Section 29.2168. Local government fund.

Rule 68. Section 280.107 is amended to read as follows:

Section 280.107. A local government owner or operator may satisfy the requirements of section 280.93 by establishing a dedicated fund account that conforms to the requirements of  this  section.  Except  as  specified  in subsection (b) of this section, a dedicated fund may not be commingled with other funds or otherwise used in normal operations. A dedicated fund will be considered eligible if it meets any of the following requirements:

(a)   The fund is dedicated by state constitutional provision or by local government statute, charter, ordinance, or order to pay for taking corrective action and for compensating third parties for bodily injury and property damage caused by accidental releases arising from the operation of petroleum underground storage tanks and is funded for the full amount of  coverage required under section 280.93, or is funded for part of the required amount of coverage and is used in combination with another mechanism or mechanisms that provide the remaining coverage.

(b)   The fund is dedicated by state constitutional provision or by local government statute, charter, ordinance, or order as a contingency fund for general emergencies, including taking corrective action and compensating third parties for bodily injury and property damage caused by accidental releases arising from the operation of petroleum underground   storage   tanks, and is funded for 5 times the full amount of coverage

required under section 280.93 or is funded for part of the required amount of coverage and is used in combination with  another  mechanism  or  mechanisms  that   provide the remaining coverage. If the fund is funded for less than 5 times the amount of coverage required under section 280.93, then the amount of financial responsibility demonstrated by the fund may not be more than 1/5 the  amount in the fund.

(c)   The fund is dedicated by state constitutional provision or by local government statute, charter, ordinance, or order to pay for taking corrective action and for compensating third parties for bodily injury and property damage caused by accidental releases arising from the operation of petroleum underground storage tanks. A payment is made to the fund once every year for 7 years until the fund is fully funded. The 7- year period is hereafter referred to as the "pay-in period." The amount of each payment shall be determined by the following formula:

TF - CF Y

Where TF is the total  required  financial   assurance  for  the  owner  or operator, CF is the current amount in the fund, and Y is the number of years remaining in the pay-in period, and either of the following provisions applies:

(1)     The local government owner or operator has available bonding authority, approved through voter referendum if approval is necessary before the issuance of bonds, for an amount equal to the difference between the required amount of coverage and the amount held in the dedicated fund. The bonding authority  shall  be  available for taking corrective action and for compensating third parties for bodily injury and property damage caused by accidental releases arising from the operation of petroleum underground storage tanks.

(2)     The local government owner or operator  has  a  letter  signed  by  the appropriate state attorney general stating that the use  of  the   bonding authority will not increase the local government's debt beyond the legal debt ceilings established by the relevant state laws. The letter shall also state that prior voter approval is not necessary before use of the bonding authority.

(d)  To demonstrate that it meets the requirements of the local government fund, the chief financial officer of the local government owner  or  operator or guarantor shall sign a letter worded exactly as follows, except that the instructions in brackets are to be replaced by the relevant information  and the brackets deleted:

Letter From Chief Financial Officer

I am the chief financial officer of [insert: name and address of local government owner or operator, or guarantor]. This letter is in support of the use of the local government fund mechanism 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"] 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 local government fund mechanism: [list for each facility: the name and address of the facility where tanks are assured by the local government fund].

[Insert: "the local government fund is funded for the full amount of coverage required under section 280.93, or funded for part of the required amount of coverage and used in combination with other mechanism(s) that provide the remaining coverage." Or "the local government fund is funded for 10 times the full amount of coverage required under section 280.93, or funded for part of the required amount of coverage and used in combination with other mechanism(s) that provide the remaining coverage," or  "a   payment  is made to the fund once every year for 7 years until the fund is fully-funded and [name of local government owner or operator]  has  available bonding authority, approved through voter referendum, of an amount equal to the difference between the required amount of coverage and the amount held in the

dedicated fund" or "a payment is made to the fund once every year for 7 years until the fund is fully-funded and I have attached a letter signed by the state attorney general stating that (1) the use of the bonding authority will not increase the local government's debt beyond the legal debt ceilings established by the relevant state laws and (2) that prior voter approval is not necessary before use of the bonding authority"].

The details of the local government fund are as follows:

Amount in fund (market value of fund of close of last fiscal year):                    

[If fund balance is incrementally funded as specified in MCL 280.107(c), insert: Amount added to fund in the most recently completed fiscal year:

Number of years remaining in the pay-in period:

A copy of the state constitutional provision, or local government statute, charter, ordinance or order dedicating the fund is attached.

I hereby certify that the wording of this letter is identical to  the wording specified in 40 C.F.R. 280.107(d) as such regulations   were constituted on the date shown immediately below.

[Signature] [Name] [Title] [Date]

History: 1998-2000 AACS.