(i) disposal facilities;

(ii) tank systems that are required under section 373-3.10(h) of this Subpart to meet the requirements for landfills; and

(iii) containment buildings that are required under section 373-3.30(c) of this Subpart to meet the requirements for landfills.

(i) prescribes alternative requirements for the regulated unit under sections 373-3.6 and/or 373-3.7(a)(4) of this Subpart; and

(ii) determines that it is not necessary to apply the requirements of this section because the alternative financial assurance requirements will protect human health and the environment.

(i) Assets means all existing and all probable future economic benefits obtained or controlled by a particular entity.

(ii) Current assets means cash or other assets or resources commonly identified as those which are reasonably expected to be realized in cash or sold or consumed during the normal operating cycle of the business.

(iii) Current liabilities means obligations whose liquidation is reasonably expected to require the use of existing resources properly classifiable as current assets or the creation of other current liabilities.

(iv) Current plugging and abandonment cost estimate means the most recent of the estimates prepared in accordance with 40 CFR 144.62 (see section 370.1[e] of this Title).

(v) Independently audited refers to an audit performed by an independent certified public accountant in accordance with generally accepted auditing standards.

(vi) Liabilities means probable future sacrifices of economic benefits arising from present obligations to transfer assets or provide services to other entities in the future as a result of past transactions or events.

(vii) Net working capital means current assets minus current liabilities.

(viii) Net worth means total assets minus total liabilities and is equivalent to owner's equity.

(ix) Tangible net worth means the tangible assets that remain after deducting liabilities; such assets would not include intangibles such as good will and rights to patents or royalties.

(i) Accidental occurrence means an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured.

(ii) Legal defense costs means any expenses that an insurer incurs in defending against claims of third parties brought under the terms and conditions of an insurance policy.

(iii) Nonsudden accidental occurrence means an occurrence which takes place over time and involves continuous or repeated exposure.

(iv) Sudden accidental occurrence means an occurrence which is not continuous or repeated in nature.

(i) The estimate must equal the cost of final closure at the point in the facility's active life when the extent and manner of its operation would make closure the most expensive, as indicated by its closure plan (see section 373-3.7[c] [2] of this Subpart).

(ii) The closure cost estimate must be based on the costs to the owner or operator of hiring a third party to close the facility. A third partyis a party who is neither a parent nor a subsidiary of the owner or operator. (See definition of parent corporation in subdivision [b] of this section.) The owner or operator may use costs for onsite disposal if the owner or operator can demonstrate that onsite disposal capacity will exist at all times over the life of the facility.

(iii) The closure cost estimate may not incorporate any salvage value that may be realized with the sale of hazardous wastes, or nonhazardous wastes if applicable under section 373-3.7(d)(4) of this Subpart, facility structures or equipment, land or other assets associated with the facility at the time of partial or final closure.

(iv) The owner or operator may not incorporate a zero cost for hazardous wastes, or nonhazardous wastes if applicable under section 373-3.7(d)(4) of this Subpart, that might have economic value.

(i) The first adjustment is made by multiplying the closure cost estimate by the inflation factor. The result is the adjusted closure cost estimate.

(ii) Subsequent adjustments are made by multiplying the latest adjusted closure cost estimate by the latest inflation factor.

(i) An owner or operator may satisfy the requirements of this subdivision by establishing a closure trust fund which conforms to the requirements of this paragraph and submitting an originally signed duplicate of the trust agreement to the commissioner. The trustee must be an entity which has the authority to act as a trustee and whose trust operations are regulated and examined by a Federal or State agency.

(ii) The wording of the trust agreement must be identical to the wording specified in section 373-2.8(j)(1) of this Part, and the trust agreement must be accompanied by a formal certification of acknowledgment (for example, see section 373-2.8[j][1]). Schedule A of the trust agreement must be updated within 60 days after a change in the amount of the current closure cost estimate covered by the agreement.

(iii) Payments into the trust fund must be made annually by the owner or operator over the first five years of operation or over the remaining operating life of the facility as estimated in the closure plan, whichever period is shorter; this period is hereinafter referred to as the “pay-in period.” The payments into the closure trust fund must be made as follows:

(iv) The owner or operator may accelerate payments into the trust fund or may deposit the full amount of the current closure cost estimate at the time the fund is established. However, the owner or operator must maintain the value of the fund at no less than the value that the fund would have if annual payments were made as specified in subparagraph (iii) of this paragraph.

(v) If the owner or operator established a closure trust fund after having used one or more alternate mechanisms specified in this subdivision, the first payment must be in at least the amount that the fund would contain if the trust fund were established initially and annual payments made as specified in subparagraph (iii) of this paragraph.

(vi) After the pay-in period is completed or whenever the current closure cost estimate changes, the owner or operator must compare the new estimate with the trustee's most recent annual valuation of the trust fund. If the value of the fund is less than the amount of the new estimate, the owner or operator, within 60 days after the change in the cost estimate, must either deposit an amount into the fund so that its value after this deposit at least equals the amount of the current closure cost estimate, or obtain other financial assurance as specified in this subdivision to cover the difference.

(vii) If the value of the trust fund is greater than the total amount of the current closure cost estimate, the owner or operator may submit a written request to the commissioner for release of the amount in excess of the current closure cost estimate.

(viii) If an owner or operator substitutes other financial assurance as specified in this subdivision for all or part of the trust fund, the owner or operator may submit a written request to the commissioner for release of the amount in excess of the current closure cost estimate covered by the trust fund.

(ix) Within 60 days after receiving a request from the owner or operator for release of funds as specified in subparagraph (vii) or (viii) of this paragraph, the commissioner will instruct the trustee to release to the owner or operator such funds as the commissioner specifies in writing.

