401 KAR 48:310 - Financial requirements and bonds
RELATES TO: KRS 224.01-010-224.01-070, 224.40-100-224.43-345, 224.99-010, Chapter 355
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
224.40-305 requires the cabinet to promulgate
administrative regulations for the managing, processing, or disposal of wastes.
KRS
224.40-650 requires that persons engaging in
the management, processing, and disposal of waste obtain a permit. KRS 224.650
and
KRS
224.40-110 require permit applicants to post
a performance bond with a mechanism of financial assurance. This chapter
establishes the minimum technical standards for solid waste sites or
facilities. This administrative regulation sets forth the financial
requirements for closure,
Section 1. Financial Assurance Criteria. The
financial assurance criteria and bond requirements apply to each owner and
operator of any solid waste disposal site or facility . Any owner or operator
that is a city, county, urban-county government, 109 district, taxing district,
political subdivision of the Commonwealth, the Commonwealth, or any agency
thereof, or any entity whose debts and liabilities are the debts and
liabilities of the above entities, shall be required to comply with Sections 2,
3, and 15 of this administrative regulation.
Section 2. Closure Cost Estimate. Except as
provided by
KRS
224.40-120, the owner or operator shall have
a detailed written estimate, in current dollars, of the cost of hiring a third
party to close the solid waste disposal site or facility in accordance with the
closure plan developed to satisfy the closure requirements in Section 4(1) of
401
KAR 48:060, Section (15) of
401 KAR
48:070, Section 4 of
401 KAR
48:170, Section 5 of
401 KAR
48:200, and KRS 224.40.650.
(1) The estimate shall equal the cost of
closing the solid waste disposal site or facility at the point in the active
life when the extent and manner of its operation would make closure the most
expensive. The cabinet shall adjust the figure for inflation and other factors
each year. The owner or operator shall base the cost estimate on the following
elements:
(a) Design;
(b) Site grading and drainage;
(c) Hauling and placing of each element of
the approved cap;
(d) Final grading
and drainage of the cap;
(e)
Revegetation of the cap; and
(f)
Quality control and construction certification .
(2) The owner or operator shall increase the
closure cost estimate and the amount of financial assurance provided under
Section 5 of this administrative regulation if changes to the closure plan or
solid waste disposal site or facility conditions increase the maximum cost of
closure at any time during the active life .
(3) The owner or operator may request a
reduction in the closure cost estimate and the amount of financial assurance
provided under Section 5 of this administrative regulation if he can
demonstrate that the cost estimate exceeds the maximum cost of closure at any
time over the life of the solid waste disposal site or facility .
(4) The owner or operator shall keep a copy
of the latest closure cost estimate at the solid waste disposal site or
facility until the owner or operator has been notified by the cabinet that he
has been released from closure financial assurance requirements under Section 5
of this administrative regulation.
Section 3. Closure Care Cost Estimate.
(1) Except as provided for by
KRS
224.40-120, the owner or operator of each
solid waste site or facility shall have a detailed written estimate, in current
dollars, of the cost of hiring a third party to conduct each phase of closure
care monitoring and maintenance in accordance with the closure care plan
developed to satisfy the closure care requirements of Section 3 of
401
KAR 48:060, Section 14 of
401 KAR
48:090, and Section 3 of
401 KAR
48:170. The closure care cost estimate for each phase
of closure care used to demonstrate financial assurance in Section 6 of this
administrative regulation shall be calculated by multiplying the annual cost
estimate for each phase of closure care by the number of years of closure care
required. For contained landfills, the closure care estimate mandated by
KRS
224.40-650 shall be a minimum of $10,000 per
year, using 1990 as the baseline year.
(2) The cost estimate for each phase of
closure care shall be based on the most expensive costs of closure care during
that phase. The cabinet shall adjust the figure each year for inflation and
other factors.
(3) The owner or
operator shall increase the amount of the closure care cost estimate and the
amount of financial assurance provided under Section 6 of this administrative
regulation if changes in the closure care plan or facility conditions increase
the maximum costs of closure care .
(4) The owner or operator may request a
reduction in the closure cost estimate and the amount of financial assurance
provided under Section 6 of this administrative regulation if he can
demonstrate to the satisfaction of the cabinet that the cost estimate exceeds
the maximum costs of closure care remaining over the closure care
period.
