed to receive or process, through 

liquid separation or biological digestion, the sewage discharged from a building sewer. The 

effluent from such receptacle is distributed for disposal through the soil and settled solids and 

scum from the tank are pumped out periodically and hauled to a treatment facility. 

Storm-water or wastewater collection system means piping, pumps, conduits, and any

other equipment necessary to collect and transport the flow of surface water run-off resulting 

from precipitation, or domestic, commercial, or industrial wastewater to and from retention areas 

or any areas where treatment is designated to occur. The collection of storm water and 

wastewater does not include treatment except where incidental to conveyance.

Surface impoundment is a natural topographic depression, man-made excavation, or diked 

area formed primarily of earthen materials (although it may be lined with man-made materials) 

that is not an injection well.

Tank is a stationary device designed to contain an accumulation of regulated substances 

and constructed of non-earthen materials (e.g., concrete, steel, plastic) that provide structural 

support.

Training program means any program established by the implementing agency that 

provides information to and evaluates the knowledge of a Class A, Class B, or Class C operator 

regarding requirements for UST systems. 

Under-dispenser containment or UDC means containment underneath a dispenser system 

designed to prevent dispenser system leaks from reaching soil or groundwater.

Underground area means an underground room, such as a basement, cellar, shaft or vault, 

providing enough space for physical inspection of the exterior of the tank situated on or above 

the surface of the floor.
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

12

Underground release means any belowground release.

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 percent or more beneath the surface of the ground. This term does not include any:

(a) Farm or residential tank of 1,100 gallons or less capacity used for storing motor fuel 

for noncommercial purposes;

(b) Tank used for storing heating oil for consumptive use on the premises where stored;

(c) Septic tank;

(d) Pipeline facility (including gathering lines):

(1) Which is regulated under U.S.C. 49 chapters 601 and 603, or

(2) Which is an intrastate pipeline facility regulated under state laws as provided in U.S.C. 

49 chapters 601 and 603 ,

and which is determined by the Secretary of Transportation to be connected to a pipeline, or to 

be operated or intended to be capable of operating at pipeline pressure, or as an integral part of a 

pipeline;

(e) Surface impoundment, pit, pond, or lagoon;

(f) Storm-water or wastewater collection system;

(g) Flow-through process tank;

(h) Liquid trap or associated gathering lines directly related to oil or gas production and 

gathering operations; or

(i) 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 paragraphs (a) through (i) of this definition.

Upgrade means the addition or retrofit of some systems such as cathodic protection, 

lining, or spill and overfill controls to improve the ability of an underground storage tank system 

to prevent the release of product. 

UST system or Tank system means an underground storage tank, connected underground 

piping, underground ancillary equipment, and containment system, if any.
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

13

Wastewater treatment tank means a tank that is designed to receive and treat an influent 

wastewater through physical, chemical, or biological methods. 

Subpart B -- UST Systems: Design, Construction, Installation and Notification

§ 280.20 Performance standards for new UST systems.

In order to prevent releases due to structural failure, corrosion, or spills and overfills for as 

long as the UST system is used to store regulated substances, all owners and operators of new 

UST systems must meet the following requirements.

(a) Tanks. Each tank must be properly designed and constructed, and any portion 

underground that routinely contains product must be protected from corrosion, in accordance 

with a code of practice developed by a nationally recognized association or independent testing 

laboratory as specified in paragraphs (a)(1) through (a)(5) of this section. In addition, all new or 

replaced tanks where installation began after [effective date of rule] must be secondarily 

contained in accordance with paragraph (a)(6) of this section:

(1) The tank is constructed of fiberglass-reinforced plastic; or

Note to paragraph (a)(1): The following codes of practice may be used to comply with 

paragraph (a)(1) of this section: 

(A) Underwriters Laboratories Standard 1316, "Glass-Fiber-Reinforced Plastic 

Underground Storage Tanks for Petroleum Products, Alcohols, and Alcohol-Gasoline Mixtures"; 

or

(B) Underwriter's Laboratories of Canada S615, "Standard for Reinforced Plastic 

Underground Tanks for Flammable and Combustible Liquids".

(2) The tank is constructed of steel and cathodically protected in the following manner:

(i) The tank is coated with a suitable dielectric material; 

(ii) Field-installed cathodic protection systems are designed by a corrosion expert;

(iii) Impressed current systems are designed to allow determination of current operating 

status as required in § 280.31(c); and

(iv) Cathodic protection systems are operated and maintained in accordance with § 280.31 

or according to guidelines established by the implementing agency; or
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

14

Note to paragraph (a)(2): The following codes of practice may be used to comply with 

paragraph (a)(2) of this section:

(A) Steel Tank Institute Specification "sti-P3® Specification and Manual for External 

Corrosion Protection of Underground Steel Storage Tanks";

(B) Underwriters Laboratories Standard 1746, "Standard for External Corrosion 

Protection Systems for Steel Underground Storage Tanks";

(C) Underwriters Laboratories of Canada S603, "Standard for Steel Underground Tanks 

for Flammable and Combustible Liquids," and S603.1, "Standard for External Corrosion 

Protection Systems for Steel Underground Tanks for Flammable and Combustible Liquids," and 

S631, "Standard for Isolating Bushings for Steel Underground Tanks Protected with External 

Corrosion Protection Systems";

(D) Steel Tank Institute Standard F841, "Standard for Dual Wall Underground Steel 

Storage Tanks"; or

(E) NACE International Recommended Practice RP 0285, "Corrosion Control of 

Underground Storage Systems by Cathodic Protection," and Underwriters Laboratories Standard 

58, "Standard for Steel Underground Tanks for Flammable and Combustible Liquids".

(3) The tank is constructed of steel and clad or jacketed with a non-corrodible material; or

Note to paragraph (a)(3): The following codes of practice may be used to comply with 

paragraph (a)(3) of this section:

 

(A) Underwriters Laboratories Standard 1746, "Standard for External Corrosion Protection 

Systems for Steel Underground Storage Tanks";

(B) Steel Tank Institute Specification F894, “ACT-100® Specification for External

Corrosion Protection of FRP Composite Steel USTs”;

(C) Steel Tank Institute Specification F961, “ACT-100-U® Specification for External 

Corrosion Protection of Composite Steel Underground Storage Tanks”; or

(D) Steel Tank Institute Specification F922, “Steel Tank Institute Specification for 

Permatank®”.

(4) The tank is constructed of metal without additional corrosion protection measures 

provided that:

(i) The tank is installed at a site that is determined by a corrosion expert not to be 

corrosive enough to cause it to have a release due to corrosion during its operating life; and
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

15

(ii) Owners and operators maintain records that demonstrate compliance with the 

requirements of paragraph (a)(4)(i) of this section for the remaining life of the tank; or

(5) The tank construction and corrosion protection are determined by the implementing 

agency to be designed to prevent the release or threatened release of any stored regulated 

substance in a manner that is no less protective of human health and the environment than 

paragraphs (a)(1) through (4) of this section; or

(6) The tank is secondarily contained. Secondary containment must be periodically

tested in accordance with § 280.36. Secondarily contained tanks must meet the following:

(i) Be able to contain regulated substances leaked from the primary containment until 

they are detected and removed; and

(ii) Be able to prevent the release of regulated substances to the environment at any time 

during the operational life of the UST system.

Note to paragraph (a)(6): The following codes of practice may be used to comply with 

paragraph (a)(6) of this section:

(A) Underwriters Laboratories Standard 58, "Standard for Steel Underground Tanks for 

Flammable and Combustible Liquids";

(B) Underwriters Laboratories Standard 1316, "Glass-Fiber-Reinforced Plastic 

Underground Storage Tanks for Petroleum Products, Alcohols, and Alcohol-Gasoline Mixtures";

(C) Underwriters Laboratories Standard 1746, "Standard for External Corrosion Protection 

Systems for Steel Underground Storage Tanks";

(D) Steel Tank Institute Standard F841, "Standard for Dual Wall Underground Steel 

Storage Tanks"; or

(E) Steel Tank Institute Specification F922, “Steel Tank Institute Specification for 

Permatank®”.

(b) Piping. The piping that routinely contains regulated substances and is in contact with 

the ground must be properly designed, constructed, and protected from corrosion in accordance 

with a code of practice developed by a nationally recognized association or independent testing 

laboratory as specified in paragraphs (b)(1) through (b)(4) of this section. In addition, except for 

suction piping that meets the requirements of 280.41(b)(1)(ii)(A) through (E) and piping 

associated with field-constructed tanks and airport hydrant fuel distribution systems, all new or 

replaced piping where installation began after [effective date of rule] must be secondarily 

contained in accordance with paragraph (b)(5) of this section. The entire piping run must be 

replaced when 50 percent or more of a piping run is replaced.

(1) The piping is constructed of a non-corrodible material; or 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

16

Note to paragraph (b)(1): The following codes of practice may be used to comply with 

paragraph (b)(1) of this section:

(A) Underwriters Laboratories Standard 971, "Standard for Non-Metallic Underground 

Piping for Flammable Liquids"; or

(B) Underwriters Laboratories of Canada Standard S660, " Standard for Non-Metallic 

Underground Piping for Flammable Liquids".

(2) The piping is constructed of steel and cathodically protected in the following manner:

(i) The piping is coated with a suitable dielectric material;

(ii) Field-installed cathodic protection systems are designed by a corrosion expert;

(iii) Impressed current systems are designed to allow determination of current operating 

status as required in § 280.31(c); and

(iv) Cathodic protection systems are operated and maintained in accordance with § 280.31 

or guidelines established by the implementing agency; or

Note to paragraph (b)(2): The following codes of practice may be used to comply with 

paragraph (b)(2) of this section:

(A) American Petroleum Institute Recommended Practice 1632, "Cathodic Protection of 

Underground Petroleum Storage Tanks and Piping Systems";

(B) Underwriters Laboratories Subject 971A, "Outline of Investigation for Metallic 

Underground Fuel Pipe";

(C) Steel Tank Institute Recommended Practice R892, “Recommended Practice for 

Corrosion Protection of Underground Piping Networks Associated with Liquid Petroleum 

Storage and Dispensing Systems”; 

(D) NACE International Standard Practice SP 0169, "Control of External Corrosion on

Underground or Submerged Metallic Piping Systems"; or

(E) NACE International Recommended Practice RP 0285, "Corrosion Control of 

Underground Storage Systems by Cathodic Protection".

(3) The piping is constructed of metal without additional corrosion protection measures 

provided that:

(i) The piping is installed at a site that is determined by a corrosion expert to not be 

corrosive enough to cause it to have a release due to corrosion during its operating life; and
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

17

(ii) Owners and operators maintain records that demonstrate compliance with the 

requirements of paragraph (b)(3)(i) of this section for the remaining life of the piping; or

(4) The piping construction and corrosion protection are determined by the implementing 

agency to be designed to prevent the release or threatened release of any stored regulated 

substance in a manner that is no less protective of human health and the environment than the 

requirements in paragraphs (b)(1) through (3) of this section; or

(5) The piping is secondarily contained. Secondary containment must be periodically 

tested in accordance with § 280.36. Secondarily contained piping must meet the following:

(i) Be able to contain regulated substances leaked from the primary containment until 

they are detected and removed; and

(ii) Be able to prevent the release of regulated substances to the environment at any time 

during the operational life of the UST system.

Note to paragraph (b)(5): The following codes of practice may be used to comply with 

paragraph (b)(5) of this section:

(A) Underwriters Laboratories Standard 971, "Standard for Non-Metallic Underground 

Piping for Flammable Liquids"; or

(B) Underwriters Laboratories Subject 971A, "Outline of Investigation for Metallic 

Underground Fuel Pipe”.

(c) Spill and overfill prevention equipment.

(1) Except as provided in paragraphs (c)(2) and (c)(3) of this section, to prevent spilling 

and overfilling associated with product transfer to the UST system, owners and operators must 

use the following spill and overfill prevention equipment:

(i) Spill prevention equipment that will prevent release of product to the environment 

when the transfer hose is detached from the fill pipe (for example, a spill catchment basin); and

(ii) Overfill prevention equipment that will:

(A) Automatically shut off flow into the tank when the tank is no more than 95 percent 

full; or

(B) Alert the transfer operator when the tank is no more than 90 percent full by restricting 

the flow into the tank or triggering a high-level alarm; or
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

18

(C) Restrict flow 30 minutes prior to overfilling, alert the transfer operator with a high 

level alarm one minute before overfilling, or automatically shut off flow into the tank so that 

none of the fittings located on top of the tank are exposed to product due to overfilling.

(2) Owners and operators are not required to use the spill and overfill prevention 

equipment specified in paragraph (c)(1) of this section if:

(i) Alternative equipment is used that is determined by the implementing agency to be no

less protective of human health and the environment than the equipment specified in paragraph 

(c)(1)(i) or (ii) of this section; or

(ii) The UST system is filled by transfers of no more than 25 gallons at one time.

(3) Flow restrictors used in vent lines may not be used to comply with paragraph (c)(1)(ii)

of this section when overfill prevention is installed or replaced after [effective date of rule].

(4) Spill and overfill prevention equipment must be periodically tested in accordance with 

§ 280.35.

(d) Installation. All tanks and piping must be properly installed in accordance with a code 

of practice developed by a nationally recognized association or independent testing laboratory

and in accordance with the manufacturer's instructions. 

Note to paragraph (d): Tank and piping system installation practices and procedures 

described in the following codes of practice may be used to comply with the requirements of 

paragraph (d) of this section:

(A) American Petroleum Institute Publication 1615, "Installation of Underground 

Petroleum Storage System";

(B) Petroleum Equipment Institute Publication RP100, "Recommended Practices for 

Installation of Underground Liquid Storage Systems"; or

(C) National Fire Protection Association Standard 30, "Flammable and Combustible 

Liquids Code" and Standard 30A, “Code for Motor Fuel Dispensing Facilities and Repair 

Garages”.

(e) Certification of installation. All owners and operators must ensure that one or more of 

the following methods of certification, testing, or inspection is used to demonstrate compliance 

with paragraph (d) of this section by providing a certification of compliance on the UST 

notification form in accordance with § 280.22.

(1) The installer has been certified by the tank and piping manufacturers; or

(2) The installer has been certified or licensed by the implementing agency; or
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

19

(3) The installation has been inspected and certified by a registered professional engineer 

with education and experience in UST system installation; or

(4) The installation has been inspected and approved by the implementing agency; or

(5) All work listed in the manufacturer's installation checklists has been completed; or

(6) The owner and operator have complied with another method for ensuring compliance 

with paragraph (d) of this section that is determined by the implementing agency to be no less 

protective of human health and the environment.

