Chapter ATCP 93

ATCP 93.703 Note Note: The affidavit of financial responsibility is available from the Bureau of Weights and Measures, PO Box 8911, Madison, WI 53708-8911, or by telephone at [phone], or from the Bureau’s Web site at https://datcp.wi.gov/Pages/Programs_Services/PetroleumHazStorageTanksForms.aspx.

ATCP 93.703 Note Note: The affidavit of financial responsibility is required in addition to the certification showing the specific type of financial responsibility. See s. ATCP 93.745 (2) (j) for further information.

ATCP 93.703(3) (3) “Aggregate” means an accident or a continuous or repeated exposure to conditions that result in a release from a storage tank system which might occur in one year.

ATCP 93.703 Note Note: This definition is intended to assist in the understanding of these regulations and is not intended either to limit the meaning of “aggregate” in a way that conflicts with standard insurance usage or to prevent the use of other standard insurance terms in place of “aggregate.”

ATCP 93.703(4) (4) “Bodily injury” has the meaning given to this term by applicable Wisconsin statutes; however, this term does not include those liabilities that, consistent with standard insurance industry practices, are excluded from coverage in liability insurance policies for bodily injury.

ATCP 93.703 Note Note: For further information about this term, see ch. Ins 6, which interprets this term as it is used in s. 292.63 (1) (ad), Stats., for petroleum storage environmental cleanup.

ATCP 93.703(5) (5) “Controlling interest” means direct ownership of at least 50 percent of the voting stock of another entity.

ATCP 93.703(6) (6) “Financial reporting year” means the latest consecutive 12-month period for which any of the following reports are prepared:

ATCP 93.703(6)(a) (a) A 10-K report submitted to the US securities and exchange commission.

ATCP 93.703(6)(b) (b) An annual report of tangible net worth submitted to Dun and Bradstreet.

ATCP 93.703(6)(c) (c) An annual report submitted to the federal energy information administration or rural utilities service.

ATCP 93.703 Note Note: “Financial reporting year” may thus comprise a fiscal or a calendar year period.

ATCP 93.703(7) (7) “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:

ATCP 93.703(7)(a) (a) By the EPA or the department to require corrective action or to recover the costs of corrective action.

ATCP 93.703(7)(b) (b) By or on behalf of a third party for bodily injury or property damage caused by an accidental release.

ATCP 93.703(7)(c) (c) By any person to enforce the terms of a financial assurance mechanism.

ATCP 93.703(8) (8) “Occurrence” means an accident, or a continuous or repeated exposure to conditions, that results in a release from a storage tank system.

ATCP 93.703 Note Note: This definition is intended to assist in the understanding of these regulations and is not intended either to limit the meaning of “occurrence” in a way that conflicts with standard insurance usage or to prevent the use of other standard insurance terms in place of “occurrence.”

ATCP 93.703(9) (9) “Operation” or “in operation” means the underground storage tank was used to store a regulated substance at any time after December 22, 1988, regardless of the current status of the tank.

ATCP 93.703(10) (10) “Owner or operator,” when the owner or operator are separate parties, means the party that is obtaining or has obtained financial assurances.

ATCP 93.703(11) (11) “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.

ATCP 93.703(12) (12) “Petroleum marketing firms” means all firms owning petroleum marketing facilities. Firms owning other types of facilities with tanks covered in the scope of this subchapter as well as petroleum marketing facilities are considered to be petroleum marketing firms.

ATCP 93.703(13) (13) “Property damage” has the meaning given to this term by administrative rules of the office of commissioner of insurance. This term does not include those liabilities that, consistent with standard insurance industry practices, are excluded from coverage in liability insurance policies for property damage. However, such exclusions for property damage do not include corrective action associated with releases from tanks that are covered by the policy.

ATCP 93.703 Note Note: For further information about this term, see ch. Ins 6, which interprets this term as it is used in s. 292.63 (1) (ad), Stats. for petroleum storage environmental cleanup.

