Section 19.051 - Financial Assurance Requirements(1)Applicability. The provisions of 310 CMR 19.051 apply to:(b) other facilities which the Department determines on a facility specific base should provide such financial assurance.(2)Financial Responsibility for Closure, Post-Closure and Corrective Action.(a) The owner or operator of a facility identified in 310 CMR 19.051(1) shall establish or obtain, and continuously maintain, financial assurance that is adequate to assure the Department that the owner or operator is at all times financially capable of complying with the provisions of 310 CMR 19.00 governing the closure of the facility and its post-closure maintenance. An owner or operator of a facility shall meet this financial assurance obligation by using any of the methods authorized in 310 CMR 19.051 (an approved financial assurance mechanism) and shall file with the Department and maintain in current form approved documents constituting or evidencing compliance with this obligation. Where the Department establishes a form for a financial assurance instrument the instruments submitted must be identical to the approved form. Where the Department does not establish a form the applicant shall submit a draft of the proposed financial assurance mechanism for Department approval.(b) An approved financial assurance mechanism shall be in full effect on or before the date that an owner or operator of a facility receives an authorization to operate under 310 CMR 19.042 and shall remain in full force and effect until the owner or operator obtains a release from this obligation pursuant to the provisions of 310 CMR 19.051(11). The Department shall not issue or renew an authorization to operate unless an owner or operator first complies with the provisions of 310 CMR 19051 and may, pursuant to 310 CMR 19.081, revoke an approval, permit or authorization previously issued or take other appropriate enforcement should an owner or operator fail to remain in compliance with the provisions of 310 CMR 19.051.(c) The initial and revised amounts of an approved financial assurance mechanism shall be no less than the estimate of the cost of closure and post-closure maintenance of the facility submitted to and approved by the Department according to the provisions of 310 CMR 19.051(5). No financial assurance mechanism shall be terminated by an owner or operator without the approval of the Department.(d) An approved financial assurance mechanism shall be structured so that the Department shall be a party to said mechanism to the extent that it shall have the right to obtain, without the consent of the owner or operator, exclusive direction and control over the transfer, use and disbursement of the secured funds or performance benefits to perform approved closure and post-closure maintenance or secure reimbursement for costs incurred for so performing upon its determination that an owner or operator has failed in whole or in part to carry out closure or post-closure requirements in accordance with 310 CMR 19.000 or any plan or permit conditions or orders issued hereunder.(e) Effective April 9, 1994, the Department may order the owner or operator of a municipal solid waste landfill required to perform corrective action under 310 CMR 19.151 to establish or obtain, no later than 120 days after the corrective action remedy has been selected, and continuously maintain financial assurance which is adequate to assure the Department that the owner or operator is at all times capable of complying with the provisions of 310 CMR 19.000 governing the performance of corrective actions. Except as may be expressly provided herein or in an order of the Department, the provisions of 310 CMR 19.000 governing the estimation, establishment, revision, release and approved mechanisms of closure and post closure financial assurance shall also apply to corrective action financial assurance.(3)Transfer of Permit, Authorization, or Other Interest. No person may transfer or obtain by any form of transfer any permit, authorization, or interest in the ownership, possession, or operation of a facility without first complying with the applicable provisions of 310 CMR 19.051.