Iowa Administrative Code › Agency 567 - Environmental Protection Commission › Title IX - Spills and Hazardous Conditions › Chapter 136 - Financial Responsibility for Underground Storage Tanks › Rule 567-136.13 - Local Government Bond Rating Test

Current through Register Vol. 47, No. 3, July 24, 2024
(1) A general purpose local government owner
				or operator and/or local government serving as a guarantor may satisfy the
				requirements of rule 567-136.4 (455B) 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 & Poor's, the lower 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.
(2) 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 rule
				567-136.4 (455B) by having a
				currently outstanding issue or issues of revenue bonds of $1 million or more,
				excluding refunded issues, and 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.
(3) 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.
(4) 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 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 567-subrule 136.13(4) of the Iowa Administrative
				  Code on the date shown immediately below.
[Signature]
[Name]
[Title]
[Date]
(5)
				To demonstrate that it meets the local government bond rating test, the chief
				financial officer or 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 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 567-subrule 136.13(5) of the Iowa Administrative
				  Code on the date shown immediately below.
[Signature]
[Name]
[Title]
[Date]
(6)
				The director of the Iowa department of natural resources 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 this rule, the local government owner or operator must obtain
				alternative coverage within 30 days after notification of such a
				finding.
(7) 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.
(8) 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 department 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.