310 CMR 19.051
Financial Assurance Requirements
(1) Applicability. The provisions of 310 CMR 19.051 apply to:
(a) landfills; and
(b) other facilities which the Department determines on a facility specific base should
provide such financial assurance.
(2) Financial Responsibility for Closure, Post-Closure and Corrective Action.
(a) The owner or operator of a facility identified in 310 CMR 19.051(1) shall establish or
obtain, and continuously maintain, financial assurance that is adequate to assure the
Department that the owner or operator is at all times financially capable of complying with
the provisions of 310 CMR 19.00 governing the closure of the facility and its post-closure
maintenance. An owner or operator of a facility shall meet this financial assurance
obligation by using any of the methods authorized in 310 CMR 19.051 (an approved
financial assurance mechanism) and shall file with the Department and maintain in current
form approved documents constituting or evidencing compliance with this obligation.
Where the Department establishes a form for a financial assurance instrument the
instruments submitted must be identical to the approved form. Where the Department does
not establish a form the applicant shall submit a draft of the proposed financial assurance
mechanism for Department approval.
(b) An approved financial assurance mechanism shall be in full effect on or before the date
that an owner or operator of a facility receives an authorization to operate under 310 CMR
19.042 and shall remain in full force and effect until the owner or operator obtains a release
from this obligation pursuant to the provisions of 310 CMR 19.051(11). The Department
shall not issue or renew an authorization to operate unless an owner or operator first
complies with the provisions of 310 CMR 19051 and may, pursuant to 310 CMR 19.081,
revoke an approval, permit or authorization previously issued or take other appropriate
enforcement should an owner or operator fail to remain in compliance with the provisions
of 310 CMR 19.051.
(c) The initial and revised amounts of an approved financial assurance mechanism shall be
no less than the estimate of the cost of closure and post-closure maintenance of the facility
submitted to and approved by the Department according to the provisions of 310 CMR
19.051(5). No financial assurance mechanism shall be terminated by an owner or operator
without the approval of the Department.
(d) An approved financial assurance mechanism shall be structured so that the Department
shall be a party to said mechanism to the extent that it shall have the right to obtain, without
the consent of the owner or operator, exclusive direction and control over the transfer, use
and disbursement of the secured funds or performance benefits to perform approved closure
and post-closure maintenance or secure reimbursement for costs incurred for so performing
upon its determination that an owner or operator has failed in whole or in part to carry out
closure or post-closure requirements in accordance with 310 CMR 19.000 or any plan or
permit conditions or orders issued hereunder.
(e) Effective April 9, 1994, the Department may order the owner or operator of a municipal
solid waste landfill required to perform corrective action under 310 CMR 19.151 to establish
or obtain, no later than 120 days after the corrective action remedy has been selected, and
continuously maintain financial assurance which is adequate to assure the Department that
the owner or operator is at all times capable of complying with the provisions of 310 CMR
19.000 governing the performance of corrective actions. Except as may be expressly
provided herein or in an order of the Department, the provisions of 310 CMR 19.000
governing the estimation, establishment, revision, release and approved mechanisms of
closure and post closure financial assurance shall also apply to corrective action financial
assurance.
(3) Transfer of Permit, Authorization, or Other Interest. No person may transfer or obtain by
any form of transfer any permit, authorization, or interest in the ownership, possession, or
operation of a facility without first complying with the applicable provisions of 310 CMR
19.051.
(4) Demonstration of Compliance with Financial Assurance Requirements.
(a) Existing Landfills. An owner or operator of an existing landfill shall:
1. as a condition of continued operation under a prior plan approval or approval of an
application for a permit, modification or authorization to operate provide to the
Department documents constituting or evidencing an approved financial assurance
mechanism adequate to defray the cost of closure of any portion of the facility which has
received waste but has not been closed in accordance with an approved plan as well as
the post-closure maintenance of any such area and the closure and post-closure
maintenance costs of the area currently approved to accept waste; and
2. as a pre-condition to obtaining subsequent authorization to operate or expansion
modifications provide the Department with documents constituting or evidencing an
approved financial assurance mechanism adequate to defray the cost of the closure and
post-closure maintenance of each subsequent operating phase.
