Benefits to State Regulatory Agencies

• NatLUST Financing Not Debt To State - NatLUST financing is not "debt" to the state's taxpayers, its LUST fund or the regulatory agency. The LUST fund just continues to do what its has always done ---reimburse approved claims. The only party borrowing money is NatLUST.
• Improved Voluntary Cooperation - Immediate liquidity from NatLUST will improve voluntary cooperation, thereby facilitating the timely clean up of LUST's.
• Improved Public Health - Cleaning up LUST's at an accelerated pace will lead to improved public health.
• Saves Taxpayer Money - When the fund can't reimburse claims in a timely manner, the marketplace becomes illiquid. This breeds inefficiencies that drive up clean up costs. Immediate liquidity will eliminate inefficiences and reduce clean up costs.
• No Interference - NatLUST has no involvement in how the state regulatory agency conducts clean ups or with the claim review & approval process. Also, NatLUST will not impede with the agency or legislature's ability to make future changes to its fund program.
• Eliminates "Slow Pay" Complaints - Complaints about the fund's inability to reimburse claims in a timely manner disappear overnight; political risk to the fund is likely reduced, too.
• Avoids Tax Increase - NatLUST financing may eliminate the need for a tax increase tax to rescue the fund. Taxpayers can gain immediate benefit from a cleaner environment, and over time the backlog of claims will diminish.
• No Increase In Staffing Requirements or Workload -NatLUST will not result in the state's environmental agency or LUST fund having to add staff or increase departmental expenses (Virginia's experience suggests that it will likely provide a minor reduction in staff workload once the program is up and running).
• Direct Pay Fosters Cooperation From Consultants - Virginia's experience suggests that the Direct Pay feature financially motivates environmental consultants to cooperate with agency's technical staff and follow established procedures, and to quickly complete each phase of LUST clean up in order to receive the initial funding check.
• Self Supporting - NatLUST is self-supporting-- the program's participants---and not the state's taxpayers or LUST fund--- bear the program's costs. Also, the LUST fund is not exposed to interest rate risk.
• Cost Recovery - NatLUST will not impede the state regulatory agency's ability to seek "cost recovery" from RP's and/or environmental contractor.
• Voluntary Participation - Participation in NatLUST is voluntary and there is no requirement that the state agency force RP's into the NatLUST program.

Benefits to Regulated Tank Owners

• NatLUST Improves RP's Cash Flow & Financial Condition - NatLUST saves the RP from tying up substantial amounts of working capital in reimbursable expenses, thereby directly improving their cash flow and balance sheet.
• Not Debt - Where NatLUST is purchasing "approved" claims, it is not "debt" to the RP or their consultant. The RP is simply selling an asset on a non-recourse basis to NatLUST.
• Participation is Voluntary - Participation is completely voluntary, and RP's (or their consultants) can pick & choose which claims they wish to assign to NatLUST.
• Direct Pay Shifts Risk of Denial - In states where Direct Pay is not prohibited, many RP's & consultants will consensually adopt a business model where the RP's pays their deductible or co-pay, and the consultant performs the reimbursable portion of the clean up, receiving Direct Payment from NatLUST as soon as the claim is approved by the state agency. This model benefits the RP by shifting the risk of claim denial to the consultant, the "expert" who is typically best positioned to understand the LUST fund's reimbursement program. Direct Pay also motivates the consultant to cooperate with the state environmental agency and follow its established procedures & complete the project quickly.
• RP Retains Control of Their Environmental Program - Even though RP's may choose to use Direct Pay, they still retain full authority over their environmental program and guiding their sites to closure. For example, some large RP's as a matter of policy specify additional work that goes beyond the state clean up standards. They can still do so, paying their contractor directly for such non-reimbursable work. NatLUST has no involvement with the technical aspects of how an RP manages its environmental program.
• Accounting Benefits - NatLUST's nonrecourse and Direct Pay features may allow certain RP's to reduce or even eliminate the need to include reimbursable items in their annual environmental liability reserve calculation.
• Accelerate Clean Up Program - NatLUST financing may allow RP's to accelerate their clean up program, potentially generating cost savings.
• Intangible benefits - By accelerating their clean up program, RP's may foster better relations with regulatory agencies. In addition, NatLUST helps preserve financially strapped LUST funds as viable mechanisms for meeting EPA's financial responsibility rules, a fact that will likely not be lost on state regulators. NatLUST may also lessen the risk that an otherwise "insolvent" fund is terminated by the state's legislature.
• No Risk from Other State Programs - RP's from one state will not be exposed to credit risk from other states. NatLUST cannot divert money intended for parties in one state to support another state program. NatLUST's credit providers will assume the credit risk on a state-by-state basis.

Benefits to Environmental Consultants

• Not Debt - NatLUST financing is not "debt" to the consultant. NatLUST does not require that the consultant supply tax returns or financial statements in order to receive Direct Payment where the state has already issued a claim decision. This is because NatLUST is looking to the fund to pay, not the consultant.
• Direct Pay - NatLUST initial payment checks will be mailed directly to the consultant immediately after each claim is approved. Residual payments will be remitted shortly after each claim is reimbursed.
• Inexpensive - For most consultant's, NatLUST financing is likely materially less expensive than bank financing. Smaller consulting firms, which may not have access to traditional bank financing, can compete for business, thereby increasing their bottom line.