329 IAC 10-39-10 Financial assurance for corrective action for municipal solid waste landfills

Sec. 10. (a) If the permittee of a MSWLF is required to undertake a corrective action program for ground water impacts, the permittee shall establish financial assurance for the most recent corrective action program. The permittee shall choose from the following options: (1) The trust fund option, including the following: (A) The permittee shall demonstrate financial assurance for corrective action by doing as follows: (i) Obtain a trust fund on forms as approved by the commissioner. (ii) Submit an original signed copy of the trust agreement to the commissioner. (B) All trust funds must conform to the requirements detailed in section 2(a)(1)(B) of this rule, with the exception that the term "corrective action" be substituted for the term "closure". (2) The performance surety bond option, including the following: (A) The permittee shall demonstrate financial assurance for corrective action by doing as follows: (i) Obtain a performance surety bond on forms as approved by the commissioner. (ii) Submit an original signed copy of the performance surety bond to the commissioner. (B) All surety bonds must conform to the requirements detailed in section 2(a)(2)(C) through 2(a)(2)(F) of this rule, with the exception that the term "corrective action" be substituted for the term "closure". (3) The letter-of-credit option, including the following: (A) The permittee shall demonstrate financial assurance for corrective action by doing as follows: (i) Obtain a letter-of-credit on forms as approved by the commissioner. (ii) Submit an original signed copy of the letter-of-credit to the commissioner. (B) All letters of credit must conform to the requirements detailed in section 2(a)(3)(B) through 2(a)(3)(D) of this rule, with the exception that the term "corrective action" be substituted for the term "closure". (4) The local government financial test option, including the following: (A) This financial test is only available for permittees that are local governments. As used in this subdivision, "local government" means a county, municipality, township, or solid waste management district. (B) A permittee shall meet the criteria set forth in section 2(a)(6)(B) and 2(a)(6)(C) of this rule to be deemed to have established financial responsibility. (C) If, at any time, the permittee fails to meet the financial test, the permittee shall establish an alternate financial responsibility mechanism within one hundred twenty (120) days after the end of the fiscal year for which the financial data required by this subdivision shows that the permittee no longer meets the requirements. (D) The commissioner may disallow use of this test in accordance with the following: (i) On the basis of qualifications in the opinion expressed in the state board of accounts' annual financial audit of the permittee. An adverse opinion or a disclaimer of opinion is cause for disallowance. (ii) Other qualifications may be cause for disallowance if, in the opinion of the commissioner, the qualifications indicate the permittee does not meet the requirements of this subdivision. (E) The permittee shall choose an alternate financial responsibility mechanism within ninety (90) days after notification of the disallowance under clause (D). (5) The local government guarantee option. The local government guarantor and the permittee shall meet the requirements of section 2(a)(7)(B) and 2(a)(7)(C) of this rule for the permittee to be deemed to have established financial responsibility. (6) The insurance option, including the following: (A) The permittee shall do as follows: (i) Provide evidence of insurance on forms approved by the commissioner. (ii) Submit a certificate of corrective action insurance to the commissioner. (B) All insurance must conform to the requirements detailed in section 2(a)(4)(B) and 2(a)(4)(C) of this rule, with the exception that the term "corrective action" be substituted for the term "closure". (b) The permittee of a MSWLF shall choose a financial responsibility mechanism that guarantees funds will be available to meet the corrective action requirements under 329 IAC 10-21-13. The permittee shall provide continuous coverage for corrective action until released from financial assurance requirements for corrective action by demonstrating compliance with 329 IAC 10-21-13, and shall comply with the following, as applicable: (1) Payments into the trust fund must be made as follows: (A) Annually by the permittee over half of the estimated length of the corrective action program in the case of corrective action for known releases. This period is referred to as the pay-in period. (B) For a trust fund used to demonstrate financial assurance for corrective action, the first payment into the trust fund must be at least equal to one-half (1/2) of the current cost estimate for corrective action divided by the number of years in the corrective action pay-in period. The amount of subsequent payments must be determined by the following formula: Next Payment = RB - CV Y Where: RB = the most recent estimate of the required trust fund balance for corrective action (that is, the total costs that will be incurred during the second half of the corrective action period) CV = the current value of the trust fund Y = the number of years remaining in the pay-in period (C) The initial payment into the trust fund must be made not later than one hundred twenty (120) days after the corrective action remedy has been selected in accordance with 329 IAC 10-21-13. (2) The surety bond must be effective not later than one hundred twenty (120) days after the corrective action remedy has been selected in accordance with 329 IAC 10-21-13. (3) The letter-of-credit must be effective not later than one hundred twenty (120) days after the corrective action remedy has been selected in accordance with 329 IAC 10-21-13. (4) The local government financial test must be effective not later than one hundred twenty (120) days after the corrective action remedy has been selected in accordance with 329 IAC 10-21-13. (5) The local government guarantee must be effective not later than one hundred twenty (120) days after the corrective action remedy has been selected in accordance with 329 IAC 10-21-13. (c) A permittee of a MSWLF required to undertake a corrective action program for ground water impacts shall comply with the following requirements for the corrective action cost estimate: (1) Have a detailed written estimate, in current dollars, of the cost of hiring a third party to perform the corrective action in accordance with the program required under 329 IAC 10-21-13. (2) The corrective action cost estimate must account for the total costs of corrective action activities as described in the corrective action plan for the entire corrective action period. (3) The permittee shall notify the commissioner that the estimate has been placed in the operating record. (4) The permittee shall adjust the corrective action cost estimate in accordance with the following: (A) Annually adjust the estimate for inflation until the corrective action program is completed in accordance with 329 IAC 10-21-13. The annual adjustment must use an inflation factor derived from the most recent implicit price deflator for gross national product published by the U.S. Department of Commerce in its Survey of Current Business*, specified as follows: (i) The first adjustment is made by multiplying the current corrective action cost estimate by the inflation factor, with the result being the adjusted corrective action cost estimate. (ii) Subsequent adjustments are made by multiplying the latest adjusted corrective action cost estimate by the latest inflation factor. (B) Increase the corrective action cost estimate and the amount of financial assurance provided under subsections (a) and (b) if changes in the corrective action program or MSWLF conditions increase the maximum costs of corrective action. The revised corrective action cost estimate must be adjusted annually for inflation in accordance with clause (A). (C) The permittee may reduce the amount of the corrective action cost estimate and the amount of financial assurance provided under subsections (a) and (b) if the cost estimate exceeds the maximum remaining costs of corrective action. The permittee shall notify the commissioner that the justification for the reduction of the corrective action cost estimate and the amount of financial assurance has been placed in the operating record. *This document is available for viewing at https://apps.bea.gov/scb/ and may be obtained from the United States Department of Commerce, Bureau of Economic Analysis, 4600 Silver Hill Road, Suitland, MD 20746.