An owner or operator may satisfy the requirements of financial assurance for closure by obtaining a local government guarantee provided by a local government. The local government guarantee must meet the requirements of this section, in addition to the requirements as specified in Subchapters A and B of this chapter (relating to General Financial Assurance Requirements and Financial Assurance Requirements for Closure). The local government guarantor must meet the requirements of the local government financial test as specified in §37.271 of this title (relating to Local Government Financial Test for Closure) and must comply with the following terms to the local government guarantee:

1. (1) If the owner or operator fails to perform closure of a facility covered by the guarantee, the guarantor will:

   1. (A) perform, or pay a third party to perform closure as required; or
   2. (B) establish a fully funded trust fund as specified in §37.201 of this title (relating to Trust Fund for Closure) in the name of the owner or operator.
2. (2) The guarantee will remain in force unless the guarantor sends notice of cancellation by certified mail to the owner or operator and to the executive director. Cancellation may not occur, however, during the 120 days beginning on the date of the receipt of the notice of cancellation by both the owner or operator and the executive director, as evidenced by the return receipts.
3. (3) If a guarantee is canceled, the owner or operator must, within 90 days following receipt of the cancellation notice, obtain alternate financial assurance and submit evidence of that alternate financial assurance to the executive director. If the owner or operator fails to provide alternate financial assurance within the 90-day period, the guarantor must provide that alternate assurance within 120 days following the guarantor's notice of cancellation.
4. (4) The owner or operator must submit to the executive director the original local government guarantee worded as specified in §37.381 of this title (relating to Local Government Guarantee for Closure). The guarantee must accompany the items sent to the executive director as specified in §37.271(3) of this title and must be updated annually in accordance with the requirements of the local government financial test.
5. (5) The owner or operator is no longer required to comply with the requirements of this section when the conditions as specified in §37.61 of this title (relating to Termination of Mechanisms) are met.
6. (6) If a local government guarantor no longer meets the requirements of §37.271 of this title, the owner or operator must, within 90 days, obtain alternate financial assurance, and submit such evidence of the alternative assurance to the executive director. If the owner or operator fails to obtain alternate financial assurance within that 90-day period, the guarantor must provide that alternative assurance within the next 30 days.

Source Note:The provisions of this §37.281 adopted to be effective July 7, 1998, 23 TexReg 6966.