United States Solid Waste and
Environmental Protection Emergency Response
Agency (5305W)
EPA530-R-97-053
PB98-108087
November 1997
RCRA, Superfund & EPCRA
Hotline Training Module
Introduction to:
Financial Assurance
(40 CFR Parts 264/265, Subpart H)
Updated November 1997
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DISCLAIMER
This document was developed by Booz-Allen & Hamilton Inc. under contract 68-WO-0039 to EPA. It is
intended to be used as a training tool for Hotline specialists and does not represent a statement of EPA
policy.
The information in this document is not by any means a complete representation of EPA's regulations or
policies. This document is used only in the capacity of the Hotline training and is not used as a reference
tool on Hotline calls. The Hotline revises and updates this document as regulatory program areas change.
The information in this document may not necessarily reflect the current position of the Agency. This
document is not intended and cannot be relied upon to create any rights, substantive or procedural,
enforceable by any party in litigation with the United States.
RCRA, Super-fund & EPCRA Hotline Phone Numbers:
National toll-free (outside of DC area)
Local number (within DC area)
National toll-free for the hearing Impaired (TDD)
(800) 424-9346
(703)412-9810
(800) 553-7672
The Hotline is open from 9 am to 6 pm Eastern Time,
Monday through Friday, except for federal holidays.
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50272-101
REPORT DOCUMENTATION
PAGE
' 1. REPORT NO.
• EPA530-R-97-053
2.
4. Title and Subtitle
RCRA, SUPERFUND, AND EPCRA HOTLINE TRAINING NODULE: INTRODUCTION TO RCRA
FINANCIAL ASSURANCE (40 CFR PARTS 264/265, SUiPART H)
5. Report Date
NOVEMBER 1997
• 6.
7. Author(s)
0 8. Performing Organization Kept. No
9. Performing Organization Name and Address
U.S. EPA
OFFICE OF SOLID WASTE
401 N STREET, SW
WASHINGTON. DC 20460
° 10. Project/Task/Work Unit Ho.
o
• 11. Contract(C) or Grant(G) No.
• (C) 68-yO-0039
12. Sponsoring Organization Name and Address
BOOZ-ALLEN & HAMILTON
4330 EAST WEST HIGHWAY
BETHESOA, MARYLAND 20814
0 13. Type of Report & Period Covered
0 TRAINING UPDATED 7/97
14.
15. Supplementary Notes
16. Abstract (Limit: 200 words}
ONE OF A SERIES OF NODULES DEVELOPED AS A TRAINING TOOL FOR HOTLINE SPECIALISTS. ADDRESSES FINANCIAL ASSURANCE STAN-
DARDS EXPLAINING FIRST MECHANISMS AND THEN THE EXTENT OF COVERAGE REQUIRED. DESCRIBES THE APPLICABILITY OF FINANCIAL
ASSURANCE FOR CLOSURE AND POST-CLOSURE. IDENTIFIES NECESSARY FACTORS FOR CALCULATING COST ESTIMATES. EXPLAINS ALLOW-
ABLE MECHANISMS FOR FINANCIAL ASSURANCE, INCLUDING WHICH MECHANISMS CAN BE USED TOGETHER AND UNDER WHAT CONDITIONS.
EXPLAINS HOW FINANCIAL ASSURANCE WORKS WHEN A COMPANY OWNS SEVERAL FACILITIES OR WHEN A COMPANY IS OWNED BY ONE OR MORE
LARGER COMPANIES. PRESENTS THE FINANCIAL ASSURANCE REQUIREMENTS FOR ACCIDENT LIABILITY COVERAGE. IDENTIFIES WHO IS SUB-
JECT TO SUDDEN VERSUS NONSUDDEN LIABILITY PROVISIONS AND CITES APPLICABLE DEFINITIONS. SPECIFIES THE AMOUNT OF LIABILITY
COVERAGE REQUIRED FOR SINGLE AND MULTIPLE FACILITIES. LISTS ALLOWABLE MECHANISMS AND COMBINATIONS OF MECHANISMS THAT
CAN BE USED TO SATISFY FINANCIAL ASSURANCE LIABILITY REQUIREMENTS. THE INFORMATION IN THIS DOCUMENT IS NOT A COMPLETE
REPRESENTATION OF EPA'S REGULATIONS OR POLICIES, BUT IS AN INTRODUCTION USED FOR HOTLINE TRAINING PURPOSES.