3. The Department may allow an existing facility owner or operator a conditional grace
period to meet the financial assurance requirements described in 310 CMR
19.051(4)(a)1. for inactive areas of the facility provided the owner or operator
demonstrates that during the time the applicant owned or operated the facility a closure
performance bond or another approved financial assurance mechanism in accordance
with 310 CMR 19.25(4): Completion of Landfill (1971 Landfill Regulations) was
maintained, and that an approved closure and post-closure trust fund or Enterprise fund
is established and is fully funded over a pay-in period which is not greater than the
approved life of the current operating phase of the facility minus one year or the life of
the facility minus one year if it does not operate in phases. For the purpose of 310 CMR
19.051 an inactive area is an area on which waste has been disposed, which has not
closed in accordance with Department approved plans and which has not been approved
for further waste disposal.
4. A private owner or operator of an existing landfill, shall make the submission
described in 310 CMR 19.051(4)(a) upon the earlier of filing an application for a solid
waste management facility permit in accordance with the schedule set forth at 310 CMR
19.020(3), an application to operate or an application for a permit or modification to
expand facility capacity.
5. A public owner or operator of an existing landfill shall make the submissions
described in 310 CMR 19.051(4)(a) upon written notice or order from the Department.
6. In lieu of submitting all or part of the financial assurance mechanism the owner or
operator may, no later than the dates set forth at 310 CMR 19.051(4)(a)4. or 5. submit
plans for final closure of the inactive portions of the facility and complete closure of said
areas in accordance with approved plans on an expedited schedule to be determined by
the Department.
(b) New Landfills. An applicant for a permit to construct and operate a landfill shall:
1. in addition to the submission required by 310 CMR 19.030, provide to the
Department documents constituting or evidencing an approved financial assurance
mechanism adequate to defray the cost of closure and post-closure maintenance of the
first operating phase of the proposed landfill and, if additional costs are involved, of the
entire facility; and
2. as a pre-condition to obtaining an authorization to operate under 310 CMR 19.042
for each subsequent phase, provide to the Department documents constituting or
evidencing an approved financial assurance mechanism adequate to defray the cost of
closure and post-closure maintenance of each subsequent operating phase of the proposed
landfill and, if additional costs are involved, of the entire facility.
(c) Other Solid Waste Management Facilities. A person seeking authorization to operate
a solid waste management facility other than a landfill shall, where required by the
Department and as a pre-condition to obtaining an authorization to operate under 310 CMR
19.042, provide to the Department documents constituting or evidencing approved financial
assurance mechanisms adequate to defray the cost of closure and post-closure maintenance
of the facility.
(5) Estimation of Costs for Closure and Post-Closure Maintenance.
(a) An owner or operator of a proposed solid waste management facility required to provide
an approved financial assurance mechanism shall prepare and submit to the Department, as
a part of the permit application required under 310 CMR 19.030 a written estimate,
unadjusted for time, inflation, return on invested funds, or other purely financial factors, of
the cost of a third party closing and performing post-closure maintenance of the facility. This
estimate shall be based upon the closure and post-closure plans for the facility required under
310 CMR 19.000 and equal the cost of closing the facility and providing post-closure
maintenance at that point in the facility's active life when the manner and extent of its
operations would make closure and post-closure most expensive.
(b) An owner or operator of an existing facility required to provide an approved financial
assurance mechanism shall prepare and submit to the Department, as a part of the permit
application required under 310 CMR 19.030(4), an application to operate or application for
a modification to expand capacity, a written estimate, unadjusted for time, inflation, return
on invested funds, or other purely financial factors, of the cost of closing and providing
post-closure maintenance of those portions of the facility in which waste has been disposed
and not closed in accordance with an approved plan, the area in which it is currently
authorized to operate and, if appropriate, the proposed expansion area. This estimate shall
be based upon the closure and post-closure plans for the facility required under 310 CMR
19.000 and equal the cost of closing the facility and providing post-closure maintenance at
that point in the facility's active life when the manner and extent of its operations would
make closure and post-closure most expensive.
(c) A written estimate which conforms to the requirements set forth in 310 CMR
19.051(5)(a) or (b) shall be submitted with each application for authorization to operate in
a subsequent operating phase or application for an expansion of capacity.