(4)Demonstration of Compliance with Financial Assurance Requirements. (a)Existing Landfills. An owner or operator of an existing landfill shall: 1. as a condition of continued operation under a prior plan approval or approval of an application for a permit, modification or authorization to operate provide to the Department documents constituting or evidencing an approved financial assurance mechanism adequate to defray the cost of closure of any portion of the facility which has received waste but has not been closed in accordance with an approved plan as well as the post-closure maintenance of any such area and the closure and post-closure maintenance costs of the area currently approved to accept waste; and2. as a pre-condition to obtaining subsequent authorization to operate or expansion modifications provide the Department with documents constituting or evidencing an approved financial assurance mechanism adequate to defray the cost of the closure and post-closure maintenance of each subsequent operating phase.3.The Department may allow an existing facility owner or operator a conditional grace period to meet the financial assurance requirements described in 310 CMR 19.051(4)(a)1. for inactive areas of the facility provided the owner or operator demonstrates that during the time the applicant owned or operated the facility a closure performance bond or another approved financial assurance mechanism in accordance with 310 CMR 19.25(4): Completion of Landfill (1971 Landfill Regulations) was maintained, and that an approved closure and post-closure trust fund or Enterprise fund is established and is fully funded over a pay-in period which is not greater than the approved life of the current operating phase of the facility minus one year or the life of the facility minus one year if it does not operate in phases. For the purpose of 310 CMR 19.051 an inactive area is an area on which waste has been disposed, which has not closed in accordance with Department approved plans and which has not been approved for further waste disposal.4.A private owner or operator of an existing landfill, shall make the submission described in 310 CMR 19.051(4)(a) upon the earlier of filing an application for a solid waste management facility permit in accordance with the schedule set forth at 310 CMR 19.020(3), an application to operate or an application for a permit or modification to expand facility capacity.5.A public owner or operator of an existing landfill shall make the submissions described in 310 CMR 19.051(4)(a) upon written notice or order from the Department.6.In lieu of submitting all or part of the financial assurance mechanism the owner or operator may, no later than the dates set forth at 310 CMR 19.051(4)(a)4. or 5. submit plans for final closure of the inactive portions of the facility and complete closure of said areas in accordance with approved plans on an expedited schedule to be determined by the Department. (b)New Landfills. An applicant for a permit to construct and operate a landfill shall:1.in addition to the submission required by 310 CMR 19.030, provide to the Department documents constituting or evidencing an approved financial assurance mechanism adequate to defray the cost of closure and post-closure maintenance of the first operating phase of the proposed landfill and, if additional costs are involved, of the entire facility; and2.as a pre-condition to obtaining an authorization to operate under 310 CMR 19.042 for each subsequent phase, provide to the Department documents constituting or evidencing an approved financial assurance mechanism adequate to defray the cost of closure and post-closure maintenance of each subsequent operating phase of the proposed landfill and, if additional costs are involved, of the entire facility.(c)Other Solid Waste Management Facilities. A person seeking authorization to operate a solid waste management facility other than a landfill shall, where required by the Department and as a pre-condition to obtaining an authorization to operate under 310 CMR 19.042, provide to the Department documents constituting or evidencing approved financial assurance mechanisms adequate to defray the cost of closure and post-closure maintenance of the facility.(5)Estimation of Costs for Closure and Post-Closure Maintenance. (a) An owner or operator of a proposed solid waste management facility required to provide an approved financial assurance mechanism shall prepare and submit to the Department, as a part of the permit application required under 310 CMR 19.030 a written estimate, unadjusted for time, inflation, return on invested funds, or other purely financial factors, of the cost of a third party closing and performing post-closure maintenance of the facility. This estimate shall be based upon the closure and post-closure plans for the facility required under 310 CMR 19.000 and equal the cost of closing the facility and providing post-closure maintenance at that point in the facility's active life when the manner and extent of its operations would make closure and post-closure most expensive.