Section 30.906 - Financial Assurance for Post-closure CareThe owner or operator of each facility shall establish and continuously maintain financial assurance for post-closure care of the facility using the options specified in 310 CMR 30.906(1) through (6).
(1)Post-closure Trust Fund.(a) An owner or operator may satisfy the requirements of 310 CMR 30.906, by establishing a post-closure trust fund which conforms to 310 CMR 30.906(1) and by sending an originally signed duplicate of the trust agreement to the Department within the applicable time period prescribed in 310 CMR 30.901(3) or (4). The trustee shall be a bank or other financial institution which has the authority to act as a trustee and whose trust operations are regulated and examined by the Massachusetts Commissioner of Banking, or the trustee shall be a national bank.(b) The wording of the trust agreement shall be identical to the wording specified in 310 CMR 30.909(1)(a), and the trust agreement shall be accompanied by a formal certification of acknowledgment identical to the wording specified in 310 CMR 30.909(1)(b). Schedule A of the trust agreement shall be updated within 60 days after a change in the amount of the current post-closure cost estimate which is the subject of the trust agreement.(c) The owner or operator shall make payments into the post-closure trust fund no less frequently than annually over the term of the license issued pursuant to 310 CMR 30.000 in the case of a new facility, or over a period no greater than ten years in the case of any other facility, or the remaining operating life of the facility as estimated in the post-closure plan, whichever period is the shortest. This period is hereinafter referred to as the "pay-in period." The payments into the post-closure trust fund shall be made as follows: 1. For each facility, the first payment shall be made pursuant to the applicable time period prescribed in 310 CMR 30.901(3) or (4). A receipt from the trustee for this payment shall be submitted by the owner or operator to the Department as evidence of payment. Except as provided in 310 CMR 30.906(6), the first payment shall be at least equal to the current post-closure cost estimate, divided by the number of years in the pay-in period. Such pay-in period shall be no greater than the operating life of the facility. Subsequent payments shall be made no later than 30 days after each anniversary date of the first payment. The amount of each subsequent payment shall be calculated by the formula: Next Payment = CE - CV / Y
where CE is the current post-closure cost estimate, CV is the current value of the trust fund, and Y is the number of years in the pay-in period.
2. If an owner or operator of a facility which has interim status pursuant to RCRA establishes a trust fund pursuant to 310 CMR 30.906(1), and the value of that trust fund is less than the current post-closure cost estimate when a license is issued for that facility, the amount of the current post-closure cost estimate still to be paid into the trust fund shall be paid over the pay-in period specified in 310 CMR 30.906(1)(c). Payment by an owner or operator of a facility which has interim status pursuant to RCRA which has become licensed shall continue to be made no later than 30 days after each anniversary date of the first payment made as an interim status facility pursuant to 310 CMR 30.901(4). The amount of each payment shall be determined by the formula: Next Payment = CE - CV / Y
where CE is the current post-closure cost estimate, CV is the current value of the trust fund, and Y is the number of years remaining in the pay-in period.
(d) The owner or operator may accelerate payments into the post-closure trust fund, or deposit into the post-closure trust fund the full amount of the current post-closure cost estimate at the time the post-closure trust fund is established. However, the owner or operator shall 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 310 CMR 30.906(1)(c).(e) If the owner or operator establishes a post-closure trust fund after having used one or more alternate mechanisms specified in 310 CMR 30.906, the owner's or operator's first payment shall be in at least the amount that the fund would contain if the post-closure trust fund were established initially and annual payments were made in compliance with 310 CMR 30.906.(f) After the pay-in period is completed, whenever the current post-closure cost estimate changes, the owner or operator shall compare the new estimate with the trustee's most recent annual valuation of the trust fund.1. If the value of the post-closure trust fund is less than the amount of the new current post-closure cost estimate, the owner or operator shall, within 60 days after the change in the cost estimate, either deposit an amount into the fund so that the fund's value after this deposit at least equals the amount of the current post-closure cost estimate, or obtain other financial assurance as specified in 310 CMR 30.906, to cover the difference.2. If the value of the post-closure trust fund is greater than the total amount of the new current post-closure cost estimate, the owner or operator may submit a written request to the Department for release of the amount in excess of the current post-closure cost estimate.(g) If an owner or operator substitutes other financial assurance as specified in 310 CMR 30.906 for all or part of the post-closure trust fund, he may submit a written request to the Department for release of the amount in excess of the current post-closure cost estimate covered by the post-closure trust fund.