N.D. Admin. Code § 33.1-24-08-85
1. 1. An owner or operator, or guarantor, or both, may satisfy the requirements of section 33.1-24-08-83 by passing a financial test as specified in this section. To pass the financial test of self-insurance, the owner or operator, or guarantor, or both, must meet the criteria of subsection 2 or 3 based on year-end financial statements for the latest completed fiscal year.
2. 2. The following apply:
1. a. The owner or operator, or guarantor, or both, must have a tangible net worth of at least ten times: 1. (1) The total of the applicable aggregate amount required by section 33.1-24-08-83, based on the number of underground storage tanks for which a financial test is used to demonstrate financial responsibility to the department; 2. (2) The sum of the corrective action cost estimates, the current closure and postclosure care cost estimates, and amount of liability coverage for which a financial test is used to demonstrate financial responsibility to the department under sections 33.1-24-05-58, 33.1-24-05-77, and 33.1-24-05-79; and 3. (3) The sum of current plugging and abandonment cost estimates for which a financial test is used to demonstrate financial responsibility to the department under chapter 33.1-25-01.
2. b. The owner or operator, or guarantor, or both, must have a tangible net worth of at least ten million dollars.
3. c. The owner or operator, or guarantor, or both, must have a letter signed by the chief financial officer worded as specified in subsection 4.
4. d. The owner or operator, or guarantor, or both, must either: 1. (1) File financial statements annually with the United States securities and exchange commission, the energy information administration, or the rural utilities service; or 2. (2) Report annually the firm's tangible net worth to dun and bradstreet, and dun and bradstreet must have assigned the firm a financial strength rating of 4A or 5A.
5. e. The firm's year-end financial statements, if independently audited, cannot include an adverse auditor's opinion, a disclaimer of opinion, or a 'going concern' qualification.
3. 3. The following apply:
1. a. The owner or operator, or guarantor, or both, must meet the financial test requirements of subdivision a of subsection 6 of section 33.1-24-05-79, substituting the appropriate amounts specified in subdivisions a and b of subsection 2 of section 33.1-24-08-83 for the 'amount of liability coverage' each time specified in that section;
4. To demonstrate that it meets the financial test under subsection 2 or 3, the chief financial officer of the owner or operator, or guarantor, must sign, within one hundred twenty days of the close of each financial reporting year, as defined by the twelve-month period for which financial statements used to support the financial test are prepared, a letter worded exactly as follows, except the instructions in brackets are to be replaced by the relevant information and the brackets deleted:
I am the chief financial officer of [insert: name and address of the owner or operator, or guarantor]. This letter is in support of the use of [insert: 'the financial test of self-insurance', and/or 'guarantee'] 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 financial test by this [insert: 'owner or operator', and/or 'guarantor']: [List for each facility: the name and address of the facility where tanks assured by this financial test are located, and whether tanks are assured by this financial test. If separate mechanisms or combinations of mechanisms are being used to assure any of the tanks at this facility, list each tank assured by this financial test by the tank identification number provided in the notification submitted pursuant to state requirements.]
A [insert: 'financial test', and/or 'guarantee'] is also used by this [insert: 'owner or operator', or 'guarantor'] to demonstrate evidence of financial responsibility in the following amounts under other environmental protection agency regulations or state programs authorized by the environmental protection agency under 40 CFR Parts 271 and 145:
| EPA Regulations | Amount |
|---|---|
| Closure [§§264.143 and 265.143] | $ _____ |
| Post-Closure Care [§§264.145 and 265.145] | $ _____ |
| Liability Coverage [§§264.147 and 265.147] | $ _____ |
| Corrective Action [§264.101(b)] | $ _____ |
| Plugging and Abandonment [§144.63] | $ _____ |
| Closure | $ _____ |
| Post-Closure Care | $ _____ |
| Liability Coverage | $ _____ |
| Corrective Action | $ _____ |
| Plugging and Abandonment | $ _____ |
| Total | $ _____ |
This [insert: "owner or operator", or "guarantor"] has not received an adverse opinion, a disclaimer of opinion, or a "going concern" qualification from an independent auditor on his financial statements for the latest completed fiscal year.
