5 Colo. Code Regs. § 1002-66.6
Current through Register Vol. 47, No. 11, June 10, 2024
Section 5 CCR 1002-66.6 - SURETY BOND CRITERIA (for guaranteeing performance or payment)A permittee or applicant may satisfy the requirements of subsection 61.13 of Regulation No. 61 by submitting to the Program a surety bond that conforms to the requirements of section 66.6 . A surety bond can be for the purpose of either guaranteeing full closure of a facility(ies) or guaranteeing payment of closure cost funds into a standby trust fund. The surety company issuing the bond and any co-sureties must have the authority to issue a surety bond and must be regulated and examined by a federal or state agency. The surety company must be conducting business in Colorado and issue the bond subject to the applicable laws and jurisdiction of the state of Colorado. If co-sureties are being used, the original bond must reflect that fact.
(1) If the surety is using reinsurance, a treasury reinsurance form must be submitted with the bond to the Division or within forty-five (45) days thereafter. (2) The surety bond must be effective as of the date of issuance.(3) The wording of the surety bond must be identical to the wording for either a payment guarantee surety bond in Appendix D or a performance guarantee bond in Appendix E, as applicable.(4) A permittee or applicant who uses a surety bond to satisfy the requirements of this section must also establish a standby trust fund, unless there has been an alternate instrument established by the State of Colorado to directly receive monies, or the applicant or permittee has previously established a trust fund under section 66.5 . Under the terms of the bond, all payments made there under will be deposited by the surety directly into the standby trust fund, or other trust fund, in accordance with the instructions from the Division. This standby trust fund must meet the requirements of the trust fund, section 66.5 , except the following provisions are not required:(a) Updating of Schedule A of the trust agreement to show current closure costs; and,(b) Annual valuations as required by the trust agreement; and(c) Notices of nonpayment as required by the trust agreement.(5) Where a standby trust fund is established in accordance with subsection 66.6 , the wording of the standby trust must be identical to the wording specified in Appendix C and the standby trust must be submitted to the Division concurrently with the surety bond.(6) The bond must guarantee that the permittee will, as applicable:(a) For payment guarantee bonds- fund the standby trust fund in an amount equal to the penal sum of the bond before the beginning of final closure of the operation;(b) For performance guarantee bonds- faithfully perform closure, post-closure, and corrective actions for each facility for which this bond guarantees closure costs, in accordance with the approved financial assurance plan;(c) For payment guarantee bonds- fund the standby trust fund in an amount equal to the penal sum within fifteen (15) days after an order to begin closure is issued by the Division or state court or other court of competent jurisdiction;(d) For both performance and payment guarantee bonds- provide alternate financial assurance that meets the requirements of subsections 61.13 -(iv) of Regulation No. 61, and obtain the approval of the Division within (90) days after receipt by the permittee and the Division of a notice of cancellation of the bond from the surety.(7) Under the terms of the bond, the surety will become liable on the bond obligation when the permittee fails to perform as guaranteed by the bond.(8) The penal sum of the bond must be in an amount at least equal to the closure costs, less amounts covered by alternative financial assurance instruments.(9) The Division shall agree to termination of a bond when the provisions of subsection 61.13 of Regulation No. 61 have been satisfied. (10) A bond must provide that the surety waives all rights of set off or liens against the bond.