(d) Where a facility is operated or is to be operated in phases an owner or operator may
allocate proportions of the estimate of the cost of closure and post-closure maintenance to
each such phase for the purpose of complying with the requirements of 310 CMR
19.051(4)(a) or (b). Such an allocation may not result in the under-estimation of the cost of
closure and post-closure of any such phase or of the entire facility at that point in the facility's
active life when the manner and extent of its operations would make closure and post-closure
maintenance most expensive. Where the facility is to be developed in phases the estimate
shall include in the estimate the cost of integrating the closed phases into prospective phases.
(e) The Department shall review the estimate submitted and notify the applicant if it
determines the estimate to be adequate. The Department may determine upon review of an
estimate that its amount is inadequate to defray either or both the cost of closure or
post-closure maintenance of the facility. Upon such a determination, the Department may
require the applicant to submit a revised estimate or it may adjust the estimate and use the
adjusted estimated cost rather than the estimated cost to establish the minimum amount of
the financial assurance mechanism. If the Department determines to adjust the estimate and
it increases the amount of the estimate by 10% or more, the provisions of 310 CMR
19.051(7) apply to the estimate as if it were a revised estimate determined pursuant to the
provisions of that sub-section.
(f) An owner or operator of a facility may propose that the estimate of the cost of closing
the facility or of providing post-closure maintenance prepared and submitted to the
Department in accordance with the provisions of 310 CMR 19.051(5)(a), (b) or (c) be
adjusted by the consideration or application of such financial factors as may reasonably affect
the determination of the amount of money required to assure the Department that the owner
or operator is at all times financially capable of complying with the provisions of 310 CMR
19.000 governing the closure of the facility and its post-closure maintenance. If the
Department determines to adjust the estimated cost, the adjusted estimated cost, rather than
the estimated cost shall be the minimum amount of the financial assurance mechanism.
(g) All submitted estimates shall be certified by a Massachusetts registered professional
engineer except as otherwise approved by the Department.
(6) Revision of Estimates of Closure and Post-Closure Costs.
(a) An owner or operator of a facility shall revise the estimate of the cost of closure and
post-closure maintenance submitted to the Department pursuant to 310 CMR 19.051(5) every
year and every second year shall submit the revised estimate in written form, accompanied
by a detailed explanation of its method of calculation, to the Department on or before June
1 of the year to which the revised estimate relates.
(b) Unless otherwise approved by the Department, a revision of the estimate of the cost of
closure and post-closure maintenance of a facility shall be computed using the following
formula:
Revised Present Estimate of Cost: Cp = Co x Ip/Io + CoC where:
Cp
=
(present) revised cost estimate
Co
=
(original) cost estimate as filed pursuant to 310 CMR 19.051(5)
Ip
=
(present) index value
Io
=
(original) index value at time of filing pursuant to 310 CMR 19.051(5) and where
the index is the so-called "Construction Cost Index" published in the periodical
Engineering News Record.
CoC =
Change in compliance costs as a result of changes in site conditions, changes in law,
regulations, permit conditions, judicial or administrative orders or other significant
changes.
(c) An owner or operator of a facility shall, in addition to submitting to the Department the
adjustment pursuant to 310 CMR 19.051(6)(a), revise the estimate of the cost of closure and
post-closure maintenance of a facility and submit such revised estimate to the Department
within 30 days of the date that the Department approves a modification of the facility permit
pursuant to 310 CMR 19.039 or 310 CMR 19.040 which would affect said closure or
maintenance costs.
(d) An owner or operator of a facility shall maintain records of the calculation and
determination of the original and all revisions of the estimate of the cost of closure and
post-closure maintenance of a solid waste management facility until such time as the owner
or operator obtains a release from the obligation imposed by 310 CMR 19.051(2).
(7) Increase in the Amount of Financial Assurance.
(a) An owner or operator of a facility shall, upon determining a revised estimate of the cost
of closure or post-closure maintenance of the facility exceeds by 10% the amount of the
applicable approved financial assurance mechanism, promptly notify the Department of the
determination and either:
1. increase the amount of the applicable financial assurance mechanism to an amount
equal to the full amount of the revised estimate of the cost of closure or post-closure
maintenance of the facility; or
2. secure and maintain in compliance with the requirements of 310 CMR 19.051 an
additional approved financial assurance mechanism in an amount equal to the difference
between the amount of the existing applicable approved financial assurance mechanism
and the full amount of the revised estimate of the cost of closure or post-closure
maintenance of the facility.
