[Code of Federal Regulations]
[Title 40, Volume 24]
[Revised as of July 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 40CFR264.145]

[Page 270-279]
 
                   TITLE 40--PROTECTION OF ENVIRONMENT
 
         CHAPTER I--ENVIRONMENTAL PROTECTION AGENCY (CONTINUED)
 
PART 264_STANDARDS FOR OWNERS AND OPERATORS OF HAZARDOUS WASTE TREATMENT, 
STORAGE, AND DISPOSAL FACILITIES--Table of Contents
 
                    Subpart H_Financial Requirements
 
Sec. 264.145  Financial assurance for post-closure care.

    The owner or operator of a hazardous waste management unit subject 
to the requirements of Sec. 264.144 must establish financial assurance 
for post-closure care in accordance with the approved post-closure plan 
for the facility 60 days prior to the initial receipt of hazardous waste 
or the effective date of the regulation, whichever is later. He must 
choose from the following options:
    (a) Post-closure trust fund. (1) An owner or operator may satisfy 
the requirements of this section by establishing a post-closure trust 
fund which conforms to the requirements of this paragraph and submitting 
an originally signed duplicate of the trust agreement to the Regional 
Administrator. An owner or operator of a new facility must submit the 
originally signed duplicate of the trust agreement to the Regional 
Administrator at least 60 days before the date on which hazardous waste 
is first received for disposal. The trustee must be an entity which 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 Sec. 264.151(a)(1), and the trust agreement must 
be accompanied by a formal certification of acknowledgment (for example, 
see Sec. 264.151(a)(2)). Schedule A of the trust agreement must be 
updated within 60 days after a change in the amount of the current post-
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 RCRA 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 post-closure trust fund 
must be made as follows:
    (i) For a new facility, the first payment must be made before the 
initial receipt of hazardous waste for disposal. A receipt from the 
trustee for this payment must be submitted by the owner or operator to 
the Regional Administrator before this initial receipt of hazardous 
waste. The first payment must be at least equal to the current post-
closure cost estimate, except as provided in Sec. 264.145(g), divided 
by the number of years in the pay-in period. Subsequent payments must be 
made no later than 30 days after each anniversay date of the first 
payment. The amount of each subsequent payment must be determined by 
this formula:
[GRAPHIC] [TIFF OMITTED] TC01AU92.050

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.

    (ii) If an owner or operator establishes a trust fund as specified 
in Sec. 265.145(a) of this chapter, and the value of that trust fund is 
less than the current post-closure cost estimate when a permit is 
awarded for the facility, the amount of the current post-closure cost 
estimate still to be paid into the fund must be paid in over the pay-in 
period as defined in paragraph (a)(3) of this section. Payments must 
continue to be made no later than 30 days after each anniversary date of 
the first payment made pursuant to Part 265 of

[[Page 271]]

this chapter. The amount of each payment must be determined by this 
formula:
[GRAPHIC] [TIFF OMITTED] TC01AU92.050

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.