(5) The owner or operator
shall keep a copy of the latest closure care cost estimate at the facility
until he has been notified by the cabinet that he has been released from
closure care financial assurance requirements for the entire facility under
Section 6 of this administrative regulation.
Section 4. Financial Mechanisms. The
mechanisms used to demonstrate financial assurance under this administrative
regulation shall ensure that the funds necessary to meet the costs of closure
and closure care will be available in a timely manner whenever they are needed.
The owner or operator shall execute a performance bond specified in Section 7
with one (1) or a combination of the financial mechanisms in Sections 9, 10,
11, 12, and 13 of this administrative regulation, that satisfies the following
criteria:
(1) The financial assurance
mechanism shall ensure that the amount of funds is sufficient to cover the
costs of closure and closure care ;
(2) The financial assurance mechanism shall
ensure that funds shall be available in a timely fashion;
(3) The financial assurance mechanism shall
guarantee the availability of the required amount of coverage from May 8, 1990,
or prior to the initial receipt of solid waste, whichever is later, until the
owner or operator establishes an alternative financial assurance mechanism or
is released from the financial assurance requirements under Sections 5, 6, 7,
and 14 of this administrative regulation. The amount of financial assurance
obtained from a single financial institution shall not exceed the limit of
federal insurance, when such assurance is provided by a financial institution
that uses federal insurance to guarantee the availability of funds.
Section 5. Closure Financial
Assurance. Except as provided by
KRS
224.40-120, the owner or operator of each
solid waste disposal site or facility shall establish, in accordance with
Section 4 of this administrative regulation, financial assurance for closure of
the facility , in an amount equal to the most recent closure cost estimate
prepared in accordance with Section 2 of this administrative regulation. The
owner or operator shall provide continuous coverage for closure until released
from financial assurance requirements. The owner or operator may be released
from financial assurance requirements for closure after a site visit by a
cabinet representative and approval by the cabinet. For contained landfills,
the owner or operator shall submit the certification that closure has been
completed in accordance with the approved closure plan. Following receipt of
the closure certification or completion of the closure inspection, the cabinet
shall:
(1) Notify the owner or operator in
writing that he is no longer required to maintain financial assurance for
closure; or
(2) Provide the owner
or operator with a detailed written statement of any reason to believe that
closure has not been conducted in accordance with the approved closure
plan.
Section 6. Closure
Care . Except as provided by
KRS
224.40-120, the owner or operator of each
solid waste site or facility shall provide for closure care as required under
Section 3 of
401
KAR 48:060, Section 13 of
401 KAR
48:090, and Section 3 of
401 KAR
48:170 for the required period following the cabinet's
acceptance of closure. The owner or operator of a contained landfill may be
released from closure care requirements after the cabinet has received a
certification that the closure care period has been completed in accordance
with the approved plan as required under Section 14 of
401 KAR
48:090. Following receipt of the closure care
certification , the cabinet shall notify the owner or operator with a detailed
written statement of any reason to believe that closure care has not been
conducted in accordance with the approved closure care plan.
Section 7. Performance Bond. Before the
cabinet shall issue a permit, the owner or operator of a solid waste disposal
site or facility that is required to execute a performance bond and post a
financial assurance mechanism or other security pursuant to
KRS
224.40-650 shall complete the performance
bond and financial assurance mechanism in a manner approved by the cabinet. To
satisfy the financial requirement, the owner or operator shall submit a
performance bond (see Section 8 of this administrative regulation) and one (1)
or more of the following five (5) financial mechanisms:
(1) Surety bond as specified in Section 9 of
this administrative regulation;
(2)
Letter of credit as specified in Section 10 of this administrative
regulation;
(3) Escrow agreement as
specified in Section 11 of this administrative regulation;
(4) Trust agreement as specified in Section
12 of this administrative regulation; or
(5) Insurance policy as specified in Section
13 of this administrative regulation.
Section 8. Wording of the Performance Bond. A
performance bond guaranteeing performance of closure and closure care , or
closure individually and closure care individually, shall be executed on DEP
Form 6053-A, entitled "Performance Bond" (November 2016), which is hereby
incorporated by reference. This document may be obtained from the Division of
Waste Management, 300 Sower Boulevard, Frankfort, Kentucky 40601, (502)
564-6716, from 8 a.m. to 4:30 p.m., eastern time, Monday through Friday,
excluding state holidays, or from the Web site at
eec.ky.gov/environmental-protection/waste.
