La. Admin. Code tit. 33 § V-3707

Current through Register Vol. 50, No. 9, September 20, 2024

Section V-3707 - Financial Assurance for Closure

An owner or operator of each facility must establish financial assurance for closure of the facility. Under this Part, the owner or operator must choose from the options as specified in Subsections A-F of this Section, which choice the administrative authority must find acceptable based on the application and the circumstances.

A. Closure Trust Fund

1. An owner or operator may satisfy the requirements of this Part by establishing a closure trust fund that conforms to the requirements of this Subpart, and submitting an originally signed duplicate of the trust agreement to the Office of Environmental Services. An owner or operator of a new facility must submit the originally signed duplicate of the trust agreement to the administrative authority at least 60 days before the date on which hazardous waste is first received for treatment, storage, or disposal. The trustee must be an entity that has the authority to act as a trustee and whose trust operations are regulated and examined by a federal or state agency.

2. The wording of the trust agreement must be identical to the wording specified in LAC 33:V.3719.A.1, and the trust agreement must be accompanied by a formal certification of acknowledgment (for example, see LAC 33:V.3719.A.2). Schedule A of the trust agreement must be updated within 60 days after a change in the amount of the current closure cost estimate covered by the agreement.

3. Payments into the trust fund must be made annually by the owner or operator over the term of the initial permit, or over the remaining operating life of the facility as estimated in the closure plan, whichever period is shorter; this period is hereafter referred to as the "pay-in period." The payments into the closure trust fund must be made as follows.

a. For a new facility, the first payment must be made before the initial receipt of hazardous waste for treatment, storage, or disposal. A receipt from the trustee for this payment must be submitted by the owner or operator to the administrative authority before this initial receipt of hazardous waste. The first payment must be at least equal to the current closure cost estimate, except as provided in LAC 33:V.3707.G divided by the number of years in the pay-in period. Subsequent payments must be made no later than 30 days after each anniversary date of the first payment. The amount of each subsequent payment must be determined by this formula.

Click Here To View Image

CE = current closure cost estimate;

CV = current value of the trust fund; and

Y = number of years remaining in the pay-in period.

b. If an owner or operator has previously established a trust fund as specified in LAC 33:V.4403.A and the value of that trust fund is less than the current closure cost estimate when a permit under these regulations is awarded for the facility, then the amount of the current closure cost estimate still to be paid into the trust fund must be paid in over the pay-in period as defined in LAC 33:V.3707.A.3. Payments must continue to be made no later than 30 days after each anniversary date of the first payment made. The amount of each payment must be determined by this formula.

Click Here To View Image

where:

CE = current closure cost estimate;

CV = current value of the trust fund; and

Y = number of years remaining in the pay-in period.

4. The owner or operator may accelerate payments into the trust fund or he may deposit the full amount of the current closure cost estimate at the time the fund is established. However, he must maintain the value of the fund at no less than the value that the fund would have if annual payments were made as specified in LAC 33:V.3707.A.3.

5. If the owner or operator establishes a closure trust fund after having used one or more alternate mechanisms specified in this Section or in LAC 33:V.4403, his first payment must be in at least the amount that the fund would contain if the trust fund were established initially and annual payments made according to specifications of this Section and LAC 33:V.4403.A, as applicable.

6. After the pay-in period is completed, whenever the current closure cost estimate changes, the owner or operator must compare the new estimate with the trustee's most recent annual valuation of the trust fund. If the value of the fund is less than the amount of the new estimate, the owner or operator, within 60 days after the change in the cost estimate, must either deposit an amount into the fund so that its value after this deposit at least equals the amount of the current closure cost estimate, or obtain other financial assurance as specified in this Section to cover the difference.

7. If the value of the trust fund is greater than the total amount of the current closure cost estimate, the owner or operator may submit a written request to the Office of Environmental Services for release of the amount in excess of the current closure cost estimate.

8. If an owner or operator substitutes other financial assurance as specified in this Part for all or part of the trust fund, he may submit a written request to the Office of Environmental Services for release of the amount in excess of the current closure cost estimate covered by the trust fund.

