An owner or operator of each facility shall establish and
demonstrate to the Department financial assurance for closure of the facility.
The owner or operator shall choose from the options as specified in subsections
(a) through (f) and (i) of this section or section
66264.146 of this article.
(a) Closure trust fund.
(1) An owner or operator may satisfy the
requirements of this section by establishing a closure trust fund which
conforms to the requirements of this subsection and submitting an originally
signed duplicate of the trust agreement to the Department. An owner or operator
of a new facility shall submit the originally signed duplicate of the trust
agreement to the Department at least 60 days before the date on which hazardous
waste is first received for transfer, treatment, storage or disposal. The
trustee shall 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.
(2) The wording of the
trust agreement shall be identical to the wording specified in section
66264.151, subsection (a)(1),
shall contain original signatures and shall be accompanied by a formal
certification of acknowledgment (for example, see section
66264.151, subsection (a)(2)).
Schedule A of the trust agreement shall be updated within 60
days after a
change in the amount of the
current closure cost estimate covered by the trust
agreement.
(3) Payments into the
trust fund shall be made annually by the
owner or operator over the term of the
initial
RCRA permit, or ten (10) years beginning with the establishment of the
trust fund or over the remaining
operating life of the facility as estimated in
the
closure plan, whichever period is shorter; this period is hereafter
referred to as the "pay-in period." The payments into the
closure trust fund
shall be made as follows:
(A) For existing
facilities, the first payment shall be made at the time the trust fund is
established; a receipt from the trustee for this payment shall be submitted by
the
owner or operator to the
Department. The first payment shall be at least
equal to the
current closure cost estimate, except as provided in subsection
(g) of this section, divided by the number of years in the pay-in period.
Subsequent payments shall be made no later than 30
days after each anniversary
date of the first payment. The amount of each subsequent payment shall be
determined by this formula:
where CE is the current closure cost estimate, CV is the
current value of the trust fund and Y is the number of years remaining in the
pay-in period.
(B) For a
new
facility, the first payment shall be made before the initial receipt of
hazardous waste for
transfer,
treatment,
storage or disposal. A receipt from
the trustee for this payment shall be submitted by the
owner or operator to the
Department before this initial receipt of
hazardous waste. The first payment
shall be at least equal to the
current closure cost estimate, except as
provided in subsection (g) of this section, divided by the number of years in
the pay-in period. Subsequent payments shall be made no later than 30
days
after each anniversary date of the first payment. The amount of each subsequent
payment shall be determined by this formula:
where CE is the current closure cost estimate, CV is the
current value of the trust fund, and Y is the number of years remaining in the
pay-in period.
(C) If an
owner or operator establishes a trust fund as specified in section
66265.143(a) of
this division, and the value of that trust fund is less than the
current
closure cost estimate when a
permit is awarded for the facility, the amount of
the
current closure cost estimate still to be paid into the trust fund shall be
paid in over the pay-in period as defined in subsection (a)(3) of this section.
Payments shall continue to be made no later than 30
days after each anniversary
date of the first payment made pursuant to chapter 15 of this division. The
amount of each payment must be determined by this formula:
where CE is the current closure cost estimate, CV is the
current value of the trust fund, and Y is the number of years remaining in the
pay-in period.
(4)
The owner or operator may accelerate payments into the trust fund or the full
amount of the current closure cost estimate may be deposited at the time the
fund is established. However, the value of the fund shall be maintained at no
less than the value that the fund would have if annual payments were made as
specified in subsection (a)(3) of this section.
(5) If the
owner or operator establishes a
closure trust fund after having used one or more alternate mechanisms specified
in this section or in section
66265.143 of this division, the
first payment shall be in at least the amount that the fund would contain if
the trust fund were established initially and annual payments made according to
specifications of this subsection and section
66265.143, subsection (a) of this
division, as applicable.
(6) After
the pay-in period is completed, whenever the current closure cost estimate
changes, the owner or operator shall compare the new estimate with the
trustee's most recent annual valuation of the trust fund. If the value of the
fund is less than the amount of the new estimate, the owner or operator, within
60 days after the change in the cost estimate, shall either deposit an amount
into the fund so that its value after this deposit at least equals the amount
of the current closure cost estimate, or obtain other financial assurance as
specified in this section to cover the difference.
