Hawaii Administrative Rules
Title 11 - DEPARTMENT OF HEALTH
Subtitle 1 - GENERAL DEPARTMENTAL PROVISIONS
Chapter 58.1 - SOLID WASTE MANAGEMENT CONTROL
Subchapter 2 - SOLID WASTE DISPOSAL FACILITIES
Section 11-58.1-18 - Municipal solid waste landfills - financial assurance

(A) The cost estimate must equal the cost of closing the largest area of all MSWLF units 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 section 11-58.1-17(a) (3) (B) ).

(B) During the active life of the MSWLF unit, the owner or operator must annually adjust the closure cost estimate for inflation.

(C) The owner or operator must increase the closure cost estimate and the amount of financial assurance required under paragraph (2) if changes to the closure plan or MSWLF unit conditions increase the maximum cost of closure at any time during the remaining active life.

(D) The owner or operator may reduce the closure cost estimate and the amount of financial assurance required under paragraph (2) 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 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.

(A) 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.

(B) 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.

(C) The owner or operator must increase the post-closure care cost estimate and the amount of financial assurance required under paragraph (2) if changes in the post-closure plan or MSWLF unit conditions increase the maximum costs of post-closure care.

(D) The owner or operator may reduce the post-closure cost estimate and the amount of financial assurance required under paragraph (2) 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 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.

(A) The owner or operator must annually adjust the estimate for inflation until the corrective action program is completed in accordance with section 11-58.1-16(h)(6).

(B) The owner or operator must increase the corrective action cost estimate and the amount of financial assurance required under paragraph (2) if changes in the corrective action program or MSWLF unit conditions increase the maximum costs of corrective action.

(C) The owner or operator may reduce the amount of the corrective action cost estimate and the amount of financial assurance required under paragraph (2) if the cost estimate exceeds the maximum remaining costs of corrective action. The owner or operator must notify the director that the justification for the reduction of the corrective action cost estimate and the amount of financial assurance has been placed in the operating record.

(A) An owner or operator may satisfy the requirements of this subsection 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.

(B) 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.

(C) 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 (10), divided by the number of years in the pay-in period as defined in subparagraph (B). The amount of subsequent payments must be determined by the following formula:

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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.

(D) 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 (10), divided by the number of years in the corrective action pay-in period as defined in subparagraph (B). The amount of subsequent payments must be determined by the following formula:

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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 on the pay-in period.

(E) The initial payment into the trust fund must be made before the initial receipt of waste or before the effective date of this section (April 9, 1994), whichever is later, in the case of closure and post-closure care, or within one hundred twenty days after the corrective action remedy has been selected in accordance with the requirements of section 11-58.1-16(h).

(F) If the owner or operator establishes a trust fund after having used one or more alternate mechanisms specified in this subsection, 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.

(G) 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 director that documentation of the justification for reimbursement has been placed in the operating record and that reimbursement has been received.

(H) 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 subsection or if the owner or operator is no longer required to demonstrate financial responsibility in accordance with the requirements of subsection (b) (2), (c) (2), or (d) (2).

(A) 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 this section (April 9, 1994), whichever is later, in the case of closure and post-closure care, or within one hundred twenty days after the corrective action remedy has been selected in accordance with the requirements of section 11-58.1-16(h). The owner or operator must notify the 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.

(B) 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 applies, except as provided in paragraph (11).

(C) 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.

(D) The owner or operator must establish a standby trust fund. The standby trust fund must meet the requirements of paragraph (1) except the requirements for initial payment and subsequent annual payments specified in paragraph (1)(B) through (E).

(E) 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.

(F) 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 director one hundred twenty 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.

(G) The owner or operator may cancel the bond only if alternate financial assurance is substituted as specified in this subsection or if the owner or operator is no longer required to demonstrate financial responsibility in accordance with subsection (b) (2), (c) (2), or (d) (2).

