Mich. Admin. Code R. 299.9706 - Letter of credit
Rule 706.
(1) An
owner or operator may satisfy the requirements of this part by obtaining an
irrevocable letter of credit which conforms to the requirements of this rule
and which is executed on a form approved by the director. The issuing
institution shall be a bank or financial institution 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.
(2) The letter of credit shall include all of
the following information:
(a) The site
identification number.
(b) Name and
address of the facility.
(c) The
amount of funds assured for closure or postclosure care of the facility by the
letter of credit.
(3)
The letter of credit shall be irrevocable and issued for a period of at least 1
year. The letter of credit shall provide that the expiration date will be
automatically extended for a period of at least 1 year unless, not less than
120 days before the current expiration date, the issuing institution notifies
both the owner or operator and the director by certified mail of a decision not
to extend the expiration date. Under the terms of the letter of credit, the 120
days shall begin on the date when both the owner or operator and the director
have received the notice, as evidenced by the return receipts.
(4) The letter of credit shall be issued in
an amount at least equal to the current closure or postclosure cost estimate,
or both, except as provided in R 299.9703 (2).
(5) When the current closure or postclosure
cost estimate, or both, increases to an amount more than the amount of the
credit, the owner or operator, within 60 days after the increase, shall either
cause the amount of the credit to be increased so that it at least equals the
current closure or postclosure cost estimate and submit evidence of such
increase to the director or obtain other financial assurance as specified in
this part to cover the increase. When the current closure or postclosure cost
estimate decreases, the amount of the credit may be reduced to the amount of
the current closure or postclosure cost estimate following written approval by
the director.
(6) The director may
draw on the letter of credit to correct violations, complete closure, and
maintain the facility pursuant to approved plans after doing both of the
following:
(a) Issuing a notice of violation
or other order to the owner or operation which alleges that the owner or
operator has failed to perform final closure or postclosure care, or both,
pursuant to the closure and postclosure plans and other license requirements
when required.
(b) Providing the
owner or operator with 7 days notice and opportunity for hearing.
(7) If the owner or operator does
not establish alternate financial assurance as specified in this part and
obtain written approval of such alternate assurance from the director within 90
days after receipt by both the owner or operator and the director of a notice
from the issuing institution that it has decided not to extend the letter of
credit beyond the current expiration date, then the director shall draw on the
letter of credit. The director may delay the drawing if the issuing institution
grants an extension of the term of the credit. During the last 30 days of any
such extension, the director shall draw on the letter of credit if the owner or
operator has failed to provide alternate financial assurance as specified in
this part and obtain written approval of such assurance from the
director.
(8) The director shall
return the letter of credit to the issuing institution for termination when
either of the following occurs:
(a) An owner
or operator substitutes alternate financial assurance as specified in this
part.
(b) The director releases the
owner or operator from the requirements of this part pursuant to R 299.9703
(5).
Notes
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