• What Is NatLUST?
• Why Is NatLUST Needed In Illinois?
• Who Helped to Bring NatLUST's Program To Illinois?
• What Changes Is IEPA Making to Facilitate Claim Assignments?
• Is NatLUST Financing Debt to My Company?
• Is NatLUST's Financing Nonrecourse?
• Do We Have to Supply Financial Information on Our Company?
• I Have Already Borrowed Money to Finance UST Clean Ups. How Can NatLUST Help Me?
• Can NatLUST Pay My Consultant Directly?
• What Does it Cost to Participate?
• Who Pays NatLUST's Carrying Costs?
• What Kind of Experience Does NatLUST Have in Funding Claims? What Companies Have Used NatLUST's Program?
• Where Does NatLUST Get It's Financing?
• Is NatLUST Endorsed by the Illinois Petroleum Marketers Association?
• How is NatLUST Governed?
• I Am An Owner/Operator. How Do I Participate?
• I Am A Consultant. How Do I Participate?
• My Consulting Firm Receives Financing From EnviroCap. Can I Participate?
• Will NatLUST Offer A Program To Fund My Claims Prior to Approval?
• Does IEPA Require One Assignment Form for Each Claim?
• I Have Claims That Have Been Submitted to IEPA For Processing But Have Not Yet Received A Claim Decision. Can I Assign Them?
• I Am An Owner/Operator Who's Company Is in Bankruptcy. Can I Participate?
• How Often Will NatLUST Issue Initial Payments?
• How Often Will NatLUST Issue The Back End Residual Payment?
• Can Consultants Use a Power of Attorney From the Claimant to Sign the Assignment Forms?
• Why Doesn't NatLUST Quote a Specific Interest Rate?
• Why Does NatLUST Use a "Two Payment" Financing Model?
• Will I Receive a 1099 From NatLUST?
• How Can I Determine What Initial Payment Percentage My Claim Will Receive?

The National Leaking Underground Storage Tank Program Fund ("NatLUST") is a 501(c)(3) nonprofit program created to provide low-cost claim financing to owner/operators ('claimants') and their consultants.

NatLUST is the successor to a governmental financing program that the State of Virginia created in 2002 to provide liquidity to its stakeholders. At the time, Virginia's UST fund was taking over a year to reimburse claims. NatLUST became the successor to Virginia's program in February 2005. We operate UST financing programs in Virginia and Connecticut, and will add additional states in 2008.

By providing inexpensive claims financing, NatLUST helps the Illinois EPA protect the environment by keeping clean ups going, thereby lessening the burdens of government. NatLUST does not operate as a typical corporation, but as a servant of the State.

Key political leaders in Illinois are very aware that claimants and consultants have been suffering and acted to provide financial relief.

Illinois EPA ('IEPA') Director Douglas P. Scott, and his staff crafted a statute change in the spring of 2007 to allow the agency the ability to create a claim assignment program. Without this legislation, NatLUST could not offer its program in Illinois.

Rep. Thomas Holbrook and Senator James Clayborne, Jr., who chair the House & Senate Environment Committees, respectively, sponsored the legislation, which was supported by House Speaker Michael Madigan as well as State's largest petroleum organization, the Illinois Petroleum Marketers Association/Illinois Association of Convenience Stores. The legislation passed the House and Senate unanimously, and was signed into law by Governor Rod Blagojevich in August 2007.

In addition to the statute change, IEPA has and continues to make changes to its UST program to make the claim assignment and funding process work smoothly. For example:

• IEPA has already created a claim assignment form;
  
• IEPA is now posting its Payment Priority List in Excel to make sorting claims easier;
  
• IEPA has added the names of the assignees to its Payment Priority List; and
  
• IEPA has made various other operational changes

Absent fraud or state intercept, NatLUST financing is non-recourse to the claimant and their consultant, just like NatLUST's Virginia and Connecticut programs. If the IL UST fund ceases to reimburse claims or NatLUST's "holdback" is insufficient to cover the accrued carrying costs, NatLUST and its credit providers will suffer the loss.

NatLUST will retain recourse in the event the claimant's claim is intercepted by the State Comptroller (ex. for failure to pay taxes). In such event, the claimant is required to make us whole. We have the right to offset other claims payable to the claimant and/or their consultant.

No.

Claimants and/or consultants that have borrowed money from conventional lending sources can use NatLUST financing to repay their bank, thereby freeing up borrowing capacity for other income producing opportunities. NatLUST financing is likely less expensive than bank financing, too.

NatLUST charges 'carrying costs' to the payee. These charges accrue and are deducted from the holdback when the claim is eventually reimbursed.

NatLUST's carrying costs are a function of fixed and variable expenses. The largest component is NatLUST's cost of borrowed money. Currently, our cost of borrowed money is running about 6% per year, but fluctuates from month-to-month. Our administrative costs are running less than 1.50% per year, and fluctuate periodically. too. NatLUST also amortizes its legal and related expenses by allocating a small fixed charge against each funded claim. In general, the larger the program becomes, the less expensive it is for the participants, everything else being equal.

In Virginia and Connecticut, NatLUST's carrying costs have historically been quite low. We also publish our carrying costs for each state to the web every month.

