TSCA GUIDANCE MANUAL FOR
COMMERCIAL PCB STORAGE
FACILITY APPLICATIONS
October 18, 1989
Office of Toxic Substances
U.S. Environmental Protection Agency
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TABLE OF CONTENTS
Title ' Page
CHAPTER 1. APPROVING COMMERCIAL PCB STORAGE FACILITIES . . 1
1.1 INTRODUCTION, ORGANIZATION AND USE OF THE
MANUAL 1
1.2 RELATIONSHIP AMONG THE CLOSURE PLAN,
COST ESTIMATES AND FINANCIAL RESPONSIBILITY 3
CHAPTER 2. APPLICABILITY 7
2.1 GENERAL APPLICABILITY AND APPROVAL 7
22 FACILITIES SUBJECT TO COMMERCIAL PCB
STORAGE AND RCRA SUBTITLE C REGULATIONS 8
CHAPTER 3. GENERAL APPROVAL APPLICATION REQUIREMENTS 11
3.1 QUALIFICATIONS OF THE OWNER OR OPERATOR
AND KEY EMPLOYEES -. . . . 11
32 FACILITY DESIGN QUALIFICATIONS 12
33 INFORMATION SOURCES 13
CHAPTER 4. THE CLOSURE PLAN 15
4.1 FACILITY DESCRIPTION 16
42 DISPOSAL OF PCB WASTE INVENTORY
(40 CFR 761.65(e)(l)(iii)) 17
43 CLOSURE PLAN SAMPLING, DECONTAMINATION, AND
COMPLIANCE WITH THE SPILL CLEANUP POLICY 19
43.1 Equipment and Area Classification 20
43.2 Numerical Standards 21
433 Statistical Sampling Program 22
43.4 Decontamination Procedures 27
43.5 Post-Cleanup Verification Procedures 28
4.4 OTHER CLOSURE ACTIVITIES 28
4.5 SCHEDULE FOR CLOSURE 28
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TABLE OF CONTENTS (continued)
Title m Page
4.6 MODIFICATION TO CLOSURE PLANS 32
4.7 CLOSURE PLAN CHECKLIST 32
CHAPTER 5. CLOSURE COST ESTIMATES 39
5.1 REVIEW OF THE INITIAL COST ESTIMATE 39
52 REVIEW OF COST ESTIMATE ADJUSTMENTS 41
53 SOURCE OF FURTHER INFORMATION 43
\
CHAPTER 6. FINANCIAL RESPONSIBILITY DEMONSTRATIONS 48
6.1 TRUST FUNDS AND STANDBY TRUST FUNDS 51
6.1.1 Trust Fund Submissions 51
6.12 Reimbursements from the Trust 54
6.13 Terminating the Trust 55
6.1.4 Standby Trust Funds 55
6.1.5 Sources of Further Information 56
62 SURETY BONDS 69
6.2,1 Surety Bond Submissions 69
6.2L2 Drawing on Surety Bonds 73
6.23 Terminating Surety Bonds 74
6.2.4 Sources of Further Information 74
63 LETTERS OF CREDIT 86
63.1 Letter of Credit Submissions 86
632 Drawing on Letters of Credit 89
633 Terminating Letters of Credit 90
63.4 Sources of Further Information 90
6.4 INSURANCE 97
6.4.1 Insurance Submissions 97
6A2 Drawing on the Insurance 100
6.43 Terminating Insurance 101
6.4.4 Sources of Further Information 101
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TABLE OF CONTENTS (continued)
Title Page
6.5 FINANCIAL TEST *.... 107
6.5.1 Financial Test Submissions 107
6.52 Use of Financial Test by Local Government Entities 112
6.53 Sources of Further Information 112
6.6 CORPORATE GUARANTEE 133
6.6.1 Corporate Guarantee Submissions 133
6.6.2 Drawing on the Corporate Guarantee . . . . 135
6.63 Terminating the Corporate Guarantee 135
6.7 COMBINATIONS OF MECHANISMS 142
APPENDICES
A. APPROVAL CONTACTS BY EPA REGION A-l
B. INFORMATION SOURCES B-l
C STATE RCRA PROGRAM CONTACTS C-l
D. FEDERAL REGULATORY AUTHORITIES FOR
FINANCIAL INSTITUTIONS AND FINANCIAL
MARKETS D-l
E. STATE REGULATORY AUTHORITIES FOR
FINANCIAL INSTITUTIONS E-l
F. GLOSSARY OF TERMS F-l
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CHAPTER 1
APPROVAL OF COMMERCIAL PCB STORAGE FACILITIES
1.1 INTRODUCTION, ORGANIZATION, AND USE OF THE MANUAL
This guidance manual focuses on the application process for PCB commercial storage
facility approvals. The manual establishes guidelines to be used by EPA reviewers in evaluating
the completeness of applicants' closure plans, closure cost estimates, and financial responsibility
mechanisms. The manual may also be used by commercial storers of PCB waste as guidance in
preparing their storage approval applications.
The manual accompanies revisions to the regulations governing handling and use of PCBs
at 40 CFR 761. These regulations establish additional components of the PCB regulatory
program covering notification to EPA by all PCB waste handlers, a tracking system similar to
the RCRA "cradle-to-grave" tracking system, and an approval requirement for all commercial
storers of PCB wastes. These requirements are found in 40 CFR 7613, 761.65, and 761.180.
Requirements pertaining to PCB waste disposal records and reports are found in 40 CFR
761.202, 761.205, 761207-211, 761215, and 761.218.
Under the application and review process, EPA ensures that PCB commercial storage
facilities meet requirements in four areas:
• Owner or operator and key employee qualifications and facility design
(Chapter 3);
Closure Plan (Chapter 4);
• Closure Cost Estimate (Chapter 5); and
• Financial Responsibility (Chapter 6).
This manual is organized into six chapters. Chapter 2 discusses the applicability and
process of the approval requirements. Chapters 3 through 6 provide specific guidance for
meeting EPA requirements in the four areas listed above. Chapter 6 describes each allowable
financial assurance mechanism in detail so that the reviewer or applicant may use sections of
the chapter selectively, referring to a complete set of instructions only for the mechanism of
interest In addition, some chapters include checklists, worksheets, lists of references, and lists
of relevant source materials.
Because the closure plan and cost estimates are site-specific and must closely reflect the
individual facility's description and projected operations, the guidance cannot answer every
question or identify every element of an adequate application. Therefore, several appendices
are included at the end of the manual and will be referenced throughout the manual:
A. EPA Regional Contacts for PCB Commercial Storage Facility Approval
B. Facility-Specific Information Sources
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C. State RCRA Program Contacts
D. Federal Regulatory Authorities for Financial Institutions and Financial
Markets
E. State Regulatory Authorities for Financial Institutions
F. Glossary
Exhibits 1-1 and 1-2 illustrate the steps involved in the application and review process for PCB
commercial storage facility approval. EPA Regions and Headquarters share responsibility for
the review of each application for storage approval Regional offices will receive applications
from commercial PCB storage facilities and will review each application for. completeness.
Exhibit 1-3 presents a checklist of items that should be included in each application.
Incomplete applications will be returned to applicants. Complete applications will be forwarded
to Headquarters for further evaluation.
EPA Headquarters will review complete commercial storage applications and develop a
report evaluating the applicant's closure plan, financial assurance, and history of environmental
violations. In evaluating a faculty's environmental violations history, the Agency's review will
include the following data bases:
FINDS - Facility Index System;
• CERCLIS - Comprehensive Environmental Response, Compensation
and Liability Information System;
• PRP - Principal Responsible Party;
• Docket - Consolidated Docket Enforcement System
• Consent Decree Tracking System
• HWDMS - Hazardous Waste Data Management System
PCS Facility Report
• CDS - Compliance Data System
FITS - FIFRA/TSCA Tracking System
• Dun and Bradstreet
LEXIS/NEXIS
EPA Headquarters will also publish in the Federal Register a list of applicants for approval and
provide back-up guidance to Regional Offices on problems as they arise.
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1.2 RELATIONSHIP AMONG THE CLOSURE PLAN, COST ESTIMATES, AND
FINANCIAL RESPONSIBILITY
Understanding the relationship among the closure plan, cost estimates, and financial
responsibility demonstration is key to ensuring that the approval system works effectively. The
purpose of the closure plan is to ensure that all PCB wastes remaining in the facility when it
ceases operation are properly disposed of and that all contamination is cleaned up, so that no
further cleanup will be needed in the future. The closure plan must be detailed and complete.
Every aspect of the facility's operational activities, design, and use of equipment in the storage
operation must be accounted for, as well as proper disposition of all remaining PCB wastes.
The closure cost estimates must be equally detailed and complete. They must be as
accurate (in terms of actual cost) .as is feasible to ensure that the owner or operator is
anticipating all costs of completing an adequate closure of the facility. The purpose of the
financial responsibility requirement is to ensure that the owner or operator has made provisions
to pay for the costs of completing closure.
Although this guidance discusses each of these three components of the application
separately (Chapters 4, 5, and 6), the closure plan, cost estimate, and financial responsibility
demonstration must be consistent with each other.
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EXHIBIT 1-1
THE APPLICATION PROCESS
Commercial storers must
submit a completed final
approval application by 180
days from tha effective data
I
All commercial storers
granted Interim approval
to oparata for 180 days
from tha af f actlva data
Tha EPA Rational Of flea
ravlaws tha application
for complatanass
i
Intarlm approval axtandad
for commercial storers
that have submitted
complete application*
Commercial storers that fall to
submit complete applications
by 180 days from tha effective
date lose Interim approval and
may not store PCB wastes
Commercial storers with
satisfactory applications
granted final approval
EPA Regional Office
and Headquarters review
complete application*
(See Exhibit 1-2)
Commercial storers with
unsatisfactory applications
lose Interim approval and
may not store any PCB wastes
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EPA Rtglonal Of f Ice reviews
applications for completeness
Incomplete applications
returned to PCB
commercial storers
v
for completion
EPA Headquarters reviews
completed applications and
other Information
(e.g., compliance histories)
EPA Headquarters reports
the findings of each review
to the Regional Office
Regional Office conducts
further analysis of commercial
storers with deficient
qualifications (e.g., poor
enforcement history or poor
technical qualifications)
Regional Office grants
final approval
to satisfactory
commercial storers
If ntcessary,
Regional Office consults
with EPA Headquarters
Regional Office denies
final approval
to unsatisfactory
commercial storers
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EXfflBIT 1-3
APPLICATION FOR COMMERCIAL STORAGE FACILITY APPROVAL
COMPLETENESS CHECKLIST
Facility name and address (address must identify physical location)
Identification (names and positions) of owner(s) and/or operator(s)
Identification (name and position) of the responsible party
Identification of the technical qualifications for the facility owner, operator, or
responsible party
Listing of State or Federal environmental violations (past five years)
Listing of affiliates in which the owner, operator, or key employees had/have an
interest (past five years)
Estimate of the maximum amount of PCBs to be stored at the facility
Certification of compliance for the facility indicating compliance with all applicable
requirements, including a map of the facility indicating its location in relation to the
100-year flood plain elevation
Closure plan
Qosure cost estimate
Financial assurance for closure
Qosure Trust Fund
Surety Bond (guaranteeing payment into closure trust fund)
Surety Bond (guaranteeing performance of closure)
Qosure Letter of Credit
Financial Test and Corporate Guarantee for Qosure
Other (multiple financial mechanisms)
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CHAPTER 2
APPLICABILITY
2.1 GENERAL APPLICABILITY AND APPROVAL
The requirement to obtain approval from EPA is applicable to all commercial storers (as
defined in 40 CFR 7613) of PCB waste. A commercial storer is the owner or operator of a
facility that engages in storage activities involving PCB wastes generated by others. The receipt
of a fee or other compensation for storage services is not necessary to qualify as a commercial
storer of PCB wastes.
All commercial storage facilities are subject to the PCB storage facility standards at 40
CFR 761.65(b) and 40 CFR 761.65(c), recordkeeping and reporting requirements at 40 CFR
761.180, and approval requirements of 40 CFR 761.65(d)-(h). Existing facilities must obtain
approval in order to continue operation. New facilities must obtain approval prior to accepting
PCB waste. Storage areas at transfer facilities are not required to obtain final approvals
provided they do not store the same PCB waste for more than ten consecutive days.
All commercial storers of PCB wastes have interim approval to operate until 180 days
after the effective date of the final rule. They are prohibited from storing any PCB wastes at
their facilities after 180 days after the effective date of the rule unless they have submitted a
complete application for a storage approval under 40 CFR 761.65(d)(2) by that date.
Commercial storers who submit a complete application within 180 days after promulgation of
the rule have interim approval to operate during the period that EPA considers their
application.
The initial application must be complete if it is to be considered for review. If any
portions are missing, EPA wfll send the owner or operator a deficiency notice requesting
submission of any missing components. The notice may contain:
• A statement that the Agency has done only a completeness check of
the application, not a substantive review, and that the notice does not
imply any determination on the adequacy of information provided in the
submission.
• A list of any components of the application that must be submitted.
The regulations state that an owner or operator must submit a complete application within 180
days after the effective date of the final rule. If the application remains incomplete by the
scheduled due date, the owner or operator loses interim status and must cease operation.
When the Agency has determined that the application is complete and acceptable,
approval to operate must be issued in writing to the commercial facility for the storage of PCB
wastes. EPA may grant approval based on a review of application materials submitted by the
owner or operator of the facility and described in 40 CFR 761.65(d)(3) as well as other facility-
specific information reviewed by the Agency.
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22 FACUJTIES SUBJECT TO COMMERCIAL PCS STORAGE AND RCRA SUBTITLE C
REGULATIONS
Some facilities that apply for approval to operate as commercial PCB storage facilities
may also be subject to regulation under RCRA Subtitle C as hazardous waste treatment,
storage, or disposal (TSD) facilities because they store hazardous waste as well as PCB waste.
TSCA approval requirements for commercial PCB storage facilities are independent of RCRA
requirements. Thus, the fact that a facility may have a RCRA permit or RCRA interim status
would not necessarily excuse the facility from the requirement to obtain federal approval to
store PCB wastes commercially under TSCA. Likewise, the fact that such a facility is already
covered by a RCRA closure plan and financial responsibility requirements would not necessarily
excuse the facility from the new TSCA requirements to develop closure plans and demonstrate
financial responsibility for closure if the existing RCRA permit does not adequately cover PCB
inventories in its closure plan and financial assurance mechanisms.
. PCB commercial storage facilities may be subject to RCRA requirements for two different
reasons:
1. The facility also stores, treats, or disposes of RCRA hazardous wastes,
in addition to PCB wastes. In this case, PCB storage areas may be
separate from hazardous waste storage units, or they may be combined,
as long as the area meets the PCB storage facility requirements in 40
CFR 761.65(b).
2. The facility is located in a state that has designated PCB wastes as
hazardous under the state hazardous waste management program. In
this case, the facility is subject to state requirements for hazardous
waste storage facilities in addition to the requirements addressed here
for commercial storers of PCB wastes. In such cases, the facility must
at least meet the standards for PCB storage facilities, unless the state
standards are more stringent
EPA encourages the submission of an integrated closure plan and financial assurance
demonstration for PCB commercial storage facilities that are also subject to RCRA permitting
requirements. PCB storage areas at RCRA-permitted facilities may be exempt from obtaining a
separate TSCA storage approval upon a showing to the Regional Administrator's satisfaction
that the existing RCRA closure plan and financial assurance demonstration account for their
PCB inventories. The closure plan must meet the spirit of TSCA closure requirements, even if
they are not exactly the same as those required under TSCA. However, the technical
qualifications and backgrounds of principals and key employees and closure plan as integral
parts of the plan must be addressed and deemed acceptable by the Regional Administrator.
In addition, EPA may waive any technical differences between financial responsibility
requirements in a RCRA permit and those in the TSCA rule if the cost estimates clearly take
PCB costs into account and the financial demonstration is already approved under RCRA. For
example, EPA would accept a RCRA permit with a 10-year pay-in period, rather than the 3-
year pay-in period unless the RCRA pay-in period were due to expire in less than 3 years, in
which case, the 3-year pay-in period would apply. EPA would also accept the longer pay-in
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period under RCRA in cases where the RCRA approval did not include financial assurance for
PCB inventories and such assurance is now required under this rule.
There are important differences in the definitions that apply to facilities under the PCB
regulatory program and under the RCRA Subtitle C regulatory program, as discussed below.
o
PCB Facility Definition
In the PCB program, "facility" generally refers to a building, including any associated
outside areas for temporary storage on pallets of non-leaking and undamaged large capacitors
and undrained PCB contaminated electrical equipment An associated area is any clearly
defined space within or next to the building used for storage of PCB wastes.
RCRA Facility Definition
Under Subtitle Q 40 CFR 260.10 defines a "facility" as all contiguous land and structures
or other appurtenances, and improvements on the land, used for treating, storing, or disposing
of hazardous waste. A facility may consist of several treatment, storage, or disposal operational
units (e.g. one or more landfills, surface impoundments, or combinations of such units).
Hazardous waste management units within a RCRA facility are the areas where hazardous
waste is managed. 40 CFR 260.10 also defines a "hazardous waste management unit" as a
"contiguous area of land on or in which hazardous waste is placed, or the largest area in which
there is a significant likelihood of mixing hazardous waste constituents in the same area."
Examples include a surface impoundment, landfill cell, and a container storage area.
These differences in definition are important to recognize because a PCB storage facility
may be located within a RCRA treatment, storage, or disposal (TSD) facility. However, the
PCB waste storage facility is not a hazardous waste management unit under RCRA unless
hazardous wastes are stored together with PCB wastes or the state has designated PCBs as a
hazardous waste. The significance of this distinction in terms of an application for commercial
PCB waste storage approval is as follows:
• If the PCB storage facility is located within a hazardous waste storage
unit, there should be a RCRA closure plan, cost estimates, and
financial assurance for the unit The RCRA closure plan, cost
estimates, and financial assurance should include PCB units.
The RCRA closure plan should meet all the requirements in 40 CFR
761.65(e) (see Chapter 4). If the closure plan does not meet the
requirements in 40 CFR 761.65(e), it must be revised. Closure plan
adequacy will be determined by whether
- The RCRA storage unit meets TSCA standards in 40 CFR
761.65(b);
— PCB wastes are included in the waste inventory, closure plan, cost
estimate, and disposal plans for closure (and the decontamination
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and cleanup activities comply with the requirements of the PCB
Spill Cleanup Policy); and
- The cost estimate and demonstration of financial responsibility
include all costs for closing the PCB storage facility. If the
closure plan requires revision, the cost estimates must also be
revised and the amount of financial assurance must be adjusted
• If the PCB waste storage facility is located within a hazardous waste
TSD facility, but no hazardous waste is stored in the PCB waste
storage areas, the RCRA closure plan will not necessarily cover PCB
waste storage.
The owner or operator may have to submit a separate closure plan, cost
estimate, and financial assurance mechanism for the PCB waste storage
facility in compliance with 40 CFR 761.65(e).
Note, however, that many RCRA facilities are now undertaking
corrective action to clean up releases of hazardous constituents (which
include PCBs). A PCB storage unit with existing contamination at a
RCRA TSD facility, whether it is a hazardous waste management unit
or a solid waste management unit, is subject to RCRA corrective action
requirements under RCRA Sections 3004(u) and 3008(h). The facility
may be scheduled to clean up existing PCB contamination either under
a permit schedule of compliance or a compliance action order.
The following chapters discuss in more detail the specific components of the approval
application and the relationship between these requirements and the RCRA Subtitle C
requirements.
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CHAPTER 3
GENERAL APPROVAL APPLICATION REQUIREMENTS
This chapter provides guidance for the completion and review of the' general requirements
of an owner or operator's approval application. It contains the following sections:
3.1 Qualifications of the Owner or Operator and Key Employees
3.2 Facility Design Qualifications
3.3 Information Sources
3.1 QUALIFICATIONS OF THE OWNER OR OPERATOR AND KEY EMPLOYEES
An application for final storage approval must include any relevant information regarding
the qualifications of the facility's owner or operator and key employees7 to engage in
commercial storage of PCB wastes in a manner protective of human health and the
environment This information shall include, but not be limited to, the following (40 CFR
761.65(d)(3)):
• Identification of the principals or key employees who are or will be
responsible for the operation of the facility.
• Information concerning the principals' or key employees' technical
qualifications and experience2 in handling PCB wastes or other wastes
in compliance with regulatory requirements (e.g., a demonstration of a
history of adequate recordkeeping).
• A list of all companies owned or operated currently or in the past by
the principals or key employees.
• Information concerning any past State, Federal, or local environmental
violations5 involving the same business or another business with which
the principals or key employees were affiliated during the five years
prior to the date the application was submitted.
; Key employees include, but are not limited to, the manager of operations at the facility,
persons responsible for environmental compliance, and other supervisors or foremen.
2 Including education and work experience.
5 Environmental violations may involve waste handling, including transport, storage for
disposal, disposal, and processing. Violations may also include recurrent problems with storage
of PCB wastes for more than one year, as reflected in operating records, and non-compliance
with the Spill Cleanup Policy as reflected in certification and cleanup records.
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3.2 FACILITY DESIGN QUALIFICATIONS
Applications must also include any relevant information bearing on the design
qualifications of a facility to engage in commercial storage of PCB wastes in a manner
protective of human health and the environment This information shall include, but not be
limited to, the following (40 CFR 761.65(d)(2)):
• A written statement certifying compliance with facility design and
construction standards in 40 CFR. 761.65(b) (the certification must
follow the format defined in 40 CFR 7613, see Exhibit 5-4 of this
manual).
• A demonstration that the facility has the capacity to handle the
quantities of PCB wastes that the owner or operator estimates will be
the maximum quantities of PCB waste handled at any one time.
The facility's design and construction standards include the requirements of 40 CFR
761.65(b) that:
• The roof and walls are adequate to prevent rain from reaching the
stored "PCBs and PCB items" [PCB Articles, Items, Containers and
Equipment defined in 40 CFR 7613]; and
• The floor is designed to meet these criteria:
(1) Flooring must have continuous curbing to provide
containment, with a minimum 6-inch high curb;
(2) The floor and curbing must provide a containment volume
equal to at least two times the internal volume of the
largest PCB article or PCB container stored there, or 25
percent of the total internal volume of all PCB articles or
PCB containers stored there, whichever is greater (The
maximum inventory projected for the facility cannot exceed
this design capacity.);
(3) No drain valves, floor drains, expansion joints, sewer lines,
or other openings that would permit liquids to flow from
the curbed area are allowed; and
(4) The floors and curbing must be constructed from smooth
and impervious materials, such as Portland cement,
concrete, or steel, to prevent or minimiTfi the penetration
of PCBs.
• The facility's location is not below the 100-year flood water elevation.
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The owner/operator should include engineering drawings illustrating the requirements listed
above.
If the facility is a bulk storage tank as referenced in 40 CFR 761.65(c)(7), then it must
meet the requirements of that section:
•3
• Containers must be designed, constructed, and operated in compliance
with Occupational Safety and Health Standards at 29 CFR 1910.106.
• Owners or operators must prepare and implement a Spill Prevention
Control and Countenneasure (SPCC) Plan as described in 40 CFR 111
Non-leaking, undamaged PCB high-voltage capacitors and undrained PCB contaminated
electrical equipment may be stored on pallets next to storage facilities, provided the facility
meets the following requirements:
• All leaking PCB articles and equipment must be stored in non-leaking
PCB containers with sufficient sorbent materials to absorb any liquid
PCBs remaining in the PCB items.
• The facility must have unfilled storage space immediately available
inside the facility equal to at least 10 percent of the PCB items stored
outside (40 CFR 761.65(c)(2)).
• The location and numbers of existing or planned bulk tanks must be
identified (any facility using the bulk storage tanks must also prepare
and implement a SpQl Prevention Control and Countermeasures (SPCC)
• plan) (40 CFR 761.65(c)(7)).
PCB storage capacity information should include two elements:
• Estimate of maximum capacity and
• Estimate of maximum inventory that will be stored.
Maximum inventory may be lower than maximum capacity. However, in no case should
maximum inventory exceed maximum capacity.
Other information may be required to demonstrate any other conditions deemed necessary
by the Agency to ensure that the facility poses no unreasonable risks to human health and the
environment.
33 INFORMATION SOURCES
EPA and applicants for approval may use several sources of information to assist in
completing and reviewing the general application (facility-specific data sources are described in
Appendix A):
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Facility operating records. All PCB storage facilities in operation on
the effective date of the application requirements must have facility
operating records/
o
Documentation for PCB spills. Records of cleanup and certification are
required by the Spill Cleanup Policy (40 CFR 761.125(b)(3) and (c)(5)).
Special records. All PCB storage facilities in operation on the effective
date of the final rule must maintain special records (e.g., State and local
approvals maintained under 40 CFR 761.180(f)).
The Hazardous Waste Data Management System (HWDMS),
maintained by EPA Regional Offices and states for all RCRA Subtitle
C TSD facilities, contains the permitting and compliance history for
each facility. Any commercial PCB storage facility that is also a RCRA
TSD facility has an EPA ID number and is entered in this system.
4 Facility operating records may include annual summaries of PCB waste activities including
weights, types, quantities, and disposal dates of PCBs and PCB items (40 CFR Part 760.180(b)).
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CHAPTER 4
THE CLOSURE PLAN
EPA reviews closure plans to ensure that the facility has planned closure in a manner
that eliminates or minimiTes post-closure escape of PCBs to the environment The program
requires that commercial PCB storage facilities must submit facility closure plans to receive
operating approval from EPA. Closure must include removal and proper disposal of PCB waste
residues, PCB solids and liquids, and PCB-contaminated materials, and decontamination of all
PCB-contaminated equipment, containers, structures, and floors. In addition, the closure plan
should describe the design and operation of the facility so that the reviewer can determine the
adequacy of the plan and the accuracy of the corresponding cost estimates.
The reviewer must ensure that the closure plan is complete and technically adequate.
The closure plan included in the Agency's written approval must meet several requirements:
• The closure plan is a self-sufficient document that does not reference
other materials; and
• The closure plan fully incorporates the changes made during the closure
plan approval process either by redrafting the plan and incorporating all
changes, or the final plan may be the initial plan with attachments
indicating the changes agreed upon during the review process and a
table of contents or introduction that clearly identifies all components
of the approved closure plan.
This chapter provides guidance on the contents of the closure plan. These components
are:
Section 4.1 Facility Description;
Section 4.2 Disposal of PCB Waste Inventory,
Section 4.3 Closure Plan Sampling, Decontamination, and Compliance
with the Spill Cleanup Policy,
Section 4.4 Other Closure Activities;
Section 4.5 Closure Schedule;
Section 4.6 Modifications to the Closure Plan; and
Section 4.7 Closure Plan Checklist
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4.1 FACILITY DESCRIPTION
A facility description provides background information necessary to evaluate the adequacy
of the closure plan. Site-specific information will help EPA to ascertain the consistency of the
closure plan with facility operations. For example, the closure activities in the plan, including
disposal, decontamination, and other closure activities, should closely track the facility
description and operations to ensure that closure adequately addresses all waste inventories and
potential areas of contamination at the facility. Examples of facility information is described
below.
Site Location and Boundaries
The owner/operator should describe the site location as well as illustrate it on a map.
The facility description should include:
• Identification of the jurisdiction in which the facility is located;
• A topographic map of the site showing the location of:
PCB storage facilities;
PCB treatment and disposal facilities;
Hazardous waste management units;
Other buildings;
Any 100-year floodplain;5
Adjacent surface waters;
Surrounding land uses;
Other key topographic features; and
Location of any underground storage tanks;
• Identification of traffic patterns within the facility boundaries;
• The location and nature of security systems; and
• Closed PCB or hazardous waste management units.
If the PCB storage facility is located within a RCRA facility (including all contiguous land
and structures), this information should already be assembled as part of the RCRA permit
application.
Environmental Conditions of the Site
In the facility description, the owner/operator should highlight those environmental
conditions surrounding the facility that may be affected by PCB spills and which could be the
basis for.requiring cleanup levels more stringent than those required in the Spill Cleanup Policy.
Such conditions include:
PCB storage facilities may not be located below the 100-year flood water elevation.
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• Proximity to surface waters, including ponds, lagoons, wetlands, and
storage reservoirs;
• Proximity to any private or public drinking water sources or distribution
systems;
a
• Sewer location (including storm drains or other wastewater collection
systems) and design that could result in the direct contamination of
sewers or sewage treatment systems from PCB spills;
• Location of any nearby animal grazing lands, agricultural lands, or
vegetable gardens; and
• The presence of a shallow well, ground water near the surface, or a soil
type that poses a high potential for ground-water contamination.
PCB Waste Storage Facility Design
The owner/operator should describe the PCB waste storage facility in detail, including the
size and dimensions of the storage areas, design capacity, and types of monitoring and
containment systems. Any proposed areas to be brought on-line in the future should be
included in this detailed description.
The facility description in the closure plan should detail the design aspects described in 40
CFR Section 761.65(b) and/or (c)(7) and in Section 32 of this document Engineering
specifications and maps of storage facility construction should be included, such as floor plans,
curbing, design specifications of building roof and walls, drainage systems, and the estimated
available unfilled storage space in the facility.
The plan should describe and provide engineering drawings of any storage areas outside
of storage buildings where PCB articles and equipment may be temporarily stored on pallets.
In addition, any existing or planned bulk tank locations and numbers should be described.
42 DISPOSAL OF PCB WASTE INVENTORY (40 CFR 76L65(e)(l)(iii))
Maximum Inventory
The closure plan must provide for disposal of the maximum inventory, including all
undisposed PCBs and PCB residues on-site at any time over the life of the facility, and any
planned expansion of the facility that has been accounted for in a modification to the closure
plan.
In estimating the maximum inventory on-site, an owner or operator must take into
account expected periodic accumulations of inventory that occur when predictable events affect
operating procedures during the life of the facility (e.g., down-time for incinerators or periodic
pick-ups from haulers). The estimate of maximum inventory should identify the types and
quantities of different PCB wastes. This estimate must still remain less than or equal to the
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- 18-
design capacity and within the containment design criteria noted in 40 CFR 761.65(b). The
actual inventory of PCB wastes must not exceed the rated capacity of the facility.
Disposal of Inventory
This portion of the closure plan should describe the process for removal of all PCB
wastes stored at the facility at the time of closure. This disposal must be carried out within 90
days from final receipt of PCB waste in .accordance with requirements for the disposal of PCB
wastes in 40 CER. 761.60, A storage facility owner or operator becomes a PCB waste generator
during closure, and therefore must comply with PCB waste generator requirements (e.g.,
preparation of manifests, recordkeeping, and tracking the delivery and disposal of PCB wastes).
The closure plan should include:
• An estimate of the quantity of PCB waste to be disposed of or sent off-
site for storage for disposal;
• A description of any treatment of PCB wastes to be performed prior to
transport, if applicable;
• The methods and arrangements that will be used during closure,
including on-site disposal (if an approved PCB disposal facility) or
removal to off-site approved PCB commercial storage or disposal
facilities; and
• A detailed description of treatment or disposal methods and capacities
at the final treatment or disposal facilities - (e.g., incineration or
landfilling) as well as the identity of the specific TSCA-approved
disposal facility to be used.
• Detailed information on the removal, transport, tracking, and off-site
disposal of bulk storage tanks larger than those specified in the shipping
container specifications of the DOT regulations (noted in 40 CER.
761.65(c)(7)).
Allowable disposal methods for PCB wastes include incineration, landfilling, and other
technologies that have been approved and are the equivalent of incineration. Landfilling of
PCB wastes is restricted to stabilized liquids containing less than 500 ppm PCBs, and certain
non-liquid wastes when properly containerized such as soils, rags, and other debris from spill
cleanups and excavations of old disposal sites.
The Agency allows on-site disposal during closure if an approved PCB disposal facility
with sufficient capacity at the time of closure exists on-site. Applicants should cite disposal
capacity information from the PCB disposal approval
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4.3 CLOSURE PLAN SAMPLING, DECONTAMINATION, AND COMPLIANCE WITH THE
SPILL CLEANUP POLICY
The closure plan must contain a detailed description of the activities that will be carried
out to remove or decontaminate PCB waste residues and contaminated containment system
components, equipment, building structures, soils, and other environmental media, if necessary,
during closure in accordance with the PCB Spill Cleanup Policy (40 CFR 761, Subpart G). The
decontamination section of the closure plan must address the following:
• Equipment and Area Classification: This classification should describe
all areas and equipment in a PCB waste storage facility according to
their level of use, access, possible exposure, and type of material
construction (Section 4.3.1).
• Numerical Cleanup Levels: The closure plan should rely on numerical
clean-up levels listed in the Spill Cleanup Policy (40 CFR 761.125(c)(3)
and (4)) that are applicable to each facility area, equipment, and soils
(Section 432).
• Statistical Sampling Program: The closure plan should include a
statistical sampling program that determines levels of contamination of
facility areas, structures, equipment and soils (40 CFR 761.130) (Section
43.3).
• Decontamination Procedures: The closure plan should describe
decontamination procedures for equipment, structures and goods in
accordance with the Spill Cleanup Policy (40 CFR 761.125(b) and (c))
(Section 43.4).
• Post-Cleanup Verification Procedures: The closure plan's post-cleanup
verification will describe post-cleanup sampling as well as waste
management associated with the decontamination process. The closure
plan must specify that.all rags, equipment and solvents used in the
cleanup process be properly disposed of as PCB wastes (40 CFR
761.125(a)(4)) (Section 43.5).
All sources of PCB contamination in a facility are subject to the Spill Cleanup policy at
closure, even if the contamination occurred before May 4, 1987 (i.e^ the date the Spill
Cleanup Policy became effective). Commercial PCB storers must include cleanup of all PCB
contamination at the faculty in the closure plan (including contamination from a pre-1978
release of PCBs) in order to receive approval to operate. At PCB storage facilities that are
also RCRA Subtitle C facilities, RCRA corrective action authorities (e.g., under RCRA
Sections 3004(u) and 3008(h)) also require'the cleanup of old PCB spills.
For facilities that are also RCRA facilities with closure plans that cover the PCB waste
storage area, EPA will review the plan carefully to determine whether:
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• The storage facility complies with the facility design requirements of
40 CFR 761.65(b);
• The plan includes PCBs as well as general waste inventories; and
a
• The cleanup and decontamination components of the plan are specific
and demonstrate compliance with the numeric standards in the Spill
Cleanup Policy.
If the RCRA closure plan does not comply with these requirements, it must be amended to
include PCB inventories. The closure cost estimate and financial responsibility mechanism must
also be reviewed carefully and may require adjustments to reflect changes in the closure plan
due to PCB storage facility closure.
43.1 Equipment and Area Classification
To ensure a thorough cleanup of the entire facility, the closure plan should include a
complete itemization of each structure, containment system, and equipment unit The size and
dimensions of each unit should be recorded. In addition, each unit should be classified
according to the Spill Cleanup Policy restricted/non-restricted access and surface contact criteria.
These are:
• . Other restricted access areas - Areas that are not electrical substation
areas, but are at least 0.1 kilometer away from a residential/commercial
area and limited by manmade barriers, or substantially limited by
naturally occurring physical barriers.
• Non-restricted access areas - any area other than outdoor electrical
substations or other restricted access locations.
• High-contact residential/commercial surface - a surface in a commercial
area which is touched frequently. This surface may include doors, wall
areas (below 6 feet), uncovered flooring, windowsflls, and banisters;
• Low-contact commercial surface — includes such surfaces as interior
ceilings, wall areas above 6 feet, roofs, exterior structural building
components, unmanned machinery, and pipes;
• High-contact industrial surface - is a surface in an industrial setting
which is touched frequently for relatively long periods of time. These
include manned machinery and control panels;
• Low-contact industrial surface - include the same items as in low
contact commercial surfaces;
• Impervious solid surface - nonporous solid surfaces such as metals,
glass, aluminum siding, and enameled or laminated surfaces;
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- 20 -
• The storage facility complies with the facility design requirements of
40 CFR 761.65(b);
• The plan includes PCBs as well as general waste inventories; and
• The cleanup and decontamination components of the plan are specific
and demonstrate compliance with the numeric standards in the Spill
Cleanup Policy.
