| (a) An owner or operator may satisfy the requirements
of a fully funded trust or standby trust fund as provided in §37.201
of this title (relating to Trust Fund), except within 60 days following
the executive director's final review and approval of closure or post
closure expenditures for reimbursement, release of funds shall occur.
(b) An owner or operator may satisfy the requirements
of a surety bond guaranteeing payment as provided in §37.211
of this title (relating to Surety Bond Guaranteeing Payment) except:
(1) the surety must also be licensed in the State of
Texas;
(2) cancellation may not occur during the 90 days beginning
on the date of receipt of the notice of cancellation; and
(3) the bond must guarantee that the owner or operator
will provide alternate financial assurance within 30 days after receipt
of a notice of cancellation of the bond.
(c) An owner or operator may satisfy the requirements
of an irrevocable standby letter of credit as provided in §37.231
of this title (relating to Irrevocable Standby Letter of Credit),
except:
(1) the letter of credit shall be automatically extended
unless the issuer provides notice of cancellation at least 90 days
before the current expiration date. Under the terms of the letter
of credit, the 90 days shall begin on the date when both the owner
or operator and the executive director have received the notice, as
evidenced by the return receipts; and
(2) in accordance with §37.231(h) of this title,
the executive director shall draw on the letter of credit within 30
days after receipt of notice from the issuing institution that the
letter of credit will not be extended, or within 60 days of an extension,
if the owner or operator fails to establish and obtain approval of
such alternate financial assurance from the executive director.
(d) A statement of intent may be used by a governmental
entity subject to this subchapter. The statement of intent shall be
subject to the executive director's approval and shall include the
following:
(1) a statement that funds will be made immediately
available upon demand by the executive director;
(2) the signature of an authorized official who has
the authority to bind the governmental entity into a financial obligation,
and has the authority to sign the statement of intent;
(3) name of facility(ies), license number, and physical
and mailing addresses; and
(4) corresponding current cost estimates.
(e) An owner or operator may satisfy the requirements
of financial assurance by establishing an external sinking fund as
specified in this subsection. An external sinking fund has two components:
a sinking fund account and a financial assurance mechanism such that
the total of both equals, at all times, the current cost estimate.
A sinking fund account is an account segregated from the owner's or
operator's assets and is outside the owner's or operator's administrative
control. As the value of the sinking fund account increases, the value
of the second financial assurance mechanism decreases. When the external
sinking fund account is equal to the current cost estimate, the second
financial assurance mechanism will no longer be required to be maintained.
(1) An external sinking fund account shall be approved
by the executive director and administered by a third party that is
regulated and examined by a federal or state agency.
(2) The external sinking fund is established and maintained
by setting aside funds periodically, at least annually.
(f) An owner or operator may satisfy the requirements
of financial assurance by obtaining insurance that conforms to the
requirements of this subsection, in addition to the requirements specified
in Subchapters A and B of this chapter (relating to General Financial
Assurance Requirements; and Financial Assurance Requirements for Closure,
Post Closure, and Corrective Action), and submitting an originally-signed
endorsement to the insurance policy to the executive director.
(1) At a minimum, the insurer on the policy must be
authorized to transact or be a surplus lines insurer eligible to engage
in the business of insurance in Texas and have a minimum financial
strength rating of "A" and a financial size category of "XV" as assigned
by the A.M. Best Company.
(2) The insurance policy must designate the commission
as an additional insured.
(3) The owner or operator must maintain the policy
in full force and effect until the executive director consents to
termination of the policy. Failure to pay the premium, without substitution
of alternate financial assurance as specified in this subchapter,
shall constitute a violation of these regulations, warranting such
remedy as the executive director deems necessary. Such violation shall
be deemed to begin upon receipt by the executive director of a notice
of future cancellation, termination, or failure to renew due to nonpayment
of the premium, rather than upon the date of expiration of the policy.
(4) 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 shall, 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
executive director. Cancellation, termination, or failure to renew
may not occur, however, during 120 days beginning with the date of
receipt of the notice by both the executive director and the owner
or operator, as evidenced by the return receipts. The policy must
also provide that the insurer shall pay the face amount of the insurance
policy to the State of Texas for deposit as specified under §37.9045(a)(6)
of this title (relating to Financial Assurance Requirements for Closure,
Post Closure, and Corrective Action), if the executive director does
not approve acceptable replacement financial assurance within 90 days
of receiving notice by certified mail from the insurer of its election
to cancel, terminate, or not renew the policy.
(5) The insurance policy may not contain an exclusion
for intentional, willful, knowing, or deliberate noncompliance with
a statute, regulation, order, notice, or government instruction.
(6) The wording of the endorsement to the insurance
policy must be identical to the wording specified in §37.9052
of this title (relating to Endorsement).
(7) The insurance policy must be issued for a face
amount at least equal to the current cost estimate for closure, post
closure, or corrective action, except when a combination of mechanisms
are used in accordance with §37.41 of this title (relating to
Use of Multiple Financial Assurance Mechanisms). Actual payments by
the insurer shall not change the face amount, although the insurer's
future liability shall be lowered by the amount of the payments.
(8) The insurance policy must guarantee that funds
shall be available to provide for closure, post closure, or corrective
action of the facility. The policy shall also guarantee that once
closure, post closure, or corrective action begins, the issuer shall
be responsible for paying out funds, up to an amount equal to the
face amount of the policy, upon the direction of the executive director,
to such party or parties as the executive director specifies.
(9) An owner or operator or any other person authorized
to perform closure, post closure, or corrective action may request
reimbursement for closure, post closure, or corrective action expenditures
by submitting itemized bills to the executive director. The request
shall include an explanation of the expenses and all applicable itemized
bills. The owner or operator may request reimbursement 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,
post closure, or corrective action activities, the executive director
shall determine whether the closure, post closure, or corrective action
expenditures are in accordance with the approved closure, post closure,
or corrective action activities or are otherwise justified and, if
so, shall instruct the insurer to make reimbursement in such amounts
as the executive director specifies in writing. If the executive director
has reason to believe that the maximum cost of closure, post closure,
or corrective action over the remaining life of the facility will
be greater than the face amount of the policy, the executive director
may withhold reimbursement of such amounts as deemed prudent until
the executive director determines, in accordance with Subchapters
A and B of this chapter, that the owner or operator is no longer required
to maintain financial assurance requirements for closure, post closure,
or corrective action of the facility. If the executive director does
not instruct the insurer to make such reimbursements, the executive
director shall provide the owner or operator with a detailed written
statement of Cont'd... |
