Financial Assurance for Solid Waste Management Facilities

 *** Financial Assurance Memo October 12, 2010 ***

 The Financial Assurance Program is based on the Financial Assurance Rule .1628 which requires owners/operators of municipal solid waste landfills (MSWLFs), operating after April 9, 1994,  to demonstrate that the owner/operator will have the funds necessary to properly close,  provide 30 years of post-closure maintenance, and fund any corrective action costs for the permitted landfill.   The rules describe seven different "mechanisms" that owners/operators of MSWLFs can use to demonstrate financial assurance.  The seven mechanisms are as follows:

Municipal Solid Waste Landfill (MSWLF) .1600 Rule Mechanisms:

• Local Government Financial Test   The local government financial test consists of three components:  a financial component, a public notice component, and a record-keeping and reporting component.
• Corporate Test and Corporate Guarantee Guidance and 40 CFR Reference for Corporate Test and Corporate Guarantee
• Trust Fund (also used for Standby Trust Agreement) 
• Surety Bond Guaranteeing Payment or Surety Bond Guaranteeing Performance
• Letter of Credit
• Insurance
• Capital Reserve Fund

Mechanisms for all other Solid Waste Management Facilities: 

• Local Government Financial Test   The local government financial test consists of three components:  a financial component, a public notice component, and a record-keeping and reporting component.
• Corporate Test and Corporate Guarantee Guidance and 40 CFR Reference for Corporate Test and Corporate Guarantee
• Trust Fund (also used for Standby Trust Agreement) 
• Surety Bond Guaranteeing Payment or Surety Bond Guaranteeing Performance
• Letter of Credit
• Insurance
• Capital Reserve Fund