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(continued)
Note: Authority cited: Sections 40502, 42966 and 43020, Public Resources Code. Reference: Sections 42950, 42951, 42952, 42953, 42961.5 and 42962, Public Resources Code.
s 18462. Manifest System Requirements for Waste Tire Generators.
(a) A waste tire generator shall not give, contract, or arrange with another person to transport used or waste tires unless that person is a registered waste tire hauler or is exempt under Public Resources Code Section 42954.
(1) If a tire casing is being shipped from a generator for inspection, retreading, or recapping by a Retreader, an invoice as required pursuant to 18459.2.1(c) may be substituted for the Manifest form. This invoice shall be retained at the place of business for a period of three (3) years and be made available to any authorized representative of the Board upon request.
(b) As provided in s 18459.3(a), a waste tire generator shall retain a Board approved EDT form, completed receipt from the Comprehensive Trip Log provided by the hauler, or, retain a copy, and forward the original Manifest Form to the Board.
(c) If waste or used tires are removed from the generator's location by a registered waste tire hauler and a completed receipt from the Comprehensive Trip Log is not provided, the generator shall complete a Unregistered Hauler & Comprehensive Trip Log Substitution Form (CIWMB 204) within 48 hours of the tire removal and submit the form to the CIWMB within 90 days.
Note: Authority cited: Sections 40502, 42966 and 43020, Public Resources Code. Reference: Sections 42950, 42951, 42952, 42953, 42954, 42961.5 and 42962, Public Resources Code.
s 18462.1. Can I Give Tires to a Person Wanting to Haul my Waste Tires but Who Doesn't Have a Registration or is Not Exempt From the Registration?
Note: Authority cited: Sections 40502, 42966 and 43020, Public Resources Code. Reference: Sections 42950, 42951, 42952, 42953, 42961.5 and 42962, Public Resources Code.
s 18462.2. Do I need to Know the Destination Site or Collection Facility for the Waste Tires?
Note: Authority cited: Sections 40502, 42966 and 43020, Public Resources Code. Reference: Sections 42950, 42951, 42952, 42953, 42961.5 and 42962, Public Resources Code.
s 18463. Civil Penalties.
Any waste tire generator, end-use facility, or waste tire hauler or any party or person who commits any of the following acts shall be liable for a civil penalty:
(a) Intentionally, or negligently violates any permit, rule, regulation, standard, or requirement pursuant to Chapter 19 of the Public Resources Code relating to the generation, transportation or disposal of used or waste tires.
(b) The aiding or abetting, or allowing of any violation, or noncompliance with any permit, rule, regulation, standard, or requirement pursuant to Chapter 19 of the Public Resource Code relating to the generation, transportation or disposals of used or waste tires.
(c) Any violation of, or noncompliance with any order issued by the Board or by a hearing officer or a court relating to the generation, transportation or disposal of used or waste tires.
(d) Any false statement, misrepresentation, or omission of a significant fact or other required information in the application for a waste tire hauler registration, Comprehensive Trip Log, Retreader Trip Log, Manifest Form or Tire Trip Log, or in information regarding these matters subsequently reported to the Board.
(e) In addition to liability for a civil penalty, the Board may:
(1) File a claim against any registered waste tire hauler surety bond for activities resulting from the illegal disposal of tires or injury.
(2) Deny, suspend, or revoke a waste tire hauler registration.
Note: Authority cited: Sections 40502 and 42962, Public Resources Code. Reference: Section 42962, Public Resources Code.
s 18464. Amount of Civil Penalties and Administrative Penalty Schedule.
(a) Civil penalties may be imposed administratively in accordance with the following penalty tables:
1. For waste and used tire haulers, tire generators, and end-use facilities, using Penalty Table I;
A. Determine what violations have occurred.
B. Determine the number of violations or offenses that have occurred.
C. Add up the penalties to determine the applicable fine.
Penalty Table I: For Tire Haulers, Tire Generators, and End-Use Facilities
Violation Description 1st 2nd 3rd
Offense Offense and
of Violation Subse-
que-
nt
Offen-
ses
PRC 42951(b) Failure of tire haulers to
transport
waste or used tires to a facility
that is permitted, excluded,
exempted, or otherwise authorized
by the board, by statute or $1,000-$- $2,000-$- $3,0-
3,000 4,000 00--
$5,-
000
regulation, to accept waste or used
tires, or to a facility that
lawfully
accepts waste or used tires for
reuse or
disposal. (major, minor).
PRC 42952(b) Falsely advertising or representing
himself or herself as being in the
business of a waste and used tire $1,000-$- $2,000-$- $4,0-
2,000 4,000 00--
$5,-
000
hauler without being registered as
a
waste or used tire hauler by the
board.
Any person who gives, contracts,
or arranges with another person to
transport waste or used tires and
fails to utilize a tire hauler
holding
a valid waste and used tire hauler
PRC 42953 registration from the board (unless $500-$1,- $1,000-$- $2,00-
000 2,000 0-$-
3,0-
00
the tire hauler is exempted from
registration requirements as
specified in Public Resource Code
Section 42954).