    (4) The owner or operator may accelerate payments into the trust 
fund or he may deposit the full amount of the current post-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 paragraph (a)(3) of this 
section.
    (5) If the owner or operator establishes a post-closure trust fund 
after having used one or more alternate mechanisms specified in this 
section or in Sec. 265.145 of this chapter, 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 paragraph and Sec. 265.145(a) of this chapter, 
as applicable.
    (6) After the pay-in period is completed, whenever the current post-
closure cost estimate changes during the operating life of the facility, 
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 post-closure cost estimate, or 
obtain other financial assurance as specified in this section to cover 
the difference.
    (7) During the operating life of the facility, if the value of the 
trust fund is greater than the total amount of the current post-closure 
cost estimate, the owner or operator may submit a written request to the 
Regional Administrator for release of the amount in excess of the 
current post-closure cost estimate.
    (8) If an owner or operator substitutes other financial assurance as 
specified in this section for all or part of the trust fund, he may 
submit a written request to the Regional Administrator for release of 
the amount in excess of the current post-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 paragraph (a) (7) or (8) 
of this section, the Regional Administrator will instruct the trustee to 
release to the owner or operator such funds as the Regional 
Administrator specifies in writing.
    (10) During the period of post-closure care, the Regional 
Administrator may approve a release of funds if the owner or operator 
demonstrates to the Regional Administrator that the value of the trust 
fund exceeds the remaining cost of post-closure care.
    (11) An owner or operator or any other person authorized to conduct 
post-closure care may request reimbursements for post-closure care 
expenditures by submitting itemized bills to the Regional Administrator. 
Within 60 days after receiving bills for post-closure care activities, 
the Regional Administrator will instruct the trustee to make 
reimbursements in those amounts as the Regional Administrator specifies 
in writing, if the Regional Administrator determines that the post-
closure care expenditures are in accordance with the approved post-
closure plan or otherwise justified. If the Regional Administrator does 
not instruct the trustee to make such reimbursements, he will provide 
the owner or operator with a detailed written statement of reasons.
    (12) The Regional Administrator will agree to termination of the 
trust when:
    (i) An owner or operator substitutes alternate financial assurance 
as specified in this section; or
    (ii) The Regional Administrator releases the owner or operator from 
the requirements of this section in accordance with Sec. 264.145(i).
    (b) Surety bond guaranteeing payment into a post-closure trust fund. 
(1) An owner or operator may satisfy the requirements of this section by 
obtaining a surety bond which conforms to the requirements of this 
paragraph and

[[Page 272]]

submitting the bond to the Regional Administrator. An owner or operator 
of a new facility must submit the bond to the Regional Administrator at 
least 60 days before the date on which hazardous waste is first received 
for 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.
    (2) The wording of the surety bond must be identical to the wording 
specified in Sec. 264.151(b).
    (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 Regional Administrator. This 
standby trust fund must meet the requirements specified in Sec. 
264.145(a), except that:
    (i) An originally signed duplicate of the trust agreement must be 
submitted to the Regional Administrator with the surety bond; and
    (ii) Until the standby trust fund is funded pursuant to the 
requirements of this section, the following are not required by these 
regulations:
    (A) Payments into the trust fund as specified in Sec. 264.145(a);
    (B) Updating of Schedule A of the trust agreement (see Sec. 
264.151(a)) to show current post-closure cost estimates;
    (C) Annual valuations as required by the trust agreement; and
    (D) Notices of nonpayment as required by the trust agreement.
    (4) The bond must guarantee that the owner or operator will:
    (i) 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
    (ii) Fund the standby trust fund in an amount equal to the penal sum 
within 15 days after an administrative order to begin final closure 
issued by the Regional Administrator becomes final, or within 15 days 
after an order to begin final closure is issued by a U.S. district court 
or other court of competent jurisdiction; or
    (iii) Provide alternate financial assurance as specified in this 
section, and obtain the Regional Administrator's written approval of the 
assurance provided, within 90 days after receipt by both the owner or 
operator and the Regional Administrator 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 post-closure cost estimate, except as provided in Sec. 
264.145(g).
    (7) 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, must 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 Regional Administrator, or 
obtain other financial assurance as specified in this section 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 Regional Administrator.
    (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 Regional Administrator. 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 Regional 
Administrator, as evidenced by the return receipts.
    (9) The owner or operator may cancel the bond if the Regional 
Administrator has given prior written consent based on his receipt of 
evidence of alternate financial assurance as specified in this section.
    (c) Surety bond guaranteeing performance of post-closure care. (1) 
An owner or operator may satisfy the requirements of this section by 
obtaining a surety