An owner or operator of a facility shall file with the Department and maintain in current
form those documents constituting or evidencing compliance with this requirement within
60 days of determining a revised estimate of the cost of closure or post-closure maintenance
of the facility that exceeds by 10% the amount of the applicable approved financial assurance
mechanism. In the event that the revised estimate is a biennial estimate determined pursuant
to the provisions of 310 CMR 19.051(6), an owner or operator shall make such filing no later
than June 1 of the year to which the revised estimate applies.
(b) The Department may review the estimate submitted and notify the applicant if it
determines the estimate to be adequate. The Department may determine upon review of an
estimate that its amount is inadequate to defray either or both the cost of closure or
post-closure maintenance of the facility. Upon such a determination, the Department may
require the applicant to submit a revised estimate or it may adjust the estimate and use the
adjusted estimated cost rather than the estimated cost to establish the minimum amount of
the financial assurance mechanism.
(8) Decrease in the Amount of Financial Assurance. An owner or operator of a solid waste
management facility may, upon determining a revised estimate of the cost of closure or
post-closure maintenance of the facility, decrease the amount of the applicable financial
assurance mechanism to an amount equal to the full amount of the revised estimate of the cost
of closure or post-closure maintenance of the facility, having first requested and received the
written approval of the Department. The Department shall approve the decrease upon its
determination that the proposed decreased amount of the financial assurance mechanisms equals
or exceeds the necessary cost of closure or post-closure maintenance.
(9) Procedure Governing the Use of Assured Funds.
(a) The Department shall notify the owner, operator and persons who are parties to the
financial assurance mechanism whenever the Department has determined that the owner or
operator is not in compliance due to a failure to close or conduct post-closure maintenance
in accordance with the applicable regulations, permits or orders. No less than 21 days after
such notification the Department may exercise its rights under the financial assurance
mechanism to secure control over and direct the transfer, use and disbursement of the
security for the purpose of effecting closure and post-closure maintenance including but not
limited to:
1. directing the holder of the financial assurance mechanism to perform actions intended
to bring the facility into compliance; and
2. directing the holder of the financial assurance mechanism to reimburse the
Department for actions it or its agents has performed to bring the facility into
compliance.
(b) After beginning final closure, an owner or operator or any other person authorized by
the Department to perform closure may request reimbursement for closure expenditures by
submitting itemized bills or other adequate proof of the performance of the work in
accordance with the approved closure or post-closure plans. After making a determination
that the work has been performed in compliance with the plan(s) the Department may direct
the holder of the funds under the financial assurance mechanism to reimburse the party
performing the work or release a proportionate amount of the secured funds. The
Department may withhold reimbursement or release of such amounts it deems prudent until
it determines, in accordance with 310 CMR 19.051(11) that the owner or operator is not
required to maintain financial assurance for closure or post-closure.
(10) Cancellation or Termination of an Approved Financial Assurance Mechanism. An owner
or operator of a facility may apply to the Department for reduction, cancellation or termination
of an outstanding financial assurance mechanism established pursuant to 310 CMR 19.051(2).
The application shall detail one of the following reasons in support of the application: the
substitution of an alternative assurance mechanism, transfer of an interest in the facility in
accordance with 310 CMR 19.044, an approved decrease in the amount of required financial
assurance in accordance with 310 CMR 19.051(8), activities which have taken place under 310
CMR 19.051(9)(b) or the Department's termination of the financial assurance obligation by
granting a release to the owner or operator pursuant to the provisions of 310 CMR 19.051(11).
(11) Release from Financial Assurance Requirements.
(a) Closure. The owner or operator of a facility shall be released in whole or in part from
the requirement to provide financial assurance for closure upon receiving written notification
from the Department that closure has been completed in accordance with the closure plan
and permit conditions and in compliance with 310 CMR 19.000. An owner or operator of
a facility may subsequently submit to the Department such documents as may be necessary
to cancel or terminate the approved financial assurance mechanism that the owner or operator
is no longer obligated to maintain.