(x) After beginning partial or final closure, an owner or operator or another person authorized to conduct partial or final closure may request reimbursements for partial or final closure expenditures by submitting itemized bills to the commissioner. The owner or operator may request reimbursements for partial closure only if sufficient funds are remaining in the trust fund to cover the maximum costs of closing the facility over its remaining operating life. Within 60 days after receiving bills for partial or final closure activities, the commissioner will instruct the trustee to make reimbursements in those amounts as the commissioner specifies in writing, if the commissioner determines that the partial or final closure expenditures are in accordance with the approved closure plan, or otherwise justified. If the commissioner has reason to believe that the maximum cost of closure over the remaining life of the facility will be significantly greater than the value of the trust fund, the commissioner may withhold reimbursements of such amounts as he or she deems prudent until the commisioner determines, in accordance with paragraph (8) of this subdivision, that the owner or operator is no longer required to maintain financial assurance for final closure of the facility. If the commissioner does not instruct the trustee to make such reimbursements, the commissioner will provide the owner or operator with a detailed written statement of reasons.

(xi) The commissioner will agree to termination of the trust when:

(i) An owner or operator may satisfy the requirements of this subdivision by obtaining a surety bond which conforms to the requirements of this paragraph and submitting the bond to the commissioner. The surety company issuing the bond must, at a minimum, be among those listed as acceptable sureties on Federal bonds in Circular 570 of the U.S. Department of the Treasury.

(ii) The wording of the surety bond must be identical to the wording specified in section 373-2.8(j)(2) of this Part.

(iii) The owner or operator who uses a surety bond to satisfy the requirements of this subdivision must also establish a standby trust fund. Under the terms of the bond, all payments made thereunder will be deposited by the surety directly into the standby trust fund in accordance with instructions from the commissioner. The standby trust fund must meet the requirements specified in paragraph (1) of this subdivision, except that:

(iv) The bond must guarantee that the owner or operator will:

(v) Under the terms of the bond, the surety will become liable on the bond obligation when the owner or operator fails to perform as guaranteed by the bond.

(vi) The penal sum of the bond must be in an amount at least equal to the current closure cost estimate, except as provided in paragraph (6) of this subdivision.

(vii) Whenever the current closure cost estimate increases to an amount greater than the penal sum, the owner or operator, within 60 days after the increase, must either cause the penal sum to be increased to an amount at least equal to the current closure cost estimate and submit evidence of such increase to the commissioner, or obtain other financial assurance as specified in this subdivision to cover the increase. Whenever the current closure cost estimate decreases, the penal sum may be reduced to the amount of the current closure cost estimate following written approval by the commissioner.

(viii) Under the terms of the bond, the surety may cancel the bond by sending notice of cancellation by certified mail, return receipt requested to the owner or operator and to the commissioner. Cancellation may 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 commissioner, as evidenced by the return receipts.

(ix) The owner or operator may cancel the bond if the commissioner has given prior written consent based on the receipt of evidence of alternate financial assurance as specified in this subdivision.

(i) An owner or operator may satisfy the requirements of this subdivision by obtaining an irrevocable letter of credit which conforms to the requirements of this paragraph and submitting the letter to the commissioner. The issuing institution must be an entity which has the authority to issue letters of credit and whose letter of credit operations are regulated and examined by a Federal or State agency.

(ii) The wording of the letter of credit must be identical to the wording specified in section 373-2.8(j)(3) of this Part.

(iii) An owner or operator who uses a letter of credit to satisfy the requirements of this subdivision must also establish a standby trust fund. Under the terms of the letter of credit, all amounts paid pursuant to a draft by the commissioner will be deposited by the issuing institution directly into the standby trust fund in accordance with instructions from the commissioner. This standby trust fund must meet the requirements of the trust fund specified in paragraph (1) of this subdivision, except that:

(iv) The letter of credit must be accompanied by a letter from the owner or operator referring to the letter of credit by number, issuing institution, and date, and providing the following information: the EPA identification number, name and address of the facility, and the amount of funds assured for closure of the facility by the letter of credit.

(v) The letter of credit must be irrevocable and issued for a period of at least one year. The letter of credit must provide that the expiration date will be automatically extended for a period of at least one year unless, at least 120 days before the current expiration date, the issuing institution notifies both the owner or operator and the commissioner, by certified mail, return receipt requested, of a decision not to extend the expiration date. Under the terms of the letter of credit, the 120 days will begin on the date when both the owner or operator and the commissioner have received the notice, as evidenced by the return receipts.

(vi) The letter of credit must be issued in an amount at least equal to the current closure cost estimate, except as provided in paragraph (6) of this subdivision.

(vii) Whenever the current closure cost estimate increases to an amount greater than the amount of the credit, the owner or operator, within 60 days after the increase, must either cause the amount of the credit to be increased so that it at least equals the current closure cost estimate, and submit evidence of such increase to the commissioner, or obtain other financial assurance as specified in this subdivision to cover the increase. Whenever the current closure cost estimate decreases, the amount of the credit may be reduced to the amount of the current closure cost estimate following written approval by the commissioner.

(viii) Following a determination, pursuant to section 373-3.7 of this Subpart, that the owner or operator has failed to perform final closure in accordance with the closure plan and other interim status requirements when required to do so, the commissioner may draw on the letter of credit.

(ix) If the owner or operator does not establish alternate financial assurance, as specified in this subdivision, and obtain written approval of such alternate assurance from the commissioner within 90 days after receipt by both the owner or operator and the commissioner of a notice from the issuing institution that it has decided not to extend the letter of credit beyond the current expiration date, the commissioner will draw on the letter of credit. The commissioner may delay the drawing if the issuing institution grants an extension of the term of the credit. During the last 30 days of any such extension, the commissioner will draw on the letter of credit if the owner or operator has failed to provide alternate financial assurance as specified in this subdivision and obtain written approval of such assurance from the commissioner.