(h) After receiving a written request from the owner or operator for release of the funds as specified in 310 CMR 30.906(1)(f)2, or 310 CMR 30.906(1)(g), the Department may instruct the trustee to release to the owner or operator such funds as the Department may specify in writing.(i) During the period of post-closure care, the Department may approve a release of funds if the owner or operator demonstrates to the Department that the value of the post-closure trust fund exceeds the remaining cost of post-closure care.(j) After beginning post-closure care, an owner or operator or any other person authorized by the Department to perform post-closure care may request reimbursement for post-closure expenditures by submitting itemized bills to the Department. After receiving bills for post-closure activities, the Department shall determine whether the post-closure expenditures are in accordance with the post-closure plan or otherwise justified, and, if so, the Department may instruct the trustee to make reimbursement in such amounts as the Department may specify in writing. Whenever the Department is not persuaded that the cost of post-closure care will not be significantly greater than the value of the post-closure trust fund, the Department may withhold reimbursement of such amounts as it deems prudent until it determines, in accordance with 310 CMR 30.906(8), that the owner or operator is no longer required to maintain financial assurance for post-closure care.(k) The Department may agree to termination of the trust when: 1. Either the Department is persuaded that the owner or operator has substituted alternate financial assurance for post-closure care as specified in 310 CMR 30.906, or the Department has released the owner or operator from the requirements of 310 CMR 30.906, pursuant to 310 CMR 30.906(8); and2. The Department gives prior written consent for such termination.(2)Surety bond guaranteeing payment into a post-closure trust fund. (a) An owner or operator may satisfy the requirements of 310 CMR 30.906, by obtaining a surety bond which conforms to 310 CMR 30.906(2) and by submitting the surety bond to the Department within the applicable time period prescribed in 310 CMR 30.901(3) or (4). 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 U.S. Department of the Treasury.(b) The wording of the surety bond shall be identical to the wording specified in 310 CMR 30.909(2).(c) An owner or operator who uses a surety bond to satisfy the requirements of 310 CMR 30.906 shall also establish a standby trust fund. Under the terms of the surety bond, all payments made thereunder shall be 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 30.906(1), except that: 1. An originally signed duplicate of the trust agreement shall be submitted to the Department with the surety bond; and2. Until the standby trust fund is funded pursuant to the requirements of 310 CMR 30.906, the following are not required:a. Payment into the trust fund as specified in 310 CMR 30.906(1);b. Annual valuations as required by the trust agreement (see310 CMR 30.909(1)(a)10.); andc. Notices of nonpayment as required by the trust agreement (see310 CMR 30.909(1)(a)15.).(d) The bond shall guarantee that the owner or operator shall:1. Fund the standby trust fund in an amount equal to the penal sum of the bond (see310 CMR 30.909(2) ) before the beginning of final closure of the facility; or2. Fund the standby trust fund in an amount equal to the penal sum within 15 days after the Department or a court of competent jurisdiction issues an order to begin closure; or3. Provide alternate financial assurance as specified in 310 CMR 30.906, and obtain the Department's written approval of the assurance provided, within 90 days after receipt by both the owner or operator and by the Department of a notice of cancellation of the surety bond from the surety.(e) Under the terms of the bond (see310 CMR 30.909(2) ) , the surety shall become liable on the bond obligation when the owner or operator does not perform as guaranteed by the bond (see310 CMR 30.909(2) ) .(f) The penal sum of the bond shall be an amount at least equal to the current post-closure cost estimate, except as provided in 310 CMR 30.906(6).(g) Whenever the current post-closure cost estimate increases to an amount greater than the penal sum, the owner or operator, within 60 days after the increase, shall either cause the penal sum to be increased to an amount at least equal to the current post-closure cost estimate and submit evidence of such increase to the Department, or obtain other financial assurance as specified in 310 CMR 30.906, to cover the increase. Whenever the current post-closure cost estimate decreases, the penal sum may be reduced to the amount of the current post-closure cost estimate following written approval by the Department.(h) 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.(i) The Department may agree to cancellation of the bond when:1. Either the Department is persuaded that the owner or operator has substituted alternate financial assurance for post-closure care as specified in 310 CMR 30.906, or the Department has released the owner or operator from the requirements of 310 CMR 30.906, pursuant to 310 CMR 30.906(8); and2. The Department gives prior written consent for such cancellation.(3)Surety bond guaranteeing performance of post-closure care. (a) An owner or operator may satisfy the requirements of 310 CMR 30.906, by obtaining a surety bond which conforms to 310 CMR 30.906(3) and by submitting the surety bond to the Department within the applicable time period prescribed in 310 CMR 30.901(3) or (4). 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 U.S. Department of the Treasury.(b) The wording of the surety bond shall be identical to the wording specified in 310 CMR 30.909(3).