6 CRR-NY 360.22NY-CRR

OFFICIAL COMPILATION OF CODES, RULES AND REGULATIONS OF THE STATE OF NEW YORK
TITLE 6. DEPARTMENT OF ENVIRONMENTAL CONSERVATION
CHAPTER IV. QUALITY SERVICES
SUBCHAPTER B. SOLID WASTES
PART 360. SOLID WASTE MANAGEMENT FACILITIES GENERAL REQUIREMENTS
6 CRR-NY 360.22
6 CRR-NY 360.22
360.22 Financial assurance.
(a) Applicability.
Except as otherwise provided in this Part or in Parts 361, 362, 363, 365, or Subpart 374-2 of this Title, the owner or operator of a facility that requires financial assurance must comply with the requirements of this section.
(1) Except as provided in section 360.4 of this Part, each owner or operator of a facility required to obtain financial assurance must provide continuous coverage beginning no later than 60 days prior to the initial receipt of waste and until released by the department from financial assurance requirements by demonstrating compliance with the applicable closure, post-closure care, custodial care, and corrective measures requirements pertaining to the facility, and demonstrating that the facility and any waste remaining at the facility do not pose a threat to public health or the environment.
(b) Closure, post-closure care, custodial care, and corrective measures cost estimates.
(1) The owner or operator of any facility required to obtain financial assurance, other than a landfill, must have a detailed written estimate, in current dollars, of the cost of hiring a third party to perform closure in compliance with the requirements in section 360.21 of this Part and Subpart 374-2 of this Title.
(i) At a minimum, the closure cost estimate must include the cost to load, transport and dispose of the maximum permitted storage capacity at that facility. Cost estimates must also include or reflect the design, materials, equipment, labor, administration, and quality assurance for closure in accordance with the facility-specific closure plan. Additional financial assurance may be required on a site-specific basis if the potential exists for storage beyond the permitted storage capacity.
(ii) The closure cost estimate must not incorporate any salvage value that may be realized with the sale of materials, facility structures or equipment, land, or other assets associated with the facility at the time of closure.
(2) The owner or operator of a landfill must have a detailed written estimate, in current dollars, of the cost of hiring a third party to perform closure, post-closure care, custodial care, and, if necessary, corrective measures in compliance with the requirements in this Part, Part 363 of this Title, and a department-approved closure plan, post-closure care plan, custodial care plan and corrective measures plan.
(i) At a minimum, the closure cost estimate must equal the cost to close the greatest number of landfill cells which, at any given point during the lifetime of the facility, have received waste but have not undergone final closure, as indicated by the closure plan.
(a) The closure cost estimates must include or reflect the design, materials, equipment, labor, administration, and quality assurance for closure in accordance with the facility-specific closure plan.
(b) The closure cost estimate for a landfill’s preliminary closure plan must include the costs of developing final closure, post closure care and custodial care plans as well as the costs to prepare engineering drawings and specifications, bidding documents, and other construction-related documents.
(c) The closure cost estimate must not incorporate any salvage value that may be realized with the sale of materials, facility structures or equipment, land, or other assets associated with the facility at the time of closure.
(ii) At a minimum, the post closure care cost estimate must be based on the number of landfill cells that are actively receiving waste and those that have undergone final closure, as indicated by the post-closure care plan. The post closure care cost estimate must account for the total costs of conducting post closure care, including annual and periodic costs, as well as replacement costs related to the predicted service life of landfill components as described in the post-closure care plan, over a rolling 30-year post closure care period.
(iii) At a minimum, the custodial care cost estimate must be based on the number of landfill cells that have undergone final closure, as indicated by the custodial care plan. The custodial care cost estimate must account for the total costs of conducting custodial care after the landfill concludes post-closure care activities, including annual and periodic costs, as well as replacement costs related to the predicted service life of landfill components as described in the custodial care plan, over a rolling 30-year custodial care period. The initial custodial care cost estimate must be submitted to the department as part of the demonstration that the threat to public health or the environment has been reduced to a level where environmental monitoring and maintenance can be reduced.
(iv) The corrective measures cost estimate must account for the total costs of corrective measures as described in the corrective measures work plan for the entire corrective measures period as described in Subpart 363-10 of this Title.
(v) The total cost estimate must be increased by a contingency factor of at least 15 percent for estimates up to $100,000, 10 percent for estimates between $100,000 and $1 million, and 5 percent for estimates above $1 million.
(vi) The supporting documentation used to substantiate the cost estimates must be submitted to the department for review with the cost estimates.
(vii) The department must approve closure, post-closure care, custodial care, and corrective measures cost estimates.
(3) Annual cost estimate adjustments.
(i) During the active life of a facility, other than a landfill that requires financial assurance, the owner or operator must annually submit to the department for review and approval adjusted closure cost estimates, including supporting justification to account for inflation and changes in facility conditions.
(ii) During the active life of a landfill and during its closure, post-closure care, and custodial care periods, the owner or operator must annually submit to the department for review and approval adjusted closure, post-closure care, custodial care, and corrective measures cost estimates including supporting justification to account for inflation and changes in facility conditions.
(iii) The adjusted cost estimates can be made by:
(a) recalculating the maximum costs estimates in current dollars; or
(b) using an inflation factor described in 6 NYCRR section 373-2.8(c)(2).
(iv) Each annual adjustment to the post-closure care cost estimate and the custodial care cost estimate must reflect the cost for a combined 30-year period from the date of each annual adjustment.
(v) For owners and operators that use a local government financial test or guarantee, the cost estimates must be updated for inflation within 90 days after the close of the municipality's fiscal year.
(4) Discounting. The department may approve discounted estimates of post-closure care, custodial care costs and/or of corrective measures costs up to the rate of return for essentially risk-free investments, net of inflation, under the following conditions:
(i) the department determines that the cost estimates are complete and accurate and the owner or operator of the facility that is the subject of the cost estimates has submitted a certification from a professional engineer that the estimates are complete and accurate;
(ii) the department finds the facility that is the subject of the cost estimates is in compliance with applicable permit or other department conditions, this Part, and with Parts 361, 362, 363, or 365, or Subpart 374-2 of this Title as they pertain to the facility;
(iii) the department determines that the closure date is certain and the owner or operator certifies that there are no foreseeable factors that will change the estimate of the remaining active life of the facility; and
(iv) discounted cost estimates must be adjusted annually to reflect inflation and years of remaining active life and/or years remaining in the period covered by the estimate.
(5) Submission. The owner or operator must include the cost estimates in the facility annual report submitted to the department and keep a copy at the facility or other approved location.
(c) Financial assurance requirements.
(1) The terms of any financial assurance mechanisms provided to the department to satisfy compliance with any financial security obligation imposed by this Part or Parts 361, 362, 363, and 365 of this Title must ensure that:
(i) the amount of funds assured is sufficient to cover the costs of closure, and in the case of landfills, post closure care, custodial care, and corrective measures for known releases when needed. The amount of coverage must be revised whenever necessary to cover a revised cost estimate;
(ii) the funds will be available when needed;
(iii) for landfills, mechanisms for custodial care must be effective no later than 60 days after the determination that the landfill’s post-closure care period is complete;
(iv) mechanisms for corrective measures must be effective no later than 120 days after the department’s approval of the corrective measures remedy;
(v) the mechanisms must be legally valid, binding, and enforceable under State and Federal Law;
(vi) if the financial assurance mechanism is provided by the private operator of a municipally owned landfill, the post-closure mechanism must be one that is transferrable and the fully funded post-closure mechanism must be transferred to the municipality upon closure of the landfill or when the operator is no longer responsible for the facility under agreement with the municipality.