17. Document Analysis a. Descriptors
b. Identifiers/Open-Ended Terms
c. COSATI Field/Group
18. Availability Statement
RELEASE UNLIMITED
• 19. Security Class (This Report)" 21. No. of Pages
° UNCLASSIFIED * 12
0 20. Security Class (This Page) " 22. Price
0 UNCLASSIFIED * 0.00
(See ANSI-Z39.18)
OPTIONAL FORM 272 (4-773
(Formerly NTIS-35)
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RCRA FINANCIAL ASSURANCE
CONTENTS
1. Introduction,. 1
2, Regulatory Summary 3
2.1 Applicability..... 3
2.2 Closure/Post-Closure Care 4
2.3 Closure/Post-Closure Financial Assurance Mechanisms 5
2.4 Liability Requirements.... 10
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Financial Assurance -1
1. INTRODUCTION
In order to operate a treatment, storage, or disposal facility (TSDF), an
owner/operator must be able to demonstrate that funds will be available to properly
close the facility and provide post-closure care. A TSDF owner/operator also needs
to have funds available to cover costs when there is an accident at the facility. These
requirements are called financial assurance in the Resource Conservation and
Recovery Act (RCRA) Subtitle C program. Subpart H of 40 CFR Parts 264/265
provides specific mechanisms for a TSDF owner/operator to make these
demonstrations. This training module addresses the financial assurance standards,
explaining first the allowable financial mechanisms and then the extent of financial
coverage required. Be prepared to learn some legal and financial concepts with
which you may not be familiar.
After completing this module, you will be able to explain the financial assurance
requirements for closure and post-closure care. Specifically, you will be able to:
* Determine the applicability of financial assurance for closure and
post-closure
• Identify necessary factors for calculating cost estimates
* Understand the allowable mechanisms for financial assurance, including
which mechanisms can be used together and under what conditions
* Explain how financial assurance works when a company owns several
facilities or when a company is owned by one or more larger companies.
Additionally, you will be able to explain the financial assurance requirements for
accident liability coverage. Specifically, you will be able to:
* Identify who is subject to sudden versus nonsudden liability provisions
and cite applicable definitions
* Specify the amount of liability coverage required for single facilities and
multiple facilities
* List allowable mechanisms and combinations of mechanisms that can be
used to satisfy financial assurance liability requirements
* Specify the required coverage period for liability.
Use this list of objectives to check your knowledge of this topic after you complete
the training session.
The information in this document is not by any means a complete representation of EPA's regulations or policies,
but is an introduction to the topic used for Hotline training purposes.
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2 - Financial Assurance
The information in this document is not by any means a complete representation of EPA's regulations or policies,
but is an introduction to the topic used for Hotline training purposes.
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Financial Assurance - 3
2. REGULATORY SUMMARY
In order to ensure that hazardous waste facilities are closed properly, EPA
established specific closure and post-closure care requirements to minimize long-
term environmental and health threats posed by these facilities. These
requirements alone, however, do not guarantee that owners/operators of TSDFs
will have sufficient funds to properly close and maintain the site. EPA promulgated
Parts 264/265, Subpart H, as a precaution against using federal funds for situations
where owners/operators would be unable or unwilling to cover these significant
closure and post-closure costs. Subpart H outlines the mechanisms an
owner/opera tor may use to prove that funds will be available as well as the
amounts that must be provided. Subpart H also establishes minimum amounts of
liability coverage for accidents during the active life (normal operation) of the
facility. Both types of requirements come under the term "financial assurance."
2.1 APPLICABILITY
According to §§264/265.140(a), the requirements of Subpart H apply to owners/
operators of all hazardous waste TSDFs, The requirements of this subpart are not,
however, applicable to state and federally owned or operated facilities
(§§264/265.140(c)).
CLOSURE
All TSDFs, except those exempted in §§264/265,1 or in Subpart H, must fulfill certain
closure requirements. As specified in §§264/265.142 and §§264/265.143, these TSDFs
must demonstrate financial assurance for closure. The closure requirements in
Parts 264/265, Subpart G, detail steps for safely and permanently ceasing operations
at active TSDFs. According to these requirements, owners/operators must submit a
closure plan that details the steps necessary to close or partially close the facility. In
addition to the general facility closure obligations of Subpart G, owners/operators
must also comply with closure and post-closure requirements for specific hazardous
waste management and disposal units (e.g., surface impoundments (Subpart K),
landfills (Subpart N)) in Parts 264 and 265. Even those surface impoundments and
waste piles which the owner/operator intends to clean close by removing hazardous
waste at closure are required to have contingent closure plans (§264.228(c)(l)(i) and
§264.258(c)(l)(i)).