(b) An owner or operator of an existing facility required to provide an approved financial assurance mechanism shall prepare and submit to the Department, as a part of the permit application required under 310 CMR 19.030(4), an application to operate or application for a modification to expand capacity, a written estimate, unadjusted for time, inflation, return on invested funds, or other purely financial factors, of the cost of closing and providing post-closure maintenance of those portions of the facility in which waste has been disposed and not closed in accordance with an approved plan, the area in which it is currently authorized to operate and, if appropriate, the proposed expansion area. This estimate shall be based upon the closure and post-closure plans for the facility required under 310 CMR 19.000 and equal the cost of closing the facility and providing post-closure maintenance at that point in the facility's active life when the manner and extent of its operations would make closure and post-closure most expensive.(c) A written estimate which conforms to the requirements set forth in 310 CMR 19.051(5)(a) or (b) shall be submitted with each application for authorization to operate in a subsequent operating phase or application for an expansion of capacity.(d) Where a facility is operated or is to be operated in phases an owner or operator may allocate proportions of the estimate of the cost of closure and post-closure maintenance to each such phase for the purpose of complying with the requirements of 310 CMR 19.051(4)(a) or (b). Such an allocation may not result in the under-estimation of the cost of closure and post-closure of any such phase or of the entire facility at that point in the facility's active life when the manner and extent of its operations would make closure and post-closure maintenance most expensive. Where the facility is to be developed in phases the estimate shall include in the estimate the cost of integrating the closed phases into prospective phases.(e) The Department shall review the estimate submitted and notify the applicant if it determines the estimate to be adequate. The Department may determine upon review of an estimate that its amount is inadequate to defray either or both the cost of closure or post-closure maintenance of the facility. Upon such a determination, the Department may require the applicant to submit a revised estimate or it may adjust the estimate and use the adjusted estimated cost rather than the estimated cost to establish the minimum amount of the financial assurance mechanism. If the Department determines to adjust the estimate and it increases the amount of the estimate by 10% or more, the provisions of 310 CMR 19.051(7) apply to the estimate as if it were a revised estimate determined pursuant to the provisions of that sub-section.(f) An owner or operator of a facility may propose that the estimate of the cost of closing the facility or of providing post-closure maintenance prepared and submitted to the Department in accordance with the provisions of 310 CMR 19.051(5)(a), (b) or (c) be adjusted by the consideration or application of such financial factors as may reasonably affect the determination of the amount of money required to assure the Department that the owner or operator is at all times financially capable of complying with the provisions of 310 CMR 19.000 governing the closure of the facility and its post-closure maintenance. If the Department determines to adjust the estimated cost, the adjusted estimated cost, rather than the estimated cost shall be the minimum amount of the financial assurance mechanism.(g) All submitted estimates shall be certified by a Massachusetts registered professional engineer except as otherwise approved by the Department.(6)Revision of Estimates of Closure and Post-Closure Costs. (a) An owner or operator of a facility shall revise the estimate of the cost of closure and post-closure maintenance submitted to the Department pursuant to 310 CMR 19.051(5) every year and every second year shall submit the revised estimate in written form, accompanied by a detailed explanation of its method of calculation, to the Department on or before June 1 of the year to which the revised estimate relates.(b) Unless otherwise approved by the Department, a revision of the estimate of the cost of closure and post-closure maintenance of a facility shall be computed using the following formula: Revised Present Estimate of Cost: Cp = Co x Ip/Io + CoC where:
Cp = (present) revised cost estimate
Co = (original) cost estimate as filed pursuant to 310 CMR 19.051(5)
Ip = (present) index value
Io = (original) index value at time of filing pursuant to 310 CMR 19.051(5) and where the index is the so-called "Construction Cost Index" published in the periodical Engineering News Record.
CoC = Change in compliance costs as a result of changes in site conditions, changes in law, regulations, permit conditions, judicial or administrative orders or other significant changes.
