Section 096-400-11 - Financial Assurance for Solid Waste Disposal Facility Closure and Post-Closure Care and Corrective ActionA. Financial Assurance for Closure and Post-Closure Care(1)Applicability . An owner or operator of a solid waste disposal facility shall provide financial assurance sufficient to ensure that funds are available to pay for the anticipated costs of compliance with all facility closure, post-closure maintenance, and post-closure monitoring requirements. State or federally owned solid waste disposal facilities, and landfills regulated under the provisions of 06-096 CMR 401, section 7, are not subject to the requirements of this section. Financial assurance must be provided in accordance with the requirements of this section. This section does not apply to a municipally owned or operated solid waste disposal facility that accepts exclusively special waste, construction and demolition debris, land clearing debris or any combination of those types of waste.
(2)Time-line for Meeting Financial Assurance Requirements . Adequate financial assurance as approved by the Department must be provided by the solid waste disposal facility owner or operator according to the following schedules: (a) For new facilities, prior to the receipt of solid wastes;(b) For transfer of ownership, the financial assurance of the original owner or operator must remain in place until the transfer of ownership takes place. A new owner must provide financial assurance that is received and approved by the Department in compliance with these rules before the transfer of ownership;(c) For all solid waste disposal facilities not excluded in paragraph A(1) above and not currently providing financial assurance under the solid waste management rules or under conditions of the facility's license, within 120 days of the effective date of this rule. (3)Cost Computation(a) Based on Third Party Work. The amount of financial assurance required of a solid waste disposal facility owner or operator must be approved by the Department. The amount may be adjusted from time to time as required by subparagraph A(4)(c). The amount of the financial assurance must be at least equal to the estimated cost of a third party:(i) Closing the incinerator or landfill in accordance with the closure criteria of these rules;(ii) Conducting post-closure care and maintenance of the facility, including environmental monitoring and reporting as required by law;(iii) Collecting and treating all leachate or other contaminants generated by the facility during the post-closure period; and(iv) Collecting, controlling, and treating landfill gases during the post-closure period.(b)Thirty Year Post-Closure Period . The cost estimates must be based on projections for the entire expected time that the facility is expected to be generating leachate, methane or other gases, contaminants or otherwise potentially creating an adverse environmental impact, but in no case less than 30 years after a landfill facility closes. The financial assurance cost estimates must be made in accordance with established estimating practices and may not incorporate any salvage or other value that may be realized by the sale of materials, wastes, facility structures or equipment, land, or other assets associated with the facility.(4)Financial Assurance Funding(a)Initial Payment for a New Facility . A solid waste disposal facility owner or operator shall provide financial assurance in accordance with this section, as approved by the Department, and prior to the facility receiving wastes, in the following amounts: (i) If financial assurance is provided with a letter of credit, surety bond, or reserve account, the current estimate of the amount required for closure and post-closure care as established in paragraph A(3) above; and(ii) If financial assurance is provided with a cash trust fund, an amount equal to the current cost estimate for closure and post-closure care to close the facility after the first year of operation. Annual payments after that will be the total cost of closure and post-closure care, divided by the number of years in the pay-in period. The pay-in period shall be the years of expected operation of the landfill minus one year. Trust fund payments in subsequent years must be determined calculating the then current cost for closure and post-closure care, subtracting the current value of the trust fund minus all taxes, brokerage commissions and other expenses paid from the fund and dividing the remainder by the number of years remaining in the pay-in period.(b)Initial Payment for Existing Facilities . The owner or operator of an existing solid waste disposal facility, if financial assurance for closure and post-closure care and maintenance of that facility is not already being provided, shall provide financial assurance in compliance with the provisions below. (i) If financial assurance is provided with a letter of credit, surety bond, or reserve fund, the amount provided in subparagraph (4)(a)(i) above;(ii) If financial assurance is provided with a cash trust fund, an initial payment into the trust fund of at least the amount that the fund would contain if the trust fund had been established when the solid waste disposal facility became operational and had received annual payments made according to the specification of subparagraph (4)(a)(ii).