[[Page 273]]

bond which conforms to the requirements of this paragraph and submitting 
the bond to the Regional Administrator. An owner or operator of a new 
facility must submit the bond to the Regional Administrator at least 60 
days before the date on which hazardous waste is first received for 
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.
    (2) The wording of the surety bond must be identical to the wording 
specified in Sec. 264.151(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 Regional Administrator. This 
standby trust fund must meet the requirements specified in Sec. 
264.145(a), except that:
    (i) An originally signed duplicate of the trust agreement must be 
submitted to the Regional Administrator with the surety bond; and
    (ii) Unless the standby trust fund is funded pursuant to the 
requirements of this section, the following are not required by these 
regulations:
    (A) Payments into the trust fund as specified in Sec. 264.145(a);
    (B) Updating of Schedule A of the trust agreement (see Sec. 
264.151(a)) to show current post-closure cost estimates;
    (C) Annual valuations as required by the trust agreement; and
    (D) Notices of nonpayment as required by the trust agreement.
    (4) The bond must guarantee that the owner or operator will:
    (i) Perform post-closure care in accordance with the post-closure 
plan and other requirements of the permit for the facility; or
    (ii) Provide alternate financial assurance as specified in this 
section, and obtain the Regional Administrator's written approval of the 
assurance provided, within 90 days of receipt by both the owner or 
operator and the Regional Administrator 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 
pursuant to section 3008 of RCRA that the owner or operator has failed 
to perform post-closure care in accordance with the approved post-
closure plan and other permit requirements, under the terms of the bond 
the surety will perform post-closure care in accordance with the post-
closure plan and other permit requirements 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 post-closure cost estimate.
    (7) Whenever the current post-closure cost estimate increases to an 
amount greater than the penal sum during the operating life of the 
facility, 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 post-closure cost estimate and submit evidence of such 
increase to the Regional Administrator, or obtain other financial 
assurance as specified in this section. Whenever the current post-
closure cost estimate decreases during the operating life of the 
facility, the penal sum may be reduced to the amount of the current 
post-closure cost estimate following written approval by the Regional 
Administrator.
    (8) During the period of post-closure care, the Regional 
Administrator may approve a decrease in the penal sum if the owner or 
operator demonstrates to the Regional Administrator that the amount 
exceeds the remaining cost of post-closure care.
    (9) 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 Regional Administrator. 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 Regional 
Administrator, as evidenced by the return receipts.

[[Page 274]]

    (10) The owner or operator may cancel the bond if the Regional 
Administrator has given prior written consent. The Regional 
Administrator will provide such written consent when:
    (i) An owner or operator substitutes alternate financial assurance 
as specified in this section; or
    (ii) The Regional Administrator releases the owner or operator from 
the requirements of this section in accordance with Sec. 264.145(i).
    (11) The surety will not be liable for deficiencies in the 
performance of post-closure care by the owner or operator after the 
Regional Administrator releases the owner or operator from the 
requirements of this section in accordance with Sec. 264.145(i).
    (d) Post-closure letter of credit. (1) An owner or operator may 
satisfy the requirements of this section by obtaining an irrevocable 
standby letter of credit which conforms to the requirements of this 
paragraph and submitting the letter to the Regional Administrator. An 
owner or operator of a new facility must submit the letter of credit to 
the Regional Administrator at least 60 days before the date on which 
hazardous waste is first received for disposal. The letter of credit 
must be effective before this initial receipt of hazardous waste. The 
issuing institution must be an entity which 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 Sec. 264.151(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 Regional Administrator will be deposited by the issuing 
institution directly into the standby trust fund in accordance with 
instructions from the Regional Administrator. This standby trust fund 
must meet the requirements of the trust fund specified in Sec. 
264.145(a), except that:
    (i) An originally signed duplicate of the trust agreement must be 
submitted to the Regional Administrator with the letter of credit; and
    (ii) Unless the standby trust fund is funded pursuant to the 
requirements of this section, the following are not required by these 
regulations:
    (A) Payments into the trust fund as specified in Sec. 264.145(a);
    (B) Updating of Schedule A of the trust agreement (see Sec. 
264.151(a)) to show current post-closure cost estimates;
    (C) Annual valuations as required by the trust agreement; and
    (D) 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, and address of the facility, and the amount 
of funds assured for post-closure care of the facility by the letter of 
credit.
    (5) The letter of credit must be irrevocable and issued for a period 
of at least 1 year. The letter of credit must provide that the 
expiration date will be automatically extended for a period of at least 
1 year unless, at least 120 days before the current expiration date, the 
issuing institution notifies both the owner or operator and the Regional 
Administrator 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 Regional 
Administrator have received the notice, as evidenced by the return 
receipts.
    (6) The letter of credit must be issued in a amount at least equal 
to the current post-closure cost estimate, except as provided in Sec. 
264.145(g).
    (7) 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, must either cause the amount of the credit to be increased so 
that it at least equals the current post-closure cost estimate and 
submit evidence of such increase to the Regional Administrator, or 
obtain other financial assurance as specified

