Kan. Admin. Regs. § 28-29-2106 - Financial assurance provided by an irrevocable letter of credit
(a) Letter of
credit. Any owner or operator of a permitted solid waste disposal area or
processing facility may satisfy the requirements of K.A.R. 28-29-2101 or K.A.R.
28-29-2102, or both, by obtaining a letter of credit that conforms to the
requirements of this regulation and by submitting the original letter of credit
to the department.
(1) Each owner or operator
of a new facility shall submit to the department the letter of credit before
the permit is issued by the department.
(2) Each owner or operator required to
provide financial assurance for a corrective action plan shall submit the
letter of credit to the department within the times specified in K.A.R.
28-29-2102(d).
(3) The institution
issuing the letter of credit shall meet the following criteria:
(A) Be unrelated to the owner or operator;
(B) be authorized to issue letters
of credit in Kansas; and
(C)
conduct letter of credit activities that are regulated by an agency of the
state or federal government.
(b) Form of the letter of credit. The wording
of the letter of credit shall be identical to the wording in the document
provided by the department. If the amount of the letter of credit is changed or
the expiration date is extended, an original amendment to the letter of credit
shall be filed with the department.
(c) Standby trust fund. Any owner or operator
who uses a letter of credit to satisfy the requirements of K.A.R. 28-29-2101 or
K.A.R. 28-29-2102, or both, shall also establish a standby trust fund. A copy
of the standby trust agreement with an original signature shall be submitted to
the department along with the original letter of credit. Under the terms of the
letter of credit, all payments from the penal sum shall be deposited by the
issuing institution directly into the standby trust fund, in accordance with
instructions from the department. The standby trust fund shall conform to the
requirements specified in K.A.R. 28-29-2103, except that, until the trust
account is funded pursuant to the requirements of this regulation, the
following shall not be required:
(1) Payments
into the fund as specified in K.A.R. 28-29-2103(c) or (e) ;
(2) updates to schedule A of the trust
agreement as specified in K.A.R. 28-29-2103(b)(3) ;
(3) annual valuations as required by the
trust agreement; and
(4) notices
of nonpayment as required by the trust agreement.
(d) Provisions of the letter of credit. The
letter of credit shall be irrevocable and shall be issued for a period of at
least one year. The letter of credit shall require that the expiration date be
automatically extended for a period of at least one year on the expiration date
and on each succeeding expiration date, unless 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 terms of the letter of credit, the 120-day period shall begin on
the date by which both the owner or operator and the department have received
the notice, as evidenced by the return receipts.
(e) Amount of the letter of credit. The
letter of credit for closure, postclosure, or both, shall be issued for at
least the amount of the current cost of closure or postclosure, or both,
whichever is greater. The letter of credit for corrective action shall be
issued for at least the amount of the current cost estimate for corrective
action during the entire corrective action period.
(f) Increases in the amount of the letter of
credit. Whenever the current cost of closure, postclosure, corrective action,
or any combination of these, 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 to the
new amount and submit evidence of the increase to the department, or obtain
other financial assurance as specified in K.A.R. 28-29-2101(b) to cover the
increase. Whenever the current cost of closure, postclosure, corrective action,
or any combination of these, decreases, the owner or operator may request
approval from the department to decrease the amount of the letter of credit.
The request shall be evaluated by the department, and the amount shall be
decreased consistent with the department's evaluation.
(g) Failure to perform closure, postclosure,
and corrective action. The amount of the letter of credit, in whole or in part,
shall be drawn by the department following a determination by the department of
either of the following:
(1) That the owner
or operator has failed to perform closure, postclosure, or corrective action,
or any combination of these, in accordance with the closure, postclosure, or
corrective action plan, or any combination of these, when required; or
(2) that the owner or operator has
failed to perform according to the terms and conditions of the permit.
(h) Failure to supply
alternate financial assurance. If the owner or operator does not establish
alternate financial assurance as specified by this regulation and does not
obtain written approval for its use from the department within 90 days after
the date by which both the owner or operator and the department have received a
notice from the issuing institution that it has decided not to renew the letter
of credit beyond the current expiration date, the amount of the letter of
credit may be drawn by the department.
(i) Termination of the letter of credit by
the owner or operator. The owner or operator may request termination of the
letter of credit if any of the following occurs:
(1) The owner or operator substitutes an
alternative method of financial assurance as specified in K.A.R. 28-29-2101(b)
and obtains written approval for its use from the department.
(2) The owner or operator is released by the
department from further obligation for closure or postclosure, or both, at the
facility.
(3) The owner or
operator completes required corrective action and is released from further
obligation by the department or any court of competent jurisdiction.
(j) The provisions of this
regulation shall apply on and after February 24, 2000.
Notes
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