(2) The department may reduce the amount of financial assurance required under this section by the amount of financial assurance obtained by a facility, for closure, post-closure, custodial care or corrective measures, for the benefit of a municipality.
(d) Allowable financial assurance mechanisms.
Except where otherwise indicated in subparagraph (c)(1)(vi) of this section, owners and operators must choose from the options specified in paragraphs (1) through (9) of this subdivision for closure.
(1) Trust fund.
(i) An owner or operator of a facility required to provide financial assurance may satisfy the requirements of subdivision (c) of this section by establishing an irrevocable trust fund that conforms to the requirements of this paragraph. The trustee must be an entity with the authority to act as a trustee. An original, signed duplicate of the trust agreement must be submitted to the department along with evidence or a certification by the trustee that the trustee meets the requirements of this paragraph.
(ii) Pay-in period.
(a) For a trust fund used to demonstrate financial assurance for closure at a facility required to provide financial assurance, other than a landfill, the pay-in period may be no more than one year.
(b) The owner or operator of a landfill constructed on or after the effective date of this section must make payments into the trust fund at least annually over the term of 10 years after the initial permit is issued.
(1) Closure. For a trust fund used to demonstrate financial assurance for closure, the first payment into the fund must be made no later than 60 days before the initial receipt of waste and must be at least equal to the current cost estimate for closure, except as provided in paragraph (9) of this subdivision, divided by the number of years of remaining operating life of the facility if less than 10 years or by 10 if the remaining operating life is more than 10 years. The amount of subsequent payments must be determined by the following formula:
Next Payment = (CE – CV)/Y
where CE is the cost estimate for closure (updated for inflation or other changes), CV is the current value of the trust fund, and Y is the number of years remaining in the pay in period. For pay-in periods less than one year, the amounts of each payment into the trust fund must be approved by the department.
(2) Post-closure and custodial care. For a trust fund used to demonstrate financial assurance for post-closure and custodial care, the first payment into the fund must be at least equal to the current cost estimate for post closure care and custodial care, except as provided in paragraph (9) of this subdivision, divided by the number of years of remaining operating life of the facility if less than 10 years or by 10 if the remaining operating life is more than 10 years. The amount of subsequent payments must be determined by the following formula:
Next Payment = (PCE – CV)/Y
where PCE is the cost estimate for post closure care and custodial care (updated for inflation or other changes), CV is the current value of the trust fund, and Y is the number of years remaining in the pay in period. For pay-in periods less than one year, the amounts of each payment into the trust fund must be approved by the department. The initial payment into the trust fund for post closure care and custodial care must be made no later than 60 days before the initial receipt of waste.
(3) Corrective measures. For a trust fund used to demonstrate financial assurance for corrective measures at a landfill, the owner or operator must make payments into the trust fund at least annually over one half of the estimated length of the corrective measures program. The first payment into the trust fund must be at least equal to one half of the current cost estimate for corrective measures, except as provided in paragraph (9) of this subdivision, divided by the number of years in the corrective measures pay in period. The amount of subsequent payments must 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 measures (i.e., the total costs that will be incurred during the second half of the corrective measures period), CV is the current value of the trust fund, and Y is the number of years remaining in the pay in period. For pay-in periods less than one year, the amounts of each payment into the trust fund must be approved by the department. The initial payment into the trust fund for corrective measures must be made no later than 120 days after the department’s approval of the corrective measures remedy.
(c) If the owner or operator establishes a trust fund after having used one or more alternate mechanisms specified in this section, the initial payment into the trust fund must be at least the amount that the fund would contain if the trust fund were established initially and payments made according to the specifications of this paragraph and paragraph (9) of this subdivision, as applicable.
(d) The owner or operator, or other person authorized to conduct closure, post closure care, custodial care, or corrective measures activities, may request reimbursement from the trustee for these expenditures by submitting itemized bills and supporting documentation to the department for review and approval. If approved, the department will instruct the trustee to make reimbursements in those amounts the department specifies in writing. Requests for reimbursement will be granted only if sufficient funds are remaining in the trust fund to cover the remaining costs of closure, post closure care, custodial care or corrective measures. The owner or operator or other person authorized must notify the department that reimbursement has been received.
(e) The owner or operator may terminate the trust fund only if:
(1) the department authorizes termination in advance and in writing and the owner or operator substitutes alternate financial assurance as identified in this section that provides for continuous financial assurance being in effect until the owner or operator is no longer required to demonstrate financial assurance; or
(2) the owner or operator is no longer required to demonstrate financial assurance.
(2) Surety bond guaranteeing payment.
(i) An owner or operator of a facility required to provide financial assurance may satisfy the requirements of subdivision (c) of this section by obtaining a payment surety bond that conforms to the requirements of this paragraph. Except as required under section 360.4(j) of this Part, the bond for closure and in the case of a landfill, post closure care, and custodial care must be effective no later than 60 days before the initial receipt of waste; and, the bond for corrective measures at a landfill must be effective no later than 120 days after the department’s approval of the corrective measures remedy. The surety company issuing the bonds described in this subparagraph 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. The original bond must be submitted to the department along with evidence or a certification by the surety company that the surety company meets the requirements of this subparagraph.
(ii) The penal sum of the bond must be an amount at least equal to the current cost estimate for closure, post closure care, custodial care, or corrective measures, if applicable, except as provided in paragraph (9) of this subdivision.
(iii) Under the terms of the bond, the surety will become liable on the bond obligation if the owner or operator fails to perform as guaranteed by the bond, or fails to provide alternate financial assurance as specified in this section and obtain the department's written approval of the assurance provided within 90 days after the owner or operator and the department receive a notice of cancellation of the bond from the surety.
(iv) For bonds which are valued at $50,000 or more, the owner or operator must establish a standby trust fund. The standby trust fund must meet the requirements of paragraph (1) of this subdivision except the requirements for initial payment and subsequent payments specified in subparagraph (1)(ii) of this subdivision. The provisions in the trust agreement, as specified in paragraph (1) of this subdivision, for submitting annual valuations and notices of nonpayment also do not apply to a standby trust agreement established pursuant to this subparagraph until payments from the bond or other sources are deposited into the trust fund.
(v) Payments made under the terms of the bond will be deposited by the surety directly into the standby trust fund, or as otherwise directed by the department. Payments from the standby trust fund must be approved in advance by the department in writing.
(vi) Under the terms of the bond, the surety may cancel the bond by sending notice of cancellation by certified mail to the owner and operator and to the department 120 days in advance of cancellation. If the surety cancels the bond, the owner or operator must obtain alternate financial assurance as specified in this section. Any notice of cancellation, reinstatement, or renewal of the bond, or any other notice relating to the bond, must clearly identify the owner or operator and each facility for which the bond provides financial assurance, including the name and address of the owner or operator, and the name, address and amount guaranteed for each facility.
(vii) The owner or operator may cancel the bond only if:
(a) the department authorizes cancellation in advance and in writing and the owner or operator substitutes alternate financial assurance as identified in this section that provides for continuous financial assurance being in effect until the owner or operator is no longer required to demonstrate financial assurance; or
(b) the owner or operator is no longer required to demonstrate financial assurance.