If the RCRA closure plan does not comply with these requirements, it must be amended to
include PCB inventories. The closure cost estimate and financial responsibility mechanism must
also be reviewed carefully and may require adjustments to reflect changes in the closure plan
due to PCB storage facility closure.
43.1 Equipment and Area Classification
To ensure a thorough cleanup of the entire facility, the closure plan should include a
complete itemization of each structure, containment system, and equipment unit. The size and
dimensions of each unit should be recorded. In addition, each unit should be classified
according to the Spill Cleanup Policy restricted/non-restricted access and surface contact criteria.
These are:
• Other restricted access areas - Areas that are not electrical substation
areas, but are at least 0.1 kilometer away from a residential/commercial
area and limited by manmade barriers, or substantially limited by
naturally occurring physical barriers.
• Non-restricted access areas — any area other than outdoor electrical
substations or other restricted access locations.
• High-contact residential/commercial surface - a surface in a commercial
area which is touched frequently. This surface may include doors, wall
areas (below 6 feet), uncovered flooring, windowsflls, and banisters;
• Low-contact commercial surface - includes such surfaces as interior
ceilings, wall areas above 6 feet, roofs, exterior structural building
components, unmanned machinery, and pipes;
• High-contact industrial surface - is a surface in an industrial setting
which is touched frequently for relatively long periods of time. These
include manned machinery and control panels;
• Low-contact industrial surface - include the same items as in low
contact commercial surfaces;
• Impervious solid surface — nonporous solid surfaces such as metals,
glass, aluminum siding, and enameled or laminated surfaces;
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• Nonimpervious solid surface - porous solid surfaces such as wood,
concrete, asphalt, and plasterboard.
Classification of surfaces is the basis for determining numerical cleanup standards.
43.2 Numerical Standards
Numerical standards designate the cleanup levels of all areas, structures, and equipment in
the facility and must be included in the closure plan. The numerical standards set forth in the
Spill Cleanup Policy are based upon the classifications described in the section above (40 CFR
761.125(c)(3) and (4)).
Unless the owner or operator demonstrates that access to the facility will be restricted
after closure, EPA wfll assume that these areas may allow unrestricted access to the local
population. Therefore, these facilities must meet the decontamination requirements for non-
restricted access areas described in the Spill Cleanup Policy. At such times as restricted access
areas are converted to another use, the site shall be cleaned up to the nonrestricted areas
requirements (40 CFR 761.125(c)(3)).
The Spill Cleanup Policy fully describes the numerical decontamination levels for non-
restricted access areas. These levels are generally more stringent because buildings, structures,
or equipment may be unrestricted after closure and thus pose a higher exposure risk than
restricted access areas. State and local standards may also be applicable if they are more
stringent than the Spill Cleanup Policy requirements. The rule briefly outlines target
decontamination concentration levels for non-restricted access areas:
• High contact outdoor solid surface should be cleaned to 10
micrograms/lOO cm2 (as measured by standard wipe test6);
• Low contact, outdoor, impervious solid surfaces should be cleaned to 10
micrograms/100 cm2 (standard wipe test);
• Low contact, outdoor, nonimpervious solid surfaces should be cleaned
to (1) 10 micrograms/100 cnr or (2) 100 micrograms/cm2 and
encapsulated (though two options are available, EPA retains final
authority to disallow the encapsulation option);
• PCB contaminated soil should be removed to 10 ppm, provided that soil
is excavated to a minimum depth of 10 inches. The excavated soil
should be replaced with clean soil (less than 1 ppm PCBs).
There may be unique circumstances where cleanup to the numerical values in the Spill
Cleanup Policy may be impracticable. For such cases, EPA retains the flexibility to establish
cleanup levels based on site-specific risk factors.
6 The standard wipe test is a PCB sampling method in which an area (10 cm x 10 cm) is
quickly wiped with a solvent-saturated gauze pad or glass wool and analyzed.
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4.3.3 Statistical Sampling Program
The closure plan should include a detailed section on the precleanup and post cleanup
sampling that will ensure the facility will be properly decontaminated upon closure. Reference
materials for developing sampling, survey, and safety plans are provided in Appendix B.
Pre-Cleanup Survey and Sampling
The closure plan should include a description of the pre-cleanup site survey and sampling
plan. The survey assesses the amount of contamination at an existing facility and consequently
the extent of cleanup required to bring the facility into compliance with the numerical standards
set forth in the Spill Cleanup Policy.
This portion of the closure plan should include:
A safety plan for the sampling team;
A plan for the initial, visual inspection of the facility, and
A plan for the sampling visit.
The Spill Cleanup Policy discusses two types of sampling: an initial, visual inspection that
determines areas of apparent PCB contamination (40 CFR 761.125(c)(l)(iii)), and a statistically-
based sampling scheme that establishes the boundaries and quantifies levels of contamination.
Requirements for the sampling survey are discussed in the Spill Cleanup Policy (40 CFR
761.125(a)(3)).
The Safety Plan. The safety plan details precautions required to minimize the risk to
personnel performing the on-site inspection and sampling. The safety plan should:
• Include a list of the PCBs on-site against which the sampling crew
should be protected. This list should cross reference with the inventory
in the closure plan to ensure the accuracy of the safety plan. If the
facility treats, stores, or disposes of non-PCB hazardous wastes (e.g.,
under RCRA), the facility owner/operator should include such
constituents in the safety plan, unless there is no chance of exposure to
the constituents during the site inspection and sampling.
• Describe sampling activities for the site, and discuss known hazards and
risks involved during any of the sampling procedures.
• Include emergency information (e.g,, phone numbers for the project
health and safety officer, police, fire, ambulance, and hospital).
• Include a history of the facility's activities, a facility description, and a
facility map.
• Describe the necessary protection required by personnel on-site (e.g.,
protective clothing, respirators).
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• Discuss decontamination procedures necessary for site visits.
• Document any environmental quality monitoring (e.g., soil, ground
water) required during sampling to ensure sampling personnel
protection, and identify action levels for different levels of protection
(e.g., dermal, respiratory).
• Describe access control procedures in effect. Access control procedures
may indicate areas requiring more stringent safety precautions than the
rest of the facility (e.g., hotspots on the premises).
• Document special training required for sampling.
• Describe any weather-related precautions (e.g., rain, snow).
Initial Inspection of the Facility. The facility owner/operator or a contractor performs the
initial (visual) inspection of the facility. The initial inspection locates apparent areas of PCB
contamination requiring intensive sampling, including visually contaminated areas, along with
areas suspected of contamination due to operating patterns or locations of stored wastes. The
inspection should cover the entire site, including tanks, valves, equipment, containment areas,
and the site's property boundaries. Potential off-site contamination should also be investigated,
A record review and interviews with site personnel can also locate areas of potential
contamination.
The initial inspection verifies the necessary sampling methods required for the sampling
visit EPA will study the following items in the visual inspection plan:
• The methodology used when conducting the visual inspection;
• A list of additional media other than soil (e.g., surface water, ground
water) that should be sampled. The facility description included in the
closure plan should verify the need for ground-water testing (Le., pallet
storage, highly permeable soils, and a shallow depth to the water table
may indicate the need for ground-water sampling);
• All structures, soils, items, equipment, and off-site areas to be inspected;
• The means of documenting visible signs of PCB contamination including
photographs, documentation on facility maps, and written accounts;
• A description of any methods necessary to assess safety precautions for the
sampling inspection; and
• Methods used to determine and document the facility's structural
integrity.
The Sampling Plan. The sampling plan reviews the types of sampling necessary, the
facility's characteristics, and its location. Sampling should encompass contaminated areas
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identified during the visual inspection, as well as randomly selected areas that show no obvious
evidence of PCB contamination. The media sampled should include soil, aqueous materials,
building materials, and equipment In addition to determining the location and concentration of
PCBs at the facility, sampling should determine the depth of penetration of PCBs in permeable
surfaces and soils. Sampling may take place in more than one step. Taking screening samples
may help determine locations, for subsequent samples. EPA will consider the following issues
when evaluating a PCB storage facility's pre-cleanup sampling plan:
• Statistical and technical review: Sampling and visual inspection plans
must be valid and must ensure that the results will accurately represent
the extent of PCB contamination at the facility. The plan must also be
technically feasible and effective.
• Compatibility with Analytical Considerations: The sampling
methodology should maintain sample integrity and prevent adverse
effects during analysis. In addition, the sampling team should collect
proper materials for the analyses performed.
• Practicality and Simplicity: The methods chosen should be simple,
proven procedures capable of use or easily adapted to a variety of
situations. Sampling methods should be easy, even while wearing
protective clothing. Equipment should be rugged and reliable.
• Safety: The pre-cleanup sampling plan should incorporate the safety
precautions contained in the safety plan.
The sampling survey portion of the closure plan should include the following items:
• Sampling locations and their rationale;
• Sampling activities required (e.g., standard wipe tests, soil cores);
• Analytical requirements for each sampling method;
• Sample handling requirements;
• Quality Assurance and Quality Control (QA/QC) measures (e.g., the
number of blanks used per number of samples);
• Sampling equipment decontamination methods; and
• Chain of custody for samples retrieved, including the necessary shipping,
and standard operating procedures for handling the samples.
Sampling locations and their rationale, sampling methods, and QA/QC procedures are
particularly important features of the sampling plan.
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Sampling Locations. The pre-cleanup survey of the closure plan should involve two types
of sampling. Judgmental sampling will be performed by the owner/operator where the visual
inspection found evidence of a release or where use patterns indicate a high probability of PCB
contaminatioa Random or systematic sampling will be performed on the rest of the site, taking
into account the lower probability of contamination.
Judgmental sampling involves collecting a set of samples based on best professional
judgment to determine the extent of PCB contamination and concentrations at a specific area.
The plan should propose judgmental sampling in areas that will indicate potential contamination
due to site layout or unit characteristics. This type of sampling defines the locations and
boundaries of PCB contamination. EPA may request that judgmental sampling use a coordinate
(grid) system to help locate the contamination on a site plan.
Random and systematic sampling involves collecting statistically unbiased samples for the
site and should uncover any other contaminated areas. This sampling technique divides a
sampling area into a grid-like pattern and takes representative samples from each grid. The
random method samples random spots among the cells of the grid, while the systematic method
samples from each node of the grid (see Exhibit 4-1).
Establishing a coordinate (or grid) system for the site better describes locations of
contamination, and links areas of visible contamination to the random or systematic sampling.
occurring on-site. The sampling plan should set up sampling grids for homogeneous areas on-
site (e.g. walls, floors, soils). The plan should describe the sampling grid, including grid size,
and sampling frequency for each part of the facility. EPA and the owner/operator must ensure
that the grid covers an area greater than any suspected contamination, that spacing is relevant
to the needs of an investigation, and that the grid proposed will easily transfer to the study
area.
EPA may review the sampling scheme using statistical analysis to ensure that sampling
results could be duplicated, and that sampling results accurately represent all contamination at
the facility. Statistical analyses proposed by the owner/operator should ensure proper sampling
frequency when EPA performs relevant statistical tests on the sampling plans.
Sampling Methods. Sampling a PCB storage facility involves several media, including soil,
concrete, metal, and other impervious and non-impervious surfaces. Grab samples are sufficient
for sampling at most locations at the facility due to the low mobility of PCBs. Sampling
techniques include determining the depth of penetration of PCBs on pervious surfaces and soils,
using the Standard Wipe Test for surfaces as required in the Spill Cleanup Policy (40 CER
761.123), sampling soil with soil boring, and sampling other media if judged at risk (e.g., ground
water, vegetation, or surface waters).
Quality Assurance and Quality Control (QA/QQ. The sampling plan should describe
measures that will ensure adequate data quality. The sampling plan's QA/QC should coven
• Experimental measurement objectives; and
• Quality control methodology.
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EXfflBIT 4-1
GRID SAMPLING
a) SYSTEMATIC GRID SAMPUNG
C
b) RANDOM GRID SAMPLING
Source: EPA, RCRA Facility Investigation fRFD Guidance. Volume I of IV, EPA 530/SW-
87-001, April 1987, p. 3-24.
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Tbe sampling plan's experimental measurement portions should describe the constituents
to be sampled, sampling procedures, and activities required to avoid sample contamination. The
sampling plan should clearly state measurement objectives for each constituent, and include
measurement parameters, the expected frequency, reliability, and required equipment
calibrations. The plan should describe laboratory operations and equipment, standard operating
procedures, and sample custody. Sample custody details the procedures used for reagent
preparation, sample recording, and sample preservation.
The sampling plan should include controls for validating data (e.g., replicates, blanks,
internal standards, calibration standards, and spiked samples). The plan should describe the
data reduction scheme planned for collected data, and the methods used for outliers. Statistical
tests proposed in the plan should include: central tendency and dispersion tests (e.g., means,
range, standard deviation), measurements of variability (e.g., accuracy, bias, precision within and
between laboratories), confidence limit tests, and significance tests (e.g., u-tests, t-tests, F-tests,
chi-square tests). The plan should describe system audits to be performed during sampling.
System audits monitor the capability and performance of measurement systems once the systems
are operational by evaluating field and laboratory control procedures.
43.4 Decontamination Procedures
Appropriate cleanup method(s) are key elements of the closure plan. The plan should
include an evaluation of the methods chosen for decontamination of the facility building,
structures, soils, and equipment Selection should be based on effectiveness, equipment and
support facilities needed, time and safety requirements, the amount of wastes generated from
the process, and costs.
Details of decontamination procedures must be in compliance with 40 CFR 761.125 for
every portion of the facility and grounds. The "double wash/rinse" method described in the Spill
Cleanup Policy should be used for cleanup of PCB contaminated hard surfaces (40 CFR
761.123). The plan's description of the double-wash rinse method should include the solvents
used for washing, the number of rinses, and the estimated volume of rinsewater. The plan
should include descriptions of required equipment and activities involved in the excavation of all
contaminated soils and clean soil backfilling. The plan should also estimate items and activities
involved in the decontamination of non-impervious surfaces as required by 40 CFR
761.125(c)(4)(vi). The plan should also estimate items and activities involved in the
decontamination of cleanup equipment including the containerization and disposal of
contaminated items as PCB wastes as required by 40 CFR 761.60.
Worker protection should also be addressed in decontamination procedures. Proposed
provisions for personnel training, medical surveillance, personal protective equipment, and site
safety must be included in the description of decontamination procedures. (Contaminant
concentration and decontamination methods must be defined before worker health and safety
plans are developed.) A reference material on developing a decontamination plan for a facility
is provided in Appendix B.
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4.3.5 Post-Cleanup Verification Procedures
Post-cleanup sampling (40 CFR 761.125(c)(5)(viii)) to ensure complete decontamination is
required for closure certification. The owner/operator should include a description of the
sampling methods and analytical techniques that will be used during the post-cleanup sampling
in the closure plan.
Owners/operators should describe the decontamination and containerization activities
required for the contaminated solvents, rags and equipment used for post-cleanup verification.
The closure plan should describe their decontamination or containerization as PCB wastes
according to the requirements in 40 CER 761.60 and 40 CFR 761.125(a)(2). The
owner/operator should detail the amount of estimated wastes resulting from.the
decontamination of the facility's equipment, grounds, and structures, as well as transportation
and disposal facilities that will remove and dispose of the wastes.
4.4 OTHER CLOSURE ACTIVITIES'
The owner/operator should provide a description of other closure activities necessary to
ensure that risks to the environment will be eliminated in the closure plan. These activities
may include but are not limited to (40 CFR 761.65(e)(l)(v)):
• Ground-water monitoring - the closure plan should provide results, or a
description of why there is no foreseeable possibility of ground-water
contamination;
• The plan should include methods to treat, remove, or dispose of run-on
and run-off due to decontamination water, rain, or melting snow,
• The plan should include the use of security devices such as signs,
fences, or guards that would prevent unpennitted or unintentional
access to the site.
4.5 SCHEDULE FOR CLOSURE
The closure plan must include a schedule for closing each area within the facility where
PCB wastes are stored or handled, and the time required to complete each phase of the closure
process. An estimate for the expected year of closure is required in the closure plan. Factors
to consider when estimating the expected year of closure include but are not limited to:
• The remaining capacity of the units;
• Projected shutdown of related industrial plants;
• Expiration date of contracts with customers who currently send PCB
waste to the facility; and
• Expected retirement date for the facility.
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Notification to EPA should occur 60 days prior to closure, and no longer than 30 days
after the facility's receipt of its last wastes (40 CFR 761.65(e)(l)(vi) and (vii)). All wastes
should be sent off-site to other facilities within 90 days after final receipt of PCB wastes, and
closure should be completed within 180 days after final receipt of PCB wastes. Within 60 days
of completion of closure, the facility owner or operator must certify completion of closure in a
written notice to EPA. The certification of completion of closure must be- signed by an
independent professional engineer and by the owner/operator. The closure schedule
requirements are listed in Exhibit 4-2. Exhibit 4-3 gives a general timeline for the activities
required for closure, based on these regulatory requirements.
EPA may grant an extension to the date for commencement of closure for an additional
30-day period if the owner or operator can demonstrate good cause for the delay (40 CFR
761.65(e)(6)(ii)). In addition, EPA may grant extensions to the period for removal of wastes
and the closure period if the owner/operator shows good cause (40 CFR 761.65(e)(6)(iii) and
(iv)). The Agency may consider granting an extension only if the owner or operator will
continue to take steps to prevent threats to human health and the environment including
compliance with all applicable regulations, and that closure of necessity will take longer than
the allowed time.
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EXHffiIT4-2
REQUIREMENTS
DEADLINES
Notification
Start of Closure
Removal of PCBs from Facility
Completion of Closure
Closure Certification
• 60 days before closure starts as determined in the
closure plan
• 30 days after final PCBs are received (30 day extension
allowed)*
• 90 days after final PCBs are received*
• 180 days after closure begins*
• 60 days after closure has been completed
* Deadlines may be extended by EPA with good cause.
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Exhibit 4-3
TIMELINE OF PCB STORAGE FACILITY CLOSURE REQUIREMENTS
NOTIFICATION
OF
CLOSURE
FINAL
PCBs
RECEIVED
TIME IN MONTHS
-2
1
-1
1
0
1
1
1
2
1
3
1
4
1
5
1
6
1
7
1
8
1
1
1
t
CLOSURE
BEGINS
PCB
REMOVAL
COMPLETE
CLOSURE
COMPLETED
CLOSURE
CERTIFICATION
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4.6 MODIFICATION TO CLOSURE PLANS
Owners or operators must amend closure plans and then submit them to the Agency for
approval if:
• A change in operating plans or facility design affects the closure plan,
for example:
Increases in facility size and/or capacity,
- Increases in the estimate of maximum inventory;
- Changes in regulatory requirements that affect closure activities;
Changes in surrounding land use (e.g. drinking water wells are
installed in close proximity to the facility or sewer extensions
increase the possibility of contaminating sewage treatment plant
operations in the event of a spill);
• An unexpected event occurs while conducting final closure activities
that affects the closure plan;
• There is a change in the expected year of closure; or
• Financial status changes which may result in an inability to adequately
pay for closure.
4.7 CLOSURE PLAN CHECKLIST
Exhibit 4-4 provides a closure plan checklist that lists items that should be discussed and
included in the closure plan. Spaces are available to check when an item is included, and some
portions of the checklist provide room for comments.
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Page 1 of 6
EPA ID #
EXHIBIT 4-4
CLOSURE PLAN CHECKLIST FOR COMMERCIAL PCB STORAGE FACILITIES
Provided Not Applicable Comments
1.0 Facility Description:
1.1 General description
12 Jurisdiction in which facility is located
13 Written description as well as topographic map detailing information on:
• PCB storage facilities
• PCB treatment and disposal facilities
• Hazardous waste management units
(if RCRA permitted also)
• All buildings and structures
• Any 100-year Qoodplain
• Adjacent surface waters or wetlands
• Surrounding land uses
• Other key topographic features
• Traffic patterns
• Location and status of underground
storage tanks
• Location and nature of security systems
• Qosed PCB Units (or hazardous waste
management units if RCRA permitted)
1.4 Description of environmental conditions on-eite:
• Proximity to surface waters including
ponds, lagoons, wetlands and storage
rescrvoin
• Prosimity to public or private drinking
water sources
• Sewer location and <**""gf which could
result in contamination of sewers or
sewage treatment systems from PCB
spilb
• Location of nearby grazing lands, farms,
and vegetable gardens
• Presence of a shallow well, ground
water near the surface, or which poses '
a high potential for ground-water
contamination
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Page 2 of 6
EPA ID #
EXHIBIT 4-4 (continued)
CLOSURE PLAN CHECKLIST FOR COMMERCIAL PCB STORAGE FACILITIES
1.5 Detailed description with engineering drawings of facility design:
Design . Containment
Capacity Monitoring System
Roof and walls
Flooring
Curbing and its containment
volume
Drain valves, floor drain, etc.
Storage pallets outside of
storage buildings (including
locations and numbers)
Bulk tanks
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-35 -
Page 3 of 6
EPA ID #
EXHIBIT 4-4 (continued)
CLOSURE PLAN CHECKLIST FOR COMMERCIAL PCB STORAGE FACILITIES
2.0 Disposal of PCB Waste Inventory.
Provided Not Applicable Comments
2.1 Maximum inventory
• Provide design capacity
• Estimate of maximum types and
quantities ot
PCB Articles
PCB Article Containers
PCB liquids in Bulk Tanks
PCB Containers
PCB Capacitors
PCB Transformers
PCB Contaminated Electrical
Equipment
Other PCBs
Total PCB Inventory
22 Disposal of inventory:
• Details to ensure compliance as a PCB
waste generator
• Estimate of maximum inventory to be
sent off-site
• Description of any treatment prior to
transport, if applicable
• Methods and arrangement* used for PCB
waste removal and transportation off-
site to approved storage and disposal
facilities
• Description of treatment or disposal
methods at the final treatment or
disposal facilities
• Bulk tank removal, transport, tracking,
and off-site disposal of tank capacity
• Proposed schedule to complete disposal
within 90 days from closure commence-
ment
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-36-
Page 4 of 6
EPA ID #
. EXHIBIT 4-4 (continued)
CLOSURE PLAN CHECKLIST FOR COMMERCIAL PCB STORAGE FACILITIES
4.0 Closure Plan Sampling. Decontamination, and Compliance with the Spill Cleanup Policy
4.1 Identification and classification of items to be decontaminated
Numerical
Spill Cleanup Cleanup Levels
Structures/Equipment Policy Classification Applicable
Construction of Materials, from the Spill
Use Materials Structures, and Equipment Cleanup Policy
Facility structure components
(roof, walls etc.)
Surrounding soil, pavement
and vegetation
Containment systems and
piping
Equipment
Pallets
Bulk tanks
OTHER
42 Prc-deanup survey and sampling
a) Visual inspection to ascertain sampling boundaries includes detailed discussion of inspection for PCB contaminated
residues or paniculate matter on:
Provided Not Applicable Comments
• Tanks
• Valves and piping
• Equipment
• Containment areas
SOU
• OTHER
b) Sampling survey should include:
• Discussion of methods for toil and
aqueous mutgrUh
• Discussion and maps of proposed grid
sampling
• Sampling plan for solid surfaces
• Sampling for the penetration and
contamination of PCBs into solid
surfaces
• Discussion of validity of statistical
sampling plan
QA/QC
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-37 -
Page 5 of 6
EPA ID #
EXHIBIT 4-4 (continued)
CLOSURE PLAN CHECKLIST FOR COMMERCIAL PCB STORAGE FACILITIES
5.0 Decontamination
5.1 Cleanup methods for each contaminated component should be described in detail
Description of
Decontamination Description of Worker
Method Protection Measures
Facility walls
floors
roof
Soil
Containment systems and
valves
Equipment
Pallets
Bulk tanks
OTHER
52 A description of the criteria used to choose each decontamination method for the components listed below:
Support Time Safety Amounts of
Facilities Require- Require- Wastes
Equipment Needed ments ments Generated
Facility walls
Doors
roof
Sofl
Containment system*
and valves
Equipment
Palleu
Bulk tanks
OTHER
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-38-
Page 6 of 6
EPA ID #
EXHIBIT 4-4 (continued)
CLOSURE PLAN CHECKLIST FOR COMMERCIAL PCB STORAGE FACILITIES
53 Decontamination should also detail post cleanup verification sampling - especially visually contaminated areas:
Provided Not Applicable Comments
5.4 Decontamination, containerization and disposal of both PCB and non-PCB wastes produced in facility
decontamination, including solvents, rags and equipment
• Estimates of wastes produced from:
- decontamination of equipment
- decontamination of structures
- decontamination of grounds
- post cleanup verification
Estimates of transportation of above
wastes
Estimates of disposal facilities that
would take these wastes
6.0 Other Activities Covered in the Closure Plan:
6.1 Ground-water monitoring plan
6.2 Treatment, removal, and disposal of
run-on and runoff due to decontamination
procedures
63 Security measures to prevent uninten-
tional or unpermitted access to the site
7.0 Schedule for Closure Detailing the Above Activities
-------
-39-
CHAPTER5
CLOSURE COST ESTIMATES
Closure cost estimates must cover the costs of carrying out all the activities described in
the closure plan. The total amount of the cost estimate then becomes the basis for the
required level of financial responsibility.
All commercial storers (other than those that are State or Federal government entities)
are required to submit a closure cost estimate when applying for EPA approval to operate.
Storers are also required to adjust their cost estimates annually for inflation, and whenever a
modification to the closure plan that would increase the costs of closure is approved by the
Regional Administrator. A facility's most recent cost estimate must be kept on-site during the
operating life of the facility, and the Regional Office may request a copy of the most recent
cost estimate from the owner or operator at any time.
This chapter addresses:
• The closure cost estimate at the time of the initial applications;
• Cost estimate adjustments to account for modifications to the closure
plan or annual adjustments for inflation.
5.1 REVIEW OF THE INITIAL COST ESTIMATE
A complete review of the initial cost estimate consists of the following steps. Exhibit 5-1
summarizes these steps in a checklist form.
Step 1: Verify that the written closure cost estimate is certified by the person who prepared
the estimate. The certification should be worded as defined in 40 CFR 7613 (see
Exhibit 5-4).
Step 2: Ensure that the estimate is in accordance with the approved closure plan for the
facility, and that it reflects the costs of conducting closure in the year the estimate
is prepared.
The closure cost estimate must:
- be based on the activities described in the closure plan;
- include a cost for each activity or sub-activity outlined in the
closure plan; and
- contain enough detail to evaluate their accuracy relative to the
activities specified in the closure plan (see Chapter 4 and Exhibit
4-4).
-------
- 40 -
Cost estimates should include all components of the costs of closing a facility,
including direct costs (materials, labor, transport and disposal of PCB waste
inventories, equipment), and indirect costs (engineering and supervision fees,
contractor fees, and contingency fees). Indirect costs may be a significant portion
of the costs of closure. For example, typical contingency fees charged by
contractors range from 10% to 25% of the direct costs.
Several sources that might be useful in reviewing cost estimates for the activities
listed in the closure plan are:
• Owner or operator experience. In many cases, the most readily
available source of cost information for existing facilities will be
operating records and contractor invoices.
• Contractor estimates. Many cost estimates may be obtained from
the contractors themselves. It is not necessary for documentation
purposes to have written and validated cost estimates; a record of
the party contacted, the date of the contact, and the estimates
given is sufficient
• Worksheets and workups. Detailed workups of the costs should
include an estimate of labor, equipment, energy, and material
needs; the basis for these assumptions and the total time required
for each activity should be included in the workup. Costs for
supervision and administration should be added and adjustments
made to account for fully loaded labor and equipment costs.
Step 3: Confirm that the cost estimate addresses the most expensive closure that mav be
necessary. The estimate should be high enough so that no matter when closure
occurs, the costs will not exceed the estimate. The conditions on which the cost
estimate is predicated are likely to differ from those which may actually be present
at the time of closure. For example, the estimate should account for managing the
maximum inventory of PCB wastes. Also, the estimate should cover closure costs of
the maximum storage area that will ever be operating at one time.
Step 4: Determine whether the estimate includes costs of off-site commercial disposal of the
maximum estimated inventory, unless on-site disposal capacity will exist throughout
the facility's operating life.
PCBs may be disposed of on-site or off-site. However, if an owner or operator
chooses on-site management, he must demonstrate that on-site capabilities will be
available at all times over the life of the facility. For example, if an owner or
operator intends to dispose of PCBs by incinerating them on-site, the closure plan
must indicate that incinerators will be open and operating and that sufficient
capacity will be available on-site at all times over the life of the facility. If on-site
capacity is not sufficient, then current market prices for off-site commercial
disposal must be used.
-------
- 41 -
Step 5: Verify that the estimate is based on the costs that a third party would charge to
conduct the closure activities.
The cost estimates must incorporate the costs of a third party (Le., a party that is
not employed or related to the storer) conducting all closure activities including
managing PCBs on-site, if applicable. For example, the estimate must include the
costs of hiring a third party to remove PCBs or dispose of them on-site or off-site.
Corporate parents or subsidiaries of the owner or operator cannot be considered
third parties.7 The regulations do not require that the estimates be prepared by a
third party, or that closure be conducted by a third party, but only that the cost
estimate account for the possibility that a third party may be required to conduct
closure. The owner or operator (or corporate parent or subsidiary) may eventually
conduct the activities specified in the closure plan.
Step 6: Confirm that the estimate does not incorporate any salvage value for wastes.
equipment land, facility structures, or other assets associated with the facility at the
time of closure.
Ari owner or operator may not deduct the potential salvage value from recycling or
sale of equipment, land, or PCBs from the closure cost estimate. Similarly, owners
or operators may not assign a zero value to the costs of disposing of PCBs, even if
the PCBs are expected to have economic value at closure.
5.2 REVIEW OF COST ESTIMATE ADJUSTMENTS
Adjustments to the cost estimate are required in two situations: (1) after certain
modifications to the closure plan, and (2) annually to account for inflation. These situations
are described below.
Adjusting the Cost Estimate for Closure Plan Modifications
Owners or operators are required to revise their cost estimates within 30 days of Regional
Administrator approval of any closure plan modification that increases the costs of closure.
Although the owner or operator is not required to submit an updated cost estimate wbsn the
closure plan is modified, the updated cost estimate should be requested when the owner or
operator is notified that a change in the closure plan has been approved. The modified cost
estimate should be prepared and reviewed in the same way as the initial cost estimate was
reviewed.
The following changes in facility conditions or activities could increase the closure cost
estimate:
7 A parent is a corporation that directly owns 50 percent or more of the voting stock of
the firm that owns or operates the facility. A corporation is considered a subsidiary of the
owner or operator if 50 percent or more of its stock is owned by the owner or operator.
-------
-42-
• An increase in facility size and/or capacity,
• An increase in the estimate of maximum inventory;
• Changes in regulatory requirements that affect the costs of closure
activities;
• Contingencies over the operating life of the facility which affect the
types of activities that will be required at closure (e.g., the occurrence
of a spill necessitates additional closure activities); or
• Changes in surrounding land use (e.g., an increase in population density
surrounding the facility warrants increased security provisions).
An owner or operator also may request that a reduction in the cost estimate be allowed
if costs decrease. A reduced closure cost estimate is allowable only if the new estimate still
accounts for the maximum costs of closing units at any time over the life of the facility. The
following changes in facility conditions may justify a decrease in the closure cost estimate:
• Reductions in the size of the facility remaining to be closed over the
remaining life of the facility,
• Changes in operating processes reduce the quantities of PCBs to be
handled at the time of maximum estimated inventory.
Adjusting the Cost Estimate for Annual Inflation Adjustments
The cost estimate must be revised annually to account for inflation (40 CFR
761.65((f)(2)). Because the updated cost estimate is the basis for the level of financial
assurance required, owners or operators must update their closure cost estimates within 60 days
prior to the anniversary date of the establishment of the current financial assurance instruments.
However, owners or operators using the financial test or corporate guarantee to demonstrate
financial assurance must update their cost estimates for inflation within 30 days after the end of
the firm's fiscal year and prior to the submission of financial test documentation to the
Regional Office (see Chapter 6).
Inflation-adjusted cost estimates should be requested from the owner or operator to
review annually the adjustment for inflation, and to verify that the storer has either:
(1) Recalculated the estimate using that year's current prices (for example,
if the storer prepared the initial cost estimates in 1988 using the
prevailing prices in 1988, in 1989 he may recalculate the estimates using
the prices prevailing in 1989);
91
(2) Multiplied the previous estimate by an inflation factor that measures the
general trend in prices in the economy. The inflation factor must be
-------
-43 -
derived from the most recent annual implicit price deflator for Gross
National Product (GNP) and the annual implicit price deflator of the
previous year. The implicit price deflator is an index that reflects the
increase or decrease in the general price level over the past year.
If the owner or operator has adjusted the estimate using the first method, then the
estimate should be reviewed just like the initial cost estimate was reviewed.
If the storer uses the second method, then the estimate may be reviewed by duplicating
and confirming the calculations. To do this, use the following three steps:
Step 1. Obtain the most recent annual implicit price deflator and the annual
implicit price deflator for the previous year from Survey of Current
Business or Economic Indicators, available at Regional Offices. Exhibit
5-2 highlights the deflators from page 14 of the June 1989 issue of
Survey of Current Business. Exhibit 5-3 highlights the deflators found
on page 2 of the same month's issue of Economic Indicators. Note
that the deflators used are annual deflators rather than quarterly
deflators (which may be more recent). The deflators may also be
obtained by calling the RCRA/Superfund Hotline (toll free from 8:30 to
430 EST, 800-424-9346, or in Washington, D.C, 202-382-3000).
Step 2. Calculate the inflation factor by dividing the most recent deflator by the
previous deflator. For example:
Most recent annual deflator _ 121.7 _ .. n,
""* "~~ i.*v/*J
Previous year's annual deflator 117.7
Step 3. Multiply the inflation factor by the old cost estimate to derive the new
cost estimate. For example:
Previous year's cost estimate $100,000
x Inflation factor = x 1.03
Updated cost estimate $103,000
Review of cost estimates for inflation updates might also be undertaken using an
automated spreadsheet system that would recalculate the cost estimates based on the latest
inflation factor.
5.3 SOURCE OF FURTHER INFORMATION
Guidance Manual: Cost Estimates for Closure and Post-Closure Plans (Subparts G and
HX Volumes I, m, IV, EPA (OSWER Policy Directive Number 9476.00-6),
November 1986.
-------
•44-
EXHTOIT 5-1
INITIAL COST ESTIMATE CHECKLIST
1. Written closure cost estimate is certified by the person who prepared it using the
wording in Exhibit 5-4 (40 CFR 7613).
2. The closure cost estimate covers all activities in the closure plan and reflects
current costs.
3. The cost estimate covers costs of closing the facility at the time when costs would
be the highest
4. The cost estimate includes the costs of off-site disposal at a commercial facility,
unless the owner or operator has demonstrated that disposal capability and capacity
will be available on-site,
. 5. The estimate is based on the costs of hiring a third-party to conduct closure.
i
6. No salvage value is included in the cost estimate for any wastes, equipment, land,
facility structures, or other assets associated with the facility.
