[The following is an excerpted from “Environmental Liability: Managing Environmental Risks in Corporate, Real Estate and Brownfield Transactions” written by Larry Schnapf and published by Lexis Law Publishing]

State UST Trust Fund Programs.

	Because private UST insurance was unavailable to many UST owners and operators or very expensive for those who could qualify, petroleum marketers lobbied state legislatures to create UST trust funds. Approximately 43 states have financial assurance programs or trust funds which not only satisfy federal financial assurance funds but which are also used to provide partial or full reimbursement UST owners and operators for the corrective action costs they have incurred. Unlike the CERCLA trust fund which is often only used as a last resort, the state UST trust funds have been remarkably successful and efficient. The state UST funds have spent approximately $1.8 billion to help defray the costs of UST cleanups and are expected to disburse about $15.2 billion over the course of the UST program. In addition, many states have provided financial assistance or loans to help pay for UST upgrades.  
		The state trust funds vary in the amount and type of coverage they provide, and in their application procedures.  Most programs have deductible requirements which usually range from $10,000 to $50,000. In some cases, the funds will only make reimbursements for releases that occurred after the effective date of the program. Many states tie compliance with UST standards with reimbursement and may either reject claims of owners with USTs that are out-of-compliance or reduce the amount of the reimbursement. Sources of funding for the state cleanup funds include annual tank fees, registration fees, motor fuel taxes and the federal LUST fund. 
	Some state funds have recently begun to run out of money. There have also been cases of widespread fraud where states have received reimbursement requests for cleanups that never took place. As a result, many states are beginning to institute cost control measures to stretch out their funds  
	Following is a description of the basic elements of the various state UST trust fund programs.

ALABAMA
		Alabama's fund has been in effect since October 1, 1988 but administration of the UST program has not yet been delegated to the state by EPA. The fund is administered by the Department of Environmental Management.  The fund program covers cleanup costs up to $1 million per site with a deductible of $5,000.  The fund does not cover third‑party liability costs.  The fund's balance is approximately $ 9 million.

ARIZONA
		Arizona's fund has been in effect since June, 1990 but administration of the UST program has not yet been delegated to the state by EPA. The fund is administered by the Department of Environmental Quality.  The fund program covers only cleanup costs and does not cover third party liability. Reimbursement depends on the date the costs were incurred and the amount of coverage desired.  For costs incurred before December 31, 1991, the claimant can choose coverage up to $250,000 with a deductible of $25,000 or coverage up to $145,000 with a deductible of $5,000.  For costs incurred after January 1, 1992, the claimant can choose coverage up to $200,000 with a deductible of $25,000 or coverage up to $130,000 with a deductible of $5,000.  The fund's balance  is approximately $42.1 million.

ARKANSAS
		Arkansas' fund has been in effect since April 22, 1990 but administration of the UST program has not yet been delegated to the state by EPA. The fund is administered by the Department of Pollution Control and Ecology.  The fund program covers cleanup and third‑party liability costs up to $1 million with a separate deductible of $25,000.  The fund's balance is approximately $10.9 million. 

CALIFORNIA
		California's fund has been in effect since September 26, 1990 but administration of the UST program has not yet been delegated to the state by EPA. The fund is administered by the Waste Resources Control Board.  The fund program covers cleanup and third‑party liability costs up to $990,000 million with a combined deductible of $10,000 or $20,000 depending on whether the owner or operator is in compliance. Reimbursement of response costs associated with existing USTs that were not registered by January 1, 1990 are subject to double deductible. The fund balance is approximately $190 million with no claims yet to be paid.

COLORADO
		Colorado's fund has been in effect since July 1, 1989 but administration of the UST program has not yet been delegated to the state by EPA. The fund is administered by the State Department of Health.  The fund program provides up to a total of $1 million coverage for both cleanup and third party liability costs.  There is a $10,000 deductible on cleanup costs and a $25,000 deductible on third‑party liability costs.  The fund's balance ranges between $15-20 million and $16 million in claims have been paid to date.

CONNECTICUT
		Connecticut's program has been in effect since July 5, 1989 but administration of the UST program has not yet been delegated to the state by EPA. The fund is administered by the Department of Environmental Protection.  The fund program covers cleanup and third‑party liability costs up to $1 million with a combined deductible of $10,000. The fund balance $ 12 million with $ 20 million in claims paid since the program's inception. 