(c) An owner or operator of a facility shall, in addition to submitting to the Department the adjustment pursuant to 310 CMR 19.051(6)(a), revise the estimate of the cost of closure and post-closure maintenance of a facility and submit such revised estimate to the Department within 30 days of the date that the Department approves a modification of the facility permit pursuant to 310 CMR 19.039 or 310 CMR 19.040 which would affect said closure or maintenance costs.(d) An owner or operator of a facility shall maintain records of the calculation and determination of the original and all revisions of the estimate of the cost of closure and post-closure maintenance of a solid waste management facility until such time as the owner or operator obtains a release from the obligation imposed by 310 CMR 19.051(2).(7)Increase in the Amount of Financial Assurance. (a) An owner or operator of a facility shall, upon determining a revised estimate of the cost of closure or post-closure maintenance of the facility exceeds by 10% the amount of the applicable approved financial assurance mechanism, promptly notify the Department of the determination and either: 1.increase the amount of the applicable financial assurance mechanism to an amount equal to the full amount of the revised estimate of the cost of closure or post-closure maintenance of the facility; or2.secure and maintain in compliance with the requirements of 310 CMR 19.051 an additional approved financial assurance mechanism in an amount equal to the difference between the amount of the existing applicable approved financial assurance mechanism and the full amount of the revised estimate of the cost of closure or post-closure maintenance of the facility. An owner or operator of a facility shall file with the Department and maintain in current form those documents constituting or evidencing compliance with this requirement within 60 days of determining a revised estimate of the cost of closure or post-closure maintenance of the facility that exceeds by 10% the amount of the applicable approved financial assurance mechanism. In the event that the revised estimate is a biennial estimate determined pursuant to the provisions of 310 CMR 19.051(6), an owner or operator shall make such filing no later than June 1 of the year to which the revised estimate applies.
(b) The Department may review the estimate submitted and notify the applicant if it determines the estimate to be adequate. The Department may determine upon review of an estimate that its amount is inadequate to defray either or both the cost of closure or post-closure maintenance of the facility. Upon such a determination, the Department may require the applicant to submit a revised estimate or it may adjust the estimate and use the adjusted estimated cost rather than the estimated cost to establish the minimum amount of the financial assurance mechanism.(8)Decrease in the Amount of Financial Assurance. An owner or operator of a solid waste management facility may, upon determining a revised estimate of the cost of closure or post-closure maintenance of the facility, decrease the amount of the applicable financial assurance mechanism to an amount equal to the full amount of the revised estimate of the cost of closure or post-closure maintenance of the facility, having first requested and received the written approval of the Department. The Department shall approve the decrease upon its determination that the proposed decreased amount of the financial assurance mechanisms equals or exceeds the necessary cost of closure or post-closure maintenance.(9)Procedure Governing the Use of Assured Funds. (a) The Department shall notify the owner, operator and persons who are parties to the financial assurance mechanism whenever the Department has determined that the owner or operator is not in compliance due to a failure to close or conduct post-closure maintenance in accordance with the applicable regulations, permits or orders. No less than 21 days after such notification the Department may exercise its rights under the financial assurance mechanism to secure control over and direct the transfer, use and disbursement of the security for the purpose of effecting closure and post-closure maintenance including but not limited to: 1.directing the holder of the financial assurance mechanism to perform actions intended to bring the facility into compliance; and2.directing the holder of the financial assurance mechanism to reimburse the Department for actions it or its agents has performed to bring the facility into compliance.(b) After beginning final closure, an owner or operator or any other person authorized by the Department to perform closure may request reimbursement for closure expenditures by submitting itemized bills or other adequate proof of the performance of the work in accordance with the approved closure or post-closure plans. After making a determination that the work has been performed in compliance with the plan(s) the Department may direct the holder of the funds under the financial assurance mechanism to reimburse the party performing the work or release a proportionate amount of the secured funds. The Department may withhold reimbursement or release of such amounts it deems prudent until it determines, in accordance with 310 CMR 19.051(11) that the owner or operator is not required to maintain financial assurance for closure or post-closure.