ATCP 93.703(14) (14) “Provider of financial assurance” means an entity that provides financial assurance to an owner or operator of a tank system covered in this subchapter through one of the mechanisms listed in ss. ATCP 93.710 to 93.735, including a guarantor, insurer, risk retention group, surety, issuer of a letter of credit, issuer of a state-required mechanism, or a state.

ATCP 93.703(15) (15) “Substantial business relationship” means the extent of a business relationship necessary under Wisconsin law to make a guarantee contract issued incident to that relationship valid and enforceable. A guarantee contract is issued incident to that relationship if it arises from and depends on current economic transactions between the guarantor and the owner or operator.

ATCP 93.703(16) (16) “Tangible net worth” means the tangible assets that remain after deducting liabilities; the assets do not include intangibles such as goodwill and rights to patents or royalties. For purposes of this definition, “assets” means all current and all probable future economic benefits obtained or controlled by a particular entity as a result of past transactions.

ATCP 93.703 History History: CR 17-092: cr. Register October 2019 No. 766, eff. 11-1-19; correction in (8) made under s. 35.17, Stats., Register October 2019 No. 766.

ATCP 93.705 ATCP 93.705 Amount and scope of required financial responsibility.

ATCP 93.705(1) (1) Owners or operators of petroleum storage tank systems within the scope of this subchapter shall demonstrate financial responsibility 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 storage tank systems within the scope of this subchapter in at least the following per-occurrence amounts:

ATCP 93.705(1)(a) (a) For owners or operators of petroleum underground storage tank systems that are located at petroleum marketing facilities, or that throughput an average of more than 10,000 gallons of petroleum per month based on annual throughput for the previous calendar year; $1 million.

ATCP 93.705(1)(b) (b) For all other owners or operators of petroleum storage tank systems covered in s. ATCP 93.700 (1); $500,000.

ATCP 93.705(2) (2) 

ATCP 93.705(2)(a) (a) For the purposes of this subsection, “petroleum underground storage tank” means a single containment unit and does not mean combinations of single containment units.

ATCP 93.705(2)(b) (b) Owners or operators of petroleum underground storage tank systems shall demonstrate financial responsibility 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 tank systems in at least the following annual aggregate amounts:

ATCP 93.705(2)(b)1. 1. For owners or operators of one to 100 petroleum underground storage tanks; $1 million.

ATCP 93.705(2)(b)2. 2. For owners or operators of 101 or more petroleum underground storage tanks; $2 million.

ATCP 93.705(3) (3) Owners or operators of petroleum aboveground storage tanks covered in this subchapter shall demonstrate financial responsibility for taking corrective action and for compensating third parties for bodily injury and property damage caused by accidental releases arising from their operation in the amount of $1 million per occurrence.

ATCP 93.705(4) (4) If the owner or operator uses separate mechanisms or separate combinations of mechanisms to demonstrate financial responsibility, the amount shall be in the full amount specified in subs. (1) to (3) for any of the following, except as provided in sub. (5):

ATCP 93.705(4)(a) (a) Taking corrective action.

ATCP 93.705(4)(b) (b) Compensating third parties for bodily injury and property damage caused by sudden accidental releases.

ATCP 93.705(4)(c) (c) Compensating third parties for bodily injury and property damage caused by non-sudden accidental releases.

ATCP 93.705(5) (5) If an owner or operator uses separate mechanisms or separate combinations of mechanisms to demonstrate financial responsibility for different petroleum storage tank systems, the annual aggregate required shall be based on the number of tanks covered by each such separate mechanism or combination of mechanisms.

ATCP 93.705(6) (6) 

ATCP 93.705(6)(a) (a) Owners or operators shall review the amount of aggregate assurance provided whenever additional petroleum storage tank systems are acquired or installed.

ATCP 93.705(6)(b) (b) If the number of petroleum storage tank systems for which assurance is needed exceeds 100, the owner or operator shall demonstrate financial responsibility in the amount of at least $2 million of annual aggregate assurance by the anniversary of the date on which the mechanism demonstrating financial responsibility became effective.