PRC 42956 Failure to carry waste or used
tire hauler registration in $100-$500 $1,000-$- $3,00-
vehicle; 3,000 0-$-
5,0-
00
failure to permanently affix tire
hauler decal to the lower right
hand
corner of the windshield.
Failure to present waste or used
PRC 42956(c) tire hauler registration upon the
demand of an authorized $100-$500 $500-$1,- $1,00-
000 0-$-
1,7-
50
representative of the board.
Comprehensive Trip Log, Manifest
Violations, or Electronic
reporting;
including failure to submit the
Comprehensive Trip Log, manifests,
PRC 42961.5 or Electronic reporting on a
quarterly basis, missing $100-$500 $500-$1,- $1,50-
000 0-$-
2,5-
00
information, incomplete
information, and false information.
Failure to maintain surety bond
18456.1(b) 000 2,000 0-$-
3,0-
00
registration periods.
Failure to notify board of changes
18456.3 000 0-$-
2,0-
00
registration application form
(CIWMB 60) as required by 14 CCR
18456.3.
2. For unregistered waste and used tire haulers, using Penalty Table II;
A. Determine the number of violations or offenses.
B. Find the number of tires hauled for each load.
C. Determine whether any other violations listed in Table I have occurred and add that fine to the fine from Table II to determine the total fine.
Penalty Table II: Violation of PRC section 42951(a)
Violation 10-20 Tires 21-40 Tires 41-100 Tires More than 100
per Load per Load per Load Tires per Load
Unregistered Hauler $100-$500 $500-$750 $500-$1,000 $1,000-$2,000
(1st Offense)
Unregistered Hauler $500-$1,000 $750-$1,250 $1,000-$1,750 $2,000- $4,000
(2nd Offense)
Unregistered Hauler $1,000-$1,750 $1,250-$2,0- $1,750-$2,750 $3,000-$5,000
00
(3rd Offense)
(b) For administrative hearings held pursuant to Public Resources Code sections 42960 and 42962, a person waives the right to a hearing when that person fails to submit to the Board a Notice of Defense pursuant to Government Code section 11506 or CIWMB Request for Hearing form within 15 days of service of the administrative complaint on that person.
Note: Authority cited: Sections 40502 and 42962, Public Resources Code. Reference: Sections 42960 and 42962, Public Resources Code; and Section 11506, Government Code.
s 18465. Criteria to Impose a Civil Penalty.
In assessing the amount of civil penalty, factors to be considered shall include, but are not limited to, the following:
(1) The nature, circumstances, extent, and gravity of the violation.
(2) Evidence that the violation was willful or negligent.
(3) The good or bad faith exhibited by the party.
(4) History of violation of the same or similar nature.
(5) The extent to which the party has cooperated with the Board in remediating the violation.
(6) The extent that the party has mitigated or attempted to mitigate any damage or injury caused by his or her violation.
(7) Evidence of any financial gain resulting from the violation.
(8) Such other matters as justice may require.
Note: Authority cited: Sections 40502, 42962 and 43020, Public Resources Code. Reference: Section 42962, Public Resources Code.
s 18466. Procedure for Imposing Civil Penalties.
(a) Civil penalties may be administratively imposed pursuant to the Administrative Procedure Act Government Code Section 11500 et seq.
(b) Civil penalties may be imposed pursuant to the Public Resources Code Section 42962 in the discretion of the trier of fact in the civil proceeding.
Note: Authority cited: Sections 40502 and 42962, Public Resources Code. Reference: Sections 11500 and 42962, Public Resources Code.
s 18470. Scope and Applicability.
(a) This Article requires operators of major waste tire facilities to demonstrate adequate financial ability to conduct closure activities.
(b) Operators of all major waste tire facilities, except state and federal operators, shall comply with the requirements of this Article upon application for issuance of a major waste tire facilities permit pursuant to Chapter 6, Article 1, section 18420.
Note: Authority cited: Sections 40502 and 42820, Public Resources Code. Reference: Section 42821, Public Resources Code.
s 18471. Definitions.
(a) When used in this Article, the following terms shall have the meanings given below:
(1) "Current Closure Cost Estimate" means the most recent estimate prepared in accordance with Chapter 6, Article 6, section 18442.
(2) "Depository Trust Fund" means the fund established in conjunction with a surety bond or letter of credit and that meets the requirements of section 18474 of this Article.
(3) "Enterprise Fund" means a fund established to account for the financing of self-supporting activities of a government unit that renders services on a user-fee basis.
(4) "Government Securities" means financial obligations issued by a federal, state or local government, including general obligation bonds, revenue bonds, and certificates of participation.
(5) "Letter of Credit" means a contract by which the issuing institution promises to extend credit on behalf of an operator to the Board or its designee, on presentation of the mechanism in accordance with its terms.
(6) "Provider of financial assurance" means an entity, other than an operator, that provides financial assurance to an operator of a major waste tire facility, including but not limited to a trustee, an institution issuing a letter of credit, or a surety company.