(c) An owner or operator who uses a surety bond to satisfy the requirements of 310 CMR 30.906, shall also establish a standby trust fund. Under the terms of the surety bond, all payments made thereunder shall be 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 30.906(1), except that: 1. An originally signed duplicate of the trust agreement shall be submitted to the Department with the surety bond; and2. Until the standby trust fund is funded pursuant to the requirements of 310 CMR 30.906, the following are not required:a. Payment into the trust fund as specified in 310 CMR 30.906(1);b. Annual valuations as required by the trust agreement (see310 CMR 30.909(1)(a)10.); andc. Notices of nonpayment as required by the trust agreement (see310 CMR 30.909(1)(a)15.).(d) The bond shall guarantee that the owner or operator shall:1. Perform post-closure care in accordance with the post-closure plan and other requirements of the license for the facility whenever required to do so; or2. Provide alternate financial assurance as specified in 310 CMR 30.906, and obtain the Department's written approval of the assurance provided, within 90 days after receipt by both the owner or operator and by the Department of a notice of cancellation of the surety bond from the surety, as shown by the later return receipt.(e) Under the terms of the bond (see310 CMR 30.909(3) ) , the surety shall become liable on the bond obligation when the owner or operator does not perform as guaranteed by the bond (see310 CMR 30.909(3) ) . When the owner or operator does not perform post-closure care in accordance with 310 CMR 30.590A through 30.595A (Effective through 6/30/88) or 30.590B through 30.595B (Effective on and after 7/1/88), the surety shall become liable on the bond obligation to: 1. Perform post-closure care as guaranteed by the bond; and2. Deposit the amount of the penal sum into the standby trust fund.(f) The penal sum of the bond shall be an amount at least equal to the current post-closure cost estimate, except as provided in 310 CMR 30.906(6).(g) Whenever the current post-closure cost estimate increases to an amount greater than the penal sum, the owner or operator, within 60 days after the increase, shall either cause the penal sum to be increased to an amount equal to the current post-closure cost estimate and submit evidence of such increase to the Department, or obtain other financial assurance as specified in 310 CMR 30.906, to cover the increase. Whenever the current post-closure cost estimate decreases, the penal sum may be reduced to the amount of the current post-closure cost estimate following written approval by the Department.(h) 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.(i) The Department may agree to cancellation of the bond when:1. Either the Department is persuaded that the owner or operator has substituted alternate financial assurance for post-closure care as specified in 310 CMR 30.906, or the Department has released the owner or operator from the requirements of 310 CMR 30.906, pursuant to 310 CMR 30.906(8); and2. The Department gives prior written consent for such cancellation.(j) The surety will not be liable for deficiencies in the performance of post-closure care by the owner or operator after the Department releases the owner or operator from the requirements of 310 CMR 30.906, pursuant to 310 CMR 30.906(8).(4)Post-closure letter of credit.(a) An owner or operator may satisfy the requirements of 310 CMR 30.906, by obtaining an irrevocable standby letter of credit which conforms to 310 CMR 30.906(4) and by submitting the letter to the Department within the applicable time period prescribed in 310 CMR 30.901(3) or (4). The institution issuing the letter of credit shall be an entity which has the authority to issue letters of credit and whose letter-of-credit operations are regulated and examined by the Massachusetts Commissioner of Banking, or the institution shall be a national bank.(b) The wording of the letter of credit shall be identical to the wording specified in 310 CMR 30.909(4).(c) An owner or operator who uses a letter of credit to satisfy the requirements of 310 CMR 30.906, 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 into the standby trust fund in accordance with instructions from the Department. This standby trust shall meet the requirements in 310 CMR 30.906(1), except that: 1. An originally signed duplicate of the trust agreement shall be submitted to the Department with the letter of credit; and2. Until the standby trust fund is funded pursuant to the requirements of 310 CMR 30.906, the following are not required:a. Payment into the trust fund as specified in 310 CMR 30.906(1);b. Annual valuations as required by the trust agreement (see310 CMR 30.909(1)(a)10.); andc. Notices of nonpayment as required by the trust agreement (see310 CMR 30.909(1)(a)15.).(d) The letter of credit shall be accompanied by a letter from the owner or operator which shall state:1. The letter of credit number;2. The name of the issuing institution;3. The date of issuance of the letter of credit;4. The EPA identification number of the facility;5. The name and address of the facility; and6. The amount of funds assured by the letter of credit for post-closure care of the facility.(e) The letter of credit shall be irrevocable and shall be issued for a period of at least one year. The letter of credit shall provide that the expiration date will be automatically extended for a period of at least one year unless, no 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 a 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 or operator and the Department have received the notice, as shown by the later return receipt.