New Mexico Administrative Code › Title 20 - ENVIRONMENTAL PROTECTION › Chapter 5 - PETROLEUM STORAGE TANKS › Part 117 - FINANCIAL RESPONSIBILITY › Section 20.5.117.1763 - FORM DOCUMENTS FOR STANDBY TRUST FUND

Current through Register Vol. 35, No. 13, July 16, 2024
A. To satisfy the requirements of
				20.5.117.1712 NMAC, 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 New Mexico Environmental Improvement
								Board, "EIB," has established certain regulations applicable to the Grantor,
								requiring that an owner or operator of a 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
								non-sudden accidental releases arising from the operation of the 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 located that
								are covered by 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 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 Secretary of the New Mexico Environment
								Department's instructions 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 Environment Department.
Section 4. Payment for ["Corrective Action" and/or
								"Third-Party Liability Claims"]
The Trustee shall make payments from the Fund as
								the Secretary 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 "non-sudden 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 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 20.5.117.1703 New Mexico
								Administrative Code (NMAC).
The Trustee shall reimburse the Grantor, or other
								persons as specified by the Secretary, from the Fund for corrective action
								expenditures and/or third-party liability claims in such amounts as the
								Secretary shall direct in writing. In addition, the Trustee shall refund to the
								Grantor such amounts as the Secretary 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 20.5.117 NMAC.
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 Secretary to
								the Trustee shall be in writing, signed by the Secretary, 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 Secretary 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 Secretary, 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
								Secretary 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 Secretary, 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 Secretary 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 New Mexico, 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 20.5.117.1763 NMAC and
								Paragraph (1) of Subsection B of 20.5.117.1713 NMAC 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 Witness]
[Title]
[Seal]
B.
				The standby trust agreement, or trust agreement, shall be accompanied by a
				formal certification of acknowledgment similar to the following:
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]