-------
-45 -
EXHIBIT 5-2
T«bk 7.4._ImpUctt Prta Dcftaton for Grom Nitiou! Product
. 1*0.1001 '
Ttbk 7.7— Implicit Prtet D*Aiton for tht Rttette* tt Gram HHteaf Pro-.*
Net N»tioa»l Product. tad NitiwAj Ii
DwiMc |
rut*
Nonmidnail-
Snam—
117.1
I07.9
U2.I
12U
IOS.2
100.4
II 1.1
tit:
UL7
nai
1164
IH.I
105.7
IOU
95.4
IH.T
. 190.1001
IV
in*
ULJ
106.*
UJ.9
105.4
994
III4
95.1
IIJ.7
IW
UM
lOt. 1
111.1
IIU
I05J
99.6
Ill*
*u
11IJ
uu
UU
109.*
n to
IM*
105.1
I11J
»44
UL4
UU
110.4
117.1
115.6
105.3
**.7
HO
»44
IV
1J6V7
111.4
UU
1DJ
107.2
101.*
us.*
ni
120.4
UU
UU
119.9
1J9J
107.7
IOU
1174
1211
' r • HHmrnm •«
Uat I*tn0 hum w Md mn !uMtir^
i -• ^ - L
i*n
117.7
100
1UJ
117.1
UU
IB.7
1H»
Ul.7
103.6
UU
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119.7
U4J
l*«7
rv
uu
104.«
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Ui-l
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1 | D
1U.4
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1174
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1054
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131.6
119*
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D
Ui4
105.4
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tlt.4
1)0.4
U44
rv j i-
U4J; us
i
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ut4J ir
i
l]4.»| :r
1210 i l-
iuj| ir
Ttbk 7A—IrapUdt Price MUton far Coamud-Kufe Croa N«flon*J
Prodvct
117.1 UU' UUJ 119.4!
I
T.bk 7 J.—Implicit Pnct DtfUton for Ores Nittoaal Pradnet by Major Type
of Product
T»bk 13—FUtd-WtiffaUd Priet Io6*sm for Ptrtocul Cottwrnptioe
Exptnditum by M^or Tjpt of Product. 19C
flOBM MBM1. 1*0-100)
.NOTT— ^wons'. :MT»E irar pftcadut pviae far
T»bU 7.6.— implid: Pnct DtfUtors for Gros Nsttoul Prodaet by Sector
1K>»00)
117.7 UL7
117.7! ULT
122* 12J
122J| 121*
12O6J 121J
140.?! 14J.9
1014!
122*1 12U
Nonftnr. feu Haunt
T»bk 7.14^-FlMd-Wtighlcd Prict Indextt for Exports a*d Import! of Oooc
and S«T>k». 19(2
1*U»I001
111* IK.': IJ4.9
104.1! IK.tl 105*
IJ1.9
142*:
1064 { 106.9
144 jl 14*4
lie*: in;
127.4!
I40J: I4U
U64 UT4
: 11T.7 111*
11?J llu! UC4
104.5; w^. :c:.:-
105.01 ICU. 10:.'
103.9 j 9«.9 9I.J
(roc emoint pcnorj tar MMme
121.4. 121?! 12
4' 11331 1J47; '.264
121.4. ;sj| 1215, ::«.'
-------
-46-
EXHIBIT 5-3
GROSS NATIONAL PRODUCT IN 1982 DOLLARS
1962 AoJUn; qvi4ruri? feu it Miinnillj t4>mW unul nut)
I960
1981
1981
1981
1964 ..,„
1986
19M
1987
Iggg _
1981 IV
I98S: IV
1984: IV
1985: IV
1988. IV
1987: ID
rv
1988: I
n
m
IV
1989: I '
OHM
product
I.187.I
82488
1,186.0
J.179.1
3401.4
S.618.7
8,711.7
S.M7.0
S.998.1
3.199.1
3465.1
3435.2
3.882.4
3.734.7
3 M5.3
3.923.0
3.956.1
3.989.2
4.009.4
4.033.4
4.0774
ftnaatl
cat-
wmpon
txffato-
tint
2.000.4
20241
2.090.7
2.146.0
2449.3
2.354.8
1.496.2
1411.0
2492.2
2.078.7
2.191.9
2.281.1
2.386.9
2.486.2
2.549.2
S431.7
2459.8
2479.0
2.803.8
2.626.2
26349
0
toot
Nan*-
ndmad
fixed
379.2
3952
S86.7
M1.2
4294
4914
443.1
449.1
4874
(92.3
390.4
444.4
480.9
427.3
MTU
464.8
473.4
490.2
495.0
491.4
9009
row prr^
•be BVM
B«i-
MMI)
hW
137.0
1*6.9
105.1
148J
170.9
174.4
195.0
196.2
191.8
1154
I99J
188.6
17B.4
199.7
19J.1
19S.7
1884
1S9.6
191.8
196.6
194.3
M
IMB1
Htinft
•
btm-
DT«.
tOTM*
-6.9
23.9
-24.5
-6.4
634
9.1
19.4
34.4
424
-994
r.o
41.7
7.7
-104
13.0
67,
66.0
39.3
894
29.1
355
Export
po4
No
•xpara
57.0
494
264
-19.9
-84.0
-1044
-1874
-128-t
-1004
11.7
-464
-944
-1254
-142.4
-130.7
-126.0
-109.0
-92.6
-934
-106.4
-89J
,*„,
I t*i «r
It-
rant
3884
8927
8814
848.1
8714
S«74
878.4
4*74
9044
8M.O
8964
376.6
867.4
8874
440.9
45*4
4884
496.9
914.0
921.1
540.7
ora W
ram
Imparu
882,0
343.4
889.6
868.1
4664
471.4
919J
566.7
806.0
3X4
401.6
4T1.4
492.6
9304
571.6
5864
596.1
589.5
807.9
6*7.4
6*6.6
Toul
6204
639.7
641.7
649.0
6TJ.7
731.2
7804
780.2
7824
880.1
6424
6834
752.7
7744
782.9
792.6
778.4
783.8
7734
7954
7964
Oorcru
I**
T
j.iso-
3 199 4
s.iss.:
3.299. >
348i.«
3.723.(
3.&59.1
8475.9
4.0964
3.147.1
3.411.!
3.630.1
J.787.6
J.8TI.5
1.9961
4.04B.I
4.069.1
4.077.9
:i
IMPLICIT PRICE DEFLATORS FOR GROSS NATIONAL PRODUCT
[1982-100:
dta at
Pehod
1960
1W1
1985 ._
1883 _
1964 .._
1985
19Af
11987
1988
198S IV
1983- IV
1964: IV _.
1985- IV
19M- rv . .
1987- ffi
rv
1968 1
n
m
rv
199g 1 •
S»nr Drwr.au:
-------
- 47 -
EXHIBIT 5-4
CERTIFICATION STATEMENT
(40 CFR 7613)
"Certification" means a written statement regarding a specific fact or representation that
contains the following language:
Under the civil and criminal penalties of law for the making or
submission of false or fraudulent statements or representations (18
U.S.C. 1001 and 15 U.S.C. 2615), I certify that the information
contained in or accompanying this document is true, accurate, and
complete. As to the identified section(s) of this document for which I
cannot personally verify truth and accuracy, I certify as the company
official having supervisory responsibility for the persons who, acting
under my direct instructions, made the verification that this information
is true, accurate, and complete.
This statement must accompany any certification required for compliance with PCB
commercial storage approval requirements, including certification of a complete application for
approval to operate and certification of closure.
-------
-48-
CHAFTER 6
FINANCIAL RESPONSmilJTY DEMONSTRATIONS
This chapter discusses the mechanisms that storers may use to meet the financial
responsibility requirement. A demonstration of financial responsibility is an essential part of the
storage approval application. Storage facilities that meet financial responsibility requirements
must still meet all other requirements discussed in earlier chapters in order to obtain storage
approval.
The amount of financial assurance required for each commercial PCB storage facility is
determined by the facility's closure cost estimate, which is based on the site-specific closure
plan. Financial assurance should be maintained from the time the storer initially applies to
EPA for final storage approval until the storer is released from the financial assurance
requirements by the EPA Regional Administrator. The Regional Administrator will notify the
storer of its release from the requirements within 60 days after receiving certifications from the
storer and an independent registered professional engineer that final closure was completed in
accordance with the approved closure plan. However, if the Regional Administrator has reason
to believe that final closure was not conducted in accordance with the approved closure plan,
then he will provide the storer with a detailed written statement of the reasons for not allowing
release from the requirements (40 CFR 761.65(h)).
The financial assurance mechanisms that commercial storers of PCB wastes may use are
virtually identical to the mechanisms allowed for hazardous waste management facilities under
Subpart H of 40 CFR 264, promulgated under the Resource Conservation and Recovery Act of
1976 (RCRA). This chapter provides guidance in determining the adequacy of financial
assurance mechanisms. Each allowable mechanism is discussed in detail in the following
sections:
6.1 Trust Funds and Standby Trust Funds
6.2 Surety Bonds
6.3 Letters of Credit
6.4 Insurance
6.5 Financial Test
6.6 Corporate Guarantee
6.7 Combination of Mechanisms
Exhibit 6-1 summarizes the responsibilities of a reviewer with respect to all financial assurance
mechanisms, while Sections 6.1 through 6.6 detail the responsibilities specific to each
mechanism. Section 6.7 discusses the use of combinations of mechanisms.
-------
- 49 -
EXHIBIT 6-1
SUMMARY OF RESPONSIBILITIES*
o
(1) Verify that the financial assurance mechanism is:
• Issued by a qualified party;
• Correctly worded;
• In a sufficient amount;
• Signed as necessary, and
• In effect and submitted to the Regional Office on time.
(2) Ensure that the amount of financial assurance is increased when necessary throughout the
operating life of the facility due to:
• Annual adjustments for inflation; and
• Changes in plans and increases in cost estimates.
(3) Allow decreases in the amount of financial assurance only when cost estimates decrease
and the remaining amount of assurance will still be adequate.
(4) When the financial institution, insurer, or parent guarantor sends notice of cancellation,
either ensure that alternate assurance is provided or draw upon the financial mechanism
to fund closure.
(5) Verify that new assurance is obtained when:
• The financial institution, insurer or guarantor enters bankruptcy or
ceases operations;
• The financial institution, insurer, or parent guarantor ceases to qualify;
or
• The commercial storer requests termination of assurance because a new
mechanism is being used or ownership or operating responsibility is
being transferred.
(6) Approve requests for a change in mechanisms only if no lapse in coverage will result.
* NOTE: Details regarding specific financial assurance mechanisms and combinations of
mechanisms are presented in Sections 6.1 through 6.7.
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EXHIBIT 6-1 (continued)
SUMMARY OF RESPONSIBILITIES
(7) As necessary for trust funds and insurance, approve requests for reimbursement of closure
expenses. Requests should be approved only when itemized bills are submitted and the
expenses are in accordance with the approved closure plan or are otherwise justified
Instruct the insurer or trustee in writing to make reimbursement in the specified amounts.
If closure costs will significantly exceed the value of a trust fund or remaining insurance,
withhold a portion of reimbursement until completion of closure.
(8) Release the owner or operator from financial assurance requirements within 60 days after
receiving certification from the owner or operator and an independent registered
professional engineer that final closure has been completed in accordance with the
approved closure plans.
(9) Approve requests to terminate financial assurance when:
• Alternate assurance is substituted; or
• The owner or operator is released from financial assurance
requirements.-
(10) Maintain facility information and monitor deadlines for submissions.
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6.1 TRUST FUNDS AND STANDBY TRUST FUNDS
A trust fund is a pool of money that may be set aside by a commercial storer of PCB
wastes to cover anticipated (or unanticipated) future costs. The money is invested and managed
by a trustee (usually the trust department of a bank) on behalf of the beneficiary of the trust
(EPA). The storage facility makes payments into the trust fund annually so that the costs of
closure for the facility will be available at the appropriate time. The trust fund must be large
enough to cover the estimated costs of closure care, although it may be funded over a "pay-in
period" not to exceed three years for PCB storage facilities. The entire arrangement is
governed by a trust agreement that sets out the responsibilities and rights of each party. (A
standby trust fund is slightly different and is discussed later in this section.)
Review of the trust fund should cover the following steps. Exhibit 6-2 at the end of this
section is a checklist to document review of a trust fund.
6.1.1 Trust Fund Submissions
Review of Initial Submissions:
Step 1. Verify submission of documents. The owner or operator should submit the
following documents:
• . An originally signed duplicate copy of the trust agreement;
• A completed "Schedule A" including the following information for each
commercial storage facility covered by the trust fund:
EPA Identification Number (if one has been assigned at the time the
application has been submitted)
Name and address
f>
Amount of the current closure cost estimate covered by the trust fund
agreement
• A completed "Schedule B" listing the property or money that the fund
consists of initially.
• A notarized, formal certificate of acknowledgment such as the example in
Exhibit 6-3.
Step 2. Ensure that the Trustee is Qualified. Check to ensure that the trustee:
• Has the authority to act as a trustee, and
• Is regulated and examined by a Federal or State agency.
If there is any doubt about whether a trustee is qualified, find out what authority
regulates it, and then contact the authority to determine whether the trustee is
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qualified. Maintain regular contact with the regulatory agencies to identify trustees
that should be deleted from the list because they no longer qualify. Exhibit 6-4 at
the end of this section provides a list of different types of financial institutions
which offer trust agreements along with the primary regulatory authority that
governs these institutions. Appendix E is a list of State regulatory authorities. The
easiest way to check the trustee's qualifications may be to maintain a current list of
the qualified trustees in the Region. Regional RCRA staff may already maintain a
list of qualified trustees. If not, this list can be compiled initially by checking the
qualifications of each trustee as trust agreements are submitted and adding any
trustee that qualifies to the list
Step 3. Review the wording of the Trust Agreement The wording of the trust agreement
in all initial submissions should be substantially the same as that in the regulations.
The suggested wording for trust agreement submissions is in Exhibit 6-5 at the end
of this section.
Review of Initial Payment
Step 4. Check the sufficiency of the initial payment. The initial payment into the trust
fund is due after EPA has notified the storage facility that the application has been
conditionally approved, pending EPA review and approval of a receipt from the
trustee that the owner or operator has established a trust fund and has made an
initial payment - New facilities will not receive approval to operate until EPA has
reviewed this receipt Existing facilities must submit the receipt within 30 days after
notification of conditional approval of the application. Existing facilities that fail to
meet this deadline will lose interim approval to operate.
Check the remaining life of the facility as indicated in the closure plan to ensure
that a sufficient initial payment into the trust fund was made. Sufficiency of
payment is determined according to the following schedule:
Remaining Life of the Facility
f According to Closure Plan) Minimum Annual Payment
3 or more years 1/3 of the unfunded portion of the
closure cost estimate
2 years 1/2 of the unfunded portion of the
closure cost estimate
1 year or less full amount of the unfunded portion of
the closure cost estimate
Step 5. Compare the level of coverage to the approved cost estimate. The trust fund may
have been submitted prior to EPA's final review of the storer's closure cost
estimate; this review may cause the cost estimate to increase above the initial
estimate. Therefore, once the storer's cost estimate has been reviewed and EPA is
satisfied with the estimate, repeat Step 4. If monies in the trust fund are not
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sufficient, the Regional Office should immediately notify the storer that the
unassured costs must be assured within 60 days.
Step 6. Maintain a regional information system. As trust fund agreements are received,
record the following information in a regional information system:
• The name, address, and EPA Identification Number of the facilities covered
by one trust;
• The name of the financial institution;
• The amount of coverage for each facility and the effective date of the trust
agreement; and
• Documentation for review of the mechanism.
It may be useful to file each trust fund under both the commercial storer's name
and the name of each financial institution. (In case of bankruptcy or ineligibility of
the trustee or for other reasons, it will be easy to determine which owners or
operators need to obtain alternate financial assurance.)
Follow-Up Review of the Mechanism:
Step 7. Ensure that closure/cost estimate and Trust Fund Schedule A are updated 60 davs
prior to Trust's anniversary date. Based on the updated cost estimate, the owner or
operator must make annual payments throughout the pay-in period, and may have
to obtain additional financial assurance (if closure cost estimates increase because of
inflation or changes in plans). Even after the end of the pay-in period, the owner
or operator should increase the final value of the trust fund or add a new
mechanism (see Section 6.7, Combinations of Mechanisms) within 60 days of an
increase in the closure cost estimate, unless the amount of money in the trust fund
is at least as great as the increased cost estimate. Be aware of the following
"signals" that additional financial assurance may be necessary:
• Storer submits a revised closure plan
• There has been significant inflation in that year.
Step 8. Verify that proper annual payments have been made. The pay-in period for a trust
fund may not exceed three years. It is important to ensure that the owner or
operator makes annual payments in the proper amount to the trust fund during the
pay-in period. Annual payments must be made no later than 30 days after the
anniversary date of the first payment There are three reasons for verifying the
annual payments:
• The owner or operator is not required to submit receipts for annual payments
into the fund;
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• The trustee must notify the Regional Administrator only if the owner or
operator fails to make annual payments (i.e., an absence of a payment), not
that a payment is too small; and
• The trustee need not report failure to make payments due to increases in
cost estimates.
The size of the annual payments depends on the portion of the cost estimate that
remains unfunded, whether it is the second or third annual payment, and on the
remaining length of the facility's life:
• If the remaining life of the facility is one year or less, or if this is the third
annual payment to the fund, the payment must be sufficient to raise the value
of the fund to the total cost specified in the current closure cost estimate.
• If this is the second annual payment for a facility which still has an expected
life of more than one year, the annual payment may be calculated by
subtracting the value of the trust (prior to this payment) from the current
closure cost estimate and then dividing by two.
Once the size of the current payment has been determined, verify that the trustee
received a sufficient payment from the owner or operator.
After completion of the pay-in period, the owner or operator may need to make
additional payments within 60 days if the cost estimate exceeds the value of the
trust In other cases, the value of the trust may exceed the adjusted cost estimates.
The owner or operator may request the Regional Administrator to return the
excess. If a review of the documentation verifies that the current value of the trust
exceeds the current cost estimate, the Regional Administrator should instruct the
trustee to release the appropriate amount of funds.
Step 9. Review qualifications of Trustees. A trustee is not required by regulation to notify
the Regional Office or the owner or operator regarding disqualification. You may
therefore wish to check that existing trustees continue to remain qualified and do
not enter bankruptcy. If a trustee does enter bankruptcy, the owner or operator is
required to obtain alternate financial assurance within 60 days. If the Regional
Office maintains a list of the trustees holding RCRA or PCB trusts under the
trustee's name, it will be easy to determine which owners or operators need to
obtain alternate assurance when a trustee ceases to qualify or enters bankruptcy.
Step 10. Investigate changes of Trustee. The Regional Administrator also must approve
changes in trustees. To evaluate a new trustee, determine if it is qualified using the
same procedures as discussed in Step 2.
6.1.2 Reimbursements from the Trust
As closure activities are carried out by an owner or operator, or another person
authorized by the Regional Administrator, itemized bills should be submitted to the Regional
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Office with requests for reimbursement When reviewing itemized bills, the Regional Office
should:
• Determine within 60 days of the request for reimbursement whether the
expenses are reasonable, justified, and consistent with approved closure
plans;
• Approve the request for reimbursement and direct payment within 60
days of the request for reimbursement unless there is reason to believe
that the remaining costs of closure will be significantly greater than
available funds, or that the incurred costs are not in accordance with
the approved closure plan (or are not otherwise justifiable). If this
occurs, reimbursement may be withheld until proper closure has been
completed and certified.
• Determine if reimbursement is appropriate for expenditures caused by a
contingent event such as bad weather or an accident during closure.
These decisions will have to be made by the Regional Administrator on
a case-by-case basis. The owner or operator, however, remains
ultimately responsible for all closure costs even if the financial
assurance funds are exhausted.
6.13 Terminating the Trust
The Regional Administrator may consent to the termination of the trust only if:
• The owner or operator substitutes an alternate assurance mechanism; or
• The Regional Administrator releases the owner or operator from
applicable TSCA financial assurance requirements.
Consent should be in writing and may accompany the Regional Administrator's letter releasing
the owner or operator from closure financial assurance requirements. The trustee should be
instructed to terminate the trust and to forward the remaining funds to the owner or operator.
6.1.4 Standby Trust Funds
A standby trust fund is a trust fund that contains little or no monies initially, but which
stands ready to receive monies at any time. A standby trust differs from an ordinary trust fund
in that a standby trust exists only to facilitate the use of other financial mechanisms. Standby
trust funds must be established by an owner or operator who uses a surety bond (Section 6.2)
or a letter of credit (Section 63) as a financial assurance mechanism. If the owner or operator
defaults, the third party designated by the surety bond or the letter of credit must deposit a
specified sum of money into the standby trust fund. This is necessary because EPA is not
allowed to receive the funds directly. However, once the monies have been paid into a fund
managed by a trustee, EPA may direct how the funds are used.
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A standby trust is subject to the same requirements as trust funds, including the suggested
wording described in Exhibit 6-5, except that:
• Annual payments into the standby trust fund are not necessary (only
the nominal initial payment mentioned above is usually made); °
• Schedule A (identification of facilities and cost estimates) of the trust
agreement need not be updated;
• Annual valuations are not necessary; and
• The trustee need not send notices of nonpayment
If an owner or operator uses a trust fund in combination with a surety bond or letter of
credit (see Section 6.7), he need not establish a separate standby trust fund. In the event that
the owner or operator defaults and the surety or bank is liable for the surety bond or letter of
credit, the surety or bank can deposit the funds into the owner or operator's trust fund. Only
one standby trust fund is needed if the owner or operator uses a surety bond and a letter of
credit, or several letters of credit
6.1.5 Sources of Further Information
Exhibit 6-6 provides a list of major national trade associations which supply general
information about financial institutions.
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EXHIBIT 6-2
TRUST FUND CHECKLIST
Step 1. The necessary documents have been submitted:
An originally signed duplicate copy of the trust agreement
A completed Schedule A.
A completed Schedule B.
A notarized, formal certificate of acknowledgment
Step 2. The Trustee is qualified;
Has the authority to act as a Trustee.
Is regulated and examined by a Federal or State agency.
*
Step 3. The wording of the trust agreement is substantially similar to RCRA's
wording for Trust Fund Agreements (see Exhibit 6-5).
Step 4. Compare the level of coverage to the approved cost estimate; if necessary,
immediately notify the storer to obtain additional assurance within 60 days for
any unassured costs.
Step 5. Relevant information is recorded:
Name, address and EPA identification number of the facility(ies).
Name of the financial institution.
The amount of coverage for each facility and the effective date of the trust
agreement
Documentation for review of the mechanism.
Step 6. The initial payment into the trust fund is sufficient
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EXHIBIT 6-2 (continued)
TRUST FUND CHECKLIST
D
Step 7. Closure cost estimate and trust fund Schedule A are updated. After the pay-
in period is completed, if the cost estimate increases to more than the current
valuation of the trust fund, then, within 60 days, either additional payments
should be made into the fund to cover the difference or another financial
assurance mechanism should be obtained to cover the difference.
Step 8. The proper annual payments have been made.
Step 9. The trustee remains qualified.
Step 10. Changes in trustee is approved.
Step 11. Authorize reimbursement from the fund to the owner or operator when
appropriate.
Step 12. Consent to the termination of the trust only if:
Alternate insurance is substituted, or
The owner or operator is released from applicable TSCA financial
requirement
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EXHIBIT 6-3
SAMPLE WORDING FOR CERTIFICATE OF ACKNOWLEDGMENT
The following is an example of the certification of acknowledgment which must
accompany the trust agreement for a trust fund. State requirements may differ on the proper
content of this acknowledgment
State of —
County of
On this [date], before me personally came [owner or operator] to me known,
who, being by me duly sworn, did depose and say that she/he resides at [address],
that she/he is [title] of [corporation], the corporation described in and which
executed the above instrument; that she/he knows the seal affixed to such
instrument is such corporate seal; that it was so affixed by order of the Board of
Directors of said corporation, and that she/he signed her/his name thereto by like
order.
[Signature of Notary Public]
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EXHmiT 6-4
TRUST FUND: REGULATORY AUTHORITIES FOR FINANCIAL INSTITUTIONS
Type of Financial Institution
1. State-Chartered financial
institutions, including Commercial
Banks, Savings and Loans, Mutual
Savings Banks, Credit Unions,
State Licensed Foreign Banks
2. Nationally-Chartered Commercial
Banks, Nationally-licensed Foreign
Banks, all Washington, D.C
commercial banks
3. Nationally-Chartered Savings and
Loans
4. Nationally-Chartered Mutual
Savings Banks
5. Nationally-Chartered Credit
Unions
Primary Regulatory Authority
(and contact)
State Authority (see Appendix E)
Comptroller of the Currency, Trust
Division, (202) 447-1731
Federal Home Loan Bank Board,
General Counsel, (202) 377-6404
Federal Home Loan Bank Board (Same
as Number 3), and State Authorities
(see Appendices D and E).
National Credit Union Administration,
General Counsel, (202) 357-1030
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EXHIBIT 6-5
SAMPLE WORDING FOR TRUST FUND AGREEMENTS
A trust agreement for a trust fund may be worded as follows, except that instructions in
brackets are to be replaced with the relevant information and the brackets deleted:
TRUST AGREEMENT
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 "Grantor," and [name of corporate trustee], [insert "incorporated in the
State of " or "a national bank"], the Trustee."
Whereas, the United States Environmental Protection Agency, "EPA," an agency of the
United States Government, has established certain regulations applicable to the Grantor,
requiring that an owner or operator of a polychlorinated biphenyl (PCB) commercial storage
facility shall provide assurance that funds will be available when needed for closure and/or post-
closure care of the facility.
Whereas, the Grantor has elected to establish a trust to provide all or part of such
financial assurance for the facilities identified herein.
Whereas, the Grantor, 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 Grantor and the Trustee agree as follows:
Section 1. Definitions. As used in this Agreement:
(a) The term "Grantor" means the owner or operator who enters into this Agreement
and any successors or assigns of the Grantor,
(b) The term Trustee" means the Trustee who enters into this Agreement and any
successor Trustee.
Section 2. Identification of Facilities and Cost Estimates. This Agreement pertains to
the facilities and cost estimates identified on attached Schedule A [on Schedule A, for each
facility list the EPA Identification Number, name, address, and the current closure and/or post-
closure cost estimates, or portions thereof, for which financial assurance is demonstrated by this
Agreement].
Section 3. Establishment of Fund. The Grantor and the Trustee hereby establish a trust
fund, the "Fund," for the benefit of EPA. The Grantor 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 attached
hereto. Such property and any other property subsequently transferred to the Trustee is
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EXHIBIT 6-5 (continued)
SAMPLE WORDING FOR TRUST FUND AGREEMENTS
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
Grantor, any payments necessary to discharge any liabilities of the Grantor established by EPA.
Section 4. Payment for Closure and Post-Closure Care. The Trustee shall make
payments from the Fund as the EPA Regional Administrator shall direct, in writing, to provide
for the payment of the costs of closure and/or post-closure care of the facilities covered by this
Agreement The Trustee shall reimburse the Grantor or other persons as specified by the EPA
Regional Administrator from the Fund for closure and post-closure expenditures in such
amounts as the EPA Regional Administrator shall direct in writing. In addition, the Trustee
shall refund to the Grantor such amounts as the EPA Regional Administrator 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 accordance with general investment policies and guidelines which the
Grantor 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 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:
(i) Securities or other obligations of the Grantor, or any other owner or operator of
the facilities, or any of their affiliates as defined in the Investment Company Act of 1940, as
amended, 15 U.S.C. 80a-2.(a), shall not be acquired or held, unless they are securities or other
obligations of the Federal or a State government;
(ii) 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 State government; and
(iii) 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.
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EXHmiT 6-5 (continued)
SAMPLE WORDING FOR TRUST FUND AGREEMENTS
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 U.S.C. 80a-l 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 depositary even though, when so deposited, such securities may be merged and held in
bulk in the name of the nominee of such depositary 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; and
(e) To compromise or otherwise adjust all claims in favor of or against the Fund.
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EXHffilT 6-5 (continued)
SAMPLE WORDING FOR TRUST FUND AGREEMENTS
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 Fund shall be
paid from the Fund. All other expenses 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 Grantor, and all other
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 prior to the
anniversary date of establishment of the Fund, furnish to the Grantor and to the appropriate
EPA Regional Administrator a statement confirming the value of the Trust Any securities in
the Fund shall be valued at market value as of nor more than 60 days prior to the anniversary
date of establishment of the Fund. The failure of the Grantor to object in writing to the
Trustee within 90 days after the statement has been furnished to the Grantor and the EPA
Regional Administrator shall constitute conclusively binding assent by the Grantor, barring the
Grantor from asserting any claim or liability against the Trustee with respect to matters
disclosed in the statement
Section 11. Advice of Counsel. The Trustee may from time to time consult with
counsel, who may be counsel to the Grantor, 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 Grantor.
Section 13. Successor Trustee. The Trustee may resign or the Grantor may replace the
Trustee, but such resignation or replacement shall not be effective until the Grantor 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 Grantor 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 instructions. The successor trustee shall specify the date on which it
assumes administration of the trust in a writing sent to the Grantor, the EPA Regional
Administrator and the present Trustee by certified mail 10 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.
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EXHIBIT 6-5 (continued)
SAMPLE WORDING FOR TRUST FUND AGREEMENTS
Section 14. Instructions to the Trustee. All orders, requests, and instructions by the
Grantor to the Trustee shall be in writing, signed by such persons as are designated in the
attached Exhibit A or such other designees as the Grantor may designate by amendment to
Exhibit A, The Trustee shall be fully protected in acting without inquiry in accordance with the
Grantor's orders, requests, and instructions. All orders, requests, and instructions by the EPA
Regional Administrator to the Trustee shall be in writing, signed by the EPA Regional
Administrators of the Regions in which the facilities are located, or their designees, and the
Trustee shall act and shall be fully protected in acting in accordance 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 Grantor or EPA hereunder has occurred. The Trustee shall
have no duty to act in the absence of such orders, requests, and instructions from the Grantor
and/or EPA, except as provided for herein.
Section 15. Notice of Nonpayment The Trustee shall notify the Grantor and the
appropriate EPA Regional Administrator, by certified mail within 10 days following the
expiration of the 30-day period after the anniversary of the establishment of the Trust, if no
payment is received from the Grantor during that period. After the pay-in period is completed,
the Trustee shall not be required to send a notice of nonpayment.
Section 16. Amendment of Agreement This Agreement may be amended by an
instrument in writing executed by the Grantor, the Trustee, and the appropriate EPA Regional
Administrator, or by the Trustee and the appropriate EPA Regional Administrator if the
Grantor 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 Grantor, the Trustee, and the EPA Regional
Administrator, or by the Trustee and the EPA Regional Administrator, if the Grantor ceases to
exist Upon termination of the Trust, all remaining trust property, less final trust administration
expenses, shall be delivered to the Grantor.
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 carrying out any directions by the Grantor or the EPA Regional
Administrator issued in accordance with this Agreement The Trustee shall be indemnified and
saved harmless by the Grantor 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 Grantor fails
to provide such defense.
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EXHffilT 6-5 (continued)
SAMPLE WORDING FOR TRUST FUND AGREEMENTS
Section 19. Choice of Law. This Agreement shall be administered, construed, and
enforced according to the laws of the State of [insert name of State].
Section 20. 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 of 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 and attested
as of the date first above written: The parties below certify that the wording of this Agreement
is substantially similar to the wording in 40 CER 761.65(g)(l) as such regulations were
constituted on the date first above written.
[Signature of Grantor]
Attest:
[Title]
[Seal]
[Signature of Trustee]
Attest:
(Title]
[Seal]
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EXHIBIT6-6
National trade associations can supply information about financial institutions in general.
Major national organizations include:
1. American Bankers Association
Information Services
1120 Connecticut Avenue, N.W.
Washington, D.C. 20036
(202) 663-5000
Trade association of banks and trust companies.
2. Independent Bankers Association of America
One Thomas Circle, N.W.
Suite 950
Washington, D.C. 20005
(202) 659-8111
Association of medium size and smaller independent banks.
3. National Counsel of Savings Institutions
1101 15th Street, N.W.
Washington, D.C. 20005
(202) 857-3100
Trade association of mutual .savings banks.
4. United States League of Savings Institutions
111 East Wacker Drive
Chicago, Illinois 60601
(312) 644-3100
Trade association of savings and loan associations, cooperative banks, and
state and local savings and loan association leagues.
5. Credit Union National Association
Public Relations Department
Box 431
Madison, Wisconsin 53701
(608) 231-4000
Trade association of state credit union leagues.
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EXfflBIT 6-6 (continued)
6. Conference of State Bank Supervisors
State Banking Department Services
1015 Eighteenth Street, N.W.
Suite 606
Washington, D.C 20036
(202) 296-2840
Organization of state officials responsible for the supervision of state-
chartered banking institutions.
7. National Association of State Credit Union Supervisors
1499 Chain Bridge Road
Suite 201
McLean, Virginia 22101
(703) 821-2243
Organization of state credit union supervisors and state-chartered credit
unions.
8. National Association of State Savings and Loan Supervisors
1499 Chain Bridge Road
Suite 201
McLean, Virginia 22101
(703) 821-2488
Organization of state savings and loan supervisors.
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6.2 SURETY BONDS
A surety bond is a contract under which a surety firm provides monetary compensation or
performance to the "obligee" should the owner or operator ("the principal") fail to perform a
specific act within a specific timeframe.
Two types of surety bonds may be used to assure closure obligations. Under a payment
bond, the surety firm guarantees that if the facility owner or operator fails to fully fund a trust
fund before the beginning of closure, then the surety must fund the trust Under a
performance bond, the surety firm guarantees that if the storer fails to perform closure in
accordance with the approved closure plan, then the surety must either perform closure
activities in accordance with the closure plan, or fully fund a standby trust fund. Under either
type of surety bond, the storer must establish a trust fund or a standby trust fund.
Review of the surety bond should cover the points discussed below. The following
discussion applies to both payment bonds and performance bonds unless otherwise noted.
Exhibit 6-7 at the end of this section contains a summary checklist to document review of the
mechanism.
6.2.1 Surety Bond Submissions
Review of Initial Submissions:
Step 1. Verify submission of documents. Verify that all appropriate documents have been
submitted.
The surety bond;
• An originally signed duplicate of a trust agreement (for payment bonds) or
standby trust agreement (for performance bonds).
Step 2. Verify the qualifications of surety and broker or agent Review Circular 570
(published annually by the Department of Treasury on approximately July 1 - see
"Sources of Other Information" at the end of this section) to check that the surety.
• is listed on Circular 570;
• is licensed to do business in the State in'which the bond is signed; and
• has an underwriting limitation equal to or larger than the bond amount
Because many sureties have similar names, review Circular 570 carefully. The
circular can be obtained from the Department of the Treasury at the following
address:
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Surety Bond Branch
Financial Management Service
Department of the Treasury
Washington, D.C 20226
(202) 634-2214 or (202) 634-2245
The bond amount can exceed the surety's underwriting limitation only if the surety
properly indicates that other sureties are sharing the risk. If the surety is doing
this, or "reinsuring," then a Treasury Teinsurance form should-be submitted with the
surety bond or within 45 days thereafter. If two or more sureties are used to fulfill
the bond obligation (cosureties), the original bond should reflect that fact In all
cases, ensure that the total underwriting limitation of all sureties involved is not
exceeded
For each surety bond submitted, request to see the broker or agent's POWER OF
ATTORNEY and review it to make certain that the broker or agent has authority
to act on behalf of the surety on this type of bond (PCB wastes) and in the
amount of the bond.
Verify the qualifications of the trustee institution for the standby trust fund. The
qualifications for a standby trust are the same as for the trust fund (see Section
6.1).
Step 3. Review mechanism terms. Review the surety bond to ensure that it is:
• Effective by 180 days from the effective date of the regulations, except for
facilities opening 240 days or more after the effective date, for which the
bond should be effective 60 days prior to the first receipt of PCB material;
• Signed by both the surety representative and the owner or operator;
• Worded substantially similar to RCRA's wording for surety bonds (see Exhibit
6-8); and
• In an amount at least equal to the most recent closure cost estimates (unless
multiple mechanisms are being used).
Step 4. Compare the level of coverage to the approved cost estimate. The surety bond
may take effect prior to EPA's final review of the owner or operator's closure cost
estimate and this review may cause the cost estimate to increase above the initial
estimate. Therefore, once the owner or operator's cost estimate has been reviewed,
and EPA is satisfied with the estimate, compare the costs assured by the surety
bond with the amount of the approved cost estimate. If the surety bond does not
cover increases in the cost estimate, the Regional Office should immediately notify
the owner or operator that the cost increases must be assured within 60 days.
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Step 5. Maintain a regional information system. Record relevant information in a regional
information system as surety bonds and standby trust agreements are received. This
information should include:
• The name, address, and EPA Identification Number of tKe covered facilities;
• The name of the surety, bond number, and trustee;
• Amount of coverage for each facility and the effective date; and
• Information verification procedures performed.
Automatic data processing systems can be used for this. The Regional Office
should maintain a list of surety bonds in effect not only under the owner or
operator's name, but also under the name of each surety company and trustee
institution so that, in case of bankruptcy or ineligibflity of the provider, it will be
easy to determine which owners or operators need to obtain financial assurance
elsewhere. This system can also be used to keep track of mergers and changes in
the names of sureties.