(b) Post-Closure. The owner or operator of a facility shall be released in whole or in part
from the obligation to provide and maintain a financial assurance mechanism for post-closure
maintenance of the facility upon receiving written notification from the Department that the
post-closure period has expired and that post-closure maintenance of the facility has been
completed in compliance with 310 CMR 19.000. An owner or operator of a facility may
subsequently submit to the Department such documents as may be necessary to cancel or
terminate a financial assurance mechanism that the owner or operator is no longer obligated
to maintain.
(12) Approved Financial Assurance Mechanisms. The owner or operator of a facility may meet
the obligation to maintain financial assurance that is adequate to assure the Department that the
owner or operator is at all times financially capable of complying with the provisions of 310
CMR 19.000 governing the closure of the facility and its post-closure maintenance through the
use of one or more of the approved financial assurance mechanisms specified in 310 CMR
19.051(12).
(a) Closure, Post-Closure or Corrective Action Trust Fund.
1. An owner or operator may satisfy the requirements of 310 CMR 19.051(2) by
establishing a closure or post-closure trust fund that conforms to 310 CMR 19.051(12)(a)
and by sending an originally signed duplicate of the trust agreement to the Department
within the applicable time period set forth at 310 CMR 19.051(4).
2. The trustee shall be a bank or other financial institution that has the authority to act
as a trustee and whose trust operations are regulated and examined by the Massachusetts
Commissioner of Banking.
3. The schedule of assets in the trust agreement shall be updated within 60 days after
a change in the amount of the current closure or post-closure maintenance estimate which
is the subject of the trust agreement.
4. Payments into the trust fund shall be made as follows:
a. The first payment shall be made prior to obtaining an authorization to operate as
set forth in 310 CMR 19.042. The owner or operator shall submit a receipt from the
trustee for this payment to the Department as evidence of payment.
b. The private owner or operator of a facility shall make a first payment in an
amount equal to the approved closure and post-closure estimate for the facility
submitted pursuant to 310 CMR 19.051(5). Payments to the trust as a condition of
approval of subsequent permits or authorizations to operate shall be made in
amount(s) equal to the approved closure and post-closure maintenance estimates
submitted pursuant to 310 CMR 19.051(5).
c. A municipal owner of a facility shall make a first payment which shall at least be
equal to either the total current closure and post-closure maintenance cost or the
current closure or post-closure maintenance cost estimate, divided by the number of
years in the pay-in period. The pay-in period may not be greater than the authorized
operating life of the current phase minus one year. Payments to the trust as a
condition to approval of subsequent authorizations to operate shall be made in
amount(s) equal to the approved closure and post-closure maintenance estimates
submitted pursuant to 310 CMR 19.051(5).
d. Subsequent payments by a municipal owner shall be made no later than 30 days
after each anniversary date of the first payment. The amount of each subsequent
payment is calculated by the formula:
Next Payment
=
CE - CV
Y
where:
CE
=
current closure or post-closure cost estimate
CV
=
current value of the trust fund
Y
=
number of years remaining in the pay-in period.
5. For an owner or operator making payments into a trust fund used to demonstrate
financial assurance for corrective action, the first payment into the trust fund shall be at
least equal to one half of the current cost estimate for corrective action, divided by the
number of years in the corrective action program in case of corrective action for known
releases. This latter period of time is known as the pay-in-period. The amount of
subsequent payments shall be determined by the following formula:
Next payment = (RB-CV) / Y
where RB is the most recent estimate of the required trust fund balance for corrective
action [i.e. total costs that will be incurred during the second half of the corrective action
period], CV is the current value of the trust fund, and Y is number of years remaining on
the pay-in-period.
6. Notwithstanding the provisions of 310 CMR 19.051(2)(d), a trust fund for a facility
owned by a municipality shall be an approved financial assurance mechanism without
providing to the Department the right to obtain exclusive direction and control over the
trust fund assets provided that the documents establishing the trust require that the funds
paid into the trust cannot be withdrawn, transferred, encumbered or disbursed for any
purpose other than to meet Department approved closure and post-closure obligations
without the prior written consent of the Department.
7. If the owner or operator establishes a trust fund after having used one or more
alternate mechanisms specified in 310 CMR 19.051(12) the owner's or operator's first
payment must equal the amount that the trust fund would contain if the trust fund had
been established initially and payments made in compliance with 310 CMR
19.051(12)(a).