[[Page 275]]

in this section to cover the increase. Whenever the current post-closure 
cost estimate decreases during the operating life of the facility, the 
amount of the credit may be reduced to the amount of the current post-
closure cost estimate following written approval by the Regional 
Administrator.
    (8) During the period of post-closure care, the Regional 
Administrator may approve a decrease in the amount of the letter of 
credit if the owner or operator demonstrates to the Regional 
Administrator that the amount exceeds the remaining cost of post-closure 
care.
    (9) Following a final administrative determination pursuant to 
section 3008 of RCRA that the owner or operator has failed to perform 
post-closure care in accordance with the approved post-closure plan and 
other permit requirements, the Regional Administrator may draw on the 
letter of credit.
    (10) If the owner or operator does not establish alternate financial 
assurance as specified in this section and obtain written approval of 
such alternate assurance from the Regional Administrator within 90 days 
after receipt by both the owner or operator and the Regional 
Administrator of a notice from the issuing institution that it has 
decided not to extend the letter of credit beyond the current expiration 
date, the Regional Administrator will draw on the letter of credit. The 
Regional Administrator 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 Regional Administrator will draw on the letter 
of credit if the owner or operator has failed to provide alternate 
financial assurance as specified in this section and obtain written 
approval of such assurance from the Regional Administrator.
    (11) The Regional Administrator will return the letter of credit to 
the issuing institution for termination when:
    (i) An owner or operator substitutes alternate financial assurance 
as specified in this section; or
    (ii) The Regional Administrator releases the owner or operator from 
the requirements of this section in accordance with Sec. 264.145(i).
    (e) Post-closure insurance. (1) An owner or operator may satisfy the 
requirements of this section by obtaining post-closure insurance which 
conforms to the requirements of this paragraph and submitting a 
certificate of such insurance to the Regional Administrator. An owner or 
operator of a new facility must submit the certificate of insurance to 
the Regional Administrator at least 60 days before the date on which 
hazardous waste is first received for 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 
eligible to provide insurance as an excess or surplus lines insurer, in 
one or more States.
    (2) The wording of the certificate of insurance must be identical to 
the wording specified in Sec. 264.151(e).
    (3) The post-closure insurance policy must be issued for a face 
amount at least equal to the current post-closure cost estimate, except 
as provided in Sec. 264.145(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 post-closure insurance policy must guarantee that funds will 
be available to provide post-closure care of the facility whenever the 
post-closure period begins. The policy must also guarantee that once 
post-closure care 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 Regional Administrator, to such party or parties as the 
Regional Administrator specifies.
    (5) An owner or operator or any other person authorized to conduct 
post-closure care may request reimbursements for post-closure care 
expenditures by submitting itemized bills to the Regional Administrator. 
Within 60 days after receiving bills for post-closure care activities, 
the Regional Administrator will instruct the insurer to make 
reimbursements in those

