WAC 173-360-490
Appendix G -- Trust agreement.
TRUST AGREEMENT
Trust agreement, the "agreement," entered into as of [date]
by and between [name of the owner or operator], a Washington
state [insert "corporation," "partnership," "association," or
"proprietorship"], the "grantor," and [name of corporate
trustee], [insert "Incorporated in the state of Washington" or "a
national bank"], the "trustee."
Whereas, the department of ecology, "ecology", an agency of
the state of Washington, has established certain regulations
applicable to the grantor, requiring that an owner or operator of
an underground storage tank shall provide assurance that funds
will be available when needed for corrective action and
third-party compensation for bodily injury and property damage
caused by sudden and nonsudden accidental releases arising from
the operation of the underground storage tank. The attached
Schedule A lists the number of tanks at each facility and the
name(s) and addresses of the facility(ies) where the tanks are
located that are covered by the standby trust agreement.
[Whereas, the grantor has elected to establish [insert
either "a guarantee," "surety bond," or "letter of credit"] to
provide all or part of such financial assurance for the
underground storage tanks identified herein and is required to
establish a standby trust fund able to accept payments from the
instrument (This paragraph is only applicable to the standby
trust agreement.)];
Whereas, the grantor, acting through its duly authorized
officers, has selected the trustee to be the trustee under this
agreement, and the trustee is willing to act as trustee;
Now, therefore, the grantor and the trustee agree as
follows:
Section 1. Definitions. As used in this agreement:
(1) The term "grantor" means the owner or operator who
enters into this agreement and any successors or assigns of the
grantor.
(2) The term "trustee" means the trustee who enters into
this agreement and any successor trustee.
Section 2. Identification of the Financial Assurance
Mechanism. This agreement pertains to the [identify the
financial assurance mechanism, either a guarantee, surety bond,
or letter of credit, from which the standby trust fund is
established to receive payments (This paragraph is only
applicable to the standby trust agreement.)].
Section 3. Establishment of fund. The grantor and the
trustee hereby establish a trust fund, the "fund," for the
benefit of the Washington state department of ecology. The
grantor and the trustee intend that no third party have access to
the fund except as herein provided. [The fund is established
initially as a standby to receive payments and shall not consist
of any property.] Payments made by the provider of financial
assurance pursuant to the director of the department of ecology's
instruction are transferred to the trustee and are referred to as
the fund, together with all earnings and profits thereon, less
any payments or distributions made by the trustee pursuant to
this agreement. The fund shall be held by the trustee, IN TRUST,
as thereinafter provided. The trustee shall not be responsible
nor shall it undertake any responsibility for the amount or
adequacy of, nor any duty to collect from the grantor as provider
of financial assurance, any payments necessary to discharge any
liability of the grantor established by the department of
ecology.
Section 4. Payment for ["corrective action" and/or
"third-party liability claims"]. The trustee shall make payments
from the fund as the director of the department of ecology shall
direct, in writing, to provide for the payment of the costs of
[insert: "taking corrective action" and/or "compensating third
parties for bodily injury and property damage caused by" either
"sudden accidental releases" or "nonsudden accidental releases"
or "accidental releases"] arising from operating the tanks
covered by the financial assurance mechanism identified in this
agreement.
The fund may not be drawn upon to cover any of the
following:
(a) Any obligation of [insert owner or operator] under a
workers' compensation, disability benefits, or unemployment
compensation law or other similar law;
(b) Bodily injury to an employee of [insert owner or
operator] arising from, and in the course of, employment by
[insert owner or operator];
(c) Bodily injury or property damage arising from the
ownership, maintenance, use, or entrustment to others of any
aircraft, motor vehicle, or watercraft;
(d) Property damage to any property owned, rented, loaned
to, in the care, custody, or control of, or occupied by [insert
owner or operator] that is not the direct result of a release
from a petroleum underground storage tank;
(e) Bodily injury or property damage for which [insert owner
or operator] is obligated to pay damages by reason of the
assumption of liability in a contract or agreement other than a
contract or agreement entered into to meet the requirements of
WAC 173-360-406.