(3) Letter of credit.
(i) An owner or operator of a facility required to provide financial assurance may satisfy the requirements of subdivision (c) of this section by obtaining an irrevocable letter of credit that conforms to the requirements of this paragraph. The letter of credit for closure, post closure care and custodial care must be effective no later than 60 days before the initial receipt of waste, and the letter of credit for corrective measures at a landfill must be effective no later than 120 days after the department’s approval of the corrective measures remedy. The issuing institution must be an entity that has the authority to issue letters of credit. The original letter of credit must be submitted to the department for review and approval along with evidence or a certification by the institution issuing the letter of credit that the institution meets the requirements of this subparagraph.
(ii) 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: name and address of the facility and the amount of funds assured.
(iii) The letter of credit must be irrevocable and issued for a period of at least one year in an amount at least equal to the current cost estimate for closure, post closure care, custodial care, or corrective measures, if applicable, except as provided in paragraph (9) of this subdivision. The letter of credit must provide that the expiration date will be automatically extended for a period of at least one year unless the issuing institution has cancelled the letter of credit by sending notice of cancellation by certified mail to the owner and operator and to the department 120 days in advance of cancellation. If the letter of credit is cancelled by the issuing institution, the owner or operator must obtain alternate financial assurance. Any notice of cancellation, reinstatement, or any other changes to the letter of credit must clearly identify each owner or operator and facility for which the letter of credit provides financial assurance, including the name and address of the owner or operator, and the name, address and amount guaranteed for each facility.
(iv) The owner or operator who uses a letter of credit with a value greater than $50,000 to satisfy the requirements of this paragraph must also establish a standby trust fund. Under the terms of the letter of credit, all amounts paid pursuant to a draft by the department will be made in compliance with instructions from the department. The standby trust fund must meet the requirements of paragraph (1) of this subdivision, except for initial payment and subsequent annual payments specified in subparagraph (1)(ii) of this subdivision. The provisions in the trust agreement, as specified in paragraph (1) of this subdivision, for submitting annual valuations and notices of nonpayment also do not apply to a standby trust agreement established pursuant to this paragraph unless and until payments from the letter of credit or other sources are actually deposited into the trust fund.
(v) The owner or operator may request cancellation of the letter of credit. The letter of credit may only be cancelled under the following conditions:
(a) the department authorizes that cancellation in advance and in writing and the owner or operator substitutes alternate financial assurance as identified in this section that provides for continuous financial assurance being in effect until the owner or operator is no longer required to demonstrate financial assurance; or
(b) the owner or operator is no longer required to demonstrate financial assurance.
(vi) Following a department determination that the owner or operator has failed to perform closure, post-closure care, custodial care, or corrective measures, the department may draw on the letter of credit.
(vii) If the owner or operator does not establish alternate financial assurance as specified in this subdivision and does not obtain written approval of alternate assurance from the department within 90 days after both the owner or operator and the department receive a notice from the issuing institution that it has decided not to extend the letter of credit beyond the current expiration date, the department will draw on the letter of credit. The department may delay the drawing if the issuing institution grants an extension of the term of credit. During the last 30 days of any extension the department 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 the assurance from the department.
(viii) Payments made under the terms of the letter of credit will be deposited by the surety directly into the standby trust fund, or as otherwise directed by the department. Payments from the standby trust fund must be approved in advance by the department in writing.
(4) Local government financial test.
(i) A municipality that is an owner or operator of a facility required to provide financial assurance that satisfies the requirements of subparagraphs (ii) through (iv) of this paragraph may demonstrate financial assurance up to the amount specified in subparagraph (v) of this paragraph.
(ii) Financial component.
(a) The municipality must satisfy subclause (1) or (2) of this clause as applicable:
(1) if the municipality has outstanding rated general obligation bonds that are not secured by insurance, a letter of credit, or other collateral or guarantee, it must have a current rating of Aaa, Aa, A, or Baa, as issued by Moody's, or AAA, AA, A, or BBB, as issued by Standard and Poor's on all general obligation bonds; or
(2) the municipality must satisfy each of the following financial ratios based on the municipality’s most recent audited annual financial statement:
(i) a ratio of cash plus marketable securities to total expenditures greater than or equal to 0.05; and
(ii) a ratio of annual debt service to total expenditures less than or equal to 0.20.
(b) The municipality must prepare its financial statements in conformity with generally accepted accounting principles for governments and have its financial statements audited by an independent certified public accountant.
(c) The municipality is not eligible to assure its obligations under this subparagraph if it:
(1) is currently in default on any outstanding general obligation bonds; or
(2) has any outstanding general obligation bonds rated lower than Baa as issued by Moody's or BBB as issued by Standard and Poor's; or
(3) operated at a deficit equal to five percent or more of total annual revenue in each of the past two fiscal years; or
(4) receives an adverse opinion, disclaimer of opinion, or other qualified opinion from the independent certified public accountant auditing its financial statement as required under clause (b) of this subparagraph. However, the department may evaluate qualified opinions on a case-specific basis and allow use of the financial test in cases where the department deems the qualification insufficient to warrant disallowance of use of the test.
(iii) Public notice component. The municipality must place a reference to any closure costs, post-closure care costs, or custodial care costs that may apply and that are assured through the financial test into its next comprehensive annual financial report (CAFR) after the effective date of this section or before the initial receipt of waste at the facility, whichever is later. Disclosure must include the nature and source of closure, post-closure care and custodial care requirements, the reported liability at the balance sheet date, the estimated total closure, post-closure care, and custodial care cost remaining to be recognized, and, in the case of a landfill, the percentage of landfill capacity used to date and the estimated remaining landfill life in years. In the instance where the local government financial test is used to satisfy the requirements of any corrective measures required at a landfill, a reference to corrective measures costs must be placed in the CAFR no later than 120 days after the corrective measures have been approved in compliance with the requirements of Part 363 of this Title. For the first year the financial test is used to assure costs at a particular facility, the reference may instead be placed in the operating record until issuance of the next available CAFR, if timing does not permit the reference to be incorporated into the most recently issued CAFR or budget.
(iv) Recordkeeping and reporting requirements.
(a) Within 270 days following the close of the municipality’s fiscal year, the municipality must submit the following items to the department and must place the following items in the facility's operating record.
(1) A letter signed by the municipality's chief financial officer that:
(i) lists all the current cost estimates covered by the local government financial test, as described in subdivision (b) of this section;
(ii) provides evidence and certifies that the municipality meets the conditions of clauses (ii)(a)-(c) of this paragraph; and
(iii) certifies that the municipality meets the conditions of subparagraphs (4)(iii) and (4)(v) of this subdivision.
(2) The municipality's independently audited year-end financial statements for the latest fiscal year (except for municipalities where audits are required every two years and where unaudited statements are allowed to be used in years when audits are not required), including the unqualified opinion of the auditor who must be an independent, certified public accountant that conducts equivalent comprehensive audits.
(3) A report to the municipality from the municipality's independent certified public accountant (CPA) based on performing an agreed upon procedures engagement relative to the financial ratios required by subclause (ii)(a)(2) of this subparagraph, if applicable, and the requirements of clause (ii)(b) of this paragraph and subclauses (ii)(c)(3) and (4) of this paragraph. The CPA or State agency's report should describe the procedures performed and the CPA or State agency's findings and state that the chief financial officer’s letter required by subclause (1) of this clause was reviewed and the data in the letter derived from the financial statements for the latest completed fiscal year were compared with the amounts in the financial statements.