(7) "Surety Bond" means a contract by which a surety company promises that, if the operator fails to perform required closure activities, the surety company will be liable for the operator's responsibilities as specified by the bond.
(8) "Trust fund" means a contract by which the operator transfers assets to a trustee to hold, on behalf of the Board or its designee, to pay closure costs.
Note: Authority cited: Sections 40502 and 42820, Public Resources Code. Reference: Section 42821, Public Resources Code.
s 18472. Closure Cost Estimate Adjustments.
(a) An operator shall increase the closure cost estimate when changes to the closure plan increase the cost of closure.
(b) An operator may reduce the closure cost estimate when changes to the closure plan decrease the cost of closure. The request for reduction shall be submitted with an application for renewal or revision of the permit for approval by the Board or its designee.
(c) Each year, an operator shall submit to the Board or its designee, a report calculating the increase in the closure cost estimate due to the inflation factor for the previous calendar year.
The inflation factor is derived from the annual Implicit Price Deflator for Gross National Product as published annually by the U.S. Department of Commerce, in its Survey of Current Business. The inflation factor is the result of dividing the latest annual published deflator by the deflator for the previous year. The operator shall adjust the closure cost estimate for inflation within 60 days of the anniversary date of the establishment of the financial mechanism for closure costs. The operator shall increase the monetary amount of the financial mechanism based on this inflation factor.
(d) The mechanism(s) used to demonstrate financial responsibility shall be updated, no more than 60 days after a change in the amount of the current closure cost estimate covered by the mechanism(s).
Note: Authority cited: Sections 40502 and 42820, Public Resources Code. Reference: Section 42821, Public Resources Code.
s 18473. Acceptable Mechanisms and Combination of Mechanisms.
(a) Subject to the limitation of subsection (c) of this section, an operator shall use any one or any combination of the mechanisms specified which are defined in the following sections of this Article:
(1) Section 18474, Trust Fund
(2) Section 18475, Surety Bond
(3) Section 18476, Letter of Credit
(4) Section 18477, Government Securities
(5) Section 18478, Enterprise Fund
(6) Section 18478.5. State Approved Mechanism
(b) If a combination of mechanisms are used, the operator shall designate one mechanism as "primary" and all others as "excess" coverage.
(c) If an operator uses a trust fund in combination with a surety bond or letter of credit, the trust fund may be used as the depository trust fund for the other mechanisms.
(d) An operator shall not combine a performance bond with any other mechanism(s).
Note: Authority cited: Sections 40502 and 42820, Public Resources Code. Reference: Section 42821, Public Resources Code.
s 18474. Trust Fund.
(a) An operator may establish a trust fund to meet the requirements of this Article. The trust agreement shall be submitted to the Board or its designee as an originally signed duplicate. The trustee shall be an entity which has the authority to act as a trustee, and whose trust operations are regulated and examined by a federal or state agency.
(b) The trust agreement shall be worded as specified by using form CIWMB 140 "Trust Agreement" (12/91) which is incorporated herein by reference; and also shall contain original signature of the grantor and the trustee. (See Appendix A.)
(c) The initial deposit to the trust fund shall be at least equal to the current closure cost estimate.
(d) If the value of the fund is at any time less than the amount of the current estimate, the operator shall either deposit an amount into the fund so that the value of the fund at least equals the amount of the current closure cost estimate, or obtain other financial assurance, as specified in this Article, to cover the difference.
(e) If at any time, the value of the trust fund plus the amount of coverage demonstrated by other mechanisms is greater than the closure cost estimate based on the maximum quantity of waste tires permitted for storage, the operator may request in writing that the Board or its designee authorize the release of the excess funds. After receiving such a request, the Board or its designee shall review the request and, if any excess funds are verified, shall instruct the trustee to release the funds.
(f) After the Board or its designee has approved final closure, an operator or any other person authorized by the Board to perform closure, may request reimbursement for closure expenditures by submitting to the Board for review, documentation of those expenditures, including but not limited to tire receipts. After receiving the documentation for closure activities, the Board or its designee shall determine whether the closure expenditures are in accordance with the closure plan or otherwise justified. After the Board or its designee has approved final closure, the Board or its designee shall instruct the trustee, in writing, to reimburse the fund to the grantor.
(g) The Board or its designee shall agree to termination of the trust when:
(1) An operator substitutes alternate financial assurance as specified in section 18479 of this Article; or
(2) The Board or its designee releases the operator from the requirements of this Article in accordance with section 18482.
Note: Authority cited: Sections 40502 and 42820, Public Resources Code. Reference: Section 42821, Public Resources Code.
s 18475. Surety Bond.
(a) An operator may establish a surety bond to meet the requirements of this Article. The surety company issuing the bond shall, at a minimum, be among those listed as acceptable sureties on federal bonds in the most recent issuance of Circular 570 of the U.S. Department of the Treasury.