(10)Cancellation or Termination of an Approved Financial Assurance Mechanism. An owner or operator of a facility may apply to the Department for reduction, cancellation or termination of an outstanding financial assurance mechanism established pursuant to 310 CMR 19.051(2). The application shall detail one of the following reasons in support of the application: the substitution of an alternative assurance mechanism, transfer of an interest in the facility in accordance with 310 CMR 19.044, an approved decrease in the amount of required financial assurance in accordance with 310 CMR 19.051(8), activities which have taken place under 310 CMR 19.051(9)(b) or the Department's termination of the financial assurance obligation by granting a release to the owner or operator pursuant to the provisions of 310 CMR 19.051(11).(11)Release from Financial Assurance Requirements. (a)Closure. The owner or operator of a facility shall be released in whole or in part from the requirement to provide financial assurance for closure upon receiving written notification from the Department that closure has been completed in accordance with the closure plan and permit conditions and in compliance with 310 CMR 19.000. An owner or operator of a facility may subsequently submit to the Department such documents as may be necessary to cancel or terminate the approved financial assurance mechanism that the owner or operator is no longer obligated to maintain.(b)Post-Closure. The owner or operator of a facility shall be released in whole or in part from the obligation to provide and maintain a financial assurance mechanism for post-closure maintenance of the facility upon receiving written notification from the Department that the post-closure period has expired and that post-closure maintenance of the facility has been completed in compliance with 310 CMR 19.000. An owner or operator of a facility may subsequently submit to the Department such documents as may be necessary to cancel or terminate a financial assurance mechanism that the owner or operator is no longer obligated to maintain.(12)Approved Financial Assurance Mechanisms. The owner or operator of a facility may meet the obligation to maintain financial assurance that is adequate to assure the Department that the owner or operator is at all times financially capable of complying with the provisions of 310 CMR 19.000 governing the closure of the facility and its post-closure maintenance through the use of one or more of the approved financial assurance mechanisms specified in 310 CMR 19.051(12). (a)Closure, Post-Closure or Corrective Action Trust Fund. 1.An owner or operator may satisfy the requirements of 310 CMR 19.051(2) by establishing a closure or post-closure trust fund that conforms to 310 CMR 19.051(12)(a) and by sending an originally signed duplicate of the trust agreement to the Department within the applicable time period set forth at 310 CMR 19.051(4).2.The trustee shall be a bank or other financial institution that has the authority to act as a trustee and whose trust operations are regulated and examined by the Massachusetts Commissioner of Banking.3.The schedule of assets in the trust agreement shall be updated within 60 days after a change in the amount of the current closure or post-closure maintenance estimate which is the subject of the trust agreement.4.Payments into the trust fund shall be made as follows:a.The first payment shall be made prior to obtaining an authorization to operate as set forth in 310 CMR 19.042. The owner or operator shall submit a receipt from the trustee for this payment to the Department as evidence of payment.b.The private owner or operator of a facility shall make a first payment in an amount equal to the approved closure and post-closure estimate for the facility submitted pursuant to 310 CMR 19.051(5). Payments to the trust as a condition of approval of subsequent permits or authorizations to operate shall be made in amount(s) equal to the approved closure and post-closure maintenance estimates submitted pursuant to 310 CMR 19.051(5).c.A municipal owner of a facility shall make a first payment which shall at least be equal to either the total current closure and post-closure maintenance cost or the current closure or post-closure maintenance cost estimate, divided by the number of years in the pay-in period. The pay-in period may not be greater than the authorized operating life of the current phase minus one year. Payments to the trust as a condition to approval of subsequent authorizations to operate shall be made in amount(s) equal to the approved closure and post-closure maintenance estimates submitted pursuant to 310 CMR 19.051(5).d.Subsequent payments by a municipal owner shall be made no later than 30 days after each anniversary date of the first payment. The amount of each subsequent payment is calculated by the formula: Click to view image
where:
CE = current closure or post-closure cost estimate
CV = current value of the trust fund
Y = number of years remaining in the pay-in period.
5.For an owner or operator making payments into a trust fund used to demonstrate financial assurance for corrective action, the first payment into the trust fund shall be at least equal to one half of the current cost estimate for corrective action, divided by the number of years in the corrective action program in case of corrective action for known releases. This latter period of time is known as the pay-in-period. The amount of subsequent payments shall be determined by the following formula: Next payment = (RB-CV) / Y
where RB is the most recent estimate of the required trust fund balance for corrective action [i.e. total costs that will be incurred during the second half of the corrective action period], CV is the current value of the trust fund, and Y is number of years remaining on the pay-in-period.