(b) Enterprise Fund
1. A municipal owner may satisfy the requirements of 310 CMR 19.051(2) by
establishing a separate account which qualifies as an "Enterprise Fund" pursuant to
M.G.L. c. 44, § 53F½ for the purpose of reserving funds to meet its obligation to conduct
approved closure and post-closure maintenance and by sending an originally signed
duplicate of the documents establishing the fund to the Department within the applicable
time period set forth at 310 CMR 19.051(4).
2. Payments shall be made into the reserve fund in accordance with procedure set forth
at 310 CMR 19.051(12)(a)4.c. and d.
3. Notwithstanding the provisions of 310 CMR 19.051(2)(d), an Enterprise Fund
Account shall be an approved financial assurance mechanism without providing to the
Department the right to obtain exclusive control over the Fund provided that the
documents establishing the account require that the funds paid into the closure reserve
account cannot be withdrawn, transferred, encumbered or disbursed for any purpose other
than to meet Department approved closure and post-closure obligations without the prior
written consent of the Department.
(c) Surety Bond Guaranteeing Payment.
1. An owner or operator may satisfy the requirements of 310 CMR 19.051(2) by
obtaining and filing a surety bond that conforms to 310 CMR 19.051(12)(c) and by
sending an originally signed duplicate of the bond to the Department within the
applicable time period set forth at 310 CMR 19.051(4).
2. The surety company issuing the bond shall, at a minimum, be among those listed as
acceptable sureties on Federal bonds in Circular 570 of the United States Department of
the Treasury, or licensed, approved or authorized by the Massachusetts Division of
Insurance to secure such risks.
3. An owner or operator who uses a surety bond to satisfy the requirements of 310 CMR
19.051 shall also establish a standby trust fund. Under the terms of the surety bond, all
payments made thereunder are deposited by the surety directly into the standby trust fund
in accordance with instructions from the Department. This standby trust fund shall meet
the requirements in 310 CMR 19.051(12)(a), except that:
a. an originally signed duplicate of the trust agreement must be submitted to the
Department with the surety bond; and
b. until the standby trust fund is funded pursuant to the requirements of 310 CMR
19.051, the following are not required:
i. payment into the trust fund as specified in 310 CMR 19.051(12)(a);
ii. annual valuations as required by the trust agreement; and
iii. notices of nonpayment as may be required by the trust agreement.
4. The surety bond shall provide the owner or operator shall be in default if the
responsible party:
a. fails to fund the standby trust fund in an amount equal to the penal sum of the
bond before the beginning of closure of the applicable phase; or
b. fails to fund the standby trust fund in an amount equal to the penal sum within
21 days after the Department or a court of competent jurisdiction issues an order to
begin closure; or
c. fails to provide an alternate financial assurance mechanism as specified in 310
CMR 19.051(12), and obtain the Department's written approval of the financial
assurance mechanism provided, within 90 days after receipt by the owner or operator
of a notice of cancellation of the surety bond from the surety.
5. Under the terms of the bond, the surety shall become liable on the bond obligation
when the owner or operator is in default as defined by the bond.
6. The penal sum of the bond shall equal the current approved closure and post-closure
cost estimate.
7. Under the terms of the bond, the surety may cancel the bond by sending written
notice of cancellation by certified mail to the owner or operator and to the Department.
Cancellation may not take effect, however, until at least 120 days after the date of receipt
of the notice of cancellation by both the owner or operator and the Department, as shown
by the later return receipt.
(d) Surety Bond Guaranteeing Performance.
1. An owner or operator may satisfy the requirements of 310 CMR 19.051(2) by
obtaining and filing a surety bond that conforms to 310 CMR 19.051(12)(d) and by
sending an originally signed duplicate of the bond to the Department within the
applicable time period set forth at 310 CMR 19.051(4).
2. The surety company issuing the bond shall, at a minimum, be among those listed as
acceptable sureties on Federal bonds in Circular 570 of the United States Department of
the Treasury, or licensed, approved or authorized by the Massachusetts Division of
Insurance to secure such risks.
