(a) Incapacity of permittee or financial institutions.

1. (1) The permit owner or operator must notify the Director of the Division of Environmental Quality by certified mail of the commencement of a voluntary or involuntary proceeding under Title 11 (Bankruptcy), United States Code, naming the permittee as debtor, within ten (10) days after commencement of the proceeding.
2. (2) The permit owner or operator providing financial assurance by obtaining a surety bond, insurance, trust fund, or letter of credit will be deemed to be without the required financial assurance in the event of bankruptcy of the issuing institution, or a suspension or revocation of the authority of the institution issuing the surety bond, insurance, trust fund, or letter of credit to issue such instruments.
3. (3) The permittee must establish other financial assurance within sixty (60) days after such an event.

(b) Forfeiture of financial assurance.

1. (1)

   1. (A) The director may order that any financial assurance filed by the permittee pursuant to this subsection for closure of a landfill or landfill increment be forfeited to the state if the director determines that the permittee has failed to perform closure of the landfill or landfill increment in accordance with Rule 8 CAR § 60-1301, post-closure care of the landfill in accordance with 8 CAR § 60-1302, or corrective action in accordance with 8 CAR § 60-1208 when required to do so.
   2. (B) Any such forfeiture action shall follow the procedures provided in this subsection.

2. (2)

   1. (A) Upon determination that the permit owner or operator has failed to perform final closure, post-closure care, or corrective action, or in the case of solid waste processing facilities, the clean-up and removal of all waste from the site when required to do so, the director shall cause a notice of violation to be served upon the permittee.
   2. (B) Such notice shall be hand delivered or forwarded by certified mail.
   3. (C) The notice of violation shall:

(i) Be in accordance with the requirements of Administrative Procedures, 8 CAR pt. 11; and

1. (ii) Specify in what respect the permittee has failed to perform as required.

   1. (D) The permittee may request commission review and an adjudicatory hearing of the notice of violation in accordance with 8 CAR pt. 11 and the terms of the notice of violation.

2. (3)

   1. (A) If the director determines that the permit owner or operator has failed to perform or respond as specified in the notice of violation, the director may issue a default administrative order of forfeiture of the financial assurance filed to guarantee such performance.
   2. (B) Upon issuance, a copy of the order shall be hand delivered or forwarded by certified mail to the owner or operator and to the financial institutions, sureties, or parties guaranteeing financial assurance.
3. (4) Upon the effective date of the order of forfeiture, the director shall take legal action to collect the forfeiture.

4. (5) All fortified funds shall be deposited by the director into the Solid Waste Performance Bond Fund to be utilized by the director in performing proper closure, post-closure care, or corrective action at the facility.

   1. (c) Effect on transfer of permits.
5. (1) During permit transfers, existing financial assurance mechanisms and responsibilities shall remain in full force and effect until such time as the proposed new permit owner or operator has filed, in accordance with the requirements of this subpart, the required replacement financial assurance mechanism or mechanisms.
6. (2) When acceptable replacement financial assurance has been filed with the director, the director shall cause to be released to the former permit owner or operator (or the issuing institution, if appropriate) the financial assurance that the permit owner or operator had filed.