(c)Annual Update of Costs(i)Modifications . The amount of financial assurance must be calculated annually throughout the operating life of the solid waste disposal facility. Without limitation, changes in the amount of financial assurance are required due to modifications to the license, changes in operation, changed financial or site conditions, inflation, changes in the number of years remaining before anticipated closure, and changes in legal requirements for closure or post-closure maintenance and care. The owner or operator shall amend the financial assurance calculation annually based upon current costs of a third party undertaking the closure and post-closure care and other work required by the Department in accordance with then applicable rule or an approved Closure Plan. This calculation shall be reported in writing to the Department as part of the disposal facility's annual report and is subject to Department review and approval. Upon approval, the owner/operator must obtain financial assurance for any calculated increase within 60 days. The amount of financial assurance may also be adjusted downward in accordance with these provisions.(ii)Annual Inflation Adjustment Method . When computing the annual inflation adjustment for closure and post-closure trust funds, the owner or operator must use the current Implicit Price Deflator for Gross Domestic Product as published by the US. Department of Commerce in "Survey of Current Business" a successor index, or other Department approved index. (d)Other Requirements(i)Funds Available when Needed . All financial assurance mechanisms must ensure that the funds necessary to meet the costs of closure and post-closure care will be available within 30 days of the Department's request for, or approval of, release of funds.(ii)Valid Mechanism . Each financial assurance mechanism must be legally valid, binding, and enforceable under State and federal law. Trust fund arrangements must be formalized in an agreement that is acceptable to the Department. Such a trust fund should have substantially the same wording and conditions as the example agreement in Appendix B of this Chapter. If an owner or operator elects to use a form of trust agreement that differs materially from Appendix B of this Chapter, the owner or operator shall pay the Department's reasonable costs of review of the agreement which may include an outside independent attorney or trust officer of the Department's choosing that has expertise in financial assurance mechanisms. Each trust agreement must include a schedule that contains the payment commitment of the owner or operator.(iii)Standby Trust Requirements . If a facility owner or operator chooses to meet the financial assurance requirements of this section through the use of letter(s) of credit and/or surety bond(s), the owner or operator must also establish a standby trust fund that stands ready to receive funds from the surety bond(s) or letter(s) of credit unless this requirement is waived by the Department. A standby trust shall be established that provides for administration and oversight identical to those for an active trust fund.
(iv)Department as Beneficiary . The Department (or approved trustee for the benefit of the Department) must be named as beneficiary of any financial assurance agreement, with the right to withdraw funds and to use part or all of the funds in its discretion in order to carry out legally required closure, post-closure care, and monitoring and all costs related thereto. Withdrawal of any funds must be approved in writing by the Department.(e)Allowable Assurance Mechanisms . Unless otherwise specified in this section, the owner or operator of a solid waste disposal facility that must provide financial assurance under subsection A(1) above, must comply with the requirements of 40 CFR section 258. 70 through 40 CFR 258. 72[ii]as amended up to July 1, 2014. The provisions of 40 CFR 258. 70 through 40 CFR 258. 72 and 40 CFR 258. 74(a), (b), and (c) effective as of July 1, 2014[iii], are hereby adopted and incorporated by reference, provided however that a standby trust fund must also be established by the owner or operator of a solid waste disposal facility when providing financial assurance through a letter of credit or a surety bond. Financial assurance may also be provided by the establishment of a reserve account for closure and post-closure care costs established in accordance with the Internal Revenue Code. This method shall only be available to owners/operators having book net worth shown on audited financial statements in excess of $50,000,000 and tangible assets in Maine excluding any landfill related assets, having depreciated book value in excess of ten times the projected cost of closure and post-closure costs. This method shall not be available after closure of the facility unless the operator continues business operations in Maine that satisfy the foregoing financial standards. The owner/operator must submit a sworn statement annually in accordance with the annual reporting requirements of this section whether these provisions are met and to provide sufficient information to confirm that sworn statement. If, at any time, the owner/operator no longer meets the reserve account provisions required above, the owner/operator must notify the Department by registered mail within 7 days of becoming aware that the standard is no longer met and must provide adequate alternative financial assurance within not more that 23 days after the required notification date.
For a municipally-owned solid waste disposal facility, financial assurance may also be provided by meeting all provisions of 40 CFR 258. 74(f)[iv]as amended up to July, 2014.
The owner or operator of a solid waste disposal facility may, subject to Department approval, satisfy the requirements of this subsection by establishing more than one financial assurance mechanism per facility. Each mechanism must comply with the provisions of this section except that it is the combination of these mechanisms, rather than a single mechanism, which must provide financial assurance in an amount at least equal to the total cost of closure and post-closure care.
