Texas Administrative Code › Title 30 - ENVIRONMENTAL QUALITY › Part 1 - TEXAS COMMISSION ON ENVIRONMENTAL QUALITY › Chapter 37 - FINANCIAL ASSURANCE › Subchapter C - FINANCIAL ASSURANCE MECHANISMS FOR CLOSURE, POST CLOSURE, AND CORRECTIVE ACTION › Section 37.231 - Irrevocable Standby Letter of Credit

Current through Reg. 49, No. 28; July 12, 2024
(a) An owner or operator may satisfy the
				  requirements of financial assurance by obtaining an irrevocable standby letter
				  of credit which conforms to the requirements of this section, in addition to
				  the requirements specified in Subchapters A and B of this chapter (relating to
				  General Financial Assurance Requirements and Financial Assurance Requirements
				  for Closure, Post Closure, and Corrective Action), and submit an originally
				  signed irrevocable standby letter of credit to the executive
				  director.
(b) The financial
				  institution issuing the irrevocable standby letter of credit shall be an entity
				  that has the authority to issue irrevocable standby letters of credit and whose
				  operations are regulated and examined by a federal or state agency.
(c) The wording of the irrevocable standby
				  letter of credit must be identical to the wording specified in §
										37.331
				  of this title (relating to Irrevocable Standby Letter of Credit).
(d) The originally signed irrevocable standby
				  letter of credit must be accompanied by a letter from the owner or operator
				  referring to the irrevocable standby letter of credit by number, issuing
				  institution, and date, and providing the following information for each
				  facility: the permit number, name and physical and mailing addresses of the
				  facility, and the amount of funds assured for closure, post closure, or
				  corrective action by the irrevocable standby letter of credit.
(e) The letter of credit must be irrevocable
				  and issued for a period of at least one year. The irrevocable standby letter of
				  credit must provide that the expiration date shall be automatically extended
				  for a period of at least one year unless, at least 120 days before the current
				  expiration date, the issuing institution notifies both the owner or operator
				  and the executive director by certified mail of a decision not to extend the
				  expiration date. Under the terms of the irrevocable standby letter of credit,
				  the 120 days shall begin on the date when both the owner or operator and the
				  executive director have received the notice, as evidenced by the return
				  receipts.
(f) The irrevocable
				  standby letter of credit must be issued in an amount at least equal to the
				  current cost estimate, except as provided in §
										37.41
				  of this title (relating to Use of Multiple Financial Assurance Mechanisms),
				  §
										37.51
				  of this title (relating to Use of a Financial Assurance Mechanism for Multiple
				  Facilities), or §
										37.52
				  of this title (relating to Use of a Universal Financial Assurance Mechanism for
				  Multiple Facilities and Program Areas).
(g) Following a determination that the owner
				  or operator has failed to perform closure or post closure in accordance with
				  the closure plan, post closure plan, and other applicable requirements of the
				  permit, or has failed to perform corrective action in accordance with the
				  permit or other applicable requirements, the executive director may draw on the
				  irrevocable standby letter of credit.
(h) If the owner or operator does not
				  establish alternate financial assurance as specified in this subchapter and
				  obtain written approval of such alternate assurance from the executive director
				  within 90 days after receipt by both the owner or operator and the executive
				  director of a notice from the issuing institution that it has decided not to
				  extend the irrevocable standby letter of credit beyond the current expiration
				  date, the executive director shall draw on the irrevocable standby letter of
				  credit. The executive director may delay the drawing if the issuing institution
				  grants an extension of the term of the letter of credit. During the last 30
				  days of any such extension, the executive director shall draw on the
				  irrevocable standby letter of credit if the owner or operator has failed to
				  provide alternate financial assurance as specified in this subchapter and
				  obtain written approval of such assurance from the executive
				  director.
(i) Upon termination, in
				  accordance with §
										37.61
				  of this title (relating to Termination of Mechanisms), the executive director
				  shall return the irrevocable standby letter of credit to the issuing
				  institution.