PURPOSE: This rule describes the requirements for a local government guarantee of financial responsibility.

1. (1) A local government owner or operator may satisfy the requirements of 10 CSR 20- 11.093 by obtaining a guarantee that conforms to the requirements of this rule. 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 shall demonstrate that it meets the—

   1. (A) Bond rating test requirement of 10 CSR 20-11.112 and deliver a copy of the chief financial officer’s letter as contained in 10 CSR 20-11.112(4) or (5) to the local government owner or operator;
   2. (B) Worksheet test requirements of 10 CSR 20-11.113 and deliver a copy of the chief financial officer’s letter as contained in 10 CSR 20-11.113(3) to the local government owner or operator; or
   3. (C) Local government fund requirements of 10 CSR 20-11.115(1)(A), (B) or (C) and deliver a copy of the chief financial officer’s letter as contained in 10 CSR 20-11.115 to the local government owner or operator.
2. (2) If the local government guarantor is unable to demonstrate financial assurance under any of 10 CSR 20-11.112, 10 CSR 20- 11.113, 10 CSR 20-11.115(1)(A), (B) or (C), at the end of the financial reporting year, the guarantor shall send by certified mail, before cancellation or nonrenewal of the guarantee, notice to the owner or operator. The guarantee will terminate no less than one hundred twenty (120) days after the date the owner or operator receives the notification, as evidenced by the return receipt. The owner or operator shall obtain alternative coverage as specified in 10 CSR 20-11.110(5).

3. (3) The guarantee agreement shall be worded as specified in 10 CSR 20-11 Appendix, Form 14 or 15 (see 10 CSR 20-11.115), depending on which of the following alternative guarantee arrangements is selected, if in the default or incapacity of the owner or operator, the guarantor guarantees to—

   1. (A) Fund a standby trust as directed by the director, the guarantee shall be worded as specified in 10 CSR 20-11 Appendix, Form 14 (see 10 CSR 20-11.115);
   2. (B) Make payments as directed by the director for taking corrective action or compensating third parties for bodily injury and property damage, the guarantee shall be worded as specified in 10 CSR 20-11 Appendix, Form 15 (see 10 CSR 20-11.115).
4. (4) If the guarantor is the state, the local government guarantee with standby trust shall be worded as specified in 10 CSR 20-11 Appendix, Form 14 (see 10 CSR 20-11.115).
5. (5) If the guarantor is a local government, the local government guarantee with standby trust shall be worded as specified in 10 CSR 20-11 Appendix, Form 15 (see 10 CSR 20- 11.115).
6. (6) If the guarantor is the state, the local government guarantee without standby trust shall be worded as specified in 10 CSR 20-11 Appendix, Form 16 (see 10 CSR 20-11.115).
7. (7) If the guarantor is a local government, the local government guarantee without standby trust shall be worded as specified in 10 CSR 20-11 Appendix, Form 17 (see 10 CSR 20- 11.115).

AUTHORITY: sections 319.114, RSMo (Cum. Supp. 1989) and 644.026, RSMo (Cum. Supp. 1993).* Original rule filed Aug. 3, 1993, effective April 9, 1994. *Original authority: 319.114, RSMo (1989) and 644.026, RSMo (1972), amended 1973, 1987, 1993.