(4) A copy of the CAFR used to comply with subparagraph (iii) of this paragraph.
(b) The items required in clause (a) of this subparagraph covering closure, post closure care and custodial care must be placed in the facility’s operating record no later than 60 days before the initial receipt of waste; and the items required in clause (a) of this subparagraph covering corrective measures must be placed in the facility’s operating record no later than 120 days after the department’s approval of the corrective measures remedy.
(c) After the initial placement of the items in the facility's operating record, the municipality must update the information and submit it to the department and place the updated information in the operating record within 270 days following the close of the municipality's fiscal year.
(d) The municipality is no longer required to meet the requirements of subparagraph (iv) of this paragraph when:
(1) the department authorizes termination in advance and in writing and the municipality substitutes alternate financial assurance as identified in this section that provides for continuous financial assurance being in effect until the municipality is no longer required to demonstrate financial assurance; or
(2) the municipality is no longer required to demonstrate financial assurance.
(e) A municipality must satisfy the requirements of the local government financial test at the close of each fiscal year. If the municipality no longer meets the requirements of the local government financial test it must, within 300 days following the close of the municipality's fiscal year, establish alternative financial assurance that meets the requirements of this section, place the required submissions for that assurance in the operating record, and notify the department that the municipality no longer satisfies the requirements of the local government financial test and that alternate financial assurance has been obtained. If the alternative financial assurance is a trust fund or reserve fund, the municipality may consider the facility to have been constructed on or after the effective date of this Part for purposes of the pay-in period calculations of subparagraph (1)(ii) of this subdivision.
(f) The department, based on a reasonable belief that the municipality may no longer meet the requirements of the local government financial test, may require additional reports of financial condition from the municipality at any time. If the department finds, on the basis of these reports or other information, that the municipality no longer meets the requirements of the local government financial test, the municipality must provide alternate financial assurance in compliance with this section.
(v) Calculation of costs to be assured. The portion of the closure, post-closure, custodial care, and corrective measures costs for which a municipality can assure under this paragraph is determined as follows:
(a) if the municipality does not assure other environmental obligations through a local government financial test and provides no other financial assurance instrument, it may assure closure, post-closure, custodial care and corrective measures costs that equal up to 43 percent of the municipality's total annual revenue;
(b) if the municipality assures other environmental obligations through a local government financial test, including those associated with Underground Injection Control (UIC) facilities under 40 CFR section 144.62 or Part 750 of this Title, petroleum underground storage tank facilities under 40 CFR part 280 or Part 612 of this Title, PCB storage facilities under 40 CFR part 761 or Subpart 373-2 of this Title, and hazardous waste treatment, storage, and disposal facilities under 40 CFR parts 264 and 265 or Subpart 373-2 or 373-3 of this Title, as incorporated by reference in section 360.3 of this Part, it must add those costs to the closure, post-closure, custodial care and corrective measures costs it seeks to assure under this paragraph. The total that may be assured in the absence of a financial assurance instrument must not exceed 43 percent of the municipality's total annual revenue;
(c) the municipality must obtain an alternate financial assurance instrument for those costs that exceed the limits set in clauses (a) and (b) of this subparagraph.
(5) Local government guarantee.
(i) An owner or operator required to provide financial assurance may demonstrate financial assurance for closure, post-closure, custodial care, and corrective measures, as required by this Part, by obtaining a written guarantee provided by a municipality. The guarantor must meet the requirements of the local government financial test in paragraph (4) of this subdivision, and must comply with the terms of a written guarantee.
(ii) Terms of a local government guarantee. The guarantee covering closure, post closure care, and custodial care, whichever is applicable, must be placed in the facility’s operating record no later than 60 days before the initial receipt of waste; and the guarantee covering corrective measures must be placed in the facility’s operating record no later than 120 days after the department’s approval of the corrective measures remedy. The guarantee must provide that:
(a) if the owner or operator fails to perform closure, post-closure care, custodial care and/or corrective measures of a facility covered by the guarantee, the guarantor will:
(1) perform, or pay a third party to perform, closure, post-closure care, custodial care and/or corrective measures as required; or
(2) establish a fully funded trust fund as identified in paragraph (1) of this subdivision in the name of the owner or operator.
(b) The guarantee will remain in force unless the guarantor sends notice of cancellation by certified mail to the owner or operator and to the department. Cancellation may not occur, however, during the first 120 days beginning on the date of receipt of the notice of cancellation by both the owner or operator and the department, as evidenced by the return receipts.
(c) If the guarantor seeks to cancel the guarantee, the owner or operator must, within 90 days following receipt of the cancellation notice by the owner or operator and the department, obtain alternate financial assurance, place evidence of that alternate financial assurance in the facility operating record, and notify the department. If the owner or operator fails to provide alternate financial assurance within the 90-day period, the guarantor must provide that alternate assurance within 120 days following the guarantor's notice of cancellation, place evidence of the alternate assurance in the facility operating record, and notify the department.
(d) The owner or operator may cancel the guarantee only if:
(1) the department authorizes cancellation in advance and in writing and the owner or operator substitutes alternate financial assurance as identified in this section that provides for continuous financial assurance being in effect until the owner or operator is no longer required to demonstrate financial assurance; or
(2) the owner or operator is no longer required to demonstrate financial assurance.
(iii) Recordkeeping and reporting.
(a) In the case of closure, post-closure care, and custodial care, the owner or operator must submit to the department and place into the facility’s operating record, no later than 60 days before the initial receipt of waste, a certified copy of the guarantee covering closure, post-closure care, and custodial care and the items required under subparagraph (4)(iv) of this subdivision. In the case of corrective measures at a landfill, the owner or operator must submit to the department and place into the facility’s operating record, no later than 120 days after the department’s approval of the corrective measures remedy for a landfill, a certified copy of the guarantee covering the corrective measures and the items required under subparagraph (4)(iv) of this subdivision.
(b) If a local government guarantor no longer meets the requirements of paragraph (4) of this subdivision, the owner or operator must, within 90 days, establish alternate financial assurance, place evidence of the alternate assurance in the facility’s operating record, and notify the department. If the owner or operator fails to obtain alternate financial assurance within that 90-day period, the guarantor must provide that alternate financial assurance within the next 30 days. If the alternative financial assurance is a trust fund or reserve fund, the municipality may consider the facility to have been constructed on or after the effective date of this Part for purposes of the pay-in period calculations of subparagraph (1)(ii) of this subdivision.
(6) Reserve fund. A capital reserve fund or a solid waste management facility reserve fund established and funded pursuant to the General Municipal Law satisfies these requirements provided the pay in period is consistent with paragraph (1) of this subdivision.
(7) The full faith and credit of New York State or the Federal government shall be used for facilities owned or operated by New York State or the Federal government.