DELAWARE
		Delaware's program has been in effect since January 16, 1987 but administration of the UST program has not yet been delegated to the state by EPA. The fund is administered by the Department of Natural Resources and Environmental Control.  The fund program covers cleanup and third‑party liability costs up to $1 million with a $2,500 combined deductible. However, owners or operators of USTs that were not registered between July 16, 1987 and January 16, 1989 are not eligible for reimbursement. The fund balance is $ 600,000 with $ 1.7 million in claims paid since the program's inception. 

FLORIDA
		Florida's fund has been in effect since July 1, 1986 but administration of the UST program has not yet been delegated to the state by EPA. The fund is administered by the Department of Environmental Regulation.  The fund provides $1 million coverage for cleanup costs which is limited to an annual aggregate of $2 million. UST owners and operators contribute a copayment (deductible) of up to $25,000 of cleanup costs.There is a separate insurance fund for third-party liability claims. The fund balance is currently approximately $30 million per year but there is currently a backlog of $200 million in claims and the DER has been asked to halt processing of further claims.  

GEORGIA
		Georgia's fund has been in effect since July 1, 1988 and EPA delegated administration of the UST program to the state in 1991. The fund is administered by the Department of Natural Resources Environmental Protection Division.  The fund program provides $1 million coverage for both cleanup and third‑party liability costs with a combined deductible of $10,000. The most recent figures available for this fund estimate a balance of $ 14 million with $ 1.4 million in claims paid since the program's inception. 

IDAHO
		Idaho's underground storage tank program has no reimbursement fund. Instead, Idaho has an insurance program which is administered by the State Insurance Fund. The maximum coverage is $1 million per year per incident with a total of $2 million in any one year. There is a $10,000 deductible.  Administration of the UST program has not yet been delegated to the state by EPA.
The fund balance is approximatelt $40 million.

ILLINOIS
		Illinois' fund has been in effect since, July 28, 1989 but Administration of the UST program has not yet been delegated to the state by EPA. The fund is administered by the Environmental Protection Agency.  The fund provides $1 million coverage for both cleanup and third‑party liability costs.  The deductible amount for cleanup may either be $10,000 or $100,000, depending on the number of tanks. The deductible for third‑party liability costs is $10,000.  Any costs over $1 million must be reimbursed by the owner of operator.  The most recent figures available for this fund estimate a balance of $ 3 million with $ 80.5 million in claims paid since the program's inception. However, the fund is nearly insolvent and may lose its federal LUST funding because of enforcement difficulties.  

INDIANA
		Indiana's fund has been in effect since April 1, 1988 but administration of the UST program has not yet been delegated to the state by EPA. The fund is administered by the Department of Environmental Management. The fund program provides $1 million coverage for both cleanup and third‑party liability costs with a combined deductible of $25,000, $30,000 or $35,000 depending on the tank upgrade status.  The fund balance is $ 25 million with $ 13 million in claims paid since the program's inception. 

IOWA
		Iowa's fund covers costs incurred after June 30, 1988 for releases reported by October 26, 1990. Administration of the UST program has not yet been delegated to the state by EPA. The fund is actually an insurance program administered by the Underground Storage Tank Board.  The fund program provides $1 million coverage for cleanup costs with a $5,000 or $10,000 deductible. The fund balance is $ 30 million with approximately $ 3 million in claims paid since the program's inception. 

KANSAS
		Kansas' fund has been in effect since April 1, 1990 and only covers leaks discovered after December 22, 1988. EPA delegated administration of the UST program to the state in 1994.  The program is administered by the Department of Health and Environment. The fund program provides $1 million coverage for cleanup costs with a $3,000 deductible and a charge of $500 per tank or $100,000, whichever is less.  The program also provides an insurance plan for third‑party claims with an optional deductible of either $2,500, $5,000, or $10,000 per occurrence.  The fund balance is approximately $ 5 million with $ 7 million in claims paid since the program's inception. 

KENTUCKY
		Kentucky's fund has been in effect since April 9, 1990 but administration of the UST program has not yet been delegated to the state by EPA. The fund is administered by the Petroleum Storage Tank Environmental Assurance Fund Commission.  The fund provides $1 million for both cleanup and third‑party liability costs with a combined deductible.  For tank owners or operators of five or fewer tanks the deductible is $1,000, $5,000 for owners or operators of 6-11 USTs and $25,000  12 or more USTs. The fund balance is $ 24.3 million with $ 9 million in claims paid since the program's inception. 

