Section 601.310  Funding for Disposal Site Closure and Stabilization

a)         The applicant shall provide assurances prior to the commencement of operations that sufficient funds will be available to carry out disposal site closure and stabilization.  These assurances shall be based on Department-approved cost estimates reflecting the Department approved plan for disposal site closure and stabilization.  The applicant's cost estimates must take into account total costs that would be incurred if an independent contractor were hired to perform the closure and stabilization work.  The assurances shall establish that there will be sufficient funds for:

1)         decontamination or dismantlement of land disposal facility structures; and

2)         closure and stabilization of the disposal site so that following transfer of custody of the disposal site to the State or Federal government, the need for ongoing active maintenance is eliminated to the extent practicable and only minor custodial care, surveillance, and monitoring are required.

b)         In order to avoid unnecessary duplication and expense, the Department will accept financial sureties that have been consolidated with earmarked financial or surety arrangements established to meet requirements of other Federal or State agencies and/or local governing bodies for such decontamination, closure and stabilization.  The Department will accept these arrangements only if the Department considers them to be adequate to satisfy these requirements and that the portion of the surety which covers the closure of the disposal site is clearly identified and committed for use in accomplishing these activities.

c)         The licensee's surety mechanism will be submitted annually for review by the Department to assure that sufficient funds are available for completion of the closure plan, assuming that the work has to be performed by an independent contractor.

d)         The amount of surety liability will be considered in accordance with the projected cost of future closure and stabilization.  Factors affecting closure and stabilization cost estimates include:  inflation; increases in the amount of disturbed land; changes in engineering plans; closure and stabilization that has already been accomplished; and any other conditions affecting costs.  This will yield a surety that is at least sufficient at all times to cover the costs of closure of the disposal units that are expected to be used before the next license renewal.

e)         The term of the surety mechanism shall be open ended unless it can be demonstrated that another arrangement would provide an equivalent level of assurance.  This assurance could be provided with a surety mechanism which is written for a specified period of time (e.g., five (5) years) yet which shall be automatically renewed unless the party who issues the surety notifies the Department and the beneficiary (the State) and the principal (the licensee) not less than 90 days prior to the renewal date of its intention not to renew.  In such a situation the licensee must submit a replacement surety within 30 days after notification of cancellation.  If the licensee fails to provide a replacement surety acceptable to the Department, the State may collect on the original surety.

f)          Proof of forfeiture shall not be necessary to collect the surety so that in the event the licensee cannot provide an acceptable replacement surety within the required time, the surety shall be automatically collected prior to its expiration.  The conditions described above would have to be clearly stated on any surety instrument which is not open ended, and shall be agreed to by all parties.  Liability under the surety mechanism shall remain in effect until the closure and stabilization program has been completed and approved by the Department and the license has been transferred to the site owner.

g)         Financial surety arrangements generally acceptable to the Department include:  surety bonds, cash deposits, certificates of deposit, deposits of government securities, escrow accounts, irrevocable letters or lines of credit, trust funds, and combinations of the above or such other types of arrangements as may be approved by the Department.  However, self-insurance, or any arrangement which essentially constitutes pledging the assets of the licensee, will not satisfy the surety requirement for private sector applicants since this provides no additional assurance other than that which already exists through license requirements in accordance with Sections 300 and 310.