(8) Use of multiple financial mechanisms. An owner or operator required to provide financial assurance may satisfy the requirements of this subdivision by establishing more than one financial assurance mechanism per facility. The mechanisms must be as identified in paragraphs (1) through (6) of this subdivision, except that it is a combination of mechanisms, rather than the single mechanism, which must provide financial assurance for an amount at least equal to the current cost estimate for closure, post closure care, custodial care or corrective measures, whichever is applicable. If the owner or operator uses a trust fund in combination with a surety bond or a letter of credit, the trust fund may be used as the standby trust fund for the other mechanisms. A single standby trust fund, if required, may be established for two or more mechanisms. The department may allow the use of any or all of the mechanisms to provide for closure, post-closure care, custodial care or corrective measures of the facility.
(9) Use of a financial mechanism for multiple facilities. An owner or operator required to provide financial assurance may use a financial assurance mechanism identified in this subdivision to meet the requirements of this section for more than one facility. Evidence of financial assurance submitted to the department must include a list showing, for each facility, the name, address, and the amount of funds assured by the mechanism. The amount of funds available through the mechanisms must be no less than the sum of funds that would be available if a separate mechanism had been established and maintained for each facility. In directing funds available through the mechanisms for closure, post-closure care, custodial care or corrective measures of any of the facilities covered by the mechanism, the department may direct only the amount of funds designated for the facility, unless its owner or operator agrees to the use of additional funds available under the mechanism.
(e) Wording of instruments.
(1) For instruments covering one or more facilities required to provide financial assurance located entirely within one administrative region of the department, the owner or operator of the facility or facilities must submit each original instrument to the director of the administrative region of the department in which the facility or facilities are located, and submit a copy to the director of the Division of Materials Management or successor administrative unit.
(2) For instruments covering one or more facilities required to provide financial assurance located in more than one administrative region of the department, the owner or operator of the facility or facilities must submit each original instrument to the director of the Division of Materials Management or successor administrative unit, and submit a copy to each director of the administrative regions of the department in which the facility or facilities are located.
(3) A trust agreement for a trust fund, as identified in paragraph (d)(1) of this section, must be worded as follows, except that instructions in brackets are to be replaced with the relevant information and the brackets deleted:
TRUST AGREEMENT
[or insert STANDBY TRUST AGREEMENT if established as a standby trust to receive funds from a letter of credit, surety bond or other instrument]
TRUST AGREEMENT, the "Agreement," entered into as of [date] by and between [name of the owner or operator], a [name of State ] [insert "corporation," partnership," "association," or "proprietorship"], the "Settlor," and [name of corporate trustee], [insert "incorporated in the State of ___________" or "a national bank"], the "Trustee."
WHEREAS, the New York State Department of Environmental Conservation (hereinafter referred to as "Department") has established certain regulations applicable to the Settlor, requiring that an owner or operator of a solid waste management facility shall provide financial assurance that funds will be available when needed [insert "for facility closure, and/or post-closure monitoring and maintenance, and/or custodial care monitoring and maintenance, and/or corrective measures, if necessary" or other language upon written approval of the commissioner of Department which limits or reduces the extent of the activities funded by this trust] [hereinafter referred to as [insert "Closure, Post Closure, Custodial Care and Corrective Measures"], and
WHEREAS, the Settlor has elected to establish a trust to provide all or part of such financial assurance for the [facility or facilities] identified herein, and
WHEREAS, the Settlor acting through its duly authorized officers, has selected the Trustee to be the trustee under this Agreement, and the Trustee is willing to act as trustee,
NOW, THEREFORE, the Settlor and the Trustee agree as follows:
Section 1. ‘Definitions’. As used in this Agreement:
(a) The term ‘Settlor’ means the owner or operator who enters into this Agreement and any successors or assigns of the Settlor.
(b) The term ‘Trustee’ means the Trustee who enters into this Agreement and any successor Trustee.
(c) The term ‘Commissioner’ means the Commissioner of Environmental Conservation, or the Commissioner’s duly appointed designee.
Section 2. ‘Identification of Facilities and Cost Estimates’. This Agreement pertains to the [facility or facilities] and cost estimates identified on attached Schedule A [on Schedule A, for each facility, list the Department identification numbers, names, addresses, and the costs, as established or approved by the Commissioner, per facility for Closure, Post-Closure, Custodial Care and Corrective Measures, or portions thereof, for which financial assurance is demonstrated by this Agreement].
Section 3. ‘Establishment of Fund’. The Settlor and the Trustee hereby establish a trust fund (hereinafter referred to as the "Fund") for the sole benefit of the Department. The Settlor and the Trustee intend that no third party have access to the Fund except as herein provided. The Fund is established initially as consisting of the property, which is acceptable to the Trustee, described in Schedule B annexed hereto. Such property and any other property subsequently transferred to the Trustee is referred to as the Fund, together with all earnings and profits thereon, less any payments or distributions made by the Trustee pursuant to this Agreement. The Fund shall be held by the Trustee, IN TRUST, as hereinafter provided. The Trustee shall not be responsible, nor shall it undertake any responsibility for the amount or adequacy of, nor any duty to collect from the Settlor, any payments necessary to discharge any liabilities of the Settlor established by the Department.
Section 4. ‘Payment for Closure, Post-closure, Custodial Care and Corrective Measures’. The Trustee shall make payment from the Fund as the Commissioner shall direct, in writing, to provide for the payment of the costs of Closure, Post-closure, Custodial Care and/or Corrective Measures of the facilities covered by this Agreement. The Trustee shall reimburse the Settlor or other persons as identified by the Commissioner from the Fund for the expenditures of such covered activities in such amounts as the Commissioner shall direct in writing. In addition, the Trustee shall refund to the Settlors such amounts as the Commissioner specifies in writing. Upon refund, such funds shall no longer constitute part of the Fund as defined herein.
Section 5. ‘Payments Comprising the Fund’. Payments made to the Trustee for the Fund shall consist of cash or securities acceptable to the Trustee.
Section 6. ‘Trustee Management’. The Trustee shall invest and reinvest the principal and income of the Fund and keep the Fund invested as a single fund, without distinction between principal and income, in compliance with general investment policies and guidelines which the Settlor may communicate in writing to the Trustee from time to time, subject, however, to the provisions of this section. In investing, reinvesting, exchanging, selling, and managing the Fund, the Trustee shall discharge his or her duties with respect to the trust fund solely in the interest of the beneficiary and with the care, skill, prudence, and diligence under the circumstances then prevailing which persons of prudence, acting in a like capacity and familiar with such matters, would use in the conduct of an enterprise of a like character and with like aims; except that:
(a) Securities or other obligations of the Settlor, or any other owner or operator of the facilities, or any of their affiliates as defined in the Investment Company Act of 1940, 15 USC 80a 2(a), shall not be acquired or held, unless they are securities or other obligations of the Federal or a state government;
(b) The Trustee is authorized to invest the Fund in time or demand deposits of the Trustee, to the extent insured by an agency of the Federal or a state government; and
(c) The Trustee is authorized to hold cash awaiting investment or distribution uninvested for a reasonable time and without liability for the payment of interest thereon.
Section 7. ‘Commingling and Investment’. The Trustee is expressly authorized in its discretion:
(a) To transfer from time to time any or all of the assets of the Fund to any common, commingled, or collective trust fund created by the Trustee in which the Fund is eligible to participate, subject to all of the provisions thereof, to be commingled with the assets of other trusts participating therein; and
(b) To purchase shares in any investment company registered under the Investment Company Act of 1940, 15 USC 80a 1 ‘et seq.’, including one which may be created, managed, underwritten, or to which investment advice is rendered or the shares of which are sold by the Trustee. The Trustee may vote such shares in its discretion.