(f) Dispenser Systems. Each UST system must be equipped with under-dispenser 

containment for any new dispenser system installed. 

(1) A dispenser system is considered new when both the dispenser and the equipment 

needed to connect the dispenser to the underground storage tank system are installed at an UST 

facility. The equipment necessary to connect the dispenser to the underground storage tank 

system includes check valves, shear valves, unburied risers or flexible connectors, or other 

transitional components that are beneath the dispenser and connect the dispenser to the 

underground piping.

(2) Under-dispenser containment must be liquid-tight on its sides, bottom, and at any 

penetrations. Under-dispenser containment must allow for visual inspection and access to the 

components in the containment system or be continuously monitored for leaks from the 

dispenser system.

§ 280.21 Upgrading of existing UST systems. In accordance with subpart G of this part, 

owners and operators must permanently close any UST system that does not meet the new UST 

system performance standards in § 280.20 or has not been upgraded in accordance with 

paragraphs (b) through (d) of this section. This does not apply to previously deferred UST 

systems described in paragraph (e) of this section and where an upgrade is determined to be 

appropriate by the implementing agency.

(a) Alternatives allowed. All existing UST systems must comply with one of the following 

requirements:

(1) New UST system performance standards under § 280.20;

(2) The upgrading requirements in paragraphs (b) through (d) of this section; or

(3) Closure requirements under subpart G of this part, including applicable requirements 

for corrective action under subpart F. 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

20

(b) Tank upgrading requirements. Steel tanks must be upgraded to meet one of the 

following requirements in accordance with a code of practice developed by a nationally

recognized association or independent testing laboratory:

(1) Interior lining. Tanks upgraded by internal lining must meet the following:

(i) The lining was installed in accordance with the requirements of § 280.33, and

(ii) Within 10 years after lining, and every 5 years thereafter, the lined tank is internally

inspected and found to be structurally sound with the lining still performing in accordance with 

original design specifications. If the internal lining is no longer performing in accordance with 

original design specifications and cannot be repaired in accordance with a code of practice 

developed by a nationally recognized association or independent testing laboratory, then the 

lined tank must be permanently closed in accordance with subpart G of this part.

(2) Cathodic protection. Tanks upgraded by cathodic protection must meet the 

requirements of § 280.20(a)(2)(ii), (iii), and (iv) and the integrity of the tank must have been

ensured using one of the following methods:

(i) The tank was internally inspected and assessed to ensure that the tank was structurally 

sound and free of corrosion holes prior to installing the cathodic protection system; or

(ii) The tank had been installed for less than 10 years and is monitored monthly for 

releases in accordance with § 280.43(d) through (i); or

(iii) The tank had been installed for less than 10 years and was assessed for corrosion 

holes by conducting two tightness tests that meet the requirements of § 280.43(c). The first 

tightness test must have been conducted prior to installing the cathodic protection system. The 

second tightness test must have been conducted between three and six months following the first 

operation of the cathodic protection system; or

(iv) The tank was assessed for corrosion holes by a method that is determined by the 

implementing agency to prevent releases in a manner that is no less protective of human health 

and the environment than paragraphs (b)(2)(i) through (iii) of this section.

(3) Internal lining combined with cathodic protection. Tanks upgraded by both internal 

lining and cathodic protection must meet the following:

(i) The lining was installed in accordance with the requirements of § 280.33; and

(ii) The cathodic protection system meets the requirements of § 280.20(a)(2)(ii), (iii), and 

(iv).

Note to paragraph (b): The following historical codes of practice were listed as options for 

complying with paragraph b of this section:
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

21

(A) American Petroleum Institute Publication 1631, "Recommended Practice for the 

Interior Lining of Existing Steel Underground Storage Tanks";

(B) National Leak Prevention Association Standard 631, "Spill Prevention, Minimum 10 

Year Life Extension of Existing Steel Underground Tanks by Lining Without the Addition of 

Cathodic Protection";

(C) National Association of Corrosion Engineers Standard RP-02-85, "Control of External 

Corrosion on Metallic Buried, Partially Buried, or Submerged Liquid Storage Systems"; and

(D) American Petroleum Institute Publication 1632, "Cathodic Protection of Underground 

Petroleum Storage Tanks and Piping Systems".

Note to paragraph b(1)(ii): The following codes of practice may be used to comply with 

the periodic lining inspection requirement of this section:

(A) American Petroleum Institute Recommended Practice 1631, "Interior Lining and 

Periodic Inspection of Underground Storage Tanks";

(B) National Leak Prevention Association Standard 631, "Entry, Cleaning, Interior 

Inspection, Repair, and Lining of Underground Storage Tanks"; or

(C) Ken Wilcox Associates Recommended Practice, “Recommended Practice for 

Inspecting Buried Lined Steel Tanks Using a Video Camera”.

(c) Piping upgrading requirements. Metal piping that routinely contains regulated 

substances and is in contact with the ground must be cathodically protected in accordance with a 

code of practice developed by a nationally recognized association or independent testing 

laboratory and must meet the requirements of § 280.20(b)(2)(ii), (iii), and (iv).

Note to paragraph (c): The codes of practice listed in the note following § 280.20(b)(2) 

may be used to comply with this requirement.

(d) Spill and overfill prevention equipment. To prevent spilling and overfilling associated 

with product transfer to the UST system, all existing UST systems must comply with new UST 

system spill and overfill prevention equipment requirements specified in § 280.20(c).

(e) Upgrade requirements for previously deferred UST systems. Previously deferred 

wastewater treatment tank systems, airport hydrant fuel distribution systems, and UST systems 

with field-constructed tanks where installation commenced on or before [effective date of rule]

must meet the following requirements according to the time table in subpart A or be permanently 

closed pursuant to subpart G of this part.

(1) Corrosion protection. UST system components in contact with the ground that 

routinely contain regulated substances must meet one of the following:
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

22

(i) The new UST system performance standards for tanks at § 280.20(a) and for piping at §

280.20(b); or

(ii) Be constructed of metal and cathodically protected according to a code of practice 

developed by a nationally recognized association or independent testing laboratory and meets the 

following:

(A) Cathodic protection must meet the requirements of § 280.20(a)(2)(ii), (iii) and (iv) for 

tanks, and § 280.20(b)(2)(ii), (iii), and (iv) for piping.

(B) Tanks greater than 10 years old without cathodic protection must be assessed to 

ensure the tank is structurally sound and free of corrosion holes prior to adding cathodic 

protection. The assessment must be by internal inspection or another method determined by the 

implementing agency to adequately assess the tank for structural soundness and corrosion holes.

Note to paragraph (e): The following codes of practice may be used to comply with this 

paragraph:

(A) NACE International Recommended Practice RP 0285, "Control of Underground 

Storage Tank Systems by Cathodic Protection";

(B) NACE International Standard Practice SP 0169, “Control of External Corrosion on 

Underground or Submerged Metallic Piping Systems”;

(C) National Leak Prevention Association Standard 631, "Entry, Cleaning, Interior 

Inspection, Repair, and Lining of Underground Storage Tanks"; or

(D) American Society for Testing and Materials Standard G158, “Standard Guide for 

Three Methods of Assessing Buried Steel Tanks”.

(2) Spill and overfill prevention equipment. To prevent spilling and overfilling associated 

with product transfer to the UST system, all previously deferred UST systems must comply with 

new UST system spill and overfill prevention equipment requirements specified in § 280.20(c).

§ 280.22 Notification requirements.

(a) After May 8, 1986, an owner must submit notice of a tank system’s existence to the 

implementing agency within 30 days of bringing the underground storage tank system into use. 

Owners must use the form in Appendix I of this part.

Note to paragraph (a): Owners and operators of UST systems that were in the ground on 

or after May 8, 1986, unless taken out of operation on or before January 1, 1974, were required 

to notify the designated state or local agency in accordance with the Hazardous and Solid Waste 

Amendments of 1984, Public Law 98-616, on a form published by EPA on November 8, 1985 

(50 FR 46602) unless notice was given pursuant to section 103(c) of CERCLA. Owners and 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

23

operators who have not complied with the notification requirements may use portions I through 

VI of the notification form contained in Appendix I of this part.

(b) Within 30 days of acquisition, any person who assumes ownership of a regulated 

underground storage tank system, except as described in paragraph (a) of this section, must 

submit a notice of the ownership change to the implementing agency, using the form in

Appendix II of this part.

(c) In states where state law, regulations, or procedures require owners to use forms that 

differ from those set forth in Appendix I and Appendix II of this part to fulfill the requirements 

of this section, the state forms may be submitted in lieu of the forms set forth in Appendix I and 

Appendix II of this part. If a state requires that its form be used in lieu of the form presented in 

Appendix I and Appendix II of this part, such form must, at a minimum, collect the information 

prescribed in Appendix I and Appendix II of this part.

(d) Owners required to submit notices under paragraph (a) or (b) of this section must 

provide notices to the appropriate implementing agency for each tank they own. Owners may

provide notice for several tanks using one notification form, but owners who own tanks located 

at more than one place of operation must file a separate notification form for each separate place 

of operation.

(e) All owners and operators of new UST systems must certify in the notification form 

compliance with the following requirements:

(1) Installation of tanks and piping under § 280.20(e);

(2) Cathodic protection of steel tanks and piping under § 280.20(a) and (b);

(3) Financial responsibility under subpart H of this part; and

(4) Release detection under §§ 280.41 and 280.42.

(f) All owners and operators of new UST systems must ensure that the installer certifies in 

the notification form that the methods used to install the tanks and piping complies with the 

requirements in § 280.20(d).

(g) Beginning October 24, 1988, any person who sells a tank intended to be used as an 

underground storage tank must notify the purchaser of such tank of the owner's notification 

obligations under paragraph (a) of this section. The statement provided in Appendix III of this 

part, when used on shipping tickets and invoices, may be used to comply with this requirement.

(h) Within 30 days of [effective date of rule], all owners of previously deferred UST 

systems must submit a notice of tank system existence to the implementing agency, using the 

form in Appendix I of this part.
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

24

Subpart C -- General Operating Requirements

§ 280.30 Spill and overfill control.

(a) Owners and operators must ensure that releases due to spilling or overfilling do not 

occur. The owner and operator must ensure that the volume available in the tank is greater than 

the volume of product to be transferred to the tank before the transfer is made and that the 

transfer operation is monitored constantly to prevent overfilling and spilling.

Note: The transfer procedures described in National Fire Protection Association Standard 

385, “Standard for Tank Vehicles for Flammable and Combustible Liquids” or American 

Petroleum Institute Recommended Practice 1007, “Loading and Unloading of MC 306/DOT 406 

Cargo Tank Motor Vehicles” may be used to comply with paragraph (a) of this section. Further 

guidance on spill and overfill prevention appears in American Petroleum Institute Recommended 

Practice 1621, "Bulk Liquid Stock Control at Retail Outlets".

(b) The owner and operator must report, investigate, and clean up any spills and overfills 

in accordance with § 280.53.

§ 280.31 Operation and maintenance of corrosion protection.

All owners and operators of metal UST systems with corrosion protection must comply

with the following requirements to ensure that releases due to corrosion are prevented until the 

UST system is permanently closed or undergoes a change-in-service pursuant to § 280.71:

(a) All corrosion protection systems must be operated and maintained to continuously

provide corrosion protection to the metal components of that portion of the tank and piping that 

routinely contain regulated substances and are in contact with the ground.

(b) All UST systems equipped with cathodic protection systems must be inspected for 

proper operation by a qualified cathodic protection tester in accordance with the following 

requirements:

(1) Frequency. All cathodic protection systems must be tested within 6 months of 

installation and at least every 3 years thereafter or according to another reasonable time frame 

established by the implementing agency; and

(2) Inspection criteria. The criteria that are used to determine that cathodic protection is 

adequate as required by this section must be in accordance with a code of practice developed by 

a nationally recognized association.

Note to paragraph (b): The following codes of practice may be used to comply with 

paragraph (b) of this section:

(A) NACE International Test Method TM 0101, “Measurement Techniques Related to 

Criteria for Cathodic Protection on Underground or Submerged Metallic Tank Systems”;
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

25

(B) NACE International Test Method TM0497, “Measurement Techniques Related to 

Criteria for Cathodic Protection on Underground or Submerged Metallic Piping Systems”;

(C) Steel Tank Institute Recommended Practice R051, “Cathodic Protection Testing 

Procedures for sti-P3 USTs”;

(D) NACE International Recommended Practice RP 0285, "Control of Underground

Storage Tank Systems by Cathodic Protection"; or

(E) NACE International Standard Practice SP 0169, “Control of External Corrosion on 

Underground or Submerged Metallic Piping Systems”.

(c) UST systems with impressed current cathodic protection systems must also be 

inspected every 60 days to ensure the equipment is running properly.

(d) For UST systems using cathodic protection, records of the operation of the cathodic

protection must be maintained (in accordance with § 280.34) to demonstrate compliance with the 

performance standards in this section. These records must provide the following:

(1) The results of the last three inspections required in paragraph (c) of this section; and 

(2) The results of testing from the last two inspections required in paragraph (b) of this 

section.

280.32 Compatibility.

(a) Owners and operators must use an UST system made of or lined with materials that are 

compatible with the substance stored in the UST system.
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

26

(b) Owners and operators storing any regulated substance containing greater than 10 

percent ethanol or greater than 20 percent biodiesel, or any other regulated substance identified 

by the implementing agency, must use one or more of the following methods to demonstrate 

UST system compatibility with these regulated substances:

(1) Certification or listing of UST system components by a nationally recognized, 

independent testing laboratory for use with the regulated substance stored;

(2) Equipment or component manufacturer approval. The manufacturer’s approval must 

be in writing, indicate an affirmative statement of compatibility, specify the range of biofuel 

blends the component is compatible with, and be from the equipment or component 

manufacturer; or

(3) Another method determined by the implementing agency to be no less protective of 

human health and the environment than the methods listed in paragraphs (b)(1) or (b)(2) of this 

section.

(c) Owners and operators must maintain the following records (in accordance with § 

280.34) for the life of the equipment or component:

(1) Documentation of compliance with paragraph (b) of this section, as applicable; and

(2) Records of all equipment or components installed or replaced after [effective date of 

rule]. At a minimum, each record must include the date of installation or replacement, 

manufacturer, and model.

§ 280.33 Repairs allowed.

Owners and operators of UST systems must ensure that repairs will prevent releases due to 

structural failure or corrosion as long as the UST system is used to store regulated substances. 