Section 9. Wording of Surety Bond.
(1) A surety bond, as allowed in Sections 4
and 7 of this administrative regulation, shall be executed on DEP Form 6053-L,
entitled "Surety Bond" (November 2016), which is hereby incorporated by
reference. This document may be obtained from the Division of Waste Management,
300 Sower Boulevard, Frankfort, Kentucky 40601, (502) 564-6716, from 8 a.m. to
4:30 p.m., eastern time, Monday through Friday, excluding state holidays, or
from the Web site at eec.ky.gov/environmental-protection/waste.
(2) To be eligible to issue a surety bond, a
surety shall be listed as acceptable in the current edition of U.S. Treasury
Circular 570. The penal sum of the bond shall not exceed the amount of the
surety's underwriting limitation.
Section 10. Wording of the Instrument for a
Letter of Credit. A letter of credit, as allowed by Sections 4 and 7 of this
administrative regulation, shall be executed on DEP Form 6053-B, entitled
"Irrevocable Letter of Credit" (November 2016), which is hereby incorporated by
reference. This document may be obtained from the Division of Waste Management,
300 Sower Boulevard, Frankfort, Kentucky 40601, (502) 564-6716, from 8 a.m. to
4:30 p.m., eastern time, Monday through Friday, excluding state holidays, or
from the Web site at eec.ky.gov/environmental-protection/waste.
Section 11. Wording of the Escrow Agreement.
An escrow agreement, as allowed in Sections 4 and 7 of this administrative
regulation, shall be executed on DEP Form 6053-C, entitled "Escrow Agreement"
(November 2016), which is hereby incorporated by reference. This document may
be obtained from the Division of Waste Management, 300 Sower Boulevard,
Frankfort, Kentucky 40601, (502) 564-6716, from 8 a.m. to 4:30 p.m., eastern
time, Monday through Friday, excluding state holidays, or from the Web site at
eec.ky.gov/environmental-protection/waste. If a certificate of deposit is used
in conjunction with the escrow agreement, it shall be made payable to the
financial institution as the escrow agent.
Section 12. Wording of Trust Fund Agreement.
A trust fund, as allowed by Sections 4 and 7 of this administrative regulation,
shall be executed on DEP Form 6053-K, entitled "Trust Fund Agreement"
(September 1994), which is hereby incorporated by reference. This document may
be obtained from the Division of Waste Management, 300 Sower Boulevard,
Frankfort, Kentucky 40601, (502) 564-6716, from 8 a.m. to 4:30 p.m., eastern
time, Monday through Friday, excluding state holidays, or from the Web site at
eec.ky.gov/environmental-protection/waste.
Section 13. Insurance Policies.
(1) The owner or operator of a solid waste
disposal site or facility may provide an insurance policy to demonstrate the
financial assurance for closure or closure care of the facility . The insurance
policy shall conform with the requirements of this section and shall be
submitted along with DEP Form 6053-D, entitled "Certificate of Insurance for
Closure or Closure Care " (November 2016), which is hereby incorporated by
reference. DEP Form 6053-D may be obtained from the Division of Waste
Management, 300 Sower Boulevard, Frankfort, Kentucky 40601, (502) 564-6716,
from 8 a.m. to 4:30 p.m., eastern time, Monday through Friday, excluding state
holidays, or from the Web site at
eec.ky.gov/environmental-protection/waste.
(2) The insurance policy shall guarantee that
the funds will be available to close the solid waste disposal site or facility
when closure occurs or to provide closure care for the solid waste site or
facility when the closure care period begins, whichever is applicable. The
policy shall guarantee that once closure or closure care begins, whichever is
applicable, the insurer will be responsible for the paying out of funds to the
owner or operator or other person authorized to conduct closure or closure
care , up to an amount equal to the face amount of the policy. The insurance
policy shall be issued for a face amount at least equal to the current closure
cost estimate for closure or the current closure care cost estimate, whichever
is applicable. The term "face value" refers to 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 will be lowered
by the amount of payments.
(3) The
owner or operator , or any other person authorized to conduct closure or closure
care , may receive reimbursements for closure or closure care expenditures.
