Section 170. Letter of credit

A. An owner or operator may satisfy the requirements of this article by obtaining an irrevocable standby letter of credit that satisfies the requirements of this section and by submitting the original letter of credit to the director. A copy of the letter of credit shall be placed in the facility's operating record. The letter of credit shall be effective before the initial receipt of waste or before January 7, 1998, whichever is later, in case of closure and post-closure care, or no later than 120 days after the corrective action remedy has been selected. The issuing institution shall be a bank or other financial institution that has the authority to issue letters of credit and whose letter of credit operations are regulated and examined by the Commonwealth of Virginia, by a federal agency, or by an agency of another state.

B. The letter of credit shall 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, or corrective action, whichever is applicable. The letter of credit shall provide that the expiration date will be automatically extended for a period of at least one year. If the issuing institution decides not to extend the letter of credit beyond the current expiration date it shall, at least 120 days before the date, notify both the owner or operator and the director by certified mail of that decision. The 120-day period will begin on the date of receipt by the director as shown on the signed return receipt. Expiration cannot occur, however, while an enforcement action is pending. Within 60 days of receipt of notice from the issuing institution that it does not intend to extend the letter of credit, the owner or operator shall obtain alternate financial assurance and submit it to the director.

C. Whenever the cost estimate increases to an amount greater than the amount of credit, the owner or operator shall, within 60 days of the increase, cause the amount of credit to be increased to an amount at least equal to the new estimate or obtain other financial assurance as specified in this article to cover the increase. Whenever the cost estimate decreases, the letter of credit may be reduced to the amount of the new estimate following written approval by the director. The issuing institution shall send the notice of an increase or decrease in the amount of the credit to the director by certified mail within 60 days of the change.

D. In the event of failure of the owner or operator to comply with the final closure, post-closure care or corrective action requirements, the director may cash the letter of credit.

E. The owner or operator may cancel the letter of credit only if alternate financial assurance acceptable to the director is substituted as specified in this article or if the owner or operator is released by the director from the requirements of this chapter.

F. The director shall return the original letter of credit to the issuing institution for termination when:

1. The owner or operator substitutes acceptable alternate financial assurance for closure, post-closure care, or corrective action as specified in this article; or

2. The director notifies the owner or operator that he is no longer required by this article to maintain financial assurance for closure, post-closure, or corrective action of the facility.

G. The owner or operator shall establish a standby trust fund. The standby trust fund shall meet the requirements of 9VAC20-70-150 except the requirements for initial payment and subsequent annual payments.

H. Payments made under the terms of the letter of credit will be deposited by the issuing institution directly into the standby trust fund. Payments from the trust fund shall be approved by the director.

I. The director may cash the letter of credit if it is not replaced 30 days prior to expiration with alternate financial assurance acceptable to the director.

J. The wording of the letter of credit shall be identical to the wording specified in 9VAC20-70-290 C.

Historical Notes

Derived from Volume 14, Issue 06, eff. January 7, 1998; amended, Virginia Register Volume 18, Issue 03, eff. November 21, 2001.

Statutory Authority

§§ 10.1-1402 and 10.1-1410 of the Code of Virginia.