Alabama Administrative Code › Title 335 - ALABAMA DEPARTMENT OF ENVIRONMENTAL MANAGEMENT › LAND DIVISION - SCRAP TIRE PROGRAM › Chapter 335-4-8 - FINANCIAL ASSURANCE › Section 335-4-8-.04 - Financial Assurance Instruments For Closure

Current through Register Vol. 42, No. 9, June 28, 2024
The following instruments may be used to provide financial
				  assurance for closure. The instruments selected shall ensure that the funds
				  necessary to meet the costs of closure will be available whenever needed. The
				  instruments must be in effect for a new facility at least sixty (60) days prior
				  to receiving tire materials for processing, and must be in effect for an
				  existing facility when it submits a permit application in
				  335-4-3-.04.
(a)
Trust Fund
. An
				owner or operator may establish a trust fund that conforms to the following
				requirements:
1. The trustee shall be an
				entity that has the authority to act as a trustee and whose trust operations
				are examined by the State of Alabama.
2. Payments into the Trust.
(i) The owner or operator shall make a
				payment into the trust fund each year during the pay-in period.
(ii) The pay-in period is five years. The
				pay-in period commences on the date the facility first receives scrap tires or
				processed tire material.
(iii)
				Annual payments are determined by the following formula:
Annual payment = (CE-CV)/Y where:
CE = Current cost estimate
CV = Current value of the trust fund
Y = Number of years remaining in the pay-in period.
(iv) The owner or operator shall
				make the first annual payment prior to the beginning of the pay-in period.
				Prior to the beginning of the pay-in period, the owner or operator shall submit
				to ADEM a receipt from the trustee for the first annual payment.
(v) Subsequent annual payments shall be made
				no later than thirty (30) days after each anniversary of the first
				payment.
(vi) The owner or operator
				may accelerate payments into the trust fund, or deposit the full amount of the
				current cost estimate at the time the fund is established.
(vii) If the owner or operator establishes a
				trust fund after having used one or more alternative instruments, the first
				payment shall be at least equal to the amount the fund may contain if the trust
				fund were established initially and payments made as provided in
				335-4-8-04(a)3.
3. The
				trustee shall evaluate the trust fund annually, as of the day the trust was
				created. The trustee shall notify the owner or operator and ADEM of the value
				within thirty (30) days after the evaluation date.
(i) Whenever the current closure cost
				estimate exceeds the amount of the trust fund, the owner or operator, within
				sixty (60) days after the new estimate, shall either cause the amount of the
				trust fund to be increased to equal the current closure cost estimate and
				submit evidence of the increase to ADEM, or obtain other or additional
				financial assurance as specified in
				335-4-8-.04 to meet the current
				closure cost estimate.
(ii)
				Whenever the current closure cost estimate is less than the trust fund amount,
				the trust fund may be reduced accordingly with ADEM approval.
4. Release of Excess Funds.
(i) If the value of the financial assurance
				is greater than the current cost estimates for closure, the owner or operator
				may submit a written request to ADEM for a release of the amount in excess of
				the current cost estimate.
(ii) Not
				later than sixty (60) days after receiving a request from the owner or operator
				for a release of funds for which the value of the financial assurance
				instrument is greater then the current closure cost estimate, ADEM shall
				instruct the trustee in writing to release to the owner or operator the funds
				to be in excess of the current cost estimates.
5. Reimbursement for Closure Expenses.
(i) After initiating closure, an owner or
				operator, or another person allowed to perform closure, may request
				reimbursement for work performed by submitting itemized invoices to
				ADEM.
(ii) Not later than sixty
				(60) days after receiving the itemized invoices, ADEM shall determine if the
				expenditures are consistent with the approved Closure Plan. If the expenditures
				are in accordance with the approved Closure Plan, ADEM shall instruct the
				trustee in writing to make reimbursement in the amounts specified for work
				performed.
(iii) If ADEM determines
				that the cost of closure will be greater than the value of the trust fund, it
				shall withhold reimbursement of the amount it determines is necessary to
				preserve the trust corpus in order to accomplish closure until it determines
				that the owner or operator is no longer required to maintain financial
				assurance for closure.
(iv) If the
				owner or operator is named as a debtor in a voluntary or involuntary proceeding
				under the U.S. Bankruptcy Code, the trustee shall release all trust fund monies
				to ADEM for the purpose of completing required closure activities. In the event
				the bankruptcy proceeding results in the liquidation or dissolution of the
				assets of the owner or operator, any funds so released which remain upon
				completion of all required closure activities may be used by ADEM at other STF
				sites in the state.