(7) If the value of the trust fund is greater
than the total amount of the current closure cost estimate, the owner or
operator may submit a written request to the Department for release of the
amount in excess of the current closure cost estimate.
(8) If an owner or operator substitutes other
financial assurance as specified in this section for all or part of the trust
fund, a written request may be submitted to the Department for release of the
amount in excess of the current closure cost estimate covered by the trust
fund.
(9) Within 60 days after
receiving a request from the owner or operator for release of funds as
specified in subsections (a)(7) or (8) of this section, the Department will
instruct the trustee to release to the owner or operator such funds as the
Department specifies in writing.
(10) Before beginning final closure, the
value of the trust fund shall equal the amount of the current closure cost
estimate. If the value of the fund is less than the amount of the current
estimate, the owner or operator shall either deposit an amount into the fund so
that its value after this deposit at least equals the amount of the current
closure cost estimate, or obtain other financial assurance, as specified in
this section, to cover the difference.
(11) After beginning partial or final
closure, an owner or operator or another person authorized to conduct partial
or final closure may request reimbursements for partial or final closure
expenditures by submitting itemized bills to the Department. The owner or
operator may request reimbursements for partial closure only if sufficient
funds are remaining in the trust fund to cover the maximum costs of closing the
facility over its remaining operating life. Within 60 days after receiving
bills for partial or final closure activities, the Department shall instruct
the trustee to make reimbursements in those amounts as the Department specifies
in writing, if the Department determines that the partial or final closure
expenditures are in accordance with the approved closure plan, or otherwise
justified. If the Department has reason to believe that the maximum cost of
closure over the remaining life of the facility will be significantly greater
than the value of the trust fund, reimbursements of such amounts may be
withheld until the Department determines, in accordance with subsection (j) of
this section that the owner or operator is no longer required to maintain
financial assurance for final closure of the facility. If the Department does
not instruct the trustee to make such reimbursements, the Department shall
provide the owner or operator with a detailed written statement of
reasons.
(12) The
Department shall
agree to termination of the trust when:
(A) an
owner or operator substitutes alternate financial assurance as specified in
this section; or
(B) the Department
releases the owner or operator from the requirements in accordance with
subsection (j) of this section.
(b) Surety bond guaranteeing payment into a
closure trust fund.
(1) An owner or operator
may satisfy the requirements of this section by obtaining a surety bond which
conforms to the requirements of this subsection and submitting the bond to the
Department. An owner or operator of a new facility shall submit the bond to the
Department at least 60 days before the date on which hazardous waste is first
received for transfer, treatment, storage or disposal. The bond shall be
effective before this initial receipt of hazardous waste. 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 wording of the
surety bond shall be identical to the wording specified in section
66264.151, subsection (b). The
surety bond shall contain original signatures and shall be accompanied by the
documents specified in this subsection.
(3) The
owner or operator who uses a surety
bond to satisfy the requirements of this section shall also establish a standby
trust fund. Under the terms of the bond, all payments made thereunder shall be
deposited by the surety directly into the standby trust fund in accordance with
instructions from the
Department. This standby trust fund shall meet the
requirements specified in subsection (a) of this section, except that:
(A) an originally signed duplicate of the
standby trust agreement shall be submitted to the Department with the surety
bond; and
(B) until the standby
trust fund is funded pursuant to the requirements of this section, the
following are not required by these regulations:
1. payments into the trust fund as specified
in subsection (a) of this section;
2. updating of Schedule A of the trust
agreement (see section
66264.151, subsection (a)) to show
current
closure cost estimates as required by subsection (a)(2) of this
section;
3. annual valuations as
required by the trust agreement; and
4. notices of nonpayment as required by the
trust agreement.
(4) The bond shall guarantee that the
owner
or operator shall:
(A) fund the standby trust
fund in an amount equal to the penal sum of the bond before the beginning of
final closure of the facility; or
(B) fund the standby trust fund in an amount
equal to the penal sum within 15 days after an administrative order to begin
final closure issued by the Department becomes final, or within 15 days after
an order to begin final closure is issued by a U.S. district court or other
court of competent jurisdiction; or
(C) provide alternate financial assurance as
specified in this section, and obtain the Department's written approval of the
assurance provided, within 90 days after receipt by both the owner or operator
and the Department of a notice of cancellation of the bond from the
surety.