B. Financial Assurance for Corrective Action(1)Applicability . An owner or operator of a solid waste disposal facility shall provide financial assurance at least equal to the cost of a third party conducting all of the corrective action activities for known releases, violations, or environmental damage, as approved by the Department in the corrective action plan for the entire corrective action period. State or federally owned solid waste disposal facilities and landfills regulated under the provisions of 06-096 CMR 401, section 7 are not subject to the requirements of this section.(2)Time-line for Meeting Financial Assurance Requirements . Unless otherwise required as a license condition, the owner or operator of an existing solid waste disposal facility must comply with the provisions of this subsection within 120 days of the effective date of this Chapter.(3)Financial Assurance Funding(a)Initial payment . The initial amount of financial assurance deposited into a Department approved financial assurance mechanism must be the estimated cost of corrective action as approved by the Department in the owner's or operator's corrective action plan, as allocated below. Financial assurance in this amount must be made no later than 120 days after the corrective action plan has been approved by the Department. (i) If financial assurance is provided with a letter of credit, surety bond, or reserve account, the amount shall be the full cost, as estimated by the operator and approved by the Department, of the corrective action; or(ii) If financial assurance is provided with a trust fund, the first payment into the trust fund shall be at least equal to one-half of the full cost of corrective action.(b)Annual trust fund payments . Unless modified under subparagraph (c) below, remaining payments into the trust fund must be made annually at a uniform rate, so that all the remaining payments for corrective action will be made in their entirety on or before one-half of the estimated length of time, as estimated by the operator and approved by the Department, remaining in the approved corrective action plan. NOTE : The following example outlines the payment schedule for a $4 million corrective action that is projected to last 5 years. Initial payment into the trust fund would be $2 million. The remaining payments would be made annually over one-half of the remaining estimated time that the corrective action program would take. This means that payments of $1 million would be made annually for a period of 2 years to bring the total trust fund to $4 million.
(c)Annual Adjustments . The owner or operator must annually adjust the estimate for inflation until the corrective action program is completed. The owner or operator must also increase the corrective action cost estimate and the amount of financial assurance provided whenever changes in the corrective action program or conditions at the site increase the maximum anticipated costs of corrective action. The owner or operator may decrease the cost estimate of financial assurance to the extent costs have been incurred and paid. The annual adjustment for inflation and adjustments due to changes in the corrective action program or facility conditions must be approved by the Department. Upon approval, the owner/operator must obtain financial assurance for any calculated increase within 60 days. The amount of financial assurance may also be adjusted downward in accordance with these provisions.
(4)Other Requirements(a)Funds Available when Needed . All financial assurance mechanisms must ensure that the funds necessary to meet the costs of corrective action will be available within 30 days of the Department's request for, or approval of, release of funds. (b)Valid Mechanism . Each financial assurance mechanism must be legally valid, binding, and enforceable under State and federal law. Trust fund arrangements must be formalized in an agreement that is acceptable to the Department. Such a trust fund should have substantially the same wording and conditions as the example agreement in Appendix B of this Chapter. If an owner or operator elects to use a form of trust agreement that differs materially from Appendix B of this Chapter, the owner or operator shall pay the Department's reasonable costs of review of the agreement which may include an independent outside attorney or trust officer of the Department's choosing that has expertise in financial assurance mechanisms. Each trust agreement must include a schedule that contains the payment commitment of the owner or operator. Financial assurance may also be provided by the establishment of a reserve account for corrective care established in accordance with the Internal Revenue Code. This method shall only be available to owners/operators having book net worth shown on audited financial statements in excess of $50,000,000 and tangible assets in Maine excluding any landfill related assets, having depreciated book value in excess of ten times the projected cost of closure and post-closure costs. This method shall not be available after closure of the facility unless the operator continues business operations in Maine that satisfy the foregoing financial standards. The owner/operator must submit a sworn statement annually in accordance with the annual reporting requirements of this section that these provisions met and to provide sufficient information to confirm that statement. If at any time, the owner/operator no longer meets the reserve account provisions required above, the owner/operator must notify the Department by registered mails within 7 days of becoming aware that the standard is no longer met and must provide adequate alternative financial assurance within not more than 23 days after the required notification date.
For a municipally- owned solid waste disposal facility, financial assurance may also be provided by meeting all provisions of 40 CFR 258. 74(f)iv as amended up to July, 2014.
(c)Standby Trust Requirements . If a facility owner or operator chooses to meet the financial assurance requirements of this section through the use of letter(s) of credit and/or surety bond(s), the owner or operator must also establish a standby trust fund that stands ready to receive funds from the surety bond(s) or letter(s) of credit, unless this requirement is waived by the Department. A standby trust shall be established that provides for administration and oversight identical to those for an active trust fund.
(d)Department as Beneficiary . The Department (approved Trustee for the benefit of the Department) must be named as beneficiary of any financial assurance agreement, with the right to withdraw funds and to use part or all of the funds in its discretion in order to carry out legally required corrective action and all costs related thereto. Withdrawal of any funds must be approved in writing by the Department.(5)Allowable Financial Assurance Mechanisms . In providing financial assurance for corrective action, the owner or operator must comply with the requirements of 40 CFR 258. 74(a), (b) and (c)vas amended up to July, provided however that a standby trust fund must also be established by the owner or operator of the solid waste disposal facility for a letter of credit or a surety bond. The owner or operator of a solid waste disposal facility may, subject to Department approval, satisfy the requirements of this subsection by establishing more than one financial assurance mechanism per facility. Each mechanism must comply with the provisions of this section except that it is the combination of these mechanisms, rather than a single mechanism, which must provide financial assurance in an amount at least equal to the total cost of corrective action.
06-096 C.M.R. ch. 400, § 11