9. Within 60 days after receiving a request from the owner or operator for release of funds as specified in LAC 33:V.3707.A.7 and A.8, the administrative authority will instruct the trustee to release to the owner or operator such funds as the administrative authority specifies in writing.

10. After beginning partial or final closure, an owner or operator, or any other person authorized to conduct partial or final closure may request reimbursements for partial or final closure expenditures by submitting itemized bills to the administrative authority. The owner or operator may request reimbursement for partial closure only if sufficient funds are remaining in the trust fund to cover the maximum costs of closing the facility over its operating life. Within 60 days after receiving bills for partial or final closure activities, the administrative authority will instruct the trustee to make reimbursements in those amounts as the administrative authority specifies in writing, if the administrative authority determines that the partial or final closure expenditures are in accordance with the approved closure plan, or otherwise justified. If the administrative authority has reason to believe that the maximum cost of closure over the remaining life of the facility will be significantly greater than the value of the trust fund, he may withhold reimbursements of such amounts as he deems prudent until he determines, in accordance with this Section, that the owner or operator is no longer required to maintain financial assurance for final closure of the facility. If the administrative authority does not instruct the trustee to make such reimbursements, he will provide the owner or operator with a detailed written statement of reasons.

11. The administrative authority will agree to termination of the trust when:

a. an owner or operator substitutes alternate financial assurance as specified in this Part; or

b. the administrative authority releases the owner or operator from the requirements of this Part in accordance with LAC 33:V.3707.I.

B. Surety Bond Guaranteeing Payment into a Closure Trust Fund

1. An owner or operator may satisfy the requirements of this Part by obtaining a surety bond that conforms to the requirements of this Paragraph and submitting the bond to the Office of Environmental Services. An owner or operator of a new facility must submit the bond to the administrative authority at least 60 days before the date on which hazardous waste is first received for treatment, storage, or disposal. The bond must be effective before this initial receipt of hazardous waste. The surety company issuing the bond must, at a minimum, be among those listed as acceptable sureties on federal bonds in Circular 570 of the U.S. Department of the Treasury, and approved by the administrative authority.

2. The wording of the surety bond must be identical to the wording specified in LAC 33:V.3719.B.

3. The owner or operator who uses a surety bond to satisfy the requirements of this Part must also establish a standby trust fund. Under the terms of the bond, all payments made thereunder will be deposited by the surety directly into the standby trust fund in accordance with instructions from the administrative authority. This standby trust fund must meet the requirements specified in LAC 33:V.3707.A except that:

a. an originally signed duplicate of the trust agreement must be submitted to the administrative authority with the surety bond; and

b. until the standby trust fund is funded pursuant to the requirements of this Part, the following are not required by these regulations:

i. payments into the trust fund as specified in LAC 33:V.3707.A;

ii. updating of Schedule A of the trust agreement to show current closure cost estimates;

iii. annual valuations as required by the trust agreement; and

iv. notices of nonpayment as required by the trust agreement.

4. The bond must guarantee that the owner or operator will:

a. fund the standby trust fund in an amount equal to the penal sum of the bond before the beginning of final closure of the facility; or

b. fund the standby trust fund in an amount equal to the penal sum within 15 days after an order to begin final closure is issued by the administrative authority, or court of competent jurisdiction; or

c. provide alternate financial assurance as specified in this Part and obtain the administrative authority's written approval of the assurance provided, within 90 days after receipt by both the owner or operator and the administrative authority of a notice of cancellation of the bond from the surety.

5. Under the terms of the bond, the surety will become liable on the bond obligation when the owner or operator fails to perform as guaranteed by the bond.

6. The penal sum of the bond must be in an amount at least equal to the current closure cost estimate, except as provided in LAC 33:V.3707.G.

7. Whenever the current closure cost estimate increases to an amount greater than the penal sum, the owner or operator, within 60 days after the increase, must either cause the penal sum to be increased to an amount at least equal to the current closure cost estimate and submit evidence of such increase to the Office of Environmental Services or obtain other financial assurance as specified in this Part to cover the increase. Whenever the current closure cost estimate decreases, the penal sum may be reduced to the amount of the current closure cost estimate following written approval by the administrative authority.