(5) Under the
terms of the bond, the surety shall become liable on the bond obligation when
the owner or operator fails to perform as guaranteed by the bond.
(6) The penal sum of the bond shall be in an
amount at least equal to the current closure cost estimate, except as provided
in subsection (g) of this section.
(7) Whenever the current closure cost
estimate increases to an amount greater than the penal sum, the owner or
operator, within 60 days after the increase, shall either cause the penal sum
to be increased to an amount at least equal to the current closure cost
estimate and submit evidence of such increase to the Department, or obtain
other financial assurance as specified in this section to cover the increase.
Whenever the current closure cost estimate decreases, the penal sum may be
reduced to the amount of the current closure cost estimate following written
approval by the Department.
(8)
Under the terms of the bond, the surety may cancel the bond by sending notice
of cancellation by certified mail to the owner or operator and to the
Department. Cancellation shall not occur, however, during the 120 days
beginning on the date of receipt of the notice of cancellation by both the
owner or operator and the Department, as evidenced by the return
receipt.
(9) The owner or operator
may cancel the bond with prior written consent from the Department based on
receipt of evidence of alternate financial assurance as specified in this
section.
(c) Surety bond
guaranteeing performance of
closure.
(1) An
owner or operator of a
permitted facility, as defined in section
66260.10, may satisfy the
requirements of this section by obtaining a surety bond which conforms to the
requirements of this subsection and submitting the bond to the
Department. An
owner or operator of a
new facility shall submit the bond to the
Department at
least 60
days before the date on which
hazardous waste is first received for
transfer,
treatment,
storage or disposal. The bond shall be effective before
this initial receipt of
hazardous waste. The surety company issuing the bond
shall, 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 wording of the surety bond shall be
identical to the wording specified in section
66264.151, subsection (c). The
surety bond shall contain original signatures and shall be accompanied by the
documents specified in this subsection.
(3) The
owner or operator who uses a surety
bond to satisfy the requirements of this section shall also establish a standby
trust fund. Under the terms of the bond, all payments made thereunder shall be
deposited by the surety directly into the standby trust fund in accordance with
instructions from the
Department. This standby trust must meet the requirements
specified in subsection (a) of this section, except that:
(A) an originally signed duplicate of the
standby trust agreement shall be submitted to the Department with the surety
bond; and
(B) unless the standby
trust fund is funded pursuant to the requirements of this section, the
following are not required by these regulations:
1. payments into the trust fund as specified
in subsection (a) of this section;
2. updating of Schedule A of the trust
agreement to show current closure cost estimates as required by subsection
(a)(2) of this section;
3. annual
valuations as required by the trust agreement; and
4. notices of nonpayment as required by the
trust agreement.
(4) The bond shall guarantee that the
owner
or operator will:
(A) perform final closure in
accordance with the closure plan and other requirements of the permit for the
facility whenever required to do so; or
(B) provide alternate financial assurance as
specified in this section, and obtain the Department's written approval of the
assurance provided, within 90 days after receipt by both the owner or operator
and the Department of a notice of cancellation of the bond from the
surety.
(5) Under the
terms of the bond, the surety shall become liable on the bond obligation when
the owner or operator fails to perform as guaranteed by the bond. Following a
determination by the Department that the owner or operator has failed to
perform final closure in accordance with the approved closure plan and other
permit requirements when required to do so, under the terms of the bond the
surety shall perform final closure as guaranteed by the bond or shall deposit
the amount of the penal sum into the standby trust fund. For facilities that
require a RCRA permit, the determination shall be made pursuant to Health and
Safety Code Section
25187.
(6) The penal sum of the bond shall be in an
amount at least equal to the current closure cost estimate.
(7) Whenever the current closure cost
estimate increases to an amount greater than the penal sum, the owner or
operator, within 60 days after the increase, shall either cause the penal sum
to be increased to an amount at least equal to the current closure cost
estimate and submit evidence of such increase to the Department, or obtain
other financial assurance as specified in this section. Whenever the current
closure cost estimate decreases, the penal sum may be reduced to the amount of
the current closure cost estimate following written approval from the
Department.
