R 299.9706 Letter of credit.

Rule 706. (1) An owner or operator may satisfy the requirements of this part by obtaining an irrevocable letter of credit that conforms to the requirements of this rule and is executed on a form approved by the director. The issuing institution shall be a bank or financial institution that 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 letter of credit must include all the following information: (a) The site identification number. (b) Name and address of the facility. (c) The amount of funds assured for closure or postclosure care of the facility by the letter of credit. (3) The letter of credit must be irrevocable and issued for a period of not less than 1 year. The letter of credit must provide that the expiration date will be automatically extended for a period of not less than 1 year unless, not less than 120 days before the current expiration date, the issuing institution notifies both the owner or operator and the director by certified mail of a decision not to extend the expiration date. Under the terms of the letter of credit, the 120 days begin on the date when both the owner or operator and the director have received the notice, as evidenced by the return receipts. (4) The letter of credit must be issued in an amount equal to the current closure or postclosure cost estimate, or both, except as provided in R 299.9703(2). (5) When the current closure or postclosure cost estimate, or both, increases to an amount more than the amount of the credit, the owner or operator, within 60 days after the increase, shall either cause the amount of the credit to be increased so that it is not less than the current closure or postclosure cost estimate and submit evidence of the increase to the director or obtain other financial assurance as specified in this part to cover the increase. When the current closure or postclosure cost estimate decreases, the amount of the credit may be reduced to the amount of the current closure or postclosure cost estimate following written approval by the director. (6) The director may draw on the letter of credit to correct violations, complete closure, and maintain the facility pursuant to approved plans after doing both of the following: (a) Issuing a notice of violation or other order to the owner or operation that alleges that the owner or operator has failed to perform final closure or postclosure care, or both, pursuant to the closure and postclosure plans and other license requirements when required. (b) Providing the owner or operator with 7 days notice and opportunity for hearing. (7) If the owner or operator does not establish alternate financial assurance as specified in this part and obtain written approval of the alternate assurance from the director within 90 days after receipt by both the owner or operator and the director of a notice from the issuing institution that it has decided not to extend the letter of credit beyond the current expiration date, then the director shall draw on the letter of credit. The director may delay the drawing if the issuing institution grants an extension of the term of the credit. During the last 30 days of the extension, the director shall draw on the letter of credit if the owner or operator has failed to provide alternate financial assurance as specified in this part and obtain written approval of the assurance from the director. (8) The director shall return the letter of credit to the issuing institution for termination 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 pursuant to R 299.9703(5).