Section 8. ‘Express Powers of Trustee’. Without in any way limiting the powers and discretions conferred upon the Trustee by the other provisions of this Agreement or by law, the Trustee is expressly authorized and empowered:
(a) To sell, exchange, convey, transfer, or otherwise dispose of any property held by it, by public or private sale. No person dealing with the Trustee shall be bound to see to the application of the purchase money or to inquire into the validity or expediency of any such sale or other disposition;
(b) To make, execute, acknowledge, and deliver any and all documents of transfer and conveyance and any and all other instruments that may be necessary or appropriate to carry out the powers herein granted;
(c) To register any securities held in the Fund in its own name or in the name of a nominee and to hold any security in bearer form or in book entry, or to combine certificates representing such securities with certificates of the same issue held by the Trustee in other fiduciary capacities, or to deposit or arrange for the deposit of such securities in a qualified central depository even though, when so deposited, such securities may be merged and held in bulk in the name of the nominee of such depository with other securities deposited therein by another person, or to deposit or arrange for the deposit of any securities issued by the United States Government, or any agency or instrumentality thereof, with a Federal Reserve bank, but the books and records of the Trustee shall at all times show that all such securities are part of the Fund;
(d) To deposit any cash in the Fund in interest-bearing accounts maintained or savings certificates issued by the Trustee, in its separate corporate capacity, or in any other banking institution affiliated with the Trustee, to the extent insured by an agency of the Federal or State government;
(e) To accept additions to the Fund from sources other than the Settlor of the Trust; and
(f) To contest, compromise, or otherwise settle any claim in favor of the Fund or Trustee, or in favor of third persons and against the Fund or Trustee.
Section 9. ‘Taxes and Expenses’. All taxes of any kind that may be assessed or levied against or in respect of the Fund and all brokerage commissions incurred by the Trustee in connection with the administration of this Trust, including fees for legal services rendered to the Trustee, the compensation of the trustee to the extent not paid directly by the Settlor, and all of the proper charges and disbursements of the Trustee shall be paid from the Fund.
Section 10. ‘Annual Valuation’. The Trustee shall annually, at least 30 days before the anniversary date of establishment of the Fund, furnish to the Settlor and to the Commissioner, a statement confirming the value of the Trust. Any securities in the fund shall be valued at market value as of no more than 60 days before the anniversary date of the establishment of the Fund. The failure of the Settlor to object in writing to the Trustee within 90 days after the statement has been furnished to the Settlor and to the Commissioner shall constitute a conclusively binding assent by the Settlor, barring the Settlor from asserting any claim or liability against the Trustee with respect to matters disclosed in the statement. [For a standby trust agreement, insert “This provision does not apply to a standby trust fund until payments have been made to the Fund”]
Section 11. ‘Advice of Counsel’. The Trustee may from time to time consult with counsel, who may be counsel to the Settlor, with respect to any question arising as to the construction of this Agreement or any action to be taken hereunder. The Trustee shall be fully protected, to the extent permitted by law, in acting upon the advice of counsel.
Section 12. ‘Trustee Compensation’. The Trustee shall be entitled to reasonable compensation for its services as agreed upon in writing from time to time with the Settlor.
Section 13. ‘Successor Trustee’. The Trustee may resign or the Settlor may replace the Trustee, but such resignation or replacement shall not be effective until the Settlor has appointed a Successor Trustee and this successor accepts the appointment. The Successor Trustee shall have the same powers and duties as those conferred upon the Trustee hereunder. Upon the Successor Trustee's acceptance of the appointment, the Trustee shall assign, transfer, and pay over to the Successor Trustee the funds and properties then constituting the Fund. If for any reason the Settlor cannot or does not act in the event of the resignation of the Trustee, the Trustee may apply to a court of competent jurisdiction for the appointment of a Successor Trustee or for instruction. The Successor Trustee shall specify the date on which it assumes administration of the trust in writing sent to the Settlor, the Commissioner, and the present Trustee by certified mail, return receipt requested, 30 days before such change becomes effective. Any expenses incurred by the Trustee as a result of any of the acts contemplated by this section shall be paid as provided in section 9.
Section 14. ‘Instructions to the Trustee’. All orders, requests, and instructions by the Settlor to the Trustee shall be in writing, signed by such persons as are designated in the attached Schedule C or such other designees as the Settlor may designate by amendment to Schedule C. The Trustee shall be fully protected in acting without inquiry in compliance with the Settlor's orders, requests, and instructions. All orders, requests, and instructions by the Department to the Trustee shall be in writing, signed by the Commissioner, and the Trustee shall act and shall be fully protected in acting in compliance with such orders, requests, and instructions. The Trustee shall have the right to assume, in the absence of written notice to the contrary, that no event constituting a change or a termination of the authority of any person to act on behalf of the Settlor or Department hereunder has occurred. The Trustee shall have no duty to act in the absence of such orders, requests, and instructions from the Settlor and/or Department except as provided for herein.
Section 15. ‘Notice of Nonpayment’. The Trustee shall notify the Settlor and the Commissioner, by certified mail, return receipt requested, [if annual payments are to be made to the Fund insert “within 30 days after each anniversary of the establishment of the Trust” or if payments are to be made on a different basis, such as monthly or quarterly, then insert other language approved by the Department], if no payment is received from the Settlor during that period. After the pay-in period is completed, the Trustee shall not be required to send a notice of nonpayment. [For a standby trust agreement, insert “This provision does not apply to a standby trust fund unless and until payments have been made to the Fund.”]
Section 16. ‘Amendment of Agreement’. This Agreement may be amended by an instrument in writing executed by the Settlor, the Trustee, and the Commissioner or by the Trustee and the Commissioner if the Settlor ceases to exist.
Section 17. ‘Irrevocability and Termination’. Subject to the right of the parties to amend this Agreement as provided in section 16, this Trust shall be irrevocable and shall continue until terminated at the written agreement of the Settlor, the Trustee, and the Commissioner, or by the Trustee and the Commissioner if the Settlor ceases to exist. Upon termination of the Trust, all remaining trust property, less final trust administration expenses, shall be delivered to the Settlor.
Section 18. ‘Immunity and Indemnification’. The Trustee shall not incur personal liability of any nature in connection with any act or omission, made in good faith, in the administration of this Trust, or in the carrying out of any directions by the Settlor or the Commissioner issued in compliance with this Agreement. The Trustee shall be indemnified and saved harmless by the Settlor or from the Trust Fund, or both, from and against any personal liability to which the Trustee may be subjected by reason of any act or conduct in its official capacity, including all expenses reasonably incurred in its defense in the event the Settlor fails to provide such defense.
Section 19. ‘Choice of Law’. This Agreement shall be administered, construed, and enforced according to the laws of the State of New York.