Requests for reimbursement for expenditures shall be made by submitting
itemized bills to the cabinet. The cabinet shall determine whether the closure
or closure care expenditures are in accordance with the approved closure or
closure care plan, or are otherwise justified, and if so, shall instruct the
insurer to make reimbursements in such amounts as the cabinet specifies in
writing. If the cabinet has reason to believe that the cost of closure or
closure care will be greater than the face amount of the policy, then the
cabinet may withhold reimbursement of such amounts and set forth the reasons
for the withholding in writing.
(4)
An insurance policy shall contain a provision allowing assignment of the policy
to a successor owner or operator . This assignment may be conditional upon
consent of the insurer, provided the consent is not unreasonably
refused.
(5) The insurance 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 cancel the policy by sending notice of the
cancellation by certified mail to the owner or operator and to the cabinet 120
days or more in advance of the cancellation. Cancellation, termination, or
failure to renew shall not occur, and the policy shall remain in force, if on
or before the date of expiration:
(a) Closure
is ordered by the cabinet or a court of competent jurisdiction;
(b) The owner or operator is named as debtor
in a voluntary or involuntary bankruptcy proceeding under Title 11 U.S. Code;
or
(c) The premium is
paid.
(6) If the insurer
cancels the policy, the owner or operator shall obtain by the effective date of
the cancellation, alternate financial assurance as specified in this
administrative regulation.
(7) For
insurance policies providing coverage for closure care , commencing on the date
that liability to make payments pursuant to the policy accrues, the insurer
shall thereafter annually increase the face amount of the policy. This increase
shall be equivalent to the face amount of the policy, less any payments made,
multiplied by an amount equivalent to eighty-five (85) percent of the most
recent investment rate or the equivalent coupon-issued yield announced by the
U.S. Treasury for twenty-six (26)-week treasury securities.
(8) The owner or operator may cancel the
insurance policy only if alternate financial insurance is substituted and
approved by the cabinet, as specified in this administrative regulation, or if
the owner or operator is no longer required to demonstrate financial assurance
in accordance with Section 14 of this administrative regulation and 401 KAR
Chapters 47 and 48.
(9) If the
owner or operator chooses to purchase an insurance policy to cover the cost of
closure or closure care , whichever is applicable, the chosen insurer shall be
licensed to transact the business of insurance, or eligible to provide
insurance as an excess or surplus lines insurer, in one (1) or more states of
the United States of America.
(10)
The owner or operator shall submit a copy of the insurance policy and an
executed DEP Form 6053-D to the cabinet for approval prior to this method of
financial insurance being accepted. The owner or operator shall also execute a
performance bond in accordance with Section 7 of this administrative
regulation.
Section 14.
Release of Financial Assurance Mechanisms and Performance Bonds.
(1) Financial assurance mechanisms and
performance bonds posted to assure proper closure of a solid waste disposal
site or facility shall be released two (2) years after the date that the
cabinet determines the final cover has been constructed and revegetated with
permanent vegetation and all of requirements of the approved closure plan have
been accomplished. The cabinet may withhold a portion of the financial
assurance mechanism in the amount necessary to correct deficiencies in the
solid waste disposal site or facility or its closure system.
(2) Financial assurance mechanisms and
performance bonds posted to assure performance and closure of landfarming
facilities shall be released when the owner or operator demonstrates to the
cabinet's satisfaction that the site has been closed and is in compliance with
401 KAR
47:030,
401
KAR 48:300, and KRS Chapter 224.
(3) Financial assurance mechanisms and
performance bonds posted to assure proper closure care shall be released when
the owner or operator demonstrates to the cabinet's satisfaction that the solid
waste disposal site or facility has completed closure care activities in
conformance with the approved closure care plan under Section 3 of
401
KAR 48:060, Section 14 of
401 KAR
48:090, or Section 3 of
401 KAR
48:170.
Section 15. Financial Assurance for
Publicly-Owned Facilities. The owner or operator of a publicly-owned solid
waste disposal facility shall provide a budget for the permitting,
construction, operation, closure, and closure care of the facility consistent
with the permit application , closure plan, and closure care cost estimates. The
budget shall be revised and submitted annually. When elements of the facility 's
permitting, construction, operation, closure, or closure care are to be
accomplished by contract or agreement, a copy of the contract or agreement
shall be submitted to the cabinet.