(8) Under the terms of
the bond, the surety may cancel the bond by sending notice of cancellation by
certified mail to the owner or operator and to the Department. Cancellation
shall not occur, however, during the 120 days beginning on the date of receipt
of the notice of cancellation by both the owner or operator and the Department,
as evidenced by the return receipts.
(9) The
owner or operator may cancel the bond
if the
Department has given prior written consent. The
Department will provide
such written consent when:
(A) an owner or
operator substitutes alternate financial assurance as specified in this
section; or
(B) the Department
releases the owner or operator from the requirements of this section in
accordance with subsection (j) of this section.
(10) The surety shall not be liable for
deficiencies in the performance of closure by the owner or operator after the
Department releases the owner or operator from the requirements of this section
in accordance with subsection (j) of this section.
(d) Closure 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 subsection and submitting the
letter to the Department. An owner or operator of a new facility shall submit
the letter of credit to the Department at least 60 days before the date on
which hazardous waste is first received for transfer, treatment, storage or
disposal. The letter of credit shall be effective before this initial receipt
of hazardous waste. The issuing institution shall 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) The wording of the letter of credit shall
be identical to the wording specified in section
66264.151, subsection (d). The
letter of credit shall contain original signatures and shall be accompanied by
the documents specified in (3) and (4) of this subsection.
(3) An
owner or operator who uses a letter of
credit to satisfy the requirements of this section shall also establish a
standby trust fund. Under the terms of the letter of credit, all amounts paid
pursuant to a draft by the
Department shall be deposited by the issuing
institution directly into the standby trust fund in accordance with
instructions from the
Department. This standby trust fund shall meet the
requirements of the trust fund specified in subsection (a) of this section,
except that:
(A) an originally signed
duplicate of the standby trust agreement shall be submitted to the Department
with the letter of credit; and
(B)
unless the standby trust fund is funded pursuant to the requirements of this
section, the following are not required by these regulations:
1. payments into the trust fund as specified
in subsection (a) of this section;
2. updating of Schedule A of the trust
agreement (see section
66264.151, subsection (a)) to show
current
closure cost estimates;
3.
annual valuations as required by the trust agreement; and
4. notices of nonpayment as required by the
trust agreement.
(4) The letter of credit shall be accompanied
by a letter from the owner or operator referring to the letter of credit by
number, issuing institution, and date and providing the following information:
the hazardous waste facility Identification Number, name, and address of the
facility, and the amount of funds assured for closure of the facility by the
letter of credit.
(5) The letter of
credit shall be irrevocable and issued for a period of at least one (1) year.
The letter of credit shall provide that the expiration date will be
automatically extended for a period of at least one (1) year unless, at least
120 days before the current expiration date, the issuing institution notifies
both the owner or operator and the Department by certified mail of a decision
not to extend the expiration date. Under the terms of the letter of credit, the
120 days shall begin on the date when both the owner or operator and the
Department have received the notice, as evidenced by the return
receipts.
(6) The letter of credit
shall be issued in an amount at least equal to the current closure cost
estimate, except as provided in subsection (g) of this section.
(7) Whenever the current closure cost
estimate increases to an amount greater than the amount of the letter of
credit, the owner or operator, within 60 days after the increase, shall either
cause the amount of the letter of credit to be increased so that it at least
equals the current closure cost estimate and submit evidence of such increase
to the Department, or obtain other financial assurance as specified in this
section to cover the increase. Whenever the current closure cost estimate
decreases, the amount of the letter of credit may be reduced to the amount of
the current closure cost estimate following written approval from the
Department.
(8) Following a
determination by the Department that the owner or operator has failed to
perform final closure in accordance with the closure plan and other permit
requirements when required to do so, the Department may draw on the letter of
credit. For facilities that require a RCRA permit, the determination shall be
made pursuant to Health and Safety Code Section
25187.
(9) If the owner or operator does not
establish alternate financial assurance as specified in this section, and
obtain written approval of such alternate assurance from the Department within
90 days after receipt by both the owner or operator and the Department of a
notice from the issuing institution that it has decided not to extend the
letter of credit beyond the current expiration date, the Department shall draw
on the letter of credit. The Department shall delay drawing on the letter of
credit in accordance with the provisions of this paragraph, if the issuing
institution grants an extension of the term of the credit. During the last 30
days of any such extension the Department shall draw on the letter of credit if
the owner or operator has failed to provide alternate financial assurance as
specified in this section and obtain written approval of such assurance from
the Department.