(b) The surety bond shall be worded as specified by using one of the following forms which are incorporated by reference;
(1) Form CIWMB 141 (1/92) "Performance Bond," which is incorporated herein by reference, for a surety bond guaranteeing performance (See Appendix A.); or
(2) Form CIWMB 142 (1/92) "Financial Guarantee Bond", which is incorporated herein by reference, for a surety bond guaranteeing payment. (See Appendix A.)
(c) An operator who uses a surety bond to satisfy the requirements of this Article, or the surety who issues the bond, shall also establish a depository trust fund which meets the requirements of section 18474 of this Article if:
(1) An operator fails to demonstrate alternate financial assurance within 60 days after receiving notice of cancellation of the mechanism;
(2) An operator fails to perform closure in accordance with the applicable approved closure plan and permit requirements when required to do so by the Board or its designee; or
(3) A surety fails to perform such activities on behalf of the operator. This applies to the performance bond only.
(d) Under the terms of the bond, all payments made from the bond shall be deposited by the surety directly into the depository trust fund.
(e) A surety company shall become liable under the terms of the bond, if the Board or its designee determines that the operator has failed to perform closure as guaranteed by the bond.
(f) Under the terms of the bond, a surety may cancel the bond by sending notice of cancellation by certified mail to the operator and the Board or its designee. Cancellation shall not take effect until 120 days after the date of receipt of the notice of cancellation by both the operator and the Board or its designee, as evidenced by the return receipts.
(g) An operator may cancel a bond by sending written notice to the Surety(ies), provided, however, that no such notice shall become effective until the Surety(ies) receive(s) written authorization from the Board or its designee to terminate the bond.
Note: Authority cited: Sections 40502 and 42820, Public Resources Code. Reference: Section 42821, Public Resources Code.
s 18476. Letter of Credit.
(a) An operator may establish a letter of credit to meet the requirements of this section. The issuing institution shall be 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.
(b) The letter of credit shall be worded as specified by using form CIWMB 143 "Irrevocable Letter of Credit for Closure Costs" (12/91) which is incorporated herein by reference. (See Appendix A.)
(c) The letter of credit shall be accompanied by a letter from the operator identifying the number, issuing institution, and date of issuance of the letter of credit; and the name, address, facility number, and amount of funds assured by the letter of credit for closure for each major waste tire facility.
(d) An operator who uses a letter of credit to satisfy the requirements of this Article or the issuing institution shall also establish a depository trust fund which meets the requirements of section 18474 of this Article if:
(1) An operator fails to demonstrate alternate financial assurance within 60 days after receiving notice of cancellation of the mechanism; or
(2) An operator fails to perform closure in accordance with the applicable approved closure plan and permit requirements when required to do so by the Board or its designee.
(e) Under the terms of the letter of credit, all payments made from the letter of credit shall be deposited by the financial institution issuing the letter of credit, directly into the depository trust fund.
(f) The letter of credit shall:
(1) Be irrevocable and issued for a period of at least one year; and
(2) Provide that the expiration date will be automatically extended for a period of at least one year unless, at least 120 days before the current expiration date, the issuing institution notifies both the operator and the Board or its designee 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 operator and the Board or its designee have received the notice, as evidenced by the return receipts.
Note: Authority cited: Sections 40502 and 42820, Public Resources Code. Reference: Section 42821, Public Resources Code.
s 18477. Government Securities.
(a) Government securities may be used to cover closure costs only for major waste tire facilities operated by government agencies.
(b) The terms of issuance of government securities shall specify that proceeds from the sale of the securities shall be deposited into a financial assurance mechanism that meets the requirements of Section 18478(d) of this Article.
(c) The securities shall have been issued and the proceeds deposited into the financial assurance mechanism that provides equivalent protection to a trust fund by meeting the following requirements:
(1) Proceeds from the sale of securities shall be used exclusively to pay for closure activities;
(2) The financial operations of the provider of the financial assurance are regulated by a federal or state agency, or the provider is otherwise certain to maintain and disburse the assured funds properly;
(3) If the provider of financial assurance has authority to invest revenue deposited into the mechanism, the provider shall exercise investment discretion similar to a trustee; and
(4) The mechanism meets other requirements that the Board determines are necessary to ensure that the assured funds shall be available in a timely manner.
Note: Authority cited: Sections 40502 and 42820, Public Resources Code. Reference: Section 42821, Public Resources Code.
s 18478. Enterprise Fund.
(a) The enterprise fund may be used to cover closure costs only for major waste tire facilities operated by government agencies.
(b) The enterprise fund shall dedicate its revenue exclusively or with exclusive first priority to financing closure activities.
(c) The enterprise fund shall be established and the documents shall be worded as specified by using form CIWMB 144 "Enterprise Fund for Financial Assurances" (3/92), which is incorporated herein by reference. (See Appendix A.) The wording, however, may be modified to accommodate special circumstances on a case-by-case basis, as approved by the Board or its designee.
