§342L-36  Financial responsibility. (a)  The department, pursuant to chapter 91, shall adopt requirements formaintaining evidence of financial responsibility for taking response action andcompensating third parties for bodily injury and property damage caused by anyaccidental releases arising from operating an underground storage tank or tanksystem.  Evidence of financial responsibility may be established by any one, orany combination of the following:  insurance, guarantee, surety bond, letter ofcredit, qualification as a self-insurer, or any other method satisfactory tothe department.  In prescribing requirements under this subsection, thedepartment may specify policy or other contractual terms, conditions, ordefenses that are necessary or acceptable to establish evidence of financialresponsibility.

(b)  If the owner or operator is in bankruptcy,reorganization, or arrangement pursuant to the Federal Bankruptcy Code, or ifjurisdiction in any state or federal court cannot be obtained over an owner oroperator likely to be solvent at the time of judgment, any claim arising fromconduct for which evidence of financial responsibility must be provided underthis subsection may be asserted directly against the provider of financialassurance.  In the case of action pursuant to this subsection, the provider offinancial assurance may invoke all rights and defenses that would have beenavailable to the owner or operator if any action had been brought against theowner or operator by the claimant and which would have been available to theprovider of financial assurance if an action had been brought against theprovider of financial assurance by the owner or operator.

(c)  The total liability of a provider offinancial assurance shall be limited to the aggregate amount that the providerof financial assurance has provided as evidence of financial responsibility tothe owner or operator under this subsection.  This subsection does not limitany other state or federal statutory, contractual, or common law liability of aprovider of financial assurance to the owner or operator, including, but notlimited to, the liability of the provider of financial assurance for bad faithin negotiating or in failing to negotiate the settlement of any claim.  Thissubsection does not diminish the liability of any person under section 107 or111 of the federal Comprehensive Environmental Response, Compensation, andLiability Act of 1980 or other applicable law.

(d)  The department may establish the amount ofrequired coverage for particular classes or categories of underground storagetanks or tank systems containing petroleum, which shall not be less than$1,000,000 for each occurrence with an appropriate aggregate requirement.

(e)  The department may establish amounts lowerthan the amounts required by subsection (d) for underground storage tanks ortank systems containing petroleum, which are at facilities not engaged inpetroleum production, refining, or marketing, and which are not used to handlesubstantial quantities of petroleum.

(f)  The department may consider the followingfactors in establishing the amount of coverage:

(1)  The size, type, location, storage, and handlingcapacity of underground storage tanks or tank systems in the class or categoryand the volume of petroleum handled by the tanks or tank systems;

(2)  The likelihood of release from undergroundstorage tanks or tank systems in the class or category;

(3)  The economic impact of the limits on the ownersand operators of each such class or category, particularly relating to thesmall business segment of the petroleum marketing industry;

(4)  The availability of methods of financialresponsibility in amounts greater than the amount established by this section;and

(5)  Such other factors as the department deemspertinent.

(g)  The department may suspend enforcement ofthe financial responsibility requirements for a particular class or category ofunderground storage tanks or tank systems if the department determines thatmethods of financial responsibility satisfying the requirements of this sectionare not generally available for underground storage tanks or tank systems inthat class or category, and:

(1)  Steps are being taken to form a risk retentiongroup for the class of tanks or tank systems; or

(2)  The State is taking steps to establish a fund tobe implemented by the department or local agencies and departments for responseaction and compensation for the class of tanks or tank systems.

The initial suspension by the departmentpursuant to this subsection may be for a period not to exceed one hundredeighty  days.  A determination to continue suspension may be made with respectto the same class or category at the end of the period, but only if substantialprogress has been made in establishing a risk retention group, or the owners oroperators in the class or category demonstrate, and the department finds, thatthe formation of such a group is not possible and that the State is unable orunwilling to establish such a fund described in paragraph (2). [L 1989, c 212,pt of §6; am L 1992, c 259, §26]