(6)
Financial assurance instruments established under this section must meet the
following criteria.
(a) Trust fund. An owner
or operator may satisfy the requirements of this section by establishing a
trust fund which conforms to the requirements of (a)(i) through (viii) of this
subsection.
(i) 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. The owner or operator must
place a copy of the trust agreement for approval by the jurisdictional health
department in the application for a permit under WAC
173-351-700 or through the permit
modification process of WAC
173-351-720(6)
for closure and post-closure financial assurance and to the department for
approval for remedial action financial assurance.
(ii) Pay-in period. Payments into the trust
fund must be made annually by the owner or operator over the duration (as
defined in WAC
173-351-750 ) of the initial or
reissued 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 remedial action program in the case of
remedial action for known releases. This period is referred to as the pay-in
period.
(iii) 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 when using multiple mechanisms as provided
in subsection (5)(c) of this section, divided by the number of years in the
pay-in period as defined in (a)(ii) of this subsection. The amount of
subsequent payments must be determined by the following formula:
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.
(iv) For a trust
fund used to demonstrate financial assurance for remedial action, the first
payment into the trust fund must be at least equal to one-half of the current
cost estimate for remedial action, except when using multiple mechanisms as
provided in subsection (5)(c) of this section, divided by the number of years
in the remedial action pay-in period as defined in (a)(ii) of this subsection.
The amount of subsequent payments must be determined by the following formula:
where RB is the most recent estimate of the required trust fund
balance for remedial action (i.e., the total costs that will be incurred during
the second half of the remedial action period), CV is the current value of the
trust fund, and Y is the number of years remaining in the pay-in period.
(v) The initial payment into the
trust fund must be made before the initial receipt of waste or before the
effective date of this section, whichever is later, in the case of closure and
post-closure care, or no later than one hundred twenty days after the cleanup
action plan has been established in accordance with the requirements of WAC
173-351-440(6) and
(7).
(vi) 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 (a)(iii) and (iv) of
this subsection as applicable.
(vii) The owner or operator, or other person
authorized to conduct closure, post-closure care, or remedial action activities
may request reimbursement from the trustee for these expenditures. Requests for
reimbursement will be granted by the trustee only if:
(A) Sufficient funds are remaining in the
trust fund to cover the remaining costs of closure, post-closure care, or
remedial action;
(B) If
justification and documentation of the cost is submitted to the jurisdictional
health department for closure and post-closure or the department for remedial
action for review and approval; and
(C) The owner or operator has a post-closure
permit in effect according to WAC
173-351-720(4)(c).
(viii) The trust fund may be
terminated by the owner or operator only if:
(A) The owner or operator substitutes
alternate financial assurance as specified in this subsection; or
(B) The owner or operator is no longer
required to demonstrate financial responsibility in accordance with the
requirements of subsection (2)(b), (3)(b), or (4)(b) of this section.
(b) Surety bond
guaranteeing payment or performance. An owner or operator may satisfy the
requirements of this section with a surety bond guaranteeing payment or
performance which conforms to the requirements of (b)(i) through (viii) of this
subsection.
(i) The owner or operator must
place a copy of the bond and standby trust agreement for approval by the
jurisdictional health department in the application for a permit under WAC
173-351-700 or through the permit
modification process of WAC
173-351-720(6)
for closure and post-closure financial assurance and the department for
approval for remedial action financial assurance.
(ii) The surety company must be listed as
acceptable in Circular 570 of the United States Treasury Department.
(iii) The penal sum of the bond must be in an
amount at least equal to the current closure, post-closure, or remedial action
cost estimate except when using multiple financial mechanisms as provided in
subsection (5)(d) of this section.
(iv) The surety must become liable for the
bond obligation if the owner or operator fails to perform as guaranteed by the
bond.
(v) The owner or operator
must also establish a standby trust fund meeting the requirements of (6)(a) of
this subsection except for specified initial and subsequent annual payments.
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.
(vi) The
surety may not cancel the bond until at least one hundred twenty days after the
owner or operator, the jurisdictional health department, and the department
have received notice of cancellation. If the owner or operator has not provided
alternate financial assurance conforming to this section within ninety days of
the cancellation notice, the surety must pay the amount of the bond into the
standby trust fund.
(vii) The owner
or operator may cancel the bond only by substituting alternate financial
assurance conforming to this section or if the owner or operator is no longer
required to demonstrate financial responsibility in accordance with subjection
(2)(b), (3)(b), or (4)(b) of this section.
(viii) The following types of surety bonds
are allowed:
(A) Surety bond; or
(B) Surety bond guaranteeing that the owner
or operator will perform final closure, post-closure, or remedial action
activities.
(c) Irrevocable letter of credit. An owner or
operator may satisfy the requirements of this section with an irrevocable
letter of credit which conforms to the requirements of (c)(i) through (v) of
this subsection. The issuing institution must have the authority to issue
letters of credit and its letter of credit operations must be regulated and
examined by a federal or state agency.
(i)
The owner or operator must also establish a standby trust fund meeting the
requirements of (a) of this subsection except for specified initial and
subsequent annual payments. Payments made under the terms of the irrevocable
letter of credit will be deposited by the institution directly into the standby
trust fund. Payments from the trust fund must be approved by the
trustee.
(ii) The following must be
submitted for approval by the jurisdictional health department in the
application for a permit under WAC
173-351-700 for closure and
post-closure financial assurance, and to the department for approval for
remedial action financial assurance:
(A) The
letter of credit;
(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; and
(C) A copy of the standby trust
agreement.
(iii) 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 closure, post-closure, or
remedial action cost estimate except when using multiple financial mechanisms
as provided in subsection (5)(d) 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 notifies the owner or
operator, the jurisdictional health department, and the department at least one
hundred twenty days before the current expiration date.
(iv) If the owner or operator fails to
perform activities according to the closure, post-closure, or cleanup action
plans, or if the owner or operator fails to provide alternate financial
assurance conforming to this section within ninety days after notification that
the letter of credit will not be extended, the issuing institution must deposit
the funds from the letter of credit to the standby trust fund.
(v) The owner or operator may cancel the
letter of credit only by substituting alternate financial assurance conforming
to this section or if the owner or operator is no longer required to
demonstrate financial responsibility in accordance with subsection (2)(b),
(3)(b), or (4)(b) of this section.