LOUISIANA
		Louisiana's fund has been in effect since July 15, 1988 and administration of the UST program was delegated to the state by EPA in 1992.   The fund is administered by the Department of Environmental Quality.  The fund program, which provides $1 million for commercial tanks and $500,000 for noncommercial tanks, covers both cleanup and third‑party liability costs.  The deductible amount depends on when the costs were incurred and the number of tanks owned or operated. From July 15, 1988 ‑ June 30, 1989, the deductible is $10,000 each; July 1, 1989 ‑ July 15, 1992, the deductible is $15,000 each; July 15 ‑ present the deductible is $5,000 for 1 to 12 tanks, $10,000 for 13 to 99 tanks, and $15,000 for 100 or more tanks. The fund balance is approximately $ 2.4 million with $ 19 million in claims paid since the program's inception. 

MAINE
	Maine's fund has been in effect since April 1, 1990 and administration of the UST program was delegated to the state by EPA in 1992.  The fund is administered by the State Department of Environmental Protection.  The fund program provides $1 million coverage for both cleanup and third‑party liability costs.  The deductible amount depends on the number of USTs owned or operated by the claimant with a deductible of $2,500 for one UST; $5,000 for 2-5 USTs, $10,000 for 6-10 USTs, $25,000 for 11-20 USTs and $ 50, 00 for more than twenty USTs. The UST fund is almost insolvent.

MARYLAND
		Maryland's fund has been in effect since October 1, 1993 and EPA delegated administration of the UST program to the state in 1992. The fund is administered by the Maryland Department of Environmental Waste Management Administration.  The fund is very limited and only covers approximately 30 sites a year.  Participants in the program are mainly large oil companies.  Most tank owners and operators have to rely on private insurance.  The fund provides $125,000 coverage only for cleanup costs.  The deductible for cleanup costs varies depending on the number of tanks owned.  The deductible for 1 to 5 tanks is $15,000; for 6 to 15 tanks $20,000; 16 to 30 tanks $30,000; for 31+ tanks $40,000.  There is no deductible for third‑ party liability costs.

MASSACHUSETTS
		Massachusetts' fund  covers costs incurred after April 4, 1991 and EPA delegated administration of the UST program to the state in 1995. The fund is administered by the Department Of Public Safety.  The fund provides  $1 million for both cleanup and third‑party liability costs with a combined deductible.  The deductible amount is depends on the number of owned USTs: $5,000 for one UST; $7,500 for two USTs and $10,000 for three USTs. The most recent figures available for this fund estimate a balance of $ 25.1 million with no paid claims. 

MICHIGAN
		Michigan's fund has been in effect since July 18, 1989 but administration of the UST program has not yet been delegated to the state by EPA. The fund is administered by the Department of Management and Budget.  The fund program provides $1 million for both cleanup and third‑party liability costs with a combined deductible.  Tank owners and operators contribute a 10% copayment up to $15,000 for the first release, and a 30% copayment up to $45,000 for the second release.  The most recent figures available for this fund estimate a balance of $ 234.5 million with claims of $258.6 million paid since the program's inception. 

MINNESOTA
		Minnesota's fund has been in effect since June 4, 1987 but administration of the UST program has not yet been delegated to the state by EPA. The fund is administered by the State Department of Commerce. The fund program provides up to $1 million coverage for both cleanup and third‑party liability costs. Tank owners and operators must meet a copayment of 10 percent of the first $250,000 of cleanup and third‑party liability costs and 25% of any costs that exceed that amount. Deductions from claim amounts are made for non-compliance with UST standards. The fund balance is approximately $14 million and has paid over $170 million in claims since the program's inception. 

MISSISSIPPI
		Mississippi's fund has been in effect since May 18, 1988 but administration of the UST program has not yet been delegated to the state by EPA. The fund is administered by the Department of Environmental Quality.  The fund program provides $1 million coverage for cleanup costs and $2 million coverage for third‑party liability costs.  There is no deductible. The fund balance is $ 7.8 million with approximately $ 19.1 million in claims paid since the program's inception. 

