(1) Applicability.

(a) For the purposes of this regulation private landfill disposal facilities are privately owned facilities that do not accept waste from the general public and dispose of only their own generated waste.

(b) These standards apply to all new and expanded landfill disposal facilities, and to existing landfill disposal facilities that have not been closed on or before November 27, 1989. Landfill disposal facilities include:

(i) Facilities operated as surface impoundments under WAC 173-304-430 that are closed with waste remaining in place and therefore required to meet the requirements of WAC 173-304-407; and

(ii) Woodwaste landfills operated under WAC 173-304-462.

(2) Cost estimates for closure and post-closure.

(a) Each owner or operator shall prepare separate written closure and post-closure cost estimates as part of the facility closure and post-closure plans. The cost estimates shall be in current dollars and represent the cost of closing or post-closure care of the facility for a period of twenty years in accordance with the closure requirements in WAC 173-304-407.

(i) The cost estimate shall be based on a reasonable cost estimate for completing design, purchase, construction, and other activities as identified in the facility closure or post-closure plan as required under WAC 173-304-407;

(ii) The closure and post-closure plans shall project intervals for withdrawal of funds from the closure or post-closure financial assurance instrument to complete the activities identified in the approved closure or post-closure plan;

(iii) The closure and post-closure cost estimate shall not be reduced by allowance for salvage value of equipment, waste, or the resale value of property or land.

(b) Each owner or operator shall prepare a new closure or post-closure cost estimate in accordance with (a) and (c) of this subsection whenever:

(i) Changes in operating plans or facility design affect the closure or post-closure plans;

(ii) There is a change in the expected year of closure that affects the closure plan; or

(iii) The jurisdictional health department directs the owner or operator to revise the closure or post-closure plan or closure or post-closure cost estimate.

(c) Each owner or operator shall review the closure and post-closure cost estimate thirty days prior to the anniversary date of the date on which the first closure and post-closure cost estimate was prepared. The review shall examine all factors, including inflation, involved in estimating the closure and post-closure cost. Any cost changes shall be factored into a revised closure or post-closure cost estimate and submit the revised cost estimate to the jurisdictional health department and the department of ecology.

(d) During the operating life of the facility, the owner or operator must keep the latest closure and post-closure cost estimate prepared in accordance with (a) and (b) of this subsection, and when this estimate has been adjusted in accordance with (c) of this subsection, available for review.

(e) The department of ecology will evaluate each cost estimate for completeness, and may accept, or require a revision of the cost estimate in accordance with its evaluation.

(3) Financial assurance mechanism for closure and post-closure. Each owner or operator of an applicable landfill disposal facility shall establish financial assurance mechanisms in an amount equal to the closure cost estimate and post-closure cost estimate prepared in accordance with subsection (2) of this section.

(a) Applicable landfill disposal facilities shall provide one or more of the following financial assurance instruments:

(i) Closure and post-closure trust funds established with an entity which has authority to act as a trustee and whose trust operations are regulated and examined by a federal or state agency. The wording of the trust agreement must be acceptable to the department of ecology. The purpose of the closure and post-closure trust funds is to receive and manage any funds paid by the owner or operator and to disburse those funds only for closure or post-closure activities as identified in the approved closure and post-closure plan;

(ii) Surety bond guaranteeing payment into a closure and post-closure trust fund issued by a surety company listed as acceptable in Circular 570 of the United States Treasury Department or as hereafter amended. The wording of the surety bond(s) must be acceptable to the department. A standby closure and post-closure trust fund must also be established by the permittee. The purpose of the standby closure or post-closure trust fund is to receive any funds that may be paid by the operator or surety company. The bond must guarantee that the permittee will either fund the standby closure or post-closure trust in an amount equal to the penal sum of the bond before the site stops receiving waste. The surety shall become liable on the bond obligation if the permittee fails to perform as guaranteed by the bond. The surety may not cancel the bond until at least one hundred twenty days after the notice of cancellation has been received by both the permittee and the local health department. If the permittee has not provided alternate financial assurance acceptable under this section within ninety days of the cancellation notice, the surety must pay the amount of the bond into the standby closure or post-closure trust account;