Section 20. ‘Fund Not an Asset of Settlor in Bankruptcy’. It is the Settlor’s legal and equitable obligation under the permit and other applicable law, which obligation is not limited to the value of the Fund, to provide for the payment of the costs of Closure, Post-closure, Custodial Care, and/or Corrective Measures of the [facility or facilities], inter alia, in accordance with the terms of the permit, any subsequent modifications thereof, and 6 NYCRR Parts 360, 361, 362, 363, and 365. This trust is irrevocable and created for the sole benefit of the Department. The parties agree that normal principles of trust law apply, and that legal Title to the Fund shall be in the trustee and the Department, to ensure, inter alia, Proper Closure, Post-Closure, Custodial Care and/or Corrective Measures are carried out at the [facility or facilities] without adverse environmental or health impacts. The Settlor shall have no property interest in the Fund except a contingent remainder interest which shall entitle it to receive, upon the completion of Closure, Post-Closure, Custodial Care and/or Corrective Measures to the satisfaction of the Department, any funds remaining in the trust in excess of such costs and the final administrative costs of the trustee and the Fund. The interest of any beneficiary, including any contingent remainder interest, of any trust created hereunder, either as to income or principal, shall not be anticipated, alienated or in any manner assigned by such beneficiary or contingent remainder interest holder, and shall not be subject to any legal process, bankruptcy proceedings or the interference or control of creditors or others.
Section 21. ‘Interpretation’. As used in this Agreement, words in the singular include the plural and words in the plural include the singular. The descriptive headings for each section of this Agreement shall not affect the interpretation or the legal efficacy of this Agreement.
IN WITNESS WHEREOF the parties have caused this Agreement to be executed by their respective officers duly authorized and their corporate seals to be hereunto affixed, if appropriate, and attested as of the date first written below. The parties below certify that the wording of this Agreement is identical to the wording identified in 6 NYCRR 360.22(e)(3) as such regulations were constituted on the date first written below.
_________________
Settlor
_________________
Title
_________________
Company Name
_________________
Trustee
_________________
Title
_________________
Banking Institution or Trust Company
(ACKNOWLEDGMENT BY TRUSTEE) within New York
State of New York }
{ ss.:
County of }
On the day of , in the year 2 , before me, the undersigned, personally appeared , personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s) or the person upon behalf of which the individual(s) acted, executed the instrument.
Notary Public
(ACKNOWLEDGMENT BY TRUSTEE) outside New York
[Insert State, District of Columbia, Territory, Possession or Foreign Country] } ss.
On the day of , in the year 2 , before me, the undersigned, personally appeared , personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument, and that such individual made such appearance before the undersigned in the [Insert the City or other political subdivision and the state or country or other place the acknowledgement was taken].
Signature:
Name:
Office:
(ACKNOWLEDGMENT BY SETTLOR) within New York
State of New York }
} ss.:
County of }
On the day of , in the year 2 , before me, the undersigned, personally appeared , personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s) or the person upon behalf of which the individual(s) acted, executed the instrument.
Notary Public
(ACKNOWLEDGMENT BY SETTLOR) outside New York
[Insert State, District of Columbia, Territory, Possession or Foreign Country] } ss.
On the day of , in the year 2 , before me, the undersigned, personally appeared , personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument, and that such individual made such appearance before the undersigned in the [Insert the City or other political subdivision and the state or country or other place the acknowledgement was taken].
Signature:
Name:
Office:
Schedule A
Identification of Facility(ies) and Cost Estimates
[Provide the following information for each facility covered under the Trust Agreement.]
Name and Address of Facility(ies)_______________
_________________
_________________
NYS DEC Identification Number(s): _______________
Cost estimate(s):
Closure_________
Post-Closure Care _________
Custodial Care __________
Corrective Measures __________
Total _______
Schedule B
Identification of Property
The fund is established initially as consisting of the following:
Amount: $______
Type of property: [identify the type of property used to establish the fund (e.g., cash, check, etc.)]
Source: [identify the name of the source of the funds (e.g., bank, facility owner or operator, etc.)]
Date: [insert date].
[For a Standby Trust Agreement insert “This agreement will be funded by the following:
Type of property and number: [Letter of Credit and #, Surety Bond and #, cash, etc.]
Issued by: [identify the name of the source of the funds (e.g.,. bank, facility owner or operator, etc.)]
Date: [insert date] in accordance with the terms of [(e.g., Letter of Credit, Surety Bond, etc.)].”]
Schedule C
Identification of Authorized Personnel
Any orders, requests or instructions by the Settlor to the Trustee may be signed by any one of the following persons:
[Provide the following contact information for each person authorized to give orders, requests or instructions.]
_________________
Title:
Name:
_________________
Address:
_________________
Phone Number: __________
(4) A surety bond, as identified in paragraph (d)(2) of this section, must be worded exactly as follows, except that instructions in brackets are to be replaced with the relevant information and the brackets deleted:
SURETY BOND
(Financial Guarantee Bond)
Bond Number:
_________________
Date bond executed:
_________________
[If more than one Surety, identify bond number with respective Surety]
Effective date:
_________________
Principal:
_________________
[Legal name and business address of owner or operator]
Type of organization:
_________________
[Insert "individual," "joint venture," "partnership," or "corporation"]
State of Incorporation:
_________________
Surety(ies):
_________________
[Name(s) and business address(es) of Surety(ies)]
Obligee: New York State Department of Environmental Conservation (hereinafter referred to as “Department”)
Department identification numbers, name, address, and closure, post-closure, custodial care, and/or corrective measures amount(s) for each facility guaranteed by this bond [indicate facility and closure, post-closure, custodial care and corrective measures amounts separately]:
_________________
_________________
_________________
Total penal sum of bond: $ __________ (payable in good and lawful money of the United States of America)
NOW, THEREFORE, Know All Persons By These Presents, that we, the Principal and Surety(ies) hereto are held and firmly bound to the Department in the above penal sum for the payment of which we bind ourselves, our heirs, executors, administrators, successors, and assigns jointly and severally; provided that, where the Surety(ies) are corporations acting as co-sureties, we, the Sureties, bind ourselves in such sum "jointly and severally" only for the purpose of allowing a joint action or actions against any or all of us, and for all other purposes each Surety binds itself, jointly and severally with the Principal, for the payment of such sum only as is set forth opposite the name of such Surety, but if no limit of liability is indicated, the limit of liability shall be the full amount of the penal sum.
WHEREAS said Principal is required, under Environmental Conservation Law (ECL) Article 27, to have a permit in order to operate each solid waste management facility identified above; and
WHEREAS said Principal is required to provide financial assurance for closure, post-closure care, custodial care and/or corrective measures as referred to above, as a condition of the permit(s); and
WHEREAS said Principal shall establish a standby trust fund as is required when a surety bond is used to provide such financial assurance;
NOW, THEREFORE, the conditions of the obligation are such that if the Principal shall faithfully perform and complete [insert “closure”, “post-closure care”, “custodial care” “and/or corrective measures”] whenever required to do so at each facility for which this bond guarantees payment for [“closure”, “post-closure care”, “custodial care” “and/or corrective measures”] in compliance with the [“closure plan”, “post-closure care plan”, “custodial care plan” “and/or corrective measures plan”] and other requirements of the permit, applicable rules, regulations, and orders of the department, and applicable provisions of the laws of the State of New York,
OR, if the Principal shall faithfully, before the beginning of final closure of each facility for which this bond guarantees payment, fund the standby trust fund in the amount(s) identified above for each facility,
OR, if the Principal shall fund the standby trust fund in such amount(s) within 15 days after an order to begin closure is issued by the Commissioner of the New York State Department of Environmental Conservation or the Commissioner’s duly appointed designee (hereinafter referred to as the “Commissioner”) or a United States district court or other court of competent jurisdiction,
OR, if the Principal shall provide alternate financial assurance, as identified in 6 NYCRR Section 360.22(d), as applicable, and obtain the Commissioner’s written approval of such assurance, within 90 days after the date notice of cancellation is received by both the Principal and the Department from the Surety(ies), then this obligation shall be null and void, otherwise it is to remain in full force and effect.