MISSOURI
		Missouri's fund has been in effect since August 28, 1989 but administration of the UST program has not yet been delegated to the state by EPA. The fund is administered by the Department of Natural Resources. The fund program provides $1 million coverage for both cleanup and third‑party liability costs.  The deductible is $ 10,000. The fund balance is $ 30 million with $ 8.7 million in claims paid since the program's inception.  

MONTANA
		Montana's fund has been in effect since April 13, 1989 but administration of the UST program has not yet been delegated to the state by EPA. The fund is administered by the Petroleum Release Compensation Board.  The fund program provides $1 million coverage for commercial tanks and $500,000 coverage for noncommercial tanks with combined deductibles.  The fund covers both cleanup and third‑party liability costs.  For commercial tanks, there is a deductible of $17,500, and for noncommercial tanks there is a $5,000 deductible.  The fund balance is approximtely $ 4 million with $ 12 million in claims paid since the program's inception. 

NEBRASKA
		Nebraska's fund covers costs incurred after May 29, 1989 for releases reported after July 17, 1983 but administration of the UST program has not yet been delegated to the state by EPA. The fund is administered by the Department of Environmental Quality.  The fund program provides up to $1 million coverage for both cleanup and third‑party liability costs with a combined deductible of $5,000 or $10,000 plus 25% of the next $40,000 to $60,000, depending on the volume. The fund balance is approximately $ 1 million with $ 25 million in claims paid since the program's inception. 

NEVADA
	Nevada's fund has been in effect since May 27, 1989 but administration of the UST program has not yet been delegated to the state by EPA. The fund is administered by the Department of Environmental Quality.  The fund provides $1 million  for both cleanup and third‑party liability costs with a combined deductible of $10,000. The fund balance is estimated at $ 4 million. The fund has paid 97% of claims submitted since the program's inception.  

NEW HAMPSHIRE
		New Hampshire's fund has been in effect since July, 1, 1988 and EPA delegated administration of the UST program to the state in 1993.  The fund is administered by the  Department of Environmental Services.  The fund provides $1 million in cleanup and third‑party coverage.  The combined deductible amount for cleanup costs and third‑party liability costs ranges from $5,000 to $30,000 depending on the number of USTs owned.  The fund balance is estimated at $ 3.5 million with $ 20.4 million in claims paid since the program's inception. 

NEW JERSEY
		New Jersey currently is without a trust fund program and administration of the UST program has not yet been delegated to the state by EPA. New Jersey does have a $5 million loan program which lends up to $100,000 for upgrading USTs to eligble UST owners who can demonstrate economic hardship. 

NEW MEXICO
		New Mexico's fund has been in effect since March 7, 1990 and EPA delegated administration of the UST program to the state in 1990. The program is administered by the Environment Department.  The fund program provides $1 million only for cleanup and not for third‑party liability costs.  The deductible is $10,000 and is aimed at commercial owners and operators.  Individual tank owners typically do not have to pay the deductible.  The fund balance is estimated at $ 17 million with approximately $35 million in claims paid since the inception of the program.  

NEW YORK
		New York currently is without a trust fund program. New York's Underground Storage Tank Program is funded by an annual $.04 per gallon fee on petroleum.

NORTH CAROLINA
		North Carolina's fund  covers commercial releases occurring after June, 1988 and noncommercial costs incurred after June, 1988. Administration of the UST program has not yet been delegated to the state by EPA. The fund is administered by the Department of Environment, Health and Natural Resources.  The fund provides $1 million for both cleanup and third‑party liability costs with a deductible for cleanup costs of $20,000 to $50,000, depending on the date of release.  The deductible for third‑party liability costs is $100,000.  The most recent figures available for this fund estimate a balance of $ 37.2 million with claims of $ 33 million paid since the program's inception. 

NORTH DAKOTA
		North Dakota's fund has been in effect since April 1, 1988 and EPA delegated administration of the UST program to the state in 1991.  The fund is administered by the Commissioner of Insurance.  The fund provides $1 million coverage for both cleanup and third‑party liability costs. The combined deductible for cleanup and third‑party liability costs is $5,000 plus 10% of costs between $5,000 and $155,000. Costs exceeding $155,000 are 100% reimburseable up to $1 million. Thus, for claims below $1 million, the maximum out-of-pocket costs for UST ownersor operators is $20,000. The fund balance is estimated at $ 3.8 million with claims. 