POST-CLOSURE
Post-closure care for inactive facilities entails long-term maintenance, monitoring,
and recordkeeping to ensure continuing protection of human health and the
environment after a TSDF has ceased operation. The financial requirements for
The information in this document is not by any means a complete representation of EPA's regulations or policies,
but is an introduction to the topic used for Hotline training purposes.
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4 - Financial Assurance
post-closure care in §§264/265.144 and §§264/265.145 apply to all owners/operators of
disposal facilities as defined in §§264/265.140(b). Disposal facilities subject to these
requirements include not only landfills, but waste piles, surface impoundments,
and tanks that cannot be clean-closed, and therefore must be closed as landfills.
These units are then subject to full post-closure care. As part of the post-closure care
requirements, owners/operators must submit a post-closure plan that details the
operation and maintenance measures needed to ensure that no hazardous waste
will migrate off-site. Financial assurance for post-closure care is not required for
units that will be clean-closed (see §264.197 for tank systems, §264.228 for surface
impoundments, and §264.258 for waste piles). On the other hand, most
owners/opera tors will be required to prepare a contingent post-closure plan to
ensure that funds will be available to monitor any migration of waste left on-site in
the unforeseen event that a tank system, surface impoundment, or waste pile
cannot be clean-closed.
2.2 CLOSURE/POST-CLOSURE CARE
After an owner/operator completes the written closure and post-closure plans for a
facility, he or she must collect cost estimates based on cost of a third-party contractor
performing closure activities to determine the implementation cost for both plans.
These estimates provide the base figure for the amount of financial assurance a
facility will need to demonstrate.
COST ESTIMATES
According to §§264/265.142 and §§264/265.144, cost estimates must reflect the cost of
hiring a third party to conduct all activities outlined in the closure and post-closure
plans. If a contingent closure or post-closure plan is required for a permitted surface
impoundment or waste pile, the cost of its implementation must be calculated into
the final cost estimate for the facility. Closure cost estimates are based on the point
in the facility's operating life when closure would be the most expensive. Post-
closure cost estimates are based on projected costs for a post-closure period of 30
years, which can only be reduced or extended by the Regional Administrator or state
Director.
COST ADJUSTMENTS
Closure and post-closure cost estimates are adjusted annually for inflation until
closure is completed. Since a dollar this year is not worth as much as a dollar last
year, stating that a facility will cost one hundred dollars to close raises the question,
"which dollar should we use to make cost estimates?" There are two ways
owners/opera tors may address this issue. The more obvious and more
cumbersome method would be to recalculate the cost estimates completely each
year. To save time, however, a simpler method may be used. The Department of
Commerce publishes an official figure, called the Implicit Price Deflator (IPD), which
The Information in this document is not by any means a complete representation of EPA's regulations or policies,
but is an introduction to the topic used for Hotline training purposes.
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Financial Assurance - 5
summarizes what a certain group of goods and services costs during that year. An
owner/operator can then use the IPD to determine how much prices "went up" (the
inflaction factor) and make a percentage adjustment to the previous year's
closure/post-closure cost estimate. For example, the 1996 IPD is 109.7 and the 1995
IPD is 107.6. By dividing the 1996 IPD by the 1995 IPD, the inflation factor is
determined, in this case 1.02. An owner/operator who estimated closure/post-
closure costs at $100 in 1995 dollars would multiply $100 by the inflation factor of
1.03 to find an updated estimate of $103 in 1996 dollars. (Note that some states
require the use of the most current quarterly IPD to calculate the inflation factor
while others require use of the annual figure.)
This calculation is illustrated by the following equation:
IPD current year = inflation factor
IPD previous year
(inflation factor) x (old estimate) = new estimate
Inserting the figures given:
109.7
107-7 = 1.02 = inflation factor
(1.02) x ($100) = $102 = new cost estimate
Historically, the Department of Commerce emphasized the use of the IPD derived
from the Gross National Product (GNP), but since December 1991 the Department of
Commerce has focused on the use of the Gross Domestic Product (GDP) to derive
the IPD. There is only a slight difference between the numbers, and
owners/operators may use either to derive the IPD as long as they are consistent in
their use of GNP or GDP.
