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§144.70 Wording of the instruments.
(a)(1) A trust agreement for a trust fund, as specified in §144.63(a) of this
chapter, must 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 United States Environmental Protection Agency, "EPA," an agency of the United States Government, has established certain regulations applicable to the Grantor, requiring that an owner or operator of an injection well shall provide assurance that funds will be available when needed for plugging and abandonment of the injection well,
Whereas, the Grantor has elected to establish a trust to provide all or part of such financial assurance for the facility(ies) identified herein,
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.
(c) Facility or activity means any "underground injection well" or any other facility or activity that is subject to regulation under the Underground Injection Control Program.
Section 2. Identification of Facilities and Cost Estimates. This Agreement pertains to the facilities and cost estimates identified on attached Schedule A [on Schedule A, for each facility list the EPA Identification Number, name, address, and the current plugging and abandonment cost estimate, or portions thereof, for which financial assurance is demonstrated by this Agreement].
Section 3. Establishment of Fund. The Grantor and the Trustee hereby establish a trust fund, the "Fund," for the benefit of EPA. 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 consisting of the property, which is acceptable to the Trustee, described in Schedule B attached hereto. Such property and any other property subsequently transferred to the Trustee is 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, any payments necessary to discharge any liabilities of the Grantor established by EPA.
Section 4. Payment for Plugging and Abandonment. The Trustee shall make payments from the Fund as the EPA Regional Administrator shall direct, in writing, to provide for the payment of the costs of plugging and abandonment of the injection wells covered by this Agreement. The Trustee shall reimburse the Grantor or other persons as specified by the EPA Regional Administrator from the Fund for plugging and abandonment expenditures in such amounts as the EPA Regional Administrator shall direct in writing. In addition, the Trustee shall refund to the Grantor such amounts as the EPA Regional Administrator 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 or 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 beneficiary 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:
(i) Securities or other obligations of the Grantor, or any other owner or operator of the facilities, 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;
(ii) 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
(iii) 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 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 depositary 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. Annual Valuation. The Trustee shall annually, at least 30 days prior to the anniversary date of establishment of the Fund, furnish to the Grantor and to the appropriate EPA Regional Administrator a statement confirming the value of the Trust. Any securities in the Fund shall be valued at market value as of no more than 60 days prior to the anniversary date of establishment of the Fund. The failure of the Grantor to object in writing to the Trustee within 90 days after the statement has been furnished to the Grantor and the EPA Regional Administrator shall constitute a conclusively binding assent by the Grantor, barring the Grantor from asserting any claim or liability against the Trustee with respect to matters disclosed in the statement.
Section 11. Advice of Counsel. The Trustee may from time to time consult with counsel, who may be counsel to the Grantor, with respect to any question arising as to the construction of this Agreement of 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 12. 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 13. 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 a writing sent to the Grantor, the EPA Regional Administrator, 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 14. 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 Exhibit A or such other designees as the Grantor may designate by amendment to Exhibit A. 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 EPA Regional Administrator to the Trustee shall be in writing, signed by the EPA Regional Administrators of the Regions in which the facilities are located, or their designees, 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 EPA 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 EPA, except as provided for herein.
Section 15. Notice of Nonpayment. The Trustee shall notify the Grantor and the appropriate EPA Regional Administrator, by certified mail within 10 days following the expiration of the 30-day period after the anniversary of the establishment of the Trust, if no payment is received from the Grantor during that period. After the pay-in period is completed, the Trustee shall not be required to send a notice of nonpayment.
Section 16. Amendment of Agreement. This Agreement may be amended by an instrument in writing executed by the Grantor, the Trustee, and the appropriate EPA Regional Administrator, or by the Trustee and the appropriate EPA Regional Administrator if the Grantor ceases to exist.
Section 17. Irrevocability and Termination. Subject to the right of the parties to amend this Agreement as provided in Section 16, this Trust shall be irrevocable and shall continue until terminated at the written agreement of the Grantor, the Trustee, and the EPA Regional Administrator, or by the Trustee and the EPA Regional Administrator 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 18. 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 EPA Regional Administrator issued in accordance with this Agreement. The Trustee shall be indemnified and saved harmless by the Grantor or from the Trust Fund, or both, 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 19. Choice of Law. This Agreement shall be administered, construed, and enforced according to the laws of the State of [insert name of State].