Section
16. Financial Assurance for Captive Facilities.
(1) A solid waste disposal site or facility
that is operated exclusively by a solid waste generator on property owned by
the solid waste generator for the purpose of accepting industrial solid waste
exclusively from the solid waste generator may meet the financial assurance
requirements of this administrative regulation by completing a performance bond
and submitting one (1) of the following financial assurance mechanisms: any of
the five (5) mechanisms set forth in Section 7 of this administrative
regulation; a corporate guarantee, in accordance with Section 17 of this
administrative regulation and executed on DEP Form 6053-E; a corporate
financial test, in accordance with Section 17 and executed on DEP form 6053-F;
or any alternative mechanism that meets the criteria of Section 4 of this
administrative regulation and is approved by the cabinet.
(2)
(a) The
following documents are hereby incorporated by reference:
1. DEP Form 6053-E, entitled "Corporate
Guarantee for Closure or Closure Care " (November 2016); and
2. DEP form 6053-F, entitled "Letter from
Chief Financial Officer on Corporate Financial Test" (November 2016).
(b) The documents referenced in
paragraph (a) of this subsection may be obtained from the Division of Waste
Management, 300 Sower Boulevard, Frankfort, Kentucky 40601, (502) 564-6716,
from 8 a.m. to 4:30 p.m., eastern time, Monday through Friday, excluding state
holidays, or from the Web site at
eec.ky.gov/environmental-protection/waste.
Section 17. Financial Test and Corporate
Guarantee.
(1) The owner of a captive facility
as defined in Section 16 of this administrative regulation may satisfy the
requirements of this administrative regulation by demonstrating that he passes
a financial test as specified in this section. To pass this test, the owner or
operator shall meet the criteria set forth in paragraph (a) and either
paragraph (b) or (c) of this subsection:
(a)
Less than fifty (50) percent of the parent corporations' gross revenues are
derived from solid waste disposal operations.
(b) The owner or operator shall have:
1. Satisfaction of at least two (2) of the
following ratios: a ratio of total liabilities to net worth less than two
(2.0); a ratio of the sum of net income plus depreciation, depletion, and
amortization to total liability greater than one-tenth (0.1); or a ratio of
current assets to current liabilities greater than one and five-tenths
(1.5);
2. Net working capital and
tangible net worth each at least six (6) times the sum of the current closure
and current closure care cost estimates;
3. Tangible net worth of at least ten (10)
million dollars; and
4. Assets in
the United States amounting to at least ninety (90) percent of total assets or
at least six (6) times the sum of the current closure and current closure care
cost estimates.
(c) The
owner or operator shall have:
1. A current
rating for his 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 (6) times
the sum of the current closure and current closure care cost
estimates;
3. Tangible net worth of
at least ten (10) million dollars; and
4. Assets located in the United States
amounting to at least ninety (90) percent of total assets or at least six (6)
times the sum of the current closure and current closure care cost
estimates.
(2)
The phrase "current closure and current closure care cost estimates" as used in
subsection (1) of this section refers to the cost estimates required under
Sections 2 and 3 of this administrative regulation and referenced in the letter
from the owner or operator 's chief financial officer.
(3) To demonstrate that requirements of this
test are met, the owner or operator shall submit the following items to the
cabinet:
(a) A letter signed by the owner or
operator 's chief financial officer and worded as specified on DEP Form
6053-F;
(b) A copy of a report by
an independent certified public accountant examining the owner or operator 's
financial statements for the most recently completed fiscal year; and
(c) A special report from the owner 's or
operator 's independent certified public accountant to the owner or operator
stating that:
1. The auditor has compared the
data that the letter from the chief financial officer specified as having been
derived from the independently audited year-end financial statements for the
most recent fiscal year with the amounts in such financial statements;
and
2. In connection with that
procedure, no matters came to his attention that caused him to believe that the
specified data should be adjusted.
(4) After the initial submission of the items
specified in subsection (3) of this section, the owner or operator shall send
updated information to the cabinet not later than ninety (90) days after the
close of each succeeding fiscal year. This information shall include all three
(3) items specified in subsection (3) of this section.
(5) If the owner or operator no longer meets
the requirements of subsection (1) of this section, notice shall be sent to the
cabinet of the intent to establish alternate financial assurance, as specified
in this administrative regulation. The notice shall be sent by certified mail
no later than ninety (90) days after the end of the fiscal year for which the
year-end financial data show that the owner or operator no longer meets the
requirements. The owner or operator shall provide that alternate financial
assurance no later than 120 days after the end of that fiscal year.