(d) Revenue generated by an enterprise fund shall be deposited into a financial assurance mechanism which:
(1) Provides equivalent protection to a trust fund as described in section 18474 of this Article;
(2) Shall be funded within five years as described in Section 18474 of this Article;
(3) Is used exclusively to finance closure activities and shall remain inviolate against all other claims, including any claims by the operator, the operator's governing body, and the creditors of the operator and its governing body;
(4) Authorizes the Board or its designee to direct the provider of financial assurance to pay closure costs if the Board or its designee determines that the operator has failed to perform closure activities covered by the mechanism;
(5) Is maintained by a provider whose financial operations are regulated by a federal or state agency, or the provider is otherwise certain to maintain and disburse the assured funds properly;
(6) Is maintained by a provider who has authority to invest revenue deposited into the mechanism.
(7) Meets other requirements that the Board determines are necessary to ensure that the assured amount of funds shall be available for closure activities in a timely manner.
Note: Authority cited: Sections 40502 and 42820, Public Resources Code. Reference: Section 42821, Public Resources Code.
s 18478.5. State Approved Mechanism.
(a) An operator may satisfy the requirements of this Chapter by obtaining any other mechanism that meets the following criteria, and that is approved by the Board.
(1) The financial assurance mechanism(s) must ensure that the amount of funds assured is sufficient to cover the costs assured when needed;
(2) The financial assurance mechanism(s) must ensure that funds will be available in a timely fashion when needed;
(3) The financial assurance mechanism(s) must be obtained by the operator before the first waste is received at a new facility and before any other financial mechanism is cancelled at existing facilities. The financial mechanism must be maintained until the operator is released from the financial assurance requirements under this Chapter.
(4) The financial assurance mechanism(s) must be legally valid, binding, and enforceable under California and Federal law.
Note: Authority cited: Sections 40502 and 42820, Public Resources Code. Reference: Sections 40502 and 42821, Public Resources Code.
s 18479. Substitution of Mechanisms by Operator.
(a) An operator may substitute any alternate financial assurance mechanism(s) acceptable to the Board or its designee as specified in this Article, provided that at all times the operator maintains an effective mechanism or combination of mechanisms that satisfies the requirements of section 18473 of this Article, and informs the Board of such substitution.
(b) After obtaining alternate financial assurance, an operator may request that the Board or its designee terminate or authorize the termination of a financial assurance mechanism. The operator shall submit such a request in writing with evidence of alternate financial assurance.
(c) Following written approval by the Board or its designee, the operator may cancel a financial assurance mechanism by giving notice to the provider of financial assurance.
Note: Authority cited: Sections 40502 and 42820, Public Resources Code. Reference: Section 42821, Public Resources Code.
s 18480. Bankruptcy or Other Incapacity of an Operator or Provider of Financial Assurance.
(a) Within 10 days after commencement of a voluntary or involuntary proceeding under the Bankruptcy Code, Title 11, U.S.C. sections 101-1330 in which:
(1) The operator is named as debtor. The operator shall notify the Board or its designee by certified mail of such commencement.
(2) A provider of financial assurance is named as debtor, such provider shall notify the operator and the Board or its designee by certified mail of such commencement.
(b) An operator shall be deemed to be without the financial assurances in the event of bankruptcy of its provider, or in the event of a suspension or revocation of the authority of the provider to issue such coverage. If such an event occurs, the operator shall demonstrate, to the Board or its designee, alternate coverage as specified in this Article within 60 days after receiving notice of the event. If the operator fails to obtain alternate coverage within 60 days, the operator shall notify the Board or its designee within 10 days of such failure.
Note: Authority cited: Sections 40502 and 42820, Public Resources Code. Reference: Section 42821, Public Resources Code.
s 18481. Recordkeeping and Reporting Requirements.
(a) An operator shall maintain evidence of all financial assurance mechanisms until the operator is released from the requirements of this Article, as specified in section 18482. This evidence shall be maintained at each major waste tire facility, whenever possible, or at an alternate, designated location approved by the Board or its designee and which is accessible to the operator, and available for the Board or its designee to review.
(b) An operator shall maintain the following types of evidence of financial assurance:
(1) Trust Fund. An operator using a trust fund shall maintain a copy of the trust agreement and statements verifying the current balance of the fund.
(2) Surety Bond. An operator using a surety bond shall maintain a copy of the bond and any amendments to the bond.
(3) Letter of Credit. An operator using a letter of credit shall maintain a copy of the letter of credit and any amendments to the letter of credit.
(4) Government Securities. An operator using government securities shall maintain a copy of the following:
(A) All official resolutions, forms, letters or other pertinent documents generated to issue the securities;
(B) The terms of issuance of the securities; and
(C) With respect to the financial assurance mechanism into which proceeds from the issuance are deposited, the information listed in subsection (5)(C)1., 2., and 3. of this section.