Follow-Up Review of the Mechanism:
Step 6. Ensure that coverage is sufficient relative to updated cost estimates. Coverage
should be increased whenever the closure cost estimate increases to more than the
existing coverage. Therefore, sufficiency of coverage should be evaluated whenever
the cost estimate is likely to increase:
• Upon Modification of the Closure Plan. If a modification to the closure plan
increases the closure cost estimate, the storer must adjust the cost estimate
within 30 days of the approval of the modification.
• On the Anniversary Date of the Establishment of Coverage. Storers should
update the closure cost estimate for inflation within 60 days prior to the
anniversary date of the establishment of financial assurance coverage.
If the cost estimate increases to more than the existing level of financial assurance
coverage, the storer should, within 60 days, increase the coverage either by raising
the coverage of the existing mechanism or by increases in other financial assurance
(see Section 6.7, Combinations of Mechanisms).
If cost estimates decrease, the owner or operator may apply for a reduction in the
penal sum of the surety bond. The Regional Administrator should approve the
decrease in writing only if the owner or operator demonstrates that the reduced
financial responsibility level will still cover closure expenses. Sucb a determination
will require a review of the closure plan for technical adequacy and completeness as
well as a review of the reasonableness of the associated cost estimates.
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Step 7. Ensure that assurance is maintained in the event of disqualification of the surety.
If a surety loses its qualifications or enters bankruptcy, Regional Offices should
verify that the owner or operator has obtained a new financial assurance
mechanism. The new mechanism should be in place within 60 days of the
disqualification or the beginning of bankruptcy proceedings. It is important to note
that the surety is not required by regulation to notify the Regional Administrator
or the owner or operator regarding disqualification or bankruptcy.
Maintain up-to-date lists of which sureties are currently listed on Circular 570, the
States where they are licensed, and what their underwriting limitations are. In
addition, a list of surety bonds in effect should be kept under each surety's name so
that in the case of bankruptcy or other disqualification, it is easy to determine
which owners or operators need to obtain financial assurance elsewhere. This
system could also be used to keep track of mergers and changes in the names of
sureties. Automated data processing information systems may be particularly useful
in helping ensure that alternative assurance is obtained within 60 days after the
surety becomes bankrupt or otherwise ceases to qualify.
Requests to use alternate assurance mechanisms should be approved if no lapse in
coverage will result
Step 8. Ensure that assurance is maintained in the event of cancellation of the surety bond.
Surety bonds may only be cancelled by the issuer 120 days after the surety's notice
of cancellation to both the owner or operator and the Regional Administrator have
been Deceived. If notice of cancellation is received, the storer should obtain within
90 days:
• Alternate financial assurance coverage; and
• Written approval of such assurance.
The 90-day period begins after both the owner or operator and the Regional Office
have received the notice of cancellation. If the owner or operator is unable to
obtain acceptable alternate assurance within 90 days, the Regional Office should call
upon the surety to fulfill its obligations under the bond (see Section 6.2.2).
Upon receipt of a cancellation notice from a surety, a Regional Office should
contact the owner or operator to determine:
• The date the owner or operator received the notice from the surety, and
• The owner or operator's plans to provide alternate assurance.
In the event of transfer of ownership or operation of a facility, a surety may wish
to cancel the surety bond. The Regional Office should verify that assurance is
maintained until the new owner or operator satisfies the financial requirements, and
should draw upon the surety bond (see Section 6.2.2) prior to the transfer of
ownership if the new owner or operator has not obtained financial assurance.
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6.2.2 Drawing on Surety Bonds
Performance Bonds:
The Regional Administrator must make demand upon the surety to fulfill its obligations
under a financial guarantee bond when:
• The surety has sent notice of cancellation of the bond and the owner
or operator has not obtained alternate financial assurance within 90
days; or
• A final administrative determination pursuant to Section 16 of TSCA
finds that the owner or operator has failed to complete a proper
closure of the facility, including performing all activities required by the
closure plan and other activities required by the Regional Administrator
to ensure that any post-closure releases of PCBs to the environment
will not present unreasonable risks.
The Regional Office should instruct the surety in writing to perform closure activities or to
deposit the funds into the standby trust The Regional Office should also notify the trustee of
the standby trust in advance of expected payments into the trust
Payment Bonds:
The Regional Administrator is authorized to draw on funds from the surety bond for
closure:
• If the surety has sent notice of cancellation of the bond and the owner
or operator has not obtained alternate financial assurance within 90
days; or
• If, prior to the beginning of final closure, the owner or operator has
not funded the trust fund in an amount equal to the penal sum of the
bond
• Within 15 days after an administrative order to begin closure issued by
the Regional Administrator becomes final, or within 15 days after an
order to begin final closure is issued by a U.S. District Court or other
court of competent jurisdiction; or
The Regional Office should instruct the surety to deposit the funds into the trust. The
Regional Office should also notify the trustee of the standby trust in advance of expected
payments into the trust
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6.23 Terminating Surety Bonds
The Regional Office may consent to the termination of the surety bond if:
• Alternate assurance is substituted; or °
• The owner or operator is released from applicable closure financial
requirements.
If the Regional Office approves termination of the surety bond, notice must be given to the
owner or operator in writing. This notice may accompany the Regional Administrator's letter
releasing the owner or operator from closure financial assurance.
At the same time, the Regional Office may consent to the termination of the standby
trust fund unless the owner or operator is obtaining an alternate financial assurance mechanism
for which a stand-by trust fund is also necessary.
6.2.4 Sources of Further Information
In addition to the Circular 570 updates discussed above. Circular 297 of the Treasury
Department - a more technical document - contains the Treasury regulations governing
sureties doing business with the United States. These regulations were promulgated pursuant to
Title 6 of the U.S. Code, Sections 6-13, and could be useful in answering specific questions that
may arise concerning sureties.
Exhibit 6-9 is a list of major national trade associations concerned with surety bonds.
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EXHIBIT 6-7
SURETY BOND CHECKLIST
3
Step 1. The necessary documents have been submitted:
The surety bond.
An originally signed duplicate of a trust or standby trust agreement
Step 2. The surety is qualified:
The surety is listed on Circular 570 and is licensed in the state.
The surety has a sufficiently large underwriting limitation (or shares the risk
with other sureties or reinsurers and the combined underwriting limitation is
not exceeded).
The broker or agent's power of attorney is authorized by the surety to issue
this type of bond in the amount needed
The trustee institution for the trust fund or standby trust is qualified.
Step 3. The surety bond is:
Effective by 180 days from the effective date of the regulations (or, for
facilities opening 240 days or more after the effective date, 60 days prior to
the first receipt of PCB material).
Signed by both the surety representative and the owner or operator.
Worded substantially similar to RCRA's wording for surety bonds (see Exhibit
6-8).
In an amount at least equal to the most recent cost estimates.
Step 4. Compare the level of coverage to the approved cost estimate; if necessary,
immediately notify the owner or operator to obtain additional assurance
within 60 days for any unassured costs.
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EXHIBIT 6-7 (continued)
SURETY BOND CHECKLIST
Step 5. Relevant information is recorded:
Name, address and EPA identification number of the facility.
Amount of coverage for each facility and the effective date.
Information verification procedures performed.
Step 6. Increases in cost estimates are covered within 60 days either by increases in
the penal sum of surety bonds or other added financial assurance. Decreases
in surety bond penal sums are approved only when sufficient coverage will
remain.
Step 7. Assurance is maintained in the event of disqualification of the surety.
The Regional Office keeps track of which sureties enter bankruptcy or cease
to be listed in Circular 570.
The Regional Office ensures that owners or operators obtain alternate
assurance within 60 days after such events.
Step 8. Assurance is maintained in the event of cancellation:
The owner or operator is contacted following notice from the surety of intent
to cancel
The owner or operator obtains alternative means of financial assurance within
90 days after receipt of notice of cancellation, or the Regional Office draws
upon the mechanism.
In the event of transfer of ownership, the surety bond is not cancelled until
the new owner or operator meets financial responsibility requirements.
Step 9 A. The Regional Office draws on the performance bond when:
The surety has sent notice of cancellation and no alternate financial assurance
has been obtained.
The owner or operator has failed to complete proper closure of the facility.
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EXfflBIT 6-7 (continued)
SURETY BOND CHECKLIST
Step 9B. The Regional Administrator draws on the payment bond:
If the surety has sent notice of cancellation and no alternate financial
assurance has been obtained.
If, prior to final closure, the owner or operator has not fully funded the
standby trust
Within 15 days after an order to begin final closure is issued either by the
Regional Administrator or by a court of competent jurisdiction.
Step 10. Requests to terminate the bond are approved in writing when:
Alternate financial assurance is substituted.
The owner or operator has been released from financial responsibility
requirements for closure.
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EXHIBIT 6-8
SAMPLE WORDING FOR SURETY BONDS
A. Sample Wording for Payment Bonds
FINANCIAL GUARANTEE BOND
Date Bond executed:
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)]
EPA Identification Number, name, address and closure and/or post-closure
amount(s) for each facility guaranteed by this bond [indicate closure and post-closure
amounts separately]: .
Total penal sum of bond: $
Surety's bond number
Know All Persons By These Presents, That, we, the Principal and Surety(ies) hereto are
firmly bound to the U.S. Environmental Protection Agency (hereinafter called EPA), 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 joiiit action or actions against any or all of us, and
for all other purposes such 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 the Toxic Substances Control Act (TSCA) as
amended, to have a permit, approval, or interim status in order to own or operate each PCB
commercial storage facility identified above, and
Whereas, said Principal is required to provide financial assurance for closure or closure
and post-closure care, as a condition of the permit, approval, or interim status, 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, before the beginning of final closure of each facility identified above, fund the
standby trust fund in the amount(s) identified above for the facility.
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EXHIBIT 6-8 (continued)
SAMPLE WORDING FOR SURETY BONDS
Or, if the Principal shall fund the standby trust fund hi such amount(s) within 15 days
after a final order to begin closure is issued by an EPA Regional Administrator or a U.S.
district court or other court of competent jurisdiction.
Or, if the Principal shall provide alternate financial assurance, as specified in Subpart D
of 40 CFR 761, as applicable, and obtain the EPA Regional Administrator's written approval of
such assurance, within 90 days after the date notice of cancellation is received by both the
Principal and the EPA Regional Administrator(s) 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 an EPA Regional
Administrator that the Principal has failed to perform as guaranteed by this bond, the
Surety(ies) shall place funds in the amount guaranteed for the facflity(ies) into the standby trust
fund as directed by the EPA Regional Administrator.
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) may cancel the bond by sending notice of cancellation by certified mail to
the Principal and to the EPA Regional Administrator(s) for the Regjon(s) in which the
facih'ty(ies) is(are) located, 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 EPA Regional Administrator(s), 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 EPA Regional Administrator(s) of the
EPA Region(s) in which the bonded facih'ty(ies) is(are) located.
[The following paragraph is an optional rider that may be included but is not required,]
Principal and Surety(ies) hereby agree to adjustment the penal sum of the bond yearly so
that it guarantees a new closure and/or post-closure amount, provided that the penal sum does
not increase by more than 20 percent in any one year, and no decrease in the penal sum takes
place without the written permission of the EPA Regional Administrator(s).
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EXHffilT 6-8 (continued)
SAMPLE WORDING FOR SURETY BONDS
In Witness Whereof, the Principal and; Surety(ies) have executed this Financial Guarantee
Bond and 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 substantially similar to the wording in 40 CFR 761.65(g)(2) as such regulations
were constituted on the date this bqnd was executed.
Principal
[Signature(s)]
[Name(s)]
[Title(s)]
[Corporate seal]
Corporate Surety(ies)
[Name and address]
[State of Incorporation:]
Liability limit: $
[Signature(s)]
[Name(s) and title(s)]
[Corporate seal]
[For every co-surety, provide signature(s), corporate seal, and other information in the same
manner as for Surety above.]
Bond premium: $
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EXHIBIT 6-8 (continued)
SAMPLE WORDING FOR SURETY BONDS
B. Sample Wording for Performance Bonds
PERFORMANCE BOND
Date bond executed: —•
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)]
EPA Identification Number, name, address, and closure and/or post-closure amount(s) for each
facility guaranteed by this bond indicate closure and post-closure amounts separately]:
Total penal sum of bond: $
Surety's bond number
Know All Persons By These presents, That we, the Principal and Surety(ies) hereto are
firmly bound to the U.S. Environmental Protection Agency (hereinafter called EPA), 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 aU of us, and
for all other purposes such 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 lability shall be the full amount of the penal sum.
Whereas said Principal is required, under the Toxic Substances Control Act (TSCA) as
amended, to have a permit or approval in order to own or operate each PCB commercial
storage facility identified above, and
Whereas said Principal is required to provide financial assurance for closure, or closure
and post-closure care, as a condition of the permit or approval, and
Whereas said Principal shall establish a standby trust fund as is required when a surety
bond is used to provide such financial assurance;
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EXHIBIT 6-8 (continued)
SAMPLE WORDING FOR SURETY BONDS
Now, Therefore, the conditions of this obligation are such that if the Principal shall
faithfully perform closure, whenever required to do so, of each facility for which this bond
guarantees closure, in accordance with the closure plan and other requirements of the permit or
approval as such plan, permit, and/or approval may be amended, pursuant to all applicable laws,
statutes, rules, and regulations may be amended,
And, if the Principal shall faithfully perform post-closure care of each facility for which
this bond guarantees post-closure care, in accordance with the post-closure plan and other
requirements of the permit or approval, as such plan, permit, and/or approval may be amended,
pursuant to all applicable laws, statutes rules, and regulations, as such laws, statutes, rules, and
regulations may be amended,
Or, if the Principal shall provide alternate financial assurance as specified in Subpart D of
40 CFR 761, and obtain the EPA Regional Administrator's written approval of such assurance,
within 90 days after the date notice of cancellation is received by both the Principal and the
EPA Regional Administrator(s) 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 an EPA Regional Administrator that the Principal has been found
in violation of the closure requirements of 40 CFR 761, for a facility for which this bond
guarantees performance of closure, the Surety(ies) shall either perform closure in accordance
with the closure plan and other permit or approval requirements or place the closure amount
guaranteed for the facility into the standby trust fund as directed by the EPA Regional
Administrator.
Upon notification by an EPA Regional Administrator that the Principal has been found
in violation of the post-closure requirements of 40 CFR 761 for a facility for which this bond
guarantees performance of post-closure care, the Surety(ies) shall either perform post-closure
care in accordance with the post-closure plan and other permit or approval requirements or
place the post-closure amount guaranteed for the facility into the standby trust fund as directed
by the EPA Regional Administrator.
Upon notification by an EPA Regional Administrator that the Principal has failed to
provide alternate financial assurance as specified in Subpart D of 40 CFR 761, and obtain
written approval of such assurance from the EPA Regional Administrator(s) during the 90 days
following receipt by both the Principal and the EPA Regional Administrator(s) of a notice of
cancellation of the bond, the Surety(ies) shall place funds in the amount guaranteed for the
facility(ies) into the standby trust fund as directed by the EPA Regional Administrator.
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EXHIBIT 6-8 (continued)
SAMPLE WORDING FOR SURETY BONDS
The surety(ies) hereby waive(s) notification of amendments to closure plans, permits,
approvals, applicable laws, statutes, rules, and regulations and agrees that no such amendment
shall in any way alleviate its (their) obligation on this bond.
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) may cancel the bond by ending notice of cancellation by certified mail to
the owner or operator and to the EPA Regional Administrators) for the Region(s) in which
the facility(ies) is(are) located, 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 EPA Regional Administrator(s), 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 EPA Regional Administrator(s) of the
EPA Region(s) in which the bonded facility(ies) is(are) located.
[The following paragraph is an optional rider that may be included but is not required.]
Principal and Surety(ies) hereby agree to adjust the penal sum of the bond yearly so that
it guarantees a new closure and/or post-closure amount, provided that the penal sum does not
increase by more than 20 percent in any one year, and no degree in the penal sum takes place
without the written permission of the EPA Regional Administrator(s).
In Witness Whereof, The Principal and Surety(ies) have executed this Performance Bond
and 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
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EXHIBIT 6-8 (continued)
SAMPLE WORDING FOR SURETY BONDS
surety bond is substantially similar to the wording in 40 CFR 761.65(g)(3) as such regulation
was constituted on the date this bond was executed
Principal
[Signature]
[Name(s)]
[Title(s)]
[Corporate seal]
Corporate Surety(ies)
[Name and address]
State of incorporation:
Liability limit: $
[Signature(s)]
[Name(s) and title(s)]
[Corporate seal]
[For every co-surety, provide signature(s), corporate seal, and other information in the same
manner as for Surety above]
Bond premium: $
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EXHIBIT 6-9
National trade associations concerned with surety bonds are:
o
1. National Association of Surety Bond Producers
6931 Arlington Road
Suite 308
Bethesda, Maryland 20814
(301) 986-4166
Trade association of surety bond agents
2. Surety Association of America
100 Wood Avenue, South
Iselin, New Jersey 08830
(201) 494-7600
Trade association of surety companies
3. National Association of Insurance Commissions
1125 Grand Avenue
Suite 1900
Kansas City, Missouri 64106
(816) 842-3600
Organization of state insurance commissioners, who are responsible for the
state regulations of surety companies and their agents
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63 LETTERS OF CREDIT
A letter of credit is a mechanism by which a bank or other financial institution (the
issuer) extends credit on behalf of a PCB commercial storer (the account party) to the EPA to
assure the availability of funds for closure expenses. The issuer offers this assurance in
exchange for a fee paid by the owner or operator of the facility. This assurance may only be
used to finance closure in the event that the owner or operator is unable to pay. In the case
of nonpayment or nonperformance by the owner or operator, or if the letter of credit is about
to be cancelled without substitution of alternate assurance, EPA can direct the deposit of funds
from the letter of credit into a standby trust fund. (Storers must also establish a trust or
standby trust, discussed in Section 6.1, to use the letter of credit to satisfy the regulations.)
The owner or operator would then be responsible for repaying the bank.
Described below are the responsibilities of the Regional Office for reviewing letters of
credit Exhibit 6-10 at the end of this section is a checklist to document review of the
mechanism.
6.3.1 Letter of Credit Submissions
Review of Initial Submissions:
Step 1. Verify submission of documents. Verify that all appropriate documents have been
submitted:
• The letter of credit;
• An accompanying letter referring to the letter of credit by number, issuing
institution, and date, which provides the EPA Identification Number, name,
and address of each facility, and the amount of funds assured by the letter of
credit for closure of each facility, and
• An originally signed duplicate of a trust or standby trust agreement
Step 2. Verify qualifications of issuers. Check to ensure that the financial institution:
• Has the authority to issue letters of credit; and
• Is regulated by a Federal or State Agency.
These qualifications should be checked with the appropriate regulatory authority on
a case-by-case basis. Exhibit 6-11 at the end of this section lists regulatory
authorities that could be contacted to verify an issuer's qualifications. Federal and
State authorities are listed in Appendix D and Appendix E.
Also verify the qualifications of the Trustee institution for the standby trust These
are the same as for the trust fund (see Section 6.1).
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Step 3. Review mechanism terms. Review the letter of credit to ensure that it is:
• Effective by 180 days from the effective date of the regulations, except for
facilities opening 240 days or more after the effective dafe, for which the
letter of credit must be effective 60 days prior to the first receipt of PCS
material;
• Worded substantially similar to RCRA's wording for letters of credit (see
Exhibit 6-12);
• Signed by officials of the financial institution issuing the letter of credit; and
• In an amount at least equal to the current cost estimate(s) (unless multiple
mechanisms are being used).
Step 4. Compare the level of coverage to the approved cost estimate. The letter of credit
may take effect prior to EPA's final review of the owner or operator's closure cost
estimate and. this review may cause the cost estimate to increase above the initial
estimate. Therefore, once the owner or operator's cost estimate has been reviewed,
and EPA is satisfied with the estimate, compare the costs assured by the letter of
credit with the amount of the approved cost estimate. If the letter of credit does
not cover increases in the cost estimate, the Regional Office should immediately
notify the owner or operator that the cost increases should be assured within 60
days.
Step 5. Maintain a regional information system. Record relevant information in a regional
information system as letters of credit and standby trust agreements are received.
This information should include:
• The name, address, and EPA Identification Number of the facility;
• Letter of credit number and financial institution name;
• Amount of coverage for each facility and effective date; and
• Information verification procedures performed.
Also, keep a list of letters of credit and standby trust funds in effect under the
owner or operator's name, and under each financial institution's name so that in the
case of bankruptcy, de-licensing, or other events, it is easy to determine which
owners or operators need to obtain financial assurance elsewhere. This information
system could also be used to keep track of mergers and changes in the names of
financial institutions.
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Follow-Up Review of the Mechanism:
Step 6. Ensure that coverage is sufficient relative to updated cost estimates. Coverage must
be increased whenever the closure cost estimate increases to more than the existing
coverage. Therefore, sufficiency of coverage should be evaluated whenever the cost
estimate is likely to increase:
• Upon Modification of the Closure Plan. If a modification to the closure plan
increases the closure cost estimate, the storer must adjust the cost estimate
within 30 days of the approval of the modification.
• On the Anniversary Date of the Establishment of Coverage. Storers are
required to update the closure cost estimate for inflation within 60 days prior
to the anniversary date of the establishment of financial assurance coverage.
If the cost estimate increases to more than the existing level of financial assurance
coverage, the storer should, within 60 days, increase the coverage either by raising
the coverage of the existing mechanism or by increases in other financial assurance
(see Section 6.7, Combinations of Mechanisms).
If cost estimates decrease, the owner or operator may apply for a reduction in the
face value of the letter of credit The Regional Administrator should approve the
decrease in writing only if the owner or operator demonstrates that the reduced
financial responsibility level will still cover closure plan for technical adequacy and
completeness as well as a review of the reasonableness of the associated cost
estimates.
Step 7. Ensure that assurance is maintained in the event of disqualification of the issuer. If
a financial institution loses its qualification to offer letters of credit or enters
bankruptcy proceedings, verify that the owner or operator has obtained a new
financial assurance mechanism. It is important to note that the issuing institution
is not required by regulation to notify the Regional Administrator or the owner or
operator regarding disqualifications or bankruptcy.
Though Regional offices are not expected to develop surveillance systems to
monitor these disqualifications, they should periodically review the qualifications
(see Step 2 of this section) of issuers to ensure that no owner or operator is using
a letter of credit issued by an unqualified financial institution. Information
concerning disqualified institutions could be incorporated into an automated
information system that would alert the Region or other owners and operators with
letters of credit issued by unqualified institutions. Regional staff should be
prepared to instruct owners or operators to obtain alternate assurance in the event
the disqualification, bankruptcy, or termination of the issuer becomes known.
Step 8. Ensure that assurance is maintained in the event of cancellation or nonrenewal by
the issuer. Cancellation or nonrenewal by the issuer may not occur less than 120
days after the issuer serves notice of intent to cancel the letter of credit. If notice
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of cancellation or nonrenewal is received, the owner or operator must obtain within
90 days:
• Alternate financial assurance coverage; and
o
• Written approval of such assurance.
The 90-day period begins after both the owner or operator and the Regional Office
have received the notice of non-renewal
Upon receipt of the notice, the Regional Office should contact the owner or
operator to determine:
• Exactly when the 90-day period will begin; and
• When the owner or operator plans to provide alternate assurance.
The Agency needs this information to determine the nature and timing of future
action. If the owner or operator does not provide alternate assurance, the Regional
Office may have to draw on the letter of credit.
In the event of the transfer of ownership of or operating responsibility for a facility,
the issuer of the letter of credit may wish to terminate it. The Regional Office
should not allow the letter of credit for that facility to be terminated until the new
owner or operator has met the applicable financial responsibility requirements. The
Regional Office should draw upon the letter of credit prior to the transfer of
ownership if the new owner or operator has not obtained alternate assurance.
632 Drawing on Letters of Credit
The Regional Administrator is authorized to draw on funds from the letter of credit for
closure:
• If the owner or operator fails to provide alternate assurance within 90
days after receipt of a notice of non-renewal from the issuing
institution. If the issuer grants an extension of the term of the credit,
EPA may delay drawing on the letter of credit. However, if the owner
or operator fails to provide alternate assurance and obtain the written
approval of the Regional Administrator, EPA should draw on the letter
during the last 30 days of any extension; or
• If the owner or operator has failed to fulfill closure requirements in
accordance with previously approved closure plans whenever required to
do so. The Regional Office may draw on the mechanism following a
final administrative determination under TSCA Section 16, that the
owner or operator has failed to perform final closure in accordance
with the closure plan and other approval or regulatory requirement
when required to do so.
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Funds drawn from the letter of credit must be deposited into the standby trust fund. The
Regional Office should instruct the issuing institution in writing to deposit the funds. If
possible, the Regional Office should notify the trustee of the standby trust in advance of
expected payments into the trust
6.3.3 Terminating Letters of Credit
Termination of the letter of credit may occur only:
• If alternate assurance is substituted; or
• If the owner or operator is released from all applicable financial
requirements (40 CFR 761.65(h)).
The letter of credit can only be terminated with the Regional Administrator's approval. If
termination is approved:
• Notice must be given to the owner or operator in writing (this notice
may accompany the letter releasing the owner or operator from closure
financial assurance); and
• The letter of credit should be returned to the issuing institution.
The standby trust fund may also be terminated at this time unless the owner or operator is still
demonstrating financial assurance with a surety bond, which also requires a standby trust
Procedures for terminating the standby trust fund are identical to the procedures for
terminating trust funds, discussed in Section 6.1.
63.4 Sources of Further Information
Information on letters of credit may be found in Article 5 of the Uniform Commercial
Code or the International Chamber of Commerce "Uniform Customs and Practices for
Documentary Credits," and is also available from the State and Federal regulatory agencies (see
Appendix D and Appendix E). Exhibit 6-13 is a list of major national trade associations which
can also provide information on letters of credit and financial institutions in general
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EXHIBIT 6-10
LETTER OF CREDIT CHECKLIST
a
Step 1. The appropriate documents have been submitted:
The letter of credit
The accompanying letter detailing coverage.
The originally signed duplicate of the standby trust agreement
Step 2. The issuing institution is qualified:
The trustee financial institution is qualified.
The issuing institution has the authority to issue letters of credit
The issuing institution is regulated by a Federal or State Agency.
Step 3. The letter of credit is:
Effective by the appropriate date.
Worded substantially similar to RCRA's wording for letters of credit (see
Exhibit 6-12).
Signed by an authorized officer of the financial institution.
Step 4. Compare the level of coverage to the approved cost estimate; if necessary,
immediately notify the owner or operator to obtain additional assurance
within 60 days for any unassured costs.
Step 5. Relevant information is recorded:
Name, address, and EPA identification number of the facility.
Amount of coverage for each facility and effective date.
Information verification procedures performed.
Step 6. Evidence is submitted within 60 days of increases in cost estimates that the
amount of the letter of credit,is properly increased as necessary (or other
financial assurance is increased). Decreases in the amount of the credit are
approved only when sufficient coverage will remain.
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EXHIBIT 6-10 (continued)
LETTER OF CREDIT CHECKLIST
Step 7. Assurance is maintained in the event of disqualification of the issuer
Owners or operators obtain alternate assurance within 60 days if the issuing
institution ceases to qualify, ceases operations, or files for bankruptcy.
Step 8. Assurance is maintained in the event the letter of credit is cancelled or not
renewed:
The owner or operator is contacted after receipt of notice of intent to cancel
or not renew.
Alternate financial assurance is obtained within 90 days after notification of
nonrenewal by the issuer.
In the event of transfer of ownership, the letter of credit is not cancelled
unless the new owner or operator meets financial responsibility requirements.
Step 9. The Regional Office draws upon letters of credit when appropriate:
The letter of credit is drawn upon when the owner or operator has not
obtained alternate financial assurance within 90 days after notice of
cancellation by issuing institution or prior to the last 30 days of any extension
granted by the issuer.
The letter of credit is drawn upon following a determination by the Regional
Administrator that the owner or operator had failed to perform closure as
required.
Funds drawn from the letter of credit are deposited by the issuer into the
standby trust fund.
The trustee of the standby trust fund is notified, if possible, in advance of
payments into the trust
Step 10. Requests to terminate the letter of credit are approved in writing when:
Alternate assurance is provided; or
The owner or operator has been released from financial assurance
requirements.
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EXHIBIT 6-11
LETTER OF CREDIT! REGULATORY AUTHORITIES FOR FINANCIAL INSTITUTIONS
Type of Financial Institution
1. State-Chartered financial
institutions, including Commercial
Banks, Savings and Loans, Mutual
Savings Banks, Credit Unions,
State Licensed Foreign Banks
2. Nationally-Chartered Commercial
Banks, Nationally-licensed Foreign
Banks, all Washington, D.C.
commercial banks
3. Nationally-Chartered Savings and
Loans
4. Nationally-Chartered Mutual
Savings Banks
5. Nationally-Chartered Credit
Unions
Primary Regulatory Authority
fand contact')
State Authority (see Appendix E)
Comptroller of the Currency, Trust
Division, (202) 447-1731
Federal Home Loan Bank Board,
General Counsel, (202) 377-6404
Federal Home Loan Bank Board (Same
as Number 3), and State Authorities
(see Appendices D and E).
National Credit Union Administration,
General Counsel, (202) 357-1030
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EXHffiIT6-12
SAMPLE WORDING FOR LETTERS OF CREDIT
Regional Administrator(s)
Region(s)
U.S. Environmental Protection Agency
Dear Sir or Madam:
We hereby establish our Irrevocable Standby 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 [in words] U.S. dollars J .available upon presentation [insert, if more
than one Regional Administrator is a beneficiary, "by any one of you"] 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 Toxic Substances Control Act as amended."
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 1 year]
on [date] and on each successive expiration date, unless, at least 120 days before the current
expiration date, we notify both you and [owner's or operator's name] by certified mail 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 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.
Whenever this letter of credit is drawn on under and in compliance with the terms of this
credit, we shall duly honor such draft upon presentation to us, and we shall deposit the amount
of the draft directly into the standby trust fund of [owner's or operator's name] in accordance
with your instructions.
We certify that the wording of this letter of credit is substantially similar to the wording
in 40 CFR 761.65(g)(4) as such regulations were constituted on the date shown immediately
below.
[Signature(s) and title(s) of official(s) of issuing institution] pate]
This credit is subject to [insert "the most recent edition of the Uniform Customs and
Practice for Documentary Credits, published by the International Chamber of Commerce," or
"the Uniform Commercial Code"].
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EXHIBIT 6-13
National trade associations can supply information about letters of credit and financial
institutions in general. Major national organization include:
1. American Bankers Association
Information Services
1120 Connecticut Avenue, N.W.
Washington, D.C. 20036
(202) 663-5000
Trade association of banks and trust companies.
2. Independent Bankers Association of America
One Thomas Circle, N.W.
Suite 950
Washington, D.C. 20005
(202) 659-8111
Association of medium size and smaller independent banks.
3. National Council of Savings Institutions
1001 Fifteenth Street, N.W.
Washington, D.C. 20005
(202) 857-3100
Trade association of mutual savings banks.
4. United States League of Savings Associations
111 East Wacker Drive
Chicago, Illinois 60601
(312) 644-3100
Trade association of savings and loan associations, cooperative banks, and
state and local savings and loan association leagues.
5. Credit Union National Association
Public Relations Department
Box 431
Madison, Wisconsin 53701
(608) 231-4000
Trade association of state credit union leagues,
6. 'Conference of State Bank Supervisors
State Banking Department Services
1015 Eighteenth Street, N.W., Suite 606
Washington, D.C. 20036
(202) 296-2840
Organization of state officials responsible for the supervision of state-
chartered banking institutions.
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EXfflBIT 6-13 (continued)
7. National Association of State Credit Union Supervisors
1499 Chain Bridge Road, Suite 201
McLean, Virginia 22101
(703) 821-2243
Organization of state credit union supervisors and state-chartered credit
unions.
8. National Association of State Savings and Loan Supervisors
1499 Chain Bridge Road
Suite 201
McLean, Virginia 22101
(703) 821-2488
Organization of state savings and loan supervisors.
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6.4 INSURANCE
Another mechanism which may be used to satisfy the financial responsibility requirements
for closure is insurance. Under this mechanism, the insurer agrees to fund the closure at the
direction of the EPA. (This may involve reimbursing the owner or operator or another party
who conducts closure activities.) The owner or operator pays the insurer (in premiums) to
assume the liability of providing for closure expenses up to the value or face amount of the
policy. The face amount of the insurance policy should at least equal the current closure cost
estimate (unless the insurance is combined with another mechanism, in which case the
combined coverage should be at least equal to the cost estimate). The initial amount of
insurance coverage, alone or in combination, may be larger than the cost estimate in order to
accommodate increases due to inflation. This type of insurance funds an event (closure) which
is certain to occur, and should not be confused with liability insurance coverage for a pollution
occurrence.
Exhibit 6-14 at the end of this section is a checklist to use when documenting review of
the insurance mechanism.
6.4.1 Insurance Submissions
Review of Initial Submissions:
Step 1. Verify submission of documents. Verify that the "certificate of insurance" has been
submitted The certificate of insurance, required by regulations, is a specifically-
worded statement certifying that the actual insurance policy complies with applicable
requirements.
Step 2. Verify qualifications of the insurer. Check to verify that the insurer is:
• licensed to transact the business of insurance by one or more states; or
• eligible to provide insurance as an excess or surplus lines insurer (see
glossary for complete definition) in one or more States,
It is important to note that the insurer need not be qualified in the state in which
the covered facility is located. Contact the insurer and appropriate State regulatory
agencies (such as the State Insurance Commission) to verify qualifications. See
Appendix D for a list of State regulatory authorities.
Step 3. Review mechanism terms.- Review the certificate of insurance to verify that:
• The wording of the certificate is substantially similar to that presented in
Exhibit 6-15 at the end of this section;
• The certificate clearly indicates that the. policy is effective 180 days from the
effective date of the rule, except for facilities opening 240 days or more after
the effective date, for which the policy must be effective 60 days prior to the
first receipt of PCB material;
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• The face amount of the certificate is at least equal to current closure cost
estimate(s) (unless multiple mechanisms are being used).
Owners or operators of existing PCB storage facilities who are interested in using
closure insurance .must submit to the Region (by 180 days from the effective date
of the rule) a letter from an insurer stating that it will issue a policy if all of EPA's
other requirements are met For such submittals, the Regional Office should also
verify that the insurance certificate is provided. Owners or operators of new PCB
facilities must submit the certificate of insurance 60 days prior to the first receipt of
PCB material
Step 4. Compare the level of coverage to the approved cost estimate. The insurance may
take effect prior to EPA's final review of the owner or operator's closure cost
estimate and this review may cause the cost estimate to increase above the initial
estimate. Therefore, once the owner or operator's cost estimate has been reviewed,
and EPA is satisfied with the estimate, compare the costs assured with the amount
of the approved cost estimate. If the insurance does not cover increases in the cost
estimate, the Regional Office should immediately notify the owner or operator that
the cost increases must be assured within 60 days.
Step 5. Maintain a regional information system. Record relevant information in a Regional
information system as certificates of insurance are received. This information
should include: -:
• The name, address, and EPA Identification Number of the facility,
• Insurance policy number and insurer name;
• Amount of coverage for each facility and the effective date of the policy; and
• Information verification procedures performed.
Similarly, if an owner or operator of an existing facility submits a letter from a
potential insurer, log the name, address, and EPA identification number of the
facility and verify that financial assurance is established within 90 days after the
effective date. Keep a list of insurance contracts in effect under the owner's or
operator's name and also under each insurer's name. This listing is useful in
notifying owners or operators of insurers undergoing bankruptcy, de-licensing, or
other events which might affect the owner or operator's insurance coverage. An
automated data processing system can be a useful tool in organizing and storing this
information. This system could also be used to keep track of mergers and changes
in the name of insurers.