8. Under the terms of the bond, the surety may cancel the bond by sending notice of cancellation by certified mail to the owner or operator, and to the administrative authority. Cancellation may not occur, however, during the 120 days beginning on the date of receipt of the notice of cancellation by both the owner or operator and the administrative authority, as evidenced by the return receipts.

9. The owner or operator may cancel the bond if the administrative authority has given prior written consent based on his receipt of evidence of alternate financial assurance as specified in this Part.

C. Surety Bond Guaranteeing Performance of Closure

1. An owner or operator may satisfy the requirements of this Section by obtaining a surety bond that conforms to the requirements of this Subsection and submitting the bond to the Office of Environmental Services. An owner or operator of a new facility must submit the bond to the administrative authority at least 60 days before the date on which hazardous waste is first received for treatment, storage, or disposal. The bond must be effective before this initial receipt of hazardous waste. The surety company issuing the bond must, at a minimum, be among those listed as acceptable sureties on federal bonds in Circular 570 of the U.S. Department of the Treasury, and approved by the administrative authority.

2. The wording of the surety bond must be identical to the wording specified in LAC 33:V.3719.C.

3. The owner or operator who uses a surety bond to satisfy the requirements of this Section must also establish a standby trust fund. Under the terms of the bond, all payments made thereunder will be deposited by the surety directly into the standby trust fund in accordance with instructions from the administrative authority. This standby trust must meet the requirements specified in Subsection A of this Section except that:

a. an originally signed duplicate of the trust agreement must be submitted to the administrative authority with the surety bond; and

b. unless the standby trust fund is funded pursuant to the requirements of this Section, the following are not required by these regulations:

i. payments into the trust fund as specified in LAC 33:V.3707.A;

ii. updating of Schedule A of the trust agreement (for example, see LAC 33:V.Chapter 37) to show current closure cost estimates;

iii. annual valuations as required by the trust agreement; and

iv. notices of nonpayment as required by the trust agreement.

4. The bond must guarantee that the owner or operator will:

a. perform final closure in accordance with the closure plan and other requirements of the permit for the facility whenever required to do so; or

b. provide alternate financial assurance as specified in this Part, and obtain the administrative authority's written approval of the assurance provided, within 90 days after receipt of both the owner or operator, and the administrative authority of a notice of cancellation of the bond from the surety.

5. Under the terms of the bond, the surety will become liable on the bond obligation when the owner or operator fails to perform as guaranteed by the bond. Following a final administrative determination by the administrative authority pursuant to R.S. 30:2025 that the owner or operator has failed to perform final closure in accordance with the approved closure plan and other permit requirements when required to do so, under the terms of the bond the surety will perform final closure as guaranteed by the bond or will deposit the amount of the penal sum into the standby trust fund.

6. The penal sum of the bond must be in an amount at least equal to the current closure cost estimate.

7. Whenever the current closure cost estimate increases to an amount greater than the penal sum, the owner or operator, within 60 days after the increase, must either cause the penal sum to be increased to an amount at least equal to the current closure cost estimate and submit evidence of such increase to the Office of Environmental Services or obtain other financial assurance as specified in this Part. Whenever the current closure cost estimate decreases, the penal sum may be reduced to the amount of the current closure cost estimate following written approval by the administrative authority.

8. Under the terms of the bond, the surety may cancel the bond by sending notice of cancellation by certified mail to the owner or operator and to the administrative authority. Cancellation may not occur, however, during the 120 days beginning on the date of receipt of the notice of cancellation by both the owner or operator and the administrative authority, as evidenced by the return receipts.

9. The owner or operator may cancel the bond if the administrative authority has given prior written consent. The administrative authority will provide such written consent when:

a. an owner or operator substitutes alternate financial assurance as specified in this Part; or

b. the administrative authority releases the owner or operator from the requirements of this Part in accordance with LAC 33:V.3707.I.

10. The surety will not be liable for deficiencies in the performance of closure by the owner or operator after the administrative authority releases the owner or operator from the requirements of this Part in accordance with LAC 33:V.3707.I.