(10) The
Department
shall return the letter of credit to the issuing institution for termination
when:
(A) an owner or operator substitutes
alternate financial assurance as specified in this section; or
(B) the Department releases the owner or
operator from the requirements of this section in accordance with subsection
(j) of this section.
(e) Closure insurance.
(1) An
owner or operator may satisfy the
requirements of this section by obtaining
closure insurance that conforms to
the requirements of this section and submitting a certificate of such insurance
to the
Department. An
owner or operator of a
new facility shall submit the
certificate of insurance to the
Department at least 60
days before the date on
which
hazardous waste is first received for
transfer,
treatment,
storage, or
disposal. The insurance shall be effective before this initial receipt of
hazardous waste. At a minimum, the insurer shall be:
(A) an admitted carrier, licensed to transact
the business of insurance in California; or
(B) a nonadmitted carrier eligible to provide
insurance as an excess or surplus lines insurer in California. Any excess or
surplus insurance relied upon by the owner or operator to meet the requirements
of this subsection shall be underwritten by a surplus lines insurer that is on
the California Department of Insurance's List of Approved Surplus Line Insurers
as being eligible to cover risks in California, or the Quarterly Listing of
Alien Insurers maintained by the International Insurers Department of the
National Association of Insurance Commissioners and is licensed as an insurer
in its domiciliary jurisdiction.
(2) The wording of the certificate of
insurance shall be identical to the wording specified in section
66264.151, subsection (e). The
certificate of insurance shall contain original signatures.
(3) The closure insurance policy shall be
issued for a face amount at least equal to the current closure cost estimate,
except as provided in subsection (g) of this section. The term "face amount"
means the total amount the insurer is obligated to pay under the policy. Actual
payments by the insurer shall not change the face amount, although the
insurer's future liability shall be lowered by the amount of the
payments.
(4) The closure insurance
policy shall guarantee that funds shall be available to close the facility
whenever final closure occurs. The policy shall also guarantee that once final
closure begins, the insurer shall be responsible for paying out funds, up to an
amount equal to the face amount of the policy, upon direction from the
Department, to such party or parties as the Department specifies.
(5) After beginning partial or final closure,
an owner or operator or any other person authorized to conduct closure may
request reimbursements for closure expenditures by submitting itemized bills to
the Department. The owner or operator may request reimbursements for partial
closure only if the remaining value of the policy is sufficient to cover the
maximum costs of closing the facility over its remaining operating life. Within
60 days after receiving bills for closure activities, the Department shall
instruct the insurer to make reimbursements in such amounts as the Department
specifies in writing, if the Department determines that the partial or final
closure expenditures are in accordance with the approved closure plan or are
otherwise justified. If the Department has reason to believe that the maximum
cost of closure over the remaining life of the facility will be significantly
greater than the face amount of the policy, the Department may withhold
reimbursements of such amounts as it deems prudent until it is determined, in
accordance with subsection (j) of this section, that the owner or operator is
no longer required to maintain financial assurance for final closure of the
facility. If the Department does not instruct the insurer to make such
reimbursements, the owner or operator will be provided a detailed written
statement of reasons.
(6) The owner
or operator shall maintain the policy in full force and effect until the
Department consents to termination of the policy by the owner or operator as
specified in subsection (e)(10) of this section. Failure to pay the premium,
without substitution of alternate financial assurance as specified in this
section, shall constitute a significant violation of these regulations,
warranting such remedy as the Department deems necessary. Such violation will
be deemed to begin upon receipt by the Department of a notice of future
cancellation, termination, or failure to renew due to nonpayment of the
premium, rather than upon the date of expiration.
(7) Each policy shall contain a provision
allowing assignment of the policy to a successor owner or operator. Such
assignment may be conditional upon consent of the insurer, provided such
consent is not unreasonably refused.