Section 20. 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 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 40 CFR 144.70(a)(1) as such regulations were constituted on the
date first above written. [Signature of Grantor]
By [Title]
Attest:
[Signature of Trustee]
By
Attest:
(2) The following is an example of the certification of acknowledgment which
must accompany the trust agreement for a trust fund as specified in §144.63(a).
State requirements may differ on the proper content of this acknowledgment.
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 to the Board of Directors of said corporation,
and that she/he signed her/his name thereto by like order. [Signature of Notary Public] (b) A surety bond guaranteeing payment into a trust fund, as specified in
§144.63 of this chapter, must be worded as follows, except that instructions in
brackets are to be replaced with the relevant information and the brackets
deleted:
Principal: [legal name and business address of owner or operator].
Type of organization: [insert "individual," "joint venture," "partnership,"
or "corporation"]. State of incorporation:_____
Surety(ies): [name(s) and business address(es)].
EPA Identification Number, name, address, and plugging and abandonment
amount(s) for each facility guaranteed by this bond [indicate plugging and
abandonment amounts separately]: ___
Total penal sum of bond: $___
Surety's bond number: ___
Know All Persons By These Presents, That we, the Principal and Surity(ies)
hereto are firmly bound to the U.S. Environmental Protection Agency (hereinafter
called EPA), in the above penal sum for the payment of which we bind ourselves,
our heirs, executors, administrators, successors, and assigns jointly and
severally; provided that, where the Surety(ies) are corporations acting as
co-surties, we, the Sureties, bind ourselves in such sum "jointly and severally"
only for the purpose of allowing a joint action or actions against any or all of
us, and for all other purposes each Surety binds itself, jointly and severally
with the Principal, for the payment of such sum only as is set forth opposite
the name of such Surety, but if no limit of liability is indicated, the limit of
liability shall be the full amount of the penal sum.
Whereas said Principal is required, under the Underground Injection Control
Regulations (UIC), to have a permit or comply with requirements to operate under
rule in order to own or operate each injection well identified above, and
Whereas said Principal is required to provide financial assurance for
plugging and abandonment as a condition of the permit or provisions to operate
under rule, and
Whereas said Principal shall establish a standby trust fund as is required
when a surety bond is used to provide such financial assurance;
Now, therefore, the conditions of the obligation are such that if the
Principal shall faithfully, before the beginning of plugging and abandonment of
each injection well identified above, fund the standby trust fund in the
amount(s) identified above for the injection well,
Or if the Principal shall fund the standby trust fund in such amount(s)
within 15 days after an order to begin plugging and abandonment is issued by an
EPA Regional Administrator or a U.S. district court or other court of competent
jurisdiction,
Or, if the Principal shall provide alternate financial assurance, as
specified in subpart F of 40 CFR part 144, as applicable, and obtain the EPA
Regional Administrator's written approval of such assurance, within 90 days
after the date of notice of cancellation is received by both the Principal and
the EPA Regional Administrator(s) from the Surety(ies), then this obligation
shall be null and void, otherwise it is to remain in full force and effect.
The Surety(ies) shall become liable on this bond obligation only when the
Principal has failed to fulfill the conditions described above. Upon
notification by an EPA Regional Administrator that the Principal has failed to
perform as guaranteed by this bond, the Surety(ies) shall place funds in the
amount guaranteed for the injection well(s) into the standby trust funds as
directed by the EPA Regional Administrator.
The liability of the Surety(ies) shall not be discharged by any payment or
succession of payments hereunder, unless and until such payment or payments
shall amount in the aggregate to the penal sum of the bond, but in no event
shall the obligation of the Surety(ies) hereunder exceed the amount of said
penal sum.
The Surety(ies) may cancel the bond by sending notice of cancellation by
certified mail to the Principal and to the EPA Regional Administrator(s) for the
Region(s) in which the injection well(s) is (are) located, provided, however,
that that cancellation shall not occur during the 120 days beginning on the date
of receipt of the notice of cancellation by both the Principal and the EPA
Regional Administrator(s), as evidenced by the return receipts.