(x) The commissioner will return the letter of credit to the issuing institution for termination when:

(i) An owner or operator may satisfy the requirements of this subdivision by obtaining closure insurance which conforms to the requirements of this paragraph and submitting a certificate of such insurance to the department. The owner or operator must submit to the department a letter from an insurer stating that the insurer is considering issuance of closure insurance conforming to the requirements of this paragraph to the owner or operator. Within 90 days after the effective date of these regulations, the owner or operator must submit the certificate of insurance to the department or establish other financial assurance as specified in this section. At a minimum, the insurer must be authorized by the Superintendent of the New York State Department of Financial Services to conduct the business of insurance, or eligible to provide insurance as an excess or surplus lines insurer, in New York State.

(ii) The wording of the certificate of insurance must be identical to the wording specified in section 373-2.8(j)(4) of this Part.

(iii) The closure insurance policy must be issued for a limit of liability at least equal to the current closure cost estimate, except as provided in paragraph (6) of this subdivision. The term limits of liability means the total amount the insurer is obligated to pay under the policy. Actual payments by the insurer will not change the limits of liability, although the insurer's future liability will be lowered by the amount of the payments.

(iv) The closure insurance policy must guarantee that funds will be available to close the facility whenever final closure occurs. The policy must also guarantee that once final closure begins, the insurer will be responsible for paying out funds, up to an amount equal to the limits of liability of the policy, upon the direction of the commissioner, to such party or parties as the commissioner specifies.

(v) After beginning partial or final closure, an owner or operator or any other person authorized to conduct closure may request reimbursements for closure expenditures by submitting itemized bills to the commissioner. The owner or operator may request reimbursements for partial closure only if the remaining value of the policy is sufficient to cover the maximum costs of closing the facility over its remaining operating life. Within 60 days after receiving bills for closure activities, the commissioner will instruct the insurer to make reimbursements in such amounts as the commissioner specifies in writing, if the commissioner determines that the partial or final closure expenditures are in accordance with the approved closure plan or otherwise justified. If the commissioner has reason to believe that the maximum cost of closure over the remaining life of the facility will be significantly greater than the face amount of the policy, the commissioner may withhold reimbursements of such amounts as he or she deems prudent until the commissioner determines, in accordance with paragraph (8) of this subdivision, that the owner or operator is no longer required to maintain financial assurance for final closure of the particular facility. If the commissioner does not instruct the insurer to make such reimbursements, the commissioner will provide the owner or operator with a detailed written statement of reasons.

(vi) The owner or operator must maintain the policy in full force and effect until the commissioner consents to termination of the policy by the owner or operator as specified in subparagraph (x) of this paragraph. Failure to pay the premium, without substitution of alternate financial assurance as specified in this subdivision, will constitute a significant violation of these regulations, warranting such remedy as the commissioner deems necessary. Such violation will be deemed to begin upon receipt by the commissioner of a notice of future cancellation, termination or failure to renew due to nonpayment of the premium, rather than upon the date of expiration.

(vii) Each policy must 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 such consent is not unreasonably refused.

(viii) The policy must provide that the insurer may not cancel, terminate or fail to renew the policy except for failure to pay the premium. The automatic renewal of the policy must, at a minimum, provide the insured with the option of renewal at the limits of liability of the expiring policy. If there is a failure to pay the premium, the insurer may elect to cancel, terminate or fail to renew the policy by sending notice, by certified mail, return receipt requested, to the owner or operator and the commissioner. Cancellation, termination or failure to renew may not occur, however, during the 120 days beginning with the date of receipt of the notice by both the commissioner and the owner or operator, as evidenced by the return receipts. Cancellation, termination or failure to renew may not occur and the policy will remain in full force and effect, in the event that on or before the date of expiration:

(ix) Whenever the current closure cost estimate increases to an amount greater than the limits of liability of the policy, the owner or operator, within 60 days after the increase, must either cause the limits of liability face amount to be increased to an amount at least equal to the current closure cost estimate and submit evidence of such increase to the commissioner, or obtain other financial assurance as specified in this subdivision to cover the increase. Whenever the current closure cost estimate decreases, the limits of liability may be reduced to the amount of the current closure cost estimate following written approval by the commissioner.

(x) The commissioner will give written consent to the owner or operator that the insurance policy may be terminated when:

(i) An owner or operator of a facility which is not a revenue-oriented facility may satisfy the requirements of this section by demonstrating that the owner or operator passes a financial test as specified in this paragraph. No revenue-oriented facilities will be allowed to use this financial assurance mechanism. To pass this test, the owner or operator must meet the criteria of either clause (a) or (b) of this subparagraph.

(ii) The phrases “current closure and post-closure cost estimates” and “current plugging and abandonment cost estimates,” as used in subparagraph (i) of this paragraph, refer to the cost estimates required to be shown in paragraphs 1-3 of the letter from the owner's or operator's chief financial officer.

(iii) To demonstrate that he or she meets this test, the owner or operator must submit the following items to the commissioner:

(iv) After the initial submission of items specified in subparagraph (iii) of this paragraph, the owner or operator must send updated information to the commissioner within 90 days after the close of each succeeding fiscal year. This information must consist of all three items specified in subparagraph (iii) of this paragraph.

(v) If the owner or operator no longer meets the requirements of subparagraph (i) of this paragraph, the owner or operator must send notice to the commissioner of intent to establish alternate financial assurance as specified in this subdivision. The notice must be sent by certified mail, return receipt requested, within 90 days after the end of the fiscal year for which the year-end financial data show that the owner or operator no longer meets the requirements. The owner or operator must provide the alternate financial assurance within 120 days after the end of such fiscal year.

