[Code of Federal Regulations]
[Title 40, Volume 25]
[Revised as of July 1, 2008]
From the U.S. Government Printing Office via GPO Access
[CITE: 40CFR265.143]

[Page 543-551]
 
                   TITLE 40--PROTECTION OF ENVIRONMENT
 
         CHAPTER I--ENVIRONMENTAL PROTECTION AGENCY (CONTINUED)
 
PART 265_INTERIM STATUS STANDARDS FOR OWNERS AND OPERATORS OF HAZARDOUS WASTE 
 
                    Subpart H_Financial Requirements
 
Sec. 265.143  Financial assurance for closure.

    By the effective date of these regulations, an owner or operator of 
each facility must establish financial assurance for closure of the 
facility. He must choose from the options as specified in paragraphs (a) 
through (e) of this section.
    (a) Closure trust fund. (1) An owner or operator may satisfy the 
requirements of this section by establishing a 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. 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 
closure cost estimate covered by the agreement.
    (3) Payments into the trust fund must be made annually by the owner 
or operator over the 20 years beginning with the effective date of these 
regulations 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 
closure trust fund must be made as follows:
    (i) The first payment must be made by the effective date of these 
regulations, except as provided in paragraph (a)(5) of this section. The 
first payment must be at least equal to the current closure cost 
estimate, except as provided in Sec. 265.143(f), divided by the number 
of years in the pay-in period.
    (ii) Subsequent payments must be made no later than 30 days after 
each anniversary 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 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 closure cost 
estimate at the

[[Page 544]]

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 closure trust fund after 
having used one or more alternate mechanisms specified in this section, 
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 as specified in paragraph (a)(3) of this section.
    (6) After the pay-in period is completed, whenever the current 
closure cost estimate changes, 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 
closure cost estimate, or obtain other financial assurance as specified 
in this section to cover the difference.
    (7) If the value of the trust fund is greater than the total amount 
of the current 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 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 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) After beginning partial or final closure, an owner or operator 
or another person authorized to conduct partial or final closure may 
request reimbursements for partial or final closure expenditures by 
submitting itemized bills to the Regional Administrator. The owner or 
operator may request reimbursements for partial closure only if 
sufficient funds are remaining in the trust fund to cover the maximum 
costs of closing the facility over its remaining operating life. No 
later than 60 days after receiving bills for partial or final closure 
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 partial or 
final closure expenditures are in accordance with the approved closure 
plan, or otherwise justified. If the Regional Administrator has reason 
to believe that the maximum cost of closure over the remaining life of 
the facility will be significantly greater than the value of the trust 
fund, he may withhold reimbursements of such amounts as he deems prudent 
until he determines, in accordance with Sec. 265.143(h) that the owner 
or operator is no longer required to maintain financial assurance for 
final closure of the facility. If the Regional Administrator does not 
instruct the trustee to make such reimbursements, he will provide to the 
owner or operator a detailed written statement of reasons.
    (11) 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. 265.143(h).
    (b) Surety bond guaranteeing payment into a 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 submitting the bond to the Regional Administrator. 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.

[[Page 545]]

    (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. 
265.143(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. 265.143(a);
    (B) Updating of Schedule A of the trust agreement (see Sec. 
264.151(a)) to show current 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 closure cost estimate, except as provided in Sec. 
265.143(f).
    (7) Whenever the current 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 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 closure cost estimate decreases, the penal sum may 
be reduced to the amount of the current 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) 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. 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

[[Page 546]]

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. 265.143(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. 265.143(a);
    (B) Updating of Schedule A of the trust agreement (see Sec. 
264.151(a)) to show current 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 closure 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 an amount at least equal 
to the current closure cost estimate, except as provided in Sec. 
265.143(f).
    (7) Whenever the current closure cost estimate increases to an 
amount greater than the amount of the credit, 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 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 closure cost 
estimate decreases, the amount of the credit may be reduced to the 
amount of the current closure cost estimate following written approval 
by the Regional Administrator.
    (8) Following a final administrative determination pursuant to 
section 3008 of RCRA that the owner or operator has failed to perform 
final closure in accordance with the approved closure plan when required 
to do so, the Regional Administrator may draw on the letter of credit.
    (9) 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 al ter nate 
financial assurance as specified in this section and obtain written ap 
pro val of such assurance from the Regional Administrator.
    (10) 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

[[Page 547]]