The Principal may terminate this bond by sending written notice to the
Surety(ies), provided, however, that no such notice shall become effective until
the Surety(ies) receive(s) written authorization for termination of the bond by
the EPA Regional Administrator(s) of the Region(s) in which the bonded
facility(ies) is (are) located.
[The following paragraph is an optional rider that may be included but is not
required.]
Principal and Surety(ies) hereby agree to adjust the penal sum of the bond
yearly so that it guarantees a new plugging and abandonment amount, provided
that the penal sum does not increase by more than 20 percent in any one year,
and no decrease in the penal sum takes place without the written permission of
the EPA Regional Administrator(s).
In Witness Whereof, the Principal and Surety(ies) have executed this
Financial Guarantee Bond and have affixed their seals on the date set forth
above.
The persons whose signatures appear below hereby certify that they are
authorized to execute this surety bond on behalf of the Principal and
Surety(ies) and that the wording of this surety bond is identical to the wording
specified in 40 CFR 144.70(b) as such regulations were constituted on the date
this bond was executed.
[Signature(s)]
[Name(s)]
[Title(s)]
[Corporate seal]
[Name and address]
State of incorporation: ___.
Liability limit: $___.
[Signature(s)]
[Name(s) and title(s)]
[Corporate seal]
[For every co-surety, provide signature(s), corporate seal, and other
information in the same manner as for Surety above.]
Bond premium: $___. (c) A surety bond guaranteeing performance of plugging and abandonment, as
specified in §144.63(c), must be worded as follows, except that the instructions
in brackets are to be replaced with the relevant information and the brackets
deleted:
Date bond executed: ___.
Effective date: ___.
Principal: [legal name and business address of owner or operator].
Type of organization: [insert "individual," "joint venture," "partnership,"
or "corporation"].
State of incorporation: ___.
Surety(ies): [name(s) and business address(es)] _____
EPA Identification Number, name, address, and plugging and abandonment
amounts(s) for each injection well guaranteed by this bond [indicate plugging
and abandonment amounts for each well]: _____
Total penal sum of bond: $___.
Surety's bond number: ___.
Know All Persons By These Presents, That We, the Principal and Surety(ies)
hereto are firmly bound to the U.S. Environmental Protection Agency [hereinafter
called EPA], in the above penal sum for the payment of which we bind ourselves,
our heirs, executors, administrators, successors, and assigns jointly and
severally; provided that, where the Surety(ies) are corporations acting as
co-sureties, we, the Sureties, bind ourselves in such sum "jointly and
severally" only for the purpose of allowing a joint action or actions against
any or all of us, and for all other purposes each Surety binds itself, jointly
and severally with the Principal, for the payment of such sum only as is set
forth opposite the name of such Surety, but if no limit of liability is
indicated, the limit of liability shall be the full amount of the penal sum.
Whereas said Principal is required, under the Undergound Injection Control
Regulations, as amended, to have a permit or comply with provisions to operate
under rule for each injection well identified above, and
Whereas said Principal is required to provide financial assurance for
plugging and abandonment as a condition of the permit or approval to operate
under rule, and
Whereas said Principal shall establish a standby trust fund as is required
when a surety bond is used to provide such financial assurance;
Now, Therefore, the conditions of this obligation are such that if the
Principal shall faithfully perform plugging and abandonment, whenever required
to do so, of each injection well for which this bond guarantees plugging and
abandonment, in accordance with the plugging and abandonment plan and other
rquirements of the permit or provisions for operating under rule and other
requirements of the permit or provisions for operating under rule as may be
amended, pursuant to all applicable laws, statutes, rules and regulations, as
such laws, statutes, rules, and regulations may be amended,
Or, if the Principal shall provide alternate financial assurance as specified
in subpart F of 40 CFR part 144, and obtain the EPA Regional Administrator's
written approval of such assurance, within 90 days after the date of notice of
cancellation is received by both the Principal and the EPA Regional
Administrator(s) from the Surety(ies), then this obligation shall be null and
void, otherwise it is to remain in full force and effect.
The Surety(ies) shall become liable on this bond obligation only when the
Principal has failed to fulfill the conditions described above.