6.Notwithstanding the provisions of 310 CMR 19.051(2)(d), a trust fund for a facility owned by a municipality shall be an approved financial assurance mechanism without providing to the Department the right to obtain exclusive direction and control over the trust fund assets provided that the documents establishing the trust require that the funds paid into the trust cannot be withdrawn, transferred, encumbered or disbursed for any purpose other than to meet Department approved closure and post-closure obligations without the prior written consent of the Department.7.If the owner or operator establishes a trust fund after having used one or more alternate mechanisms specified in 310 CMR 19.051(12) the owner's or operator's first payment must equal the amount that the trust fund would contain if the trust fund had been established initially and payments made in compliance with 310 CMR 19.051(12)(a). (b)Enterprise Fund1.A municipal owner may satisfy the requirements of 310 CMR 19.051(2) by establishing a separate account which qualifies as an "Enterprise Fund" pursuant to M.G.L. c. 44, § 53F½ for the purpose of reserving funds to meet its obligation to conduct approved closure and post-closure maintenance and by sending an originally signed duplicate of the documents establishing the fund to the Department within the applicable time period set forth at 310 CMR 19.051(4).2.Payments shall be made into the reserve fund in accordance with procedure set forth at 310 CMR 19.051(12)(a)4.c. and d.3.Notwithstanding the provisions of 310 CMR 19.051(2)(d), an Enterprise Fund Account shall be an approved financial assurance mechanism without providing to the Department the right to obtain exclusive control over the Fund provided that the documents establishing the account require that the funds paid into the closure reserve account cannot be withdrawn, transferred, encumbered or disbursed for any purpose other than to meet Department approved closure and post-closure obligations without the prior written consent of the Department.(c)Surety Bond Guaranteeing Payment.1.An owner or operator may satisfy the requirements of 310 CMR 19.051(2) by obtaining and filing a surety bond that conforms to 310 CMR 19.051(12)(c) and by sending an originally signed duplicate of the bond to the Department within the applicable time period set forth at 310 CMR 19.051(4).2.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 United States Department of the Treasury, or licensed, approved or authorized by the Massachusetts Division of Insurance to secure such risks.3.An owner or operator who uses a surety bond to satisfy the requirements of 310 CMR 19.051 shall also establish a standby trust fund. Under the terms of the surety bond, all payments made thereunder are 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 in 310 CMR 19.051(12)(a), except that: a.an originally signed duplicate of the trust agreement must be submitted to the Department with the surety bond; andb.until the standby trust fund is funded pursuant to the requirements of 310 CMR 19.051, the following are not required:i.payment into the trust fund as specified in 310 CMR 19.051(12)(a);ii.annual valuations as required by the trust agreement; andiii.notices of nonpayment as may be required by the trust agreement.4.The surety bond shall provide the owner or operator shall be in default if the responsible party: a.fails to fund the standby trust fund in an amount equal to the penal sum of the bond before the beginning of closure of the applicable phase; orb.fails to fund the standby trust fund in an amount equal to the penal sum within 21 days after the Department or a court of competent jurisdiction issues an order to begin closure; orc.fails to provide an alternate financial assurance mechanism as specified in 310 CMR 19.051(12), and obtain the Department's written approval of the financial assurance mechanism provided, within 90 days after receipt by the owner or operator of a notice of cancellation of the surety 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 is in default as defined by the bond.6.The penal sum of the bond shall equal the current approved closure and post-closure cost estimate.7.Under the terms of the bond, the surety may cancel the bond by sending written notice of cancellation by certified mail to the owner or operator and to the Department. Cancellation may not take effect, however, until at least 120 days after the date of receipt of the notice of cancellation by both the owner or operator and the Department, as shown by the later return receipt.(d)Surety Bond Guaranteeing Performance. 1.An owner or operator may satisfy the requirements of 310 CMR 19.051(2) by obtaining and filing a surety bond that conforms to 310 CMR 19.051(12)(d) and by sending an originally signed duplicate of the bond to the Department within the applicable time period set forth at 310 CMR 19.051(4).2.