The repairs must meet the following requirements:

(a) Repairs to UST systems must be properly conducted in accordance with a code of 

practice developed by a nationally recognized association or an independent testing laboratory.

Note to paragraph (a): The following codes of practice may be used to comply with 

paragraph (a) of this section: 

(A) National Fire Protection Association Standard 30, "Flammable and Combustible 

Liquids Code";

(B) American Petroleum Institute Recommended Practice RP 2200, "Repairing Crude Oil, 

Liquified Petroleum Gas, and Product Pipelines";

(C) American Petroleum Institute Recommended Practice RP 1631, "Interior Lining and 

Periodic Inspection of Underground Storage Tanks";

(D) National Fire Protection Association Standard 326, “Safeguarding of Tanks and 

Containers for Entry, Cleaning, or Repair”;
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

27

(E) National Leak Prevention Association Standard 631, "Entry, Cleaning, Interior 

Inspection, Repair, and Lining of Underground Storage Tanks"; 

(F) Steel Tank Institute Recommended Practice R972, “Recommended Practice for the 

Addition of Supplemental Anodes to sti-P3® Tanks”;

(G) NACE International Recommended Practice RP 0285, "Control of Underground 

Storage Tank Systems by Cathodic Protection"; or

(H) Fiberglass Tank and Pipe Institute Recommended Practice T-95-02, “Remanufacturing 

of Fiberglass Reinforced Plastic (FRP) Underground Storage Tanks”.

(b) Repairs to fiberglass-reinforced plastic tanks may be made by the manufacturer's 

authorized representatives or in accordance with a code of practice developed by a nationally 

recognized association or an independent testing laboratory.

(c) Metal pipe sections and fittings that have released product as a result of corrosion or 

other damage must be replaced. Non-corrodible pipes and fittings may be repaired in accordance 

with the manufacturer's specifications.

(d) Repaired tanks and piping must be tightness tested in accordance with § 280.43(c) and 

§ 280.44(b) within 30 days following the date of the completion of the repair except as provided 

in paragraphs (d)(1) through (4), of this section:

(1) The repaired tank is internally inspected in accordance with a code of practice 

developed by a nationally recognized association or an independent testing laboratory; or

(2) The repaired portion of the UST system is monitored monthly for releases in 

accordance with a method specified in § 280.43(d) through (i); 

(3) UST systems with secondary containment must be tested as specified in § 280.36

within 30 days following the completion of any repair. Tanks using interstitial sensors must be 

tested using a vacuum, pressure, or liquid method in accordance with one of the criteria listed in 

§ 280.36(a)(1)(ii) following any repair; or

(4) Another test method is used that is determined by the implementing agency to be no 

less protective of human health and the environment than those listed above.

(e) Within 6 months following the repair of any cathodically protected UST system, the 

cathodic protection system must be tested in accordance with § 280.31(b) and (c) to ensure that it 

is operating properly.

(f) Within 30 days following any repair to spill or overfill prevention equipment, the 

repaired spill or overfill prevention equipment must be tested in accordance with § 280.35 to 

ensure it is operating properly. 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

28

(g) UST system owners and operators must maintain records (in accordance with § 

280.34) of each repair until the UST system is permanently closed or undergoes a change-inservice pursuant to § 280.71.

§ 280.34 Reporting and recordkeeping.

Owners and operators of UST systems must cooperate fully with inspections, monitoring 

and testing conducted by the implementing agency, as well as requests for document submission, 

testing, and monitoring by the owner or operator pursuant to section 9005 of Subtitle I of the 

Solid Waste Disposal Act, as amended.

(a) Reporting. Owners and operators must submit the following information to the 

implementing agency:

(1) Notification for all UST systems (§ 280.22), which includes certification of 

installation for new UST systems (§ 280.20(e)) and notification when any person assumes 

ownership of an UST system (§ 280.22(b));

(2) Reports of all releases including suspected releases (§ 280.50), spills and overfills (§ 

280.53), and confirmed releases (§ 280.61);

(3) Corrective actions planned or taken including initial abatement measures (§ 280.62), 

initial site characterization (§ 280.63), free product removal (§ 280.64), investigation of soil and 

ground-water cleanup (§ 280.65), and corrective action plan (§ 280.66); and

(4) A notification before permanent closure or change-in-service (§ 280.71).

(b) Recordkeeping. Owners and operators must maintain the following information:

(1) A corrosion expert's analysis of site corrosion potential if corrosion protection 

equipment is not used (§ 280.20(a)(4); § 280.20(b)(3)).

(2) Documentation of operation of corrosion protection equipment (§ 280.31(d));

(3) Documentation of compatibility for UST Systems (§ 280.32(c));

(4) Records for all UST system equipment installed or replaced after [effective date of 

rule] (§ 280.32(c));

(5) Documentation of UST system repairs (§ 280.33(g));

(6) Documentation of compliance for spill and overfill prevention equipment 

(§ 280.35(c));
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

29

(7) Documentation of compliance for tanks, piping, and containment sumps using 

interstitial monitoring (§ 280.36(c));

(8) Documentation of periodic walkthrough inspections (§ 280.37(b));

(9) Recent compliance with release detection requirements (§ 280.45);

(10) Results of the site investigation conducted at permanent closure (§ 280.74); and

(11) Documentation of operator training (§ 280.245).

(c) Availability and Maintenance of Records. Owners and operators must keep the 

records required either:

(1) At the UST site and immediately available for inspection by the implementing agency; 

or 

(2) At a readily available alternative site and be provided for inspection to the 

implementing agency upon request.

(3) In the case of permanent closure records required under § 280.74, owners and 

operators are also provided with the additional alternative of mailing closure records to the 

implementing agency if they cannot be kept at the site or an alternative site as indicated above.

§ 280.35 Periodic testing of spill and overfill prevention equipment.

(a) Owners and operators of UST systems with spill and overfill prevention equipment 

must meet the following requirements to ensure the equipment is operating properly and will 

prevent releases to the environment:

(1) Spill prevention equipment (such as a catchment basin, spill bucket, or other spill

containment device) must prevent releases to the environment by meeting one of the following:

(i) The spill prevention equipment has two walls and the space between the walls is 

monitored continuously to ensure the integrity of the inner and outer walls is maintained; or

(ii) The spill prevention equipment is tested at installation and at least once every 12 

months to ensure the spill prevention equipment is liquid tight by using vacuum, pressure, or 

liquid testing in accordance with one of the following criteria:

(A) Requirements developed by the manufacturer (Note: Owners and operators may use 

this option only if the manufacturer has developed testing requirements);

(B) Code of practice developed by a nationally recognized association or independent 

testing laboratory; or
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

30

(C) Requirements determined by the implementing agency to be no less protective of 

human health and the environment than the requirements listed in paragraphs (a)(1)(ii) (A) and 

(B) of this section; and

(2) Overfill prevention equipment must be tested at installation and at least once every

three years. At a minimum, testing must ensure that overfill prevention equipment is set to 

activate at the correct level specified in § 280.20(c) and will activate when regulated substance

reaches that level. Testing must be conducted in accordance with one of the criteria in paragraph

(a)(1)(ii) of this section.

(b) Owners and operators must begin meeting these requirements as follows:

(1) For UST systems in use on or before [effective date of rule]:

(i) Not later than [one year after effective date of rule] for spill prevention equipment; 

and

(ii) For overfill prevention equipment, not later than the phase-in schedule in the 

following table:

Phase-In Schedule For Overfill Prevention Equipment Testing

Criteria Date By Which First Test Must Be Conducted

One or more USTs at the facility

were installed on or before

12/22/1988

[1 year after effective date of rule]

No USTs at the facility were installed 

on or before 12/22/1988 and at least 

one UST at the facility was installed 

on or before 12/22/1998

[2 years after effective date of rule]

All USTs at the facility were installed 

after 12/22/1998

[3 years after effective date of rule]

(2) For UST systems brought into use after [effective date of rule], these requirements 

apply at installation.

(c) Owners and operators must maintain the following records (in accordance with § 

280.34) for spill and overfill prevention equipment:

(1) All records of spill prevention equipment testing and overfill prevention equipment 

testing must be maintained for three years; and

(2) For spill prevention equipment not tested every 12 months, documentation showing 

that the spill prevention equipment has two walls and is monitored continuously. Owners and 

operators must maintain this documentation for as long as the spill prevention equipment is 

monitored continuously, and for three additional years after continuous monitoring ends.
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

31

Note to paragraphs (a)(1)(ii) and (a)(2): The following codes of practice may be used to 

comply with paragraphs (a)(1)(ii) and (a)(2) of this section: PLACEHOLDER – PEI Developing 

Std that might be appropriate

§ 280.36 Periodic testing of secondary containment.

(a) Owners and operators of UST systems with secondary containment using interstitial 

monitoring must ensure the integrity of all interstitial areas (including all containment sumps 

used for interstitial monitoring).

(1) Tanks must meet one of the following:

(i) The interstitial space is continuously monitored; or

(ii) The interstitial space is not continuously monitored and the integrity of the interstitial 

space is ensured at least once every three years by using vacuum, pressure, or liquid testing in 

accordance with one of the following criteria:

(A) Requirements developed by the manufacturer (Note: Owners and operators may use 

this option only if the manufacturer has developed integrity testing requirements);

(B) Code of practice developed by a nationally recognized association or independent 

testing laboratory; or 

(C) Requirements determined by the implementing agency to be no less protective of 

human health and the environment than the requirements listed in paragraphs (a)(1)(ii) (A) and 

(B) of this section;

(2) Piping must meet one of the following:

(i) The interstitial space is continuously monitored using vacuum, pressure, or a liquidfilled interstitial space; or

(ii) The interstitial space is monitored using an interstitial monitoring method not listed in 

paragraph (a)(2)(i) of this section and the integrity of the interstitial space is ensured at least once 

every three years by using vacuum, pressure, or liquid testing in accordance with one of the 

criteria listed in paragraph (a)(1)(ii) of this section; and

(3) Containment sumps must meet one of the following:

(i) The containment sump has two walls and the space between the walls is continuously

monitored; or

(ii) The containment sump is tested at least every three years to ensure the containment 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

32

sump is liquid tight by using vacuum, pressure, or liquid testing in accordance with one of the 

criteria listed in paragraph (a)(1)(ii) of this section.

(b) Owners and operators of UST systems using interstitial monitoring must begin 

meeting this requirement as follows:

(1) For UST systems in use on or before [effective date of rule], not later than the phasein schedule in the following table:

Phase-In Schedule For Interstitial Area Testing

Criteria Date By Which First Test Must Be Conducted

One or more USTs at the facility were 

installed on or before 12/22/1988

[1 year after effective date of rule]

No USTs at the facility were installed on 

or before 12/22/1988 and at least one 

UST at the facility was installed on or 

before 12/22/1998

[2 years after effective date of rule]

All USTs at the facility were installed 

after 12/22/1998

[3 years after effective date of rule]

(2) For UST systems brought into use after [effective date of rule], these requirements 

apply at installation.

(c) Owners and operators must maintain the following records (in accordance with § 

280.34) for the time frames indicated for each tank, piping, and containment sump that uses 

interstitial monitoring:

(1) Records of interstitial space testing must be maintained for three years; or

(2) As appropriate, records demonstrating: the tank is using continuous interstitial 

monitoring; the piping is using continuous interstitial monitoring with vacuum, pressure, liquidfilled interstitial space; and the containment sump has two walls and uses continuous interstitial 

monitoring. Owners and operators must maintain these records for as long as the tank, piping, or 

containment sump uses one of these continuous methods of interstitial monitoring, and for three 

additional years after continuous monitoring ends. 

Note to paragraphs (a)(1)(ii), (a)(2)(ii), and (a)(3)(ii): The following codes of practice may

be used to comply with paragraphs (a)(1)(ii), (a)(2)(ii), and (a)(3)(ii) of this section: 

(A) Steel Tank Institute Recommended Practice R012, “Recommended Practice for 

Interstitial Tightness Testing of Existing Underground Double Wall Steel Tanks”; or

(B) Fiberglass Tank and Pipe Institute Protocol, “Field Test Protocol for Testing the 

Annular Space of Installed Underground Fiberglass Double and Triple-Wall Tanks with Dry

Annular Space”.
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

33

§ 280.37 Periodic operation and maintenance walkthrough inspections.

(a) To properly operate and maintain UST systems, owners and operators must meet one 

of the following:

(1) Conduct a walkthrough inspection at least once every 30 days that, at a minimum and 

as appropriate to the facility, checks the following equipment as specified:

(i) Spill prevention equipment - open and visually check for any damage; remove any 

liquid or debris; check each fill cap to make sure it is securely on the fill pipe; and for spill 

prevention equipment with continuous interstitial monitoring, check for a leak in the interstitial 

area,

(ii) Sumps - open and visually check for any damage, leaks to the containment area, or 

releases to the environment; remove any liquid (in contained sumps) or debris; and for sumps 

with continuous interstitial monitoring, check for a leak in the interstitial area,

(iii) Dispenser cabinets - open and visually check for any damage, leaks to the containment 

area, or releases to the environment; remove any liquid (in dispensers with under-dispenser 

containment) or debris; and for under-dispenser containment with continuous interstitial 

monitoring, check for a leak in the interstitial area,

(iv) Monitoring/observation wells - check covers to make sure they are secured,

(v) Cathodic protection - check to make sure impressed current cathodic protection 

rectifiers are on and operating; and ensure records of three year cathodic protection testing and 

60 day impressed current system inspections are reviewed and current, and

(vi) Release detection systems - check to make sure the release detection system is on and 

operating with no alarms or other unusual operating conditions present; check any devices such 

as tank gauge sticks, groundwater bailers, and hand-held vapor monitoring devices for 

operability and serviceability; and ensure records of release detection testing are reviewed 

monthly and current; or

(2) Conduct operation and maintenance walkthrough inspections at least once every 30 

days according to a standard code of practice developed by a nationally recognized association or 

independent testing laboratory that are comparable to (a)(1) of this section; or

(3) Conduct operation and maintenance walkthrough inspections developed by the 

implementing agency that are comparable to paragraph (a)(1) of this section.

(b) Owners and operators must maintain records (in accordance with § 280.34) of 

operation and maintenance walkthrough inspections for one year. The record must include a 

listing of each area checked, whether each area checked was acceptable or needed to have any 

action taken, and a description of any actions taken to correct an issue.
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

34

Note to paragraph (a)(2): the following code of practice may be used to comply with 

paragraph (a)(2) of this section: 

(A) Petroleum Equipment Institute Recommended Practice RP 900, “Recommended 

Practices for the Inspection and Maintenance of UST Systems”.