(f) The letter of credit shall be issued in an amount at least equal to the current post-closure cost estimate, except as provided in 310 CMR 30.906(6).(g) Whenever the current post-closure cost estimate increases to an amount greater than the amount of the credit during the operating life of the facility, the owner or operator, within 60 days after the increase, shall either cause the amount of the credit to be increased to an amount equal to the current post-closure cost estimate and submit evidence of such increase to the Department, or obtain other financial assurance as specified in 310 CMR 30.906, to cover the increase. Whenever the current post-closure cost estimate decreases, the amount of the credit may be reduced to the amount of the current post-closure cost estimate following written approval by the Department.(h) The Department may draw upon the letter of credit when the owner or operator does not perform post-closure care in accordance with 310 CMR 30.590A through 30.595A (Effective through 6/30/88) or 30.590B through 30.595B (Effective on and after 7/1/88). (i) If the owner or operator does not establish alternate financial assurance as required by 310 CMR 30.906, and does not obtain written approval from the Department of any such alternate financial assurance within 90 days of receipt by both the owner or operator and by the Department of a notice that the issuing institution will not extend the letter of credit beyond the current expiration date, the Department shall draw on the letter of credit. The Department may delay drawing on the letter of credit if the issuing institution grants an extension of the term of the letter of credit. During the last 30 days of any such extension, the Department shall draw on the letter of credit if the owner or operator has failed to provide alternate financial assurance as specified in 310 CMR 30.906, or has failed to obtain written approval by the Department of any such assurance.(j) The Department may return the letter of credit to the issuing institution for termination when: 1. Either the Department is persuaded that the owner or operator has substituted alternate financial assurance for post-closure as specified in 310 CMR 30.906, or the Department has released the owner or operator from the requirements of 310 CMR 30.906, pursuant to 310 CMR 30.906(8); and2. The Department gives prior written consent for such termination.(5)Post-Closure Insurance.(a) An owner or operator may satisfy the requirements of 310 CMR 30.906, by obtaining post-closure insurance which conforms to the requirements of 310 CMR 30.906(5) and by submitting a certificate of such insurance to the Department within the applicable time period prescribed in 310 CMR 30.901(3) or (4). The Department may require submission of a duplicate of the complete insurance policy. At a minimum, the insurer shall be licensed to transact the business of insurance or authorized to provide insurance as an excess or surplus lines insurer in the Commonwealth of Massachusetts.(b) The wording of the certificate of insurance shall be identical to the wording specified in 310 CMR 30.909(5).(c) The post-closure care insurance policy shall be issued for a face amount at least equal to the current post-closure cost estimate, except as provided in 310 CMR 30.906(6). 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 the payments.(d) The post-closure care insurance policy shall guarantee that funds in an amount equal to the face amount of the post-closure care insurance policy shall be available to perform post-closure care whenever final closure ends. The policy shall also guarantee that once post-closure care begins, the insurer shall be responsible for paying out funds up to an amount equal to the face amount of the post-closure insurance policy, upon the direction of the Department, to such persons as the Department may specify in writing.(e) After beginning post-closure care, an owner or operator or any other person authorized to perform post-closure care may request reimbursement for post-closure care expenses by submitting itemized bills to the Department. After receiving bills for post-closure care activities, the Department shall determine whether the post-closure care expenditures are in accordance with the post-closure plan or otherwise justified, and, if so, the Department may instruct the insurer to make reimbursement in such amounts as the Department may specify in writing. Whenever the Department is not persuaded that the cost of post-closure care will not be significantly greater than the face amount of the post-closure care insurance policy, the Department may withhold reimbursement of such amounts as it deems prudent until it determines, in accordance with 310 CMR 30.906(8), that the owner or operator is no longer required to maintain financial assurance for post-closure care.(f) The Department may agree to termination of the post-closure care insurance policy when: 1. Either the Department is persuaded that the owner or operator has substituted alternate financial assurance for post-closure care as specified in 310 CMR 30.906, or the Department has released the owner or operator from the requirements of 310 CMR 30.906, pursuant to 310 CMR 30.906(8); and2. The Department gives prior written consent for such termination. Failure to pay the premium, without substitution of alternate financial assurance as specified in 310 CMR 30.906, shall constitute violation of 310 CMR 30.000. Such violation shall be deemed to begin upon receipt by the Department of a notice of future cancellation, termination, or failure to renew due to nonpayment of premium, rather than upon the date of expiration.