(5) Enterprise Fund. An operator using a enterprise fund shall maintain a copy of the following:
(A) All official resolutions, forms, letters, or other pertinent documents generated to establish the fund;
(B) The annual financial statements of the fund; and
(C) With respect to the financial assurance mechanism into which enterprise fund revenue is deposited:
1. The mechanism, which shall identify the major waste tire facility(ies) and the current closure cost estimates covered by the mechanism;
2. A letter from an authorized officer of the institution maintaining the mechanism, identifying the amount of coverage provided by the mechanism as of the date of its establishment and each anniversary date of establishment; and
3. Documentation that the mechanism meets the requirements of section 18478(d) of this Article.
(c) An operator shall submit current evidence of financial responsibility, as described in subsection (b) of this section, to the Board or its designee:
(1) Whenever a financial assurance mechanism is established or amended.
(A) In the case of a trust fund, letter of credit or surety bond, such documentation shall include the original mechanisms or amendments;
(B) In the case of government securities such documentation shall include the information as specified in subsection (b)(4)(C) of this section.
(C) In the case of the enterprise fund such documentation shall include the information as specified in subsection (b)(5)(C) of this section.
(2) When a closure plan is required to be submitted as required in Article 6, or when the amendment of a cost estimate is required to be submitted as required in Articles 6 or 9; or
(3) If an operator fails to increase the balance of a trust fund or an enterprise fund in accordance with section 18474(c) of this Article.
Note: Authority cited: Sections 40502 and 42820, Public Resources Code. Reference: Section 42821, Public Resources Code.
s 18482. Release from Financial Assurance Requirements for Closure Costs.
(a) After approving the closure of a major waste tire facility as specified in Article 6 of Chapter 6, the Board or its designee shall notify the operator in writing, that the operator is no longer required by this Article to maintain financial assurance for closure of a particular facility; or
(b) When operational control of a major waste tire facility is transferred, the existing operator shall remain subject to the requirements of this Article until the new operator provides acceptable financial assurances to the Board or its designee. The Board or its designee shall notify the previous operator in writing that they are no longer required to maintain financial assurance for closure of that particular facility.
Note: Authority cited: Sections 40502 and 42820, Public Resources Code. Reference: Section 42821, Public Resources Code.
s 18485. Scope and Applicability.
(a) This Article requires operators of major waste tire facilities to demonstrate adequate financial ability to compensate third parties for bodily injury and property damage caused by facility operation.
(b) Operators of all major waste tire facilities, except state and federal operators, shall comply with the requirements of this Article upon application for issuance of a major waste tire facilities permit pursuant to Chapter 6, Article 1, section 18420.
Note: Authority cited: Sections 40502 and 42820, Public Resources Code. Reference: Section 42821, Public Resources Code.
s 18486. Definitions.
(a) When used in this Article, the following terms shall have the meanings described in Chapter 5, Article 3.5, section 18281:
(1) "Assets";
(2) "Current assets";
(3) "Current liabilities";
(4) "Financial reporting year";
(5) "Liabilities";
(6) "Net working capital";
(7) "Net worth";
(8) "Parent corporation"; and
(9) "Tangible net worth".
(b) When used in this Article, the following terms shall have the meanings given below:
(1) "Accidental occurrence" means an event, including pollution exposure, which occurs during the operation of a major waste tire facility prior to closure, that results in bodily injury and/or property damage, and includes continuous or repeated exposure to conditions, neither expected nor intended from the standpoint of the facility operator.
(2) "Admitted carrier" means an insurance company entitled to transact the business of insurance in this state, having complied with the laws imposing conditions precedent to transactions of such business.
(3) "Auto" means a land motor vehicle, trailer or semitrailer designed for travel on public roads, including any attached machinery or equipment. But "auto" does not include "mobile equipment."
(4) "Bodily injury" means any injury to the body, sickness or disease sustained by a person, including death resulting from any of these at any time. Damages because of "bodily injury" include damages claimed by any person or organization for care, loss of services or death resulting at any time from the "bodily injury." "Bodily injury" excludes:
(A) "Bodily injury" expected or intended from the standpoint of the operator. This exclusion does not apply to "bodily injury" resulting from the use of reasonable force to protect persons or property.
(B) "Bodily injury" for which the operator is obligated to pay damages by reason of the assumption of liability in a contract or agreement. This exclusion does not apply to liability for damages that the operator would have in the absence of the contract or agreement.
(C) Any obligation of the operator under a workers compensation, disability benefits or unemployment compensation law or any similar law.
(D) "Bodily injury" to:
1. An employee of the operator arising out of and in the course of employment by the operator; or
2. The spouse, child, parent, brother or sister of that employee as a consequence of subsection (b)(4)(D)1 above.
This exclusion applies:
a. Whether the operator may be liable as an employer or in any other capacity; and
b. To any obligation to share damages with or repay someone else who must pay damages because of the injury.
(E) "Bodily injury" arising out of the ownership, maintenance, use or entrustment to others of any aircraft, "auto" or watercraft owned or operated by or rented or loaned to any operator. Use includes operation and loading or unloading. This exclusion does not apply to:
1. Parking an "auto" on, or on the ways next to, premises the operator owns or rents, provided the "auto" is not owned by or rented or loaned to the operator;
2. "Bodily injury" arising out of the operation of any of the equipment listed in paragraph (F)2. or (F)3. of the definition of "mobile equipment", found in subsection 12 below.