Subpart D -- Release Detection

§ 280.40 General requirements for all UST systems.

(a) Owners and operators of UST systems must provide a method, or combination of 

methods, of release detection that:

(1) Can detect a release from any portion of the tank and the connected underground 

piping that routinely contains product;

(2) Is installed and calibrated in accordance with the manufacturer's instructions;

(3) Beginning on [one year after effective date of rule], is operated and maintained, and 

electronic and mechanical components are tested for proper operation, in accordance with one of 

the following: manufacturer’s instructions; a code of practice developed by a nationally

recognized association or independent testing laboratory; or requirements developed by the 

implementing agency. A test of the proper operation must be performed at least annually and, at 

a minimum and as applicable to the facility, cover the following components and criteria:

(i) Automatic tank gauge and other controllers: test alarm; verify system configuration; 

test battery backup; 

(ii) Probes and sensors: inspect for residual buildup, ensure floats move freely; ensure 

shaft is not damaged; ensure cables are free of kinks, bends, and breaks; test alarm operability

and communication with controller;

(iii) Line leak detector: test operation to meet criteria in § 280.44(a) by simulating a leak; 

inspect leak sensing o-ring; and 

(iv) Vacuum pumps and pressure gauges: ensure proper communication with sensors and 

controller.

(4) Meets the performance requirements in § 280.43, § 280.44, § 280.46, or § 280.47, as 

applicable, with any performance claims and their manner of determination described in writing 

by the equipment manufacturer or installer. In addition, the methods listed in § 280.43(b); § 

280.43(c); § 280.43(d); § 280.43(h); § 280.43(i);§ 280.44(a); § 280.44(b); §280.46; and § 

280.47, must be capable of detecting the leak rate or quantity specified for that method in the 

corresponding section of the rule with a probability of detection of 0.95 and a probability of 

false alarm of 0.05.
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

35

(b) When a release detection method operated in accordance with the performance 

standards in § 280.43, § 280.44, § 280.46, or § 280.47 indicates a release may have occurred, 

owners and operators must notify the implementing agency in accordance with subpart E.

(c) Owners and operators of Airport hydrant fuel distribution systems, UST systems with 

field-constructed tanks, and wastewater treatment tank systems must comply with the release 

detection requirements of this Subpart according to the following table:

Schedule for Phase-in of Release Detection for Airport Hydrant Fuel Distribution Systems, UST 

Systems with Field-Constructed Tanks, and Wastewater Treatment Tank Systems

Type of UST System Time Frame (after

[effective date of rule ])

Description of Requirement

Bulk piping associated with 

airport hydrant fuel 

distribution systems and 

field-constructed tanks 

using § 280.47(a) for piping 

release detection

Within three years

Conduct one bulk piping tightness 

test according to § 280.47(a) using 

the maximum detectable leak rates 

for semiannual testing. For bulk 

piping segments not capable of 

meeting the 3.0 gallon per hour leak 

rate, owners and operators may use 

a leak rate of up to 6.0 gallons per 

hour. 

Between years three and 

six

Between years six and 

seven

Conduct one bulk piping tightness 

test according to § 280.47(a) using 

the maximum detectable leak rates 

for semiannual testing.

After year seven

Conduct bulk piping tightness 

testing according to § 280.47(a).

Bulk piping associated with 

airport hydrant fuel 

distribution systems and 

field-constructed tanks not 

using § 280.47(a) for piping 

release detection

Within three years

Perform release detection according 

to this subpart.

Underground tanks 

associated with hydrant fuel 

distribution systems and 

field-constructed tanks

Within three years

Perform release detection according 

to this subpart.

Wastewater treatment tank 

systems Within three years

Perform release detection according 

to this subpart.

(d) Any UST system that cannot apply a method of release detection that complies with 

the requirements of this subpart must complete the closure procedures in subpart G. For 

previously deferred UST systems described in subpart A, this requirement applies after the 

effective date for subpart D described in § 280.10(a)(1).
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

36

§ 280.41 Requirements for petroleum UST systems.

Owners and operators of petroleum UST systems must provide release detection for tanks 

and piping as follows:

(a) Tanks. Tanks must be monitored for releases as follows:

(1) Tanks installed on or before [effective date of rule] must be monitored for releases at 

least every 30 days using one of the methods listed in § 280.43(d) through (i) except that:

(i) UST systems that meet the performance standards in § 280.20 or § 280.21, and the 

monthly inventory control requirements in § 280.43(a) or (b), may use tank tightness testing 

(conducted in accordance with § 280.43(c)) at least every 5 years until 10 years after the tank 

was installed or upgraded under § 280.21(b), whichever is later;

(ii) Tanks with capacity of 550 gallons or less and tanks with a capacity of 551 to 1,000 

gallons that meet the tank diameter criteria in § 280.43(b) may use manual tank gauging 

(conducted in accordance with § 280.43(b));

(iii) Field-constructed tanks greater than 50,000 gallons may use the alternative release 

detection requirements in § 280.46; and

(iv) Tanks using § 280.43(e) or § 280.43(f) to monitor for releases, must begin using one 

of the methods listed in § 280.43(d), (g), (h) or (i) not later than [five years after effective date of 

rule].

(2) Tanks installed after [effective date of rule] must be monitored for releases at least 

every 30 days in accordance with § 280.43(g).

 

(b) Piping. Underground piping that routinely contains regulated substances must be 

monitored for releases in a manner that meets one of the following requirements:

(1) Piping installed on or before [effective date of rule] 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 

§ 280.44(a); and

(B) Have an annual line tightness test conducted in accordance with § 280.44(b) or have 

monthly monitoring conducted in accordance with § 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 

§ 280.44(b), or use a monthly monitoring method conducted in accordance with § 280.44(c). No 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

37

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)(2)(ii)-(iv) of this 

section to be readily determined.

(iii) Bulk piping. Underground piping associated with airport hydrant fuel distribution 

systems and field-constructed tanks must meet one of the following release detection 

requirements:

(A)The requirements in paragraphs (b)(1)(i) or (ii) of this section; or

(B) The alternative release detection requirements in § 280.47.

(2) Piping installed or replaced after [effective date of rule] must meet one of the 

following: 

(i) Pressurized piping must be monitored for releases at least every 30 days in accordance 

with § 280.43(g) and be equipped with an automatic line leak detector in accordance with § 

280.44(a) 

(ii) Suction piping must be monitored for releases at least every 30 days in accordance 

with § 280.43(g). No release detection is required for suction piping that meets paragraphs 

(b)(1)(ii)(A) through (E) of this section.

(iii) Underground bulk piping associated with airport hydrant fuel distribution systems and 

field-constructed tanks must meet the requirements in paragraph (b)(1) of this section.

§ 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 § 280.43(g) at least every 30 

days:

(a) Secondary containment systems must be designed, constructed and installed to:
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

38

(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 

[effective date of rule].

(b) Double-walled tanks must be designed, constructed, and installed to:

(1) Contain a release 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 ground-water 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 § 280.44(a).

(e) For hazardous substance UST systems installed on or before [effective date of rule]

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 §§ 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.
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

39

§ 280.43 Methods of release detection for tanks.

Each method of release detection for tanks used to meet the requirements of § 280.41, 

except field-constructed tanks installed on or before [effective date of rule] with capacities 

greater than 50,000 gallons that meet § 280.46, 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 flowthrough 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.

(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 of at 

least 36 hours 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;
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

40

(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:

Nominal Tank Capacity Minimum 

Duration Of Test

Weekly Standard 

(One Test)

Monthly Standard 

(Four Test Average)

550 gallons or less 36 hours 10 gallons 5 gallons

551-1,000 gallons

(when tank diameter is 64”) 44 hours 9 gallons 4 gallons

551-1,000 gallons

(when tank diameter is 48”) 58 hours 12 gallons 6 gallons

551-1,000 gallons

(also requires periodic 

tank tightness testing)

36 hours 13 gallons 7 gallons

1,001-2,000 gallons 

(also requires periodic 

tank tightness testing)

36 hours 26 gallons 13 gallons

(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 § 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; and

(2) The test must be performed with the system operating in one of the following modes:

(i) In-tank static testing conducted on a periodic basis; 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. 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

41

(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 ground water, 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) Ground-water monitoring. Testing or monitoring for liquids on the ground water must 

meet the following requirements:

(1) The regulated substance stored is immiscible in water and has a specific gravity of less 

than one;

(2) Ground water 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 ground-water conditions;

(4) Monitoring wells shall be sealed from the ground surface to the top of the filter pack;
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

42

(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 ground water 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 release 

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 release 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 10-6cm/sec for the 

regulated substance stored) to direct a release to the monitoring point and permit its detection;

(ii) The barrier is compatible with the regulated substance stored so that a release 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 ground water, 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 ground 

water 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.
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

43

(3) For tanks with an internally fitted liner, an automated device can detect a release 

between the inner wall of the tank and the liner, and the liner is compatible with the substance 

stored.

(4) For UST systems using continuous vacuum, pressure, or liquid-filled methods of 

interstitial monitoring, the method must be capable of detecting a breach in both the inner and 

outer walls of the tank and/or piping.

(h) Statistical inventory reconciliation. Statistically based testing or monitoring methods 

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; 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.

§ 280.44 Methods of release detection for piping.

Each method of release detection for piping used to meet the requirements of § 280.41, 

except bulk piping that meets § 280.47, 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 § 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.
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

44

(c) Applicable tank methods. Except as described in § 280.41(a), any of the methods in § 

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.

§ 280.45 Release detection recordkeeping.

All UST system owners and operators must maintain records in accordance with § 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;

(b) The results of any sampling, testing, or monitoring must be maintained for at least 1 

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 § 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 § 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 or bulk tank tightness testing conducted in 

accordance with § 280.43(c) or § 280.46 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 5 years from the date of 

installation.

§ 280.46 Alternative methods of release detection for field-constructed tanks.

Owners and operators of field-constructed tanks with a capacity greater than 50,000 

gallons may use one or a combination of the following alternative methods of release detection:

(a) Conduct an annual bulk tank tightness test that can detect a 0.5 gallon per hour leak 

rate;

(b) Use an automatic tank gauging system to perform release detection at least every 30 

days that can detect a leak rate less than or equal to one gallon per hour. This method must be 

combined with a bulk tank tightness test that can detect a 0.2 gallon per hour leak rate performed 

at least every three years;
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

45

(c) Use an automatic tank gauging system to perform release detection at least every 30 

days that can detect a leak rate less than or equal to two gallons per hour. This method must be 

combined with a bulk tank tightness test that can detect a 0.2 gallon per hour leak rate performed 

at least every two years; or

(d) Another method approved by the implementing agency if the owner and operator can 

demonstrate that the method can detect a release as effectively as any of the methods allowed in 

paragraphs (a) through (c) 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 of 

detection. If the method is approved, the owner and operator must comply with any conditions 

imposed by the implementing agency on its use.

§ 280.47 Alternative methods of release detection for bulk piping.

Owners and operators of underground piping associated with airport hydrant fuel 

distribution systems and field-constructed tanks may use one or a combination of the following 

alternative methods of release detection:

(a) Perform a semiannual or annual bulk line tightness test at or above operating pressure 

in accordance with the table below. Bulk piping segments ≥ 100,000 gallons not capable of 

meeting the maximum 3.0 gallon per hour leak rate for the semiannual test may be tested at a 

leak rate up to 6.0 gallons per hour according to the schedule in §280.40(c): 

Maximum Detectable Leak Rate Per Test Section Volume

Test Section Volume

(Gallons)

Semiannual Test

Maximum 

Detectable Leak 

Rate (Gallons Per 

Hour)

Annual Test

Maximum 

Detectable Leak 

Rate (Gallons Per 

Hour)

< 50,000 1.0 0.5

≥ 50,000 to < 75,000 1.5 0.75

≥ 75,000 to < 100,000 2.0 1.0

≥ 100,000 3.0 1.5

(b) Perform continuous interstitial monitoring designed to detect a release from any 

portion of the underground piping that routinely contains product in accordance with §280.43(g);

(c) Use an automatic line leak detector that alerts the operator to the presence of a leak by 

restricting or shutting off flow of regulated substances through piping or triggering an audible or 

visual alarm. This method may be used only if it can detect a leak of three gallons per hour at 10 

pounds per square inch line pressure within one hour or equivalent. When using this method, the 

following must also be met:
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

46

(1) Perform interstitial monitoring, designed to detect a release from any portion of the 

underground piping that routinely contains product, in accordance with § 280.43(g) at least every

three months; and

(2) Conduct an annual test of the operation of the leak detector in accordance with § 

280.40(a)(3); or 

(d) Another method approved by the implementing agency if the owner and operator can 

demonstrate that the method can detect a release as effectively as any of the methods allowed in 

paragraphs (a) through (c) 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 of 

detection. If the method is approved, the owner and operator must comply with any conditions 

imposed by the implementing agency on its use.

Subpart E -- Release Reporting, Investigation, and Confirmation

§ 280.50 Reporting of suspected releases.

Owners and operators of UST systems must report to the implementing agency within 24 

hours, or another reasonable time period specified by the implementing agency, and follow the 

procedures in § 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 water or product in the interstitial space of 

secondarily contained systems), unless system equipment is found to be defective but not 

leaking, and is immediately repaired or replaced.

(c) Monitoring results, including alarms, from a release detection method required under 

§ 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; or

(2) In the case of inventory control, a second month of data does not confirm the initial 

result.

§ 280.51 Investigation due to off-site impacts. 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

47

When required by the implementing agency, owners and operators of UST systems must 

follow the procedures in § 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. 

§ 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 § 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 § 280.43(c) and § 280.44(b) or, for UST systems with secondary

containment and interstitial monitoring, the integrity testing specified in § 280.36) that determine 

whether a leak exists in that portion of the tank that routinely contains product, the attached 

delivery piping, or a breach of the interstitial space. 

(1) If the system test confirms a leak, 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 if the test results for the system, tank, or delivery piping indicate that 

a release exists.

(2) 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.

(3) 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 

ground water, 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; 

(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.
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

48

§ 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 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 302). 

(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. 

[Note: Pursuant to 302.6 and 355.40, 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.] 

Subpart F -- Release Response and Corrective Action for UST Systems Containing 

Petroleum or Hazardous Substances

§ 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 § 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.

§ 280.61 Initial response.

Upon confirmation of a release in accordance with § 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);
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

49

(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.

