R 299.9705 Surety bond guaranteeing performance of closure and/or postclosure care.

Rule 705. (1) An owner or operator may satisfy the financial assurance requirements of R 299.9703 by obtaining a surety bond that is executed on a form approved by the director and conforms to the requirements of this rule. The surety company issuing the bond shall, at a minimum, satisfy both of the following requirements: (a) The surety company shall be among those listed as acceptable sureties on federal bonds in circular 570 of the United States Department of the Treasury. (b) The surety company shall be independent, separate, and unrelated to the owner or operator. (2) The bond must guarantee that the owner or operator will do either of the following: (a) Perform final closure or postclosure care in accordance with the closure or postclosure plan and other requirements of the operating license for the facility when required to do so. (b) Within 90 days after receipt by both the owner or operator and the director of a notice of cancellation of the bond from the surety, provide alternate financial assurance as specified in this part and obtain the director's written approval of the assurance provided. (3) Under the terms of the bond, the surety shall become liable on the bond obligation under the following circumstances: (a) When the owner or operator fails to perform as guaranteed by the bond. (b) Following issuance of a notice of violation or other order by the director alleging that the owner or operator has failed to perform final closure or postclosure care, or both, in accordance with the closure and postclosure plans and other operating license requirements when required to do so and after providing the owner or operator 7 days notice and an opportunity for a hearing. (4) The penal sum of the bond must be in an amount not less than the current closure and postclosure cost estimates. (5) When the current closure or postclosure cost estimate, or both, increases to an amount more than the penal sum, the owner or operator, within 60 days after the increase, shall either cause the penal sum to be increased to an amount not less than the current closure or postclosure cost estimate, or both, and submit evidence of the increase to the director or obtain other financial assurance as specified in this part. When the current closure or postclosure cost estimate decreases, the penal sum may be reduced to the amount of the current closure or postclosure cost estimate following written approval by the director. (6) 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 director. Cancellation must 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 director, as evidenced by the return receipts. (7) The owner or operator may cancel the bond if the director has given prior written consent. The director shall provide written consent when either of the following occurs: (a) An owner or operator substitutes alternate financial assurance as specified in this part. (b) The director releases the owner or operator from the requirements of this part in accordance with R 299.9703(5). (8) The surety shall not be liable for deficiencies in the performance of closure or postclosure care, or both, by the owner or operator after the director releases the owner or operator from the requirements of this part in accordance with R 299.9703(5). (9) On receipt of a notice of cancellation of the bond from the surety, the owner or operator shall obtain alternate financial assurance approved by the director within 60 days. If the owner or operator fails to so provide, the director may issue a notice of violation or other order rendering the surety liable on the bond obligation.