(vi) The commissioner may, based on a reasonable belief that the owner or operator may no longer meet the requirements of subparagraph (i) of this paragraph, require reports of financial condition at any time from the owner or operator in addition to those specified in subparagraph (iii) of this paragraph. If the commissioner finds, on the basis of such report or other information, that the owner or operator no longer meets the requirements of subparagraph (i) of this paragraph, the owner or operator must provide alternate financial assurance as specified in this subdivision within 30 days after notification of such a finding.

(vii) The commissioner may disallow use of this test on the basis of qualifications in the opinion expressed by the independent certified public accountant in his or her report on examination of the owner's or operator's financial statements (see clause [iii][ b] of this paragraph). An adverse opinion or a disclaimer of opinion will be cause for disallowance. The commissioner will evaluate other qualifications on an individual basis. The owner or operator must provide alternate financial assurance as specified in this subdivision within 30 days after notification of the disallowance.

(viii) The owner or operator is no longer required to submit the items specified in subparagraph (iii) of this paragraph when:

(ix) An owner or operator of a facility which is not a revenue-oriented facility may meet the requirements of this subdivision by obtaining a written guarantee, hereinafter referred to as "guarantee." If the firm which is providing the guarantee does not meet the definition of "revenue-oriented" in section 373-2.8 or 373-3.8 of this Part, it may provide the guarantee on behalf of the owner or operator even if the owner or operator is a “revenue-oriented” facility. For a revenue-oriented facility, the financial statement of the owner or operator cannot be consolidated with the financial statement of the guarantor. The guarantor must be the direct or higher-tier parent corporation of the owner or operator, a firm whose parent corporation is also the parent corporation of the owner or operator, or a firm with a "substantial business relationship" with the owner or operator. The guarantor must meet the requirements for owners or operators in subparagraphs (i) through (vii) of this paragraph and must comply with the terms of the guarantee. The wording of the guarantee must be identical to the wording specified in section 373-2.8(j)(6) of this Part. A certified copy of the guarantee must accompany the items sent to the commissioner as specified in subparagraph (iii) of this paragraph. One of these items must be the letter from the guarantor's chief financial officer. If the guarantor's parent corporation is also the parent corporation of the owner or operator, the letter must describe the value received in consideration of the guarantee. If the guarantor is a firm with a "substantial business relationship" with the owner or operator, this letter must describe this "substantial business relationship" and the value received in consideration of the guarantee. The terms of the guarantee must provide that:

(i) The post-closure cost estimate must be based on the costs to the owner or operator of hiring a third party to conduct post-closure care activities. A third party is a party who is neither a parent nor a subsidiary of the owner or operator. (See definition of parent corporation in subdivision [b] of this section.)

(ii) The post-closure cost estimate is calculated by multiplying the annual post-closure cost estimate by the number of years of post-closure care required under section 373-2.7(g) of this Part.

(i) The first adjustment is made by multiplying the post-closure cost estimate by the inflation factor. The result is the adjusted closure cost estimate.

(ii) Subsequent adjustments are made by multiplying the latest adjusted post-closure cost estimate by the latest inflation factor.

(i) An owner or operator may satisfy the requirements of this subdivision by establishing a post-closure trust fund which conforms to the requirements of this paragraph and submitting an originally signed duplicate of the trust agreement to the commissioner. The trustee must be an entity which has the authority to act as a trustee and whose trust operations are regulated and examined by a Federal or State agency.

(ii) The wording of the trust agreement must be identical to the wording specified in section 373-2.8(j)(1) of this Part, and the trust agreement must be accompanied by a formal certification of acknowledgment (for example, see section 373-2.8[j][1]). Schedule A of the trust agreement must be updated within 60 days after a change in the amount of the current post-closure cost estimate covered by the agreement.

(iii) Payments into the trust fund must be made annually by the owner or operator over the first five years of operation or over the remaining operating life of the facility as estimated in the closure plan, whichever period is shorter; this period is hereinafter referred to as the “pay-in period.” The payments into the post-closure trust fund must be made as follows:

(iv) The owner or operator may accelerate payments into the trust fund or may deposit the full amount of the current post-closure cost estimate at the time the fund is established. However, the owner or operator must maintain the value of the fund at no less than the value that the fund would have if annual payments were made as specified in subparagraph (iii) of this paragraph.

(v) If the owner or operator establishes a post-closure trust fund after having used one or more alternate mechanisms specified in this subdivision, the first payment must be in at least the amount that the fund would contain if the trust fund were established initially and annual payments made as specified in subparagraph (iii) of this paragraph.

(vi) After the pay-in period is completed, whenever the current post-closure cost estimate changes during the operating life of the facility, the owner or operator must compare the new estimate with the trustee's most recent annual valuation of the trust fund. If the value of the fund is less than the amount of the new estimate, the owner or operator, within 60 days after the change in the cost estimate, must either deposit an amount into the fund so that its value after this deposit at least equals the amount of the current post-closure cost estimate, or obtain other financial assurance as specified in this subdivision to cover the difference.

(vii) During the operating life of the facility, if the value of the trust fund is greater than the total amount of the current post-closure cost estimate, the owner or operator may submit a written request to the commissioner for release of the amount in excess of the current post-closure cost estimate.

(viii) If an owner or operator substitutes other financial assurance as specified in this subdivision for all or part of the trust fund, the owner or operator may submit a written request to the commissioner for release of the amount in excess of the current post-closure cost estimate covered by the trust fund.