(5) "Corporate guarantee" means a contract meeting the requirements of section 18494 of this Article through which a guarantor promises that, if an operator fails to pay a claim by a third party for bodily injury and/or property damage caused by an accidental occurrence, the guarantor shall pay the claim on behalf of the operator.
(6) "Excess coverage" means assurance for third party bodily injury and property damage costs that are above a specified level (i.e., above the primary coverage level or a limit of lower excess coverage) but up to a specified limit.
(7) "Financial means test" means the financial assurance mechanism specified in section 18493 of this Article by which an operator demonstrates his or her ability to pay third party claims for bodily injury and property damage caused by accidental occurrences by satisfying the prescribed set of financial criteria.
(8) "Government securities" means financial obligations meeting the requirements of section 18490 of this Article that are issued by a federal, state, or local government, including but not limited to, general obligation bonds, revenue bonds, and certificates of participation.
(9) "Guarantor" means a parent corporation, or a corporation with a substantial business relationship to the operator who guarantees payment of a present or future obligation(s) of an operator.
(10) "Insurance" means a contract meeting the requirements of section 18491 of this Article by which an insurer promises to pay a claim by a third party for bodily injury and property damage caused by an accidental occurrence.
(11) "Legal defense costs" means expenses that an operator or a provider of financial assurance incurs in defending claims brought:
(A) By or on behalf of a third party for bodily injury and/or property damage caused by an accidental occurrence; or
(B) By any person to enforce the terms of a financial assurance mechanism.
(12) "Mobile equipment" means any of the following types of land vehicles, including any attached machinery or equipment:
(A) Bulldozers, farm machinery, forklifts and other vehicles designed for use principally off public roads;
(B) Vehicles maintained for use solely on or next to premises the operator owns or rents;
(C) Vehicles that travel on crawler treads;
(D) Vehicles, whether self-propelled or not, maintained primarily to provide mobility to permanently mounted:
1. Power cranes, shovels, loaders, diggers or drills; or
2. Road construction or resurfacing equipment such as graders, scrapers or rollers;
(E) Vehicles not described in (A), (B), (C) or (D) above that are not self-propelled and are maintained primarily to provide mobility to permanently attached equipment of the following types:
1. Air compressors, pumps and generators, including spraying, welding, building cleaning, geophysical exploration, lighting and well servicing equipment; or
2. Cherry pickers and similar devices used to raise or lower workers;
(F) Vehicles not described in (A), (B), (C) or (D) above maintained primarily for purposes other than the transportation of persons or cargo. However, self-propelled vehicles with the following types of permanently attached equipment are not "mobile equipment" but will be considered "autos":
1. Equipment designed primarily for:
a. Snow removal;
b. Road maintenance, but not construction or resurfacing;
c. Street cleaning;
2. Cherry pickers and similar devices mounted on automobile or truck chassis and used to raise or lower workers; and
3. Air compressors, pumps and generators, including spraying, welding, building cleaning, geophysical exploration, lighting and well servicing equipment.
(13) "Primary coverage" means the first priority coverage for third party bodily injury and property damage costs up to a specified limit when used in combination with other coverage.
(14) "Property damage" means physical injury to tangible property, including all resulting loss of use of that property, or loss of use of tangible property that is not physically injured. "Property damage" excludes:
(A) "Property damage" expected or intended from the standpoint of the operator.
(B) "Property damage" for which the operator is obligated to pay damages by reason of the assumption of liability in a contract or agreement. This exclusion does not apply to liability for damages that the operator would have in the absence of the contract or agreement.
(C) "Property damages" arising out of the ownership, maintenance, use or entrustment to others of any aircraft, "auto" or watercraft owned or operated by or rented or loaned to any operator. Use includes operation and loading and unloading. This exclusion does not apply to:
1. Parking an "auto" on, or on the ways next to, premises the operator owns or rents, provided the "auto" is not owned by or rented or loaned to the operator;
2. "Property damage" arising out of the operation of any of the equipment listed in paragraph (F)2. or (F)3. of the definition of "mobile equipment", found in subsection 12 above.
(D) "Property damage" to:
1. Property the operator owns, rents, or occupies;
2. Premises the operator sells, gives away or abandons, if the "property damage" arises out of any part of those premises;
3. Property loaned to the operator;
4. Personal property in the operator's care, custody or control;
5. That particular part of real property on which the operator or any contractors or subcontractors working directly or indirectly on the operator's behalf are performing operations, if the "property damage" arises out of those operations; or
6. That particular part of any property that must be restored, repaired or replaced because the operator's work was incorrectly performed on it.
(15) "Provider of financial assurance" means an entity, other than the operator, that provides financial assurance to the operator of a major waste tire facility, including a trustee, an insurer, or a guarantor.
(16) "Substantial business relationship" means a business relationship that arises from a pattern of recent or ongoing business transactions.
Note: Authority cited: Sections 40502 and 42820, Public Resources Code. Reference: Section 42821, Public Resources Code.
s 18487. Amount of Required Coverage.