Upon notification by an EPA Regional Administrator that the Principal has
been found in violation of the plugging and abandonment requirements of 40 CFR
part 144, for an injection well which this bond guarantees performances of
plugging and abandonment, the Surety(ies) shall either perform plugging and
abandonment in accordance with the plugging and abandonment plan and other
permit requirements or provisions for operating under rule and other
requirements or place the amount for plugging and abandonment into a standby
trust fund as directed by the EPA Regional Administrator.
Upon notification by an EPA Regional Administrator that the Principal has
failed to provide alternate financial assurance as specified in subpart F of 40
CFR part 144, and obtain written approval of such assurance from the EPA
Regional Administrator(s) during the 90 days following receipt by both the
Principal and the EPA Regional Administrator(s) of a notice of cancellation of
the bond, the Surety(ies) shall place funds in the amount guaranteed for the
injection well(s) into the standby trust fund as directed by the EPA Regional
Administrator.
The surety(ies) hereby waive(s) notification of amendments to plugging and
abandonment plans, permits, applicable laws, statutes, rules, and regulations
and agrees that no such amendment shall in any way alleviate its (their)
obligation on this bond.
The liability of the Surety(ies) shall not be discharged by any payment or
succession of payments hereunder, unless and until such payment or payments
shall amount in the aggregate to the penal sum of the bond, but in no event
shall the obligation of the Surety(ies) hereunder exceed the amount of said
penal sum.
The Surety(ies) may cancel the bond by sending notice by certified mail to
the owner or operator and to the EPA Regional Administrator(s) for the Region(s)
in which the injection well(s) is (are) located, provided, however, that
cancellation shall not occur during the 120 days beginning on the date of
receipt of the notice of cancellation by both the Principal and the EPA Regional
Administrator(s), as evidenced by the return receipts.
The principal may terminate this bond by sending written notice to the
Surety(ies), provided, however, that no such notice shall become effective until
the Surety(ies) receive(s) written authorization for termination of the bond by
the EPA Regional Administrator(s) of the EPA Region(s) in which the bonded
injection well(s) is (are) located.
[The following paragraph is an optional rider that may be included but is not
required.]
Principal and Surety(ies) hereby agree to adjust the penal sum of the bond
yearly so that it guarantees a new plugging and abandonment amount, provided
that the penal sum does not increase by more than 20 percent in any one year,
and no decrease in the penal sum takes place without the written permission of
the EPA Regional Administrator(s).
In Witness Whereof, The Principal and Surety(ies) have executed this
Performance Bond and have affixed their seals on the date set forth above.
The persons whose signatures appear below hereby certify that they are
authorized to execute this surety bond on behalf of the Principal and
Surety(ies) and that the wording on this surety bond is identical to the wording
specified in 40 CFR 144.70(c) as such regulation was constituted on the date
this bond was executed.
Principal.
[Signature(s)]
[Name(s)]
[Title(s)]
[Corporate seal]
[Corporate Surety(ies)]
[Name and address]
State of incorporation: _____
Liability limit: $___.
[Signature(s)]
[Name(s) and title(s)]
Corporate seal:
[For every co-surety, provide signature(s), corporate seal, and other
information in the same manner as for Surety above.]
Bond premium: $___. (d) A letter of credit, as specified in §144.63(d) of this chapter, must be
worded as follows, except that instructions in brackets are to be replaced with
the relevant information and the brackets deleted:
Regional Administrator(s) Region(s)_____
U.S. Environmental Protection Agency.
Dear Sir or Madam:
We hereby establish our Irrevocable Standby Letter of Credit No. ___ in your
favor, at the request and for the account of [owner's or operator's name and
address] up to the aggregate amount of [in words] U.S. dollars $___, available
upon presentation [insert, if more than one Regional Administrator is a
beneficiary, "by any one of you"] of
(1) Your sight draft, bearing reference to this letter of credit No. ___, and
(2) Your signed statement reading as follows: "I certify that the amount of
the draft is payable pursuant to regulations issued under authority of the Safe
Drinking Water Act."
This letter of credit is effective as of [date] and shall expire on [date at
least 1 year later], but such expiration date shall be automatically extended
for a period of [at least 1 year] on [date] and on each successive expiration
date, unless, at least 120 days before the current expiration date, we notify
both you and [owner's or operator's name] by certified mail that we have decided
not to extend this letter of credit beyond the current expiration date. In the
event you are so notified, any unused portion of the credit shall be available
upon presentation of your sight draft for 120 days after the date of receipt by
both you and [owner's or operator's name], as shown on the signed return
receipts.
