N.M. Admin. Code § 19.15.36.11

Current through Register Vol. 36, No. 1, January 14, 2025

Section 19.15.36.11 - FINANCIAL ASSURANCE REQUIREMENTS

A. Centralized facilities. Upon notification by the division that it has approved a permit but prior to the division issuing the permit, an applicant for a new centralized facility permit shall submit acceptable financial assurance in the amount of $25,000 per centralized facility, or a statewide "blanket" financial assurance in the amount of $50,000 to cover all of that applicant's centralized facilities, unless such applicant has previously posted a blanket financial assurance for centralized facilities.

B. New commercial facilities or major modifications of existing commercial facilities. Upon notification by the division that it has approved a permit for a new commercial facility or a major modification of an existing commercial facility but prior to the division issuing the permit, the applicant shall submit acceptable financial assurance in the amount of the commercial facility's estimated closure and post closure cost, or $25,000, whichever is greater. The commercial facility's estimated closure and post closure cost shall be the amount provided in the closure and post closure plan the applicant submitted pursuant to Paragraph (9) of Subsection C of 19.15.36.8 NMAC unless the division determines that such estimate does not reflect a reasonable and probable closure and post closure cost to implement the closure and post closure plan, in which event, the division shall determine the estimated closure and post closure cost and shall include such determination in its proposed decision. If the applicant disagrees with the division's determination of estimated closure and post closure cost, the applicant may request a hearing as provided in 19.15.36.10 NMAC. If the applicant so requests, and no other person files a request for a hearing regarding the proposed decision, the hearing shall be limited to determination of estimated closure and post closure cost.

C. Terms of financial assurance. The financial assurance shall be on division-prescribed forms, or forms otherwise acceptable to the division, payable to the energy, minerals and natural resources department, oil conservation division and conditioned upon the surface waste management facility's proper operation, site closure and post closure operations in compliance with state of New Mexico statutes, division rules, applicable division orders and the surface waste management facility permit terms. The division may require proof that the individual signing for an entity on a financial assurance document or any amendment thereto has the authority to obligate that entity.

D. Forfeiture of financial assurance. The division shall give the operator 20 days' notice and an opportunity for a hearing prior to forfeiting financial assurance. All forfeitures the division demands pursuant to 19.15.36 NMAC shall be made payable to the energy, minerals and natural resources department, oil conservation division upon demand by the division.

E. Forms of financial assurance. The division may accept the following forms of financial assurance.

(1) Surety bonds. A surety bond shall be executed and notarized by the applicant and by a corporate surety licensed by the superintendent of insurance to do business in the state . All surety bonds shall be non-cancelable and payable to the energy, minerals and natural resources department, oil conservation division within 45 days after demand is made by the division. All surety bonds shall be governed by the laws of the state of New Mexico.

(2) Letters of credit. A letter of credit shall be issued by a national or state-chartered banking association, shall be irrevocable for a term of not less than five years and shall provide for automatic renewal for successive, like terms upon expiration, unless the issuer has notified the division in writing of non-renewal at least 120 days before its expiration date. All letters of credit shall be governed by the laws of the state of New Mexico. If a letter of credit is not replaced by an approved financial assurance within 30 days of notice of non-renewal provided to the division, the division may demand and collect a letter of credit.

(3) Cash accounts. An operator may provide financial assurance in the form of a federally insured or equivalently protected cash account or accounts in a financial institution, provided that the operator and the financial institution shall execute as to each such account a collateral assignment of the account to the division, which shall provide that only the division may authorize withdrawals from the account. In the event of forfeiture pursuant to 19.15.36 NMAC, the division may, at any time and from time to time, direct payment of all or part of the balance of such account (excluding interest accrued on the account) to itself or its designee for the surface waste management facility's closure and post closure. Any assignment of cash collateral shall be governed by the laws of the state of New Mexico and shall be on division-prescribed forms.

F. Replacement of financial assurance.

(1) The division may allow an operator to replace existing forms of financial assurance with other forms of financial assurance that provide equivalent coverage.

(2) The division shall not release existing financial assurance until the operator has submitted, and the division has approved, an acceptable replacement.

(3) Any time an operator changes the corporate surety, financial institution or amount of financial assurance, the operator shall file updated financial assurance documents on division-prescribed forms within 30 days. Notwithstanding the foregoing, if an operator makes other changes to its financial assurance documents, the division may require the operator to file updated financial assurance documents on division-prescribed forms within 45 days after notice to the operator from the division.

G. Review of adequacy of financial assurance. The division may at any time not less than five years after initial acceptance of financial assurance for a commercial facility, or whenever the operator applies for a major modification of the commercial facility's permit, and at least once during every successive five-year period, initiate a review of such financial assurance's adequacy. Additionally, whenever the division determines that a landfarm operator has not achieved the closure standards specified in Paragraph (3) of Subsection G of 19.15.36.15 NMAC, the division may review the adequacy of the landfarm operator's financial assurance, without regard to the date of its last review. Upon determination, after notice to the operator and an opportunity for a hearing, that the financial assurance is not adequate to cover the reasonable and probable cost of a commercial facility's closure and post closure operations, the division may require the operator to furnish additional financial assurance sufficient to cover such reasonable and probable cost.

H. Duty to report. Any operator who files for bankruptcy shall provide notice to the division, through the process provided for under the rules of the United States bankruptcy court, and the New Mexico attorney general.

N.M. Admin. Code § 19.15.36.11

19.15.36.11 NMAC - Rp, 19.15.9.711 NMAC, 2/14/2007, Amended by New Mexico Register, Volume XXVII, Issue 12, June 30, 2016, eff. 6/30/2016