Louisiana Administrative Code › Title 33 - ENVIRONMENTAL QUALITY › Part XI - Underground Storage Tanks › Chapter 11 - Financial Responsibility › Section XI-1125 - Standby Trust Fund

Current through Register Vol. 50, No. 6, June 20, 2024
A. An owner or
				operator using any one of the mechanisms authorized by LAC 33:XI.1113, 1117, or
				1119 shall establish a standby trust fund when the mechanism is acquired. The
				trustee of the standby trust fund shall 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. The standby trust
				agreement shall meet the following requirements.
1. The standby trust agreement shall 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 Department of Environmental Quality, an agency
				  of the government of the state of Louisiana, 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 (this
				  paragraph is only applicable to the standby 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 the Department of Environmental Quality. 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 administrative authority of the
				  Department of Environmental Quality'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 department.
Section 4. Payment for ["Corrective Action" and/or
				  "Third-Party Liability Claims"]
The Trustee shall make payments from the Fund as the
				  administrative authority 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"] 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
				  worker's 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 LAC 33:XI.1107.
The Trustee shall reimburse the Grantor, or other persons as
				  specified by the administrative authority, from the Fund for corrective action
				  expenditures and/or third-party liability claims in such amounts as the
				  administrative authority shall direct in writing. In addition, the Trustee
				  shall refund to the Grantor such amounts as the administrative authority
				  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:
a. 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;
b. 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
c. 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.
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 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 administrative authority of the
				  Department of Environmental Quality to the Trustee shall be in writing, signed
				  by the administrative authority, 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 administrative
				  authority 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
				  administrative authority, except as provided for herein.
Section 14. Amendment of Agreement
This Agreement may be amended by an instrument in writing
				  executed by the Grantor and the Trustee, or by the Trustee and the
				  administrative authority of the Department of Environmental Quality 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 administrative authority of the Department of Environmental
				  Quality, 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 administrative authority 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 Louisiana, 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 LAC 33:XI.1125.B.1 as such regulations
				  were constituted on the date written above.
[Signature of grantor]
[Name of the grantor]
[Title]
Attest:
[Signature of trustee]
[Name of the trustee]
[Title]
[Seal]
[Signature of witness]
[Name of the witness]
[Title]
[Seal]
2.
				The standby trust agreement shall be accompanied by the following formal
				certification of acknowledgement.
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]