(g) The post-closure care insurance policy shall provide that the insurer may not cancel, terminate, or fail to renew the post-closure care insurance policy except for failure to pay the premium. 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 post-closure care insurance policy. If there is a failure to pay the premium, the insurer may elect to cancel, terminate, or fail to renew the post-closure care insurance policy by sending notice by certified mail to the owner or operator and to the Department. Cancellation, termination, or failure to renew may not take effect, however, until at least 120 days after the date of receipt of the notice by both the Department and the owner or operator, as shown by the later return receipt. Cancellation, termination, or failure to renew may not occur, and the post-closure care insurance policy shall remain in full force and effect, in the event that on or before the date of expiration: 1. The Department deems the facility abandoned; or2. The license is suspended or revoked or an application for a new license is denied; or3. Closure is ordered by the Department or a court of competent jurisdiction; or4. The owner or operator is named a debtor in a voluntary or involuntary bankruptcy proceeding; or5. The premium due is paid.(h) Whenever the current post-closure cost estimate increases to an amount greater than the amount of the post-closure care insurance policy, the owner or operator, within 60 days after the increase, shall either cause the face amount of the post-closure care insurance policy to be increased to an amount at least equal to the current post-closure cost estimate and submit evidence of such increase to the Department, or obtain other financial assurance as specified in, 310 CMR 30.906, to cover the increase. Whenever the current post-closure cost estimate decreases, the face amount of the post-closure care insurance policy may be reduced to the amount of the current post-closure cost estimate following written approval by the Department.(i) The Department may agree to cancellation of the post-closure care insurance policy when: 1. Either the Department is persuaded that the owner or operator has substituted alternate financial assurance for post-closure care as specified in 310 CMR 30.906, or the Department has released the owner or operator from the requirements of 310 CMR 30.906, pursuant to 310 CMR 30.906(8); and2. The Department gives prior written consent for such cancellation.(j) Commencing on the date that liability accrues to make payments pursuant to the policy, the insurer shall thereafter annually increase the face amount of the policy. At a minimum, 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 or of the equivalent coupon-issue yield announced by the U.S. Treasury for 26 week Treasury securities.(6)Use of multiple financial mechanisms. An owner or operator may satisfy the requirements of 310 CMR 30.906, by establishing more than one financial mechanism per Massachusetts facility. These mechanisms shall be limited to trust funds, surety bonds guaranteeing payment into a trust fund, letters of credit, and insurance. These mechanisms shall be in compliance with 310 CMR 30.906(1), (2), (3), (4), and (5), except that it shall be the combination of mechanisms, rather than a single mechanism, which shall provide financial assurance for an amount at least equal to the current post-closure cost estimate. If an owner or operator uses a trust fund in combination with any other mechanism, he shall use the trust fund as a standby trust fund for those mechanisms for which the establishment of a standby 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 post-closure care of the facility.(7)Use of a financial mechanism for multiple facilities. (a) An owner or operator may use a financial assurance mechanism specified in 310 CMR 30.906 to meet the requirements of 310 CMR 30.906, for more than one Massachusetts facility.(b) Evidence of financial assurance submitted to the Department shall include a list showing, for each facility, the EPA identification number, name, address, and amount of funds for post-closure care assured by the mechanism.(c) The amount of funds available through the mechanism shall 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 funds available through the mechanism for post-closure care 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.(8)Release of the owner or operator from the requirements of 310 CMR 30.906. When an owner or operator has completed, to the satisfaction of the Department, all post-closure care of the facility pursuant to 310 CMR 30.590A through 30.595A (Effective through 6/30/88) or 30.590B (Effective on and after 7/1/88), the Department shall, at the request of the owner or operator, notify him in writing that he is no longer required to maintain financial assurance for post-closure care of the facility pursuant to 310 CMR 30.906.