requirements of this section in accordance with Sec. 265.143(h).
    (d) Closure insurance. (1) An owner or operator may satisfy the 
requirements of this section by obtaining closure insurance which 
conforms to the requirements of this paragraph and submitting a 
certificate of such insurance to the Regional Administrator. By the 
effective date of these regulations the owner or operator must submit to 
the Regional Administrator a letter from an insurer stating that the 
insurer is considering issuance of closure insurance conforming to the 
requirements of this paragraph to the owner or operator. Within 90 days 
after the effective date of these regulations, the owner or operator 
must submit the certificate of insurance to the Regional Administrator 
or establish other financial assurance as specified in this section. 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 closure insurance policy must be issued for a face amount at 
least equal to the current closure cost estimate, except as provided in 
Sec. 265.143(f). 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 closure insurance policy must guarantee that funds will be 
available to close the facility whenever final closure occurs. The 
policy must also guarantee that once final closure 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) After beginning partial or final closure, an owner or operator 
or any other person authorized to conduct closure may request 
reimbursements for closure expenditures by submitting itemized bills to 
the Regional Administrator. The owner or operator may request 
reimbursements 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 activities, the Regional Administrator will instruct the 
insurer to make reimbursements in such amounts as the Regional 
Administrator specifies in writing if the Regional Administrator 
determines that the partial or final closure expenditures are in 
accordance with the approved closure plan or otherwise justified. If the 
Regional Administrator has reason to believe that the maximum cost of 
closure over the remaining life of the facility will be significantly 
greater than the face amount of the policy, he may withhold 
reimbursement of such amounts as he deems prudent until he determines, 
in accordance with Sec. 265.143(h), that the owner or operator is no 
longer required to maintain financial assurance for final closure of the 
particular facility. If the Regional Administrator does not instruct the 
insurer to make such reimbursements, he will provide to the owner or 
operator 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 (d)(10) 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

[[Page 548]]

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) Interim status is terminated or revoked; 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 closure cost estimate increases to an 
amount greater than the face amount of the policy, 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 
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 closure cost 
estimate decreases, the face amount may be reduced to the amount of the 
current closure cost estimate following written approval by the Regional 
Administrator.
    (10) 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. 265.143(h).
    (e) Financial test and corporate guarantee for closure. (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 (e)(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 located in the United States amounting to at least 90 
percent of 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 total assets or at least six times the sum of the current 
closure and post-closure cost estimates and the current

[[Page 549]]

plugging and abandonment cost estimates.
    (2) The phrase ``current closure and post-closure cost estimates'' 
as used in paragraph (e)(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 
(e)(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) The owner or operator may obtain an extension of the time 
allowed for submission of the documents specified in paragraph (e)(3) of 
this section if the fiscal year of the owner or operator ends during the 
90 days prior to the effective date of these regulations and if the 
year-end financial statements for that fiscal year will be audited by an 
independent certified public accountant. The extension will end no later 
than 90 days after the end of the owner's or operator's fiscal year. To 
obtain the extension, the owner's or operator's chief financial officer 
must send, by the effective date of these regulations, a letter to the 
Regional Administrator of each Region in which the owner's or operator's 
facilities to be covered by the financial test are located. This letter 
from the chief financial officer must:
    (i) Request the extension;
    (ii) Certify that he has grounds to believe that the owner or 
operator meets the criteria of the financial test;
    (iii) Specify for each facility to be covered by the test the EPA 
Identification Number, name, address, and current closure and post-
closure cost estimates to be covered by the test;
    (iv) Specify the date ending the owner's or operator's last complete 
fiscal year before the effective date of these regulations;
    (v) Specify the date, no later than 90 days after the end of such 
fiscal year, when he will submit the documents specified in paragraph 
(e)(3) of this section; and
    (vi) Certify that the year-end financial statements of the owner or 
operator for such fiscal year will be audited by an independent 
certified public accountant.
    (5) After the initial submission of items specified in paragraph 
(e)(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 (e)(3) of this section.
    (6) If the owner or operator no longer meets the requirements of 
paragraph (e)(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 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 (e)(1) of this section, require reports of financial condition 
at any time from the

[[Page 550]]

owner or operator in addition to those specified in paragraph (e)(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 (e)(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 (e)(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) The owner or operator is no longer required to submit the items 
specified in paragraph (e)(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. 265.143(h).
    (10) An owner or operator may meet the requirements of this section 
by obtaining a written guarantee. The guarantor must be the direct or 
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 (e)(1) through (8) 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 (e)(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 final closure of a 
facility covered by the corporate guarantee in accordance with the 
closure plan and other interim status requirements whenever required to 
do so, the guarantor will do so or establish a trust fund as specified 
in Sec. 265.143(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 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.
    (f) 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, letters of credit, and insurance. The mechanisms 
must be as specified in paragraphs (a) through (d), respectively, of 
this section, except that it is the combination of mechanisms, rather 
than the single mechanism, which must provide financial assurance for an

[[Page 551]]

amount at least equal to the current 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 closure of the facility.
    (g) 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 
closure 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 closure 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.
    (h) Release of the owner or operator from the requirements of this 
section. Within 60 days after receiving certifications from the owner or 
operator and a qualified Professional Engineer that final closure has 
been completed in accordance with the approved closure plan, the 
Regional Administrator will notify the owner or operator in writing that 
he is no longer required by this section to maintain financial assurance 
for final closure of the facility, unless the Regional Administrator has 
reason to believe that final closure has not been in accordance with the 
approved closure plan. The Regional Administrator shall provide the 
owner or operator a detailed written statement of any such reason to 
believe that closure has not been in accordance with the approved 
closure plan.

[47 FR 15064, Apr. 7, 1982, as amended at 51 FR 16456, May 2, 1986; 57 
FR 42843, Sept. 16, 1992; 71 FR 16909, Apr. 4, 2006]