(ix) Within 60 days after receiving a request from the owner or operator for release of funds as specified in subparagraph (vii) or (viii) of this paragraph, the commissioner will instruct the trustee to release to the owner or operator such funds as the commissioner specifies in writing.

(x) During the period of post-closure care, the commissioner may approve a release of funds if the owner or operator demonstrates to the commissioner that the value of the trust fund exceeds the remaining cost of post-closure care.

(xi) An owner or operator or any other person authorized to conduct post-closure care may request reimbursements for post-closure expenditures by submitting itemized bills to the commissioner. Within 60 days after receiving bills for post-closure care activities, the commissioner will instruct the trustee to make reimbursements in those amounts as the commissioner specifies in writing, if the commissioner determines that the post-closure expenditures are in accordance with the approved post-closure plan, or otherwise justified. If the commissioner does not instruct the trustee to make such reimbursements, the commissioner will provide the owner or operator with a detailed written statement of reasons.

(xii) The commissioner will agree to termination of the trust when:

(i) An owner or operator may satisfy the requirements of this subdivision by obtaining a surety bond which conforms to the requirements of this paragraph and submitting the bond to the commissioner. The surety company issuing the bond must, at a minimum, be among those listed as acceptable sureties on Federal bonds in Circular 570 of the U.S. Department of the Treasury.

(ii) The wording of the surety bond must be identical to the wording specified in section 373-2.8(j)(2) of this Part.

(iii) The owner or operator who uses a surety bond to satisfy the requirements of this subdivision must also establish a standby trust fund. Under the terms of the bond, all payments made thereunder will be deposited by the surety into the standby trust fund in accordance with instructions from the commissioner. This standby trust fund must meet the requirements specified in paragraph (1) of this subdivision, except that:

(iv) The bond must guarantee that the owner or operator will:

(v) Under the terms of the bond, the surety will become liable on the bond obligation when the owner or operator fails to perform as guaranteed by the bond.

(vi) The penal sum of the bond must be in an amount at least equal to the current post-closure cost estimate, except as provided in paragraph (6) of this subdivision.

(vii) Whenever the current post-closure cost estimate increases to an amount greater than the penal sum, the owner or operator, within 60 days after the increase, must either cause the penal sum to be increased to an amount at least equal to the current post-closure cost estimate and submit evidence of such increase to the commissioner, or obtain other financial assurance as specified in this subdivision to cover the increase. Whenever the current post-closure cost estimate decreases, the penal sum may be reduced to the amount of the current post-closure cost estimate, following written approval by the commissioner.

(viii) Under the terms of the bond, the surety may cancel the bond by sending notice of cancellation, by certified mail, return receipt requested, to the owner or operator and to the commissioner. Cancellation may 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 commissioner, as evidenced by the return receipts.

(ix) The owner or operator may cancel the bond if the commissioner has given prior written consent based on the receipt of evidence of alternate financial assurance as specified in this subdivision.

(i) An owner or operator may satisfy the requirements of this subdivision by obtaining an irrevocable standby letter of credit which conforms to the requirements of this paragraph and submitting the letter to the commissioner. The issuing institution must be an entity which has the authority to issue letters of credit and whose letter of credit operations are regulated and examined by a Federal or State agency.

(ii) The wording of the letter of credit must be identical to the wording specified in section 373-2.8(j)(3) of this Part.

(iii) An owner or operator who uses a letter of credit to satisfy the requirements of this subdivision must also establish a standby trust fund. Under the terms of the letter of credit, all amounts paid pursuant to a draft by the commissioner will be deposited by the issuing institution directly into the standby trust fund in accordance with instructions from the commissioner. This standby trust fund must meet the requirements of the trust fund specified in paragraph (1) of this subdivision, except that:

(iv) The letter of credit must be accompanied by a letter from the owner or operator referring to the letter of credit by number, issuing institution and date, and providing the following information: the EPA identification number, name and address of the facility, and the amount of funds assured for post-closure care of the facility by letter of credit.

(v) The letter of credit must be irrevocable and issued for a period of at least one year. The letter of credit must provide that the expiration date will be automatically extended for a period of at least one year unless, at least 120 days before the current expiration date, the issuing institution notifies both the owner or operator and the commissioner, by certified mail, return receipt requested, of a decision not to extend the expiration date. Under the terms of the letter of credit, the 120 days will begin on the date when both the owner or operator and the commissioner have received the notice, as evidenced by the return receipts.

(vi) The letter of credit must be issued in an amount at least equal to the current post- closure cost estimate, except as provided in paragraph (6) of this subdivision.

(vii) Whenever the current post-closure cost estimate increases to an amount greater than the amount of the credit during the operating life of the facility, the owner or operator, within 60 days after the increase, must either cause the amount of the credit to be increased so that it at least equals the current post-closure cost estimate and submit evidence of such increase to the commissioner, or obtain other financial assurance as specified in this subdivision to cover the increase. Whenever the current post-closure cost estimate decreases during the operating life of the facility, the amount of the credit may be reduced to the amount of the current post-closure cost estimate following written approval by the commissioner.

(viii) During the period of post-closure care, the commissioner may approve a decrease in the amount of the letter of credit if the owner or operator demonstrates to the commissioner that the amount exceeds the remaining cost of post-closure care.

(ix) Following a determination, pursuant to section 373-3.7 of this Subpart, that the owner or operator has failed to perform post-closure care in accordance with the post-closure plan and other permit requirements, the commissioner may draw on the letter of credit.