§ 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 ground water;

(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 § 280.52(b) or the closure site assessment of § 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 ground water 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 § 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.
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

50

§ 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 § 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 § 280.62(a)(5); and

(4) Results of the free product investigations required under § 280.62(a)(6), to be used by

owners and operators to determine whether free product must be recovered under § 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.

§ 280.64 Free product removal.

At sites where investigations under § 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 §§ 280.61 through 280.63, or preparing for actions required under §§ 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
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

51

(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.

§ 280.65 Investigations for soil and ground-water 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 ground water, 

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 ground-water 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 § 280.64;

(3) There is evidence that contaminated soils may be in contact with ground water (e.g., as 

found during conduct of the initial response measures or investigations required under §§ 280.60 

through 280.64); and

(4) The implementing agency requests an investigation, based on the potential effects of 

contaminated soil or ground water on nearby surface water and ground-water 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.
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

52

§ 280.66 Corrective action plan.

(a) At any point after reviewing the information submitted in compliance with § 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 ground water. 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 § 280.61 through § 280.63, choose 

to submit a corrective action plan for responding to contaminated soil and ground water. 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 ground 

water;

(4) The potential effects of residual contamination on nearby surface water and ground 

water;

(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 ground water before the 

corrective action plan is approved provided that they: 

(1) Notify the implementing agency of their intention to begin cleanup;
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

53

(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.

§ 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

§ 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 § 280.31, and any release 

detection in accordance with subpart D. Subparts E and F must be complied with if a release is 

suspected or confirmed. However, release detection is 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.

(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.
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

54

(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 § 280.20 for new UST systems or the upgrading requirements in § 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 §§ 280.71-280.74, 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 § 280.72 before such an extension can be applied for.

§ 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 § 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 

also be either removed from the ground or filled it with an inert solid material.

(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 § 280.72.

[Note: 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, "Requirements for Safe Entry and 

Cleaning of Petroleum Storage Tanks";

(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; 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

55

(E) National Fire Protection Association Standard 326, “Safeguarding of Tanks and 

Containers for Entry, Cleaning, or Repair”; and

(F) The 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.]

§ 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 ground water, 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 § 280.43(e) and (f) is operating in accordance with the requirements in 

§ 280.43 at the time of closure, and indicates no release has occurred.

(b) If contaminated soils, contaminated ground water, 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.

§ 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.

§ 280.74 Closure records.

Owners and operators must maintain records in accordance with § 280.34 that are capable 

of demonstrating compliance with closure requirements under this subpart. The results of the 

excavation zone assessment required in § 280.72 must be maintained for at least 3 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

 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

56

§ 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 § 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 § 280.10 (b), (c)(2) or (c)(3).

(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. 

§ 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 § 280.10.

§ 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.
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

57

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.

“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: 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.
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

58

Petroleum marketing firms are 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.

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 §§ 

280.95-280.107, 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 ground-water 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 § 280.97(b)(1) and § 280.97(b)(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.

§ 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:
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

59

(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 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

60

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.

§ 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 §§ 280.95 through 280.107 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 §§ 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 § 280.96 or surety bond under § 

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.

§ 280.95 Financial test of self-insurance.

(a) An owner or operator, and/or guarantor, may satisfy the requirements of § 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 § 280.93, based on the 

number of underground storage tanks for which a financial test is used to demonstrate financial 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

61

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 § 280.93 (b)(1) and 

(b)(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 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

62

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 (§§ 264.143 and 265.143).............................. $______

Post-Closure Care (§§ 264.145 and 265.145).............. $______

Liability Coverage (§§ 264.147 and 265.147)........... $______
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

63

Corrective Action (§§ 264.101(b)).............................. $______

Plugging and Abandonment (§ 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 § 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 § 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 ___ __
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

64

 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:]

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?
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

65

 [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 

part 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 § 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.

§ 280.96 Guarantee.

(a) An owner or operator may satisfy the requirements of § 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 § 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 § 280.95(d) and must deliver the letter to the owner or 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

66

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 § 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 § 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 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

67

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].
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

68

 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 § 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 § 280.112. This standby trust fund must meet the requirements specified in § 

280.103.

§ 280.97 Insurance and risk retention group coverage.

(a) An owner or operator may satisfy the requirements of § 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]

________________________________________________________________________

________________________________________________________________________

Name of [Insurer or Risk Retention Group]:

________________________________________________________________________
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

69

________________________________________________________________________

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.

 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 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

70

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:
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

71

 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.

 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.]
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

72

 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.

§ 280.98 Surety bond.

(a) An owner or operator may satisfy the requirements of § 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”].
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

73

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) indentified 

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.
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

74

 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)]
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

75

[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 § 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 § 280.112. This standby trust 

fund must meet the requirements specified in § 280.103.

§ 280.99 Letter of credit.

(a) An owner or operator may satisfy the requirements of § 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 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

76

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”].
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

77

(c) An owner or operator who uses a letter of credit to satisfy the requirements of § 

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 § 280.112. This standby trust fund 

must meet the requirements specified in § 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.

§ 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 § 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 § 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 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

78

compliance with the requirements of § 280.93 for underground storage tanks located in the state 

for the amounts and types of costs covered by such mechanisms.

§ 280.101 State fund or other state assurance.

(a) An owner or operator may satisfy the requirements of § 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 § 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 § 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 § 280.111(b)(8).

§ 280.102 Trust fund.

(a) An owner or operator may satisfy the requirements of § 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.

 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

79

(b) The wording of the trust agreement must be identical to the wording specified in § 

280.103(b)(1), and must be accompanied by a formal certification of acknowledgement as 

specified in § 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.

§ 280.103 Standby trust fund.

(a) An owner or operator using any one of the mechanisms authorized by § § 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 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

80

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”] 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

81

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.
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

82

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 United States Government, or 

any agency or instrumentality thereof, with a Federal Reserve bank, but the books and records of 

the Trustee shall at all times show that all such securities are part of the Fund;

 (d) To deposit any cash in the Fund in interest-bearing accounts maintained or savings 

certificates issued by the Trustee, in its separate corporate capacity, or in any other banking 

institution affiliated with the Trustee, to the extent insured by an agency of the federal or state 

government; and

 (e) To compromise or otherwise adjust all claims in favor of or against the Fund.

Section 9. Taxes and Expenses

 All taxes of any kind that may be assessed or levied against or in respect of the Fund and all 

brokerage commissions incurred by the Fund shall be paid from the Fund. All other expenses 

incurred by the Trustee in connection with the administration of this Trust, including fees for 

legal services rendered to the Trustee, the compensation of the Trustee to the extent not paid 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

83

directly by the Grantor, and all other proper charges and disbursements of the Trustee shall be 

paid from the Fund.

Section 10. Advice of Counsel

 The Trustee may from time to time consult with counsel, who may be counsel to the Grantor, 

with respect to any questions arising as to the construction of this Agreement or any action to be 

taken hereunder. The Trustee shall be fully protected, to the extent permitted by law, in acting 

upon the advice of counsel.

Section 11. Trustee Compensation

 The Trustee shall be entitled to reasonable compensation for its services as agreed upon in 

writing from time to time with the Grantor.

Section 12. Successor Trustee

 The Trustee may resign or the Grantor may replace the Trustee, but such resignation or 

replacement shall not be effective until the Grantor has appointed a successor trustee and this 

successor accepts the appointment. The successor trustee shall have the same powers and duties 

as those conferred upon the Trustee hereunder. Upon the successor trustee's acceptance of the 

appointment, the Trustee shall assign, transfer, and pay over to the successor trustee the funds 

and properties then constituting the Fund. If for any reason the Grantor cannot or does not act in 

the event of the resignation of the Trustee, the Trustee may apply to a court of competent 

jurisdiction for the appointment of a successor trustee or for instructions. The successor trustee 

shall specify the date on which it assumes administration of the trust in writing sent to the 

Grantor and the present Trustee by certified mail 10 days before such change becomes effective. 

Any expenses incurred by the Trustee as a result of any of the acts contemplated by this Section 

shall be paid as provided in Section 9.

Section 13. Instructions to the Trustee

 All orders, requests, and instructions by the Grantor to the Trustee shall be in writing, signed 

by such persons as are designated in the attached Schedule B or such other designees as the 

Grantor may designate by amendment to Schedule B. The Trustee shall be fully protected in 

acting without inquiry in accordance with the Grantor's orders, requests, and instructions. All 

orders, requests, and instructions by [the Director of the implementing agency] to the Trustee 

shall be in writing, signed by [the Director], and the Trustee shall act and shall be fully protected 

in acting in accordance with such orders, requests, and instructions. The Trustee shall have the 

right to assume, in the absence of written notice to the contrary, that no event constituting a 

change or a termination of the authority of any person to act on behalf of the Grantor or [the 

director] hereunder has occurred. The Trustee shall have no duty to act in the absence of such 

orders, requests, and instructions from the Grantor and/or [the Director], except as provided for 

herein.

Section 14. Amendment of Agreement
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

84

 This Agreement may be amended by an instrument in writing executed by the Grantor and the 

Trustee, or by the Trustee and [the Director of the implementing agency] if the Grantor ceases to 

exist.

Section 15. Irrevocability and Termination

 Subject to the right of the parties to amend this Agreement as provided in Section 14, this 

Trust shall be irrevocable and shall continue until terminated at the written direction of the 

Grantor and the Trustee, or by the Trustee and [the Director of the implementing agency], if the 

Grantor ceases to exist. Upon termination of the Trust, all remaining trust property, less final 

trust administration expenses, shall be delivered to the Grantor.

Section 16. Immunity and Indemnification

 The Trustee shall not incur personal liability of any nature in connection with any act or 

omission, made in good faith, in the administration of this Trust, or in carrying out any directions 

by the Grantor or [the Director of the implementing agency] issued in accordance with this 

Agreement. The Trustee shall be indemnified and saved harmless by the Grantor, from and 

against any personal liability to which the Trustee may be subjected by reason of any act or 

conduct in its official capacity, including all expenses reasonably incurred in its defense in the 

event the Grantor fails to provide such defense.

Section 17. Choice of Law

 This Agreement shall be administered, construed, and enforced according to the laws of the 

state of [insert name of state], or the Comptroller of the Currency in the case of National 

Association banks.

Section 18. Interpretation

 As used in this Agreement, words in the singular include the plural and words in the plural 

include the singular. The descriptive headings for each section of this Agreement shall not affect 

the interpretation or the legal efficacy of this Agreement.

 In Witness whereof the parties have caused this Agreement to be executed by their respective 

officers duly authorized and their corporate seals (if applicable) to be hereunto affixed and 

attested as of the date first above written. The parties below certify that the wording of this 

Agreement is identical to the wording specified in 40 CFR 280.103(b)(1) as such regulations 

were constituted on the date written above.

[Signature of Grantor]

[Name of the Grantor]

[Title]

Attest:

 [Signature of Trustee]
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

85

 [Name of the Trustee]

 [Title]

 [Seal]

 [Signature of Witness]

 [Name of the Witness]

 [Title]

 [Seal]

(2) The standby trust agreement, or trust agreement must be accompanied by a formal 

certification of acknowledgement similar to the following. State requirements may differ on the 

proper content of this acknowledgment.

State of_________________________________________________________________

County of_______________________________________________________________

 On this [date], before me personally came [owner or operator] to me known, who, being by 

me duly sworn, did depose and say that she/he resides at [address], that she/he is [title] of 

[corporation], the corporation described in and which executed the above instrument; that she/he 

knows the seal of said corporation; that the seal affixed to such instrument is such corporate seal; 

that it was so affixed by order of the Board of Directors of said corporation; and that she/he 

signed her/his name thereto by like order.

[Signature of Notary Public]

 [Name of Notary Public]

(c) The Director of the implementing agency will instruct the trustee to refund the 

balance of the standby trust fund to the provider of financial assurance if the Director determines 

that no additional corrective action costs or third-party liability claims will occur as a result of a 

release covered by the financial assurance mechanism for which the standby trust fund was 

established.

 

(d) An owner or operator may establish one trust fund as the depository mechanism for 

all funds assured in compliance with this rule.

§ 280.104 Local government bond rating test.

(a) A general purpose local government owner or operator and/or local government 

serving as a guarantor may satisfy the requirements of § 280.93 by having a currently

outstanding issue or issues of general obligation bonds of $1 million or more, excluding refunded 

obligations, with a Moody's rating of Aaa, Aa, A, or Baa, or a Standard & Poor's rating of AAA, 

AA, A, or BBB. Where a local government has multiple outstanding issues, or where a local 

government's bonds are rated by both Moody's and Standard and Poor's, the lowest rating must 

be used to determine eligibility. Bonds that are backed by credit enhancement other than 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

86

municipal bond insurance may not be considered in determining the amount of applicable bonds 

outstanding.

 

(b) A local government owner or operator or local government serving as a guarantor that 

is not a general-purpose local government and does not have the legal authority to issue general 

obligation bonds may satisfy the requirements of § 280.93 by having a currently outstanding 

issue or issues of revenue bonds of $1 million or more, excluding refunded issues, and by also 

having a Moody's rating of Aaa, Aa, A, or Baa, or a Standard & Poor's rating of AAA, AA, A, or 

BBB as the lowest rating for any rated revenue bond issued by the local government. Where 

bonds are rated by both Moody's and Standard & Poor's, the lower rating for each bond must be 

used to determine eligibility. Bonds that are backed by credit enhancement may not be 

considered in determining the amount of applicable bonds outstanding.

 

(c) The local government owner or operator and/or guarantor must maintain a copy of its 

bond rating published within the last 12 months by Moody's or Standard & Poor's.

 

(d) To demonstrate that it meets the local government bond rating test, the chief financial 

officer of a general purpose local government owner or operator and/or guarantor must sign 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 local government owner or 

operator, or guarantor]. This letter is in support of the use of the bond rating test 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 bond rating test: [List 

for each facility: the name and address of the facility where tanks are assured by the bond rating 

test].

 The details of the issue date, maturity, outstanding amount, bond rating, and bond rating 

agency of all outstanding bond issues that are being used by [name of local government owner or 

operator, or guarantor] to demonstrate financial responsibility are as follows: [complete table]

___________________________________________________________________________

Issue date Maturity date Outstanding amount Bond rating Rating agency

___________________________________________________________________________

 [Moody's or Standard & Poor's]

___________________________________________________________________________

 The total outstanding obligation of [insert amount], excluding refunded bond issues, exceeds 

the minimum amount of $1 million. All outstanding general obligation bonds issued by this 

government that have been rated by Moody's or Standard & Poor's are rated as at least 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

87

investment grade (Moody's Baa or Standard & Poor's BBB) based on the most recent ratings 

published within the last 12 months. Neither rating service has provided notification within the 

last 12 months of downgrading of bond ratings below investment grade or of withdrawal of bond 

rating other than for repayment of outstanding bond issues.

