Michigan Administrative Code › Department - Licensing and Regulatory Affairs › Bureau of Fire Services › Underground Storage Tank Regulations. R 29.2101-29.2192 › AMENDMENTS TO ADOPTED FEDERAL REGULATIONS › Subpart H - FINANCIAL RESPONSIBILITY › Section R. 29.2166 - Local government bond rating test

Current through Vol. 24-12, July 15, 2024
Rule 66. Section 280.104 is amended to read as
						follows:
Section 280.104.
(a) A general purpose local government O/O, a
					 local government, or any combination of owner, operator, or local government
					 serving as a guarantor may satisfy the requirements of section 280.93 by having
					 a currently outstanding issue or issues of general obligation bonds of
					 $1,000,000.00 or more, excluding refunded obligations, with a Moody's rating of
					 Aaa, Aa, A, or Baa or a Standard and Poor's rating of AAA, AA, A, or BBB. If a
					 local government has multiple outstanding issues, or if a local government's
					 bonds are rated by both Moody's and Standard and Poor's, then the lowest rating
					 must be used to determine eligibility. Bonds that are backed by credit
					 enhancement other than municipal bond insurance may not be considered in
					 determining the amount of applicable bonds outstanding.
(b) A local government O/O or local
					 government serving as a guarantor that is not a general-purpose local
					 government and that does not have the legal authority to issue general
					 obligation bonds may satisfy the requirements of section 280.93 by having a
					 currently outstanding issue or issues of revenue bonds of $1,000,000.00 or
					 more, excluding refunded issues, and having a Moody's rating of Aaa, Aa, A, or
					 Baa or a Standard and Poor's rating of AAA, AA, A, or BBB as the lowest rating
					 for any rated revenue bond issued by the local government. If bonds are rated
					 by both Moody's and Standard and Poor's, then 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 O/O, a guarantor, or any combination or owner, operator, or
					 guarantor shall maintain a copy of its bond rating published within the last 12
					 months by Moody's or Standard and Poor's.
(d) To demonstrate that it meets the local
					 government bond rating test, the chief financial officer of a general-purpose
					 local government O/O, a guarantor, or any combination of owner, operator, or
					 guarantor shall 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" and/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 Maturity Outstanding Bond Bond Rating Agency
Date Date Amount Rating [Moody's or Standard and
						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 and Poor's are rated as at least investment grade
						(Moody's Baa or Standard and 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 C.F.R. Part 280.104(d) as such
						regulations were constituted on the date shown immediately below.
[Signature]
[Name]
[Title]
[Date]
(e) To demonstrate that it meets the local
					 government bond rating test, the chief financial officer of a local government
					 O/O, a guarantor, or any other combination of owner, operator or guarantor,
					 other than a general purpose government shall 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" and/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 Maturity Outstanding Bond Bond Rating Agency
Date Date Amount Rating [Moody's or Standard and
						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 and Poor's are rated as at least investment grade (Moody's
						Baa or Standard and 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 are 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 C.F.R. Part 280.104(e) as such
						regulations were constituted on the date shown immediately below.
[Signature]
[Name]
[Title]
[Date]
(f) The director of the implementing agency
					 may require financial condition reports at any time from the local government
					 O/O, local government guarantor, or any combination of owner, operator or
					 guarantor. If the director finds, on the basis of financial condition reports
					 or other information, that the local government O/O, guarantor, or any
					 combination of owner, operator, or guarantor no longer meets the local
					 government bond rating test requirements of section 280.104, then the local
					 government O/O shall obtain alternative coverage within 30 days after
					 notification of such a finding.
(g)
					 If a local government O/O using the bond rating test to provide financial
					 assurance finds that it no longer meets the bond rating test requirements, then
					 the local government O/O shall obtain alternative coverage within 150 days of
					 the change in status.
(h) If the
					 local government O/O 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 implanting agency that it
					 no longer meets the requirements of the bond rating test, the O/O shall notify
					 the director of this failure within 10 days.