Illinois Administrative Code › Title 35 - ENVIRONMENTAL PROTECTION › Part 704 - UIC PERMIT PROGRAM › Subpart G - FINANCIAL RESPONSIBILITY FOR CLASS I HAZARDOUS WASTE INJECTION WELLS › Section 704.218 - Plugging and Abandonment Insurance

Current through Register Vol. 48, No. 28, July 12, 2024
a) An owner or operator may satisfy the
				financial assurance requirement by obtaining insurance that conforms to this
				Section and submitting a certificate of such insurance to the Agency. An owner
				or operator of a new injection well must submit the certificate of insurance to
				the Agency with the permit application or for approval operate under rule. The
				insurance must be effective before injection starts. At a minimum, the insurer
				must be licensed to transact the business of insurance, or eligible to provide
				insurance as an excess or surplus lines insurer, in one or more
				States.
b) The wording of the
				certificate of insurance must be as specified in Section
				704.240.
c) The policy must be issued for a face
				amount at least equal to the current cost estimate, except as provided in
				Section
				704.220.
				The term "face amount" means the total amount the insurer is obligated to pay
				under the policy. Actual payments by the insurer will not change the face
				amount, although the insurer's future liability will be lowered by the amount
				of the payments.
d) The policy must
				guarantee that funds will be available whenever final plugging and abandonment
				occurs. The policy must also guarantee that once plugging and abandonment
				begins, the insurer will be responsible for paying out funds, up to an amount
				equal to the face amount of the policy, upon the direction of the Agency to
				such party or parties as the Agency specifies.
e) After beginning plugging and abandonment,
				an owner or operator or any other person authorized to perform plugging and
				abandonment may request reimbursement for plugging and abandonment expenditures
				by submitting itemized bills to the Agency. Within 60 days after receiving
				bills for plugging and abandonment activities, the Agency must determine
				whether the plugging and abandonment expenditures are in accordance with the
				plan or otherwise justified, and if so, it must instruct the insurer to make
				reimbursement in such amounts as the Agency specifies in writing. If the Agency
				has reason to believe that the cost of plugging and abandonment will be
				significantly greater than the face amount of the policy, it may withhold
				reimbursement of such amounts as it deems prudent until it determines, in
				accordance with Section
				704.222,
				that the owner or operator is no longer required to maintain financial
				assurance for plugging and abandonment of the injection well.
f) The owner or operator must maintain the
				policy in full force and effect until the Agency consents to termination of the
				policy by the owner or operator, as specified in subsection (j). Failure to pay
				the premium, without substitution of alternate financial assurance, will
				constitute a significant violation of these regulations, warranting such remedy
				as the Agency deems necessary. Such violation will be deemed to begin upon
				receipt by the Agency of a notice of future cancellation, termination or
				failure to renew due to non-payment of the premium, rather than upon the date
				of expiration.
g) Each policy must
				contain provisions allowing assignment to a successor owner or operator. Such
				assignment may be conditional upon consent of the insurer, provided such
				consent is not unreasonably refused.
h) The policy must provide that the insurer
				may not cancel, terminate, or fail to renew the policy except for failure to
				pay the premium. The automatic renewal of the policy must, at a minimum,
				provide the insured with the option of renewal at the face amount of the
				expiring policy. If there is a failure to pay the premium, the insurer may
				elect to cancel, terminate, or fail to renew the policy by sending notice by
				certified mail to the owner or operator and the Agency. Cancellation,
				termination, or failure to renew may not occur, however, during 120 days
				beginning with the date of receipt of the notice by both the Agency and the
				owner or operator, as evidenced by the return of receipts. Cancellation,
				termination, or failure to renew may not occur and the policy will remain in
				full force and effect in the event that on or before the date of expiration any
				of the following occurs:
1) The Agency deems
				the injection well abandoned;
2)
				The permit is terminated or revoked or a new permit is denied;
3) Plugging and abandonment is ordered by the
				Board, a U.S. district court, or any other court of competent
				jurisdiction;
4) The owner or
				operator is named as debtor in a voluntary or involuntary proceeding under 11
				USC (Bankruptcy); or
5) The premium
				due is paid.