(x) If the owner or operator does not establish alternate financial assurance as specified in this subdivision and obtain written approval of such alternate assurance from the commissioner within 90 days after receipt by both the owner or operator and the commissioner of a notice from the issuing institution that it has decided not to extend the letter of credit beyond the current expiration date, the commissioner will draw on the letter of credit. The commissioner may delay the drawings if the issuing institution grants an extension of the term of the credit. During the last 30 days of any such extension, the commissioner will draw on the letter of credit if the owner or operator has failed to provide alternate financial assurance as specified in this subdivision and obtain written approval of such assurance from the commissioner.

(xi) The commissioner will return the letter of credit to the issuing institution for termination when:

(i) An owner or operator may satisfy the requirements of this subdivision by obtaining post-closure insurance which conforms to the requirements of this paragraph and submitting a certificate of such insurance to the commissioner. At a minimum, the insurer must be authorized by the superintendent of the New York State Insurance Department to conduct the business of insurance, or eligible to provide insurance as an excess or surplus lines insurer, in New York State.

(ii) The wording of the certificate of insurance must be identical to the wording specified in section 373-2.8(j)(4) of this Part.

(iii) The post-closure insurance policy must be issued for a limit of liability at least equal to the current post-closure cost estimate, except as provided in paragraph (d)(6) of this section. The term limits of liability means the total amount the insurer is obligated to pay under the policy. Actual payments by the insurer will not change the limits of liability, although the insurer's future liability will be lowered by the amount of the payments.

(iv) The post-closure insurance policy must guarantee that funds will be available to provide post-closure care of the facility whenever the post-closure period begins. The policy must also guarantee that once post-closure care begins, the insurer will be responsible for paying out funds, up to an amount equal to the limits of liability of the policy, upon the direction of the commissioner, to such party or parties as the commissioner specifies.

(v) An owner or operator or any other person authorized to perform post-closure care may request reimbursements for post-closure expenditures by submitting itemized bills to the commissioner. Within 60 days after receiving bills for post-closure care activities, the commissioner will instruct the insurer to make reimbursements in those amounts as the commissioner specifies in writing, if the commissioner determines that the post-closure expenditures are in accordance with the approved post-closure plan, or otherwise justified. If the commissioner does not instruct the insurer to make such reimbursements, the commissioner will provide the owner or operator with a detailed written statement of reasons.

(vi)

(vii) Each policy must 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 such consent is not unreasonably refused.

(viii) The policy must provide that the insurer may not cancel, terminate or fail to renew the policy except for failure to pay the premium. The automatic renewal of the policy must, at a minimum, provide the insured with the option of renewal at the limits of liability of the expiring policy. If there is a failure to pay the premium, the insurer may elect to cancel, terminate or fail to renew the policy by sending notice, by certified mail, return receipt requested, to the owner or operator and the commissioner. Cancellation, termination or failure to renew may not occur, however, during the 120 days beginning with the date of receipt of the notice by both the commissioner and the owner or operator, as evidenced by the return receipts. Cancellation, termination or failure to renew may not occur, and the policy will remain in full force and effect, in the event that on or before the date of expiration:

(ix) Whenever the current post-closure cost estimate increases to an amount greater than the limits of liability of the policy during the operating life of the facility, the owner or operator, within 60 days after the increase, must either cause the limits of liability to be increased to an amount at least equal to the current post-closure cost estimate and submit evidence of such increase to the commissioner, or obtain other financial assurance as specified in this subdivision to cover the increase. Whenever the current post-closure cost estimate decreases during the operating life of the facility, the limits of liability may be reduced to the amount of the current post-closure cost estimate following written approval by the commissioner.

(x) Commencing on the date that liability to make payments pursuant to the policy accrues, the insurer will thereafter annually increase the limits of liability of the policy. Such increase must be equivalent to the limits of liability of the policy, less any payments made, multiplied by an amount equivalent to 85 percent of the most recent investment rate or of the equivalent coupon-issue yield announced by the United States Treasury for 26-week Treasury securities.

(xi) The commissioner will give written consent to the owner or operator that the insurance policy may be terminated when:

(i) An owner or operator of a facility which is not a revenue-oriented facility may satisfy the requirements of this subdivision by demonstrating that the owner or operator passes a financial test as specified in this paragraph. No revenue-oriented facilities will be allowed to use this financial assurance mechanism. To pass this test, the owner or operator must meet the criteria of either clause (a) or (b) of this subparagraph:

(ii) The phrases “current closure and post-closure cost estimates” and “current plugging and abandonment cost estimates,” as used in subparagraph (i) of this paragraph, refer to the cost estimates required to be shown in paragraphs 1-3 of the letter from the owner's or operator's chief financial officer.

(iii) To demonstrate that he or she meets this test, the owner or operator must submit the following items to the commissioner:

(iv) After the initial submission of items specified in subparagraph (iii) of this paragraph, the owner or operator must send updated information to the commissioner within 90 days after the close of each succeeding fiscal year. This information must consist of all three items specified in subparagraph (iii) of this paragraph.

(v) If the owner or operator no longer meets the requirements of subparagraph (i) of this paragraph, the owner or operator must send notice to the commissioner of intent to establish alternate financial assurance as specified in this subdivision. The notice must be sent by certified mail, return receipt requested, within 90 days after the end of the fiscal year for which the year-end financial data show that the owner or operator no longer meets the requirements. The owner or operator must provide the alternate financial assurance within 120 days after the end of such fiscal year.

(vi) The commissioner may, based on a reasonable belief that the owner or operator may no longer meet the requirements of subparagraph (i) of this paragraph, require reports of financial condition at any time from the owner or operator in addition to those specified in subparagraph (iii) of this paragraph. If the commissioner finds, on the basis of such reports or other information, that the owner or operator no longer meets the requirements of subparagraph (i) of this paragraph, the owner or operator must provide alternate financial assurance as specified in this subdivision within 30 days after notification of such a finding.