Whenever this letter of credit is drawn on under and in compliance with the
terms of this credit, we shall duly honor such draft upon presentation to us,
and we shall deposit the amount of the draft directly into the standby trust
fund of [owner's or operator's name] in accordance with your instructions.
We certify that the wording of this letter of credit is identical to the
wording specified in 40 CFR 144.70(d) as such regulations were constituted on
the date shown immediately below.
[Signature(s) and title(s) of official(s) of issuing institution]
[Date]
This credit is subject to [insert "the most recent edition of the Uniform
Customs and Practice for Documentary Credits, published and copyrighted by the
International Chamber of Commerce," or "the Uniform Commercial
Code"]. (e) A certificate of insurance, as specified in §144.63(e) of this chapter,
must be worded as follows, except that instructions in brackets are to be
replaced with the relevant information and the brackets deleted: Certificate of Insurance for Plugging and Abandonment
Name and Address of Insurer (herein called the "insurer"): _____
Name and Address of Insurer (herein called the "insurer"): _____
Injection Wells covered: [list for each well: The EPA Identification Number,
name, address, and the amount of insurance for plugging and abandonment (these
amounts for all injection wells covered must total the face amount shown
below).] Face Amount: _____ Policy Number: _____
Effective Date:_____
The insurer hereby certifies that it has issued to the Insured the policy of
insurance identified above to provide financial assurance for plugging and
abandonment for the injection wells identified above. The Insurer further
warrants that such policy conforms in all respects with the requirements of 40
CFR 144.63(e), as applicable and as such regulations were constituted on the
date shown immediately below. It is agreed that any provision of the policy
inconsistent with such regulations is hereby amended to eliminate such
inconsistency.
Whenever requested by the EPA Regional Administrator(s) of the U.S.
Environmental Protection Agency, the Insurer agrees to furnish to the EPA
Regional Administrator(s) a duplicate original of the policy listed above,
including all endorsements thereon.
I hereby certify that the wording of this certificate is identical to the
wording specified in 40 CFR 144.70(e) as such regulations were constituted on
the date shown immediately below.
[Authorized signature of Insurer]
[Name of person signing]
[Title of person signing]
[Signature of witness or notary:] _____
[Date] (f) A letter from the chief financial officer, as specified in §144.63(f) of
this chapter, must be worded as follows, except that instructions in brackets
are to be replaced with the relevant information and the brackets deleted:
[Address to Regional Administrator of every Region in which injection wells
for which financial responsibility is to be demonstrated through the financial
test are located.]
I am the chief financial officer of [name and address of firm.] This letter
is in support of this firm's use of the financial test to demonstrate financial
assurance, as specified in subpart F of 40 CFR part 144.
[Fill out the following four paragraphs regarding injection wells and
associated cost estimates. If your firm has no injection wells that belong in a
particular paragraph, write "None" in the space indicated. For each injection
well, include its EPA Identification Number, name, address, and current plugging
and abandonment cost estimate.]
1. This firm is the owner or operator of the following injection wells for
which financial assurance for plugging and abandonment is demonstrated through
the financial test specified in subpart F of 40 CFR part 144. The current
plugging and abandonment cost estimate covered by the test is shown for each
injection well: ___.
2. This firm guarantees, through the corporate guarantee specified in subpart
F of 40 CFR part 144, the plugging and abandonment of the following injection
wells owned or operated by subsidaries of this firm. The current cost estimate
for plugging and abandonment so guaranteed is shown for each injection well:
___.
3. In States where EPA is not administering the financial requirements of
subpart F of 40 CFR part 144, this firm, as owner or operator or guarantor, is
demonstrating financial assurance for the plugging and abandoment of the
following injection wells through the use of a test equivalent or substantially
equivalent to the financial test specified in subpart F of 40 CFR part 144. The
current plugging and abandonment cost estimate covered by such a test is shown
for each injection well: ___.