Owners/operators must adjust cost estimates following any changes to their closure
or post-closure plan that would raise the costs involved. For example, expansion of
a surface impoundment might increase the amount of contaminated soil to be
removed at closure. The closure/post-closure estimate must be recalculated to
reflect the additional expenses.
2.3 CLOSURE/POST-CLOSURE FINANCIAL ASSURANCE
MECHANISMS
Financial assurance mechanisms are the acceptable means by which an
owner/operator can show that funds are available to pay for closure and post-
closure care of a facility.
The information in this document is not by any means a complete representation of EPA's regulations or policies,
but is an introduction to the topic used for Hotline training purposes.
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6 - Financial Assurance
Applicability
An owner/operator may demonstrate financial assurance for closure and post-
closure by choosing from the following financial assurance mechanisms:
• Trust Fund • Letter of Credit
* Surety Bonds (two types) • Insurance
- Payment Bonds * Financial Test
- Performance Bonds * Corporate Guarantee.
The wording of each mechanism, or instrument, must be identical to the examples
in §264.151. The criteria for using each of these mechanisms are discussed below.
Trust Fund
A trust fund serves as a way to set aside monies specifically earmarked for closure
and post-closure costs. Owners/opera tors pay money into the trust fund during a
specified period. By the time a facility closes, the money accumulated in the fund
should be adequate to cover the necessary closure costs. The pay-in period for
interim status facilities is 20 years, or the remaining operating life of the facility,
whichever period is shorter.
For permitted facilities, the owner/operator must make payments into the trust
fund for the term of the initial permit or the remaining operating life of the .entire
facility (as estimated in the closure plan), whichever period is shorter.
The annual payment for the duration of the pay-in period may be calculated using
the following equation, where the annual payment (AP) equals the current cost
estimate (CE) minus the current value of the trust fund (CV) divided by the number
of years remaining in the pay-in period (Y).
(CE-CV)
Surety Bonds
A surety bond is a guarantee by a surety company that certain specified obligations
will be fulfilled. If the owner/operator fails to pay the closure or post-closure costs
specified in a bond, the surety company is liable for the costs. The owner/operator
must also establish a standby trust fund into which any payments made by the
surety company will be deposited. EPA then uses the trust fund to cover closure
costs. There are two types of surety bonds:
The information in this document is not by any means a complete representation of EPA's regulations or policies,
but is an introduction to the topic used for Hotline training purposes.
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Financial Assurance - 7
Payment Bond
A payment bond will, in the event an owner/opera tor fails to pay, fund a
standby trust fund in an amount equal to the value (penal sum) of the bond.
Performance Bond
A performance bond guarantees that the owner/operator will perform the
final closure in accordance with the requirements of the facility's permit.
Performance bonds can also be paid into a standby trust fund. Interim status
facilities may not use performance bonds.
Surety bonds only pay when the owner/operator fails to either pay for or perform
closure/post-closure activities. An owner/opera tor is generally obligated to repay
the surety company.
Letter of Credit
To use a letter of credit assuring financial coverage for closure and post-closure care,
the facility owner/operator must satisfy the following requirements:
• The owner/operator must obtain a letter of credit that is irrevocable and
equals the amount of the cost estimate
* The owner/operator must increase the letter of credit within 60 days
whenever the current cost estimate increases
* The owner/operator must establish a standby trust fund into which any
payments made by the issuing institution will be deposited
« If the owner/operator fails to fulfill closure or post-closure requirements,
the Regional Administrator is entitled to direct the issuing institution to
deposit funds into the owner/operator's standby trust fund.
Insurance
In order for the owner/operator of a facility to use insurance as the financial
mechanism covering the cost of closure and post-closure care, the following
requirements must be satisfied:
• The owner/operator must obtain an insurance policy for a face amount
(the total money the insurer is obligated to pay under the policy) at least
equal to the cost estimate for closure or post-closure care
» The owner/opera tor must increase the face amount or obtain other
supplementary financial assurance if the cost estimate increases
The information in this document is not by any means a complete representation of EPA's regulations or policies,
but is an introduction to the topic used for Hotline training purposes.
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8 - Financial Assurance
* The owner/operator must allow assignment of the insurance policy to a
successor owner/operator
* The owner/operator must send a copy of the policy to the head of the
hazardous waste program in the state, if the state is authorized to
administer the RCRA base program. In unauthorized states, a copy is sent
to the Regional Administrator •'• - •
• If the owner/operator fails to pay the premium, the insurer may cancel,
terminate, or decide not to renew the policy
• The insurer must be licensed by a state, as off-shore insurers are not
acceptable.