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Follow-Up Review of the Mechanism:
Step 6. Ensure that coverage is sufficient relative to updated cost estimates. Coverage
should be increased whenever the closure cost estimate increases to more than the
existing coverage. Therefore, sufficiency of coverage should be evaluated whenever
the cost estimate is likely to increase:
• Upon Modification of the Closure Plan. If a modification to the closure plan
increases the closure cost estimate, the storer must adjust the cost estimate
within 30 days of the approval of the modification.
• On the Anniversary Date of the Establishment of Coverage. Storers are
required to update the closure cost estimate for inflation within 60 days prior
to the anniversary date of the establishment of financial assurance coverage.
If the cost estimate increases to more than the existing level of financial assurance
coverage, the storer should, within 60 days, increase the coverage either by raising
the coverage of the existing mechanism or by increases in other financial assurance
(see Section 6.7, Combinations of Mechanisms).
If cost estimates decrease, an owner or operator may apply for a reduction in the
face value of the insurance policy. Decreases in coverage should be approved only
if the owner or operator demonstrates that the reduced financial responsibility level
will still cover closure costs. Such a determination of adequate coverage will
require a review of the closure plan for technical adequacy and completeness as
well as a review of the reasonableness of associated cost estimates.
Step- 7. Ensure that assurance is maintained in the event of disqualification of the insurer.
If the insurance company becomes disqualified, ceases operation, or files for
bankruptcy, verify that the owner or operator provides alternate financial assurance.
The insurer is not required to notify the Regional Office or the owner or operator
regarding disqualifications.
Annually review the qualifications (see Step 2 of this section) of the insurer to
ensure that no owner or operator is using an unqualified insurer.
Step 8. Ensure that assurance is maintained in the event of cancellation of insurance by the
insurer. The insurer may cancel, terminate, or fail to renew the policy only if the
owner or operator fails to pay the premium of the insurance contract In such an
event the insurer must provide notice to the Regional Office and the owner or
operator by certified mail. The policy may be terminated effective 120 days after
the receipt of the notice by both the owner or operator and the Regional Office,
unless:
• The Regional Administrator judges the facility to be abandoned;
• The Regional Administrator terminates or rejects the TSCA approval;
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• Closure is ordered by the Regional Administrator or a court of competent
jurisdiction;
• The owner or operator is named as a debtor in bankruptcy proceeding; or
• The premium is paid.
Once the Regional Office has received a notice of cancellation from an insurer, it
should:
• Contact the owner or operator to determine the date he received the notice
from the insurer and whether he is willing and financially capable of paying
the premium. .
• Conduct an inspection of the facility to determine whether the facility is
abandoned, and whether it is in compliance with its application.
• Consider terminating or rejecting its approval, or ordering closure.
This information will be essential for EPA to determine the nature and timing of
future action.
In the event of transfer of ownership of a facility, an insurer may wish to cancel the
policy. EPA should verify that assurance is maintained until the new owner or
operator obtains assurance.
6.42 Drawing on the Insurance
As closure activities are carried out by the owner or operator, or other person authorized
by the Regional Administrator, itemized bflis should be submitted to the Regional Office with
requests for reimbursement When reviewing itemized bills, the Regional Office should:
• Determine within 60 days if the expenses are reasonably justified, and
consistent with approved closure plans;
• Approve the request for reimbursement and direct payment within 60
days unless there is reason to believe that the cost of closure will be
significantly greater than available funds. If this occurs, the Regional
Office may withhold reimbursement until proper closure has been
completed and certified; and
• Determine if reimbursement is appropriate for unanticipated
expenditures caused by a contingent event such as bad weather or an
accident during closure. These decisions will have to be made on a
case-by-case basis. The owner or operator, however, remains ultimately
responsible for all closure costs even if the financial assurance funds are
exhausted.
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The Regional Office will grant requests for reimbursement of partial closure expenses only if
the remaining value of the policy will cover the costs of closing the remainder of the facility.
6.43 Terminating Insurance
The owner or operator may be allowed to terminate insurance coverage only if:
• The owner or operator provides alternate assurance; or
• The owner or operator is released from applicable financial
requirements.
Insurance coverage may be terminated only with the Regional Administrator's approval The
Regional Administrator's consent should be in writing and may accompany the letter releasing
the owner or operator from closure financial assurance requirements.
6.4.4 Sources of Further Information
State agencies listed in Appendix £ can be used to determine whether an insurer is
licensed or eligible to provide insurance. Also, national trade associations listed in Exhibit 6-16
can supply general information about the insurance industry.
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EXHIBIT 6-14
INSURANCE CONTRACT CHECKLIST
Step 1. The appropriate documents are submitted:
The certificate of insurance.
Step 2. The insurer is qualified:
The insurer is licensed to transact the business of insurance; or
Eligible as a provider of excess or surplus lines insurance in any of one or
more states.
Step 3. The certificate of insurance:
Is worded substantially similar to RCRA's wording for insurance certificates
(see Exhibit 6-15).
Is effective by the appropriate date.
Has a face amount at least equal to the closure cost estimate, unless multiple
mechanisms are used.
Step 4. Compare the level of coverage to the approved cost estimate; if necessary,
immediately notify the storer to obtain additional assurance within 60 days for
any unassured costs.
Step 5. Relevant information is recorded:
Name, address, and EPA identification number of the facility.
Amount of coverage for each facility and effective date.
Information verification procedures performed.
Step 6. j Evidence of increases in the face amount of insurance coverage (or other
financial assurance coverage) is provided within 60 days of a change in the
cost estimate if necessary to cover increases in cost estimates. Decreases in
the face amount of insurance are approved only during the operating life of
the facility and only when sufficient coverage will remain.
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EXHIBIT 6-14 (continued)
INSURANCE CONTRACT CHECKLIST
Step 7. Assurance is maintained in the event of disqualification of the insurer:
Alternate financial assurance is provided within 60 days of notification if
insurance company becomes disqualified, ceases operations, or files for
bankruptcy.
Step 8. Assurance is maintained in the event the policy is cancelled or not renewed due to
nonpayment of premium or transfer of ownership:
Following a notice from the insurer of intent to cancel insurance, the owner
or operator is contacted to determine whether he will pay the premium.
Insurance policies are assigned or other financial assurance is provided in the
event of transfer of ownership or operation.
In the event of transfer of ownership, the insurance policy is not cancelled
until the new -owner or operator meets financed responsibility requirements.
Step 9. The Regional Administrator instructs the insurer in writing to make reimbursement
in the specified amounts:
Within 60 days after receiving bills, after determining that expenses are
justified and consistent with closure plans.
If there is no reason to believe that the cost of closure will be significantly
greater than available funds.
If a determination is made that reimbursement is appropriate for
unanticipated expenditures caused by a contingent event
Step 10. Requests to terminate insurance are approved in writing when:
Alternate financial assurance is substituted; or
The owner or operator has been released from closure financial requirements.
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EXHIBIT 6-15
SAMPLE WORDING FOR INSURANCE CERTIFICATE
Name and Address of Insurer
(herein called the "Insurer"):
Name and Address of Insured
(herein called the "Insured"):
Facilities Covered: [List for each facility: The EPA Identification Number, name, address,
and the amount of insurance for closure care (these amounts for all
facilities covered must total the face amount shown below.]
Face Amount:
Policy Number
Effective Date: •
The Insurer hereby certifies that it has issued to the Insured the policy of insurance
identified above to provide financial assurance for [insert "closure" or "closurd and post-closure
care" or "post-closure care"] for the facilities identified above. The Insurer further warrants that
such policy conforms with requirements of Subpart D of 40 CFR 761 as applicable and as such
regulations were constituted on the date shown immediately below. It is agreed that any
provision of the policy inconsistent with such regulations is hereby amended to eliminate such
inconsistency.
Whenever requested by the EPA Regional Administrator(s) of the U.S. Environmental
Protection Agency, the Insurer agrees to furnish to the EPA Regional Administrator(s) a
duplicate original of the policy listed above, including all endorsements thereon.
I hereby certify that the wording of this certificate is substantially similar to the wording
in 40 CFR 761.65(g)(5) as such regulations were constituted on the date shown immediately
below.
[Authorized signature for Insurer]
[Name of person signing]
a
[Title of person signing]
Signature of witness or notary.
Pate]
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EXHIBIT 6-16
National trade associations can supply information about insurance and the insurance
industry in general Major organizations include:
1. American Insurance Association
85 John Street
New York, New York 10038
(212) 669-0400
Trade and service organization of the property and casualty insurance industry.
2. Insurance Information Institute
110 William Street
New York, New York 10038
(212) 669-9200 or 1-800-221^954
Educational, fact-finding, and communications organization for all lines of insurance
except life and health insurance.
3. Independent Insurance Agents of America
100 Church Street
New York, New York 10007
(212) 285-4250
Trade association of independent insurance agents.
4. Professional Insurance Agents
400 North Washington Street
Alexandria, Virginia 22314
(703) 836-9340
Trade association of insurance agents.
5. National Association of Insurance Commissioners
1125 Grand Avenue
Suite 1900
Kansas City, Missouri 64106
(816) 842-3600
Organization of state insurance commissioners.
6. Alliance of American Insurers
1501 Woodfield Road
Suite 400 West
Schaumberg, Illinois 60173-4980
(312) 490-8500
Trade association of fire and casualty insurance companies.
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EXHIBIT 6-16 (continued)
7. National Association of Insurance Brokers
1401 New York Avenue, N.W.
Suite 720
Washington, D.C. 20005
(202) 628-6700
Trade association of commercial insurance brokers.
8. National Association of Independent Insurers
2600 River Road
Des Plains, Illinois 60018
(312) 297-7800
Trade association of property, casualty, and surety insurers.
9. National Insurance Consumer Organization
121 North Payne Street
Alexandria, Virginia 22314
(703) 549-8050
Non-profit public interest membership organization.
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6.5 FINANCIAL TEST
Owners and operators of PCB commercial storage facilities may demonstrate financial
assurance for closure by passing one of two financial tests allowed by the rule. By meeting the
financial criteria contained in a financial test, the storer demonstrates that he has the financial
resources to meet his closure obligations. (Exhibit 6-17 shows the criteria of the two tests.)
However, unlike the trust fund, surety bond, letter of credit, or insurance policy mechanisms,
the financial test does not ensure that funds are set aside to cover the costs of closure. Thus,
the storer has the responsibility to meet closure costs using his own resources when needed.
Because of the lack of third-party guarantees or set-aside funds, it is particularly important that
the financial test criteria are strictly enforced. Users of the test must be closely monitored to
ensure that their financial positions have not seriously deteriorated since last taking the test
EPA must therefore re-evaluate the financial test submissions of every owner or operator each
year, even if there has been no change in closure cost estimates.
Review of the financial test should cover the areas described below. A summary checklist
appears in Exhibit 6-18.
6.5.1 Financial Test Submissions
Review of Initial Submissions:
Step 1. Verify the submission of documents. The first step is to verify that the owner or
operator has submitted all the necessary documents as follows:
• Chief financial officer's letter including cost estimates and data from audited
financial statements;
• A copy of the independent certified public accountant's opinion of the
storer's financial statements for the latest completed fiscal year (also known as
Report on Examination);
• A special report from the independent certified public accountant
Step 2. Verify the qualifications of accountant Confirm that the independent certified
public accountant responsible for preparing the opinion and special report is
certified by an officially recognized accreditation organization. Most firms will be
easfly recognizable as certified public accountants. If there is any doubt about the
accountant's qualifications, check the credentials of the accountant by contacting the
State Board of Accountancy in the state where the accountant resides. These are
listed in Appendix E.
Step 3. Check the Chief Financial Officer's letter. Review the letter from the chief
financial officer and verify that it is complete and accurate:
• The wording of the letter should be substantially the same as the wording
found in 40 CFR 264.151(f) (see also Exhibit 6-19 at the end of this section).
If anything is missing from the letter, the Regional Office should immediately
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notify the submitter, and ensure that alternative financial assurance
mechanisms are provided or proper submissions are made;
• The letter should be signed by the chief financial officer,
• All relevant facilities of the owner or operator must be included in the chief
financial officer's letter. (Relevant facilities include any PCB storage facilities,
RCRA Subtitle C facilities, and SDWA Underground Injection Wells that are
covered by the financial test, guarantee, or substantially equivalent state
financial tests, and facilities for which no financial assurance has been
demonstrated.) This step is very important to ensure that the firm does not
use the same assets to pass separate financial tests for different EPA
programs. All financial responsibility obligations related to these facilities
must be covered by the test or another mechanism. However, note that the
financial test may not be combined with another mechanism to cover the
costs of one facility (see Section 6.7, "Combinations of Mechanisms");
• To verify financial information EPA may want to request the audited financial
statements from the firm, or obtain the Form 10K from the SEC (see Sources
of Further Information below). Since privately-owned firms are not required
to file with the SEC, requests for financial information may have to be
directed directly to certain firms. Moody's or Standard and Poor's bond
guides (available at major libraries as well as libraries in Regional Offices of
the U.S. Securities and Exchange Commission) may be checked to verify the
bond ratings.
• Verify the mathematics indicating that the owner or operator passes the
criteria of the test If any of the criteria for the financial test are not met,
the Regional Office should immediately notify the submitter, and ensure that
alternative financial assurance mechanisms are provided or proper submissions
are made;
Step 4. Review of the Accountant's Opinion of the financial statements. Determine what
kind of opinion was expressed by the accountant: Unqualified Opinion, Qualified
Opinion, Adverse Opinion, or Disclaimer of Opinion. Two exhibits at the end of
this section may assist in this review. Exhibit 6-20 provides examples of different
opinions. Some examples of conditions likely to result in a Qualified Opinion,
Adverse Opinion, and Disclaimer of Opinion are given in Exhibit 6-21.
When evaluating accountants' opinions, EPA staff should consider the following
goints:
• Accountants will generally give "unqualified" opinions to firms whose financial
statements have been properly prepared and whose financial condition is not
subject to any other qualification (see below). An unqualified opinion does
not mean that a firm passes the financial test It merely indicates the
accountant's belief that the financial statements are accurate. Therefore, it is
important to ensure that an owner or operator meets all other test criteria.
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• Occasionally, an accountant will issue either (1) an Adverse Opinion, (2) a
Disclaimer of Opinion, or (3) a Qualified Opinion based on a "going 'concern"
issue. An adverse opinion is issued when an accountant does not believe a
firm's financial statements fairly present its financial condition. A disclaimer
of opinion is given when an accountant cannot, or will not, express an
opinion on the financial statements. An opinion qualified on the basis of a
"going concern" issue suggests serious doubt about the viability of the firm. It
is inappropriate for a firm receiving any one of these types of opinions to be
permitted to use the financial test
• Accountants will issue other types of qualified opinions (either an "except for"
or a "subject to" opinion not based on a "going concern" issue) for a wide
variety of reasons. Further investigation is generally necessary in such cases
to determine whether the qualification calls into question any of the data an
owner or operator is using in his financial test submission.
The following four steps may be useful when investigating cases where an owner or
operator has received a Qualified Opinion (either an "except for" or "subject to,"
excluding those rendered on the basis of a "going concern" issue):
1. The owner or operator should be asked to submit a copy of the latest
financial statements, including notes to the statements, so that EPA may
consider the most current information available. Alternatively, a copy of the
latest Form 10-K could be obtained from the SEC
2. The opinion rendered by the accountant should be thoroughly understood in
the context of the financial statements:
• If it is an "except for" opinion, determine if the parts of the statements
which give rise to the "except for" qualification have any bearing on the
firm's ability to pass the financial test Accept the qualified opinion if
it has no bearing on the firm's ability to pass the test
• If it is a "subject to" opinion, determine the likelihood of the
occurrence of the event the accuracy of the financial statements are
"subject to," and the importance of the unforeseeable event's occurrence
or nonoccurrence on the firm's ability to pass the financial test
3. If not enough information is available in the opinion or the financial
statements to make a satisfactory decision, the firm should be asked to submit
a written explanation as to why the qualification should not be grounds for
disqualification from the financial test
4. If the matter is still unresolved, contact EPA Headquarters for additional
assistance.
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Step 5. Check the special report from the certified public accountant. The auditor's special
report should verify that the data specified in the chief financial officer's letter can
be traced back to the audited, year-end financial statements. (The auditor's
confirmation does not pass judgment on whether the owner or operator is
economically viable.) See Exhibit 6-22 at the end of this chapter for an example of
an auditor's confirmation.
Step 6. Compare the level of coverage to the approved cost estimate. The financial test
mechanism may be submitted prior to EPA's final review of the storer's closure cost
estimate; this review may cause the cost estimate to increase above the initial
estimate. Therefore, once the storer's cost estimate has been reviewed and EPA is
satisfied with all other relevant cost estimates, compare the costs assured by the
financial test with the amount of the approved cost estimates. If the financial test
does not cover the approved cost estimates, the Regional Office should immediately
notify the storer that the cost increases must be assured within 60 days.
Step 7. Maintain a regional information system. As financial information is received, record
relevant information, including the name, address, and EPA Identification Number
of the covered facilities; amount of coverage for each facility and effective date; and
information verification procedures performed Keep a file on each submitting firm,
such as the one shown in Exhibit 6-23 which keeps track of key financial data.
Follow-Up Review of the Mechanism:
Step 8. Reviewing annual submissions. To continue use of the financial test, a storer must
resubmit updated information (that is, the letter from the chief financial officer, the
accountants' opinion and special report) within 90 days after the close of every
fiscal year. Failure to do so could be an indication of financial deterioration in the
submitting firm, so the Regional Office should make prompt inquiries into such
cases. Note that the first re-evaluation may be due soon after the initial test
submission (if the initial submission was submitted just prior to the end of the firm's
fiscal year). However, subsequent re-evaluations will then be due annually.
To review the updated information, follow the same procedures that were outlined
for Initial Responsibilities, plus:
• Verify that all relevant financial responsibility obligations have been included
(see Step 3).
• Ensure that coverage is sufficient relative to updated cost estimates.
Coverage must be increased whenever the closure cost estimate increases to
more than the existing coverage. Therefore, sufficiency of coverage should be
evaluated whenever the cost estimate is likely to increase:
»
- Upon Modification of the Closure Plan. If a modification to the
closure plan increases the closure cost estimate, the storer must adjust
the cost estimate within 30 days of the approval of the modification.
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- On the Anniversary Date of the Establishment of Coverage. Storers
using the financial test are required to update the closure cost estimate
for inflation within 30 days after the end of the firm's fiscal year and
prior to the submission of the financial test documentation to the
Regional Office.
If the cost estimate increases to more than the existing level of financial
assurance coverage, the storer should, within 60 days, increase the coverage
either by raising the coverage of the existing mechanism or by increases in
other financial assurance (see Section 6.7, Combinations of Mechanisms).
If cost estimates decrease, the owner or operator may apply for a reduction in
coverage. The Regional Administrator should approve the decrease in writing
only if the owner or operator demonstrates that the reduced financial
responsibility level will still cover closure expenses. Such a determination will
require a review of the closure plan for technical adequacy and completeness
as well as a review of the reasonableness of the associated cost estimates.
• The storer is required to notify the Regional Administrator by certified mail
within 90 days after the end of the fiscal year if he no longer passes the
financial test If the owner or operator notifies the Regional Administrator
of his intent to establish alternate assurance because he no longer meets the
financial test requirements, the Regional Administrator should ensure that an
alternate mechanism is established. Such assurance must be provided within
120 days after the end of the fiscal year.
Step 9. Ongoing monitoring. Monitor storers that may be experiencing financial
deterioration. The business press (e.g., "The Wall Street Journal") may reveal
important adverse news about owners and operators. In addition, an online
computerized business data base service such as DIALOG could be used for this
purpose. Through the computerized data base, or manually, the Business Periodical
Index and the F&S Corporate Index should be searched using the firm's name as a
"keyword," for:
- Bankruptcy proceedings,
- Decreases hi bond ratings,
- Sharp stock price decreases,
- Omission of a dividend,
- Delisting from a stock exchange, or suspended trading,
—„ Mergers, acquisitions, divestitures, and
- Financial losses, competitive problems.
If any of these events occur, the firm should be investigated further (see the next
step). Storers are required to notify the Regional Administrator within ten days of
the start of any bankruptcy proceeding.
Step 10. Investigate for reasonable cause. Firms singled out for further investigation may
be monitored more frequently than annually. EPA has broad powers to obtain
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interim reports of financial condition from the owner or operator if he believes that
the firm may no longer meet the financial test criteria (Exhibit .6-17). At a
minimum, if there is suspicion of non-compliance, the latest quarterly financial
report should be obtained from the firm, or the Form 10-Q obtained from the SEC
(see Sources of Further Information below). The quarterly financial reports or
Form 10-Q should be used to see if the firm still meets the test requirements. The
Standard and Poor's or Moody's bond guides should be checked, if applicable, to
verify that the latest bond ratings are still investment grade.
Step 11. Disallow use of the test when appropriate. Based on the annual submission or on
interim reports of financial condition or any other materials, EPA may at any time
find that the owner or operator no longer meets the financial test criteria. If so,
the owner or operator must provide alternative financial assurance within 30 days
after receiving notification of this finding.
Step 12. Release from the financial test The storer may be released from the requirements
of the financial test when:
• An alternate financial assurance mechanism is substituted; or
• The storer is released from all financial responsibility requirements for
closure. The Regional Administrator should release a storer from closure
financial responsibility requirements within 60 days after receiving certification
from the storer and an independent registered professional engineer that final
closure has been conducted in accordance with the approved closure plan.
6.5.2 Use of Financial Test by Local Government Entities
The financial test used for financial assurance of PCB storage facilities was designed for
private firms and government entities that behave like firms (e.g., certain special authorities).
The financial test is inapplicable to most government entities because their financial statements
do not use the same measures as found in private sector financial statements. (For example,
because governments do not function to generate profits, a measure of "net income" does not
apply to them.)
6.5.3 Sources of Further Information
For further information on the financial test, see Background Document for the Financial
Test and Municipal Revenue Test. U.S. Environmental Protection Agency, Office of Solid
Waste, November 30, 1981 (including Appendix A and Appendix B).
a
Standard reference books include:
• American Institute of Certified Public Accountants. AICPA
Professional Standards - Volume 1, June 1, 1981.
• Burton, Palmer, and Kay. Handbook of Accounting and Auditing.
Boston: Warren, Gorham and Lamont, 1981.
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• Kohler, Eric L. A Dictionary for Accountants. New Jersey: Prentice
Kail, Inc. (Fourth edition 1970).
• Lev, Baruch Financial Statement Analysis - A New Approach, New
Jersey: Prentice-Hall, Inc., 1974.
• Merrill Lynch Pierce Fenner & Smith, Inc. How to Read A Financial
Report May 1979.
• Myer, John N. Understanding Financial Statements. American
Research Council, Inc., 1964.
• Myer, John N. Accounting for Non-Accountants. New York: New
York University Press, 1957.
• Myer, John N. Financial Statement Analysis. Englewood Cliffs:
Prentice Hall Inc., 1969.
To obtain Form 10-K or 10-Q reports from the SEC, contact: The U.S. Securities and
Exchange Commission's Public Reference Room, located at 450 Fifth Street, N.W., Washington,
D.C. 20549 (telephone: (202) 272-7450). Requests will be processed in 3-4 weeks and will be
sent C.O.D. with a 10 cents/page photocopying charge. For more urgent requests, call Bechtel
Information Services at 1-800-231-DATA or (202) 258-4300.
State Boards of Accountancy are listed in Appendix E. Finally, the American Institute of
Certified Public Accountants, 1620 Eye Street, N.W., Washington, D.C 20006, (202) 872-8190
may be of assistance.
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EXHIBIT 6-17
ALTERNATIVE FINANCIAL TESTS
Different Provisions of Teala
Alternative I Alternative II
(mint meet A, B, C, and D) (must meet A, B, C, and D)
A. Meel two of the following three ratios: A. A current rating for the most recent bond issuance of either.
(I) Total liabilities/net worth lesa than ZO (I) AAA, AA, A, BBB, as Issued by Standard and Poor's; or
(II) The sum of net Income plus depredation, depletion, and amortization/total liabilities (H) Aaa, Aa, Baa as issued by Moody*s
greater than 0.1
(ill) Current assets/current liabilities greater than 1.5
B. Meet both of the following requirements
(i) Net working capital at least 6 times the current closure cost estimates
Identical Provisions of Tests
(II) Tangible net worth at least 6 times the current closure cost estimates B. Tangible net worth at least 6 times the current closure cost estimates
C Tangible net worth of at least $10 million In the U.S. C Tangible net worth of at least $10 million
D. Meel one of the following tests: D. Meet one of the following tests:
(i) Assets in the U.S. amounting to at least 90 percent of total assets ' (i) assets in the U.S. amounting to at least 90 percent of total assets
(ii) Assets in the U.S. amounting to at least 6 limes the current closure cost estimates (ii) assets In the U.S. amounting to at least 6 times the current closure estimates
Note:
See glossary for definition of terms.
See 40 CFR 264.143(0.
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EXHIBIT 6-18
FINANCIAL TEST CHECKLIST
Step 1. All documents have been submitted:
Chief financial officer's letter.
Independent certified public accountant's opinion.
Independent certified public accountant's special report.
Step 2. The independent certified public accountant is certified.
Step 3. The letter from the chief financial officer
Is worded substantially similar to RCRA's wording for letter from chief
financial officer (see Exhibit 6-19).
Is signed by the chief financial officer.
Covers all relevant facilities.
Is complete and accurate.
Step 4. The accountant's opinion of the storer's financial statements is either
"unqualified" or otherwise acceptable.
Step 5. The accountant's special report confirms that the data in the chief financial
officer's letter are acceptable.
Step 6. Compare the level of coverage to the approved cost estimate; if necessary,
immediately notify the storer to obtain additional assurance within 60 days for
any unassured costs.
Step 7. The regional information system is updated.
Step 8. Subsequent submissions account for changes in cost estimates due to either
inflation or revised closure plans, plus meet Steps 1-6. Firms experiencing
financial deterioration should be flagged for monitoring and investigation.
Step 9. Firms are monitored to determine whether they are experiencing financial
deterioration and to see if further investigation is necessary.
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6-18 (continued)
FINANCIAL TEST CHECKLIST
Step 10. Deteriorating firms are investigated:
Interim financial data are requested.
Firm's ability to pass the financial test criteria is reassessed.
Step 11. Firms that cannot meet the criteria are directed to obtain alternative financial
assurance within 30 days, and are monitored until they obtain alternative
assurance.
Step 12. Storers are released from the requirements of the test when:
Alternative assurance is substituted; or
The storer is released from all closure financial responsibility requirements.
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EXHIBIT 6-19
SAMPLE WORDING FOR LETTER FROM CHIEF FINANCIAL OFFICER
A letter from the chief financial officer may be worded as follows, except that instructions
in brackets are to be replaced with the relevant information and the brackets deleted:
[Address to Regional Administrator of every region hi which facilities for which
financial responsibility is to be demonstrated through the financial test are located.]
I am the chief financial officer of [name and address of firm]. This letter is in support of
this firm's use of the financial test to demonstrate financial assurance, as specified in Subpart D
of 40 CFR 761.
[Fill out the following four paragraphs regarding facilities and associated cost estimates.
If your firm does not have facilities that belong in a particular paragraph, write "None" in the
space indicated. For each facility, include its EPA Identification Number, name, address, and
current closure and/or post-closure cost estimates. Identify each cost estimate as to whether it
is for closure or post-closure care.]
1. This firm is the owner or operator of the following facilities for which
financial assurance for closure or post-closure care is demonstrated
through the financial test specified hi Subpart H of 40 CFR 264 and
265 or as required by 40 CFR 761.65(g)(6). The current closure and/or
post-closure cost estimates covered by the test are shown for each
facility:
This firm guarantees, through the corporate guarantee specified in
Subpart H of 40 CFR 264 and 265 or as required by 40 CFR
761.65(g)(6), the closure or post-closure care of the following facilities
owned or operated by subsidiaries of this firm. The current cost
estimates for the closure or post-closure care so guaranteed are shown
for each facility:
3. In States where EPA is not administering the financial requirements of
Subpart H of 40 CFR 264 and 265 or of Subpart D of 40 CFR 761,
this firm, as owner or operator or guarantor, is demonstrating financial
assurance for the closure or post-closure care of the following facilities
through the use of a test equivalent or substantially equivalent to the
financial test specified in Subpart H of 40 CFR 264 and 265 or as
required by 40 CFR 761.65(g)(6). The current closure and/or post-
closure cost estimates covered by such a test are shown for each facility.
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EXfflBIT 6-19 (continued)
SAMPLE WORDING FOR LETTER FROM CHIEF FINANCIAL OFFICER
4. This firm is the owner or operator of the following PCB commercial
storage facilities for which financial assurance for closure or, if a
disposal facility, post-closure care, is not demonstrated either to EPA or
a State through the financial test or any other financial assurance
mechanism specified in Subpart H of 40 CFR 264 and 265 or required
by 40 CFR 761 or equivalent or substantially equivalent State
mechanisms. The current closure and/or post-closure cost estimates not
covered by such financial assurance are shown for each facility:
This firm [insert "is required" or "is not required"] to file a Form 10K with the Securities
and Exchange Commission (SEC) for the latest fiscal year.
The fiscal year of this firm ends on [month, day]. The figures for the following items
marked with an asterisk are derived from this firm's independently audited, year-end financial
statements and footnotes for the latest completed fiscal year, ended [date].
[Fill in Alternative I if the criteria of paragraph (f)(l)(i) of 40 CFR 264.143 or 264.145,
or of paragraph (e)(l)(i) of 40 CFR 265.143 or 265.145 of this chapter are used. Fill in
Alternative n if the criteria of paragraph (f)(l)(ii) of 40 CFR 264.143 or 264.145, or of
paragraph (e)(l)(ii) of 40 CFR 265.143 or 265.145 of this chapter are used.]
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EXHIBIT 6-19 (continued)
SAMPLE WORDING FOR LETTER FROM CHIEF FINANCIAL OFFICER
ALTERNATIVE I
1. Sum of current closure and post-closure cost estimates
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EXHIBIT 6-19 (continued)
SAMPLE WORDING FOR LETTER FROM CHIEF FINANCIAL OFFICER
ALTERNATIVE I (continued)
Yes No
16. Is line 8 divided by line 2 greater than 0.1?
17. Is line 5 divided by line 6 greater than 1.5?
ALTERNATIVE n
1. Sum of current closure and post-closure cost estimates
[total of all cost estimates shown in the four paragraphs
above]
2, Current bond rating of most recent issuance of this firm
and name of rating service
3. Date of issuance of bond
4. Date of maturity of bond
*5. Tangible net worth [if any portion of the closure and
post-closure cost estimates is included in "total
liabilities" on your firm's financial statements, you
may add the amount of that portion to this line]
*6. Total assets in U.S. (required only if less than 90 5
percent of firm's assets are located in the U.S.)
Yes No
7. Is line 5 at least $10 million?
8. Is line 5 at least 6 times line 1? -
*9. Are at least 90 percent of firm's assets located in the
U.S.? If not, complete line 10.
10. Is line* 6 at least 6 times line 1?
I hereby certify that the wording of this letter is substantially similar to the wording in 40
CFR 761.65(g)(6) as such regulations were constituted on the date shown immediately below.
[Signature]
[Name]
[Title]
Pate]
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EXHIBIT 6-20
EXAMPLES OF ACCOUNTANTS OPINIONS
A. Unqualified Opinions
Example 1: Unqualified Two-Year Opinion
The following is an unqualified report covering two years of a corporation's statements.
It is prepared in this form when the accountant has no limitations on scope, no reservations as
to his opinion and feels no supplemental information is needed in a middle paragraph:
"We have examined the balance sheets of XYZ Company, Inc. as of December 31,
19X1 and 19X0, and the related statements of earnings, stockholders' equity* and
changes in financial position for the years then ended. Our examinations were
made in accordance with generally accepted auditing standards and, accordingly,
included such tests of the accounting records and such other auditing procedures as
we considered necessary in the circumstances.
In our opinion, the financial statements referred to above present fairly the
financial position of XYZ Company, Inc. as of December 31, 19X1 and 19X0, and
the results of its operations and the changes in its financial position for the years
then ended, in conformity with generally accepted accounting principles applied on
a consistent basis."
Based on accounting practice, it is preferable to present comparative financial statements and to
cover two to three years. However, for non-public companies, it is still acceptable to present
and report on only the current year. In those situations, the report is modified to cover only
that one year. Where the prior year's financial are presented, but are unaudited or were
examined by another auditor, the current report must acknowledge that fact
Example 2: Unqualified Three-Year Opinion for SEC Registrants
"We have examined the balance sheets of ABC Company at December 31, 19X3
and 19X2, and the related statements of income, retained earnings and changes in
financial position for each of the three years in the period ended December 31,
19X3. Our examinations were made in accordance with generally accepted auditing
standards and, accordingly, included such tests of the accounting records and such
other auditing procedures as we considered necessary in the circumstances.
When appropriate, the terms "retained earnings" and "additional paid-in capital" are
tuted for "stockholders' equity."
substituted for "stockholders' equity.
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EXHIBIT 6-20 (continued)
EXAMPLES OF ACCOUNTANTS OPINIONS
In our opinion, the financial statements referred to above present fairly the
financial position of ABC Company at December 31, 19X3 and 19X2, and the
results of its operations and the changes in its financial position for each of the
three years in the period ended December 31, 19X3, in conformity with generally
accepted accounting principles applied on a consistent basis."
B. "Except For" Qualified Opinion
Example 1: "Except for" Qualified Opinion Due to a Scope Limitation
"We were not able to observe the taking of the physical inventories of cut timber,
which were necessarily taken as of September 30, in 19X2 and 19X1, since those
dates were prior to the time we were initially engaged as auditors for the Company.
The cut timber inventory was stated at $ and $ at September 30, 19X2 and
19X1, respectively. Due to the nature of the Company's records, we were unable
to satisfy ourselves as to the inventory quantities by means of other auditing
procedures.
In our opinion, except for the effects of such adjustments, if any, as might have
been determined to be necessary had we been able to observe the physical
inventories of cut timber...."
Example 2: "Except for" Qualified Opinion Due to Variances from Generally
Accepted Accounting Principles
The Company has excluded from property and debt in the accompanying balance
sheet certain lease obligations, which, in our opinion, should be capitalized in order
to conform with generally accepted accounting principles. If these lease obligations
were capitalized, property would be increased by $ , long-term debt by $ and
retained earnings by $ as of December 31, 19XX, and net income and earnings
per share would be increased (decreased) by $ and $ , respectively, for the
year then ended.
In our opinion, except for the effects of not capitalizing lease obligations, as
discussed in the preceding paragraph, the financial statements present fairly-.."
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EXHIBIT 6-20 (continued)
EXAMPLES OF ACCOUNTANT'S OPINIONS
Example 3: "Except for" Qualified Opinion Due to Inconsistencies in a
Company's Application of Generally Accepted Accounting
Principles
The following two examples illustrate how a similar "except for" situation might be
reported differently by different accountants.
Accountant "A": "In our opinion ... generally accepted accounting principles
consistently applied during the period except for the change, with which we concur,
in the method of computing depreciation as described in Note A to the financial
statements.
Accountant "B": "As disclosed in Note A to the financial statements, the Company
has adopted the sum-of-the-years digits method for computing depreciation, whereas
it previously used the straight-line method. In our opinion the Company has
provided reasonable justification for making a change as required by the generally
accepted accounting principles.
In our opinion, except for the change in accounting principles as stated above, the
financial statements referred to above present fairly the financial position of X
Company as of October 31, 19 , and the results of its operations and the changes
in its financial position for the year the ended in conformity with generally accepted
accounting principles."
C "Subject to" Qualified Opinions
Examples 1 and 2 are "subject to" Qualified Opinions based on a "going concern" issue.
In both instances, the survival of the firm is uncertain. Examples 3 and 4 are "subject to" other
considerations.
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EXmBIT 6-20 (continued)
EXAMPLES OF ACCOUNTANT'S OPINIONS
Example 1: "Subject to" Qualified Opinion Based on a "Going Concern" Issue
The financial statements referred to previously have been prepared using generally
accepted accounting principles applicable to a going concern which contemplates the
realization of assets and the liquidation of liabilities in the normal course of
business. However, continuation of the Company as a going concern is dependent
upon its obtaining additional financing and achieving profitable operations. At
December 31, 19X1, adverse operating results had reduced the Company's working
capital below the amounts required under long-term debt agreements. As explained
in Note , the working capital requirements under the debt agreements have
been waived until December 31, 19X2. Should losses continue and the lenders
exercise their rights under the debt agreements to accelerate the maturities of long-
term debt, the order of maturity of the liabilities and the carrying values of assets
would be significantly affected.