(8) The policy shall 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 shall, 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 elect to
cancel,
terminate, or fail to renew the policy by sending notice by certified
mail to the
owner or operator and the
Department. Cancellation, termination or
failure to renew may not occur, however, during the 120
days beginning with the
date of receipt of the notice by both the
Department and the
owner or operator,
as evidenced by the return receipts. Cancellation, termination or failure to
renew shall not occur and the policy shall remain in full force and effect in
the event that on or before the date of expiration:
(A) the Department deems the facility
abandoned; or
(B) the permit is
denied, terminated or revoked or a new permit is denied; or
(C) closure is ordered by the Department or
any other State or Federal agency, U.S. district court or other court of
competent jurisdiction; or
(D) the
owner or operator is named as debtor in a voluntary or involuntary proceeding
under Title 11 (Bankruptcy), U.S. Code; or
(E) the premium due is paid.
(9) Whenever the current closure
cost estimate increases to an amount greater than the face amount of the
policy, the owner or operator, within 60 days after the increase, shall either
cause the face amount to be increased to an amount at least equal to the
current closure cost estimate and submit evidence of such increase to the
Department, or obtain other financial assurance as specified in this section to
cover the increase. Whenever the current closure cost estimate decreases, the
face amount may be reduced to the amount of the current closure cost estimate
following written approval by the Department.
(10) The
Department shall give written
consent to the
owner or operator to
terminate the insurance policy when:
(A) an owner or operator substitutes
alternate financial assurance as specified in this section; or
(B) the Department releases the owner or
operator from the requirements of this section in accordance with subsection
(j) of this section.
(f) Financial test and guarantee for
closure.
(1) An
owner or operator may satisfy the
requirements of this section by demonstrating that the
owner or operator passes
the financial test specified in this subsection. To pass this test, the
owner
or operator shall meet the criteria of either subsection (f)(1)(A) or (B) of
this section.
(A) The
owner or operator shall
have all of the following:
1. two of the
following three ratios: a ratio of total liabilities to net worth less than
2.0; a ratio of the sum of net income plus depreciation, depletion and
amortization to total liabilities greater than 0.1; and a ratio of current
assets to current liabilities greater than 1.5;
2. a current corporate credit rating of AAA,
AA, A, or BBB as issued by Standard and Poor's or Aaa, Aa, A, or Baa as issued
by Moody's;
3. net working capital
and tangible net worth each at least six times the sum of the current closure
and postclosure cost estimates and the current plugging and abandonment cost
estimates;
4. tangible net worth of
at least $20 million; and
5. assets
located in the United States amounting to at least 90 percent of total assets
or at least six times the sum of the current closure and postclosure cost
estimates for all of the owner's or operator's hazardous waste facilities
regulated by the Department and the current plugging and abandonment cost
estimates.
(B) The
owner
or operator shall have all of the following:
1. a current rating for his or her 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;
2. tangible net worth at least six times the
sum of the current closure and postclosure cost estimates and the current
plugging and abandonment cost estimates;
3. tangible net worth of at least $20
million; and
4. assets located in
the United States amounting to at least 90 percent of total assets or at least
six times the sum of the current closure and postclosure cost estimates for all
of the owner's or operator's hazardous waste facilities regulated by the
Department and the current plugging and abandonment cost estimates.
(2) The phrase "current
closure and postclosure cost estimates" as used in subsection (f)(1) of this
section refers to the cost estimates required to be shown in paragraphs 1
through 6 of the letter from
the owner's or
operator's chief financial
officer
as specified in subsection
66264.151(f). The
phrase "current plugging and abandonment cost estimates" as used in subsection
(f)(1) of this section refers to the cost estimates required to be shown in
paragraphs 1 through 6 of the letter from
the owner's or
operator's chief
financial
officer.
(3) To
demonstrate that this test has been met, the
owner or operator shall submit all
of the following items to the
Department:
(A)
a letter signed by
the owner's or
operator's chief financial
officer. The
letter shall be on
the owner's or
operator's official letterhead stationery,
shall contain an original signature and shall be completed as specified in
section
66264.151, subsection
(f);
(B) a copy of the owner's or
operator's financial statements and the independent certified public
accountant's report on examination of the owner's or operator's financial
statements for the latest completed fiscal year; and
(C) a special report from
the owner's or
operator's independent certified public accountant to the
owner or operator
that includes the following:
1. a statement
that the independent certified public accountant 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
2. identification and description of the
specific accounting standards and guidance relied upon to prepare the
report.
(4) An
owner or operator of a new facility shall submit the items specified in
subsection (f)(3) of this section to the Department at least 60 days before the
date on which hazardous waste is first received for transfer, treatment,
storage, or disposal.
