Section 29.2163. Definition of terms.

Section 280.92 is amended by to read as follows: Section 280.92. As used in this subpart:

(a)       "Accidental release" means any sudden or nonsudden release  of petroleum from an underground storage tank that results in a need for corrective action and/or compensation for bodily injury or property damage neither expected nor intended by the tank owner or operator.

(b)      "Bodily injury" shall have the meaning given  to  this   term  by applicable state law; however, this term shall not include those liabilities which, consistent with standard insurance industry practices, are excluded from coverage in liability insurance policies for bodily injury.

(c)     "Chief financial officer," in the case of local government owners and operators, means the individual who has the overall authority and responsibility for the collection, disbursement, and  use  of funds by the local government.

(d)    "Controlling interest" means direct ownership of not less than 50% of the voting stock of another entity.

(e)   "Director of the implementing agency" means the director of the Michigan department of environmental quality.

(f)    "Financial reporting year" means the latest consecutive 12-month period for which any of the following reports used to support a financial test is prepared:

(1)   A 10-k report submitted to the securities exchange commission.

(2)   An annual report of tangible net worth submitted to Dun and Bradstreet.

(3)   Annual reports submitted to the energy information administration or the rural electrification administration.

(g)   "Legal defense cost" means any expense that an owner or operator  or provider of financial assurance incurs in defending against claims or actions brought by any of the following entities:

(1)   EPA or a state to require corrective action or to recover the costs of corrective action.

(2)   By or on behalf of a third party for bodily injury or property damage caused by an accidental release.

(3)   Any person to enforce the terms of a financial assurance mechanism.

(h)   "Local government" has the meaning given this term by applicable state law and includes Indian tribes. The term is generally intended to include the following entities:

(1)   Counties.

(2)   Municipalities.

(3)   Townships.

(4)   Separately chartered and operated special districts, including local government public transit systems and redevelopment authorities.

(5)   Independent school districts authorized as governmental bodies by state charter or constitution.

(6)    Special districts and independent school districts established by counties, municipalities, townships, and other general purpose governments to provide essential services.

(i)   "Occurrence" means an  accident,  including  continuous  or  repeated exposure to conditions, that results in a release from an underground storage tank.

(j)    "Owner or operator," when the owner and operator are separate parties, means the party that is obtaining or has obtained financial assurances.

(k)     "Petroleum marketing facilities" means all facilities at which petroleum is produced or refined and all facilities from which petroleum is sold or transferred to other petroleum marketers or to the public.

(l)     "Petroleum marketing firms" means all firms that own petroleum marketing facilities. Firms that own other types of facilities with USTs as well as petroleum marketing facilities are considered to be petroleum marketing firms.

(m)    "Property damage" has the meaning given this term by applicable state law. The term does not include liabilities which, consistent with standard insurance industry practices, are excluded from coverage in liability insurance policies for property damage.  However, the exclusions for property

damage shall not include corrective  action   associated  with  releases  from tanks that are covered by the policy.

(n)   "Provider of financial assurance" means an entity that provides financial assurance to an owner or operator of an underground storage tank through 1 of the mechanisms listed in sections 280.95 to 280.103, including any of the following entities:

(1)   A guarantor.

(2)   An insurer.

(3)   A risk retention group.

(4)   A surety.

(5)   An issuer of a letter of credit.

(6)   An issuer of a state-required mechanism.

(7)   A state.

(o)   "Substantial business relationship" means the extent of a business relationship necessary under applicable state law to  make  a  guarantee contract issued incident  to the relationship valid and enforceable. A guarantee contract is issued incident to the relationship if it arises from and depends on existing economic transactions between the guarantor  and  the owner or operator.

(p)         "Substantial governmental relationship" means  the   extent  of  a governmental relationship necessary under applicable state law to make an added guarantee contract issued incident to the relationship valid  and enforceable.   A guarantee contract is issued incident to the relationship if it arises for a clear commonality of interest in the event of a UST release, such as any of the following:

(1)  Coterminous boundaries.

(2)   Overlapping constituencies.

(3)   Common groundwater aquifer.

(4)     Another relationship other than monetary compensation that provides a motivation for the guarantor to provide a guarantee.

(q)   "Tangible net worth" means the tangible assets that remain after deducting liabilities. Tangible assets do not include intangibles such as goodwill and rights to patents or royalties. For  the  purposes  of  this definition, "assets" means all existing and all probable  future   economic benefits obtained or controlled by a particular entity as a result of  past transactions.

(r)   "Termination," under sections 280.97(b)(1) and (2), means only the changes that could result in a gap in coverage such as where the insured has not obtained substitute coverage or has obtained substitute coverage with a different retroactive date than the retroactive date of the original policy.

History: 1998-2000 AACS.