Financial Test
The owner/operator may satisfy the requirements for financial assurance by
meeting the financial test criteria for either of the following alternatives,
Alternative I
• The owner/operator must meet each of the following criteria:
- Net working capital equals 6 times current closure, post-closure,
, plugging, and abandonment cost estimates
- Tangible net worth is greater than $10 million
- 90 percent of total assets are located in the United States, or at least 6
times the current closure, post-closure, and plugging and abandonment
cost estimates.
AND
• The owner/operator must satisfy 2 of the following 3 ratios:
- Liabilities to net worth ratio less than 2
- Current assets to current liabilities ratio greater than 1.5
- Net income (plus depreciation, depletion, and amortization) to
liabilities ratio greater than 0.1.
Alternative II
• The owner/operator must meet each of the following criteria:
- Tangible net worth at least 6 times current closure, post-closure,
plugging, and abandonment cost estimates
- Tangible net worth is greater than $10 million
- 90 percent of total assets are located in the United States, or at least 6
times the current closure, post-closure, and plugging and abandonment
cost estimates
- The current bond rating for the most recent bond issuance is AAA, AA,
A, or BBB as issued by Standard. je Poor's or Aaa, Aa, A, or Baa as
issued by Moody's.
The information in this document is not by any means a complete representation of EPA's regulations or policies,
but is an introduction to the topic used for Hotline training purposes.
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Financial Assurance - 9
The owner/opera tor must pass one of the two financial tests specified in the
closure/post-closure financial assurance requirements. If the owner/operator
chooses to use a financial test to meet financial assurance requirements, this must be
documented in a letter to the Regional Administrator, signed by the company's
Chief Financial Officer, and attached to an independent Certified Public Accountant
report examining the owner/operator's annual report.
Corporate Guarantee
In order for the owner/operator of a facility to use a corporate guarantee to ensure
financial coverage for closure and post-closure care, the following requirements
must be satisfied:
* The guarantor must be a direct corporate parent (a corporation that directly
owns at least 50 percent of the voting stock of another corporation or
subsidiary), a corporate grandparent (a corporation that indirectly owns
over 50 percent of a company through a subsidiary), a sibling corporation
(a corporation that shares the same parent corporation), or a firm with a
substantial business relationship with the owner/operator.
» The guarantor must meet the financial test requirements outlined above.
• The guarantor must perform the required closure and post-closure care
activities or establish a trust fund to pay a third party to perform them if
the owner/operator fails to carry out final closure or post-closure care in
accordance with the approved plan,
COMBINATIONS
An owner/operator may combine several financial assurance mechanisms to cover
the cost of closure and post-closure care for a facility. Trust funds, payment surety
bonds, insurance policies, and letters of credit may be combined to meet financial
assurance requirements.
An owner/operator may also use a single financial assurance mechanism to meet
the cost of closure and post-closure care for more than one facility. The dollar
amount of the funds available through the mechanism must be no less than the
sum of funds that would be available if a separate assurance mechanism had been
established and maintained for each facility. In other words, there can be no overlap
of funding for separate facilities (§§264.143(h), 265.143(g), 264.145(h), and 265.145(g)).
PERIOD OF COVERAGE
Within 60 days after an acceptable certification of final closure is received, the
Regional Administrator must notify the owner/opera tor that financial assurance for
final closure is no longer required. Within 60 days of receipt of acceptable
The information in this document is not by any means a complete representation of EPA's regulations or policies,
but is an introduction to the topic used for Hotline training purposes.
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10 - Financial Assurance
certification that the post-closure care period has been completed,, the Regional
Administrator must notify the owner/operator that financial assurance for post-
closure care is no longer required (§§264.143(1), 265.143(h), 264.145(i), and 265.145(h)).
2.4 LIABILITY REQUIREMENTS
An owner/operator is required to maintain accident liability coverage through
certification of final closure (§§264/265.147), This coverage ensures that, should an
accident resulting in a release of hazardous constituents occur, money will be
available to compensate third parties suffering bodily injury or property damage
resulting from the accident. Under §§264/265.147(c), an owner/operator may receive
a variance from the Regional Administrator if the owner/operator can demonstrate
that the levels of financial responsibility required by the regulations are not
consistent with the levels of risk associated with the facility's operation. For
permitted facilities, this would appear as a permit modification. Variances,
however, are seldom granted. Liability coverage is not required for state or federally
owned or operated facilities.