D. Closure Letter of Credit

1. An owner or operator may satisfy the requirements of this Section by obtaining an irrevocable standby letter of credit that conforms to the requirements of this Subsection and submitting the letter to the Office of Environmental Services. An owner or operator of a new facility must submit the letter of credit to the administrative authority at least 60 days before the date on which hazardous waste is first received for treatment, storage, or disposal. The letter of credit must be effective before the initial receipt of hazardous waste. The issuing institution must be an entity that has the authority to issue letters of credit and whose letter-of-credit operations are regulated and examined by a federal or state agency.

2. The wording of the letter of credit must be identical to the wording specified in LAC 33:V.3719.D.

3. An owner or operator who uses a letter of credit to satisfy the requirements of this Section must also establish a standby trust fund. Under the terms of the letter of credit, all amounts paid pursuant to a draft by the administrative authority will be deposited by the issuing institution directly into the standby trust fund in accordance with instructions from the administrative authority. This standby trust fund must meet the requirements of the trust fund specified in LAC 33:V.3707.A, except that:

a. an originally signed duplicate of the trust agreement must be submitted to the administrative authority with the letter of credit; and

b. unless the standby trust fund is funded pursuant to the requirements of this Section, the following are not required by these regulations:

i. payments into the trust fund as specified in LAC 33:V.3707.A;

ii. updating of Schedule A of the trust agreement (see LAC 33:V.3719.A) to show current closure cost estimates;

iii. annual valuations as required by the trust agreement; and

iv. notices of nonpayment as required by the trust agreement.

4. The letter of credit must be accompanied by a letter from the owner or operator referring to the letter of credit by number, issuing institution, and date, and providing the following information: the EPA identification number, name, address, and the amount of funds assured for closure of the facility by the letter of credit.

5. The letter of credit must be irrevocable and issued for a period of at least one year. The letter of credit must provide that the expiration date will be automatically extended for a period of at least one year unless, at least 120 days before the current expiration date, the issuing institution notifies both the owner or operator and the administrative authority by certified mail of a decision not to extend the expiration date. Under the terms of the letter of credit, the 120 days will begin on the date when both the owner or operator and the administrative authority have received the notice, as evidenced by the return receipts.

6. The letter of credit must be issued in an amount at least equal to the current closure cost estimate, except as provided in Subsection G of this Section.

7. Whenever the current closure cost estimate increases to an amount greater than the amount of the credit, the owner or operator, within 60 days after the increase, must either cause the amount of the credit to be increased so that it at least equals the current closure cost estimate and submit evidence of such increase to the Office of Environmental Services or obtain other financial assurance as specified in this Part to cover the increase. Whenever the current closure cost estimate decreases, the amount of the credit may be reduced to the amount of the current closure cost estimate following written approval by the administrative authority.

8. Following a final administrative determination by the administrative authority pursuant to R.S. 30:2025 that the owner or operator has failed to perform final closure in accordance with the closure plan and other permit requirements when required to do so, the administrative authority may draw on the letter of credit.

9. If the owner or operator does not establish alternate financial assurance as specified in this Part, and obtain written approval of such alternate assurance from the administrative authority within 90 days after receipt by both the owner or operator and the administrative authority of a notice from the issuing institution that it has decided not to extend the letter of credit beyond the current expiration date, the administrative authority will draw on the letter of credit. The administrative authority may delay the drawing if the issuing institution grants an extension of the term of the credit. During the last 30 days of any such extension the administrative authority will draw on the letter of credit if the owner or operator has failed to provide alternate financial assurance as specified in this Part and obtain written approval of such assurance from the administrative authority.

10. The administrative authority will return the letter of credit to the issuing institution for termination when:

a. an owner or operator substitutes alternate financial assurance as specified in this Part; or

b. the administrative authority releases the owner or operator from the requirements of this Part in accordance with LAC 33:V.3707.I.

E. Closure Insurance

1. An owner or operator may satisfy the requirements of this Part by obtaining closure insurance that conforms to the requirements of this Paragraph and submitting a certificate of such insurance to the Office of Environmental Services. An owner or operator of a new facility must submit the certificate of insurance to the administrative authority at least 60 days before the date on which hazardous waste is first received for treatment, storage, or disposal. The insurance must be effective before this initial receipt of hazardous waste. At a minimum, the insurer must be licensed to transact the business of insurance, or be eligible to provide insurance as an excess or surplus lines insurer, in one or more states, and authorized to transact business in Louisiana.