 I hereby certify that the wording of this letter is identical to the wording specified in 40 CFR 

Part 280.104(d) as such regulations were constituted on the date shown immediately below.

[Date]__________________________________________________________________

[Signature]______________________________________________________________

[Name]_________________________________________________________________

[Title]__________________________________________________________________

(e) To demonstrate that it meets the local government bond rating test, the chief financial 

officer of local government owner or operator and/or guarantor other than a general purpose 

government must sign 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 local government owner or 

operator, or guarantor]. This letter is in support of the use of the bond rating test 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). This local government is not organized to provide general 

governmental services and does not have the legal authority under state law or constitutional 

provisions to issue general obligation debt.

 Underground storage tanks at the following facilities are assured by this bond rating test: [List 

for each facility: the name and address of the facility where tanks are assured by the bond rating 

test].

 The details of the issue date, maturity, outstanding amount, bond rating, and bond rating 

agency of all outstanding revenue bond issues that are being used by [name of local government 

owner or operator, or guarantor] to demonstrate financial responsibility are as follows: [complete 

table]

___________________________________________________________________________

Issue date Maturity date Outstanding amount Bond rating Rating agency

___________________________________________________________________________

 [Moody's or Standard & Poor's]

___________________________________________________________________________

 The total outstanding obligation of [insert amount], excluding refunded bond issues, exceeds 

the minimum amount of $1 million. All outstanding revenue bonds issued by this government 

that have been rated by Moody's or Standard & Poor's are rated as at least investment grade 

(Moody's Baa or Standard & Poor's BBB) based on the most recent ratings published within the 

last 12 months. The revenue bonds listed are not backed by third-party credit enhancement or 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

88

insured by a municipal bond insurance company. Neither rating service has provided notification 

within the last 12 months of downgrading of bond ratings below investment grade or of 

withdrawal of bond rating other than for repayment of outstanding bond issues.

 I hereby certify that the wording of this letter is identical to the wording specified in 40 CFR 

part 280.104(e) as such regulations were constituted on the date shown immediately below.

[Date]__________________________________________________________________

[Signature]______________________________________________________________

[Name]_________________________________________________________________

[Title]__________________________________________________________________

(f) The Director of the implementing agency may require reports of financial condition at 

any time from the local government owner or operator, and/or local government guarantor. If the 

Director finds, on the basis of such reports or other information, that the local government owner 

or operator, and/or guarantor, no longer meets the local government bond rating test 

requirements of § 280.104, the local government owner or operator must obtain alternative 

coverage within 30 days after notification of such a finding.

 

(g) If a local government owner or operator using the bond rating test to provide financial 

assurance finds that it no longer meets the bond rating test requirements, the local government 

owner or operator must obtain alternative coverage within 150 days of the change in status.

(h) If the local government owner or operator fails to obtain alternate assurance within 

150 days of finding that it no longer meets the requirements of the bond rating test or within 30 

days of notification by the Director of the implementing agency that it no longer meets the 

requirements of the bond rating test, the owner or operator must notify the Director of such 

failure within 10 days.

§ 280.105 Local government financial test.

(a) A local government owner or operator may satisfy the requirements of § 280.93 by

passing the financial test specified in this section. To be eligible to use the financial test, the local 

government owner or operator must have the ability and authority to assess and levy taxes or to 

freely establish fees and charges. To pass the local government financial test, the owner or 

operator must meet the criteria of paragraphs (b)(2) and (b)(3) of this section based on year-end 

financial statements for the latest completed fiscal year.

 

(b)(1) The local government owner or operator must have the following information 

available, as shown in the year-end financial statements for the latest completed fiscal year:

 

(i) Total revenues: Consists of the sum of general fund operating and non-operating 

revenues including net local taxes, licenses and permits, fines and forfeitures, revenues from use 

of money and property, charges for services, investment earnings, sales (property, publications, 

etc.), intergovernmental revenues (restricted and unrestricted), and total revenues from all other 

governmental funds including enterprise, debt service, capital projects, and special revenues, but 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

89

excluding revenues to funds held in a trust or agency capacity. For purposes of this test, the 

calculation of total revenues shall exclude all transfers between funds under the direct control of 

the local government using the financial test (interfund transfers), liquidation of investments, and 

issuance of debt.

 

(ii) Total expenditures: Consists of the sum of general fund operating and non-operating 

expenditures including public safety, public utilities, transportation, public works, environmental 

protection, cultural and recreational, community development, revenue sharing, employee 

benefits and compensation, office management, planning and zoning, capital projects, interest 

payments on debt, payments for retirement of debt principal, and total expenditures from all 

other governmental funds including enterprise, debt service, capital projects, and special 

revenues. For purposes of this test, the calculation of total expenditures shall exclude all transfers 

between funds under the direct control of the local government using the financial test (interfund 

transfers).

 

(iii) Local revenues: Consists of total revenues (as defined in paragraph (b)(1)(i) of this 

section) minus the sum of all transfers from other governmental entities, including all monies 

received from Federal, state, or local government sources.

 

(iv) Debt service: Consists of the sum of all interest and principal payments on all longterm credit obligations and all interest-bearing short-term credit obligations. Includes interest and 

principal payments on general obligation bonds, revenue bonds, notes, mortgages, judgments, 

and interest bearing warrants. Excludes payments on non-interest-bearing short-term obligations, 

interfund obligations, amounts owed in a trust or agency capacity, and advances and contingent 

loans from other governments.

 

(v) Total funds: Consists of the sum of cash and investment securities from all funds, 

including general, enterprise, debt service, capital projects, and special revenue funds, but 

excluding employee retirement funds, at the end of the local government's financial reporting 

year. Includes Federal securities, Federal agency securities, state and local government 

securities, and other securities such as bonds, notes and mortgages. For purposes of this test, the 

calculation of total funds shall exclude agency funds, private trust funds, accounts receivable, 

value of real property, and other non-security assets.

 

(vi) Population consists of the number of people in the area served by the local 

government.

 

(2) The local government's year-end financial statements, if independently audited, 

cannot include an adverse auditor's opinion or a disclaimer of opinion. The local government 

cannot have outstanding issues of general obligation or revenue bonds that are rated as less than 

investment grade.

 

(3) The local government owner or operator must have a letter signed by the chief 

financial officer worded as specified in paragraph (c) of this section.

 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

90

(c) To demonstrate that it meets the financial test under paragraph (b) of this section, the 

chief financial officer of the local government owner or operator, 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]. This 

letter is in support of the use of the local government financial test 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 [List for 

each facility: the name and address of the facility where tanks assured by this financial test are 

located. 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 by the tank identification 

number provided in the notification submitted pursuant to 40 CFR Part 280.22 or the 

corresponding state requirements.]

 This owner or operator has not received an adverse opinion, or a disclaimer of opinion from an 

independent auditor on its financial statements for the latest completed fiscal year. Any 

outstanding issues of general obligation or revenue bonds, if rated, have a Moody's rating of Aaa, 

Aa, A, or Baa or a Standard and Poor's rating of AAA, AA, A, or BBB; if rated by both firms, 

the bonds have a Moody's rating of Aaa, Aa, A, or Baa and a Standard and Poor's rating of AAA, 

AA, A, or BBB.

 Worksheet for Municipal Financial Test

 Part I: Basic Information

 1. Total Revenues

a. Revenues (dollars) ________

 Value of revenues excludes liquidation of investments and issuance of debt. Value includes all 

general fund operating and non-operating revenues, as well as all revenues from all other 

governmental funds including enterprise, debt service, capital projects, and special revenues, but 

excluding revenues to funds held in a trust or agency capacity.

b. Subtract interfund transfers (dollars) ________

c. Total Revenues (dollars) ________

 2. Total Expenditures

a. Expenditures (dollars) ________
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

91

 Value consists of the sum of general fund operating and non-operating expenditures including 

interest payments on debt, payments for retirement of debt principal, and total expenditures from 

all other governmental funds including enterprise, debt service, capital projects, and special 

revenues.

b. Subtract interfund transfers (dollars) ________

c. Total Expenditures (dollars) ________

 3. Local Revenues

a. Total Revenues (from 1c) (dollars) ________

b. Subtract total intergovernmental transfers (dollars) ________

c. Local Revenues (dollars) ________

 4. Debt Service

a. Interest and fiscal charges (dollars) ________

b. Add debt retirement (dollars) ________

c. Total Debt Service (dollars) ________

 5. Total Funds (Dollars) ________

(Sum of amounts held as cash and investment securities from all funds, excluding amounts held 

for employee retirement funds, agency funds, and trust funds)

 6. Population (Persons) ________

 Part II: Application of Test

 7. Total Revenues to Population

a. Total Revenues (from 1c) ________

b. Population (from 6) ________

c. Divide 7a by 7b ________

d. Subtract 417________

e. Divide by 5,212 ________

f. Multiply by 4.095 ________

 8. Total Expenses to Population

a. Total Expenses (from 2c) ________

b. Population (from 6) ________

c. Divide 8a by 8b ________

d. Subtract 524 ________

e. Divide by 5,401________

f. Multiply by 4.095 ________
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

92

 9. Local Revenues to Total Revenues

a. Local Revenues (from 3c) ________

b. Total Revenues (from 1c) ________

c. Divide 9a by 9b ________

d. Subtract .695 ________

e. Divide by .205 ________

f. Multiply by 2.840 ________

 10. Debt Service to Population

a. Debt Service (from 4c) ________

b. Population (from 6) ________

c. Divide 10a by 10b ________

d. Subtract 51 ________

e. Divide by 1,038 ________

f. Multiply by -1.866 ________

 11. Debt Service to Total Revenues

a. Debt Service (from 4c) ________

b. Total Revenues (from 1c) ________

c. Divide 11a by 11b ________

d. Subtract .068 ________

e. Divide by .259 ________

f. Multiply by -3.533 ________

 12. Total Revenues to Total Expenses

a. Total Revenues (from 1c) ________

b. Total Expenses (from 2c) ________

c. Divide 12a by 12b ________

d. Subtract .910 ________

e. Divide by .899 ________

f. Multiply by 3.458 ________

 13. Funds Balance to Total Revenues

a. Total Funds (from 5) ________

b. Total Revenues (from 1c) ________

c. Divide 13a by 13b ________

d. Subtract .891 ________

e. Divide by 9.156 ________

f. Multiply by 3.270 ________

 14. Funds Balance to Total Expenses
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

93

a. Total Funds (from 5) ________

b. Total Expenses (from 2c) ________

c. Divide 14a by 14b ________

d. Subtract .866 ________

e. Divide by 6.409 ________

f. Multiply by 3.270 ________

 15. Total Funds to Population ________

a. Total Funds (from 5) ________

b. Population (from 6) ________

c. Divide 15a by 15b ________

d. Subtract 270 ________

e. Divide by 4,548 ________

f. Multiply by 1.866 ________

16. Add 7f + 8f + 9f + 10f + 11f + 12f + 13f + 14f + 15f + 4.937 ________

 I hereby certify that the financial index shown on line 16 of the worksheet is greater than zero 

and that the wording of this letter is identical to the wording specified in 40 CFR part 280.105(c) 

as such regulations were constituted on the date shown immediately below.

[Date]

[Signature]

[Name]

[Title]

(d) If a local government owner or operator using the test to provide financial assurance 

finds that it 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.

 

(e) The Director of the implementing agency may require reports of financial condition at 

any time from the local government owner or operator. If the Director finds, on the basis of such 

reports or other information, that the local government owner or operator no longer meets the 

financial test requirements of § 280.105 (b) and (c), the owner or operator must obtain alternate 

coverage within 30 days after notification of such a finding.

 

(f) If the local government owner or operator fails to obtain alternate assurance within 

150 days of finding that it 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 it no longer meets the requirements of the financial test, the owner or 

operator must notify the Director of such failure within 10 days.
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

94

§ 280.106 Local government guarantee.

(a) A local government owner or operator may satisfy the requirements of § 280.93 by

obtaining a guarantee that conforms to the requirements of this section. The guarantor must be 

either the state in which the local government owner or operator is located or a local government 

having a “substantial governmental relationship” with the owner and operator and issuing the 

guarantee as an act incident to that relationship. A local government acting as the guarantor 

must:

 

(1) demonstrate that it meets the bond rating test requirement of § 280.104 and deliver a 

copy of the chief financial officer's letter as contained in § 280.104(d) and § 280.104(e) to the 

local government owner or operator; or

 

(2) demonstrate that it meets the worksheet test requirements of § 280.105 and deliver a 

copy of the chief financial officer's letter as contained in § 280.105(c) to the local government 

owner or operator; or

 

(3) demonstrate that it meets the local government fund requirements of § 280.107(a), § 

280.107(b), or § 280.107(c) and deliver a copy of the chief financial officer's letter as contained 

in § 280.107 to the local government owner or operator.

 

(b) If the local government guarantor is unable to demonstrate financial assurance under 

any of § § 280.104, 280.105, 280.107(a), 280.107(b), or 280.107(c), at the end of the financial 

reporting year, the guarantor shall send by certified mail, before cancellation or non-renewal of 

the guarantee, notice to the owner or operator. 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 § 280.114(e).

 

(c) The guarantee agreement must be worded as specified in paragraph (d) or (e) of this 

section, depending on which of the following alternative guarantee arrangements is selected:

 

(1) If, in the default or incapacity of the owner or operator, the guarantor guarantees to 

fund a standby trust as directed by the Director of the implementing agency, the guarantee shall 

be worded as specified in paragraph (d) of this section.

 

(2) If, in the default or incapacity of the owner or operator, the guarantor guarantees to 

make payments as directed by the Director of the implementing agency for taking corrective 

action or compensating third parties for bodily injury and property damage, the guarantee shall 

be worded as specified in paragraph (e) of this section.

 

(d) If the guarantor is a state, the local government guarantee with standby trust must be 

worded exactly as follows, except that instructions in brackets are to be replaced with relevant 

information and the brackets deleted:

 Local Government Guarantee With Standby Trust Made by a State
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

95

 Guarantee made this [date] by [name of state], herein referred to as guarantor, to [the state 

implementing agency] and to any and all third parties, and obliges, on behalf of [local 

government owner or operator].

 Recitals

 (1) Guarantor is a state.