(iii) Surety bond guaranteeing performance of closure or post-closure issued by a surety company listed as acceptable in Circular 570 of the United States Treasury Department or as hereafter amended. The wording of the surety bond must be acceptable to the department of ecology. A standby closure and post-closure trust fund must also be established by the permittee. The purpose of the standby closure or post-closure trust fund is to receive any funds that may be paid by the surety company. The bond must guarantee that the permittee will perform final closure or post-closure activities. The surety shall become liable on the bond obligation if the permittee fails to perform as guaranteed by the bond. The surety may not cancel the bond until at least one hundred twenty days after the notice of cancellation has been received by the permittee and the local health department. If the permittee has not provided alternative financial assurance acceptable under this section within ninety days of the cancellation notice, the surety must pay the amount of the bond into the standby closure or post-closure trust account;

(iv) Closure or post-closure irrevocable letter of credit issued by an entity which has the authority to issue letters of credit and whose letter-of-credit operations are regulated and examined by a federal or state agency. The wording of the letter of credit must be acceptable to the department. Standby closure and post-closure trust funds must also be established by the permittee. The purpose of the standby trust funds is to receive any funds deposited by the issuing institution resulting from a draw on the letter of credit. The letter of credit must be irrevocable and issued for a period of at least one year unless the issuing institution notifies both the permittee and the local health department at least one hundred twenty days before the current expiration date. If the permittee fails to perform closure and post-closure activities according to the closure or post-closure plan and permit requirements, or if the permittee fails to provide alternate financial assurance acceptable to the department within ninety days after notification that the letter of credit will not be extended, the local health department may draw from the letter of credit;

(v) Closure and post-closure insurance policies issued by an insurer who is licensed to transact the business of insurance or is eligible as an excess or surplus lines insurer in one or more states. The working of the certificate of insurance must be acceptable to the department. Each insurance policy must guarantee that the funds will be available to complete those activities identified in the approved closure and post-closure plans. The policy must also guarantee that the insurer will be responsible for paying out funds for activities identified in either the closure or post-closure plan. The policy must provide that the insurance is automatically renewable and that the insurer may not cancel, terminate, or fail to renew the policy except for failure to pay the premium. If there is a failure to pay the premium, the insurer may not terminate the policy until at least one hundred twenty days after the notice of cancellation has been received by both the permittee and the local health department. Termination of the policy may not occur and the policy must remain in full force and effect if: The local health department determines the facility has been abandoned; or closure has been ordered by the local health department or a court of competent jurisdiction, or the permittee has been named as debtor in a voluntary or involuntary proceeding under Title 11 U.S.C. (Bankruptcy); or the premium due is paid. The permittee is required to maintain the policy in full force and until an alternative financial assurance guarantee is provided or when the permit is terminated.

(vi) Financial test and corporate guarantee for closure and post-closure. A private corporation meeting the financial test may provide a corporate guarantee that closure and post-closure activities will be completed according to the approved closure and post-closure plans and permit requirements. To qualify, a private corporation must meet the criteria of either (a)(vi)(A) or (B) of this subsection:

(A) Financial test. To pass the financial test the permit must have:

(I) Two of the following three ratios: A ratio of total liabilities to net worth less than 2.0; a ratio of the sum of net income plus depreciation, depletion, and amortization to total liabilities greater than 0.1; or a ratio of current assets to current liabilities greater than 1.5;

(II) Net working capital and tangible net worth each at least six times the sum of the current closure and post-closure cost estimates;

(III) Tangible net worth of at least ten million dollars; and

(IV) Assets in the United States amounting to at least ninety percent of its total assets or at least six times the sum of the current closure and post-closure cost estimates.

(B) Alternative financial test. To pass the alternative financial test, the permittee must have:

(I) A current rating of AAA, AA, A, or BBB as issued by Standard and Poor's or Aaa, Aa, A, or Bbb as issued by Moody's;

(II) Tangible net worth at least six times the sum of the current closure and post-closure cost estimates;

(III) Tangible net worth of at least ten million dollars; and

(IV) Assets in the United States amounting to at least ninety percent of its total assets or at least six times the sum of the current closure and post-closure cost estimates.