2. The wording of the certificate of insurance must be identical to the wording specified in LAC 33:V.3719.E.

3. The closure insurance policy must be issued for a face amount at least equal to the current closure cost estimate, except as provided in LAC 33:V.3707.G. The term face amount means the total amount the insurer is obligated to pay under the policy. Actual payments by the insurer will not change the face amount, although the insurer's future liability will be lowered by the amount of the payments.

4. The closure insurance policy must guarantee that funds will be available to close the facility whenever final closure occurs. The policy must also guarantee that once final closure begins, the insurer will be responsible for paying out funds, up to an amount equal to the face amount of the policy, upon the direction of the administrative authority to such party or parties as the administrative authority specifies.

5. After beginning partial or final closure, an owner or operator, or any other person authorized to perform closure may request reimbursement for closure expenditures by submitting itemized bills to the administrative authority. The owner or operator may request reimbursements for partial closure only if the remaining value of the policy is sufficient to cover the maximum costs of closing the facility over its remaining operating life. Within 60 days after receiving bills for closure activities, the administrative authority will instruct the insurer to make reimbursements in such amounts as the administrative authority specifies in writing, if the administrative authority determines that the partial or final closure expenditures are in accordance with the approved closure plan or otherwise justified. If the administrative authority has reason to believe that the maximum cost of closure over the remaining life of the facility will be significantly greater than the face amount of the policy, he may withhold reimbursements of such amounts as he deems prudent until he determines, in accordance with LAC 33:V.3707.I, that the owner or operator is no longer required to maintain financial assurance for final closure of the facility. If the administrative authority does not instruct the insurer to make such reimbursements, he will provide the owner or operator with a detailed written statement of reasons.

6. The owner or operator must maintain the policy in full force and effect until the administrative authority consents to termination of the policy by the owner or operator as specified in LAC 33:V.3707.E.10. Failure to pay the premium, without substitution of alternate financial assurance as specified in this Part, will constitute a significant violation of these regulations, warranting such remedy as the administrative authority deems necessary. Such violation will be deemed to begin upon receipt by the administrative authority of a notice of future cancellation, termination, or failure to renew, due to nonpayment of the premium, rather than upon the date of expiration.

7. Each policy must 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 such consent is not unreasonably refused.

8. The policy must 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 must, 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 elect to cancel, terminate, or fail to renew the policy by sending notice by certified mail to the owner or operator and the administrative authority. Cancellation, termination, or failure to renew may not occur, however, during the 120 days beginning with the date of receipt of the notice by both the administrative authority and the owner or operator, as evidenced by the return receipts. Cancellation, termination, or failure to renew may not occur and the policy will remain in full force and effect in the event that on or before the date of expiration:

a. the administrative authority deems the facility abandoned; or

b. the permit is terminated or revoked, or a new permit is denied; or

c. closure is ordered by the administrative authority or a U.S. District Court or other court of competent jurisdiction; or

d. the owner or operator is named as debtor in a voluntary or involuntary proceeding under Title 11 (Bankruptcy), U.S. Code; or

e. the premium due is paid.

9. Whenever the current closure cost estimate increases to an amount greater than the face amount of the policy, the owner or operator, within 60 days after the increase, must either cause the face amount to be increased to an amount at least equal to the current closure cost estimate and submit evidence of such increase to the Office of Environmental Services or obtain other financial assurance as specified in this Part to cover the increase. Whenever the current closure cost estimate decreases, the face amount may be reduced to the amount of the current closure cost estimate following written approval by the administrative authority.

10. The administrative authority will give written consent to the owner or operator that he may terminate the insurance policy when:

a. an owner or operator substitutes alternate financial assurance as specified in this Part; or

b. the administrative authority releases the owner or operator from the requirements of this Part in accordance with LAC 33:V.3707.I.