[[Page 276]]

amounts as the Regional Administrator specifies in writing, if the 
Regional Administrator determines that the post-closure care 
expenditures are in accordance with the approved post-closure plan or 
otherwise justified. If the Regional Administrator 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 Regional Administrator consents to termination of the 
policy by the owner or operator as specified in paragraph (e)(11) of 
this section. Failure to pay the premium, without substitution of 
alternate financial assurance as specified in this section, will 
constitute a significant violation of these regulations, warranting such 
remedy as the Regional Administrator deems necessary. Such violation 
will be deemed to begin upon receipt by the Regional Administrator 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 Regional 
Administrator. 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 Regional Administrator 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:
    (i) The Regional Administrator deems the facility abandoned; or
    (ii) The permit is terminated or revoked or a new permit is denied; 
or
    (iii) Closure is ordered by the Regional Administrator or a U.S. 
district court or other court of competent jurisdiction; or
    (iv) The owner or operator is named as debtor in a voluntary or 
involuntary proceeding under Title 11 (Bankruptcy), U.S. Code; or
    (v) The premium due is paid.
    (9) Whenever the current post-closure cost estimate increases to an 
amount greater than the face amount of the policy during the operating 
life of the facility, 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 post-closure cost estimate and submit 
evidence of such increase to the Regional Administrator, or obtain other 
financial assurance as specified in this section to cover the increase. 
Whenever the current post-closure cost estimate decreases during the 
operating life of the facility, the face amount may be reduced to the 
amount of the current post-closure cost estimate following written 
approval by the Regional Administrator.
    (10) Commencing on the date that liability to make payments pursuant 
to the policy accrues, the insurer will thereafter annually increase the 
face amount of the policy. Such increase must be equivalent to the face 
amount of the policy, less any payments made, multiplied by an amount 
equivalent to 85 percent of the most recent investment rate or of the 
equivalent coupon-issue yield announced by the U.S. Treasury for 26-week 
Treasury securities.
    (11) The Regional Administrator will give written consent to the 
owner or operator that he may terminate the insurance policy when:
    (i) An owner or operator substitutes alternate financial assurance 
as specified in this section; or
    (ii) The Regional Administrator releases the owner or operator from 
the requirements of this section in accordance with Sec. 264.145(i).

[[Page 277]]

    (f) Financial test and corporate guarantee for post-closure care. 
(1) An owner or operator may satisfy the requirements of this section by 
demonstrating that he passes a financial test as specified in this 
paragraph. To pass this test the owner or operator must meet the 
criteria of either paragraph (f)(1)(i) or (ii) of this section:
    (i) The owner or operator must have:
    (A) 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
    (B) 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
    (C) Tangible net worth of at least $10 million; and
    (D) Assets 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.
    (ii) The owner or operator must have:
    (A) 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
    (B) 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
    (C) Tangible net worth of at least $10 million; and
    (D) 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.
    (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 (Sec. 264.151(f)). The phrase 
``current plugging and abandonment 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 (Sec. 144.70(f) of this title).
    (3) To demonstrate that he meets this test, the owner or operator 
must submit the following items to the Regional Administrator:
    (i) A letter signed by the owner's or operator's chief financial 
officer and worded as specified in Sec. 264.151(f); and
    (ii) 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
    (iii) A special report from the owner's or operator's independent 
certified public accountant to the owner or operator stating that:
    (A) He has compared the data which the letter from the chief 
financial officer specifies 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
    (B) 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 Regional 
Administrator at least 60 days before the date on which hazardous waste 
is first received for 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 Regional Administrator 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 Regional 
Administrator of intent to establish alternate financial assurance as 
specified in this section. The notice must be sent by certified mail 
within 90 days after the end of the

[[Page 278]]