ATCP 93.705(6)(c) (c) If assurance is being demonstrated by a combination of mechanisms, the owner or operator shall demonstrate financial responsibility in the amount of at least $2 million of annual aggregate assurance by the first-occurring effective date anniversary of any one of the mechanisms combined, other than a financial test or guarantee, to provide assurance.

ATCP 93.705(7) (7) The amounts of assurance required in this section exclude legal defense costs.

ATCP 93.705(8) (8) The required per-occurrence and annual aggregate coverage amounts do not in any way limit the liability of the owner or operator.

ATCP 93.705 History History: CR 17-092: cr. Register October 2019 No. 766, eff. 11-1-19; (2) (intro.), (a), (b), (c) renum. to (2) (b), 1., 2., (a) under s. 13.92 (4) (b) 1., Stats., and correction in (2) (a), as renumbered, made under s. 35.17, Stats., Register October 2019 No. 766.

ATCP 93.707 ATCP 93.707 Allowable mechanisms and combinations of mechanisms.

ATCP 93.707(1) (1) Subject to the limitations of subs. (3) and (4), an owner or operator may use any one or combination of the mechanisms listed in ss. ATCP 93.710 to 93.735 to demonstrate financial responsibility under this subchapter for one or more storage tank systems.

ATCP 93.707(2) (2) Subject to the limitations of subs. (3) and (4), a local government owner or operator may use any one or combination of the mechanisms listed in ss. ATCP 93.727 to 93.735 to demonstrate financial responsibility under this subchapter for one or more storage tank systems.

ATCP 93.707(3) (3) An owner or operator may use a guarantee or surety bond to establish financial responsibility only if “for value received” is included in the guarantee or surety bond mechanisms.

ATCP 93.707(4) (4) An owner or operator may use self-insurance in combination with a guarantee only if, for the purpose of meeting the requirements of the financial test under this subchapter, the financial statements of the owner or operator are not consolidated with the financial statements of the guarantor.

ATCP 93.707 History History: CR 17-092: cr. Register October 2019 No. 766, eff. 11-1-19.

ATCP 93.710 ATCP 93.710 Financial test of self-insurance.

ATCP 93.710(1) (1) To use the financial test of self-insurance to meet the financial responsibility requirements of s. ATCP 93.705, an owner or operator, or guarantor, or both, shall meet the criteria of either sub. (2) or (3) based on year-end financial statements for the latest completed fiscal year.

ATCP 93.710(2) (2) 

ATCP 93.710(2)(a) (a) The owner or operator, or guarantor, or both, shall have a tangible net worth of at least 10 times each one of the following:

ATCP 93.710(2)(a)1. 1. The total of the applicable aggregate amount required by s. ATCP 93.705, based on the number of storage tank systems for which a financial test is used to demonstrate financial responsibility to the department.

ATCP 93.710(2)(a)2. 2. The sum of the corrective action cost estimates, the current closure and post-closure care cost estimates, and amount of liability coverage for which a financial test is used to demonstrate financial responsibility to the department.

ATCP 93.710(2)(a)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.

ATCP 93.710(2)(b) (b) The owner or operator, or guarantor, or both, shall have a tangible net worth of at least $10 million.

ATCP 93.710(2)(c) (c) The owner or operator, or guarantor, or both, shall have a letter signed by the chief financial officer as specified in sub. (4).

ATCP 93.710(2)(d) (d) The owner or operator, or guarantor, or both, shall do one of the following:

ATCP 93.710(2)(d)1. 1. File financial statements annually with the U.S. securities and exchange commission, energy information administration, or rural utilities service.

ATCP 93.710(2)(d)2. 2. Report annually the firm’s tangible net worth to Dun and Bradstreet, if Dun and Bradstreet has assigned the firm a financial strength rating of 4A or 5A.

ATCP 93.710(2)(e) (e) The firm’s year-end financial statements, if independently audited, may not include an adverse auditor’s opinion, a disclaimer of opinion, or a going concern qualification.