 (2) [Local government 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 part 280 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) Guarantor guarantees to [implementing agency] and to any and all third parties that:

 In the event that [local government 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 part 280.112, in an 

amount not to exceed the coverage limits specified above.

 In the event that the [Director] determines that [local government 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 fund in accordance with the provisions of 40 CFR 

part 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 part 280.112 to satisfy such judgment(s), award(s), or 

settlement agreement(s) up to the limits of coverage specified above.

 (4) 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.

 (5) 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.

 (6) Guarantor agrees to remain bound under this guarantee for so long as [local government 

owner or operator] must comply with the applicable financial responsibility requirements of 40 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

96

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.

 (7) The guarantor's obligation does not apply to any of the following:

 (a) Any obligation of [local government 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: local government owner or operator] arising from, 

and in the course of, employment by [insert: local government 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: local government 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 part 280.93.

 (8) Guarantor expressly waives notice of acceptance of this guarantee by [the implementing 

agency], by any or all third parties, or by [local government owner or operator],

 I hereby certify that the wording of this guarantee is identical to the wording specified in 40 

CFR part 280.106(d) 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:

 If the guarantor is a local government, the local government guarantee with standby trust must 

be worded exactly as follows, except that instructions in brackets are to be replaced with relevant 

information and the brackets deleted:

Local Government Guarantee With Standby Trust Made by a Local Government

 Guarantee made this [date] by [name of guaranteeing entity], a local government organized 

under the laws of [name of state], herein referred to as guarantor, to [the state implementing 

agency] and to any and all third parties, and obliges, on behalf of [local government owner or 

operator].

 Recitals

 (1) Guarantor meets or exceeds [select one: the local government bond rating test 

requirements of 40 CFR part 280.104, the local government financial test requirements of 40 

CFR part 280.105, or the local government fund under 40 CFR part 280.107(a), 280.107(b), or 

280.107(c)].
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

97

 (2) [Local government 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 part 280 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) Incident to our substantial governmental relationship with [local government owner or 

operator], guarantor guarantees to [implementing agency] and to any and all third parties that:

 In the event that [local government 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 part 280.112, in an 

amount not to exceed the coverage limits specified above.

 In the event that the [Director] determines that [local government 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 fund in accordance with the provisions of 40 CFR 

part 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 part 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 or exceed the requirements of the financial responsibility mechanism 

specified in paragraph (1), guarantor shall send within 120 days of such failure, by certified mail, 

notice to [local government 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 [local government 

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 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

98

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 [local government 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: local government owner or operator] arising from, 

and in the course of, employment by [insert: local government 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: local government 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 part 280.93.

 (9) Guarantor expressly waives notice of acceptance of this guarantee by [the implementing 

agency], by any or all third parties, or by [local government owner or operator].

 I hereby certify that the wording of this guarantee is identical to the wording specified in 40 

CFR part 280.106(d) 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:

________________________________________________________________________

(e) If the guarantor is a state, the local government guarantee without standby trust must 

be worded exactly as follows, except that instructions in brackets are to be replaced with relevant 

information and the brackets deleted:

 Local Government Guarantee Without Standby Trust Made by a State

 Guarantee made this [date] by [name of state], herein referred to as guarantor, to [the state 

implementing agency] and to any and all third parties, and obliges, on behalf of [local 

government owner or operator].

 Recitals

 (1) Guarantor is a state.

 (2) [Local government 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 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

99

identification number provided in the notification submitted pursuant to 40 CFR part 280 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) Guarantor guarantees to [implementing agency] and to any and all third parties and obliges 

that:

 In the event that [local government 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 written instructions from the 

[Director] shall make funds available to pay for corrective actions and compensate third parties 

for bodily injury and property damage in an amount not to exceed the coverage limits specified 

above.

 In the event that the [Director] determines that [local government 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 make funds available to pay for corrective actions 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 make funds available 

to compensate third parties for bodily injury and property damage in an amount not to exceed the 

coverage limits specified above.

 (4) 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.

 (5) 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.

 (6) Guarantor agrees to remain bound under this guarantee for so long as [local government 

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. If notified of a probable release, the guarantor agrees to remain 

bound to the terms of this guarantee for all charges arising from the release, up to the coverage 

limits specified above, notwithstanding the cancellation of the guarantee with respect to future 

releases.

 (7) The guarantor's obligation does not apply to any of the following:
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

100

 (a) Any obligation of [local government 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 local government owner or operator] arising from, 

and in the course of, employment by [insert: local government 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: local government 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 part 280.93.

 (8) Guarantor expressly waives notice of acceptance of this guarantee by [the implementing 

agency], by any or all third parties, or by [local government owner or operator].

 I hereby certify that the wording of this guarantee is identical to the wording specified in 40 

CFR part 280.106(e) 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:

 If the guarantor is a local government, the local government guarantee without standby trust 

must be worded exactly as follows, except that instructions in brackets are to be replaced with 

relevant information and the brackets deleted:

Local Government Guarantee Without Standby Trust Made by a Local Government

 Guarantee made this [date] by [name of guaranteeing entity], a local government organized 

under the laws of [name of state], herein referred to as guarantor, to [the state implementing 

agency] and to any and all third parties, and obliges, on behalf of [local government owner or 

operator].

 Recitals

 (1) Guarantor meets or exceeds [select one: the local government bond rating test 

requirements of 40 CFR part 280.104, the local government financial test requirements of 40 part 

CFR 280.105, the local government fund under 40 CFR part 280.107(a), 280.107(b), or 

280.107(c).

 (2) [Local government 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 part 280 or the 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

101

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) Incident to our substantial governmental relationship with [local government owner or 

operator], guarantor guarantees to [implementing agency] and to any and all third parties and 

obliges that:

 In the event that [local government 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 written instructions from the 

[Director] shall make funds available to pay for corrective actions and compensate third parties 

for bodily injury and property damage in an amount not to exceed the coverage limits specified 

above.

 In the event that the [Director] determines that [local government 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 make funds available to pay for corrective actions 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 make funds available 

to compensate third parties for bodily injury and property damage in an amount not to exceed the 

coverage limits specified above.

 (4) Guarantor agrees that if at the end of any fiscal year before cancellation of this guarantee, 

the guarantor fails to meet or exceed the requirements of the financial responsibility mechanism 

specified in paragraph (1), guarantor shall send within 120 days of such failure, by certified mail, 

notice to [local government 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 [local government 

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. If notified of a probable release, the guarantor agrees to remain 

bound to the terms of this guarantee for all charges arising from the release, up to the coverage 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

102

limits specified above, notwithstanding the cancellation of the guarantee with respect to future 

releases.

 (8) The guarantor's obligation does not apply to any of the following:

 (a) Any obligation of [local government 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: local government owner or operator] arising from, 

and in the course of, employment by [insert: local government 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: local government 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 part 280.93.

 (9) Guarantor expressly waives notice of acceptance of this guarantee by [the implementing 

agency], by any or all third parties, or by [local government owner or operator],

 I hereby certify that the wording of this guarantee is identical to the wording specified in 40 

CFR part 280.106(e) 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:

§ 280.107 Local government fund.

A local government owner or operator may satisfy the requirements of § 280.93 by

establishing a dedicated fund account that conforms to the requirements of this section. Except as 

specified in paragraph (b), a dedicated fund may not be commingled with other funds or 

otherwise used in normal operations. A dedicated fund will be considered eligible if it meets one 

of the following requirements:

(a) The fund is dedicated by state constitutional provision, or local government statute, 

charter, ordinance, or order to pay 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 and is funded for the full amount of coverage required 

under § 280.93, or funded for part of the required amount of coverage and used in combination 

with other mechanism(s) that provide the remaining coverage; or

 

(b) The fund is dedicated by state constitutional provision, or local government statute, 

charter, ordinance, or order as a contingency fund for general emergencies, including taking 

corrective action and compensating third parties for bodily injury and property damage caused 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

103

by accidental releases arising from the operation of petroleum underground storage tanks, and is 

funded for five times the full amount of coverage required under § 280.93, or funded for part of 

the required amount of coverage and used in combination with other mechanism(s) that provide 

the remaining coverage. If the fund is funded for less than five times the amount of coverage 

required under § 280.93, the amount of financial responsibility demonstrated by the fund may

not exceed one-fifth the amount in the fund; or

 

(c) The fund is dedicated by state constitutional provision, or local government statute, 

charter, ordinance or order to pay 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. A payment is made to the fund once every year for seven 

years until the fund is fully-funded. This seven year period is hereafter referred to as the “pay-inperiod.” The amount of each payment must be determined by this formula: 

TF – CF

Y

Where TF is the total required financial assurance for the owner or operator, CF is the current 

amount in the fund, and Y is the number of years remaining in the pay-in-period, and;

 

(1) The local government owner or operator has available bonding authority, approved 

through voter referendum (if such approval is necessary prior to the issuance of bonds), for an 

amount equal to the difference between the required amount of coverage and the amount held in 

the dedicated fund. This bonding authority shall be available 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, or

 

(2) The local government owner or operator has a letter signed by the appropriate state 

attorney general stating that the use of the bonding authority will not increase the local 

government's debt beyond the legal debt ceilings established by the relevant state laws. The letter 

must also state that prior voter approval is not necessary before use of the bonding authority.

 

(d) To demonstrate that it meets the requirements of the local government fund, the chief 

financial officer of the local government owner or operator and/or guarantor must sign 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 local government owner or 

operator, or guarantor]. This letter is in support of the use of the local government fund 

mechanism 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).
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

104

 Underground storage tanks at the following facilities are assured by this local government 

fund mechanism: [List for each facility: the name and address of the facility where tanks are 

assured by the local government fund].

 [Insert: “The local government fund is funded for the full amount of coverage required under § 

280.93, or funded for part of the required amount of coverage and used in combination with 

other mechanism(s) that provide the remaining coverage.” or “The local government fund is 

funded for five times the full amount of coverage required under § 280.93, or funded for part of 

the required amount of coverage and used in combination with other mechanisms(s) that provide 

the remaining coverage,” or “A payment is made to the fund once every year for seven years 

until the fund is fully-funded and [name of local government owner or operator] has available 

bonding authority, approved through voter referendum, of an amount equal to the difference 

between the required amount of coverage and the amount held in the dedicated fund” or “A 

payment is made to the fund once every year for seven years until the fund is fully-funded and I 

have attached a letter signed by the State Attorney General stating that (1) the use of the bonding 

authority will not increase the local government's debt beyond the legal debt ceilings established 

by the relevant state laws and (2) that prior voter approval is not necessary before use of the 

bonding authority”].

 The details of the local government fund are as follows:

Amount in Fund (market value of fund at close of last fiscal year):_____

 [If fund balance is incrementally funded as specified in § 

280.107(c), insert:

Amount added to fund in the most recently completed fiscal year:_____

Number of years remaining in the pay-in period: _____]

 A copy of the state constitutional provision, or local government statute, charter, ordinance or 

order dedicating the fund is attached.

 I hereby certify that the wording of this letter is identical to the wording specified in 40 CFR 

280.107(d) as such regulations were constituted on the date shown immediately below.

[Date]

[Signature]

[Name]

[Title]

§ 280.108 Substitution of financial assurance mechanisms by owner or operator.

(a) An owner or operator may substitute any alternate financial assurance mechanisms as 

specified in this subpart, provided that at all times he maintains an effective financial assurance 

mechanism or combination of mechanisms that satisfies the requirements of § 280.93.

 

(b) After obtaining alternate financial assurance as specified in this subpart, an owner or 

operator may cancel a financial assurance mechanism by providing notice to the provider of 

financial assurance.
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

105

§ 280.109 Cancellation or nonrenewal by a provider of financial assurance.

(a) Except as otherwise provided, a provider of financial assurance may cancel or fail to 

renew an assurance mechanism by sending a notice of termination by certified mail to the owner 

or operator.

 

(1) Termination of a local government guarantee, a guarantee, a surety bond, or a letter of 

credit may not occur until 120 days after the date on which the owner or operator receives the 

notice of termination, as evidenced by the return receipt.

 

(2) Termination of insurance or risk retention coverage, except for non-payment or 

misrepresentation by the insured, or state-funded assurance may not occur until 60 days after the 

date on which the owner or operator receives the notice of termination, as evidenced by the 

return receipt. Termination for non-payment of premium or misrepresentation by the insured 

may not occur until a minimum of 10 days after the date on which the owner or operator receives 

the notice of termination, as evidenced by the return receipt.

 

(b) If a provider of financial responsibility cancels or fails to renew for reasons other than 

incapacity of the provider as specified in § 280.114, the owner or operator must obtain alternate 

coverage as specified in this section within 60 days after receipt of the notice of termination. If 

the owner or operator fails to obtain alternate coverage within 60 days after receipt of the notice 

of termination, the owner or operator must notify the Director of the implementing agency of 

such failure and submit:

 

(1) The name and address of the provider of financial assurance;

 

(2) The effective date of termination; and

 

(3) The evidence of the financial assistance mechanism subject to the termination 

maintained in accordance with § 280.111(b).

§ 280.110 Reporting by owner or operator.

(a) An owner or operator must submit the appropriate forms listed in § 280.111(b) 

documenting current evidence of financial responsibility to the Director of the implementing 

agency:

(1) Within 30 days after the owner or operator identifies a release from an underground 

storage tank required to be reported under § 280.53 or § 280.61;

 

(2) If the owner or operator fails to obtain alternate coverage as required by this subpart, 

within 30 days after the owner or operator receives notice of:

 

(i) Commencement of a voluntary or involuntary proceeding under Title 11 (Bankruptcy), 

U.S. Code, naming a provider of financial assurance as a debtor,
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

106

 

(ii) Suspension or revocation of the authority of a provider of financial assurance to issue 

a financial assurance mechanism,

 

(iii) Failure of a guarantor to meet the requirements of the financial test,

 

(iv) Other incapacity of a provider of financial assurance; or

 

(3) As required by § 280.95(g) and § 280.109(b).

 

(b) An owner or operator must certify compliance with the financial responsibility

requirements of this part as specified in the new tank notification form when notifying the 

appropriate state or local agency of the installation of a new underground storage tank under § 

280.22.

 

(c) The Director of the Implementing Agency may require an owner or operator to submit 

evidence of financial assurance as described in § 280.111(b) or other information relevant to 

compliance with this subpart at any time.

§ 280.111 Recordkeeping.

(a) Owners or operators must maintain evidence of all financial assurance mechanisms 

used to demonstrate financial responsibility under this subpart for an underground storage tank 

until released from the requirements of this subpart under § 208.113. An owner or operator must 

maintain such evidence at the underground storage tank site or the owner's or operator's place of 

work. Records maintained off-site must be made available upon request of the implementing 

agency.

