Article 5. Financial Assurances
12VAC5-481-2600. Applicant qualifications and assurances.
Article 5
Financial Assurances
Each applicant shall show that it either possesses the necessary funds or has reasonable assurance of obtaining the necessary funds, or by a combination of the two, to cover the estimated costs of conducting all licensed activities over the planned operating life of the project, including costs of construction and disposal.
Statutory Authority
§ 32.1-229 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 22, Issue 25, eff. September 20, 2006.
12VAC5-481-2610. Funding for disposal site closure and stabilization.
A. The applicant shall provide assurances prior to the commencement of operations that sufficient funds will be available to carry out disposal site closure and stabilization, including: (i) decontamination or dismantlement of land disposal facility structures; and (ii) closure and stabilization of the disposal site so that following transfer of the disposal site to the site owner the need for ongoing active maintenance is eliminated to the extent practicable and only minor custodial care, surveillance, and monitoring are required. These assurances shall be based on agency-approved cost estimates reflecting the agency-approved plan for disposal site closure and stabilization. The applicant's cost estimates must take into account total costs that would be incurred if an independent contractor were hired to perform the closure and stabilization work.
B. In order to avoid unnecessary duplication and expense, the agency will accept financial sureties that have been consolidated with earmarked financial or surety arrangements established to meet requirements of federal or other state agencies (and/or local governmental bodies) for such decontamination, closure, and stabilization. The agency will accept these arrangements only if they are considered adequate to satisfy the requirements of this section and that the portion of the surety that covers the closure of the disposal site is clearly identified and committed for use in accomplishing these activities.
C. The licensee's financial or surety arrangement shall be submitted annually for review by the agency to assure that sufficient funds will be available for completion of the closure plan.
D. The amount of the licensee's financial or surety arrangement shall change in accordance with changes in the predicted costs of closure and stabilization. Factors affecting closure and stabilization cost estimates include inflation, increases in the amount of disturbed land, changes in engineering plans, closure and stabilization that has already been accomplished, and any other conditions affecting costs. The financial or surety arrangement shall be sufficient at all times to cover the costs of closure and stabilization of the disposal units that are expected to be used before the next license renewal.
E. The financial or surety arrangement shall be either open-ended or be written for a specified period of time and shall be automatically renewed unless the person who issues the surety notifies the agency, the beneficiary (the site owner), and the principal (the licensee) not less than 90 days prior to the renewal date of its intention not to renew. In such a situation, the licensee must submit a replacement surety within 30 days after notification of cancellation. If the licensee fails to provide a replacement surety acceptable to the agency, the beneficiary may collect on the original surety.
F. Proof of forfeiture shall not be necessary to collect the surety so that, in the event that the licensee could not provide an acceptable replacement surety within the required time, the surety shall be automatically collected prior to its expiration. The conditions described above shall be clearly stated on any surety instrument.
G. Financial or surety arrangements generally acceptable to the agency include surety bonds, cash deposits, certificates of deposit, deposits of government securities, escrow accounts, irrevocable letters or lines of credit, trust funds, and combinations of the above or such other types of arrangements as may be approved by the agency. Self-insurance, or any arrangement that essentially constitutes self-insurance, will not satisfy the surety requirement for private sector applicants.
H. The licensee's financial or surety arrangement shall remain in effect until the closure and stabilization program has been completed and approved by the agency, and the license has been transferred to the site owner.
Statutory Authority
§ 32.1-229 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 22, Issue 25, eff. September 20, 2006.
12VAC5-481-2620. Financial assurances for institutional controls.
A. Prior to the issuance of the license, the applicant shall provide for agency approval, a binding arrangement, between the applicant and the disposal site owner that ensures that sufficient funds will be available to cover the costs of monitoring and any required maintenance during the institutional control period. The binding arrangement shall be reviewed periodically by the agency to ensure that changes in inflation, technology, and disposal facility operations are reflected in the arrangements.
B. Subsequent changes to the binding arrangement specified in subsection A of this section relevant to institutional control shall be submitted to the agency for prior approval.
Statutory Authority
§ 32.1-229 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 22, Issue 25, eff. September 20, 2006.