In our opinion, subject to the possible effects of such adjustments, if any, as might
have been required had the outcome of the uncertainties relating to the Company's
continuance as a going concern been known, the financial statements referred to
above present fairly the financial position of ABC Corporation, Inc. at December
31, 19X2, and 19X1."
Example 2: "Subject to* Qualified Opinion Based on a "Going Concern" Issue
The financial statements referred to above have been prepared on a going concern
basis and do not reflect any downward adjustments (presently not detenninable) to
the carrying value of assets which could be required in the event of disposal other
than in the ordinary course of business. Continuation of the business is dependent
on (1) consummation of debt restructuring agreements as discussed in Note (2)
maintaining adequate financing arrangements with all lenders, (3) achieving
profitable operations.' Should any of these circumstances interrupt the continuity of
the business, the realization of assets and order of maturity of liabilities may be
adversely affected.
In our opinion, subject to the possible effects of such adjustments, if any, as might
have been required had the outcome of the uncertainties relating to the. Company's
continuance as a going concern been known, the financial statements referred to
above present fairly the financial position of ABC Corporation, Inc. at December
31, 19X2 and 19X1."
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EXHIBIT 6-20 (continued)
EXAMPLES OF ACCOUNTANT'S OPINIONS
Example 3: "Subject to" Qualified Opinion Due to An Uncertainty Regarding
the Outcome of a Judicial Proceeding
"As discussed in Note X to the financial statements, the Company is defendant in a
lawsuit alleging infringement of certain patent rights and claiming royalties and
punitive damages. The Company has filed a counteraction, and preliminary hearings
and discovery proceedings on both actions are in progress. Company officers and
counsel believe the Company has a good chance of prevailing, but the ultimate
outcome of the lawsuits cannot presently be determined, and no provision for any
liability that may result has been made in the financial statements.
In our opinion, subject to the effects of such adjustments, if any, as might have
been required had the outcomes of the uncertainty referred to in the preceding
paragraph been known, the financial statements referred to above present fairly the
financial position of ABC Company as of (current year-end) and the results of its
operations and the changes in its financial position, in conformity with generally
accepted accounting principles."
Example 4: "Subject to" Qualified Opinion Due to a Company Without an
Operating History
Often there is uncertainty about the ability of a new enterprise to establish a profitable
level of operations. It has become accepted practice to render "subject to" opinions in these
"development stage" situations. The middle paragraph should recite all of the uncertainties
facing the company and that recitation is frequently quite extensive.
"We have examined the balance sheet of ABC Corporation, Inc., as of December
31, 19X2 and 19X1, and the related statements of operations, changes in
stockholders' equity and changes in financial position for the years then ended.
Our examination was made in accordance with generally accepted auditing standards
and, accordingly, included such tests of the accounting records and such other
auditing procedures as we considered necessary in the circumstances.
The Corporation is in the development stage as of December 31, 19X2. The
accompanying financial statements have been prepared in accordance with generally
accepted accounting principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course of business.
However, recovery of the Corporation's assets is dependent upon future events, the
outcome of which is currently indeterminable. Additionally, successful completion
of the Corporation's development program and its transition, ultimately, to attaining
profitable operations is dependent upon obtaining financing adequate to fulfill its
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EXHIBIT 6-20 (continued)
EXAMPLES OF ACCOUNTANT'S OPINIONS
development activities and achieving a level of sales adequate to support the
Corporation's cost structure. Should any of these events not occur, the
accompanying financial statements may be affected materially.
In our opinion, subject to the ultimate resolution of the uncertainties described in
the preceding paragraph, the financial statements referred to above present fairly
the financial position of ABC Corporation, Inc. at December 31, 19X2 and 19X1,
and the results of its operations, changes in its stockholders' equity and changes in
its financial position for the years then ended, in conformity with generally accepted
accounting principles applied on a consistent basis."
D. Adverse Opinions
Example of an Adverse Opinion
An Adverse Opinion is an extreme form of an "except for" Qualified Opinion in the case
of a generally accepted accounting principles (GAAP) violation.
"As discussed in Note X to the financial statements, the Company carries its
property, plant and equipment accounts at appraisal values and provides
depreciation on the basis of such values. Further, the Company does not provide
for income taxes with respect to differences between financial income and taxable
income arising because of the use, for income tax purposes, of the installment
method of reporting gross profit from certain types of sales. Generally accepted
accounting principles, in our opinion, require that property, plant and equipment be
stated at an amount not in excess of cost, reduced by depreciation based on such
amount and that deferred income taxes be provided. Because of the departure
from generally accepted accounting principles identified above, as of December 31,
19XX, inventories have been increased $— by inclusion in manufacturing overhead
of depreciation in excess of that based on cost; property, plant and equipment, less
accumulated depreciation, is carried at $ in excess of an amount based on the
cost to the Company; and allocated income tax of $ has not been recorded,
resulting in an increase of $— in retained earnings and in appraisal surplus of $—
For the year ended December 31, 19XX, cost of goods sold has been increased $_...
because of the effects of the depreciation accounting referred to above, and
deferrejd income taxes of S— have not been provided, resulting in an increase in
net income and earnings per share of $ and $—, respectively.
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EXHTBIT 6-20 (continued)
EXAMPLES OF ACCOUNTANT'S OPINIONS
In our opinion, because of the effects of the matters discussed in the preceding
paragraph, the financial statements referred to above do not present fairly, in
conformity with generally accepted accounting principles, the financial position of X
Company as of December 31, 19XX, or the results of its operations and changes in
its financial position for the year then ended."
E, Disclaimer of Opinion
Example of a Disclaimer of Opinion
A disclaimer of opinion means that the accountant can not express an opinion on the
financial statements of the firm. An example of a disclaimer resulting from an extreme form of
a scope restriction follows:
"... Except as set forth in the following paragraph, our examination was made in
accordance with generally accepted auditing standards and, accordingly, included
such tests of the accounting records and such other auditing procedures as we
considered necessary in the circumstances. ~-
The Company did not take a physical inventory of merchandise, stated at $— in
the accompanying financial statements as of December 31, 19XX, and at $— as of
December 31, 19X1. Further, evidence supporting the cost of property and
equipment acquired prior to December 31, 19XX, is no longer available. The
Company's records do not permit the application of adequate alternative procedures
regarding the inventories or the cost of property and equipment
Since the Company did not take physical inventories and we were unable to apply
adequate alternative procedures regarding inventories and the cost of property and
equipment, as noted in the preceding paragraph, the scope of our work was not
sufficient to enable us to express, and we do not express, an opinion on the
financial statements referred to above."
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EXHIBIT 6-21
CONDITIONS LIKELY TO RESULT IN A QUALIFIED OPINION, ADVERSE OPINION AND DISCLAIMER OF OPINION
CONDITION
VIOLATION OF GENERALLY ACCEPTED
ACCOUNTING PRINCJPLES (OAAP)
UNCERTAINTY
SCOPE LIMITATIONS
Except for" Qualified Opinion -
'tolslion to not overwhelming or pervasive lo
irundal statements a* a whole
• Lease obligations thai were not capitalized
that auditor thinks should have been
capitalized
Omission of disclosure that the auditor
thinks should be Included
sdverse Opinion - Violation is overwhelming or
ervasive to financial statement as a whole
A large company uses the cash bails rather
than the accrual basis of accounting and thus,
does not match expenses with revenue* for the
accounting period
"Subject To* Qualified Opinion
Internal Matters
o Lou of management
or other key per-
sonnel
o Negative trends,
recurring operating
losses, negative
cash flow
o Work stoppages
o Uneconomical long-
term commitments
External Matters
o Legal proceedings
o Legislation
o Lou of key fran-
chise, license, or
patent
o Lou of a principal
customer or supplier
o Uninsured catas-
trophes
Disclaimer of Opinion
o It Is impouible lo determine the future
operational activity of .company or the effect
of material uncertainties
"Except for" Qualified Opinion
o Segments of inventory not observed at
beginning or end of year (not so significant
as to require a disclaimer)
o Joint ventures were not audited
Disclaimer of Opinion
o The accounting/operating systems are so
unreliable that an audit cannot be performed
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EXHmiT 6-22
EXAMPLE OF AUDITOR'S SPECIAL REPORT,
CONFIRMATION OF CHIEF FINANCIAL OFFICER'S LETTER
We have examined the financial statements of XYZ Company for the year ended
December 31, 19X1, and have issued our report thereon dated March 15, 19X2. Our
examination was made in accordance with generally accepted auditing standards and,
accordingly, included such tests of the accounting records and such other auditing procedures as
we considered necessary in the circumstances.
The Company has prepared documents to demonstrate its financial responsibility under
the Environmental Protection Agency's financial assurance regulations, in compliance with 40
CFR 761, Subpart D. This letter is furnished to assist the Company in complying with these
regulations and should not be used for other purposes.
The attached schedule reconciles the specified information furnished in the Chief
Financial Officer's Letter in response to the regulations with the Company's financial
statements. In connection therewith, we have:
1. Agreed the amounts in the column "per financial statements" with
amounts contained in the Company's financial statements for the year
ended December 31, 19X1.
2. Agreed the amounts in the column "per Chief Financial Officer's
Letter" to the Letter prepared in response to the regulations.
3. Agreed the amounts in the column "reconciling items." to analyses
prepared by the Company setting forth the indicated items.
4. Recomputed the totals and percentages.
Because the above procedures do not constitute an examination made in accordance with
generally accepted auditing standards, we do not express an opinion on any amounts or items
referred to above. In connection with the procedures referred to above, no matters came to
our attention that caused us to believe the Schedule should be adjusted.
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EXfflBIT 6-22 (continued)
XYZ COMPANY
YEAR ENDED DECEMBER 31, 19X1
SCHEDULE RECONCILING AMOUNTS CONTAINED IN THE CHIEF
FINANCIAL OFFICER'S LETTER FURNISHED IN RESPONSE TO 40 CFR
761, SUBPART D TO AMOUNTS CONTAINED IN THE FINANCIAL
STATEMENTS*
Line number Per
in CFO's Financial
Letter Statements
2 Total current liabilities X
Long-term debt X
Deferred income taxes _X
XX
Accrued post-closure
costs included in current
liabilities \ X
Total liabilities (less
accrued post-closure
costs) X
3 Net Worth XX
Less: Cost in excess of
value of tangible
assets acquired X
XX
Accrued post-closure
costs included in current
liabilities X
Tangible net worth (plus
accrued post-closure
costs) XX
a
(balance of schedule not illustrated)
* This illustrates the form of schedule which is contemplated. Details and reconciling
items will differ in a specific situation.
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EXHIBIT 6-23
SAMPLE FILE ON OWNER OR OPERATOR
DATE OF CLOSE OF FISCAL YEAR
Owner/Operator
1. Sum of total of all cost estimates
2. Bond Rating
*3. Total Liabilities
•4. Tangible Net Worth
*5. Net Worth
*6. Current Assets
*7. Current Liabilities
*8. Net Working Capital
*9. Sum of Net Income, Depreciation,
Depletion, and Amortization
*10. Total assets in U.S.
11. Line 4 divided by Line 1
12. Line 8 divided by Line 1
13. Line 10 divided by Line 1
14. Line 9 divided by Line 3
15. Line 6 divided by Line 7
Initial Second Third
Year Year Year
Denotes figures derived from financial statements.
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EXHIBIT 6-23 (continued)
SAMPLE FILE ON OWNER OR OPERATOR
Initial Second Third
Year Year Year
16. Line 3 divided by Line 5 .
17. Qualified Auditor's Opinion?
18. Cost estimates changed because of
changes in operating plans?
NOTES:
[Adverse Business Press Releases, Competitive Problems, Drop in Bond Ratings]
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6.6 CORPORATE GUARANTEE
A corporate guarantee is an agreement, by the parent corporation of a subsidiary PCB
commercial storage facility owner or operator, to guarantee to perform closure or to fund a
closure trust fund if the owner or operator fails to do so. To be eligible to provide the
guarantee, a parent corporation must own at least 50 percent of the voting stock of the owner
or operator, and pass one of the financial tests described in the previous section.
Because the guarantee's value depends entirely on the corporate parent's financial health,
the guarantor is required to meet the requirements of the financial test (see the previous
section). EPA should completely re-evaluate the corporate parent each year that the guarantee
remains in effect.
Review of the corporate guarantee should follow the steps outlined below. A checklist
for tracking the review appears in Exhibit 6-24.
6.6.1 Corporate Guarantee Submissions
Review of Initial Submissions:
Step 1. Verify the submission of documents. First, verify that all documents have been
submitted, including:
• Guarantee contract;
• Guarantor's financial test submission
Letter from the corporate parent's chief financial officer including cost
estimates and data from audited financial statements.
Independent certified public accountant's opinion of the corporate
parent's financial statements for the latest completed fiscal year (also
known as Report on Examination).
Special report from the independent certified public accountant
Step 2. Verify that the guarantor is the storer's corporate parent The parent must own at
least 50 percent of the voting stock of the owner or operator. If the parent files
with the SEC, verification may be made by checking the form 10-K filed with the
SEC If not, the independently audited financial statements of the firm should be
requested from the firm. Both the, 10-K and the independently audited statements
will list the subsidiaries of the corporation in addition to other financial information.
Step 3. Review the wording of the guarantee. Review the written guarantee form for
completeness and accuracy. The wording should be substantially similar to that
prescribed in the regulations (see Exhibit 6-25).
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Step 4. Review the financial test submission. Review the chief financial officer's letter, the
accountant's opinion and the independent auditor's special report to determine if
the corporate parent passes the financial test Conduct the review of the
guarantor's financial test submission in exactly the same way as described in the
previous section on the Financial Test, except the corporate parent should be
treated as if it were the owner or operator. Also, include as relevant any facility
owned or operated by the storer, the guarantor, or any subsidiary of the guarantor
for which an alternate mechanism is not provided.
Step 5. Compare the level of coverage to the approved cost estimate. The guarantee
mechanism may take effect prior to EPA's final review of the storer's closure cost
estimate; this review may cause the cost estimate to increase above the initial
estimate. Therefore, once the storer's cost estimate has been reviewed and EPA is
satisfied with the estimate, compare the costs assured by the guarantee with the
amount of the approved cost estimate. If the guarantee does not- cover increases in
the cost estimate, the Regional Office should immediately notify the storer that the
cost increases should be assured within 60 days.
Step 6. Maintain a regional information system. Records should be maintained similar to
those maintained for financial test users. As financial information and corporate
guarantees are received, record relevant information, including the name, address
and EPA Identification Number of the covered facilities; name of the corporate
guarantor, amount of coverage for each facility and "the effective date; and
information verification procedures performed. Keep a file on each firm using the
guarantee to track the corporate guarantor's financial data (see Exhibit 6-26).
Follow-Up Review of the Mechanism:
Step 7. Review annual financial test submissions of guarantor. Conduct the review of
annual test submissions in exactly the same way as described in the previous section
of the Financial Test (See also Step 4 above.)
Step 8. Ongoing monitoring. Maintain ongoing monitoring of the guarantor and of the
owner and operator whose costs are being guaranteed. This monitoring should
involve the same steps used to monitor users of the financial tests. See the
previous section for a financial test monitoring procedures.
Step 9. Cancelling the corporate guarantee. The corporate parent may cancel its guarantee
of financial assurance 120 days after its notification of cancellation is received by
both EPA and the owner or operator. The Region should ensure that the storer
pbtains alternate financial assurance (with the approval of the Regional
Administrator) within 90 days. If the storer does not obtain alternate assurance,
the guarantor is required to do so. The Regional Office must ensure that either
the owner, operator, or guarantor has obtained alternate assurance before the 120
days have passed and the guarantee is cancelled (see the next step).
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6.62 Drawing on the Corporate Guarantee
The Regional Administrator is authorized to draw upon the corporate guarantee for
closure when:
1) The owner or operator fails to provide alternate assurance within 90
days after he and the Regional Administrator receive notice of
cancellation from the parent guarantor, or
2) A determination is made pursuant to Section 16 of TSCA, that the
owner or operator has failed to perform closure care in accordance with
previously approved plans whenever required to do so.
In the first case, the guarantor must provide alternate financial assurance. In the second case,
the parent guarantor must perform closure, or set up a trust fund as specified in 40 CFR
761.65(g)(I) in the name of the owner or operator.
6.6.3 Terminating the Corporate Guarantee
The Regional Office may consent to the termination of the corporate guarantee only if:
• Alternate assurance is provided; or
• The owner or operator is released from applicable financial assurance
requirements. The Regional Office should release a storer from closure
financial responsibility requirements within 60 days after receiving
certification from the storer and an independent registered professional
engineer that final closure has been conducted in accordance with the
approved closure plan.
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EXHTOIT6-24
CORPORATE GUARANTEE CHECKLIST
Step 1. All documents have been submitted:.
Guarantee contract
Guarantor's financial test submission:
Letter from corporate parent's chief financial officer.
Independent certified public accountant's opinion.
Independent certified public accountant's special report
Step 2. Corporate guarantor qualifies as a corporate parent of the owner or operator.
Step 3. The wording of the written guarantee of corporate parent is substantially
similar to that required by the regulations (see Exhibit 6-25).
Step 4. Guarantor's financial test submission meets requirements for the financial test,
and covers all relevant facilities owned/operated by the storer, guarantor, or
subsidiary firms.
Step 5. Compare the level of coverage to the approved cost estimate; if necessary,
immediately notify the storer to obtain additional assurance within 60 days for
any unassured costs.
Step 6. The regional information system is updated.
Step 7. Subsequent annual financial test submissions of the guarantor meet the
requirements for the financial test (see the previous section).
Step 8. Guarantors are monitored in the same way that storers using the financial test
are monitored (see the previous section).
Step 9. If parent corporation notifies in writing its intent to cancel the guarantee, the
owner or operator is monitored to ensure provision of alternate assurance
within 90 days after they and EPA are notified by the parent of cancellation.
Step 10. If alternate assurance is not provided by the owner or operator within 90 days
after notification of cancellation, the Regional Administrator has 30 more
days in which to draw upon the corporate guarantee before it lapses.
Step 11. The Regional Administrator terminates the guarantee only if alternate
assurance has been provided or closure has been completed in accordance
with the approved closure plan.
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EXHIBIT 6-25
SAMPLE WORDING FOR CORPORATE GUARANTEE
A corporate guarantee may be worded as follows, except that instructions in brackets are
to be replaced with the relevant information and the brackets deleted:
Guarantee made this [date] by [name of guaranteeing entity], a business
corporation organized under the laws of the State of [insert name of
State], herein referred to as guarantor, to the United States
Environmental Protection Agency (EPA), obligee, on behalf of our
subsidiary [owner or operator] of [business address].
Recitals
1. Guarantor meets or exceeds the financial test criteria and agrees to comply with the
reporting requirements for guarantors as required in 40 CFR 761.65(g)(6).
2. [Owner or operator] owns or operates the following PCB commercial storage
facflity(ies) covered by this guarantee: [List for each facility: EPA Identification
Number, name, and address. Indicate for each whether guarantee is for closure,
post-closure care, or both.] "
3. "Closure plans" and "post-closure plans" as used below refer to the plans maintained
as required by Subpart G of 40 CFR 264 and 265 and Subpart D of 40 CFR 761
for the closure and post-closure care of facilities as identified above.
4. For value received from [owner or operator], guarantor guarantees to EPA that in
the event that [owner or operator] fails to perform [insert "closure," "post-closure
care" or "closure and post-closure care"] of the above facility(ies) in accordance with
the closure or post-closure plans and other permit, approval, or interim status
requirements whenever required to do so, the guarantor shall do so or establish a
trust fund as specified in Subpart D of 40 CFR 761, as applicable, in the name of
[owner or operator] in the amount of the current closure or post-closure cost
estimates as specified in Subpart D of 40 CFR 761.
5. Guarantor agrees that if, at the end of any fiscal year before termination of this
guarantee, the guarantor fails to meet the financial test criteria, guarantor shall send
within 90 days, by certified mail, notice to the EPA Regional Administrator(s) for
the Region(s) 'in which the facih'ty(ies) is(are) located and to [owner or operator]
that he intends to provide alternate financial assurance as specified in Subpart D of
40 CFR 761, as applicable, in the name of [owner or operator]. Within 120 days
after the end of such fiscal year, the guarantor shall establish such financial
assurance unless [owner or operator] has done so.
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EXfflBIT 6-25 (continued)
SAMPLE WORDING FOR CORPORATE GUARANTEE
6. The guarantor agrees to notify the EPA Regional Administrator by certified mail, of
a voluntary or involuntary proceeding under Title 11 (Bankruptcy), U.S. Code,
naming guarantor as debtor, within 10 days after commencement of the proceeding.
7. Guarantor agrees that within 30 days after being notified by an EPA Regional
Administrator of a determination that guarantor no longer meets the financial test
criteria or that he is disallowed from continuing as a guarantor of closure or post-
closure care, he shall establish alternate financial assurance as specified in Subpart
D of 40 CFR 761, as applicable, in the name of [owner or operator] unless [owner
or operator] has done so.
8. Guarantor agrees to remain bound under this guarantee notwithstanding any or all
of the following: amendment or modification of the closure or post-closure plan,
amendment or modification of the permit or approval, the extension or reduction of
the time of performance of closure or post-closure, or any other modification or
alteration of an obligation of the owner or operator pursuant to 40 CFR 761.
9. Guarantor agrees to remain bound under this guarantee for so long as [owner or
operator] must comply with the applicable financial assurance requirements of
Subpart D of 40 CFR 761 for the above-listed facilities, except that guarantor may
cancel this guarantee by sending notice by certified mail to the EPA Regional
Administrator(s) for the Region(s) in which the facility(ies) is(are) located and to
[owner or operator], such cancellation to become effective no earlier than 120 days
after receipt of such notice by both EPA and [owner or operator], as evidenced by
the return receipts.
10. Guarantor agrees that if [owner or operator] fails to provide alternate financial
assurance as specified in Subpart D of 40 CFR 761, as applicable, and obtain
written approval of such assurance from the EPA Regional Administrator(s) within
90 days after a notice of cancellation by the guarantor is received by an EPA
Regional Administrator from guarantor, guarantor shall provide such alternate
financial assurance in the name of [owner or operator].
11. Guarantor expressly waives notice of acceptance of this guarantee by the EPA or
by [owner or operator]. Guarantor also expressly waives notice of amendments or
modifications of the closure and/or post-closure plan and of amendments or
modifications of the facility permit(s) and/or approvals.
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EXHIBIT 6-25 (continued)
SAMPLE WORDING FOR CORPORATE GUARANTEE
I hereby certify that are wording of this guarantee is substantially similar to the wording
in 40 CFR 761.65(g)(6) as such regulations were constituted on the date first above written.
Effective date:
[Name of guarantor]
[Authorized signature for guarantor]
[Name of person signing]
[Title of person signing]
Signature of witness or notary:
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EXHIBIT 6-26
SAMPLE FILE ON OWNER, OPERATOR, OR CORPORATE PARENT
DATE OF CLOSE OF FISCAL YEAR
Owner/Operator
Corporate Parent
1. Sum of total closure and post-closure
cost estimates
2. Bond Rating
*3. Total Liabilities
•4. Tangible Net Worth
*5. Net Worth
*6. Current Assets
*7.
Current Liabilities
*8. Net Working Capital
*9. Sum of Net Income, Depreciation,
Depletion, and Amortization
*10. Total assets in U.S.
11. Line 4 divided by Line 1
12. Line 8 divided by Line 1
a
13. Line 10 divided by Line 1
Initial Second Third
Year Year Year
Denotes figures derived from financial statements.
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EXHIBIT 6-26 (continued)
SAMPLE FILE ON OWNER, OPERATOR, OR CORPORATE PARENT
14. Line 9 divided by Line 3
15. Line 6 divided by Line 7
16. Line 3 divided by Line 5
17. Qualified Auditor's Opinion?
18. Cost estimates changed because of
changes in operating plans?
Initial Second Third
Year Year Year
NOTES:
[Adverse Business Press Releases, Competitive Problems, Drop in Bond Ratings]
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6.7 COMBINATIONS OF MECHANISMS
The financial mechanisms allowed to demonstrate financial assurance for closure include
trust funds, surety bonds (payment bonds and performance bonds), letters of credit, insurance,
the financial test, and the corporate guarantee. An owner or operator may combine trust
funds, surety bonds guaranteeing payment, letters of credit and insurance to demonstrate
financial assurance for closure of a facility. When coverage must be increased due to inflation
or changes in the closure plan, adding a different mechanism may be less expensive or
burdensome than increasing the coverage of existing mechanisms. Owners or operators may
also use one or more financial mechanisms to cover multiple facilities.
The financial test, corporate parent guarantee, and performance bond may not be
combined to provide financial assurance for partial costs of the same facility - these
mechanisms may be used only to cover the entire closure cost estimate of a facility. The
Regional Administrator may authorize payments from any or all of the combined mechanisms to
provide coverage for the facility. However, in the case of multiple facilities covered by a single
mechanism, he may only authorize use of the amount of funds designated by the cost estimates
for that facility (unless the owner or operator agrees to the use of additional funds available
under the mechanism).
Exhibit 6-27 is a checklist to use when documenting review of combinations of
mechanisms;
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EXHIBIT 6-27
COMBINATIONS OF MECHANISMS CHECKLIST
If a combination of mechanisms is used to demonstrate financial assurance:
The financial test, corporate parent guarantee, and/or performance bond are
not combined to provide coverage for partial costs at the same facility.
Each mechanism used complies with the requirements for that mechanism
The total coverage demonstrated by all mechanisms is at least as great as the
total of the cost estimates.
The total coverage demonstrated is increased, as necessary, whenever the cost
estimates increase to more than the existing coverage.
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APPENDIX A
EPA REGIONAL CONTACTS
REGION I
Tony Palermo
Air Management Division
Environmental Protection Agency
' John F. Kennedy Federal Bidding
Boston, Massachusetts02203
(617)565-3279. FTS 835-3279
REGION II
John Brogard
Air and Waste Management Division
Environmental Protection Agency
26 Federal Plaza
New York. New York 10278
(212)264-8682. FTS 264-8682
REGION III
Edward Cohen. PCB Disposal Coordinator
LJsa Nichols. PCB Compliance Coordinator
Environmental Protection Agency
841 Chestnut Street
Philadelphia. Pennsylvania 19107
(215) 597-7668 and 597-4651
FTS 597-7668
REGION IV
Robert Stryker. Chief of Toxics Division
Connie Jones
Pesticides and Toxic Substances Branch
Environmental Protection Agency
345 Courtiand Street. N.E.
Atlanta. Georgia 30365
(404)347-3864, FTS 257-3864
REGION V
Sheldon Simon, PCB Coordinator
Pesticides and Toxic Substances Branch (5S-PTSB-7)
Environmental Protection Agency
230 South Dearborn Street
Chicago, Illinois 60804
(312)886-6087. FTS 886-6087
REGION VI
Jim Sales. Environmental Engineer
Hazardous Waste Management Division
Environmental Protection Agency
First Interstate Bank Tower
1445 Ross Avenue
Dallas. Texas 75202-2733
(214)655-6785. FTS 255-6785
REGION VII
Leo Alderman. PCS Coordinator
Gary Bertram. Permitting Coordinator
Toxic and Pesticides Branch
Environmental Protection Agency
726 Minnesota Avenue
Kansas City. Kansas 66101
(913)236-2835. FTS 757-2835
REGION VIII
Dan Bench. PCB Coordinator
Toxic Substances Branch
Environmental Protection Agency
One Denver Place
999 18th Street. Suite 1300
Denver. Colorado80202-2413
(303)293-1732. FTS 564-1732
REGION IX
Greg Czajkowski, Chief of Toxics Section
Pesticides and Toxics Branch (T-5-2)
Environmental Protection Agency
215 Fremont Street
San Francisco. California 94105
(415)974-7295. FTS 454-7295
REGION X
Qi Haselberger
Hazardous Waste Management Branch
Environmental Protection Agency
1200 Sixth Avenue
Seattle. Washington 98101
(206)442-1094. FTS 399-1094
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APPENDIX B
INFORMATION SOURCES
This Appendix describes information that must be submitted to EPA or maintained on-
site by the facility. These documents could be useful to the applicant and reviewer, providing
insight into the facility's operation and design specifications, its operating history, and its
compliance history both with PCS regulatory requirements and with other regulatory programs,
as well as into potential current compliance problems.
Annual Document Log (40 CFR 761.180)
EPA requires private and commercial storers, as well as PCB disposal facilities, to keep
annual document logs on site if at least 45 kilograms of PCBs or PCB Items, more than one
transformer, or more than 50 large (high or low voltage) capacitors are on premises (40 CFR
761.l80(a)). These documents must be maintained until 5 years after closure or after the
facility stops storing PCBs. These annual document logs can offer insight into the actual
capacity and maximum inventory for the facility and how this information relates to the
inventory and design specification included in the approval application.
These annual document logs account for quantities, types, and weights of PCB wastes
entering, stored at, and existing at the facility, including: ..
• The dates when PCB wastes were removed from service for disposal;
and
• The identification, total and individual weights, and numbers oft
PCBs and PCB Containers,
- PCB Transformers,
- PCB Capacitors, and
- PCB Equipment
Specific information required for PCB storage and disposal facilities includes: an
identification and description of waste received and the date of receipt; the date when items
were disposed of or transferred off site; descriptions of items transferred offsite; the
destination's name, address, and EPA identification number for off-site shipments; and the total
weights of different PCBs, PCB Articles, PCBs in Transformers, and PCB Equipment (40 CFR
76l.l80(b)). The PCB wastes must also be categorized whether they are in containers.
Special Records Retained by Storage and Disposal Facilities (40 CFR 761.180(f))
Special "records can provide information on the facility's structure and additional data that
may aid the applicant and reviewer, including State and local government interaction with
facility owners and operators, local land use permits, and other information, such as:
• All documents, correspondence, and data that have been provided,
including correspondence and data exchanged between the owner or
operator of the facility and any State or local government agency
-------
B-2
pertaining to the storage or disposal of PCBs and PCB items at the
facility.
[NOTE: Because a number of States have designated PCBs as hazardous
wastes, facilities may be subject to State requirements for hazardous waste
storage facilities.]
• Solid waste permits or other permits and authorizations and any
applications and related correspondence sent by the owner or operator
of the facility to the local, State, or Federal authorities in regard to
wastewater discharge permits.
Annual Reporting Requirements
PCB commercial storage facilities must also include information on waste types and
quantities in their annual reports. The facility owner or operator must submit an annual report
to the Regional Administrator by July 15 following the effective date of the rule and submission
of the annual report for the calendar year in which the facility ceases PCB storage or disposal
operations. Additional information on the identity of waste shipment is required as part of the
tracking system.
The Spill Cleanup Policy (40 CFR 761.125(b)(3) and (c){5))
The Spill Cleanup Policy requires records of cleanup and certification. These records can
provide information on spills at the facility that may alter elements of the closure plan. They
may also give insight into the adequacy of cleanups and recordkeeping by the facility's owner or
operator. The records must contain the following potentially useful information:
• Source of the spill;
• Date and time of spill occurrence;
• The date and time cleanup was completed, including the reasons for
any delays;
• Description of spill location; and
• Sampling data and cleanup measures taken.
The Spill Cleanup Certification requires a description of the spill location. This
description may indicate any changes to the facility's operation or design as a result of the spilL
The information provided in this description may help the reviewer to verify information in the
closure plan with operations mentioned in the spill cleanup certification document
The Manifest System (40 CFR 761.207-.218)
The manifest system follows a system similar to RCRA's manifest system. Shipping
documents ensure the proper transport and disposal of PCBs. Two documents are used to
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B-3
notify the Regional Authority of discrepancies and exceptions to the one-year storage limit of
PCBs before final disposal: exception reports and manifest discrepancy reports. Exception
reports and manifest discrepancy reports are described below.
Exception Reports (40 CER 761.215) are submitted when:
- Generators do not receive a copy of the manifest within 45 days
of shipment (and after notifying the transporter and
storer/disposer after 35 days).
A generator has not received a Certificate of Disposal confirming
disposal of the PCBs or PCB Items, or if the Certificate of
Disposal confirms disposal after more than one year since the
PCBs were removed from service for disposal
- A disposer of PCB waste receives PCBs or PCB Items more than
9 months from the date when the items were removed from
service for disposal, and the disposer cannot dispose of the waste
within one year from removal from service for disposal
• Exception Reports include:
- Information on when the items were removed from service for
disposal;
— The dates when PCB wastes were received;
- The dates the PCB wastes were transferred;
— The identities of transporters;
- Storers or disposers known to be involved with the transaction;
and
- The reason for the delay in bringing about the disposal
Manifest Discrepancies (40 CFR 761.210):
Manifest discrepancies wfll be reconciled with the waste generator or
transporter. If it is not resolved within 15 days, the Regional
^Administrator wfll be notified, with a letter describing the discrepancy
and attempts to reconcile it, as well as a copy of the manifest
Facilities storing PCBs for greater than 9 months may be creating a situation in which their
PCB waste is not disposed of within the one-year deadline. This would be reported by disposal
facilities in exception reports. In addition, if wastes are being improperly stored, certificates of
disposal or copies of the manifest may not be received by generators. Facilities with chronic
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B-4
problems may need further scrutiny to ensure their operation is in compliance with the
regulations.
FURTHER INFORMATION AND GUIDANCE
Sampling:
Field Manual for Grid Sampling of PCS Spill Sites to Verify Cleanup. EPA 560/5-86-017,
May 1986.
Quality Assurance Program Plan for OTS. EPA, 1983.
RCRA Facility Assessment Guidance. EPA, October 1986.
RCRA Facility Investigation fRFD Guidance. Volume I of IV, EPA 530/SW-87-001, April
1987, pp. 3-19 to 3-26.
Test Methods for Evaluating Solid Waste. EPA (SW-846, November 1986, Volume n, pp.
9-1 to 9-49).
Verification of PCS Spill Cleanup by Sampling and Analysis. EPA 560/5-85-026, August
1985. --
Decontamination:
Guide for Decontaminating Buildings. Structures, and Equipment at Superfund Sites.
EPA, Office of Research and Development, March 1985.
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APPENDIX C
STATE RCRA PROGRAM CONTACTS*
This Appendix lists the names, addresses, and telephone numbers of state officials to contact for
further information about state financial assurance requirements.