ATCP 93.710(3) (3) 

ATCP 93.710(3)(a) (a) The owner or operator, or guarantor, or both, shall meet the financial test requirements of 40 CFR 264.147 (f) (1), substituting the appropriate amounts specified in s. ATCP 93.705 (2) or (3) for the amount of liability coverage each time specified in that section.

ATCP 93.710(3)(b) (b) The fiscal year-end financial statements of the owner or operator, or guarantor, or both, shall be examined by an independent certified public accountant and be accompanied by the accountant’s report of the examination.

ATCP 93.710(3)(c) (c) The firm’s year-end financial statements may not include an adverse auditor’s opinion, a disclaimer of opinion, or a going concern qualification.

ATCP 93.710(3)(d) (d) The owner or operator, or guarantor, or both, shall have a letter signed by the chief financial officer as specified in sub. (4).

ATCP 93.710(3)(e) (e) If the financial statements of the owner or operator or guarantor, or both, are not submitted annually to the U.S. securities and exchange commission, energy information administration or rural utilities service, the owner or operator, or guarantor, or both, shall obtain a special report by an independent certified public accountant stating all of the following:

ATCP 93.710(3)(e)1. 1. The accountant has compared the data that the letter from the chief financial officer specifies as having been derived from the latest year-end financial statements of the owner or operator, or guarantor, or both, with the amounts in such financial statements.

ATCP 93.710(3)(e)2. 2. In connection with that comparison, no matters came to the attention of the accountant which caused him or her to believe that the specified data should be adjusted.

ATCP 93.710(4) (4) To demonstrate that the financial test is met under sub. (2) or (3), the chief financial officer of the owner or operator, or guarantor, shall sign, within 120 days of the close of each financial reporting year, as defined by the 12-month period for which financial statements used to support the financial test are prepared, a letter worded exactly as found in 40 CFR 280.95 (d) except for the following:

ATCP 93.710(4)(a) (a) The instructions in brackets in the letter shall be replaced by the relevant information and the brackets deleted.

ATCP 93.710(4)(b) (b) If financial responsibility for aboveground tanks within the scope of this subchapter is demonstrated using this method, all of the following changes shall be made:

ATCP 93.710(4)(b)1. 1. Reference in the letter to underground tanks shall be amended to refer to aboveground tanks.

ATCP 93.710(4)(b)2. 2. Certification that wording is identical to the wording required in 40 CFR 280.95 (d) shall be deleted.

ATCP 93.710 Note Note: A link to 40 CFR 280 is available at the following EPA Web site: http://www.epa.gov/oust/fedlaws/otgg_final080807.pdf

ATCP 93.710(5) (5) If an owner or operator using the test to provide financial assurance finds that he or she no longer meets the requirements of the financial test based on the year-end financial statements, the owner or operator shall obtain alternative coverage within 150 days of the end of the year for which financial statements have been prepared.

ATCP 93.710(6) (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 meet the financial test requirements of either sub. (2) or (3) and sub. (4), the owner or operator shall obtain alternate coverage within 30 days after notification of such a finding.

ATCP 93.710(7) (7) If the owner or operator fails to obtain alternate assurance within 150 days of finding that he or she no longer meets the requirements of the financial test based on the year-end financial statements, or within 30 days of notification by the department that he or she no longer meets the requirements of the financial test, the owner or operator shall notify the department of such failure within 10 days.

ATCP 93.710 History History: CR 17-092: cr. Register October 2019 No. 766, eff. 11-1-19; correction in (7) made under s. 35.17, Stats., Register October 2019 No. 766.

ATCP 93.713 ATCP 93.713 Guarantee.

ATCP 93.713(1) (1) To use a guarantee to meet the financial responsibility requirements of s. ATCP 93.705, an owner or operator shall obtain a guarantee that conforms to the requirements of this section. The guarantor shall be a firm that is engaged in a substantial business relationship with the owner or operator and issues the guarantee as an act incident to that business relationship or the guarantor shall be a firm that meets at least one of the following requirements: