Code of Maine Rules › 06 - DEPARTMENT OF ENVIRONMENTAL PROTECTION › 096 - DEPARTMENT OF ENVIRONMENTAL PROTECTION - GENERAL › Chapter 400 - GENERAL PROVISIONS › Appendix 096-400-D

Current through 2024-29, July 17, 2024
This appendix lists each of the federal rules incorporated by
				  reference in this Chapter and denotes each by an endnote.
i
40 CFR 264. 147(f)
(f)
Financial test for liability
				  coverage.
(1) An owner or operator may satisfy the requirements of
				  this section by demonstrating that he passes a financial test as specified in
				  this paragraph. To pass this test the owner or operator must meet the criteria
				  of paragraph (f)(1)(i) or (ii):
(i) The owner or operator must have:
(A) Net working capital and tangible net worth each at least
				  six times the amount of liability coverage to be demonstrated by this test;
				  and
(B) Tangible net worth of at least $10 million; and
(C) Assets in the United States amounting to either:
(1) At least 90 percent of his total assets; or
(2) at least six times the amount of liability coverage to
				  be demonstrated by this test.
(ii) The owner or operator must have:
(A) A current rating for his most recent bond issuance of
				  AAA, AA, A, or BBB as issued by Standard and Poor's, or Aaa, Aa, A, or Baa as
				  issued by Moody's; and
(B) Tangible net worth of at least $10 million; and
(C) Tangible net worth at least six times the amount of
				  liability coverage to be demonstrated by this test; and
(D) Assets in the United States amounting to either:
(1) At least 90 percent of his total assets; or
(2) at least six times the amount of liability coverage to
				  be demonstrated by this test.
(2) The phrase "amount of liability coverage" as used in
				  paragraph (f)(1) of this section refers to the annual aggregate amounts for
				  which coverage is required under paragraphs (a) and (b) of this section.
(3) To demonstrate that he meets this test, the owner or
				  operator must submit the following three items to the Regional
				  Administrator:
(i) A letter signed by the owner's or operator's chief
				  financial officer and worded as specified in §264. 151(g). If an owner or
				  operator is using the financial test to demonstrate both assurance for closure
				  or post-closure care, as specified by §§264. 143(f), 264. 145(f),
				  265. 143(e), and 265. 145(e), and liability coverage, he must submit the letter
				  specified in §264. 151(g) to cover both forms of financial responsibility;
				  a separate letter as specified in §264. 151(f) is not required.
(ii) A copy of the independent certified public accountant's
				  report on examination of the owner's or operator's financial statements for the
				  latest completed fiscal year.
(iii) A special report from the owner's or operator's
				  independent certified public accountant to the owner or operator stating
				  that:
(A) He has compared the data which the letter from the chief
				  financial officer specifies as having been derived from the independently
				  audited, year-end financial statements for the latest fiscal year with the
				  amounts in such financial statements; and
(B) In connection with that procedure, no matters came to his
				  attention which caused him to believe that the specified data should be
				  adjusted.
(4) An owner or operator of a new facility must submit the
				  items specified in paragraph (f)(3) of this section to the Regional
				  Administrator at least 60 days before the date on which hazardous waste is
				  first received for treatment, storage, or disposal.
(5) After the initial submission of items specified in
				  paragraph (f)(3) of this section, the owner or operator must send updated
				  information to the Regional Administrator within 90 days after the close of
				  each succeeding fiscal year. This information must consist of all three items
				  specified in paragraph (f)(3) of this section.
(6) If the owner or operator no longer meets the requirements
				  of paragraph (f)(1) of this section, he must obtain insurance, a letter of
				  credit, a surety bond, a trust fund, or a guarantee for the entire amount of
				  required liability coverage as specified in this section. Evidence of liability
				  coverage must be submitted to the Regional Administrator within 90 days after
				  the end of the fiscal year for which the year-end financial data show that the
				  owner or operator no longer meets the test requirements.
(7) The Regional Administrator may disallow use of this test
				  on the basis of qualifications in the opinion expressed by the independent
				  certified public accountant in his report on examination of the owner's or
				  operator's financial statements (see paragraph (f)(3)(ii) of this section). An
				  adverse opinion or a disclaimer of opinion will be cause for disallowance. The
				  Regional Administrator will evaluate other qualifications on an individual
				  basis. The owner or operator must provide evidence of insurance for the entire
				  amount of required liability coverage as specified in this section within 30
				  days after notification of disallowance.
ii
40 CFR 258. 70 to 40 CFR
				  258. 72
§258. 70 Applicability and effective date.
(a) The requirements of this section apply to owners and
				  operators of all MSWLF units, except owners or operators who are State or
				  Federal government entities whose debts and liabilities are the debts and
				  liabilities of a State or the United States.
(b) The requirements of this section are effective April 9,
				  1997 except for MSWLF units meeting the conditions of §258. 1(f)(1), in
				  which case the effective date is October 9, 1997.
(c) The Director of an approved State may waive the
				  requirements of this section for up to one year until April 9, 1998 for good
				  cause if an owner or operator demonstrates to the Director's satisfaction that
				  the April 9, 1997 effective date for the requirements of this section does not
				  provide sufficient time to comply with these requirements and that such a
				  waiver will not adversely affect human health and the environment.
§258. 71 Financial assurance for closure.
(a) The owner or operator must have a detailed written
				  estimate, in current dollars, of the cost of hiring a third party to close the
				  largest area of all MSWLF units ever requiring a final cover as required under
				  §258. 60 at any time during the active life in accordance with the closure
				  plan. The owner or operator must notify the State Director that the estimate
				  has been placed in the operating record.
(1) The cost estimate must equal the cost of closing the
				  largest area of all MSWLF unit ever requiring a final cover at any time during
				  the active life when the extent and manner of its operation would make closure
				  the most expensive, as indicated by its closure plan (see §258. 60(c)(2)
				  of this part).
(2) During the active life of the MSWLF unit, the owner or
				  operator must annually adjust the closure cost estimate for inflation.
(3) The owner or operator must increase the closure cost
				  estimate and the amount of financial assurance provided under paragraph (b) of
				  this section if changes to the closure plan or MSWLF unit conditions increase
				  the maximum cost of closure at any time during the remaining active life.
(4) The owner or operator may reduce the closure cost
				  estimate and the amount of financial assurance provided under paragraph (b) of
				  this section if the cost estimate exceeds the maximum cost of closure at any
				  time during the remaining life of the MSWLF unit. The owner or operator must
				  notify the State Director that the justification for the reduction of the
				  closure cost estimate and the amount of financial assurance has been placed in
				  the operating record.
(b) The owner or operator of each MSWLF unit must establish
				  financial assurance for closure of the MSWLF unit in compliance with §258.
				  74. The owner or operator must provide continuous coverage for closure until
				  released from financial assurance requirements by demonstrating compliance with
				  §258. 60 (h) and (i).
§258. 72 Financial assurance for post-closure
				  care.
(a) The owner or operator must have a detailed written
				  estimate, in current dollars, of the cost of hiring a third party to conduct
				  post-closure care for the MSWLF unit in compliance with the post-closure plan
				  developed under §258. 61 of this part. The post-closure cost estimate used
				  to demonstrate financial assurance in paragraph (b) of this section must
				  account for the total costs of conducting post-closure care, including annual
				  and periodic costs as described in the post-closure plan over the entire
				  post-closure care period. The owner or operator must notify the State Director
				  that the estimate has been placed in the operating record.
(1) The cost estimate for post-closure care must be based on
				  the most expensive costs of post-closure care during the post-closure care
				  period.
(2) During the active life of the MSWLF unit and during the
				  post-closure care period, the owner or operator must annually adjust the
				  post-closure cost estimate for inflation.
(3) The owner or operator must increase the post-closure care
				  cost estimate and the amount of financial assurance provided under paragraph
				  (b) of this section if changes in the post-closure plan or MSWLF unit
				  conditions increase the maximum costs of post-closure care.
(4) The owner or operator may reduce the post-closure cost
				  estimate and the amount of financial assurance provided under paragraph (b) of
				  this section if the cost estimate exceeds the maximum costs of post-closure
				  care remaining over the post-closure care period. The owner or operator must
				  notify the State Director that the justification for the reduction of the
				  post-closure cost estimate and the amount of financial assurance has been
				  placed in the operating record.
(b) The owner or operator of each MSWLF unit must establish,
				  in a manner in accordance with §258. 74, financial assurance for the costs
				  of post-closure care as required under §258. 61 of this part. The owner or
				  operator must provide continuous coverage for post-closure care until released
				  from financial assurance requirements for post-closure care by demonstrating
				  compliance with §258. 61(e).
iii
40 CFR 258. 70 to 258. 72
				  and 40 CFR 258. 74 (a), (b), and (c)
See note ii for §258. 70 to 258. 72
§258. 74 Allowable mechanisms.
The mechanisms used to demonstrate financial assurance under
				  this section must ensure that the funds necessary to meet the costs of closure,
				  post-closure care, and corrective action for known releases will be available
				  whenever they are needed. Owners and operators must choose from the options
				  specified in paragraphs (a) through (j) of this section.
(a)
Trust Fund.
(1) An owner or operator may satisfy the requirements of
				  this section by establishing a trust fund which conforms to the requirements of
				  this paragraph. The trustee must be an entity which has the authority to act as
				  a trustee and whose trust operations are regulated and examined by a Federal or
				  State agency. A copy of the trust agreement must be placed in the facility's
				  operating record.
(2) Payments into the trust fund must be made annually by the
				  owner or operator over the term of the initial permit or over the remaining
				  life of the MSWLF unit, whichever is shorter, in the case of a trust fund for
				  closure or post-closure care, or over one-half of the estimated length of the
				  corrective action program in the case of corrective action for known releases.
				  This period is referred to as the pay-in period.
(3) For a trust fund used to demonstrate financial assurance
				  for closure and post-closure care, the first payment into the fund must be at
				  least equal to the current cost estimate for closure or post-closure care,
				  except as provided in paragraph (k) of this section, divided by the number of
				  years in the pay-in period as defined in paragraph (a)(2) of this section. The
				  amount of subsequent payments must be determined by the following
				  formula:
Next Payment = [CE - CV]/Y
where CE is the current cost estimate for closure or
				  post-closure care (updated for inflation or other changes), CV is the current
				  value of the trust fund, and Y is the number of years remaining in the pay-in
				  period.
(4) For a trust fund used to demonstrate financial assurance
				  for corrective action, the first payment into the trust fund must be at least
				  equal to one-half of the current cost estimate for corrective action, except as
				  provided in paragraph (k) of this section, divided by the number of years in
				  the corrective action pay-in period as defined in paragraph (a)(2) of this
				  section. The amount of subsequent payments must be determined by the following
				  formula:
Next Payment = [RB - CV]/Y
where RB is the most recent estimate of the required trust
				  fund balance for corrective action (i. e. , the total costs that will be
				  incurred during the second half of the corrective action period), CV is the
				  current value of the trust fund, and Y is the number of years remaining in the
				  pay-in period.
(5) The initial payment into the trust fund must be made
				  before the initial receipt of waste or before the effective date of the
				  requirements of this section (April 9, 1997, or October 9, 1997 for MSWLF units
				  meeting the conditions of §258. 1(f)(1)), whichever is later, in the case
				  of closure and post-closure care, or no later than 120 days after the
				  corrective action remedy has been selected in accordance with the requirements
				  of §258. 58.
(6) If the owner or operator establishes a trust fund after
				  having used one or more alternate mechanisms specified in this section, the
				  initial payment into the trust fund must be at least the amount that the fund
				  would contain if the trust fund were established initially and annual payments
				  made according to the specifications of this paragraph and paragraph (a) of
				  this section, as applicable.
(7) The owner or operator, or other person authorized to
				  conduct closure, post-closure care, or corrective action activities may request
				  reimbursement from the trustee for these expenditures. Requests for
				  reimbursement will be granted by the trustee only if sufficient funds are
				  remaining in the trust fund to cover the remaining costs of closure,
				  post-closure care, or corrective action, and if justification and documentation
				  of the cost is placed in the operating record. The owner or operator must
				  notify the State Director that the documentation of the justification for
				  reimbursement has been placed in the operating record and that reimbursement
				  has been received.
(8) The trust fund may be terminated by the owner or operator
				  only if the owner or operator substitutes alternate financial assurance as
				  specified in this section or if he is no longer required to demonstrate
				  financial responsibility in accordance with the requirements of
				  §§258. 71(b), 258. 72(b), or 258. 73(b).
(b)
Surety Bond Guaranteeing Payment or
				  Performance.
(1) An owner or operator may demonstrate financial assurance
				  for closure or post-closure care by obtaining a payment or performance surety
				  bond which conforms to the requirements of this paragraph. An owner or operator
				  may demonstrate financial assurance for corrective action by obtaining a
				  performance bond which conforms to the requirements of this paragraph. The bond
				  must be effective before the initial receipt of waste or before the effective
				  date of the requirements of this section (April 9, 1997, or October 9, 1997 for
				  MSWLF units meeting the conditions of §258. 1(f)(1)), whichever is later,
				  in the case of closure and post-closure care, or no later than 120 days after
				  the corrective action remedy has been selected in accordance with the
				  requirements of §258. 58. The owner or operator must notify the State
				  Director that a copy of the bond has been placed in the operating record. The
				  surety company issuing the bond must, at a minimum, be among those listed as
				  acceptable sureties on Federal bonds in Circular 570 of the U. S. Department of
				  the Treasury.
(2) The penal sum of the bond must be in an amount at least
				  equal to the current closure, post-closure care or corrective action cost
				  estimate, whichever is applicable, except as provided in §258. 74(k).
(3) Under the terms of the bond, the surety will become
				  liable on the bond obligation when the owner or operator fails to perform as
				  guaranteed by the bond.
(4) The owner or operator must establish a standby trust
				  fund. The standby trust fund must meet the requirements of §258. 74(a)
				  except the requirements for initial payment and subsequent annual payments
				  specified in §258. 74 (a)(2), (3), (4) and (5).
(5) Payments made under the terms of the bond will be
				  deposited by the surety directly into the standby trust fund. Payments from the
				  trust fund must be approved by the trustee.
(6) Under the terms of the bond, the surety may cancel the
				  bond by sending notice of cancellation by certified mail to the owner and
				  operator and to the State Director 120 days in advance of cancellation. If the
				  surety cancels the bond, the owner or operator must obtain alternate financial
				  assurance as specified in this section.
(7) The owner or operator may cancel the bond only if
				  alternate financial assurance is substituted as specified in this section or if
				  the owner or operator is no longer required to demonstrate financial
				  responsibility in accordance with §258. 71(b), §258. 72(b) or
				  §258. 73(b).
(c)
Letter of credit.
(1) An owner or operator may satisfy the requirements of
				  this section by obtaining an irrevocable standby letter of credit which
				  conforms to the requirements of this paragraph. The letter of credit must be
				  effective before the initial receipt of waste or before the effective date of
				  the requirements of this section (April 9, 1997, or October 9, 1997 for MSWLF
				  units meeting the conditions of §258. 1(f)(1)), whichever is later, in the
				  case of closure and post-closure care, or no later than 120 days after the
				  corrective action remedy has been selected in accordance with the requirements
				  of §258. 58. The owner or operator must notify the State Director that a
				  copy of the letter of credit has been placed in the operating record. The
				  issuing institution must be an entity which has the authority to issue letters
				  of credit and whose letter-of-credit operations are regulated and examined by a
				  Federal or State agency.
(2) A letter from the owner or operator referring to the
				  letter of credit by number, issuing institution, and date, and providing the
				  following information: Name, and address of the facility, and the amount of
				  funds assured, must be included with the letter of credit in the operating
				  record.
(3) The letter of credit must be irrevocable and issued for a
				  period of at least one year in an amount at least equal to the current cost
				  estimate for closure, post-closure care or corrective action, whichever is
				  applicable, except as provided in paragraph (k) of this section. The letter of
				  credit must provide that the expiration date will be automatically extended for
				  a period of at least one year unless the issuing institution has cancelled the
				  letter of credit by sending notice of cancellation by certified mail to the
				  owner and operator and to the State Director 120 days in advance of
				  cancellation. If the letter of credit is cancelled by the issuing institution,
				  the owner or operator must obtain alternate financial assurance.
(4) The owner or operator may cancel the letter of credit
				  only if alternate financial assurance is substituted as specified in this
				  section or if the owner or operator is released from the requirements of this
				  section in accordance with §258. 71(b), §258. 72(b) or §258.
				  73(b).
iv
40 CFR 258. 74(f)
(f)
Local government financial test.
An
				  owner or operator that satisfies the requirements of paragraphs (f)(1) through
				  (3) of this section may demonstrate financial assurance up to the amount
				  specified in paragraph (f)(4) of this section:
(1)
Financial component.
(i) The owner or operator must satisfy paragraph
				  (f)(1)(i)(A) or (B) of this section as applicable:
(A) If the owner or operator has outstanding, rated, general
				  obligation bonds that are not secured by insurance, a letter of credit, or
				  other collateral or guarantee, it must have a current rating of Aaa, Aa, A, or
				  Baa, as issued by Moody's, or AAA, AA, A, or BBB, as issued by Standard and
				  Poor's on all such general obligation bonds; or
(B) The owner or operator must satisfy each of the following
				  financial ratios based on the owner or operator's most recent audited annual
				  financial statement:
(1) A ratio of cash plus marketable securities to total
				  expenditures greater than or equal to 0. 05; and
(2) A ratio of annual debt service to total expenditures less
				  than or equal to 0. 20.
(ii) The owner or operator must prepare its financial
				  statements in conformity with Generally Accepted Accounting Principles for
				  governments and have its financial statements audited by an independent
				  certified public accountant (or appropriate State agency).
(iii) A local government is not eligible to assure its
				  obligations under §258. 74(f) if it:
(A) Is currently in default on any outstanding general
				  obligation bonds; or
(B) Has any outstanding general obligation bonds rated lower
				  than Baa as issued by Moody's or BBB as issued by Standard and Poor's;
				  or
(C) Operated at a deficit equal to five percent or more of
				  total annual revenue in each of the past two fiscal years; or
(D) Receives an adverse opinion, disclaimer of opinion, or
				  other qualified opinion from the independent certified public accountant (or
				  appropriate State agency) auditing its financial statement as required under
				  paragraph (f)(1)(ii) of this section. However, the Director of an approved
				  State may evaluate qualified opinions on a case-by-case basis and allow use of
				  the financial test in cases where the Director deems the qualification
				  insufficient to warrant disallowance of use of the test.
(iv) The following terms used in this paragraph are defined
				  as follows:
(A)
Deficit
equals total annual revenues
				  minus total annual expenditures;
(B)
Total revenues
include revenues from all
				  taxes and fees but does not include the proceeds from borrowing or asset sales,
				  excluding revenue from funds managed by local government on behalf of a
				  specific third party;
(C)
Total expenditures
include all
				  expenditures excluding capital outlays and debt repayment;
(D)
Cash plus marketable securities
is all
				  the cash plus marketable securities held by the local government on the last
				  day of a fiscal year, excluding cash and marketable securities designated to
				  satisfy past obligations such as pensions; and
(E)
Debt service
is the amount of principal
				  and interest due on a loan in a given time period, typically the current year.
(2)
Public notice component.
The local
				  government owner or operator must place a reference to the closure and
				  post-closure care costs assured through the financial test into its next
				  comprehensive annual financial report (CAFR) after the effective date of this
				  section or prior to the initial receipt of waste at the facility, whichever is
				  later. Disclosure must include the nature and source of closure and
				  post-closure care requirements, the reported liability at the balance sheet
				  date, the estimated total closure and post-closure care cost remaining to be
				  recognized, the percentage of landfill capacity used to date, and the estimated
				  landfill life in years. A reference to corrective action costs must be placed
				  in the CAFR not later than 120 days after the corrective action remedy has been
				  selected in accordance with the requirements of §258. 58. For the first
				  year the financial test is used to assure costs at a particular facility, the
				  reference may instead be placed in the operating record until issuance of the
				  next available CAFR if timing does not permit the reference to be incorporated
				  into the most recently issued CAFR or budget. For closure and post-closure
				  costs, conformance with Government Accounting Standards Board Statement 18
				  assures compliance with this public notice component.
(3)
Recordkeeping and reporting
				  requirements.
(i) The local government owner or operator must place the
				  following items in the facility's operating record:
(A) A letter signed by the local government's chief financial
				  officer that:
(1) Lists all the current cost estimates covered by a
				  financial test, as described in paragraph (f)(4) of this section;
(2) Provides evidence and certifies that the local government
				  meets the conditions of paragraphs (f)(1)(i), (f)(1)(ii), and (f)(1)(iii) of
				  this section; and
(3) Certifies that the local government meets the conditions
				  of paragraphs (f)(2) and (f)(4) of this section.
(B) The local government's independently audited year-end
				  financial statements for the latest fiscal year (except for local governments
				  where audits are required every two years where unaudited statements may be
				  used in years when audits are not required), including the unqualified opinion
				  of the auditor who must be an independent, certified public accountant or an
				  appropriate State agency that conducts equivalent comprehensive audits;
(C) A report to the local government from the local
				  government's independent certified public accountant (CPA) or the appropriate
				  State agency based on performing an agreed upon procedures engagement relative
				  to the financial ratios required by paragraph (f)(1)(i)(B) of this section, if
				  applicable, and the requirements of paragraphs (f)(1)(ii) and (f)(1)(iii) (C)
				  and (D) of this section. The CPA or State agency's report should state the
				  procedures performed and the CPA or State agency's findings; and
(D) A copy of the comprehensive annual financial report
				  (CAFR) used to comply with paragraph (f)(2) of this section or certification
				  that the requirements of General Accounting Standards Board Statement 18 have
				  been met.
(ii) The items required in paragraph (f)(3)(i) of this
				  section must be placed in the facility operating record as follows:
(A) In the case of closure and post-closure care, either
				  before the effective date of this section, which is April 9, 1997, or prior to
				  the initial receipt of waste at the facility, whichever is later, or
(B) In the case of corrective action, not later than 120 days
				  after the corrective action remedy is selected in accordance with the
				  requirements of §258. 58.
(iii) After the initial placement of the items in the
				  facility's operating record, the local government owner or operator must update
				  the information and place the updated information in the operating record
				  within 180 days following the close of the owner or operator's fiscal year.
(iv) The local government owner or operator is no longer
				  required to meet the requirements of paragraph (f)(3) of this section
				  when:
(A) The owner or operator substitutes alternate financial
				  assurance as specified in this section; or
(B) The owner or operator is released from the requirements
				  of this section in accordance with §258. 71(b), 258. 72(b), or 258. 73(b).
(v) A local government must satisfy the requirements of the
				  financial test at the close of each fiscal year. If the local government owner
				  or operator no longer meets the requirements of the local government financial
				  test it must, within 210 days following the close of the owner or operator's
				  fiscal year, obtain alternative financial assurance that meets the requirements
				  of this section, place the required submissions for that assurance in the
				  operating record, and notify the State Director that the owner or operator no
				  longer meets the criteria of the financial test and that alternate assurance
				  has been obtained.
(vi) The Director of an approved State, based on a reasonable
				  belief that the local government owner or operator may no longer meet the
				  requirements of the local government financial test, may require additional
				  reports of financial condition from the local government at any time. If the
				  Director of an approved State finds, on the basis of such reports or other
				  information, that the owner or operator no longer meets the requirements of the
				  local government financial test, the local government must provide alternate
				  financial assurance in accordance with this section.
(4)
Calculation of costs to be assured.
The
				  portion of the closure, post-closure, and corrective action costs for which an
				  owner or operator can assure under this paragraph is determined as
				  follows:
(i) If the local government owner or operator does not assure
				  other environmental obligations through a financial test, it may assure
				  closure, post-closure, and corrective action costs that equal up to 43 percent
				  of the local government's total annual revenue.
(ii) If the local government assures other environmental
				  obligations through a financial test, including those associated with UIC
				  facilities under 40 CFR 144. 62, petroleum underground storage tank facilities
				  under 40 CFR Part 280, PCB storage facilities under 40 CFR Part 761, and
				  hazardous waste treatment, storage, and disposal facilities under 40 CFR Parts
				  264 and 265, it must add those costs to the closure, post-closure, and
				  corrective action costs it seeks to assure under this paragraph. The total that
				  may be assured must not exceed 43 percent of the local government's total
				  annual revenue.
(iii) The owner or operator must obtain an alternate
				  financial assurance instrument for those costs that exceed the limits set in
				  paragraphs (f)(4) (i) and (ii) of this section.
v
40 CFR 258. 74 (a), (b),
				  and (c)
(a)
Trust Fund.
(1) An owner or operator may satisfy the requirements of
				  this section by establishing a trust fund which conforms to the requirements of
				  this paragraph. The trustee must be an entity which has the authority to act as
				  a trustee and whose trust operations are regulated and examined by a Federal or
				  State agency. A copy of the trust agreement must be placed in the facility's
				  operating record.
(2) Payments into the trust fund must be made annually by the
				  owner or operator over the term of the initial permit or over the remaining
				  life of the MSWLF unit, whichever is shorter, in the case of a trust fund for
				  closure or post-closure care, or over one-half of the estimated length of the
				  corrective action program in the case of corrective action for known releases.
				  This period is referred to as the pay-in period.
(3) For a trust fund used to demonstrate financial assurance
				  for closure and post-closure care, the first payment into the fund must be at
				  least equal to the current cost estimate for closure or post-closure care,
				  except as provided in paragraph (k) of this section, divided by the number of
				  years in the pay-in period as defined in paragraph (a)(2) of this section. The
				  amount of subsequent payments must be determined by the following
				  formula:
Next Payment = [CE - CV]/Y
where CE is the current cost estimate for closure or
				  post-closure care (updated for inflation or other changes), CV is the current
				  value of the trust fund, and Y is the number of years remaining in the pay-in
				  period.
(4) For a trust fund used to demonstrate financial assurance
				  for corrective action, the first payment into the trust fund must be at least
				  equal to one-half of the current cost estimate for corrective action, except as
				  provided in paragraph (k) of this section, divided by the number of years in
				  the corrective action pay-in period as defined in paragraph (a)(2) of this
				  section. The amount of subsequent payments must be determined by the following
				  formula:
Next Payment = [RB - CV]/Y
where RB is the most recent estimate of the required trust
				  fund balance for corrective action (i. e. , the total costs that will be
				  incurred during the second half of the corrective action period), CV is the
				  current value of the trust fund, and Y is the number of years remaining in the
				  pay-in period.
(5) The initial payment into the trust fund must be made
				  before the initial receipt of waste or before the effective date of the
				  requirements of this section (April 9, 1997, or October 9, 1997 for MSWLF units
				  meeting the conditions of §258. 1(f)(1)), whichever is later, in the case
				  of closure and post-closure care, or no later than 120 days after the
				  corrective action remedy has been selected in accordance with the requirements
				  of §258. 58.
(6) If the owner or operator establishes a trust fund after
				  having used one or more alternate mechanisms specified in this section, the
				  initial payment into the trust fund must be at least the amount that the fund
				  would contain if the trust fund were established initially and annual payments
				  made according to the specifications of this paragraph and paragraph (a) of
				  this section, as applicable.
(7) The owner or operator, or other person authorized to
				  conduct closure, post-closure care, or corrective action activities may request
				  reimbursement from the trustee for these expenditures. Requests for
				  reimbursement will be granted by the trustee only if sufficient funds are
				  remaining in the trust fund to cover the remaining costs of closure,
				  post-closure care, or corrective action, and if justification and documentation
				  of the cost is placed in the operating record. The owner or operator must
				  notify the State Director that the documentation of the justification for
				  reimbursement has been placed in the operating record and that reimbursement
				  has been received.
(8) The trust fund may be terminated by the owner or operator
				  only if the owner or operator substitutes alternate financial assurance as
				  specified in this section or if he is no longer required to demonstrate
				  financial responsibility in accordance with the requirements of
				  §§258. 71(b), 258. 72(b), or 258. 73(b).
(b)
Surety Bond Guaranteeing Payment or
				  Performance.