3. The Department may require a surety to establish a standby trust under the terms and
conditions set forth at 310 CMR 19.051(12)(c)3.
4. The surety bond shall provide the owner or operator shall be in default if the
responsible party:
a. fails to perform closure in accordance with the closure/post-closure plan and other
requirements of the permit for the facility whenever required to do so, and perform
post-closure maintenance in accordance with the closure/post-closure plan and other
requirements of the permit for the facility; or
b. fails to provide an alternate financial assurance mechanism pursuant to 310 CMR
19.051(12), and obtain the Department's written approval of the financial assurance
mechanism provided, within 90 days after receipt by the owner or operator of a notice
of cancellation of the surety bond from the surety.
5. Under the terms of the bond, the surety shall become liable on the bond obligation
when the owner or operator is in default as defined by the bond. When the owner or
operator does not perform closure or post-closure maintenance in accordance with
approved closure/post-closure plans or applicable permit conditions, the surety shall
become liable on the bond obligation to perform closure and post-closure maintenance
as guaranteed by the bond and deposit the amount of the penal sum of the bond into the
standby trust if one is required to be established.
6. The penal sum of the bond must equal the current closure and post-closure
maintenance cost estimates.
7. Under the terms of the bond, the surety may cancel the bond by sending written
notice of cancellation by certified mail to the owner or operator and to the Department.
Cancellation may not take effect, however, until at least 120 days after the date of receipt
of the notice of cancellation by both the owner or operator and the Department, as shown
by later return receipt.
8. The surety need not be liable for deficiencies in the performance of closure by the
owner or operator for which the Department has released the owner or operator from the
requirements of closure and post-closure maintenance,or portions thereof, pursuant to
310 CMR 19.051(11).
(e) Closure and Post-Closure Insurance.
1. An owner or operator may satisfy the requirements of 310 CMR 19.051 by obtaining
closure insurance that conforms to the requirements of 310 CMR 19.051(12)(e) and by
submitting a certificate of such insurance to the Department within the applicable time
period set forth at 310 CMR 19.051(4). The Department may require submission of a
duplicate of the complete insurance policy.
2. At minimum, the insurer shall be licensed to transact the business of insurance or
authorized or approved to provide insurance as an excess or surplus lines insurer in the
Commonwealth of Massachusetts.
3. The insurance policy shall be issued for a face amount at least equal to the current
approved closure and post-closure cost estimate. The term "face amount" means the total
amount the insurer is obligated to pay pursuant to the policy. Actual payments by the
insurer shall not change the face amount, although the insurer's future liability may be
lowered by the amount of such payments.
4. The insurance policy shall guarantee that funds in an amount equal to the face amount
of the insurance policy shall be available to close a phase or facility whenever final
closure of a phase or facility occurs and to conduct post-closure maintenance. The policy
shall also guarantee that once final closure or post-closure maintenance begins, the
insurer shall be responsible for paying out funds up to an amount equal to the face
amount of the insurance policy, upon the direction of the Department, to such persons
as the Department may specify in writing.
5. The insurance policy shall provide that the insurer may not cancel, terminate, or fail
to renew the closure or post-closure maintenance insurance policy except for the insured's
failure to pay the premium or the insurer's refusal to write solid waste management
facility closure or post-closure maintenance insurance coverage in Massachusetts. 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 closure insurance policy except in the event
of a refusal to write such coverage. If there is a failure to pay the premium or a refusal
to write such coverage, the insurer may elect to cancel, terminate, or fail to renew the
closure or post-closure maintenance insurance policy by sending notice by certified mail
to the owner or operator to the Department. No cancellation shall occur until at least 120
days after the date of receipt of the notice of cancellation by both the owner or operator
and the Department, as shown by later return receipt. No cancellation, termination, or
failure to renew may occur, and the closure insurance policy shall remain in full force
and effect, in the event that on or before the date of expiration:
a. the Department deems the facility abandoned;
b. the permit is suspended or revoked and application for a new permit or
authorization is denied;
c. closure is ordered by the Department or a court of competent jurisdiction; or
d. the owner or operator is named a debtor in a voluntary or involuntary bankruptcy
proceeding; or
e. the premium due is paid prior to the effective date of cancellation if the
cancellation was based on failure to pay the premium; or
f. the insurer continues to write solid waste management facility closure or
post-closure maintenance coverage in Massachusetts if the cancellation was based
on refusal to write said coverage.
6. Each policy shall 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 that such consent shall not be unreasonably withheld.
7. For insurance policies providing coverage for post-closure care, 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 shall be
equivalent to the face amount of the policy, less any payments made, multiplied by an
amount equivalent to 85% of the most recent investment rate of the equivalent
coupon-issue yield announced by the U.S. Treasury for 26 week Treasury certificates.
(f) Closure and post-closure letter of credit.
1. An owner or operator may satisfy the requirement of 310 CMR 19.051(2) by
obtaining an irrevocable standby letter of credit that conforms to the requirements of 310
CMR 19.051(12)(f) and by submitting an executed copy of the letter of credit to the
Department within the applicable time period set forth at 310 CMR 19.051(4). The
institution issuing the letter of credit shall be an entity which has the authority to issue
letter of credit and whose letter-of-credit operations are regulated and examined by the
Massachusetts Commissioner of Banking or other institution approved by the
Department.
2. An owner or operator who uses a letter of credit shall also establish a standby trust
fund. Under the terms of the letter of credit, all payments made thereunder shall be
deposited by the issuing institution directly in the standby trust fund in accordance with
instruction from the Department. The standby trust shall meet the requirements of 310
CMR 19.051(12)(a) except that:
a. an originally signed duplicate of the trust agreement shall be submitted to the
Department with the letter of credit; and
b. until the standby trust is funded pursuant to the requirements of 310 CMR 19.051
the following are not required:
i. payment into the trust fund as specified in 310 CMR 19.051(12)(a);
ii. annual valuations as required by the trust agreement; and
iii. notices of nonpayment as may be required by the trust agreement.
3. The letter of credit shall be accompanied by a letter from the owner or operator which
shall state:
a. the letter of credit number;
b. the name of the issuing institution;
c. the date of issuance of the letter of credit;
d. the name and address of the facility; and
e. the amount of funds assured by the letter of credit for closure of the facility.
4. The letter of credit shall be irrevocable and shall be issued for a period at least equal
to the sum of one year plus:
a. the estimated period of time required to complete closure of any unclosed inactive
areas and the current operating phase; or
b. the term of the permit if the facility is not operated in approved phases.
The letter of credit shall provide that the expiration will be automatically extended
for a period of at least one year unless, not later than 120 days before the current
expiration date pursuant to the terms of the letter of credit, the issuing institution notifies
both the owner or operator and the Department by certified mail of the decision not to
extend the expiration date. Under the terms of the letter of credit, the 120 days shall not
begin before the date when both the owner and operator and the Department have
received notice, as shown by the later return receipt.
5. The letter of credit shall be issued in an amount at least equal to the current closure
and post-closure cost estimate except as provided in 310 CMR 19.051(8).
(13) Use of Multiple Financial Assurance Mechanisms. An owner or operator may with
Department approval satisfy the requirements of 310 CMR 19.051, by establishing more than
one financial assurance mechanism per Massachusetts facility. These financial assurance
mechanisms shall be limited to the mechanisms set forth at 310 CMR 19.051(12). These
mechanisms shall be in compliance with 310 CMR 19.051(12) except that the combination of
mechanisms, rather than each mechanism, which provide for an amount equal to the required
financial assurance. If an owner or operator uses a trust fund in combination with any other
financial assurance mechanism, it shall use the trust fund for those financial assurance
mechanisms for which the establishment of a trust fund is required. A single standby trust fund
may be used for two or more mechanisms. The Department may use any or all of the
mechanisms to provide for closure of the facility.
(14) Use of a Financial Assurance Mechanism for Multiple Facilities.
(a) An owner or operator may use a financial assurance mechanism specified in 310 CMR
19.051 to meet the requirements of said section for more than one Massachusetts facility.
(b) The amount of funds available through the financial assurance mechanism shall be no
less than the sum of funds that would be available if a separate mechanism has been
established and maintained for each facility. In directing funds available through the financial
assurance mechanism for closure or post-closure maintenance of any facility covered by the
mechanism, the Department may direct only the amount of funds designated for that facility,
unless the owner or operator agrees to the use of additional funds available under the
mechanism.