(6) The cabinet may, based on a reasonable
belief that the owner or operator no longer meets the requirements of
subsection (1) of this section, require reports of financial condition at any
time from the owner or operator in addition to those specified in subsection
(3) of this section. If the cabinet finds, on the basis of these reports or
other information, that the owner or operator no longer meets the requirements
of subsection (1) of this section, the owner or operator shall provide
alternate financial assurance as specified in this administrative regulation no
later than thirty (30) days after notification of this a finding.
(7) The cabinet may disallow use of this test
on the basis of qualifications in the opinion expressed by the independent
certified public accountant in his report on examination of the owner or
operator 's financial statements. An adverse opinion or disclaimer of opinion
shall be cause for disallowance. The cabinet shall evaluate other
qualifications on an individual basis. The owner or operator shall provide
alternate financial assurance as specified in this administrative regulation no
later than thirty (30) days after notification of the disallowance.
(8) The owner or operator is no longer
required to submit the items specified in subsection (3) of this section when:
(a) The owner or operator substitutes
alternative financial assurance for closure or closure care specified in this
administrative regulation; or
(b)
The cabinet notifies the owner or operator , in accordance with Section 14 of
this administrative regulation, that it is no longer required to maintain
financial assurance for closure or closure care of the solid waste disposal
site or facility .
(9) The
owner or operator may meet the requirements of this section by obtaining a
written guarantee, hereafter referred to as a "corporate guarantee". The
guarantor shall be the parent corporation of the captive facility as defined in
Section 16 of this administrative regulation. The guarantor shall meet the
requirements for owners or operators in subsections (1) to (7) of this section
and shall comply with the terms of DEP Form 6053-E. The corporate guarantee
shall accompany the items sent to the director as specified in subsection (3)
of this section. The terms of the corporate guarantee shall provide that:
(a) If the owner or operator fails to perform
closure or closure care of a facility provided for by the corporate guarantee
in accordance with the closure or closure care plan and permit requirements,
the guarantor shall do so or shall establish a trust fund, in the name of the
owner or operator , as specified in Section 12 of this administrative
regulation;
(b) The corporate
guarantee shall remain in force unless the guarantor sends notice of
cancellation by certified mail to the owner or operator and to the cabinet.
Cancellation may not occur, however, during the 120-day period beginning on the
first day that both the owner or operator and the cabinet have received notice
of cancellation, as evidenced by the certified mail return receipts;
and
(c) If the owner or operator
fails to provide alternate financial assurance as specified in this
administrative regulation, and fails to obtain the written approval of this
alternate financial assurance from the cabinet not later than ninety (90) days
after both the owner or operator and the cabinet have received notice of
cancellation of the corporate guarantee from the guarantor, the guarantor shall
provide the alternate financial assurance in the name of the owner or
operator .
Section
18. Financial Assurance for Corrective Action.
(1) The owner or operator of a facility
required to prepare and submit a groundwater corrective action plan under
401
KAR 48:300 shall prepare a detailed written estimate,
in current dollars, of the cost of hiring a third party to conduct the
corrective action activities in accordance with the corrective action plan
developed under
401
KAR 48:300. The corrective action cost estimate shall
account for the total cost estimate of corrective action activities as
described in the corrective action plan for the entire corrective action
period. The cabinet shall annually adjust this estimate for inflation and other
factors, until the corrective action program is completed in accordance with
401
KAR 48:300 and the approved plan.
(2) The owner or operator shall increase the
corrective action cost estimate in the amount of financial assurance provided
under subsection (1) of this section if changes in the corrective action plan
or conditions at the solid waste disposal site or facility increased the
maximum cost of corrective action.
(3) The owner or operator may request from
the cabinet a reduction in the amount of corrective action cost estimate and
the amount of financial assurance provided under subsection (1) of this section
if the cost estimate exceeds the maximum remaining cost of corrective
action.
(4) The owner or operator
shall provide continuous coverage for corrective action until released from the
financial requirements for corrective action under subsection (7) of this
section.
(5) Within 120 days of
approval of the corrective action plan, the owner or operator shall post a
performance bond executed on DEP Form 6053-G, entitled "Performance Bond for
Corrective Action" (November 2016), which is hereby incorporated by reference.