TSDFs may be required to demonstrate two types of liability coverage, to cover
sudden and nonsudden occurrences. The applicability of sudden and nonsudden
coverage and the differences between them are explained below. An
owner/opera tor may use a combination of mechanisms as long as the amount
covered equals the total of sudden and nonsudden liability minimum
requirements.
SUDDEN ACCIDENTAL OCCURRENCES
A sudden accidental occurrence is an event that is not continuous or repeated.
Examples of sudden accidental occurrences are fires and explosions. All TSDFs that
are subject to financial assurance requirements must have coverage for sudden
accidental occurrences (§§264/265.147(a)).
An owner/operator must meet the minimum financial requirements for liability
coverage of sudden accidental occurrences by using one or more of the following
allowable mechanisms specified in §§264/265.147(a)(6): insurance, financial test,
corporate guarantee, letter of credit, surety bond, and trust fund. The minimum
financial requirements include at least $1 million per occurrence and an annual
aggregate of at least $2 million. These funds will satisfy the requirements for all of
the owner or oprator's facilities. Table 1 demonstrates such a disbursement of
sudden liability funds over a one-year period.
The information in this document is not by any means a complete representation of EPA's regulations or policies,
but is an introduction to the topic used for Hotline training purposes.
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Financial Assurance -11
Table 1
DISBURSEMENT OF SUDDEN LIABILITY FUNDS
Number of Accidents
1
3
6
Cost per Accident
$3 million
$1 million
$500,000
Amount Paid by Liability
Coverage
$1 million
first $2 million
$500,000 on first four
NONSUDDEN ACCIDENTAL OCCURRENCES
A nonsudden accidental occurrence is an event that takes place over time and
involves continuous or repeated exposure to hazardous waste. An example of a
nonsudden accidental occurrence is a leaking surface impoundment that
contaminates a drinking water source over time. An owner/operator of a surface
impoundment, landfill, land treatment facility, or miscellaneous disposal unit must
have financial assurance for nonsudden accidental occurrences (§§264/265.147(b)).
An owner/operator must meet the minimum financial requirements for liability
coverage of nonsudden accidental occurrences by using one or more of the
following allowable mechanisms specified in §§264/265.147(a)(6): insurance,
financial test, corporate guarantee, letter of credit, surety bond, or trust fund. The
minimum financial requirements include at least $3 million per occurrence and an
annual aggregate of at least $6 million. While a per occurrence amount limits the
payment for any one event, such as a fire, an annual aggregate caps the total dollar
value of all claims in one year. These funds will suffice to cover all of the
owner/operator's facilities.
Note that these liability minimums apply regardless of the number of facilities held
by an owner/operator. Therefore, someone owning multiple facilities only needs
one set of coverage for $3 million/$6 million. Table 2 demonstrates such a
disbursement of nonsudden liability funds over a one-year period.
The information in this document
is document is not by any means a complete representation of EPA's regulations or policies,
but is an introduction to the topic used for Hoflir
Sine training purposes.
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12 - Financial Assurance
Table 2
DISBURSEMENT OF NONSUDDEN LIABILITY FUNDS
Number of Accidents
1
3
6
Cost per Accident
$4 million
$4 million
$2 million
Amount Paid by Liability
Coverage
$3 million
$3 million on first
$3 million on second
$2- million on first three
COMBINATION OF LIABILITY COVERAGE LEVELS
Owners/opera tors who combine coverage levels for sudden and nonsudden
accidental occurrences must maintain liability coverage in the amount of at least
$4 million per occurrence ($1 million sudden plus $3 million nonsudden) and
$8 million annual aggregate ($2 million sudden plus $6 million nonsudden)
(§§264/265.147(b)).
PERIOD OF COVERAGE
Within 60 days after an acceptable certification of final closure is received, the
Regional Administrator must notify the owner/operator that liability coverage is no
longer required (§§264/265.147(e)). Since final closure occurs before a facility begins
post-closure activities, liability coverage is not required during the post-closure
period. The Regional Administrator, however, may require liability coverage if
closure was not completed in accordance with the facility's closure plan.
The information in this document is not by any means a complete representation of EPA's regulations or policies,
but is an introduction to the topic used for Hotline training purposes.
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