F. Financial Test and Corporate Guarantee for Closure

1. An owner or operator may satisfy the requirements of this Section by demonstrating that he passes a financial test as specified in this Section. To pass this test the owner or operator must meet the criteria of either of the following.

a. The owner or operator must have:

i. two of the following three ratios: a ratio of total liabilities to net worth less than 2.0; a ratio of the sum of net income plus depreciation, depletion, and amortization to total liabilities greater than 0.1; and a ratio of current assets to current liabilities greater than 1.5; and

ii. net working capital and tangible net worth each at least six times the sum of the current closure and post-closure cost estimates and the current plugging and abandonment cost estimates; and

iii. tangible net worth of at least $10 million; and

iv. assets located in the United States amounting to at least 90 percent of his total assets or at least six times the sum of the current closure and post-closure cost estimates and the current plugging and abandonment cost estimates.

b. The owner or operator must have:

i. 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; and

ii. tangible net worth at least six times the sum of the current closure and post-closure cost estimates and the current plugging and abandonment cost estimates; and

iii. tangible net worth of at least $10 million; and

2. The phrase current closure and post-closure cost estimates as used in Paragraph F.1 of this Section refers to the cost estimates required to be shown in Paragraphs 1-4 of the letter from the owner's or operator's chief financial officer (see LAC 33:V.3719.F). The phrase current plugging and abandonment cost estimates used in Paragraph F.1 of this Section refers to the cost estimates required to be shown in Paragraphs 1-4 of the letter from the owner's or operator's chief financial officer (40 CFR 144.70.f).

3. To demonstrate that he meets this test, the owner or operator must submit the following items to the Office of Environmental Services:

a. a letter signed by the owner's or operator's chief financial officer and worded as specified in LAC 33:V.3719.F; and

b. a copy of the independent certified public accountant's report on examination of the owner's or operator's financial statements for the latest 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:

i. he has compared the data with the letter from the chief financial officer specified as having been derived from the independently audited, year-end financial statements for the latest fiscal year with the amounts in such financial statements; and

ii. in connection with that procedure, no matters came to his attention which caused him to believe that the specified data should be adjusted.

4. An owner or operator of a new facility must submit the items specified in Paragraph F.3 of this Section to the Office of Environmental Services at least 60 days before the date on which hazardous waste is first received for treatment, storage, or disposal.

5. After the initial submission of items specified in Paragraph F.3 of this Section, the owner or operator must send updated information to the Office of Environmental Services within 90 days after the close of each succeeding fiscal year. This information must consist of all three items specified in Paragraph F.3 of this Section.

6. If the owner or operator no longer meets the requirements of Paragraph F.1 of this Section, he must send notice to the Office of Environmental Services of intent to establish alternate financial assurance as specified in this Part. The notice must be sent by certified mail within 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 must provide the alternate financial assurance within 120 days after the end of such fiscal year.

7. The administrative authority may, based on a reasonable belief that the owner or operator may no longer meet the requirements of LAC 33:V.3707.F.1, require reports of financial condition at any time from the owner or operator in addition to those specified in LAC 33:V.3707.F.3. If the administrative authority finds, on the basis of such reports or other information, that the owner or operator no longer meets the requirements of LAC 33:V.3707.F.1, the owner or operator must provide alternate financial assurance as specified in this Part within 30 days after notification of such a finding.

8. The administrative authority 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's or operator's financial statements (see LAC 33:V.3707.F.3). An adverse opinion or a disclaimer of opinion will be cause for disallowance. The administrative authority will evaluate other qualifications on an individual basis. Based on the application, the circumstances and the accessibility of the applicant's assets, the administrative authority may disallow the use of this test. The owner or operator must provide alternate financial assurance as specified in this Part within 30 days after notification of the disallowance.

9. The owner or operator is no longer required to submit the items specified in LAC 33:V.3707.F.3 when:

a. an owner or operator substitutes alternate financial assurance as specified in this Part; or

b. the administrative authority releases the owner or operator from the requirements of this Part in accordance with LAC 33:V.3707.I.