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 Regional Administrator may, based on a reasonable belief 
that the owner or operator may no longer meet the requirements of 
paragraph (f)(1) of this section, require reports of financial condition 
at any time from the owner or operator in addition to those specified in 
paragraph (f)(3) of this section. If the Regional Administrator finds, 
on the basis of such reports or other information, that the owner or 
operator no longer meets the requirements of paragraph (f)(1) of this 
section, the owner or operator must provide alternate financial 
assurance as specified in this section within 30 days after notification 
of such a finding.
    (8) The Regional Administrator 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 paragraph (f)(3)(ii) of this 
section). An adverse opinion or a disclaimer of opinion will be cause 
for disallowance. The Regional Administrator will evaluate other 
qualifications on an individual basis. The owner or operator must 
provide alternate financial assurance as specified in this section 
within 30 days after notification of the disallowance.
    (9) During the period of post-closure care, the Regional 
Administrator may approve a decrease in the current post-closure cost 
estimate for which this test demonstrates financial assurance if the 
owner or operator demonstrates to the Regional Administrator that the 
amount of the cost estimate exceeds the remaining cost of post-closure 
care.
    (10) The owner or operator is no longer required to submit the items 
specified in paragraph (f)(3) of this section when:
    (i) An owner or operator substitutes alternate financial assurance 
as specified in this section; or
    (ii) The Regional Administrator releases the owner or operator from 
the requirements of this section in accordance with Sec. 264.145(i).
    (11) An owner or operator may meet the requirements for this section 
by obtaining a written guarantee. The guarantor must be the direct of 
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 for 
owners or operators in paragraphs (f)(1) through (9) of this section and 
must comply with the terms of the guarantee. The wording of the 
guarantee must be identical to the wording specified in Sec. 
264.151(h). A certified copy of the guarantee must accompany the items 
sent to the Regional Administrator as specified in paragraph (f)(3) of 
this section. 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 guarantee must provide that:
    (i) If the owner or operator fails to perform post-closure care of a 
facility covered by the corporate guarantee in accordance with the post-
closure plan and other permit requirements whenever required to do so, 
the guarantor will do so or establish a trust fund as specified in Sec. 
264.145(a) in the name of the owner or operator.
    (ii) The corporate guarantee will remain in force unless the 
guarantor sends notice of cancellation by certified mail to the owner or 
operator and to the Regional Administrator. 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 Regional 
Administrator, as evidenced by the return receipts.
    (iii) If the owner or operator fails to provide alternate financial 
assurance as specified in this section and obtain

[[Page 279]]

the written approval of such alternate assurance from the Regional 
Administrator within 90 days after receipt by both the owner or operator 
and the Regional Administrator of a notice of cancellation of the 
corporate guarantee from the guarantor, the guarantor will provide such 
alternate 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 paragraphs 
(a), (b), (d), and (e), respectively, of this section, except that it is 
the combination of mechanisms, rather than the single mechanism, which 
must 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 a surety bond or a letter of credit, he may use 
the trust fund as the standby trust fund for the other mechanisms. A 
single standby trust fund may be established for two or more mechanisms. 
The Regional Administrator may use any or all of the mechanisms to 
provide for post-closure care 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 Regional 
Administrator must include a list showing, for each facility, the EPA 
Identification Number, name, address, and the amount of funds for post-
closure care assured by the mechanism. If the facilities covered by the 
mechanism are in more than one Region, identical evidence of financial 
assurance must be submitted to and maintained with the Regional 
Administrators of all such Regions. 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 funds available through the mechanism 
for post-closure care of any of the facilities covered by the mechanism, 
the Regional Administrator 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 registered professional engineer that the 
post-closure care period has been completed for a hazardous waste 
disposal unit in accordance with the approved plan, the Regional 
Administrator will notify the owner or operator that he is no longer 
required to maintain financial assurance for post-closure care of that 
unit, unless the Regional Administrator has reason to believe that post-
closure care has not been in accordance with the approved post-closure 
plan. The Regional Administrator shall provide the owner or operator 
with a detailed written statement of any such reason to believe that 
post-closure care has not been in accordance with the approved post-
closure plan.

[47 FR 15047, Apr. 7, 1982, as amended at 51 FR 16449, May 2, 1986; 57 
FR 42836, Sept. 16, 1992]