 

(b) An owner or operator must maintain the following types of evidence of financial 

responsibility:

 

(1) An owner or operator using an assurance mechanism specified in §§ 280.95 through 

280.100 or § 280.102 or §§ 280.104 through 280.107 must maintain a copy of the instrument 

worded as specified.

 

(2) An owner or operator using a financial test or guarantee, or a local government 

financial test or a local government guarantee supported by the local government financial test 

must maintain a copy of the chief financial officer's letter based on year-end financial statements 

for the most recent completed financial reporting year. Such evidence must be on file no later 

than 120 days after the close of the financial reporting year.

 

(3) An owner or operator using a guarantee, surety bond, or letter of credit must maintain 

a copy of the signed standby trust fund agreement and copies of any amendments to the 

agreement.

 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

107

(4) A local government owner or operator using a local government guarantee under § 

280.106(d) must maintain a copy of the signed standby trust fund agreement and copies of any 

amendments to the agreement.

 

(5) A local government owner or operator using the local government bond rating test 

under § 280.104 must maintain a copy of its bond rating published within the last twelve months 

by Moody's or Standard & Poor's.

 

(6) A local government owner or operator using the local government guarantee under § 

280.106, where the guarantor's demonstration of financial responsibility relies on the bond rating 

test under § 280.104 must maintain a copy of the guarantor's bond rating published within the 

last twelve months by Moody's or Standard & Poor's.

 

(7) An owner or operator using an insurance policy or risk retention group coverage must 

maintain a copy of the signed insurance policy or risk retention group coverage policy, with the 

endorsement or certificate of insurance and any amendments to the agreements.

 

(8) An owner or operator covered by a state fund or other state assurance must maintain 

on file a copy of any evidence of coverage supplied by or required by the state under §

280.101(d).

 

(9) An owner or operator using a local government fund under § 

280.107 must maintain the following documents:

 

(i) A copy of the state constitutional provision or local government statute, charter, 

ordinance, or order dedicating the fund, and

 

(ii) Year-end financial statements for the most recent completed financial reporting year 

showing the amount in the fund. If the fund is established under § 280.107(c) using incremental 

funding backed by bonding authority, the financial statements must show the previous year's 

balance, the amount of funding during the year, and the closing balance in the fund.

 

(iii) If the fund is established under § 280.107(c) using incremental funding backed by 

bonding authority, the owner or operator must also maintain documentation of the required 

bonding authority, including either the results of a voter referendum (under § 280.107(c)(1)), or 

attestation by the State Attorney General as specified under § 280.107(c)(2).

 

(10) A local government owner or operator using the local government guarantee 

supported by the local government fund must maintain a copy of the guarantor's year-end 

financial statements for the most recent completed financial reporting year showing the amount 

of the fund.

 

(11)(i) An owner or operator using an assurance mechanism specified in §§ 280.95 

through 280.107 must maintain an updated copy of a certification of financial responsibility

worded as follows, except that instructions in brackets are to be replaced with the relevant 

information and the brackets deleted:
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

108

 Certification of Financial Responsibility

 [Owner or operator] hereby certifies that it is in compliance with the requirements of subpart 

H of 40 CFR part 280.

 The financial assurance mechanism(s) used to demonstrate financial responsibility under 

subpart H of 40 CFR part 280 is (are) as follows:

 [For each mechanism, list the type of mechanism, name of issuer, mechanism number (if 

applicable), amount of coverage, effective period 

of coverage and whether the mechanism covers “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.”]

[Signature of owner or operator]

[Name of owner or operator]

[Title]

[Date]

[Signature of witness or notary]

[Name of witness or notary]

[Date]

(ii) The owner or operator must update this certification whenever the financial assurance 

mechanism(s) used to demonstrate financial responsibility change(s).

§ 280.112 Drawing on financial assurance mechanisms.

(a) Except as specified in paragraph (d) of this section, the Director of the implementing 

agency shall require the guarantor, surety, or institution issuing a letter of credit to place the 

amount of funds stipulated by the Director, up to the limit of funds provided by the financial 

assurance mechanism, into the standby trust if:

 

(1)(i) 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, as applicable, other financial assurance mechanism; and

 

(ii) The Director determines or suspects that a release from an underground storage tank 

covered by the mechanism has occurred and so notifies the owner or operator or the owner or 

operator has notified the Director pursuant to subparts E or F of a release from an underground 

storage tank covered by the mechanism; or

(2) The conditions of paragraph (b)(1) or (b)(2) (i) or (ii) of this section are satisfied.

 

(b) The Director of the implementing agency may draw on a standby trust fund when:

 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

109

(1) The Director 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 40 CFR 

part 280, subpart F; or

 

(2) The Director has received either:

 

(i) Certification from the owner or operator and the third-party liability claimant(s) and 

from attorneys representing the 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 instructions in brackets are to 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]

 Owner or Operator

 Attorney for Owner or Operator

 (Notary)

 Date

[Signatures]

 Claimant(s)

 Attorney(s) for Claimant(s)

 (Notary)

 Date

or 

(ii) 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 subpart and the Director determines that the 

owner or operator has not satisfied the judgment.

(c) If the Director of the implementing agency 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 shall be corrective action costs necessary to 

protect human health and the environment. The Director shall pay third-party liability claims in 

the order in which the Director receives certifications under paragraph (b)(2)(i) of this section, 

and valid court orders under paragraph (b)(2)(ii) of this section.

 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

110

(d) A governmental entity acting as guarantor under § 280.106(e), the local government 

guarantee without standby trust, shall make payments as directed by the Director under the 

circumstances described in § 280.112 (a), (b), and (c).

§ 280.113 Release from the requirements.

An 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 as required by 40 CFR part 280, subpart G.

§ 280.114 Bankruptcy or other incapacity of owner or 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 

must notify the Director of the implementing agency by certified mail of such commencement 

and submit the appropriate forms listed in § 280.111(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 must notify the owner or operator by certified mail of such commencement as 

required under the terms of the guarantee specified in § 280.96.

 

(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 must notify the Director of the implementing agency by

certified mail of such commencement and submit the appropriate forms listed in § 280.111(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 must notify the local government owner or operator by 

certified mail of such commencement as required under the terms of the guarantee specified in § 

280.106.

 

(e) An 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 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 owner or operator does not 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

111

obtain alternate coverage within 30 days after such notification, he must notify the Director of 

the implementing agency.

 

(f) 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 owner or operator must obtain alternate financial assurance.

§ 280.115 Replenishment of guarantees, letters of credit, or surety bonds.

(a) If at any time after a standby trust is funded upon the instruction of the Director of the 

implementing agency 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 owner or operator shall by the anniversary date 

of the financial mechanism from which the funds were drawn:

(1) Replenish the value of financial assurance to equal the full amount of coverage 

required, or

 

(2) Acquire another financial assurance mechanism for the amount by which funds in the 

standby trust have been reduced.

 

(b) For purposes of this section, the full amount of coverage required is the amount of 

coverage to be provided by § 280.93 of this subpart. 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.

§ 280.116 Suspension of enforcement. [Reserved]

Subpart I – Lender Liability

EPA made no changes to this subpart.

Subpart J – Operator Training

§ 280.240 General requirement for all UST systems.

Not later than [three years after the effective date of rule], all owners and operators of UST 

systems must ensure they have designated Class A, Class B, and Class C operators who meet the

requirements of this subpart. 

§ 280.241 Designation of operators.

UST system owners and operators must designate: 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

112

(a) At least one Class A and one Class B operator for each UST or group of USTs at a 

facility; and

(b) Each individual who meets the definition of Class C operator at the UST facility as a 

Class C operator. Class C operators must be employees of the UST system owner and operator. 

§ 280.242 Requirements for operator training.

UST system owners and operators must ensure Class A, Class B, and Class C operators 

meet the requirements of this section. Any individual designated for more than one operator 

class must successfully complete the required training program or comparable examination 

according to the operator class in which the individual is designated.

(a) Class A operators. Each designated Class A operator must either be trained in 

accordance with paragraphs (a)(1) and (a)(2) of this section or pass a comparable examination in 

accordance with paragraph (e) of this section. Class A operators must receive training from an 

independent trainer.

(1) At a minimum, the training program for the Class A operator must provide general

knowledge of the requirements in this paragraph. At a minimum, the training must teach the 

Class A operators, as applicable, on the purpose, methods, and function of:

(i) Spill and overfill prevention;

(ii) Release detection; 

(iii) Corrosion protection; 

(iv) Emergency response; 

(v) Product and equipment compatibility; 

(vi) Financial responsibility; 

(vii) Notification and storage tank registration;

(viii) Temporary and permanent closure; 

(ix) Related reporting and recordkeeping; 

(x) Environmental and regulatory consequences of releases; and

(xi) Training requirements for Class B and Class C operators.

(2) At a minimum, the training program must evaluate Class A operators to determine 

these individuals have the knowledge and skills to make informed decisions regarding 

compliance and determine whether appropriate individuals are fulfilling the operation, 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

113

maintenance, and recordkeeping requirements for UST systems in accordance paragraph (a)(1)

of this section.

(b) Class B operators. Each designated Class B operator must either receive training in 

accordance with paragraphs (b)(1) and (b)(2) of this section or pass a comparable examination, 

in accordance with paragraph (e) of this section. Class B operators must receive training from an 

independent trainer.

(1) At a minimum, the training program for the Class B operator must cover either: 

general requirements that encompass all regulatory requirements and typical equipment used at 

UST facilities; or site-specific requirements which address only the regulatory requirements and 

equipment specific to the facility. At a minimum, the training program for Class B operators 

must teach the Class B operator, as applicable, on the purpose, methods, and function of: 

(i) Operation and maintenance;

(ii) Spill and overfill prevention; 

(iii) Release detection and related reporting; 

(iv) Corrosion protection and related testing; 

(v) Emergency response; 

(vi) Product and equipment compatibility; 

(vii) Reporting and recordkeeping;

(viii) Environmental and regulatory consequences of releases; and

(ix) Training requirements for Class C operator.

(2) At a minimum, the training program must evaluate Class B operators to determine 

these individuals have the knowledge and skills to implement applicable UST regulatory

requirements in the field on the components of typical UST systems or, as applicable, sitespecific equipment used at an UST facility in accordance with paragraph (b)(1) of this section.

(c) Class C operators. Each designated Class C operator must either: be trained by a Class 

A or Class B operator in accordance with paragraphs (c)(1) and (c)(2) of this section; complete a 

training program in accordance with paragraphs (c)(1) and (c)(2) of this section; or pass a 

comparable examination, in accordance with paragraph (e) of this section. 

(1) At a minimum, the training program for the Class C operator must teach the Class C 

operators to take appropriate actions in response to:

(i) Emergencies; and 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

114

(ii) Alarms caused by spills or releases from the UST system.

(2) At a minimum, the training program must evaluate Class C operators to determine 

these individuals have the knowledge and skills to take appropriate action in response to 

emergencies (including situations posing an immediate danger or threat to the public or to the 

environment and that require immediate action) or alarms caused by spills or releases from an 

underground storage tank system.

(d) Training program. Any training program must meet the minimum requirements of 

this section and include an evaluation through testing, a practical demonstration, or another 

approach acceptable to the implementing agency. The evaluation component of the training 

program must be developed and administered by an independent organization or the 

implementing agency or delegated authority.

(e) Comparable Examination. A comparable examination must, at a minimum, test the 

knowledge of the Class A, Class B, or Class C operators in accordance with the requirements of 

paragraphs (a),(b), or (c) of this section, as applicable. The examination must be developed and 

administered by an independent organization or the implementing agency or delegated authority.

§ 280.243 Timing of operator training. 

(a) An owner and operator must ensure that designated Class A, Class B, and Class C 

operators meet requirements in § 280.242 according to the following schedule:

Phase-In Schedule For Operator Training

Criteria Date When Operator Training Or 

Comparable Examination Is Required

One or more USTs at the facility were 

installed on or before 12/22/1988

[1 year after effective date of rule]

No USTs at the facility were installed on or 

before 12/22/1988 and at least one UST at 

the facility was installed on or before 

12/22/1998

[2 years after effective date of rule]

All USTs at the facility were installed after 

12/22/1998

[3 years after effective date of rule]

(b) Class A and Class B operators designated after the applicable effective date indicated 

in the schedule above must meet requirements in § 280.242 within 30 days of assuming duties.

(c) Class C operators designated after the applicable effective date indicated in the 

schedule above must be trained before assuming duties of a Class C operator.

§ 280.244 Retraining.

 
Draft Internal EPA Document Do Not Cite, Quote or Distribute

October 2011

115

Class A and Class B operators of UST systems determined by the implementing agency to 

be out of compliance must complete a training program or comparable examination in 

accordance with requirements in § 280.242. At a minimum, the training must cover the area(s) 

determined to be out of compliance. UST system owners and operators must ensure Class A and 

Class B operators are retrained pursuant to this section no later than 30 days from the date the 

implementing agency determines the facility is out of compliance except in one of the following 

situations: 

(a) Class A and Class B operators take annual refresher training. Refresher training for 

Class A and Class B operators must cover all applicable requirements in § 280.242, or

(b) The implementing agency, at its discretion, grants a waiver of this retraining 

requirement to either the Class A or Class B operator or both. 

§ 280.245 Documentation. 

Owners and operators of underground storage tank systems must maintain a list of 

designated Class A, Class B, and Class C operators and maintain records verifying that training

and retraining, as applicable, have been completed, in accordance with § 280.34 as follows:

(a) The list must:

(1) Identify all Class A, Class B, and Class C operators at the facility over the last three 

years; and

(2) Include names, class of operator trained, date assumed duties, date each completed 

initial training, and any retraining. 

(b) Records verifying completion of training or retraining must be a paper or electronic 

record for Class A, Class B, and Class C operators. The records, at a minimum, must identify

name of trainee, date trained, and operator training class completed. Owners and operators must 

maintain these records for as long as Class A, Class B, and Class C operators are designated. 

The following requirements also apply to the following types of training:

(1) Records from classroom or field training programs or a comparable examination must, 

at a minimum, be signed by the trainer or examiner and list the printed name of the trainer or 

examiner and the company name, address, and phone number; 

(2) Records from computer-based training must, at a minimum, indicate the name of the 

training program and web address, if Internet-based; and

(3) Records of retraining must include those areas on which the Class A or Class B 

operator has been retrained.