10. An owner or operator may meet the requirements of this Section by obtaining a written guarantee. The guarantor must be the direct or higher tier parent corporation of the owner or operator, a firm whose parent corporation is also the parent corporation of the owner or operator, or a firm with a substantial business relationship with the owner or operator. The guarantor must meet the requirements of LAC 33:V.3707.F.1-8 for owners or operators, and must comply with the terms of the guarantee. The wording of the guarantee must be identical to the wording specified in LAC 33:V.3719.H. A certified copy of the guarantee must accompany the items sent to the administrative authority as specified in LAC 33:V.3707.F.3. One of these items must be the letter from the guarantor's chief financial officer. If the guarantor's parent corporation is also the parent corporation of the owner or operator, the letter must describe the value received in consideration of the guarantee. If the guarantor is a firm with a substantial business relationship with the owner or operator, this letter must describe this substantial business relationship and the value received in consideration of the guarantee. The terms of the corporate guarantee must provide that:

a. if the owner or operator fails to perform final closure of a facility covered by the guarantee in accordance with the closure plan and other permit requirements whenever required to do so, the guarantor will do so or establish a trust fund as specified in LAC 33:V.3707.A in the name of the owner or operator;

b. the guarantee will remain in force unless the guarantor sends notice of cancellation by certified mail to the owner or operator, and to the administrative authority. Cancellation may not occur, however, during the 120 days beginning on the date of receipt of the notice of cancellation by both the owner or operator and the administrative authority, as evidenced by the return receipts;

c. if the owner or operator fails to provide alternate financial assurance as specified in this Section and obtain the written approval of such alternate assurance from the administrative authority within 90 days after receipt by the owner or operator and the administrative authority of a notice of cancellation of the corporate guarantee from the guarantor, the guarantor will provide such alternative financial assurance in the name of the owner or operator.

G. Use of Multiple Financial Mechanisms. An owner or operator may satisfy the requirements of this Section by establishing more than one financial mechanism per facility. These mechanisms are limited to trust funds, surety bonds guaranteeing payment into a trust fund, letters of credit, and insurance. The mechanisms must be as specified in Subsections A, B, D, and E of this Section, respectively, except that it is the combination of mechanisms, rather than the single mechanism, that must provide financial assurance for an amount at least equal to the current closure cost estimate. If an owner or operator uses a trust fund in combination with a surety bond or a letter of credit, he may use the trust fund as the standby trust fund for the other mechanism. A single trust fund may be established for two or more mechanisms. The administrative authority may use any or all of the mechanisms to provide for closure of the facility.

H. Use of a Financial Mechanism for Multiple Facilities. An owner or operator may use a financial assurance mechanism specified in this Section to meet the requirements of this Section for more than one facility. Evidence of financial assurance submitted to the administrative authority must include a list showing, for each facility, the EPA identification number, name, address, and the amount of funds for closure assured by the mechanism. The amount of funds available through the mechanism must be no less than the sum of funds that would be available if a separate mechanism had been established and maintained for each facility. In directing the funds available through the mechanism for closure of any of the facilities covered by the mechanism, the administrative authority 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.

I. Release of the Owner or Operator from the Requirements of this Section. Within 60 days after receiving certifications from the owner or operator and an independent, qualified professional engineer that final closure has been completed in accordance with the approved closure plan, and for facilities subject to LAC 33:V.3525, after receiving the certification required under LAC 33:V.3525.B.2, the administrative authority will notify the owner or operator in writing that he is no longer required by this Section to maintain financial assurance for final closure of the particular facility, unless the administrative authority has reason to believe that final closure has not been in accordance with the approved closure plan or that the owner or operator has failed to comply with the applicable requirements of LAC 33:V.3525. The administrative authority shall provide the owner or operator a detailed written statement of any such reason to believe that closure has not been in accordance with the approved closure plan or that the owner or operator has failed to comply with the applicable requirements of LAC 33:V.3525.

La. Admin. Code tit. 33, § V-3707

Promulgated by the Department of Environmental Quality, Office of Solid and Hazardous Waste, Hazardous Waste Division, LR 10:200 (March 1984), amended LR 10:496 (July 1984), LR 13:433 (August 1987), LR 18:723 (July 1992), amended by the Office of Waste Services, Hazardous Waste Division, LR 23:1511 (November 1997), amended by the Office of Environmental Assessment, Environmental Planning Division, LR 26:2488 (November 2000), amended by the Office of the Secretary, Legal Affairs Division, LR 31:2467 (October 2005), LR 33:2118 (October 2007), LR 34:1001 (June 2008).

AUTHORITY NOTE: Promulgated in accordance with R.S. 30:2180 et seq.