4. This firm is the owner or operator of the following injection wells for
which financial assurance for plugging and abandonment is not demonstrated
either to EPA or a State through the financial test or any other financial
assurance mechanism specified in subpart F of 40 CFR part 144 or equivalent or
substantially equivalent State mechanisms. The current plugging and abandonment
cost estimate not covered by such financial assurance is shown for each
injection well: ___.
This firm [insert "is required" or "is not required"] to file a Form 10K with
the Securities and Exchange Commission (SEC) for the latest fiscal year.
The fiscal year of this firm ends on [month, day]. The figures for the
following items marked with an asterisk are derived from this firm's
independently audited, year-end financial statements for the latest completed
fiscal year, ended [date].
[Fill in Alternative I if the criteria of paragraph (f)(1)(i) of §144.63 of
this chapter are used. Fill in Alternative II if the criteria of paragraph
(f)(1)(ii) of §144.63 of this chapter are used.] I hereby certify that the wording of this letter is identical to the wording
specified in 40 CFR 144.70(f) as such regulations were constituted on the date
shown immediately below.
[Signature]
[Name]
[Title]
[Date] (g) A corporate guarantee as specified in §144.63(e) must be worded as
follows except that instructions in brackets are to be replaced with the
relevant information and the bracketed material deleted:
Guarantee made this __ day of ___, 19__, by [name of guaranteeing entity], a
business corporation organized under the laws of the State of ____, herein
referred to as guarantor, to the United States Environmental Protection Agency
(EPA), obligee, on behalf of our subsidiary [owner or operator] of [business
address].
Recitals
1. Guarantor meets or exceeds the financial test criteria and agrees to
comply with the reporting requirements for guarantors as specified in 40 CFR
144.63(e).
2. [Owner or operator] owns or operates the following Class I hazardous waste
injection well covered by this guarantee: [List for each facility: EPA
Identification Number, name, and address. Indicate for each whether guarantee is
for closure, post-closure care, or both.]
3. "Plugging and abandonment plan" as used below refers to the plans
maintained as required by 40 CFR part 144 for the plugging and abandonment of
injection wells as identified above.
4. For value received from [owner or operator], guarantor guarantees to EPA
that in the event that [owner or operator] fails to perform ["plugging and
abandonment"] of the above facility(ies) in accordance with the plugging and
abandonment plan and other requirements when required to do so, the guarantor
will do so or fund a trust fund as specified in 40 CFR 144.63 in the name of
[owner or operator] in the amount of the adjusted plugging and abandonment cost
estimates prepared as specified in 40 CFR 144.62.
5. Guarantor agrees that, if at the end of any fiscal year before termination
of this guarantee, the guarantor fails to meet the financial test criteria,
guarantor will send within 90 days, by certified mail, notice to the EPA
Regional Administrator(s) for the Region(s) in which the facility(ies) is (are)
located and to [owner or operator] that he intends to provide alternate
financial assurance as specified in 40 CFR 144.63 in the name of [owner or
operator]. Within 30 days after sending such notice, the guarantor will
establish such financial assurance if [owner or operator] has not done so.
6. The guarantor agrees to notify the Regional Administrator, by certified
mail, of a voluntary or involuntary case under Title 11, U.S. Code, naming
guarantor as debtor, within 10 days after its commencement.
7. Guarantor agrees that within 30 days after being notified by an EPA
Regional Administrator of a determination that guarantor no longer meets the
financial test criteria or that he is disallowed from continuing as a guarantor
of plugging and adandonment, he will establish alternate financial assurance, as
specified in 40 CFR 144.63, in the name of [owner or operator] if [owner or
operator] has not done so.
8. Guarantor agrees to remain bound under this guarantee notwithstanding any
or all of the following: amendment or modification of the plugging and
abandonment plan, the extension or reduction of the time of performance of
plugging and abandonment or any other modification or alteration of an
obligation of [owner or operator] pursuant to 40 CFR part 144.
9. Guarantor agrees to remain bound under this guarantee for so long as
[owner or operator] must comply with the applicable financial assurance
requirements of 40 CFR part 144 for the above-listed facilities, except that
guarantor may cancel this guarantee by sending notice by certified mail, to the
EPA Regional Administrator(s) for the Region(s) in which the facility(ies) is
(are) located and to [owner or operator], such cancellation to become effective
no earlier than 120 days after actual receipt of such notice by both EPA and
[owner or operator] as evidenced by the return receipts.