(C) The permittee shall demonstrate that it passes the financial test at the time the closure plan is filed and reconfirm that annually ninety days after the end of the corporation's fiscal year by submitting the following items to the department of ecology:

(I) A letter signed by the permittee's chief financial officer that provides the information necessary to document that the permittee passes the financial test; that guarantees that the funds to finance closure and post-closure activities according to the closure or post-closure plan and permit requirements are available; that guarantees that the closure and post-closure will be completed according to the closure or post-closure plan and permit requirements; that guarantees that within thirty days after written notification from the jurisdictional health department that the permittee no longer meets the criteria of the financial test the permittee shall provide an alternative form of financial assurance consistent with the requirements of this section; that guarantees that the permittee's chief financial officer will notify the jurisdictional health department within fifteen days any time that the permittee no longer meets the criteria of the financial test or is named as debtor in a voluntary or involuntary proceeding under Title 11 U.S.C. (Bankruptcy); and that acknowledges that the corporate guarantee is a binding obligation on the corporation and that the chief financial officer has the authority to bind the corporation to the guarantee;

(II) A copy of the independent certified public accountant's report on examination of the permittee's financial statements for the latest completed fiscal year;

(III) A special report from the permittee's independent certified public accountant (CPA) stating that the CPA has compared the data which the letter from the permittee's chief financial officer specifies as having been derived from the independently audited year end financial statements for the latest fiscal year with the amounts in such financial statement and that no matters came to the CPA's attention which caused the CPA to believe that the specified data should be adjusted;

(IV) The jurisdictional health department may, based on a reasonable belief that the permittee no longer meets the criteria of the financial test, require reports of the financial condition at any time from the permittee in addition to the annual report. If the jurisdictional health department finds, on the basis of such reports or other information that the permittee no longer meets the criteria of the financial test, the permittee shall provide an alternative form of financial assurance consistent with the requirements of this section, within thirty days after notification by the jurisdictional health department.

(b) For applicable disposal facilities of this section, any income in excess of the cost estimate(s) accruing to the established closure or post-closure financial assurance account will be at the owner's discretion as to the use of said surplus funds.

(c) A permittee may meet the requirements of this section by obtaining a written guarantee from the parent corporation of the permittee. The guarantor must meet one of the financial tests described in (a)(vi)(A) or (B) of this subsection, and must provide the documentation required by (a)(vi)(C) of this subsection. The terms of the guarantee must provide that:

(i) If the permittee fails to perform final closure and, where required, provide post-closure care of a facility covered by the guarantee in accordance with the approved closure and post-closure plans, the guarantor will do so or establish a trust fund as specified in (a)(i) of this subsection in the name of the permittee.

(ii) The guarantee will remain in force unless the guarantor sends notice of cancellation by certified mail to the permittee, to the jurisdictional health department and to the department of ecology. Cancellation may not occur, however, during the one hundred twenty days beginning on the date of receipt of the notice of cancellation by both the permittee and the department of ecology, as evidenced by the return receipts.

(iii) If the permittee fails to provide alternate financial assurance as specified in this section and obtain the written approval of such alternate assurance from the jurisdictional health department or the department of ecology within ninety days after receipt by both the permittee, the jurisdictional health department, and the department of ecology of a notice of cancellation of the guarantee from the guarantor, the guarantor will provide such alternative financial assurance in the name of the permittee.

(4) Closure/post-closure trust fund account establishment and reporting.

(a) Each owner or operator shall file with the local health department an annual audit of the financial assurance accounts established for closure and post-closure activities.

(b) Annual audits shall be conducted by a certified public accountant licensed in the state of Washington, and shall be filed with the department of ecology no later than March 31 of each year for the previous calendar year, including each of the post-closure care years.

(c) The audit shall also include calculations demonstrating the proportion of closure completed during the preceding year as specified in the closure and post-closure plans.

(5) Authorization for financial assurance account fund withdrawal for closure and post-closure activities.

(a) Each owner or operator shall withdraw funds from the closure and/or post-closure financial assurance instrument as specified in the approved closure/post-closure plans;

(b) If the withdrawal of funds from the financial assurance instrument exceeds by more than five percent the withdrawal schedule stated in the approved closure and/or post-closure plan the closure and/or post-closure plan shall be amended.