(vii) The commissioner may disallow use of this test on the basis of qualifications in the opinion expressed by the independent certified public accountant in his or her report on examination of the owner's or operator's financial statements (see clause [iii][ b] of this paragraph). An adverse opinion or a disclaimer of opinion will be cause for disallowance. The commissioner will evaluate other qualifications on an individual basis. The owner or operator must provide alternate financial assurance as specified in this subdivision within 30 days after notification of the disallowance.

(viii) During the period of post-closure care, the commissioner may approve a decrease in the current post-closure cost estimate for which this test demonstrates financial assurance if the owner or operator demonstrates to the commissioner that the amount of the cost estimate exceeds the remaining cost of post-closure care.

(ix) The owner or operator is no longer required to submit the items specified in subparagraph (iii) of this paragraph when:

(x) An owner or operator of a facility which is not a revenue-oriented facility may meet the requirements of this subdivision by obtaining a written guarantee, hereinafter referred to as “guarantee.” If the firm which is providing the guarantee does not meet the definition of revenue-oriented in section 373-2.8 or 373-3.8 of this Part, it may provide the guarantee on behalf of the owner or operator even if the owner or operator is a revenue-oriented facility. For a revenue-oriented facility, the financial statement of the owner or operator cannot be consolidated with the financial statement of the guarantor. The guarantor must be the director or higher-tier parent corporation of the owner or operator, a firm whose parent corporation is also the parent corporation of the owner or operator, or a firm with a substantial business relationship with the owner or operator. The guarantor must meet the requirements for owners or operators in subparagraphs (i) through (viii) of this paragraph and must comply with the terms of the guarantee. The wording of the guarantee must be identical to the wording specified in section 373-2.8(j)(6) of this Part. A certified copy of the guarantee must accompany the items sent to the commissioner as specified in subparagraph (iii) of this paragraph. One of these items must be the letter from the guarantor's chief financial officer. If the guarantor's parent corporation is also the parent corporation of the owner or operator, the letter must describe the value received in consideration of the guarantee. If the guarantor is a firm with a “substantial business relationship” with the owner or operator, this letter must describe this “substantial business relationship” and the value received in consideration of the guarantee. The terms of the guarantee must provide that:

(i) An owner or operator may demonstrate the required liability coverage by having liability insurance as specified in this paragraph.

(ii) An owner or operator of a facility which is not a revenue-oriented facility may meet the requirements of this paragraph by passing a financial test or using the guarantee for liability coverage as specified in paragraphs (6) and (7) of this subdivision. If the firm which is providing the guarantee does not meet the definition of revenue-oriented in section 373-2.8 or 373-3.8 of this Part, it may provide the guarantee on behalf of the owner or operator even if the owner or operator is a revenue-oriented facility. For a revenue-oriented facility, the financial statement of the owner or operator cannot be consolidated with the financial statement of the guarantor.

(iii) An owner or operator may meet the requirements of this paragraph by obtaining a letter of credit for liability coverage as specified in paragraph (8) of this subdivision.

(iv) An owner or operator may meet the requirements of this paragraph by obtaining a surety bond for liability coverage as specified in paragraph (9) of this subdivision.

(v) An owner or operator may meet the requirements of this paragraph by obtaining a trust fund for liability coverage as specified in paragraph (10) of this subdivision.

(vi) An owner or operator may demonstrate the required liability coverage through the use of combinations of insurance, financial test, guarantee, letter of credit, surety bond, and trust fund, except that the owner or operator may not combine a financial test covering part of the liability coverage requirement with a guarantee unless the financial statement of the owner or operator is not consolidated with the financial statement of the guarantor. The amounts of coverage demonstrated must total at least the minimum amounts required by this paragraph. If the owner or operator demonstrates the required coverage through the use of a combination of financial assurances under this paragraph, the owner or operator shall specify at least one such assurance as primary coverage and shall specify other assurances as excess coverage. An owner or operator of a revenue-oriented facility may use all of the above- mentioned financial mechanisms except the financial test and/or guarantee.

(vii) An owner or operator shall notify the commissioner in writing within 30 days whenever:

(i) An owner or operator may demonstrate the required liability coverage by having liability insurance as specified in this paragraph.

(ii) An owner or operator of a facility which is not a revenue-oriented facility may meet the requirements of this paragraph by passing a financial test or using the guarantee for liability coverage as specified in paragraphs (6) and (7) of this subdivision. If the firm which is providing the guarantee does not meet the definition of revenue-oriented in section 373-2.8 or 373-3.8 of this Part, it may provide the guarantee on behalf of the owner or operator even if the owner or operator is a revenue-oriented facility. For a revenue-oriented facility, the financial statement of the owner or operator cannot be consolidated with the financial statement of the guarantor.

(iii) An owner or operator may meet the requirements of this paragraph by obtaining a letter of credit for liability coverage as specified in paragraph (8) of this subdivision.

(iv) An owner or operator may meet the requirements of this paragraph by obtaining a surety bond for liability coverage as specified in paragraph (9) of this subdivision.

(v) An owner or operator may meet the requirements of this paragraph by obtaining a trust fund for liability coverage as specified in paragraph (10) of this subdivision.

(vi) An owner or operator may demonstrate the required liability coverage through the use of combinations of insurance, financial test, guarantee, letter of credit, surety bond, and trust fund, except that the owner or operator may not combine a financial test covering part of the liability coverage requirement with a guarantee unless the financial statement of the owner or operator is not consolidated with the financial statement of the guarantor. The amounts of coverage demonstrated must total at least the minimum amounts required by this paragraph. If the owner or operator demonstrates the required coverage through the use of a combination of financial assurances under this paragraph, the owner or operator shall specify at least one such assurance as primary coverage and shall specify other assurances as excess coverage. An owner or operator of a revenue-oriented facility may use all of the above- mentioned financial mechanisms except the financial test and/or guarantee.