(1) An owner or operator may demonstrate financial assurance
				  for closure or post-closure care by obtaining a payment or performance surety
				  bond which conforms to the requirements of this paragraph. An owner or operator
				  may demonstrate financial assurance for corrective action by obtaining a
				  performance bond which conforms to the requirements of this paragraph. The bond
				  must be effective before the initial receipt of waste or before the effective
				  date of the requirements of this section (April 9, 1997, or October 9, 1997 for
				  MSWLF units meeting the conditions of §258. 1(f)(1)), whichever is later,
				  in the case of closure and post-closure care, or no later than 120 days after
				  the corrective action remedy has been selected in accordance with the
				  requirements of §258. 58. The owner or operator must notify the State
				  Director that a copy of the bond has been placed in the operating record. The
				  surety company issuing the bond must, at a minimum, be among those listed as
				  acceptable sureties on Federal bonds in Circular 570 of the U. S. Department of
				  the Treasury.
(2) The penal sum of the bond must be in an amount at least
				  equal to the current closure, post-closure care or corrective action cost
				  estimate, whichever is applicable, except as provided in §258. 74(k).
(3) Under the terms of the bond, the surety will become
				  liable on the bond obligation when the owner or operator fails to perform as
				  guaranteed by the bond.
(4) The owner or operator must establish a standby trust
				  fund. The standby trust fund must meet the requirements of §258. 74(a)
				  except the requirements for initial payment and subsequent annual payments
				  specified in §258. 74 (a)(2), (3), (4) and (5).
(5) Payments made under the terms of the bond will be
				  deposited by the surety directly into the standby trust fund. Payments from the
				  trust fund must be approved by the trustee.
(6) Under the terms of the bond, the surety may cancel the
				  bond by sending notice of cancellation by certified mail to the owner and
				  operator and to the State Director 120 days in advance of cancellation. If the
				  surety cancels the bond, the owner or operator must obtain alternate financial
				  assurance as specified in this section.
(7) The owner or operator may cancel the bond only if
				  alternate financial assurance is substituted as specified in this section or if
				  the owner or operator is no longer required to demonstrate financial
				  responsibility in accordance with §258. 71(b), §258. 72(b) or
				  §258. 73(b).
(c)
Letter of credit.
(1) An owner or operator may satisfy the requirements of
				  this section by obtaining an irrevocable standby letter of credit which
				  conforms to the requirements of this paragraph. The letter of credit must be
				  effective before the initial receipt of waste or before the effective date of
				  the requirements of this section (April 9, 1997, or October 9, 1997 for MSWLF
				  units meeting the conditions of §258. 1(f)(1)), whichever is later, in the
				  case of closure and post-closure care, or no later than 120 days after the
				  corrective action remedy has been selected in accordance with the requirements
				  of §258. 58. The owner or operator must notify the State Director that a
				  copy of the letter of credit has been placed in the operating record. The
				  issuing institution must be an entity which has the authority to issue letters
				  of credit and whose letter-of-credit operations are regulated and examined by a
				  Federal or State agency.
(2) A letter from the owner or operator referring to the
				  letter of credit by number, issuing institution, and date, and providing the
				  following information: Name, and address of the facility, and the amount of
				  funds assured, must be included with the letter of credit in the operating
				  record.
(3) The letter of credit must be irrevocable and issued for a
				  period of at least one year in an amount at least equal to the current cost
				  estimate for closure, post-closure care or corrective action, whichever is
				  applicable, except as provided in paragraph (k) of this section. The letter of
				  credit must provide that the expiration date will be automatically extended for
				  a period of at least one year unless the issuing institution has cancelled the
				  letter of credit by sending notice of cancellation by certified mail to the
				  owner and operator and to the State Director 120 days in advance of
				  cancellation. If the letter of credit is cancelled by the issuing institution,
				  the owner or operator must obtain alternate financial assurance.
(4) The owner or operator may cancel the letter of credit
				  only if alternate financial assurance is substituted as specified in this
				  section or if the owner or operator is released from the requirements of this
				  section in accordance with §258. 71(b), §258. 72(b) or §258.
				  73(b).
vi
29 CFR 1910.
				  120
The full text of the rule can be found at
http://www.
				  gpo. gov/fdsys/browse/collectionCfr. action?collectionCode=CFR
and
				  selecting the appropriate year then the appropriate section.