Illinois participants should note that NatLUST plans to replace its current taxable financing with less expensive tax-exempt bond financing in coming months. We believe our cost of borrowed money will drop from about 6% to 4% or even less. The savings from this tax-exempt financing will be passed through to our participants.

The party that receives the Initial and Residual Payments Carrying costs are deducted from the back end Final Payment.

NatLUST and its predecessor Virginia VRA program have funded over 6,000 claims totaling more than $60 million since 2002.

Some of the better known participants include Amerada Hess, Ashland Oil, BP Products, Coastal Mart, Chevron, Cumberland Farms, ExxonMobil, Pilot Oil, and Sunoco. In addition scores of independent petroleum marketers and C-Stores use NatLUST. The largest participant by dollar volume has been ExxonMobil.

We have typically received funding from the governmental lending departments of large banks, including SunTrust, JPMorgan Chase, BB&T, and Paragon Bank. For the Illinois program we selected Branch Banking & Trust ("BB&T"), the country's 14th largest bank.

These banks look through NatLUST ---which is organized as a financing conduit --- to the underlying claims, which have been approved for payment by IEPA. Our banks can count this as 'zero capital' governmental loan on their books.

In addition, because NatLUST is a 501(c)(3), it can borrow money using tax-exempt bonds, which are typically considerably cheaper than conventional bank financing. BB&T will supply its letter-of-credit for the muni bond financing.

Yes, the Illinois Petroleum Marketers Association, ("IPMA") recommends NatLUST to its members. In fact, IPMA's President, Jon Stewart, recently joined NatLUST's board of directors.

IPMA is a member of the Petroleum Marketers Association of America ("PMAA"), the country's largest petroleum industry trade association. PMAA's Executive Director, Dan Gilligan, is also a NatLUST director.

NatLUST is governed by a board of independent directors that include representatives from the petroleum industry, state UST fund administrators, the consulting industry, and the financial services industry. To learn more about NatLUST's board members, click here.

Claimants participate by assigning (selling) their claims to NatLUST. The process involves completing two forms, an IEPA form and the NatLUST assignment form.

NatLUST's database system is organized whereby the consultant will have administrative rights to create the necessary paperwork for their clients. Our database system puts unique barcodes on the forms that help us track them.

Kindly note that if your business has pledged its assets to a bank (under a typical revolving loan facility), we may require that your lender execute a form letter allowing us to file a UCC-3 terminating their lien on the claims you sell to us. NatLUST has never experienced a situation where a bank refused this request, likely because they will understand that your company is better receiving cash that you can use to pay your consultant (and your property cleaned up).

NatLUST recognizes that many consultants in Illinois are playing 'banker' to their clients, and are actually the party that is waiting for the reimbursement. NatLUST has worked with the IPMA and the ACEC-IL to develop procedures to help ensure that you get paid.

The first step is to contact NatLUST to obtain a password allowing you to access our database, and a brief tutorial on how to set up claims.

My Consulting Firm Receives Financing Through EnviroCap. Can We Participate ?

If your clients have pledged and assigned their claims to your company, and your company has, in turn, assigned those claims to EnviroCap, then EnviroCap owns the claims. You may not have the ability to make the assignment on claims that have previously been sold to EnviroCap.

NatLUST is willing to finance any and all claims that EnviroCap consents to assign back to your company. Alternatively, if you can provide evidence that your financing agreement with EnviroCap gives you the right to repurchase claims, we may be able to provide financing.

As of the date of this web posting, NatLUST does not know if EnviroCap is agreeable to allowing consulting firms that it finances to participate in NatLUST.

Yes. If you are doing business with large companies, call us now. For companies doing business with smaller tank owners, look for an announcement sometime in Q1-2008 that NatLUST is offering a new program.

No. The way the statute was written, you must wait for the claim decision to be issued before you can send the assignment form to IEPA.

Consultants may, if they determine it advantageous, set up claims up in NatLUST's database, print out the forms and have them signed in advance of the claim decision being issued. The only thing you may not know is the decision amount, which you will have to pencil in prior to sending the claim to IEPA.

For NatLUST, we would like the initial claim signed by the claimant because they are granting us a limited power of attorney. However, you may use your LPOA on any subsequent claims assigned by that same claimant.

For IEPA, the statute requires that the RP sign the IEPA assignment form.

The nature of NatLUST's mission is fundamentally different than a bank. We function not as a for profit company, but as a servant of the state.

If we were to quote a specific interest rate, we would have to set it at a level that in all likelihood would cause us to make a profit, which isn't our objective. Instead, we continually adjust our carrying costs so that the program operates on a break even basis. For example, as the program expands, our fixed costs will be spread over more claims, which should make the program even more attractive.

For transparency, we post our historical carrying costs to the web each month so that participants can make informed judgments on whether to use the program. Prospective Illinois participants are encouraged to look at the historical carrying costs for Virginia and Illinois.

As of January 2008, NatLUST will advance 85% to as much as 92% of the approved amount, depending on the claims position on the IEPA's Payment Priority List.

85% Initial Payment - Claims with an IEPA queue date of 9/1/2007 or later.

87.50% Initial Payment -Claims with an IEPA queue date of 6/30/07 to 8/31/2007.

90% Initial Payment - Claims with an IEPA Queue Date of 4/1/2007 to 5/31/2007.

92% Initial Payment - Claims with an IEPA Queue Date prior to 3/31/2007.