(5) After the
initial submission of items specified in subsection (f)(3) of this section, the
owner or operator shall send updated information to the Department within 90
days after the close of each succeeding fiscal year. This information shall
consist of all three items specified in subsection (f)(3) of this
section.
(6) If the owner or
operator no longer meets the requirements of subsection (f)(1) of this section,
the owner or operator shall send notice to the Department of the owner's or
operator's intent to establish alternate financial assurance as specified in
this section. The notice shall be sent by certified mail within 90 days after
any occurrence that prevents the owner or operator from meeting the
requirements. The owner or operator shall provide the alternate financial
assurance within 120 days after the end of the company's latest completed
fiscal year.
(7) The Department
may, based on a reasonable belief that the owner or operator may no longer meet
the requirements of subsection (f)(1) of this section, require reports of
financial condition at any time from the owner or operator in addition to those
specified in subsection (f)(3) of this section. If the Department finds, on the
basis of such reports or other information, that the owner or operator no
longer meets the requirements of subsection (f)(1) of this section, the owner
or operator shall provide alternate financial assurance as specified in this
section within 30 days after notification of such a finding.
(8) The Department may disallow use of this
test by an owner or operator on the basis of qualifications in the opinion
expressed by the independent certified public accountant in his or her report
on examination of the owner's or operator's financial statements (see
subsection (f)(3)(B) of this section). An adverse opinion or a disclaimer of
opinion shall be cause for disallowance. The Department shall evaluate other
qualifications on an individual basis. The owner or operator shall provide
alternate financial assurance as specified in this section within 30 days after
notification of the disallowance.
(9) The
owner or operator is no longer
required to submit the items specified in subsection (f)(3) of this section
when:
(A) the owner or operator substitutes
alternate financial assurance as specified in this section; or
(B) the Department releases the owner or
operator from the requirements in accordance with subsection (j) of this
section.
(10) An
owner or
operator may meet the requirements of this section by obtaining a written
guarantee. The guarantor shall be the direct or higher-tier "
parent
corporation," as defined in section
66260.10, of the
owner or
operator, a
firm whose
parent corporation is also the
parent corporation of the
owner or operator, or a
firm with a "
substantial business relationship," as
defined in section
66260.10, with the
owner or
operator. The guarantor shall meet and comply with the requirements for owners
or operators in subsections (f)(1) through (f)(8) of this section and shall
comply with the terms of the guarantee. The guarantee shall be on the official
letterhead stationery of the
parent corporation. The guarantee shall contain an
original signature which shall be formally witnessed or notarized, and the
wording shall be identical to the wording specified in section
66264.151, subsection (h). A
certified copy of the guarantee shall accompany the items sent to the
Department as specified in subsection (f)(3) of this section. One of these
items must be the letter from the guarantor's chief financial
officer. If the
guarantor's
parent corporation is also the
parent corporation of the
owner or
operator, the letter must describe the value received in consideration of the
guarantee. If the guarantor is a
firm with a "
substantial business
relationship" with the
owner or operator, this letter must describe this
"
substantial business relationship" and the value received in consideration of
the guarantee. The terms of the guarantee shall provide that:
(A) if the owner or operator fails to perform
final closure of a facility covered by the guarantee in accordance with the
closure plan and other permit requirements whenever required to do so, the
guarantor shall do so or establish a trust fund as specified in subsection (a)
of this section in the name of the owner or operator;
(B) the guarantee shall remain in force
unless the guarantor sends notice of cancellation by certified mail to the
owner or operator and to the Department. Cancellation shall not occur, however,
during the 120 days beginning on the date of receipt of the notice of
cancellation by both the owner or operator and the Department, as evidenced by
the return receipts;
(C) if the
owner or operator fails to provide alternate financial assurance as specified
in this section and obtain the written approval of such alternate assurance
from the Department within 90 days after receipt by both the owner or operator
and the Department of a notice of cancellation of the guarantee from the
guarantor, the guarantor shall provide such alternative financial assurance in
the name of the owner or operator.
(11) An owner or operator may not rely on any
assets to meet the requirements of this section if those same assets serve as
the basis of satisfying any financial assurance or financial guarantee
requirement imposed by any other "governmental agency," as defined in
California Civil Code section
1633.2,
subdivision (i).