OHIO
		Ohio's fund has been in effect since July 1, 1989 but administration of the UST program has not yet been delegated to the state by EPA. The fund is administered by the Petroleum Underground Storage Tank Release Compensation Board. The fund's coverage depends on the number of tanks owned. Owners of 100 or fewer tanks are covered up to $1 million; 200 or fewer tanks are covered up to $2 million; 300 or fewer tanks are covered up to $3 million; and 400 or fewer tanks are covered up to $4 million.  The combined deductible for cleanup and third‑party liability costs is $11,000 or $55,000 depending on the number of USTs owned and tank fees paid.  The fund balance is estimated at $ 40 million with claims of $ 26 million paid since the program's inception. 
OKLAHOMA
		Oklahoma's fund has been in effect since July 1, 1989 and EPA delegated administration of the UST program to the state in 1992. The fund is administered by the Oklahoma Corporation Commission.  The fund program provides $1 million coverage for both cleanup and third‑party liability costs with a $ 5,000 combined deductible.  The most recent figures available for this fund estimate a balance of $ 14 million with claims of $ 5.7 million paid since the program's inception. 

OREGON
		Oregon's fund has been in effect since 1991 but administration of the UST program has not yet been delegated to the state by EPA. The fund is administered by the Environmental Quality Commission Department of Environmental Quality.  The program covers four different types of owners and operators who sell motor fuel: (1) those without financial need are given a 7 1/2% subsidized interest rate on a loan and an 80% loan guarantee up to $80,000; (2) those with 100 or more tanks and no financial need are given a 5% subsidized interest rate on a loan, an 80% loan guarantee up to $80,000, and insurance copayments; (3) those with 13 to 99 tanks or those in remote areas with no financial needs are given a 50% grant, a 3% subsidized interest rate on a loan, an 80% loan guarantee up to $80,000 and insurance copayments; and (4) retail facilities owning 1‑12 tanks and in not in financial need are given a 75% loan grant up to $75,000, an 80% loan guarantee and insurance copayments.  The reimbursement fund has lost its financing because of a lawsuit by the Automobile Association of America (AAA).  Consequently, the state has had to use a lottery system which has raised some funds which have gone only to category four owners and operators.

PENNSYLVANIA
		Pennsylvania's fund has been in effect since February 1, 1994 but administration of the UST program has not yet been delegated to the state by EPA. The program is administered by the State Insurance Department. The fund program provides up to a total of $1 million coverage for both cleanup and third‑party liability costs. Both cleanup and third‑party liability costs have a deductible of $ 5,000. The fund balance is estimated at $3 million with $11 million in claims paid out since the fund's inception. 

RHODE ISLAND
		Rhode Island trust fund program was established in 1994.  The fund provides $1 million in coverage for both cleanup costs and third party liability costs with a $20,000 deductible. The fund balance is approximately $3 million but no claims have been paid to date. Administration of the UST program was delegated to Rhode Island by EPA in 1993. 

SOUTH CAROLINA
		South Carolina's fund has been in effect since June, 1988 but administration of the UST program has not yet been delegated to the state by EPA. The fund is administered by the Department of Health and Environmental Control.  The fund provides $1 million coverage for both cleanup and third‑party liability costs with a separate deductible amount for each.  Costs incurred before July 1, 1993, are fully recoverable.  There is a $25,000 deductible for costs incurred after July 1, 1993. The fund balance is approximately $ 1 million with approximately $40 million in claims paid to date.

SOUTH DAKOTA
		South Dakota's fund has been in effect since April 1, 1988 and EPA delegated administration of the UST program to the state in 1995. The fund is administered by the Department of Commerce and Regulation.  The fund provides $1 million for both cleanup and third‑party liability costs.  The deductible for cleanup costs is $10,000 but can be as low as $2,000 if the occurrence is reported between April 1, 1990 and January 1, 1992.  Third‑party liability costs are covered in full. The fund balance is estimated at $ 1.6 million with claims of $ 35.2 million paid since the program's inception. 