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 United States Department of the Treasury, or licensed, approved or authorized by the Massachusetts Division of Insurance to secure such risks.3.The Department may require a surety to establish a standby trust under the terms and conditions set forth at 310 CMR 19.051(12)(c)3.4.The surety bond shall provide the owner or operator shall be in default if the responsible party: a.fails to perform closure in accordance with the closure/post-closure plan and other requirements of the permit for the facility whenever required to do so, and perform post-closure maintenance in accordance with the closure/post-closure plan and other requirements of the permit for the facility; orb.fails to provide an alternate financial assurance mechanism pursuant to 310 CMR 19.051(12), and obtain the Department's written approval of the financial assurance mechanism provided, within 90 days after receipt by the owner or operator of a notice of cancellation of the surety 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 is in default as defined by the bond. When the owner or operator does not perform closure or post-closure maintenance in accordance with approved closure/post-closure plans or applicable permit conditions, the surety shall become liable on the bond obligation to perform closure and post-closure maintenance as guaranteed by the bond and deposit the amount of the penal sum of the bond into the standby trust if one is required to be established.6.The penal sum of the bond must equal the current closure and post-closure maintenance cost estimates.7.Under the terms of the bond, the surety may cancel the bond by sending written notice of cancellation by certified mail to the owner or operator and to the Department. Cancellation may not take effect, however, until at least 120 days after the date of receipt of the notice of cancellation by both the owner or operator and the Department, as shown by later return receipt.8.The surety need not be liable for deficiencies in the performance of closure by the owner or operator for which the Department has released the owner or operator from the requirements of closure and post-closure maintenance,or portions thereof, pursuant to 310 CMR 19.051(11).(e)Closure and Post-Closure Insurance. 1.An owner or operator may satisfy the requirements of 310 CMR 19.051 by obtaining closure insurance that conforms to the requirements of 310 CMR 19.051(12)(e) and by submitting a certificate of such insurance to the Department within the applicable time period set forth at 310 CMR 19.051(4). The Department may require submission of a duplicate of the complete insurance policy.2.At minimum, the insurer shall be licensed to transact the business of insurance or authorized or approved to provide insurance as an excess or surplus lines insurer in the Commonwealth of Massachusetts.3.The insurance policy shall be issued for a face amount at least equal to the current approved closure and post-closure cost estimate. The term "face amount" means the total amount the insurer is obligated to pay pursuant to the policy. Actual payments by the insurer shall not change the face amount, although the insurer's future liability may be lowered by the amount of such payments.4.The insurance policy shall guarantee that funds in an amount equal to the face amount of the insurance policy shall be available to close a phase or facility whenever final closure of a phase or facility occurs and to conduct post-closure maintenance. The policy shall also guarantee that once final closure or post-closure maintenance begins, the insurer shall be responsible for paying out funds up to an amount equal to the face amount of the insurance policy, upon the direction of the Department, to such persons as the Department may specify in writing.5.The insurance policy shall provide that the insurer may not cancel, terminate, or fail to renew the closure or post-closure maintenance insurance policy except for the insured's failure to pay the premium or the insurer's refusal to write solid waste management facility closure or post-closure maintenance insurance coverage in Massachusetts. 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 closure insurance policy except in the event of a refusal to write such coverage. If there is a failure to pay the premium or a refusal to write such coverage, the insurer may elect to cancel, terminate, or fail to renew the closure or post-closure maintenance insurance policy by sending notice by certified mail to the owner or operator to the Department. No cancellation shall occur until at least 120 days after the date of receipt of the notice of cancellation by both the owner or operator and the Department, as shown by later return receipt. No cancellation, termination, or failure to renew may occur, and the closure insurance 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;b.the permit is suspended or revoked and application for a new permit or authorization is denied;c.closure is ordered by the Department or a court of competent jurisdiction; ord.the owner or operator is named a debtor in a voluntary or involuntary bankruptcy proceeding; ore.the premium due is paid prior to the effective date of cancellation if the cancellation was based on failure to pay the premium; orf.the insurer continues to write solid waste management facility closure or post-closure maintenance coverage in Massachusetts if the cancellation was based on refusal to write said coverage.6.