(g) Use
of multiple financial mechanisms. An owner or operator may satisfy the
requirements of this section by establishing more than one financial mechanism
per facility. The mechanisms shall be as specified in subsections (a), (b),
(d), (e), and (i) of this section, except that it is the combination of
mechanisms, rather than the single mechanism, which shall provide financial
assurance for an amount at least equal to the current closure cost estimate. If
an owner or operator uses a trust fund in combination with a surety bond or a
letter of credit, the trust fund may be used as the standby trust fund for the
other mechanisms. A single standby trust fund may be established for two or
more mechanisms. If the owner or operator demonstrates the required coverage
through the use of a combination of financial assurances under this subsection,
the owner or operator shall specify at least one such assurance as "primary"
coverage and shall specify the other as "excess" coverage. The Department may
use any or all of the mechanisms to provide for closure of the
facility.
(h) Use of a financial
mechanism for multiple facilities.
An owner or operator may use one or more of the financial
assurance mechanisms specified in this section to meet the requirements of this
section for more than one facility. Evidence of financial assurance submitted
to the Department shall include a list showing, for each facility, the
Hazardous Waste Facility Identification Number, name, address and the amount of
funds for closure assured by the mechanism. The amount of funds available
through the mechanism shall be no less than the sum of funds that would be
available if a separate mechanism had been established and maintained for each
facility. In directing funds available through the mechanism for closure of any
of the facilities covered by the mechanism, the Department may direct only the
amount of funds designated for that facility, unless the owner or operator
agrees to the use of additional funds available under the mechanism.
(i) Alternative Financial
Mechanism for
Closure Costs.
(1) An
owner or
operator of facilities which manage solely
non-RCRA hazardous waste may
establish financial assurance for
closure by means of a financial mechanism
other than as specified in subsections (a) through (f) of this section,
provided that prior to its use the mechanism has been submitted to and approved
by the
Department. The mechanism shall be at least equivalent to the financial
mechanisms specified in subsections (a) through (f) of this section. The
Department shall evaluate the equivalency of a mechanism principally in terms
of:
(A) Certainty of the availability of funds
for the required closure activities; and
(B) The amount of funds that will be made
available. The Department may also consider other factors deemed to be
appropriate, and may require the owner or operator to submit additional
information as is deemed necessary to make the determination.
(2) The
owner or operator shall
submit to the
Department the proposed mechanism together with a letter
requesting that the proposed mechanism be considered acceptable for meeting the
requirements of section
66264.143. The submission shall
include the following information:
(A) name,
address and telephone number of issuing institution; and
(B) hazardous waste facility identification
number, name, address and closure cost estimate for each facility;
and
(C) the amount of funds for
closure to be assured for each facility by the proposed mechanism;
and
(D) the terms of the proposed
mechanism (period covered, renewal/extension, cancellation).
(3) The Department shall notify
the owner or operator in writing of the determination made regarding the
proposed mechanism's acceptability in lieu of the financial mechanisms
specified in subsections (a) through (f) of this section.
(4) If a proposed mechanism is found
acceptable, the owner or operator shall submit a fully executed document to the
Department. The document shall contain original signatures and shall be
accompanied by a formal certification of acknowledgment.
(5) If a proposed mechanism is found
acceptable except for the amount of funds, the owner or operator shall either
increase the amount of the mechanism or obtain other financial assurance as
specified in subsections (a) through (f) of this section. The amount of funds
available through the combination of mechanisms shall at least equal the
current closure cost estimate.
(j) Release of the
owner or operator from the
requirements of this section.
(1) Within 60
days after receiving certifications from the owner or operator and an
independent professional engineer, registered in California, that final closure
has been completed in accordance with the approved closure plan, the Department
shall notify the owner or operator in writing that they are no longer required
by this section to maintain financial assurance for final closure of the
facility, unless the Department has reason to believe that final closure has
not been in accordance with the approved closure plan. The Department shall
provide the owner or operator a detailed written statement of any such reason
to believe that closure has not been in accordance with the approved closure
plan.
(2) When transfer of
ownership or operational control of a facility occurs, and the new owner or
operator has demonstrated to the satisfaction of the Department that they are
complying with the financial requirements of this section, the Department shall
notify the previous owner or operator in writing that they are no longer
required to maintain financial assurance for closure of that particular
facility.