ALABAMA
Daniel E. Cooper, Chief
Land Division
Alabama Department of Environmental
Management
1751 Federal Drive
Montgomery, Alabama 36130
CML (205) 271-7730
ALASKA
Stan Hungerford, Supervisor
Air and Solid Waste Management
Department of Environmental Conservation
Pouch O
Juneau, Alaska 99801
CML (907) 465-2666
AMERICAN SAMOA
Pati Faiai, Executive Secretary
Environmental Quality Commission
Government of American Samoa
Pago Pago, American Samoa 96799
Overseas Operator
(Commercial Call 663-2304)
ARIZONA
Ronald Miller, Manager
Office of Waste and Water Quality
Management
Arizona Department of Environmental
Quality
2005 North Central Avenue, Room 304
Phoenix, Arizona 85004
CML (602) 257-2305
ARKANSAS
Mike Bates, Acting Chief
Hazardous Waste Division
Arkansas Department of Pollution Control
and Ecology
P.O. Box 9583
8001 National Drive
Little Rock, Arkansas 72219
CML (501) 562-7444 ext 504
CALIFORNIA
• Alex R. Cunningham, Chief Deputy
Director
Department of Health Services
State of California
714/744 P Street
Sacramento, California 95814
CML (916) 323-2913
David C Willis, Deputy Director
Toxic Substances Control Division
Department of Health Services
714/744 P Street
Sacramento, California 94814
CML (916) 324-1826
James Easton, Executive Director
State Water Resources Control Board
P.O. Box 100
Sacramento, California 95801
CML (916) 445-1553
Source: Environmental Protection Agency, Office of Solid Waste, April 1, 1988,
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C-2
COLORADO
Joane Sowinski, Acting Director
Waste Management Division
Colorado Department of Health
4210 East llth Avenue
Denver, Colorado 80220
CML (303) 320-8333 ext 4364
COMMONWEALTH OF NORTHERN MARIANA
ISLANDS
S. Russell Mecham, n, Chief
Division of Environmental Quality
Department of Public Health and
Environmental Services
Commonwealth of the Northern Mariana
Islands
Office of the Governor
Saipan, Mariana Islands 96950
Overseas Operator: 6984
Cable address: GOV. NMI Saipan
CONNECTICUT
Dr. Stephen Hitchcock, Director
Hazardous Material Management Unit
Department of Environmental Protection
State Office Building
165 Capitol Avenue
Hartford, Connecticut 06106
CML (203) 566-4924
Marian R. Cherton, President
Connecticut Resource Recovery Authority
179 Alryn Street, Suite 603
Professional Building
Hartford, Connecticut 06103
CML (203) 549-6390
DELAWARE
Gerard L. Esposito, Deputy Director
Division of Water Resources
P.O. Box 1401
Dover, Delaware 19903
CML (302) 736-5722
DELAWARE (continued)
Gary Molchan, Manager
Hazardous Waste Management Section
Division of Air and Waste Management
Department of Natural Resources and
Environmental Control
P.O. Box 1401, 89 Kings Highway
Dover, Delaware 19903
CML (302) 736-4764
DISTRICT OF COLUMBLA
Angelo C. Tompros, Chief
Pesticides and Hazardous Waste
Management Branch/Superfund
Department of Consumer and Regulatory
Affairs
5010 Overlook Avenue, S.W., Room 114
Washington, D.C 20032
CML (202) 767-8422
FLORIDA
Raoul Clarke,- Administrator
Solid and Hazardous Waste Underground
Storage Tanks (UST)
Department of Environmental Regulation
Twin Towers Office Buflding
2600 Blair Stone Road
Tallahassee, Florida 32301
CML (904) 488-0300
GEORGIA
John D. Taylor, Jr., Chief
Land Protection Branch
Industrial and Hazardous Waste
Management Program
Floyd Towers East
205 Butler Street, SJE.
Atlanta, Georgia 30334
CML (404) 656-2833
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C-3
GUAM
Charles P. Crisotomo, Administrator
Guam Environmental Protection Agency
P.O. Box 2999
Agana, Guam 96910
Oversees Operator
(Commercial Call 646-8863)
HAWAII
Denis Lau, Manager
Hazardous Waste Program
Department of Health
P.O. Box 3378
Honolulu, Hawaii 96801
CML (808) 548-6410
IDAHO
Cheryl Koshuta, Chief
Hazardous Materials Bureau
Department of Health and Welfare
Idaho State House
Boise, Idaho 83720
FTS 8-554-5879
CML (208) 334-5879
ILLINOIS
Nancy Simpson, Library
Division of Land Pollution Control
Environmental Protection Agency
2200 Churchill Road, Room A-104
Springfield, Illinois 62706
CML (217) 782-6760
INDIANA
Nancy A. Maloley, Administrator
Indiana Department of Environmental
Management
105 South Meridian Street
Indianapolis, Indiana 46225
CML (317) 232-3210
IOWA
Luetta Floumoy
Hazardous Materials Branch
USEPA Region VH
726 Minnesota Avenue
Kansas City, Kansas 66101
FTS 8-757-2888
CML (913) 236-2888
KANSAS
Dennis Murphey, Manager
Bureau of Waste Management
Department of Health and Environment
Forbes Field, Building 321
Topeka, Kansas 66620
CML (913) 862-9360 ext 290
KENTUCKY
J. Alex Barber, Director
Division of Waste Management
Department of Environmental Protection
Cabinet for Natural Resources and
Environmental Protection'
Fort Boone Plaza, Building #2
18 Reffly Road
Frankfort, Kentucky 40601
CML (502) 564-6716 ext. 214
LOUISIANA
Bill Greenwich
Technical Services Manager
Hazardous Waste Division
Office of Solid and Hazardous Waste
Louisiana Department of Environmental
Quality
P.O. Box 44307
Baton Rouge, Louisiana 70804
CML (504) 342-9079
George Cramer, Administrator
Groundwater Division
Louisiana Department of Environmental
Quality
P.O. Box 44274
Baton Rouge, Louisiana 70804
CML (504) 342-8950
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C-4
IMAJNE
Alan Prysunka, Director
Bureau of Oil and Hazardous Materials
Control
Department of Environmental Protection
State House Station #17
Augusta, Maine 04333
CML (207) 289-2651
MARYLAND
Bernard Bigham
Maryland Waste Management
Administration
National Resources Planner
Department of Health and Mental Hygiene
201- West Preston Street, Room 212
Baltimore, Maryland 21201
CML (301) 225-5647
Ronald Nelson, Director
Maryland Waste Management
Administration
Office of Environmental Programs
Department of Health and Mental Hygiene
201 West Preston Street, Room 212
Baltimore, Maryland 21201
CML (301) 225-5647
MASSACHUSETTS
William F. Cass, Director
Division of Solid and Hazardous Waste
Massachusetts Department of
Environmental O_uality Engineering
One Winter Street, 5th Floor
Boston, Massachusetts 02108
CML (617) 292-5589
MICHIGAN
' Gary Guenther, Acting Chief
Waste Management Division
Environmental Protection Bureau
Department of Natural Resources
Box 30028
Lansing, Michigan 48909
CML (517) 373-2730
MICHIGAN (continued)
Allan Howard, Chief
Permits Unit
Technical Services Section
Waste Management Division
Department of Natural Resources
Box 30038
Lansing, Michigan 48909
CML (517) 373-2730
MINNESOTA
Richard Scanda, Director
Solid and Hazardous Waste Division
Minnesota Pollution Control Agency
520 Lafayette Road, North
SL Paul, Minnesota 55155
CML (612) 296-7282
MISSISSIPPI
Sam Mabry, Director
Division of Solid and Hazardous Waste
Management
Bureau of Pollution Control
Department of Natural Resources
P.O. Box 10385
Jackson, Mississippi 39209
CML (601) 961-5062
MISSOURI
Nick Di Pasquale, Director
Waste Management Program
Department of Natural Resources
Jefferson Building
205 Jefferson Street (13/14 floor)
P.O. Box 176
Jefferson City, Missouri 65102
CML (314) 751-3176
MONTANA
Duane L. Robertson, Chief
Solid and Hazardous Waste Bureau
Department of Health and Environmental
Sciences
Cogswell Building, Room B-201
Helena, Montana 59620
CML (406) 444-2821
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C-5
NEBRASKA
Mike Steffensmeier, Section Supervisor
Hazardous Waste Management Section
Department of Environmental Control
State House Station
P.O. Box 94877
Lincoln, Nebraska 68509
CML (402) 471-2186
NEVADA
Verne Rosse, Director
Waste Management Program
Division of Environmental Protection
Department of Conservation and Natural
Resources
Capitol Complex
201 South Fall Street
Carson City, Nevada 89710
CML (702) 885-4670
NEW HAMPSHIRE
John A. Minichiello, Assistant Director
Division of Public Health Services
Office of Waste Management
Department of Health and Welfare
Health and Welfare Building
Hazen Drive
Concord, New Hampshire 03301
CML (603) 271-2942
NEW JERSEY
Dr. John Trela, Director
Division of Waste Management
Department of Environmental Protection
32 East Hanover Street, CN-027
Trenton, New Jersey 08625
CML (609) 292-1250
NEW MEXICO
Richard Mitzelfelt, Chief
Groundwater and Hazardous Waste Bureau
Environmental Improvement Division
New Mexico Health and Environment
Department
P.O. Box 968
Santa Fe, New Mexico 87504-0968
CML (505) 827-2918
NEW MEXICO (continued)
Jack Ellvinger, Program Manager
Hazardous Waste Section
Groundwater and Hazardous Waste Bureau
New Mexico Health and Environment
Department
P.O. Box 968
Santa Fe, New Mexico 87504-0968
CML (505) 827-2924
NEW YORK
N.G. Kaul, Acting Director
Division of Solid and Hazardous Waste
Department of Environmental Conservation
50 Wolfe Road, Room 209
Albany, New York 12233
CML (518) 457-6603
NORTH CAROLINA
William L. Meyer, Head
Solid & Hazardous Waste Management
Branch
Division of Health Services
Department of Human Resources
P.O. Box 2091
Raleigh, North Carolina 27602
CML (919) 733-2178
NORTH DAKOTA
Martin Schock, Director
Division of Hazardous Waste Management
and Special Studies
Department of Health
1200 Missouri Avenue, Room 302
Box 5520
Bismarck, North Dakota 58502-5520
CML (701) 224-2366
OHIO
Charles M. Taylor, Chief
Division of Solid and Hazardous Waste
Management
Ohio Environmental Protection Agency
361 East Broad Street
Columbus, Ohio 43215
CML (614) 466-7220
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C-6
OKLAHOMA
Robert Rabatine, Chief
Waste Management Service
Oklahoma State Department of Health
P.O. Box 53551
1000 Northeast 10th Street
Oklahoma City, Oklahoma 73152
' CML (405) 271-5338
OREGON
Mike Downs, Administrator
Hazardous and Solid Waste Division
Department of Environmental Quality
811 Southwest 6th Avenue
Portland, Oregon 97204
CML (503) 229-5356
PENNSYLVANIA
Donald A. Lazarchik, Director
Bureau of Solid Waste Management
Pennsylvania Department of
Environmental Resources
P.O. Box 2063
Harrisburg, Pennsylvania 17120
CML (717) 787-9870
PUERTO RICO
Santos Rohena, President
Environmental Quality Board
Santurce, Puerto Rico 00910-1488
CML (809) 725-0439
RHODE ISLAND
Tom Getz, Director
Solid Waste Management Program
Department of Environmental Management
204 Cannon Building
75 Davis Street
Providence, Rhode Island 02908
CML (401) 277-2797
SOUTH CAROLINA
Hartsill Truesdale, Chief
Bureau of Solid and Hazardous Waste
Management
Department of Health and Environmental
Control
2600 Bull Street
Columbia, South Carolina 29201
CML (803) 758-5681
SOUTH DAKOTA
Joel C. Smith, Administrator
Office of Air Quality and Solid Waste
Department of Water and Natural
Resources
Foss Building, Room 217
Pierre, South Dakota 57501
CML (605) 773-3153
TENNESSEE
Tom Tiesler, Director
Division of Solid Waste Management
Tennessee Department of Public Health
701 Broadway
Customs House, 4th Floor
Nashville, Tennessee 37219-5403
CML (615) 741-3424
TEXAS
Hector H. Mendieta, P.E., Director
Division of Solid Waste Management
Texas Department of Health
1100 West 49th Street, T-601A
Austin, Texas 78756-3199
CML (512) 458-7271
Bryan W. Dixon, Director
Hazardous and Solid Waste Division
Texas Water Commission
P.O. Box 13087, Capitol Station
Austin, Texas 78711-3087
CML (512) 463-7760
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C-7
UTAH
Brent Bradford, Director
Bureau of Solid and Hazardous Waste
Management
Department of Health
P.O. Box 16700
288 North 1460 West Street
Salt Lake City, Utah 84116-0700
CML (801) 533-4145
VERMONT
John Malter, Director
Waste Management Division
Agency of Environmental Conservation
103 South Main Street
Montpelier, Vermont 05676
CML (802) 244-8702
VIRGIN ISLANDS
Angel Lois Le Bron, Commissioner
Department of Conservation and Cultural
Affairs
P.O. Box 4399, Charlotte
St Thomas, Virgin Islands 00801
CML (809) 774-6420
VIRGINIA
Dr. Wladimir Gulevich, Chief
Division of Technical Services
Department of Waste Management
Monroe Building, llth Floor
101 North 14th Street
Richmond, Virginia 23219
CML "(804) 225-2667
WASHINGTON
Chris Haines, Acting Manager
Solid and Hazardous Waste Management
Division
Department of Ecology
Mail Stop PV-11
Olympia, Washington 98504
CML (206) 459-6316
WEST VIRGINIA
Dr. B. Douglas Steel, Chief
Waste Management Division
1260 Greenbrier Street
Charleston, West Virginia 25311
CML (304) 348-5935
WISCONSIN
Paul Didier, Director
Bureau of Solid Waste Management
Department of Natural Resources
P.O. Box 7921
Madison, Wisconsin 53707
CML (608) 266-1327
WYOMING
David A. Finley, Supervisor
Solid Waste Management Program
State of Wyoming
Department of Environmental Quality
. 122 West 25th Street .
Herschler Building
Cheyenne, Wyoming 82002
CML (307) 777-7752
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APPENDIX D
FEDERAL REGULATORY AUTHORITIES FOR
FINANCIAL INSTITUTIONS AND FINANCIAL MARKETS
I. Regulatory Authorities for Banks
1. Comptroller of the Currency
Department of the Treasury
490 L'Enfant Plaza East, S.W.
Washington, D.C 20219
2. Board of Governors of the Federal Reserve System
20th and Constitution Avenue, N.W.
Washington, D.C 20551
(202) 452-3000
3. Federal Deposit Insurance Corporation
550 Seventeenth Street, N.W.
Washington, D.C. 20429
(202) 393-8400
EL Regulatory Authorities for Savings and Loan Institutions
1. Federal Home Loan Bank Board
1700 G Street, N.W.
Washington, D.C 20552
(202) 377-6000
2. Federal Savings and Loan Insurance Corporation
1700 G Street, N.W.
Washington, D.C 20552
(202) 377-6600
m. Regulatory Authority for Credit Unions
1. National Credit Union Administration
1776 G Street, N.W.
Washington, D.C 20456
(202) 357-1050
a,
IV. Regulatory Authority for Financial Markets
1. U.S. Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
(202) 272-3100
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D-2
Copies of corporate financial reports may be obtained by written request (marked
Attn: Public Reference) or may be obtained in person at:
Public Reference Room
U.S. Securities & Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
(202) 272-7450
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APPENDIX E
STATE REGULATORY AUTHORITIES
FOR FINANCIAL INSTITUTIONS
APPENDIX E-l: STATE AUTHORITIES WHICH REGULATE BANKS, SAVINGS AND
LOANS, AND CREDIT UNIONS E-l
APPENDIX E-2: STATE AUTHORITIES WHICH REGULATE INSURANCE COMPANIES
AND SURETY COMPANIES E-12
APPENDIX E-3: STATE BOARDS OF ACCOUNTANCY ' E-18
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APPENDIX E-l
STATE AUTHORITIES WHICH REGULATE BANKS,
SAVINGS AND LOANS, AND CREDIT UNIONS*
This Appendix lists the regulatory authorities which oversee state-chartered financial institutions
(banks, savings and loan associations, and credit unions). Some or all of these institutions may be
empowered to act as trustee or issue letters of credit in their state. In the list below, the type of institution
regulated by each state authority is indicated to the left of that agency (B = banks, including mutual savings
banks; S&L = savings and loan associations; CU = credit unions).
ALABAMA
B, James E. Goldborough
S&L Superintendent of Banks;
Savings and Loan Commissioner
State Banking Department
166 Commerce Street
3rd Floor
Montgomery, Alabama 36130
(205) 261-3452
CU Lawrence C Williams,
Administrator
Credit Union Administration
304 Dexter Avenue
Suite 1-C
Montgomery, Alabama 36130
(205) 261-3180
ALASKA
B, Willis F. Kirkpatrick, Director
S&L, Division of Banking and Securities
CU Department of Commerce and
Economic Development
Pouch D
Juneau, Alaska 99811
(907) 465-2521
ARIZONA
B, Mary C Short
S&L, Superintendent of Banks
CU State Banking Department
3225 North Central
Suite 815
Phoenix, Arizona 85012
(602) 255-4421
ARKANSAS
B Marlin D. Jackson
Bank 'Commissioner
Bank Department
Tower Building
323 Center Street
Suite 500
Little Rock, Arkansas 72201
(501) 371-1117
S&L, Beverly Bossett
CU Securities Commissioner
Arkansas Securities Department
Heritage West Building
3rd Floor
201 East Markham
Little Rock, Arkansas 72201
(501) 371-1011
* Source: Adapted from information from the Conference of State Bank Supervisors, National
Association of State Savings and Loan Supervisors, and the National Credit Union Administration.
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E-2
CALIFORNIA
B Louis Carter
Superintendent of Banks
State Banking Department
Suite 750
235 Montgomery Street
San Francisco, California 94104
(415) 557-3666 [S.F.]
(213) 736-3791 [LA]
CU Beverly Brooks, Special
Administrator for Credit Union
Law
Department of Corporations
Financial Services Division
600 South Commonwealth Avenue
Los Angeles, California 90005
(213) 736-2741
COLORADO
B, Richard B. Doby
CU State Bank Commissioner
Division of Banking
First West Plaza
Suite 700
303 West Colfax
Denver, Colorado 80204
(303) 866-3131
S&L David L. Paul
Savings and Loan Commissioner
Division of Savings and Loan
1560 Broadway
Suite 705
Denver, Colorado 80202
(303) 866-2384
COMMONWEALTH OF THE NORTHERN
MARIANAS ISLANDS
B, Alexandra Castro
S&L Attorney General
Office of the Governor
Commonwealth of the Northern
Marianas Islands
Saipan, Marianas Islands 96950
(670) 234-6207
CONNECTICUT
B, Howard B. Brown, Jr.
S&L Banking Commissioner
Department of Banking
44 Capitol Avenue
Hartford, Connecticut 06106
(203) 566-4560
CU Joseph D. Tirinzoni, Director
Credit Union Division
Ranking Department
44 Capitol Avenue
Hartford, Connecticut 06106
(203) 566-4560
DFT.AWARF.
B, John E. Malarkey
S&L State Bank Commissioner
Thomas Collins Building
P.O. Box 1401
Dover, Delaware 19903
(302)-736-4235
FLORIDA
B Gerald A. Lewis
State Comptroller
State Capitol Building
Tallahassee, Florida 32301
(904) 488-0370
S&L, Alex Hager, Chief
CU Bureau of Thrift Institutions
Department of Banking and
Finance
Suite 1402, The Capitol
Tallahassee, Florida 32399-0350
(904) 488-9570
GEORGIA
B, Edward D. Dunn, Commissioner
CU Department of Banking and
Finance
2990 Brandywine Road
Suite 200
Atlanta, Georgia 30341
(404) 393-7330
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E-3
GEORGIA (continued)
S&L Steven D. Bridges
Division Director
Department of Banking and Finance
2990 Brandywine Road
Suite 200
Atlanta, Georgia 30341
(404) 393-7330
GUAM
S&L
HAWAn
B,
S&L,
IDAHO
B,
S&L,
CU
Dave J. Santos
Banking Commissioner
855 West Marine Drive
Agana, Guam 96910
(671) 477-1040
Donna Tanoue
Commissioner of Financial
Institutions
Department of Commerce and
Consumer Affairs
P.O. Box 541
Honolulu, Hawaii 96809
(808) 548-7505
Gavin Gee, Bureau Chief
Department of Finance
700 West State Street
2nd Root
Boise, Idaho 83720
(208) 334-3319
ILLINOIS
B
William C. Harris
Commissioner of Banks and Trust
Companies
119 South Fifth Street
Room 400
Springfield, Illinois 62701
(217) 782-7966 [Springfield]
(312) 793-2043 [Chicago]
ILLINOIS (continued)
S&L Paul A Downing, Commissioner
Savings and Loan Commission
State of Illinois Center
Suite 11-300
100 West Randolph
Chicago, Illinois 60601
(312) 917-2030
CU Victor Jay Pambianto,
Supervisor
Credit Union Division
Department of Financial
Institutions
421 East Capitol
Room 205
Springfield, Illinois 62706
(217) 782-2833
INDIANA
B Ruth D. Harrison, Director
Department of Financial
Institutions
1024 State Office Building
Indianapolis, Indiana 46204
(317) 232-3960
CU, Dick Wiles, Supervisor
S&L Department of Financial
Institutions
1024 State Office Building
Indianapolis, Indiana 46204
(317) 232-3955
William R. Bernau
Superintendent of Banking
Banking Department
530 Liberty Building
418 Sixth Avenue
Des Moines, Iowa 50309
(515) 281-4014
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E-4
IOWA (continued)
S&L Gregg Barcus, Superintendent
Division of Savings and Loans
State Capitol Complex
Des Moines, Iowa 50319
(515) 281-5491
CU Betty Minor, Superintendent
Credit Union Division
Commerce Department
Executive Hills West
1209 East Court Avenue
Des Moines, Iowa 50319
(515) 281-6514
LOUISIANA
B, Kenneth Pickering
S&L Commissioner of Financial
Institutions
Department of Commerce
P.O. Box 94095, Capitol Station
Baton Rouge, Louisiana 70804-9095
(504) 925-4660
CU
KANSAS
B
Eugene T. Barrett, Jr.
State Bank Commissioner
Ranking Department
700 Jackson Street
Suite 300
Topeka, Kansas 66603
(913) 296-2266
S&L Marvin Steinert, Commissioner
Savings and Loan Department
503 Kansas Avenue
Room 220
Topeka, Kansas 66603
(913) 296-3739
CU William A. Kasting, Administrator
Department of Credit Unions
503 Kansas Avenue
Suite 342
Topeka, Kansas 66603
(913) 296-3021
KENTUCKY
B, Thomas B. Miller
S&L, Commissioner of Financial
Institutions
Department of Financial
Institutions
911 Leawood Drive
Frankfort, Kentucky 40601
(502) 564-3390
MAINE
B,
S&L,
CU
Gerald Thompson, Staff Examiner
Credit Union Division
Office of Financial Institutions
Department of Commerce
P.O. Box 94095, Capitol Station
Baton Rouge, Louisiana 70804-9095
(504) 925-4676
H. Donald DeMatteis,
Superintendent
Bureau of Banking
Department of Professional and
Financial Regulation
State House Station 36
Augusta, Maine 04333
(207) 289-3231
MARYLAND
B, Margie H. Muller
CU Bank Commissioner
Financial Regulation Division
Department of Licensing and
Regulation
34 Market Place
Baltimore, Maryland 21202
(301) 659-6262
S&L William H. Griffin, Director
Division of Savings and Loan
Associations
Department of Licensing and
Regulation
34 Market Place
Suite 800
Baltimore, Maryland 21202-4078
(301) 659-6330
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E-5
PEASSACHUSETTS
B, Paul E Bulman, Commissioner
S&L Banks Division
Leverett Saltonstall Building
100 Cambridge Street
Government Center
Boston, Massachusetts 02202
(617) 727-3120
CU Edward Welch,
Deputy Commissioner
Credit Union Division
Department of Banking and Loan
Agencies
Room 2004
100 Cambridge Street
Boston, Massachusetts 02202
(617) 727-9520
MICHIGAN
B Eugene W. Kuthy, Commissioner
Financial Institutions Bureau
Department of Commerce
P.O. Box 30224
Lansing, Michigan 48909
(517) 373-3460
S&L Darwyn V. Sanborn, Director
Corporate Division
Financial Institutions Bureau
Department of Commerce
P.O. Box 30224
Lansing, Michigan 48909
(517) 373-6940
CU Michael Fitzgerald, Director
Credit Union Division
Financial Institutions Bureau
Department of Commerce
P.O. Box 30224
Lansing, Michigan 48909
(517) 373-6930
MINNESOTA
B James G. Miller
Deputy Commissioner of Commerce
Division of Financial Examinations
Department of Commerce
500 Metro Square Building
St Paul, Minnesota 55101
(612) 296-2135
S&L Allyn R. Long
Assistant Commissioner
Department of Commerce
Metro Square Building
5th Floor
St. Paul, Minnesota 55101
(612) 296-2297
CU Terry R. Meyer
Supervisor of Credit Unions
Division of Financial Institutions
500 Metro Square Building
SL Paul, Minnesota 55101
(612) 296-2297
MISSISSIPPI
B, Jean S. Porter, Commissioner
CU Department of Banking and Consumer
Finance
P.O. Box 731
Jackson, Mississippi 39205-0731
(601) 359-1031
S&L W.M. Yeager, Commissioner
Department of Savings Associations
633 North State Street
Suite 201
Jackson, Mississippi 39201
(601) 354-6135
MISSOURI
B Thomas B. Fitzsimmons
Commissioner of Finance
Division of Finance
P.O. Box 716
Jefferson City, Missouri 65102
(314) 751-3397
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E-6
MISSOURI (continued)
S&L Mickey Brown, Director
Division of Savings and Loan
Supervision
Department of Economic
Development
301 West High Street
P.O. Box 836
Jefferson City, Missouri 65101
(314) 751-4243
CU Doyle R. Brown, Jr., Director
Division of Credit Unions
Department of Economic
Development
P.O. Box 1607
Jefferson City, Missouri 65102
(314) 751-3419
MONTANA
B, Fred Napier
S&L, Commissioner of Financial
CU Institutions
1424 Ninth Avenue
Helena, Montana 59620
(406)444-2091
NEBRASKA
B, James C Barbee, Director
S&L Department of Ranking and Finance
301 Centennial Mall, South
Lincoln, Nebraska 68509
(402) 471-2171
CU Glen Callaway, Assistant Director
Department of Banking and Finance
301 Centennial Mall, South
P.O. Box 95006
Lincoln, Nebraska 68509
(402) 471-2171
NEVADA
B,
S&L,
CU
L. Scott Walshaw, Administrator
Financial Institutions Division
Department of Commerce
406 East Second Street
Carson City, Nevada 89710
(702) 885-4259
NEW HAMPSHIRE
B A. Roland Roberge
Bank Commissioner
Banking Department
45 South Main Street
Concord, New Hamsphire 03301
(603) 271-3561
S&L, Arlan S. McKnight
CU Deputy Bank Commissioner
Banking Department
45 South Main Street
Concord, New Hampshire 03301
(603}271-3561
NEW JERSEY
B Mary Little Parell
Commissioner of Banking
Department of Ranking
36 West State Street
P.O. Box CN040
Trenton, New Jersey 08625
(609) 292-3420 [Trenton]
(201) 648-6113 [Newark]
S&L William B. Lewis
Deputy Commissioner
Division of Savings and Loan
Associations
Department of Banking
36 West State Street
P.O. Box CN040
Trenton, New Jersey 08625
(609) 292-5494
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E-7
NEW JERSEY (continued)
CU Joseph Lanigan, Chief
Consumer Credit Bureau
Department of Banking
P.O. Box CN040
36 West State Street
Trenton, New Jersey 08625
(609) 292-5466
NEW MEXICO
B Mary M. Mclnemy, Director
Financial Institutions Division
Commerce and Industry Department
Bataan Memorial Building
Santa Fe, New Mexico 87503
(505) 827-7740
S&L, Snider Campbell
CU Financial Institutions Division
Bataan Memorial Building
Room 137
Santa Fe, New Mexico 87503
(505) 827-7740
NEW YORK
B Jill M. Considine
Superintendent of Banks
Department of Banking
Two Rector Street
New York, New York 10006
(212) 618-6642
S&L, Carmine M. Tenga
CU Deputy Superintendent
Thrift Institution Division
Department of Banking
Two Rector Street
New York, New York 10006
(212) 618-6626
NORTH CAROLINA *
B James S. Currie
Commissioner of Banks
Department of Commerce
P.O. Box 29512
Raleigh, North Carolina 27626
(919) 733-3016
NORTH CAROLINA (continued)
S&L George King, Administrator
Office of Savings and Loans
Department of Commerce
P.O. Box 27945
Raleigh, North Carolina 27611
(919) 733-3525
CU Roy High, Administrator
Credit Union Division
Department of Commerce
P.O. Box 25249
Raleigh, North Carolina 27611
(919) 733-7501
NORTH DAKOTA
B, Gary Preszler, Commissioner
S&L, Department of Banking and
Financial Institutions
1301 State Capitol
Bismarck, North Dakota 58505
(701) 224-2256
OHIO
B
Linda K. Page
Superintendent of Banks
Division of Banks
Department of Commerce
2 Nationwide Plaza
Columbus, Ohio 43215
(614) 466-2932
S&L Connie J. Harris, Superintendent
Division of Savings and Loan
Associations
Department of Commerce
2 Nationwide Plaza
Chestnut and High Streets
Columbus, Ohio 43266-0544
(614) 466-3723
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E-8
OHIO (continued)
CU Kenneth A. Roberts, Acting
Superintendent
Division of Credit Unions
Department of Commerce
2 Nationwide Plaza
4th Floor
Columbus, Ohio 43215
(614) 466-2384
OKLAHOMA
B Robert Y. Empie
Bank Commissioner
State Banking Department
Maico Building
2nd Floor
4100 Lincoln Boulevard
Oklahoma City, Oklahoma 73105
(405) 521-2783
S&L, Wayne Osbom
CU Deputy Commissioner
State Banking Department
Malco Building
2nd Floor
4100 Lincoln Boulevard
Oklahoma City, Oklahoma 73105
(405) 521-2783
OREGON
B Fred A. Morgan, Supervisor
Banking Division
Financial Institutions Division
280 Court Street, NJE.
Salem, Oregon 97310
(503) 378-4140
S&L, Thomas Y. Higashi, Supervisor
CU Savings and Loans, Credit Unions,
and Consumer Finance Companies
Financial Institutions Division
280 Court Street, NJE.
Salem, Oregon 97310
(503) 378-4140
PENNSYLVANIA
B Ben McEnteer .
Secretary of Banking
Department of Banking
333 Market Street
Harrisburg, Pennsylvania 17101
(717) 787-6991
S&L Walter L. Breenenman, Director
Savings Association Bureau
Department of Banking
333 Market Street
16th Floor
Harrisburg, Pennsylvania 17101-2290
(717) 787-7333
CU Frederic George, Director
Consumer Credit Bureau
Department of Banking
333 Market Street
16th Floor
Harrisburg, Pennsylvania 17101-2290
(717)" 787-3717
PUERTO RICO
B Angel L. Rosas
Commissioner of Banking
Commonwealth of Puerto Rico
P.O. Box S4515
San Juan, Puerto Rico 00905
(809) 721-5242
CU Inspector of Cooperatives of
Puerto Rico
G.P.O. Box 4108
San Juan, Puerto Rico 00936-4108
(809) 764-2080 ,
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ISLAND
B, Mark A. Pfeiffer
S&L Director of Business Regulation
Department of Business
Regulation
100 North Main Street
Providence, Rhode Island 02903
(401) 277-2405
CU Frank Caramadre,
Chief Credit Union Examiner
Banking Division
Department of Business Regulation
100 North Main Street
Providence, Rhode Island 02903
(401) 277-2405
SOUTH CAROLINA
B, Robert C Cleveland
S&L, Commissioner of Banking
CU State Board of Financial
Institutions
Examining Division
1025 Sumter Street
Room 217
Columbia, South Carolina 29201
(803) 734-1050
SOUTH DAKOTA
B, Richard A. Duncan
S&L Director of Banking and Finance
Department of Commerce
State Capitol Building
Pierre, South Dakota 57501
(605) 773-3421
TENNESSEE
B William C Adams
Commissioner of Financial
Institutions
a
Department of Banking
James K. Polk State Office
Building
505 Deaderick Street
Nashville, Tennessee 37219
(615) 741-2236
TENNESSEE (continued)
S&L Tom Hamm, Assistant Commissioner
Loan Division
Department of Financial
Institutions
James K. Polk State Office
Building
2nd Floor
505 Deaderick Street
Nashville, Tennessee 37219
(615) 741-3186
CU Oliver G. Bamett
Assistant Commissioner
Division of Credit Unions
Department of Financial
Institutions
James K. Polk State Office
Building
505 Deaderick Street
2nd Floor
Nashville, Tennessee 37219
(615) 741-5608
James L. Sexton
Ranking Commissioner
Banking Department
2601 North Lamar
Austin, Texas 78705
(512) 479-1200
S&L L.L. Bowman HI, Commissioner
Department of Savings and Loan
2601 North Lamar
Suite 201
Austin, Texas 78705
(512) 479-1250
CU John Hale, Commissioner
Credit Union Department
914 East Anderson Lane
Austin, Texas 78752
(512) 837-9236
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E-10
Elaine B. Weis
Commissioner of Financial
Institutions
P.O. Box 89
Salt Lake City, Utah 84110
(801) 530-6502
VERMONT
B, Gretchen Babcock
S&L, Deputy Commissioner of Banking
CU Department of Ranking and
Insurance
120 State Street
Montpelier, Vermont 05602
(802) 828-3301
VIRGIN ISLANDS
B Julio A. Brady
Office of the Lieutenant Governor
Chairman of the Banking Board
Government House, Charlotte
Amalie
P.O. Box 450
SL Thomas U.S. Virgin Islands
00801
(809) 774-2991
VIRGINIA
S Sidney A. Bailey
Commissioner of Financial
Institutions
Bureau of Financial Institutions
P.O. Box 2-AE
Richmond, Virginia 23205
(804) 786-3657
S&L, Lewis S. Trueheart
CU Deputy Commissioner of Savings
and Loans and Credit Unions
Bureau of Financial Institutions
P.O. Box 2-AE
Richmond, Virginia 23205
WASHINGTON
B Thomas H. Olfield
Supervisor of Banking
Banking and Small Loans Division
Department of General
Administration
General Administration Building
Room 219
Olympia, Washington 98504
(206) 753-6520
S&L, R1L Lewis, Supervisor
CU Division of Savings and Loan
Associations
Department of General
Administration
General Administration Building
Room 217C
Olympia, Washington 98504-0622
(206) 753-5597
WEST VIRGINIA
B, Kevin Thomas
S&L, Commissioner of Banking
CU Department of Banking
State Office Building 3
Room 311A
Charleston, West Virginia 25305
(304) 348-2294
WISCONSIN
B Richard E. Galecki
Commissioner of Banking
P.O. Box 7876
Madison, Wisconsin 53707
(608) 266-1621
S&L RJ. McMahon
Savings and Loan Commission
131 West Wilson Street
Suite 502
Madison, Wisconsin 53702
(608) 266,1821
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E-ll
WISCONSIN (continued)
CU Richard Ottow
Commissioner of Credit Unions
310 North Midvale Boulevard
P.O. Box 7960
Madison, Wisconsin 53707
(608) 266-0438
WYOMING
B, Stanley R. Hunt, State Examiner
S&L Herschler Building
4th Floor West
Cheyenne, Wyoming 82002
(307) 777-6600
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E-12
APPENDIX E-2
STATE AUTHORITIES WHICH REGULATE
INSURANCE COMPANIES AND SURETY COMPANIES*
Surety companies, insurance companies, and their agents are regulated by state insurance departments.
This Appendix lists the name, address, and telephone number of the insurance commissioner in each state.
ALABAMA
Michael DeBellis
Commissioner of Insurance
Department of Insurance
135 South Union Street
Montgomery, Alabama 36130-3401
(205) 269-3550
ALASKA
John L, George
Director of Insurance
Division of Insurance
Department of Commerce
P.O. Box D
Juneau, Alaska 99811
(907) 465-2515
AMERICAN SAMOA
Arthur Roberts
Commissioner of Insurance
Office of the Governor
Pago Pago, American Samoa 96799
(684) 633-2225
ARIZONA
S. David Childers
Director of Insurance
Department of Insurance
801 East Jefferson
2nd Floor
Phoenix, Arizona 85034
(602) 255-5400
ARKANSAS
Robert M Eubanks, IJJ
Insurance Commissioner
400 University Tower Building
Twelfth and University Streets
Little Rock, Arkansas 72204
(501) 371-1325
CALIFORNIA
Roxani Gillespie
Commissioner of Insurance
Department of Insurance
600 South Commonwealth Avenue
14th Floor
Los Angeles, California 90005
(213) 736-2551
COLORADO
John Kezer
Commissioner of Insurance
Division of Insurance
Department of Regulatory Agencies
303 West Colfax Avenue
5th Floor
Denver, Colorado 80204
(303) 866-3201
COMMONWEALTH OF THE NORTHERN
MARIANAS ISLANDS
Alexandra Castro
Attorney General
Office of the Governor
Commonwealth of the Northern Marianas
Islands
Saipan, Marianas Islands 96950
(670) 234-6207
* Source: Adapted from information from the National Association of Insurance Commissioners.