The trustee shall reimburse the grantor, or other persons as
specified by the director from the fund for corrective action
expenditures and/or third-party liability claims in such amounts
as the director shall direct in writing. In addition, the
trustee shall refund to the grantor such amounts as the director
specifies in writing. Upon refund, such funds shall no longer
constitute part of the fund as defined herein.
Section 5. Payments comprising the fund. Payments made to
the trustee for the fund shall consist of cash and securities
acceptable to the trustee.
Section 6. Trustee management. The trustee shall invest
and reinvest the principal and income of the fund and keep the
fund invested as a single fund, without distinction between
principal and income, in accordance with general investment
policies and guidelines which the grantor may communicate in
writing to the trustee from time to time, subject, however, to
the provisions of this section. In investing, reinvesting,
exchanging, selling, and managing the fund, the trustee shall
discharge his duties with respect to the trust fund solely in the
interest of the beneficiaries and with the care, skill, prudence,
and diligence under the circumstances then prevailing which
persons of prudence, acting in a like capacity and familiar with
such matters, would use in the conduct of an enterprise of a like
character and with like aims; except that:
(a) Securities or other obligations of the grantor, or any
other owner or operator of the tanks, or any of their affiliates
as defined in the Investment Company Act of 1940, as amended, 15
U.S.C. 80a-2(1), shall not be acquired or held, unless they are
securities or other obligations of the federal or a state
government;
(b) The trustee is authorized to invest the fund in time or
demand deposits of the trustee, to the extent insured by an
agency of the federal or state government; and
(c) The trustee is authorized to hold cash awaiting
investment or distribution uninvested for a reasonable time and
without liability for the payment of interest thereon.
Section 7. Commingling and investment. The trustee is
expressly authorized in its discretion:
(a) To transfer from time to time any or all of the assets
of the fund to any common, commingled, or collective trust fund
created by the trustee in which the fund is eligible to
participate, subject to all of the provisions thereof, to be
commingled with the assets of other trusts participating therein;
and
(b) To purchase shares in any investment company registered
under the Investment Company Act of 1940, 15 U.S.C. 80a-1 et
seq., including one which may be created, managed, underwritten,
or to which investment advice is rendered or the shares of which
are sold by the trustee. The trustee may vote such shares in its
discretion.
Section 8. Express powers of trustee. Without in any way
limiting the powers and discretions conferred upon the trustee by
the other provisions of this agreement or by law, the trustee is
expressly authorized and empowered:
(a) To sell, exchange, convey, transfer, or otherwise
dispose of any property held by it, by public or private sale. No person dealing with the trustee shall be bound to see to the
application of the purchase money or to inquire into the validity
or expediency of any such sale or other disposition;
(b) To make, execute, acknowledge, and deliver any and all
documents of transfer and conveyance and any and all other
instruments that may be necessary or appropriate to carry out the
powers herein granted;
(c) To register any securities held in the fund in its own
name or in the name of a nominee and to hold any security in
bearer form or in book entry, or to combine certificates
representing such securities with certificates of the same issue
held by the trustee in other fiduciary capacities, or to deposit
or arrange for the deposit of such securities in a qualified
central depository even though, when so deposited, such
securities may be merged and held in bulk in the name of the
nominee of such depository with other securities deposited
therein by another person, or to deposit or arrange for the
deposit of any securities issued by the United States Government,
or any agency or instrumentality thereof, with a Federal Reserve
bank, but the books and records of the trustee shall at all times
show that all such securities are part of the fund;
(d) To deposit any cash in the fund in interest-bearing
accounts maintained or savings certificates issued by the
trustee, in its separate corporate capacity, or in any other
banking institution affiliated with the trustee, to the extent
insured by an agency of the federal or state government; and
(e) To compromise or otherwise adjust all claims in favor of
or against the fund.
Section 9. Taxes and expenses. All taxes of any kind that
may be assessed or levied against or in respect of the fund and
all brokerage commissions incurred by the fund shall be paid from
the fund. All other expenses incurred by the trustee in
connection with the administration of this trust, including fees
for legal services rendered to the trustee, the compensation of
the trustee to the extent not paid directly by the grantor, and
all other proper charges and disbursements of the trustee shall
be paid from the fund.
Section 10. Advice of counsel. The trustee may from time
to time consult with counsel, who may be counsel to the grantor,
with respect to any questions arising as to the construction of
this agreement or any action to be taken hereunder. The trustee
shall be fully protected, to the extent permitted by law, in
acting upon the advice of counsel.