TENNESSEE
		Tennessee's fund has been in effect since July 1, 1988 but administration of the UST program has not yet been delegated to the state by EPA. The fund is administered by the Department of Environment and Conservation. The fund program provides $1 million coverage for both cleanup and third‑party liability costs.  The deductible, which applies separately to each type of cost, varies and depends on the date of discovery and the number of tanks.  Between July 1, 1988 ‑ June 30, 1989 the deductible is $75,000; July 1, 1989 ‑ April 30, 1990 the deductible is $50,000; after May 1, 1990 with 1‑12 tanks the deductible is $10,000, with 13‑99 tanks the deductible is $20,000, and anything over 99 tanks the deductible is $50,000. The fund balanced is estimated at $ 20 million with claims of $ 157 million paid since the program's inception. 

TEXAS 
	The Texas fund has been in effect since September 1, 1989 and EPA delegated administration of the UST program to the state in 1995. The fund is administered by the Texas Water Commission.  The fund program provides coverage for up to $1 million of the cost of cleanup only.  There is a deductible of $10,000 for cleanup costs. The fund size is currenting operating a deficit and there is set one and a half year backlog in processing claims. 

UTAH
		Utah's fund has been in effect since 1989 and EPA delegated administration of the UST program to the state in 1994. The fund is administered by the Department of Environmental Quality.  The fund program, which covers both cleanup and third‑party liability costs, provides $1 million coverage for commercial tanks and $500,000 coverage for non‑ commercial tanks.  The combined deductible is $25,000. The most recent figures available for this fund estimate a balance of $ 20.4 million. 

VERMONT
		Vermont's fund has been in effect since January 1, 1987 and EPA delegated administration of the UST program to the state. The fund is administered by the Department of Environmental Conservation.  The fund provides $1 million coverage for both cleanup and third‑party liability costs.  There is a $10,000 deductible on cleanup costs and no deductible for third‑party liability costs.  The most recent figures available for this fund estimate a balance of $ 4.6 million with claims of $ 16 million paid since the program's inception. However, the fund has a projected deficit for 1995.  

VIRGINIA
		Virginia's fund has been in effect since December 22, 1989 but administration of the UST program has not yet been delegated to the state by EPA. The fund is administered by the Department of Environmental Quality Water Division.  The fund provides $1 million for both cleanup and third‑ party liability costs with a deductible based upon on a sliding scale according to the date of the claim application. The deductible ranges from $20,000- $200,000. The fund balance is estimated at $ 15.5 million with claims of $ 8.5 million paid since the program's inception. 

WASHINGTON
		Washington's UST fund has been in effect since 1989 and EPA delegated administration of the UST program to the state in 1993. The fund is administered by the Pollution Liability Insurance Agency.  The program provides private insurance with reinsurance subsidized by the state and covers both cleanup and third‑party liability costs up to $1 million.  After the $25,000 deductible is paid, the insurance company is responsible for the next $75,000. The state will reimburse 100% of claims for cleanup costs above $75,000 but below $1 million. The fund balance is approximately $35 million but no claims have been paid to date.

WEST VIRGINIA
		West Virginia's program has been in effect since October 1, 1991 but administration of the UST program has not yet been delegated to the state by EPA. The fund which is run by the Board of Risk and Insurance Management, is a voluntary insurance fund.  Maximum coverage is $1 million per occurrence with a $2 million annual aggregate and a deductible of either $5,000 or $50,000.  The program covers both cleanup and third‑party costs.  

WISCONSIN
		Wisconsin's fund has been in effect since August 1, 1987 but administration of the UST program has not yet been delegated to the state by EPA. The fund is administered by the Department of Industry, Labor and Human Relations. The fund, which covers both cleanup and third‑party liability costs, provides $1 million coverage for commercial tanks and $500,000 coverage for noncommercial tanks.  The combined deductible is $2,500 plus 5% of the costs up to a maximum of $7,500 per occurrence.  The most recent figures available for this fund estimate a balance of $ 400,000 with claims of $ 117.7 million paid since the program's inception. 

WYOMING
		Wyoming's fund has been in effect since March 21, 1990 but administration of the UST program has not yet been delegated to the state by EPA. The fund is administered by the Department of Environmental Quality.  There is no assurance fund program per se.  The program, however, does cover 100% of cleanup costs and up to $1 million of third party liability costs.  The third‑party liability coverage has a deductible of $30,000.  The most recent estimate for the fund balance is $10 million.