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E-13
CONNECTICUT
Peter W. Gillies
Insurance Commissioner
Department of Insurance
Room 425
165 Capitol Avenue
Hartford, Connecticut 06106
(203) 566-5275
DELAWARE
N. Levinson
Insurance Commissioner
841 Silver Lake Boulevard
Dover, Delaware 19901
(302) 736-4251
DISTRICT OF COLUMBIA
Marguerite C. Stokes
Superintendent of Insurance
Department of Insurance
614 H Street, N.W.
Suite 512
Washington, D.C 20001
(202) 727-7419
FLORIDA
BUI Gunter
Insurance Commissioner
Department of Insurance and Treasury
State Capitol, Plaza Level 11
Tallahassee, Florida 32301
(904)488-3440
GEORGIA
Warren D. Evans
Insurance Commissioner
2 Martin Luther King, Jr. Drive
Royd Memorial Building
704 West Tower
Atlanta, Georgia 30334
(404) 656-2056 •
GUAM
Dave J. Santos
Insurance Commissioner
855 West Marine Drive
Agana, Guam 96910
(671) 477-1040
HAWAn
Mario R. Ramil
Insurance Commissioner
Department of Commerce and Consumer
Affairs
P.O. Box 3614
Honolulu, Hawaii 96811
(808) 548-5450
IDAHO
Wayne L. Soward
Director of Insurance
Department of Insurance
700 West State Street
Boise, Idaho 83720
(208) 334-2250
TT.T.TNOTS
John E. Washburn
Director of Insurance
Department of Insurance
320 West Washington Street
4th Floor
Springfield, Illinois 62767
(217) 782-4515
INDIANA
Harry E. F-akin
Commissioner of Insurance
Department of Insurance
509 State Office Building
Indianapolis, Indiana 46204
(317) 232-2386
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E-14
William D. Hager
Commissioner of Insurance
Insurance Department of Iowa
State Office Building
G23 Ground Floor
Des Moines, Iowa 50319
(515) 281-5705
KANSAS
Fletcher Bell
Commissioner of Insurance
Insurance Department
420 S.W. Ninth Street
Topeka, Kansas 66612
(913) 296-7801
KENTUCKY
Gil McCarty
Insurance Commissioner
Department of Insurance
229 West Main Street
P.O. Box 517
Frankfort, Kentucky 40602
(502) 564-3630
LOUISIANA
Sherman A. Bernard
Commissioner of Insurance
Department of Insurance
P.O. Box 94214
Baton Rouge, Louisiana 70804
(504) 342-5328
MAINE
Theodore T. Briggs
Superintendent of Insurance
Department of Business Regulation
State House Station 34
Augusta, Maine 04333
(207) 289-3101
MARYLAND
Edward J. Muhl
Insurance Commissioner
Insurance Division
Department of Licensing and Regulation
501 St. Paul Place
7th Floor South
Baltimore, Maryland 21202
(301) 659-2520
MASSACHUSETTS
Peter Hiam
Commissioner of Insurance
Insurance Division
Executive Office of Consumer Affairs
100 Cambridge Street
Boston, Massachusetts 02202
(617) 727-3333
MICHIGAN
Herman A. Coleman
Commissioner of Insurance
Insurance Division
Department of Commerce
500 Metro Square Building
St. Paul, Minnesota 55101
(612) 296-6907
MINNESOTA
Michael A. Hatch
Commissioner of Insurance
Insurance Division
Department of Commerce
500 Metro Square Building
St. Paul, Minnesota 55101
(612) 296-6907
MISSISSIPPI
George Dale
Commissioner of Insurance
Insurance Department
1804 Walter Sillers Buflding
P.O. Box 79
Jackson, Mississippi 39205
(601) 359-3569
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E-15
MISSOURI
Lewis R. Christ
Director of Insurance
Division of Insurance
Department of Economic Development
301 West High Street, 6 North
P.O. Box 690
Jefferson City, Missouri 65102
(314) 751-2451
MONTANA
Andrea Bennett
Commissioner of Insurance
P.O. Box 4009
Helena, Montana 59604
(406) 444-2040
NEBRASKA
Michael J. Dugan
Director of Insurance
Department of Insurance
301 Centennial Mall South
Lincoln, Nebraska 68509
(402) 471-2201
NEVADA
David A. Gates
Commissioner of Insurance
Insurance Division
Department of Commerce
Nye Building
201 South Fall Street
Suite 312
Carson City, Nevada 89710
(702) 885-4270
NEW HAMPSHIRE
Louis E. Bergeron
Insurance Commissioner
Insurance Department
169 Manchester Street
Concord, New Hampshire 03301
(603) 271-2261
NEW JERSEY
Kenneth D. Merin
Commissioner of Insurance
Department of Insurance
201 East State Street
Trenton, New Jersey 08625
(609) 292-5363
NEW MEXICO
Vincente Jasso
Superintendent of Insurance
Insurance Department
State Corporation Commission
P.O. Drawer 1269
Santa Fe, New Mexico 87504-1269
(505) 827-4535
NEW YORK
James P. Corcoran
Superintendent of Insurance
Insurance Department
160 West Broadway
Floor 21
New York, New York 10013
(212) 602-0429
NORTH CAROLINA
James E. Long
Commissioner of Insurance
Department of Insurance
Dobbs Building
P.O. Box 26387
Raleigh, North Carolina 27611
(919) 733-7343
NORTH DAKOTA
Earl R. Pomeroy
Commissioner of Insurance
Insurance Department
Capitol Building, 5th Floor
Bismarck, North Dakota 58505
(701) 224-2440
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E-16
OHIO
George Fabe
Director of Insurance
Department of Insurance
2100 Stella Court
Columbus, Ohio 43266-0566
(614) 481-5735
OKLAHOMA
Gerald Grimes
Insurance Commissioner
Insurance Department
P.O. Box 53048
Oklahoma City, Oklahoma 73152-3408
OREGON
Josephine M. Driscoll
Insurance Commissioner
Insurance Division
Department of Commerce
158 Twelfth Street, N.E.
Salem, Oregon 97310
(503) 378-4271
PENNSYLVANIA
George F. Grode
Commissioner of Insurance
Insurance Department
1326 Strawberry Square
Harrisburg, Pennsylvania 17120
(717) 787-5173
PUERTO RICO
Juan Antonio Garcia
Commissioner of Insurance
P.O. Box 8330, Fernandez Juncus Station
Santurce, Puerto Rico 00910
(809) 722-8686
RHODE ISLAND
Mark A Pfeiffer
Insurance Commissioner
Insurance Division
Department of Business Regulation
100 North Main Street
Providence, Rhode Island 02903
(401) 277-2246
SOUTH CAROLINA
John G. Richards, V
Chief Insurance Commissioner
Department of Insurance
1612 Marion Street
P.O. Box 100105
Columbia, South Carolina 29292-3105
(803) 737-6160
SOUTH DAKOTA
Susan L. Walker
Director of Insurance
Commerce Department
Capitol Building
Pierre, South Dakota 57501
(605) 773-3563
TENNESSEE
William H. Tnman
Commissioner of Insurance
Department of Insurance
1808 West End Avenue
14th Floor
Nashville, Tennessee 37219
(615) 741-2241
TEXAS
Doyce R. Lee
Commissioner of Insurance
1110 San Jacinto Boulevard
Austin, Texas 78701-1998
(512) 463-6464
UTAH
Harold C Yancey
Commissioner of Insurance
P.O. Box 45803
Salt Lake City, Utah 84145
(801) 530-6400 .
VERMONT
Thomas P. Menson
Commissioner of Insurance
Department of Banking and Insurance
State Office Building
Montpelier, Vermont 05602
(802) 828-3301
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VIRGIN ISLANDS
Julio A. Brady
Commissioner of Insurance
Office of the Lieutenant Governor
P.O. Box 450
Charlotte Amalie
St. Thomas, Virgin Islands 00801
(809) 774-2991
VIRGINIA
James M. Thomson
Commissioner of Insurance
Bureau of Insurance
State Corporation Commission
700 Jefferson Building
P.O. Box 1157
Richmond, Virginia 23209
(804) 786-3741
WASHINGTON
Dick Marquardt
Insurance Commissioner
Office of the Insurance Commissioner
Insurance Building AQ21
Otympia, Washington 98504
(206) 753-7301
E-17
WEST VIRGINIA
• Fred E. Wright
Insurance Commissioner
Insurance Department
2100 Washington Street, East
Charleston, West Virginia 25305
(304) 348-3394
WISCONSIN
Thomas P. Fox
Commissioner of Insurance
P.O. Box 7873
Madison, Wisconsin 53707
(608) 266-0102
WYOMING
Gordon W. Taylor
Insurance Commissioner
Insurance Department
Herschler Building
122 West 25th Street
Cheyenne, Wyoming 82002
(307) 777-7401
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E-18
APPENDIX E-3
STATE BOARDS OF ACCOUNTANCY"
ALABAMA STATE BOARD OF PUBLIC
ACCOUNTANCY
20 Commerce Row
529 South Perry Street
Montgomery, Alabama 36104
Attn: Boyd E Nicholson, Jr., CPA
Executive Director
Telephone: (205) 834-7651
ALASKA STATE BOARD OF PUBLIC
ACCOUNTANCY
Department of Commerce
Division of Occupational Licensing
P.O. Box D
Juneau, Alaska 99811
Attn: Edward R. Mercer
Licensing Examiner
Telephone: (907) 465-2580
ARIZONA STATE BOARD OF ACCOUNTANCY
3110 North 19th Street
Suite 140
Phoenix, Arizona 85015
Attn: Ruth R. Lee
Executive Director
Telephone: (602)255-3648
ARKANSAS STATE BOARD OF
ACCOUNTANCY
1515 West 7th Street
Suite 320
Little Rock, Arkansas 72201
Attn: James E. Ward
Executive Director
Telephone: (501) 371-1520
CATJFOKNTA STATE BOARD OF
ACCOUNTANCY
2135 Butano Drive
Suite 112
Sacramento, California 95825
Attn: Delia Bousquet
Executive Officer
Telephone: (916) 920-7121
COLORADO STATE BOARD OF
ACCOUNTANCY
1525 Sherman Street
Denver, Colorado 80203-1768
Attn: Mary Lou Burgess
Administrator
Telephone: (303) 866-2869
CONNECnCUT:STATE BOARD OF
ACCOUNTANCY
Secretary of State
190 Trumbull Street
3rd Floor
Hartford, Connecticut 06103
Attn: Joseph A. Spagna
Administrator
Telephone: (203)566-7835
DFJ.AWARE STATE BOARD OF
ACCOUNTANCY
9 Stage Road
Newark, Delaware 19711
Attn: John Shellenberger, CPA
Executive Director
Telephone: (302) 738-6065
* Source: Adapted from information from the National Association of Insurance Commissioners.
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E-19
DISTRICT OF COLUMBIA BOARD OF
ACCOUNTANCY
Department of Consumer and Regulatory
Affairs
Investigations and Inspections
614 H Street, N.W.
Room 923
Washington, D.C 20001
Attn: Harriette Andrews
Telephone: (202)727-7468
FLORIDA BOARD OF ACCOUNTANCY
4001 Northwest 43rd Street
Suite 16
Gainesville, Honda 32606-4599
Attn: Martha P. Willis
Executive Director
Telephone: (904)372-2032
GEORGIA STATE BOARD OF ACCOUNTANCY
166 Pryor Street, S.W.
Atlanta, Georgia 30303
Attn: Barbara Wilkerson
Executive Director
Telephone: (404)656-3941
GUAM TERRITORIAL BOARD OF PUBLIC
ACCOUNTANCY
P.O. Box P
Agana, Guam 96910
Attn: Judith K. Borja
Chairman
Telephone: (671) 646-6987
HAWAn BOARD OF ACCOUNTANCY
Department of Commerce and Consumer
Affairs
P.O. Box 3469
Honolulu, Hawaii 96801
Attn: Kathleen Yokoyuchi
Executive Secretary
Telephone: (808) 548-7471
IDAHO STATE BOARD OF ACCOUNTANCY
700 West State Street .
.2nd Floor
Boise, Idaho 83720
Attn: Jeanette B. Drury
Executive Secretary
Telephone: (208) 334-2490
TT.T TNOIS COMMJLTi'HH ON ACCOUNTANCY
University of Illinois
10 Administration Building
506 South Wright Street
Urbana, Illinois 61801
Attn: Margaret Richardson
Secretary
Telephone: (217) 333-1565
TTT.TNDTS PUBLIC ACCOUNTING
REGISTRATION COMMI'lTHH
Department of Registration & Ed.
320 West Washington Street
3rd Floor -
Springfield, Illinois 62786
Attn: Mary Wright
Unit Manager
Telephone: (217)785-0800
INDIANA STATE BOARD OF PUBLIC
ACCOUNTANCY
Professional Licensing Agency
1021 State Office Building
Indianapolis, Indiana 46204
Attn: Evelyn Dollinger
Administrative Assistant
Telephone: (317)232-3898
IOWA BOARD OF ACCOUNTANCY
Executive Hills, West
1209 Court Avenue
Des Moines, Iowa 50319
Attn: William Schroeder
Executive Secretary
Telephone: (515)281-4126
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E-20
KANSAS BOARD OF ACCOUNTANCY
503 Kansas
Room 236
Topeka, Kansas 66603
Attn: Glenda Sherman
Secretary
Telephone: (913) 296-2162
KENTUCKY STATE BOARD OF
ACCOUNTANCY
332 West Broadway
Suite 310
Louisville, Kentucky 40202
Attn: James T. Abler
Executive Director
Telephone: (502)588-3037
STATE BOARD OF CPAs OF LOUISIANA
2 Canal Street
Suite 1515
New Orleans, Louisiana 70130
Attn: Mildred M. McGaha, CPA
Executive Director
Telephone: (504)566-1244
MAINE STATE BOARD OF ACCOUNTANCY
84 Harlow Street
Bangor, Maine 04401
Attn: L.E Parker, Jr., CPA
Secretary
Telephone: (207) 942-6702
MARYLAND STATE BOARD OF PUBLIC
ACCOUNTANCY
501 St. Paul Place
9th Floor
Baltimore, Maryland 21202
Attn: John A. Evans
Executive Director
Telephone: (301) 659-6322
MASSACHUSETTS BOARD OF PUBLIC
ACCOUNTANCY
100 Cambridge Street
15th Floor
Saltonstall Building
Boston, Massachusetts 02202
Attn: Lee H. Bonnarrigo, CPA
Executive Secretary
Telephone: (617) 727-3078
MICHIGAN BOARD OF ACCOUNTANCY
Department of Licensing and Regulation
P.O. Box 30018
loosing, Michigan 48909
Attn: Suzanne U. Jolicoeur
Administrative Secretary
Telephone: (517)373-0682
MINNESOTA STATE BOARD OF
ACCOUNTANCY
Metro Square Building
5th Floor ,
St. Paul, Minnesota 55101
Attn: Pamela K. Smith
Executive Secretary
Telephone: (612)296-7937
MISSISSIPPI STATE BOARD OF PUBLIC
ACCOUNTANCY
P.O. Box 55447
Jackson, Mississippi 39216
Attn: Roy Horton
Executive Director
Telephone: (601) 981-3773
MISSOURI STATE BOARD OF
ACCOUNTANCY
P.O. Box 613
3523 North Ten Mile Drive
Jefferson City, Missouri 65102
Attn: Beverley Shackelford
Executive Director
Telephone: (314) 751-2334
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E-21
MONTANA STATE BOARD OF PUBLIC
ACCOUNTANTS
1424 Ninth Avenue
Helena, Montana 59620-0407
At'tn: Brenda St. Clair
Administrative Assistant
Telephone: (406) 444-3739
NEBRASKA STATE BOARD OF PUBLIC
ACCOUNTANCY
P.O. Box 94725
Lincoln, Nebraska 68509
Attn: Lon W. Morrey, CPA
Executive Director
Telephone: (402)471-3595
NEVADA STATE BOARD OF ACCOUNTANCY
Security Bank Building
1 East Liberty Street
Suite 311
Reno, Nevada 89501
Attn: WUliam S. Zideck
Executive Director
Telephone: (702) 786-0231
NEW HAMPSHIRE BOARD OF
ACCOUNTANCY
2-1/2 Beacon Street
Concord, New Hampshire 03301-4447
Attn: Louise MacMfllan
Assistant to the Board
Telephone: (603)271-3286
NEW JERSEY STATE BOARD OF
ACCOUNTANCY
1100 Raymond Boulevard
Room 507-A
Newark, New Jersey 07102
Attn: John J. Meade
Executive Secretary
Telephone: (201)-648-3240
NEW MEXICO STATE BOARD OF PUBLIC
ACCOUNTANCY
4125 Carytyle Boulevard, N.E.
Albuquerque, New Mexico 87107
Attn: Randy Lovato
Executive Secretary
Telephone: (505) 841-6524
NEW YORK STATE BOARD FOR PUBLIC
ACCOUNTANCY
State Education Department
Cultural Ed Center
Room 3011
Albany, New York 12230
Attn: Douglas R. Martin
Executive Secretary
Telephone: (518) 474-3836
NORTH CAROLINA STATE BOARD OF CPA
EXAMINERS
1101 Oberlin Road
Suite 104 ~:
P.O. Box 12827
Raleigh, North Carolina 27605
Attn: Charles L Bunn, Jr., CPA
Executive Director
Telephone: (919) 821-2443
NORTH DAKOTA STATE BOARD OF
ACCOUNTANCY
Box 8104
University Station
Grand Forks, North Dakota 58202
Attn: Daryl J. HOI
Executive Director
Telephone: (701) 777-3869
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E-22
•TCCOUNTANCY BOARD OF OHIO
65 South Front Street
Suite 222
Columbus, Ohio 43215
Attn: Dan Joseph, Jr.
Director
Telephone: (614) 466-4135
OKLAHOMA STATE BOARD OF PUBLIC
ACCOUNTANCY
6600 North Harvey
Suite 130
Oklahoma City, Oklahoma 73116
Attn: Diana Collinsworth
Director
Telephone: (405) 521-2397
OREGON STATE BOARD OF ACCOUNTANCY
403 Labor & Industrial Building
Salem, Oregon 97310
Attn: Mary Alice Hammond
Administrator
Telephone: (503) 378-4181
PENNSYLVANIA STATE BOARD OF
ACCOUNTANCY
612 Transportation & Safety Building
Commonwealth Avenue & Forster Streets
P.O. Box 2649
Harrisburg, Pennsylvania 17105-2649
Attn: J. Robert Kline
Administrative Secretary
Telephone: (717) 783-3658
PUERTO RICO BOARD OF ACCOUNTANCY
Examining Boards
Box 3271
San Juan, Puerto Rico 00904
Attn: Carmen Ramirez Vega
Director
Telephone: (809) 754-1952
RHODE ISLAND BOARD OF ACCOUNTANCY
Department of Business Regulation
100 North Main Street
Providence, Rhode Island 02903
Attn: Nancy W. Thomas
Executive Secretary
Telephone: (401) 277-3185
SOUTH CAROLINA BOARD OF
ACCOUNTANCY
Dutch Plaza
Suite 260
800 Dutch Square Boulevard
Columbia, South Carolina 29210
Attn: R. Larry Kight
Director
Telephone: (803) 737-9266
SOUTH DAKOTA BOARD OF
ACCOUNTANCY
1509 South Minnesota Avenue
Suite 1
Sioux Falls, South Dakota 57105
Attn: Lynn Bethke
Administrative Assistant
Telephone: (605)339-6746
TENNESSEE STATE BOARD OF
ACCOUNTANCY
1808 West End Building
10th Floor
Nashville, Tennessee 37219
Attn: Anne Darnall
Administrative Assistant
Telephone: (615) 741-2550
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E-23
TEXAS STATE BOARD OF PUBLIC
ACCOUNTANCY
1033 La Posada
Suite 340
Austin, Texas 78752-3892
Attn: Bob E. Bradley
Executive Director
Telephone: (512)451-0241
UTAH COMMITTEE FOR PUBLIC
ACCOUNTANCY
160 East 300 South
Salt Lake City, Utah 84145
Attn: Richard Goode
Chairman
Telephone: (801)530-6635
VERMONT BOARD OF PUBLIC
ACCOUNTANCY
26 Terrace Street
Pavillion Office Building
Montpelier, Vermont 05602
Attn: Francis Conrad
Chairman
Telephone: (802)828-2363
VIRGIN ISLANDS BOARD OF
ACCOUNTANCY
1 B King Street
Chris tiansted
SL Croix, Virgin Islands 00820
Attn: Alan Bronstein, CPA
Secretary
Telephone: (809)773-0096
VIRGINIA STATE BOARD OF ACCOUNTANCY
3600 West Broad Street
Richmond, Virginia 23230
Attn: Roberta L. Banning
Assistant Director
Telephone: (804) 257-8544
WASHINGTON STATE BOARD OF
ACCOUNTANCY
210 East Union
Suite H
P.O. Box 9131
Olympia, Washington 98504
Attn: Carey L. Rader, CPA
Chief Executive Officer
Telephone: (206) 753-2585
WEST VIRGINIA BOARD OF ACCOUNTANCY
507 L&S Building
812 Quarrier Street
Charleston, West Virginia 25301
Attn: Mrs. W.S. Walker, Jr.
Administrative Aide
Telephone: (304)348-3557
WISCONSIN ACCOUNTING EXAMINING
BOARD
P.O. Box 8935
Madison, Wisconsin 53708
Attn: Sharon Englerth
Program Assistant
Telephone: (608)266-3020
WYOMING BOARD OF CHRTJUHUbD PUBLIC
ACCOUNTANTS
Barrett Building
3rd Floor
Cheyenne, Wyoming 82002
Attn: Peggy Morgando
Executive Director
Telephone: (307)777-7551
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APPENDIX F
GLOSSARY OF TERMS
Term
ACCOUNT PARTY
ACCOUNTANTS OPINION
ACKNOWLEDGE,
ACKNOWLEDGMENT (OF AN
INSTRUMENT)
ADJUSTED COST ESTIMATE
ADVERSE OPINION
ALIEN INSURER
AMORTIZATION
ASSETS
ASSIGNMENT
Definition
One who purchases or arranges for a letter of
credit from a financial institution.
See REPORT ON EXAMINATION.
Formal declaration before an authorized official
such as a notary, by the person who executed the
instrument, that it is his free act and deed.
A cost estimate which has been updated using the
appropriate inflation factor within 30 days of the
anniversary date on which the first cost estimate
was prepared.
Statement by an accountant that the financial
statements of the firm do not present fairly the
financial condition of the firm in conformity with
generally accepted accounting principles. This
type of opinion wfll cause the EPA to disallow
the use of the financial test for the firm.
An insurance company incorporated under the
laws of a foreign country.
Gradual reduction in the accounting or "book"
value of a fixed asset by the allocation of part of
the cost of the asset over time to individual
accounting periods. The term is used to refer to
assets which have limited life but which do not
physically wear out Examples include copyrights,
patents, and leases. See DEPRECIATION.
All existing and all probable future economic
benefits obtained or controlled by a particular
entity. Any rights or physical properties that are
owned and have monetary value.
A transfer from one party in a contract to a third
party of some or all of the rights of the contract
In this case, the contract is the liability insurance
policy.
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F-2
Term
AUDIT
AUTOMATIC EXTENSION,
AUTOMATIC RENEWAL
BENEFICIARY
BOND RATING
CAPTIVE INSURER
CASH FLOW
CERTIFIED PUBLIC
ACCOUNTANT (CPA)
CHIEF FINANCIAL OFFICER
CIRCULAR '570
Definition
Systematic inspection of accounting records
involving analyses, tests, and confirmations.
Continuation of an insurance policy or letter of
credit without the need for renegotiation.
One for whose benefit a trust of letter of credit is
established.
An assessment of the credit-worthiness of an
obligor with respect to a specific debt obligation
(bond). Ratings take the form of letters - e.g.
AA, A, B, etc. For purposes of these regulations,
Moody's and Standard & Poor's are the only two
acceptable bond-rating corporations. See also
INVESTMENT GRADE.
An insurance company set up by a company or
group of companies to insure their own risks, or
risks common to the group.
In accounting, a company's net income (sales
minus operating expenses) plus allowances for
depreciation, depletion, and amortization.
Represents the funds available as working capital
and for expansion.
An accountant with a special state license
indicating that he or she meets certain
requirements for the public practice of accounting.
Although requirements vary from state to state, all
must pass a rigorous examination administered by
the American Institute of Certified Public
Accountants.
The principal financial officer required to sign
SEC Form 10-K's or the equivalent
Circular of the U.S. Department of the Treasury,
published annually in the Federal Register on July
1. The surety company issuing the surety bond
must be among those listed as acceptable sureties
on federal bonds in Circular 570.
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F-3
Term
COLLATERAL
COMMON TRUST FUND
CORPORATE GUARANTEE
COSURETY
CLOSURE OR POST-CLOSURE
INSURANCE
CURRENT ASSETS
CURRENT COST ESTIMATE
CURRENT LIABILITIES
DEPLETION
Definition
A tangible security or property, usually readily
convertible into cash, that is deposited with a
creditor to guarantee payment of an obligation.
Either the property itself or a document or title
to it is held by the creditor until the loan is
repaid.
A trust fund into which funds from several
individual trusts may be placed.
A guarantee by the owner or operator's parent
corporation that it will meet all financial assurance
obligations specified in the regulations.
Two or more sureties who share one surety bond
obligation.
A type of insurance coverage that provides funds
for final closure or post-closure care whenever
required.
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 or
within one year if the operating cycle is less than
one year.
The most recent cost estimate which includes any
revisions due to changes in plan or inflation
adjustments.
Obligations whose liquidation is reasonably
expected to require the use of existing resources
properly classifiable as current assets or the
creation or other current liabilities or those
expected to be satisfied within a relatively short
period of time, usually one year.
In accounting, an allowance made for the
shrinkage or exhaustion of a natural resource.
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F4
Term
DEPRECIATION
DISCLAIMER OF OPINION
EXCESS OR SURPLUS LINES
FACE AMOUNT OF POLICY
FACE VALUE
Definition
In accounting, the method of allocating part of
the cost of an asset that will be used up over time
to individual accounting periods. The number of
accounting periods does not necessary correspond
to the actual life of the asset, Le., a building that
lasts 40 years may be depreciated over 10 years.
See AMORTIZATION.
Statement that the auditor does not express an
opinion on the financial statements of the firm.
This statement wfll cause EPA to disallow the use
of the financial test for the firm.
The designation that a state gives to insurance
companies which are not licensed to transact
business in that state. Because such companies,
also known as "non-admitted insurers," cannot be
regulated, states include specific regulations for
agents and brokers of excess or surplus lines in
the broker or agent's Jicense. The state of New
York, for example, requires a broker or agent to
submit declamations from five licensed (or
admitted) insurers stating that the service(s)
provided by a particular excess or surplus line
cannot be obtained from their firm. Most states
also maintain either "black lists" of non-admitted
insurers which a broker or agent cannot take on
as an excess or surplus line or "white lists" of
eligible providers. The Non-Admitted Insurers
Information Office (NAEO) of the National
Association of Insurance Commissioners (NAIQ
publishes it own "Non-Admitted Insurer's
Quarterly List'
Face value of an insurance policy, the total
amount the insurer is obligated to pay under the
policy.
The value of a security, insurance policy, or letter
of credit, expressed as a specific sum of money,
which is printed, stamped, or otherwise marked on
its face. The face value of a bond is usually the
amount the issuer promotes to pay at maturity.
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F-5
Term
FIDUCIARY
FINANCIAL GUARANTEE
BONDS
FINANCIAL RATINGS OF
INSURERS
FINANCIAL
FINANCIAL TEST
FORM 10-K, FORM 10-Q
GNP DEFLATOR
GRANTOR
INFLATION FACTOR
Definition
A person whose duty is to act on behalf of
another or to protect the interests of another. A
trustee is a fiduciary.
A type of surety bond under which the surety
agrees to pay the penal sum of the bond if the
owner or operator fails to fulfill his closure and/or
post-closure obligations. Financial guarantee
bonds may be used by facilities with interim or
general status..
Similar to a bond rating, an assessment of the
credit-worthiness of an insurance company with
respect to its future obligations.
Formal reports of the status of accounts at a
particular time, prepared to show the operating
results and financial condition of the firm. The
statements include the balance sheet and income
statement of changes in financial position.
Criteria specified in regulations which an owner,
operator, or corporate parent must pass to
establish financial assurance.
A type of report that U.S. corporations file with
the Securities and Exchange Commission. It
frequently contains more information than the
annual report distributed to stockholders. The 10-
K is submitted annually, the 10-Q quarterly.
(Note: The 10-Q report is not an audited
statement)
Weighted price index which reflects the rate of
inflation. It is derived by dividing current-dollar
Gross National Product (GNP) by constant-dollar
GNP. See also INFLATION FACTOR.
One who creates a trust Also called a trustor.
The price index used to update cost estimates for
closure and post-closure care, in order to account
for inflation. The index used is the GNP deflator.
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F-6
Term
INVESTMENT GRADE
IRREVOCABLE
ISSUER
JOINT AND SEVERALLY
RESPONSIBLE
LETTER OF CREDIT
LIABILITIES
MOODY'S
NET INCOME
NET WORKING CAPITAL
NET WORTH
NOMINAL SUM
Definition
A bond or other debt instrument with a rating
from Moody's of Aaa, Aa, A, or Baa; or a rating
from Standard & Poor's of AAA, AA, A, or BBB.
That which cannot be revoked or recalled. All
TSCA trusts must be irrevocable. A TSCA
irrevocable letter of credit cannot be cancelled
unless alternate assurance is substituted or the
account party is released from financial
requirements.
The parry who issues an insurance policy, letter of
credit, or surety bond,
A liability is said to be joint and several when the
creditor may sue one or more of the parties to
such liability separately, or all of them together at
his option. Any one of these parties may be
liable for the entire amount
A letter or instrument authorizing that credit up
to a particular amount be extended to the person
named therein.
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.
One of the two bond-rating agencies acceptable
for purposes of these regulations. Address:
Moody's Investors Service, Inc, 99 Church Street,
New York, New York 10007.
The difference between total sales and total costs
of goods sold plus expenses over the fiscal year.
Current assets minus current liabilities.
Total assets minus total liabilities. Net worth is
equivalent to owner's equity.
A small amount of money, such as $1.00 or
$10.00, with which a standby trust fund is often
started.
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F-7
ORIGINALLY SIGNED
DUPLICATE
PARENT CORPORATION
PARENT GUARANTOR
PAY-IN PERIOD
PENAL SUM
PERFORMANCE BONDS
POWER OF ATTORNEY
PREMIUM PAYMENTS
Definition
One in favor of whom the surety is obliged in a
surety bond. For TSCA surety bonds, as with
RCRA surety bonds, EPA is the obligee.
A copy of a document with an original signature.
A corporation which directly owns at least 50
percent of the voting stock of the corporation
which is the facility owner or operator, the latter
corporation is deemed a "subsidiary" of the parent
corporation.
A parent corporation which provides a corporate
guarantee.
Period of time during which the owner or
operator must make payments into the trust fund.
For facilities with interim status under RCRA, the
pay-in period is 20 years or the remaining
operating life of the facility as estimated in the
closure plan, whichever is shorter. For
commercial storage facilities under TSCA, the
pay-in period is three years or the remaining
operating life of the facility as estimated in the
closure plan, whichever is shorter.
An amount agreed upon in a bond, to be
forfeited if the condition of the bond is not
fulfilled. It represents the maximum liability of
the surety.
A type of surety bond under which the surety
agrees to either pay the penal sum of the bond or
perform the required actions if the owner or
operator fails to fulfill his obligation.
A written statement authorizing another to act as
one's agent or attorney.
The periodic payments of money which the policy-
holder agrees to pay the insurer for an insurance
policy.
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F-8
Term
PRINCIPAL
PRUDENT MAN STANDARD
QUALIFIED OPINION
REINSURANCE
REPORT ON EXAMINATION
RIDER
Definition
One who establishes a surety bond. In TSCA
surety bonds, the owner or operator is the
principal
An investment rule according to which a trustee
may invest in a security only if it is one that a
"prudent man" of discretion and intelligence,
seeking reasonable income and preservation of
capital, would buy.
Statement by an accountant that the financial
statements of a firm present fairly the financial
condition of the firm, subject to certain
conditions, or except for certain limitations.
A contract between an insurer or surety and
another party, called the reinsurer, in which the
reinsurer agrees to protect (reinsure) the insurer
or surety against loss on some of its insurance.
Reinsurance allows an insurer or surety to share
the risk among more parties and issue more
policies or bonds within its allowable limits.
The independent certified public accountant's
report on the financial statements, support
schedules, and footnotes. Often referred to as
the accountant's report or the auditor's opinion.
The. report on examination usually contains two
paragraphs - a scope paragraph and an opinion
paragraph. The scope paragraph indicates the
financial presentations covered by the opinion and
affirms that generally accepted auditing standards
and practices have been followed by the auditors.
The opinion paragraph contains the accountant's
opinion of the financial statements, schedules and
footnotes. The opinion can be unqualified,
qualified, or adverse; or there can be disclaimer of
opinion. See QUALIFIED OPINION,
UNQUALIFIED OPINION, ADVERSE
OPINION, and DISCLAIMER OF OPINION.
In insurance, a form adding special provisions to a
policy. For TSCA bonds, an optional rider allows
the owner or operator to increase the penal sum
by up to 20 percent per year without
renegotiating the bond.
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F-9
Term
SECURITIES OR OTHER
OBLIGATIONS
SHARE THE RISK
SPECIAL REPORT
STANDARD & POOR'S
STANDBY TRUST FUND
SURETY
SURETY BOND
TANGIBLE NET WORTH
TOTAL LIABILITIES
Definition
Written instruments showing evidence of
indebtedness of a business or government or
equity ownership of a business. Bonds are
securities which bear interest
An action in which a surety company or insurance
company enters into an agreement with other
companies to share a potential obligation. Also
called a "co-surety agreement," "co-insurance," or
"re-insurance."
The independent certified public accountant's
confirmation that the financial data in the letter
from the Chief Financial Officer were derived
from the annual report.
One of the two bond-rating agencies acceptable
for the purposes of these regulations. Address:
Standard & Poor's Corp., 25 Broadway, New
York, New York 10004 or P.O. Box 992, New
York, New York 10275.
A trust fund which must be established by an
owner or operator who obtains a letter of credit
or surety bond. The institution issuing the letter
of credit or surety bond will deposit into the
standby trust fund any drawings by the Regional
Administrator on the credit or bond,
A person who undertakes to pay money or do any
other act in the event that another party fails
therein.
A contract in which a party called the "surety,"
guarantees that certain obligations, such as the
payment of money, will be paid if another party
fails to perform his obligations.
Net worth minus intangible assets, such as
goodwill and rights to patents or royalties.
Total debts owed by a business or individual
including all liabilities.
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F-10
TRUST AGREEMENT
TRUST FUND
TRUSTEE
TRUSTOR
UNDERWRITE (A RISK)
UNDERWRITING LIMITATION
UNQUALIFIED OPINION
De6nition
A right of property, real or personal, held by one
party for the benefit of another. The grantor or
trustor creates the trust; the trustee holds the
property held in trust; and the beneficiary is the
party for whose benefit the trust is created.
The document which establishes a trust.
A trust fund establishes a reserve of capital to pay
claims for the completion of closure and/or post-
closure obligations.
The person appointed, or required by law, to
execute a trust, Le., to hold and protect trust
assets and invest them according to the "prudent-
man standard" and the terms of the trust
agreement for the benefit of the beneficiary.
One who creates a trust by depositing assets into
it Also called a grantor.
To insure life or property, to assume a risk. In
insurance, a person or company undertakes all or
part of the risk against theft, fire, death, or
whatever the policy stipulates, in exchange for a
payment called a premium.
The maximum amount allowed by law for which a
surety can issue a surety bond. The limit may be
exceeded if the surety "shares the risk" of the
obligation, and then still may not exceed the
combined underwriting limitation of those
companies.
Statement by an accountant that the financial
statements of a firm present fairly the financial
position, results of operations, and changes in
financial position in conformity with generally
accepted accounting principles consistently applied.
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