Section 11. Trustee compensation. The trustee shall be
entitled to reasonable compensation for its services as agreed
upon in writing from time to time with the grantor.
Section 12. Successor trustee. The trustee may resign or
the grantor may replace the trustee, but such resignation or
replacement shall not be effective until the grantor has
appointed a successor trustee and this successor accepts the
appointment. The successor trustee shall have the same powers
and duties as those conferred upon the trustee hereunder. Upon
the successor trustee's acceptance of the appointment, the
trustee shall assign, transfer, and pay over to the successor
trustee the funds and properties then constituting the fund. If
for any reason the grantor cannot or does not act in the event of
the resignation of the trustee, the trustee may apply to a court
of competent jurisdiction for the appointment of a successor
trustee or for instructions. The successor trustee shall specify
the date on which it assumes administration of the trust in
writing sent to the grantor and the present trustee by certified
mail 10 days before such change becomes effective. Any expenses
incurred by the trustee as a result of any of the acts
contemplated by this section shall be paid as provided in section
9.
Section 13. Instructions to the trustee. All orders,
requests, and instructions by the grantor to the trustee shall be
in writing, signed by such persons as are designated in the
attached Schedule B or such other designees as the grantor may
designate by amendment to Schedule B. The trustee shall be fully
protected in acting without inquiry in accordance with the
grantor's orders, requests, and instructions. All orders,
requests, and instructions by the director of the Washington
state department of ecology to the trustee shall be in writing,
signed by the director, and the trustee shall act and shall be
fully protected in acting in accordance with such orders,
requests, and instructions. The trustee shall have the right to
assume, in the absence of written notice to the contrary, that no
event constituting a change or a termination of the authority of
any person to act on behalf of the grantor or the director,
hereunder has occurred. The trustee shall have no duty to act in
the absence of such orders, requests, and instructions from the
grantor and/or the director, except as provided for herein.
Section 14. Amendment of agreement. This agreement may be
amended by an instrument in writing executed by the grantor and
the trustee, or by the trustee and the director of the department
of ecology, if the grantor ceases to exist.
Section 15. Irrevocability and termination. Subject to the
right of the parties to amend this agreement as provided in
Section 14, this trust shall be irrevocable and shall continue
until terminated at the written direction of the grantor and the
trustee, or by the trustee and the director of the department of
ecology, if the grantor ceases to exist. Upon termination of the
trust, all remaining trust property, less final trust
administration expenses, shall be delivered to the grantor.
Section 16. Immunity and indemnification. The trustee
shall not incur personal liability of any nature in connection
with any act or omission, made in good faith, in the
administration of this trust, or in carrying out any directions
by the grantor or the director of the department of ecology,
issued in accordance with this agreement. The trustee shall be
indemnified and saved harmless by the grantor, from and against
any personal liability to which the trustee may be subjected by
reason of any act or conduct in its official capacity, including
all expenses reasonably incurred in its defense in the event the
grantor fails to provide such defense.
Section 17. Choice of law. This agreement shall be
administered, construed, and enforced according to the laws of
the state of Washington, or the Comptroller of the Currency in
the case of National Association banks.
Section 18. Interpretation. As used in this agreement,
words in the singular include the plural and words in the plural
include the singular. The descriptive headings for each section
of this agreement shall not affect the interpretation or the
legal efficacy of this agreement.
In witness whereof the parties have caused this agreement to
be executed by their respective officers duly authorized and
their corporate seals (if applicable) to be hereunto affixed and
attested as of the date first above written. The parties below
certify that the wording of this agreement is identical to the
wording specified in WAC 173-360-490 as such regulations were
constituted on the date written above.
[Signature of grantor]
[Name of the grantor]
[Title]
Attest:
[Signature of trustee]
[Name of the trustee]
[Title]
[Seal]
Attest:
[Signature of witness]
[Name of witness]
[Title]
[Seal]
[Statutory Authority: Chapter 90.76 RCW. 90-24-017, §
173-360-490, filed 11/28/90, effective 12/29/90.]
NOTES:
Reviser's note: The brackets and enclosed material in the text of the above section occurred in the copy filed by the agency.