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 that such consent shall not be unreasonably withheld.7.For insurance policies providing coverage for post-closure care, commencing on the date that liability to make payments pursuant to the policy accrues, the insurer will thereafter annually increase the face amount of the policy. Such increase shall be equivalent to the face amount of the policy, less any payments made, multiplied by an amount equivalent to 85% of the most recent investment rate of the equivalent coupon-issue yield announced by the U.S. Treasury for 26 week Treasury certificates.(f)Closure and post-closure letter of credit. 1.An owner or operator may satisfy the requirement of 310 CMR 19.051(2) by obtaining an irrevocable standby letter of credit that conforms to the requirements of 310 CMR 19.051(12)(f) and by submitting an executed copy of the letter of credit to the Department within the applicable time period set forth at 310 CMR 19.051(4). The institution issuing the letter of credit shall be an entity which has the authority to issue letter of credit and whose letter-of-credit operations are regulated and examined by the Massachusetts Commissioner of Banking or other institution approved by the Department.2.An owner or operator who uses a letter of credit shall also establish a standby trust fund. Under the terms of the letter of credit, all payments made thereunder shall be deposited by the issuing institution directly in the standby trust fund in accordance with instruction from the Department. The standby trust shall meet the requirements of 310 CMR 19.051(12)(a) except that: a.an originally signed duplicate of the trust agreement shall be submitted to the Department with the letter of credit; andb.until the standby trust is funded pursuant to the requirements of 310 CMR 19.051 the following are not required:i.payment into the trust fund as specified in 310 CMR 19.051(12)(a);ii.annual valuations as required by the trust agreement; andiii.notices of nonpayment as may be required by the trust agreement.3.The letter of credit shall be accompanied by a letter from the owner or operator which shall state: a.the letter of credit number;b.the name of the issuing institution;c.the date of issuance of the letter of credit;d.the name and address of the facility; ande.the amount of funds assured by the letter of credit for closure of the facility.4.The letter of credit shall be irrevocable and shall be issued for a period at least equal to the sum of one year plus: a.the estimated period of time required to complete closure of any unclosed inactive areas and the current operating phase; orb.the term of the permit if the facility is not operated in approved phases. The letter of credit shall provide that the expiration will be automatically extended for a period of at least one year unless, not later than 120 days before the current expiration date pursuant to the terms of the letter of credit, the issuing institution notifies both the owner or operator and the Department by certified mail of the decision not to extend the expiration date. Under the terms of the letter of credit, the 120 days shall not begin before the date when both the owner and operator and the Department have received notice, as shown by the later return receipt.
5.The letter of credit shall be issued in an amount at least equal to the current closure and post-closure cost estimate except as provided in 310 CMR 19.051(8).(13)Use of Multiple Financial Assurance Mechanisms. An owner or operator may with Department approval satisfy the requirements of 310 CMR 19.051, by establishing more than one financial assurance mechanism per Massachusetts facility. These financial assurance mechanisms shall be limited to the mechanisms set forth at 310 CMR 19.051(12). These mechanisms shall be in compliance with 310 CMR 19.051(12) except that the combination of mechanisms, rather than each mechanism, which provide for an amount equal to the required financial assurance. If an owner or operator uses a trust fund in combination with any other financial assurance mechanism, it shall use the trust fund for those financial assurance mechanisms for which the establishment of a trust fund is required. A single standby trust fund may be used for two or more mechanisms. The Department may use any or all of the mechanisms to provide for closure of the facility.(14)Use of a Financial Assurance Mechanism for Multiple Facilities. (a) An owner or operator may use a financial assurance mechanism specified in 310 CMR 19.051 to meet the requirements of said section for more than one Massachusetts facility.(b) The amount of funds available through the financial assurance mechanism shall be no less than the sum of funds that would be available if a separate mechanism has been established and maintained for each facility. In directing funds available through the financial assurance mechanism for closure or post-closure maintenance of any facility 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.