(a) An operator of one or more major waste tire facilities shall demonstrate financial responsibility for compensating third parties for bodily injury and property damage caused by accidental occurrences, including exposures to pollution.
(b) The required amounts of coverage shall be:
(1) $500,000 per occurrence with a $500,000 annual aggregate for each facility permitted for 5,000 to 200,000 tires or tire equivalents; or
(2) $1,000,000 per occurrence with a $1,000,000 annual aggregate for each facility permitted for 200,001 tires or more or corresponding tire equivalents.
(c) The required amounts of coverage shall be exclusive of legal defense costs, deductibles and self-insured retentions.
(d) The required amounts of coverage shall apply exclusively to an operator's facility or facilities located in the State of California.
(e) An operator may use one or more mechanisms to provide proof of financial assurance.
(f) If a trust fund or government securities is depleted to compensate third parties for bodily injuries and/or property damages caused by accidental occurrences, the operator shall, within one year of the depletion, demonstrate financial responsibility for the full amount of coverage required by section (a) by replenishing the depleted mechanism(s) and/or acquiring additional financial assurance mechanism(s).
Note: Authority cited: Sections 40502 and 42820, Public Resources Code. Reference: Section 42821, Public Resources Code.
s 18488. Acceptable Mechanisms and Combinations of Mechanisms.
(a) Subject to the limitations of subsections (c) and (d) of this section, an operator shall use any one, or any combination of the mechanisms which are defined in the following sections:
(1) Section 18489, Trust Fund
(2) Section 18490, Government Securities
(3) Section 18491, Insurance
(4) Section 18492, Self-Insurance and Risk Management
(5) Section 18493, Financial Means Test
(6) Section 18494, Corporate Guarantee
(7) Section 18494.5, State Approved Mechanism
(b) If a combination of mechanisms are chosen, the operator shall designate one mechanism as "primary" and all others as "excess" coverage.
(c) The government securities and self-insurance and risk management mechanisms are acceptable only for major waste tire facilities operated by government agencies.
(d) The financial means test and corporate guarantee mechanisms are acceptable only for major waste tire facilities operated by private firms.
(1) A private operator may combine a financial means test with a corporate guarantee only if, for the purpose of meeting the requirements of the financial means test, the financial statements of the operator are not consolidated with the financial statements of the guarantor.
Note: Authority cited: Sections 40502 and 42820, Public Resources Code. Reference: Section 42821, Public Resources Code.
s 18489. Trust Fund.
(a) The trust fund shall have a trustee that is authorized to act as a trustee and whose trust operations are regulated and examined by a federal or state agency.
(b) The trust agreement shall be established by using form CIWMB 145 "Trust Agreement" (12/91) which is incorporated herein by reference; and also shall contain original signature of grantor and trustee. (See Appendix A.)
(c) If, at any time, the value of the trust fund is greater than the required amount of coverage minus the amount of coverage demonstrated by another mechanism, the operator may request in writing that the Board or its designee authorize the release of the excess funds. The Board or its designee shall review the request, and if any excess funds are verified, the Board or its designee shall instruct the trustee to release the funds.
Note: Authority cited: Sections 40502 and 42820, Public Resources Code. Reference: Section 42821, Public Resources Code.
s 18490. Government Securities.
(a) The terms of issuance of government securities shall specify that proceeds from the sale of the securities shall be deposited into a financial assurance mechanism that meets the requirements of section 18490(b) below.
(b) The securities shall have been issued and the proceeds already deposited into the financial assurance mechanism that provides equivalent protection to a trust fund by meeting the following requirements:
(1) Proceeds from the sale of securities shall be used exclusively to pay claims by third parties for bodily injury and property damage caused by accidental occurrences and shall remain inviolate against all other claims, including any claims by the operator, the operator's governing body, and the creditors of the operator and its governing body;
(2) The financial operations of the provider of the financial assurance are regulated by a federal or state agency, or the provider is otherwise certain to maintain and disburse the assured funds properly;
(3) If the provider of financial assurance has authority to invest revenue deposited into the mechanism, the provider shall exercise investment discretion similar to a trustee; and
(4) The mechanism meets other requirements that the Board or its designee determines are necessary to ensure that the assured funds shall be available in a timely manner.
Note: Authority cited: Sections 40502 and 42820, Public Resources Code. Reference: Section 42821, Public Resources Code.
s 18491. Insurance.
(a) The issuer of the insurance policy shall be an insurer that, at a minimum, is licensed by the California Department of Insurance to transact the business of insurance in the State of California as an admitted carrier.
(b) If coverage is not available as specified in (a) above, the operator may seek coverage by an insurer which, at a minimum, shall be eligible to provide insurance as an excess or surplus lines insurer in California.
(c) If coverage is obtained as described in section (b) of this section, the insurance shall be transacted by and through a surplus line broker currently licensed under the regulations of the California Department of Insurance and upon terms and conditions prescribed in the California Insurance Code (CIC), Division 1, Part 2, Chapter 6. (continued)