(A) An owner or operator may satisfy the requirements of this subsection 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 this section (April 9, 1994), whichever is later, in the case of closure and post-closure care, or within one hundred twenty days after the corrective action remedy has been selected in accordance with the requirements of section 11-58.1-16(h). The owner or operator must notify the 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.

(B) 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, address of the facility, and the amount of funds assured, must be included with the letter of credit in the operating record.

(C) 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 applies, except as provided in paragraph (1). 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 director one hundred twenty days in advance of cancellation. If the letter of credit is canceled by the issuing institution, the owner or operator must obtain alternate financial assurance.

(D) The owner or operator may cancel the letter of credit only if alternate financial assurance is substituted as specified in this subsection or if the owner or operator is released from the requirements of this subsection in accordance with subsection (b) (2), (c) (2), or (d) (2).

(A) An owner or operator may demonstrate financial assurance for closure and post-closure care by obtaining insurance which conforms to the requirements of this paragraph. The insurance must be effective before the initial receipt of waste or before the effective date of this section (April 9, 1994), whichever is later. 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. The owner or operator must notify the director that a copy of the insurance policy has been placed in the operating record.

(B) The closure or post-closure care insurance policy must guarantee that funds will be available to close the MSWLF unit whenever final closure occurs or to provide post-closure care for the MSWLF unit whenever the post-closure care period begins, whichever applies. The policy must also guarantee that once closure or post-closure care begins, the insurer will be responsible for the paying out of funds to the owner or operator or other person authorized to conduct closure or post-closure care, up to an amount equal to the face amount of the policy.

(C) The insurance policy must be issued for a face amount at least equal to the current cost estimate for closure or post-closure care, whichever applies, except as provided in paragraph (1). 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) An owner or operator, or any other person authorized to conduct closure or post-closure care, may receive reimbursements for closure or post-closure expenditures, whichever applies. Requests for reimbursement will be granted by the insurer only if the remaining value of the policy is sufficient to cover the remaining costs of closure or post-closure care, and if justification and documentation of the cost is placed in the operating record. The owner or operator must notify the director that the documentation of the justification for reimbursement has been placed in the operating record and that reimbursement has been received.

(E) Each policy must contain a provision allowing assignment of the policy to a successor owner or operator. The assignment may be conditional upon consent of the insurer, if the consent is not unreasonably refused.

(F) The insurance 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 cancel the policy by sending notice of cancellation by certified mail to the owner and operator and to the director one hundred twenty days in advance of cancellation. If the insurer cancels the policy, the owner or operator must obtain alternate financial assurance as specified in this subsection.

(G) For insurance policies providing coverage for post-closure care, commencing on the date that liability to make payments pursuant to the policy accrues, the insurer will thereafter annually increase the face amount of the policy. The increase must be equivalent to the face amount of the policy, less any payments made, multiplied by an amount equivalent to eighty-five per cent of the most recent investment rate or of the equivalent coupon-issue yield announced by the U.S. Treasury for twenty-six week Treasury securities.

(H) The owner or operator may cancel the insurance policy only if alternate financial assurance is substituted as specified in this subsection or if the owner or operator is no longer required to demonstrate financial responsibility in accordance with the requirements of subsection (b)(2), (c)(2), or (d) (2).

(A) The financial assurance mechanisms must ensure that the amount of funds assured is sufficient to cover the costs of closure, post-closure care, and corrective action for known releases when needed;

(B) The financial assurance mechanisms must ensure that funds will be available in a timely fashion when needed;

(C) The financial assurance mechanisms must be obtained by the owner or operator by the effective date of this section or prior to the initial receipt of solid waste, whichever is later, in the case of closure and post-closure care, and within one hundred twenty days after the corrective action remedy has been selected in accordance with the requirements of section 11-58.1-16(h), until the owner or operator is released from the financial assurance requirements under subsections (b), (c), and (d).

(D) The financial assurance mechanisms must be legally valid, binding, and enforceable under Hawaii and federal law.