(vii) An owner or operator shall notify the commissioner in writing within 30 days whenever:

(i) The owner or operator must have:

(ii) The owner or operator must have:

(iii) The phrase amount of liability coverage, as used in subparagraphs (i) and (ii) of this paragraph, refers to the annual aggregate amounts for which coverage is required under paragraphs (1) and (2) of this subdivision.

(iv) To demonstrate that he or she meets this test, the owner or operator must submit the following three items to the commissioner:

(v) After the initial submission of items specified in subparagraph (iii) of this paragraph, the owner or operator must send updated information to the commissioner within 90 days after the close of each succeeding fiscal year. This information must consist of all three items specified in subparagraph (iii) of this paragraph.

(vi) If the owner or operator no longer meets the requirements of subparagraph (i) or (ii) of this paragraph, the owner or operator must obtain insurance, a letter of credit, a surety bond, a trust fund, or a guarantee for the entire amount of required liability coverage as specified in this subdivision. Evidence of liability coverage must be submitted to the commissioner within 90 days after the end of the fiscal year for which the year-end financial data show that the owner or operator no longer meets the test requirements.

(vii) The commissioner may disallow use of this test on the basis of qualifications in the opinion expressed by the independent certified public accountant in his or her report on examination of the owner's or operator's financial statements (see clause [iv][b] of this paragraph). An adverse opinion or a disclaimer of opinion will be cause for disallowance. The commissioner will evaluate other qualifications on an individual basis. The owner or operator must provide evidence of insurance for the entire amount of required liability coverage as specified in this subdivision within 30 days after notification of disallowance.

(i) An owner or operator may meet the requirements of this subdivision by obtaining a written guarantee, hereinafter referred to as “guarantee.” If the firm which is providing the guarantee does not meet the definition of revenue- oriented in section 373-2.8 or 373-3.8 of this Part, it may provide the guarantee on behalf of the owner or operator even if the owner or operator is a revenue-oriented facility. However, the financial statement of the owner or operator cannot be consolidated with the financial statement of the guarantor. The guarantor must be the direct or higher-tier parent corporation of the owner or operator, a firm whose parent corporation is also the parent corporation of the owner or operator, or a firm with a substantial business relationship with the owner or operator. The guarantor must meet the requirements for owners or operators in paragraph (6) of this subdivision. The wording of the guarantee must be identical to the wording specified in section 373-2.8(j)(6)(ii) of this Part. A certified copy of the guarantee must accompany the items sent to the commissioner as specified in subparagraph (6)(iv) of this subdivision. One of these items must be the letter from the guarantor's chief financial officer. If the guarantor's parent corporation is also the parent corporation of the owner or operator, this letter must describe the value received in consideration of the guarantee. If the guarantor is a firm with a substantial business relationship with the owner or operator, this letter must describe the substantial business relationship and the value received in consideration of the guarantee. The terms of the guarantee must provide that:

(i) An owner or operator may satisfy the requirements of this subdivision by obtaining an irrevocable standby letter of credit that conforms to the requirements of this paragraph and submitting a copy of the letter of credit to the commissioner.

(ii) The financial institution issuing the letter or credit must be an entity 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.

(iii) The wording of the letter of credit must be identical to the wording specified in section 373-2.8(j)(10) of this part.

(iv) An owner or operator who uses a letter of credit to satisfy the requirements of this subdivision may also establish a standby trust fund. Under the terms of such a letter of credit, all amounts paid pursuant to a draft by the trustee of the standby trust will be deposited by the issuing institution into the standby trust in accordance with instructions from the trustee. The trustee of the standby trust fund must be an entity which has the authority to act as a trustee and whose trust operations are regulated and examined by a Federal or State agency.

(v) The wording of the standby trust fund must be identical to the wording specified in section 373-2.8(j)(13) of this part.

(i) An owner or operator may satisfy the requirements of this subdivision by obtaining a surety bond that conforms to the requirements of this paragraph and submitting a copy of the bond to the commissioner.

(ii) The surety company issuing the bond must be among those listed as acceptable sureties on Federal bonds in the most recent Circular 570 of the U.S. Department of the Treasury.

(iii) The wording of the surety bond must be identical to the wording specified in section 373-2.8(j)(11) of this Part.

(i) An owner or operator may satisfy the requirements of this subdivision by establishing a trust fund that conforms to the requirements of this paragraph and submitting an originally signed duplicate of the trust agreement to the commissioner.

(ii) The trustee must be an entity which has the authority to act as a trustee and whose trust operations are regulated and examined by a Federal or State agency.

(iii) The trust fund for liability coverage must be funded for the full amount of the liability coverage to be provided by the trust fund before it may be relied upon to satisfy the requirements of this subdivision. If at any time after the trust fund is created the amount of funds in the trust fund is reduced below the full amount of the liability coverage to be provided, the owner or operator, by the anniversary date of the establishment of the fund, must either add sufficient funds to the trust fund to cause its value to equal the full amount of liability coverage to be provided, or obtain other financial assurance as specified in this subdivision to cover the difference. For purposes of this paragraph, the full amount of the liability coverage to be provided means the amount of coverage for sudden and/or nonsudden occurrences required to be provided by the owner or operator by this subdivision, less the amount of financial assurance for liability coverage that is being provided by other financial assurance mechanisms being used to demonstrate financial assurance by the owner or operator.

(iv) The wording of the trust fund must be identical to the wording specified in section 373-2.8(j)(12) of this Part.