Additional Sources of  Financial Assistance for UST Cleanups

	In addition to the state trust funds, there are five federal agencies that provide financial assistance to UST owners and operators. Two of the agencies, the Bureau of Indian Afairs and the Administration for Native Americans are generally only available to Native Americans and Indian Tribes. Details on the other three federal agencies are as follows: 

	A.  Small Business Administration- This agency has established three kinds of programs for businesses that qualify as SBA small businesses. The closest regional SBA  office should be contacted for more information. 

		1.Under the Microloan Demonstration Program, the SBA will make direct loans to intermediiary lenders who extend loans to low-income or minoirity entrepreneurs for business startups or expansions. The small busineses typically use these loans to establish working capital or to purchase supplies, materials or equipment. To be eligible, the small business mustbe locate  in an area thatis served by a participating intermediarylender,  the business must be owned by women, low income and minority small business owners. Individually owned or operated franchisees (e.g. conveninece stores/gasoline stations) are also eligible for SBA assistance. The maximum loan is $25,000.

		2.  SBA 7(a) and Pollution Control Loan Gurantee Programs- These SBA loan guarantee programs help small businesses secure loans that they may not normally able to received. The loans may be used to purchase or modify pollution control equipment as well as UST replacements, upgrades and cleaups. The loan guaranmtees are available to businesses that fall within the SBA definition of a small business. In order to qualify, the borrower must demonstrate that financing on reasonable terms is not available. In addition, the borrower must provide full collateral for the loan and the lending institution mustbe willing to finance the loan with the SBA guarantee. While the amount of the loans are not limite, the SBA will only gurantee up to $1 million.

		3. Local Development Company Loans- The SBA provides loansto Local Developnebt Companies who , in turn. make long-term financing available through loan guarantees whichmay be used to purchase land, buildings, machinery and equipment such as USTs.  Ten percent of the project cost is provided bythe Local Development Company and 50%  by a private lender, and the developer must come up with the remaining 40% through personal equity, private investments or other government sources. These guarantees are only available to businesses that fall within the SBA’s definition of a small business and in locations served by a chartered Local Develoment Company. The term of the loan may not exceed 25 years and  the maximum loan guarantee is $ 1 million.    

	B. Rural Development Administration (“RDA”)-  This agency has established two loan guarantee programs that can be used to replace, upgrade or cleanup USTs. Information about these programs can be obtained from the nearest RDA regional office. 

		1. Business and Industrial  (B& I) loan guarantee program - This is intended to expand and preserve the agricultural tax base in rural areas.. The B & I loans mau be used to purchase pollution control equipment as well as to abate pollution. To be eligible, the business must be located in a rural area which is defined as an area where the population is less than 50,000 and the population density is below 100 persons per square mile. Priority is given to areas with a polulation below 25,000, for businesss that will expand or save existing jobs as well as new businesses.  
		The RDA will guarantee 90% of loans below $2 million, 80% of loans between $2-$5 million and 70% of loans exceeding $5 million. Exisiting busineses must provide at least 10% tangible equity while new bueisness must contribute 20-25% in tangible equity. The entire value of the loan must be secured and the maximum loan is $10 million. The RDA charges a two percent fee on the guaranteed portion of the loan.

		2. Rural Business Enterprise Grants (“RBE”)- This program makes direct loans and grants to public agencies and non-profit organizations (intermediary lenders) who extend loans to small and emerging buisneeses that will improce the economoes of  designated rural areas. In addition to being in an designated rural area served by a receipient of the program, a small busines must employ fewer than 50 persons and have less than $1 million in projected annual gross revenue. The maximum grant to an intermediary lender is $500,00 who, in turn, will determine the maximum grant or loan that may be available to a particular business.

		C. Economoc Development Adinistration (“EDA”)- This agency administers the Public Works and Development Facilities Program  The EDA has established this grant program to help distressed communities attract new industry, ecnourage business expansion, diversify their economies and geneate long-term private-sector employement. These grants are not available to individual owners or operators of  businesses but to private or public non-profit organizations or associations representing a redevlopment area or which proposes a public works project that benefits a redvelopment area. Grants range between $100,000 and $1.5 millio but do not generwlly exceed 50% of the total estimated construction costs. However, in areas that suffer from sever economic distress, the EDA may provide grants of  up to 80% of the project’s estimated costs.

(c) copyright 1999 Lawrence P. Schnapf