This document may be obtained from the Division of Waste Management, 300 Sower
Boulevard, Frankfort, Kentucky 40601, (502) 564-6716, from 8 a.m. to 4:30 p.m.,
eastern time, Monday through Friday, excluding state holidays, or from the Web
site at eec.ky.gov/environmental-protection/waste. The owner or operator shall
also post one (1) or a combination of the following financial assurance
mechanisms in the amount set forth in the corrective action cost estimate:
(a) A surety bond executed on DEP Form
6053-M, entitled "Surety Bond for Corrective Action" (November 2016), which is
hereby incorporated by reference. This document may be obtained from the
Division of Waste Management, 300 Sower Boulevard, Frankfort, Kentucky 40601,
(502) 564-6716, from 8 a.m. to 4:30 p.m., eastern time, Monday through Friday,
excluding state holidays, or from the Web site at
eec.ky.gov/environmental-protection/waste;
(b) A trust fund executed on DEP Form 6053-J,
entitled "Trust Agreement for Corrective Action" (November 2016), which is
hereby incorporated by reference. This document may be obtained from the
Division of Waste Management, 300 Sower Boulevard, Frankfort, Kentucky 40601,
(502) 564-6716, from 8 a.m. to 4:30 p.m., eastern time, Monday through Friday,
excluding state holidays, or from the Web site at
eec.ky.gov/environmental-protection/waste;
(c) A letter of credit executed on DEP Form
6053-H, entitled "Irrevocable Letter of Credit for Corrective Action" (November
2016), which is hereby incorporated by reference. This document may be obtained
from the Division of Waste Management, 300 Sower Boulevard, Frankfort, Kentucky
40601, (502) 564-6716, from 8 a.m. to 4:30 p.m., eastern time, Monday through
Friday, excluding state holidays, or from the Web site at
eec.ky.gov/environmental-protection/waste;
(d) An escrow agreement executed on DEP Form
6053-I, entitled "Escrow Agreement for Corrective Action" (November 2016),
which is hereby incorporated by reference. This document may be obtained from
the Division of Waste Management, 300 Sower Boulevard, Frankfort, Kentucky
40601, (502) 564-6716, from 8 a.m. to 4:30 p.m., eastern time, Monday through
Friday, excluding state holidays, or from the Web site at
eec.ky.gov/environmental-protection/waste;
(e) Any other financial assurance mechanism
that complies with subsections (1) to (4) of this section and is approved by
the cabinet.
(6) The
owner or operator may satisfy the requirements of this section by establishing
one (1) or more of the financial mechanisms listed in subsection (5) of this
section.
(7) The financial
insurance mechanisms posted to assure performance of the corrective action
required under
401
KAR 48:300 shall be released when the owner or
operator demonstrates to the cabinet's satisfaction that the groundwater
corrective action plan's remedial measures have been completed and that the
facility is in compliance with
401
KAR 48:300 and KRS Chapter 224.
Section 19. Use of Multiple Financial
Mechanisms at Single Facilities and Single Mechanisms at Multiple Facilities.
(1) The owner or operator may satisfy the
requirements of this administrative regulation by establishing more than one
(1) financial mechanism for each facility . These mechanisms are limited to
trust funds, escrow agreements, surety bonds, letter of credit, and insurance.
The mechanisms shall be as specified in Sections 8 to 12 of this administrative
regulation respectively, except that it is the combination of mechanisms,
rather than each single mechanisms, that shall provide financial assurance for
an amount at least equal to the current closure or closure care cost
estimates.
(2) The owner or
operator may use a financial assurance mechanism specified in this
administrative regulation to meet the requirements of this administrative
regulation for more than one (1) facility . Evidence of financial assurance
submitted to the cabinet shall include a list showing, for each facility , the
name, address, and amount of funds for closure and closure care assurance by
the financial mechanism. The amount of funds available through the financial
mechanism shall be no less than the sum of the funds that would be available if
a separate financial mechanism had been established and maintained for each
facility . In directing funds available through the financial mechanism for
closure or closure care of any of the facilities provided for by the financial
mechanism, the cabinet may direct only the amount of funds designated for the
facility , unless the owner or operator agrees to the use of additional funds
available under the financial mechanism.
Notes
State regulations are updated quarterly; we currently have two versions available. Below is a comparison between our most recent version and the prior quarterly release. More comparison features will be added as we have more versions to compare.
No prior version found.