The Surety(ies) shall become liable on this bond obligation only when the Principal has failed to fulfill the conditions described above. Upon notification by the Commissioner that the Principal has failed to perform as guaranteed by this bond, the Surety(ies) shall provide funds up to the amount guaranteed for the facility(ies) into the standby trust fund or as otherwise directed by the Commissioner.
The liability of the Surety(ies) shall not be discharged by any payment or succession of payments hereunder, unless and until such payment or payments shall amount in the aggregate to the penal sum of the bond, but in no event shall the obligation of the Surety(ies) hereunder exceed the amount of said penal sum.
The Surety(ies) hereby waive(s) notifications of amendments to closure, post-closure, custodial care and/or corrective measures plans, permits, applicable laws, statutes, rules, and regulations and agrees that no such amendment shall in any way alleviate the Surety’s obligation on this bond.
The Surety(ies) may cancel the bond by sending notice of cancellation by certified mail, return receipt requested, to the Principal and the Commissioner, provided, however, that cancellation shall not occur during the 120 days beginning on the date of receipt of the notice of cancellation by both the Principal and the Commissioner, as evidenced by the return receipts.
The Principal may terminate this bond by sending written notice to the Surety(ies), provided, however, that no such notice shall become effective until the Surety(ies) receive(s) written authorization for termination of the bond by the Commissioner.
Principal and Surety(ies) hereby agree to adjust the penal sum of the bond yearly so that it guarantees the current closure, post-closure and/or corrective measures amount, provided that no decrease in the penal sum takes place without the written permission of the Commissioner.
IN WITNESS WHEREOF, the Principal and Surety(ies) have affixed their seals on the date set forth above.
The persons whose signatures appear below hereby certify that they are authorized to execute this surety bond on behalf of the Principal and Surety(ies) and that the wording of this surety bond is identical to the wording identified in 6 NYCRR Section 360.22(e)(4), as such regulations were constituted on the date this bond was executed.
PRINCIPAL
(Signature(s)) ______________
(Name(s)) _________________
(Title(s)) ______________
(Corporate Seal) _________________
CORPORATE SURETY(IES)
[Name and Address]
State of Incorporation:
_________________
Liability Limit: (For each facility, and in the aggregate)
$ _________
(Signature(s)) _______________
(Name(s) and Title(s))
_________________
(Corporate Seal)
[For every co surety, provide signature(s), corporate seal if appropriate, and other information in the same manner as for Surety above.]
Bond Premium: $ ________________
(ACKNOWLEDGMENT BY TRUSTEE) within New York
State of New York }
} ss.:
County of }
On the day of , in the year 2 , before me, the undersigned, personally appeared , personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s) or the person upon behalf of which the individual(s) acted, executed the instrument.
Notary Public
(ACKNOWLEDGMENT BY TRUSTEE) outside New York
[Insert State, District of Columbia, Territory, Possession or Foreign Country] } ss.
On the day of , in the year 2 , before me, the undersigned, personally appeared , personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument, and that such individual made such appearance before the undersigned in the [Insert the City or other political subdivision and the state or country or other place the acknowledgement was taken].
Signature:
Name:
Office:
(ACKNOWLEDGMENT BY SETTLOR) within New York
State of New York }
} ss.:
County of }
On the day of , in the year 2 , before me, the undersigned, personally appeared , personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s) or the person upon behalf of which the individual(s) acted, executed the instrument.
Notary Public
(ACKNOWLEDGMENT BY SETTLOR) outside New York
[Insert State, District of Columbia, Territory, Possession or Foreign Country] } ss.
On the day of ___, in the year 2___ , before me, the undersigned, personally appeared , personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument, and that such individual made such appearance before the undersigned in the [Insert the City or other political subdivision and the state or country or other place the acknowledgement was taken].
Signature:
Name:
Office:
(5) A letter of credit, as identified in paragraph (d)(3) of this section, must be worded exactly as follows, except that instructions in brackets are to be replaced with the relevant information and the brackets deleted:
Irrevocable Letter of Credit
[Name and address of banking establishment] [Date]
[See instruction at 6 NYCRR 360.22(e)(1) and (2) of this Part for addressing]
Regional Director
Region [Number of the appropriate Department of Environmental Conservation Regional Office in which the facility is located, (i.e., 1 – 9)]
New York State Department of Environmental Conservation
[Address of the appropriate Regional Office]
OR
Commissioner
New York State Department of Environmental Conservation
Attn: Division of Materials Management [or successor administrative unit]
625 Broadway
Albany, New York 12233 7260
Re: Letter of Credit No. –––––––––
Dear [insert “Commissioner” or “Regional Director”]:
We hereby establish and open our Irrevocable Letter of Credit No. ________ in your favor, at the request and for the account of [owner's or operator's name and address] up to the aggregate amount of [insert amount of dollars in words] U.S. dollars ($ ), available upon presentation of:
(1) your sight draft, bearing reference to this Letter of Credit No. ____________, and
(2) your signed statement reading as follows: "I certify that the amount of the draft is payable pursuant to regulations issued under authority of the New York State Environmental Conservation Law."
This letter of credit covers [insert “closure”, “post-closure care”, “custodial care”, and/or “corrective measures”, whichever apply] at the following [facility or facilities]: [identify each of the owner’s or operator’s facilities by name, address and Department of Environmental Conservation identification number, and the amounts for each].
This letter of credit is effective as of [date] and shall expire on [date at least 1 year later], but such expiration date shall be automatically extended for a period of [at least one year] on [date] and on each successive expiration date thereafter, unless, at least 120 days before the current expiration date, we notify both you and [owner's or operator's name] by certified mail, return receipt requested, that we have decided not to extend this letter of credit beyond the current expiration date. In the event you are so notified, any unused portion of the credit shall be available upon presentation of your sight draft and the above-referred-to signed statement for 120 days after the date of receipt by both you and (owner's or operator's name), as shown on the signed return receipts.
The [insert name of bank issuing letter of credit] agrees that whenever this letter of credit is drawn on, under and in compliance with the terms of this letter of credit, that [insert name of bank issuing letter of credit] shall duly honor such draft upon presentation to [insert name of bank issuing letter of credit] and the [insert name of bank issuing letter of credit] shall deposit the amount of the draft into the standby trust fund of [owner's or operator's name] or the amount will be otherwise disbursed in compliance with the [“Commissioner's” or “Regional Director’s”] instructions.
We certify that the wording of this letter of credit is identical to the wording identified in 6 NYCRR 360.22(e)(5), as such regulations were constituted on the date shown immediately below.
Very truly yours,
[Insert name of bank issuing credit]
By: ______________________
[insert name and Title of authorized employee or officer of bank issuing letter of credit.]
Date: ________________
This credit is subject to [insert "the most recent edition of the Uniform Customs and Practice for Documentary Credits, published and copyrighted by the International Chamber of Commerce," as described in 6 NYCRR Part 373-2.8(j)(3), or "the Uniform Commercial Code of the State of New York"].
6 CRR-NY 360.22
Current through April 30, 2021
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