[Fill in the information for Alternative I if the criteria of subsection 2 of section 33.1-24-08-85 are being used to demonstrate compliance with the financial test requirements. Fill in the information for Alternative II if the criteria of subsection 3 of section 33.1-24-08-85 are being used to demonstrate compliance with the financial test requirements.]
| 1. Amount of annual underground storage tank aggregate coverage being assured by a financial test, and/or guarantee | $ _____ |
|---|---|
| 2. Amount of corrective action, closure and postclosure care costs, liability coverage, and plugging and abandonment costs covered by a financial test, and/or guarantee | $ _____ |
| 3. Sum of lines 1 and 2 | $ _____ |
| 4. Total tangible assets | $ _____ |
| 5. Total liabilities [if any of the amount reported on line 3 is included in total liabilities, you may deduct that amount from this line and add that amount to line 6] | $ _____ |
| 6. Tangible net worth [subtract line 5 from line 4] | $ _____ |
| Yes No | |
| 7. Is line 6 at least $10 million? | _ ___ |
| 8. Is line 6 at least 10 times line 3? | _ ___ |
| 9. Have financial statements for the latest fiscal year been filed with the Securities and Exchange Commission? | _ ___ |
10. Have financial statements for the latest fiscal year been filed with the Energy Information Administration?
11. Have financial statements for the latest fiscal year been filed with the Rural Utilities Service?
12. Has financial information been provided to Dun and Bradstreet, and has Dun and Bradstreet provided a financial strength rating of 4A or 5A? [Answer "Yes" only if both criteria have been met.]
1. Amount of annual underground storage tank aggregate coverage being assured by a test, and/or guarantee
2. Amount of corrective action, closure and postclosure care costs, liability coverage, and plugging and abandonment costs covered by a financial test, and/or guarantee
3. Sum of lines 1 and 2
4. Total tangible assets
5. Total liabilities [if any of the amount reported on line 3 is included in total liabilities, you may deduct that amount from this line and add that amount to line 6]
6. Tangible net worth [subtract line 5 from line 4]
7. Total assets in the United States [required only if less than 90 percent of assets are located in the United States]
$ ______
$ ______
$ ______
$ ______
$ ______
$ ______
$ ______
8. Is line 6 at least $10 million?
9. Is line 6 at least 6 times line 3?
Yes No
10. Are at least 90 percent of assets located in the United States? [If "No", complete line 11.]
11. Is line 7 at least 6 times line 3? [Fill in either lines 12-15 or lines 16-18.]
12. Current assets
13. Current liabilities
14. Net working capital [subtract line 13 from line 12]
$ ______
$ ______
$ ______
15. Is line 14 at least 6 times line 3?
16. Current bond rating of most recent bond issue:
Yes No
17. Name of rating service:
18. Date of maturity of bond:
19. Have financial statements for the latest fiscal year been filed with the SEC, the Energy Information Administration, or the Rural Utilities Service?
[If "No", please attach a report from an independent certified public accountant certifying that there are no material differences between data as reported in lines 4-18 above and the financial statements for the latest fiscal year.]
[For both Alternative I and Alternative II complete the certification with this statement.]
I hereby certify the wording of this letter is identical to the wording specified in subsection 4 of section 33.1-24-08-85 as such rules were constituted on the date shown immediately below.
[Signature]
[Name]
[Title]
[Date]
5. If an owner or operator using the test to provide financial assurance finds the owner or operator no longer meets the requirements of the financial test based on the year-end financial statements, the owner or operator must obtain alternative coverage within one hundred fifty days of the end of the year for which financial statements have been prepared.
6. The department may require reports of financial condition at any time from the owner or operator, or guarantor, or both. If the department finds, on the basis of such reports or other information, that the owner or operator, or guarantor, or both, no longer meets the financial test requirements of subsections 2 or 3 and 4 of section 33.1-24-08-85, the owner or operator must obtain alternate coverage within thirty days after notification of such a finding.
7. If the owner or operator fails to obtain alternate assurance within one hundred fifty days of finding the owner or operator no longer meets the requirements of the financial test based on the year-end financial statements, or within thirty days of notification by the department that the owner or operator no longer meets the requirements of the financial test, the owner or operator must notify the department of such failure within ten days.
History: Effective January 1, 2019.
General Authority: NDCC 23.1-04-03, 23.1-04-06; S.L. 2017, ch. 199, § 1