10. Guarantor agrees that if [owner or operator] fails to provide alternate
financial assurance and obtain written approval of such assurance from the EPA
Regional Administrator(s) within 90 days after a notice of cancellation by the
guarantor is received by both the EPA Regional Administrator(s) and [owner or
operator], guarantor will provide alternate financial assurance as specified in
40 CFR 144.63 in the name of [owner or operator].
11. Guarantor expressly waives notice of acceptance of this guarantee by the
EPA or by [owner or operator]. Guarantor also expressly waives notice of
amendments or modifications of the plugging and abandonment plan.
I hereby certify that the wording of this guarantee is identical to the
wording specified in 40 CFR 144.70(f).
Effective date: ___.
[Name of guarantor]
[Authorized signature for guarantor]
[Type name of person signing]
[Title of person signing]
Signature of witness or notary: ___ [48 FR 14189, Apr. 1, 1983, as amended at 59 FR 29959, June 10,
1994]
[TITLE]
[SEAL]
[TITLE]
[SEAL]
State of_____ County of_____
FINANCIAL GUARANTEE BOND
PRINCIPAL
CORPORATE SURETY(IES)
PERFORMANCE BOND
IRREVOCABLE STANDBY LETTER OF CREDIT
LETTER FROM CHIEF FINANCIAL OFFICER
Alternative I
1. (a) Current plugging and abandonment cost $____
(b) Sum of .................................
the
company's
financial
responsibili
ties under
40 CFR Parts
264 and 265,
Subpart H,
currently
met using
the
financial
test or
corporate
guarantee...
(c) Total of .................................
lines a and
b...........
*2. Total .................................
liabilities
[if any
portion of the
plugging and
abandonment
cost is
included in
total
liabilities,
you may deduct
the amount of
that portion
from this line
and add that
amount to
lines 3 and 4]
*3. Tangible .................................
net worth
*4. Net worth .................................
*5. Current .................................
assets
*6. Current .................................
liabilities
*7. Net working .................................
capital [line
5 minus line
6]
*8. The sum of .................................
net income
plus
depreciation,
depletion and
amortization
*9. Total .................................
assets in U.S.
(required only
if less than
90% of firm's
assets are
located in
U.S.)
------------------------------------------------------------------------
Yes No
------------------------------------------------------------------------
10. Is line 3 ................................. .........
at least $10
million?
11. Is line 3 ................................. .........
at least 6
times line
1(c)?
12. Is line 7 ................................. .........
at least 6
times line
1(c)?
*13. Are at ................................. .........
least 90% of
firm's assets
located in the
U.S.? If not,
complete line
14.
14. Is line 9 ................................. .........
at least 6
times line
1(c)?
15. Is line 2 ................................. .........
divided by
line 4 less
than 2.0?
16. Is line 8 ................................. .........
divided by
line 2 greater
than 0.1?
17. Is line 5 ................................. .........
divided by
line 6 greater
than 1.5?
Alternative II
1. (a) Current plugging and abandonment cost $____
(b) Sum of .................................
the
company's
financial
responsibili
ties under
40 CFR Parts
264 and 265,
Subpart H,
currently
met using
the
financial
test or
corporate
guarantee...
(c) Total of .................................
lines a and
b...........
2. Current bond .................................
rating of most
recent
issuance of
this firm and
name of rating
service
3. Date of .................................
issuance of
bond
4. Date of .................................
maturity of
bond
*5. Tangible .................................
net worth [if
any portion of
the plugging
and
abandonment
cost estimate
is included in
``total
liabilities''
on your firm's
financial
statements,
you may add
the amount of
that portion
to this line]
*6. Total .................................
assets in U.S.
(required only
if less than
90% of firm's
assets are
located in
U.S.)
------------------------------------------------------------------------
Yes.............................. No
------------------------------------------------------------------------
7. Is line 5 at ................................. .........
least $10
million?
8. Is line 5 at ................................. .........
least 6 times
line 1(c)?
*9. Are at ................................. .........
least 90% of
the firm's
assets located
in the U.S.?
If not,
complete line
10
10. Is line 6 ................................. .........
at least 6
times line
1(c)?
GUARANTEE FOR PLUGGING AND ABANDONMENT
