49-152.01. Engineering controls; financial assurance

A. If an engineering control is used to satisfy the requirements of section 49-152, the owner shall submit to the department an engineering control plan that contains all of the following:

1. A detailed description of the engineering control that is prepared by a professional engineer who is licensed in this state. The description shall include a maintenance plan for the control and shall describe how the engineering control will prevent or minimize exposure to contaminants, the control s specifications and its expected operational life.

2. A contingency plan for the engineering control in the event that the engineering control fails and must be restored or does not achieve the intended level of protection or mitigation.

3. A detailed cost analysis of the engineering control in current dollars. The cost analysis shall include the cost of construction and maintenance and the cost of implementing the contingency plan.

4. A statement from the chief financial officer or a person in a similar position of legal responsibility on behalf of the owner that indicates that the owner is financially capable of meeting the requirements of this section.

B. The owner shall submit a proposed form of financial assurance document that is based on the cost analysis prescribed by subsection A, paragraph 3 of this section and that describes how the owner will ensure that the engineering control will be maintained and that there will be sufficient funds available to restore the engineering control if it fails or if it fails to meet its performance expectations. The owner shall pay the department a fee established by rule with each request for approval, amendment or substitution of a financial assurance mechanism. The financial assurance shall include all of the following:

1. Any one or more of the following in a form and amount that is satisfactory to the director:

(a) Payment into the institutional and engineering control fund established by section 49-159, in addition to payment of the fee prescribed by section 49-152, subsection K.

(b) A maintenance and restoration trust fund.

(c) Letter of credit.

(d) Surety bond guaranteeing performance of maintenance and restoration.

(e) Insurance policy.

(f) Financial test and corporate guarantee.

(g) A government financial test for state and federal agencies, cities, towns, counties and other government entities and political subdivisions.

(h) A government guarantee test for state and federal agencies, cities, towns, counties and other government entities and political subdivisions.

(i) Any other financial assurance mechanisms or combination of mechanisms as approved by the director.

2. If a government entity uses a government financial test or a government guarantee test to meet the requirements of this section, a subsequent owner shall demonstrate financial assurance pursuant to this section within thirty days of the sale or transfer of the property for which a financial assurance mechanism is required.

3. The amount of the financial assurance shall be sufficient to cover both of the following:

(a) The cost of maintenance of the engineering control for a period of thirty years or until the owner demonstrates that continued maintenance of the engineering control is no longer necessary, whichever occurs first.

(b) The cost of restoring the engineering control if it fails.

4. The financial assurance mechanism shall be structured so that the department has prompt access to the funds necessary to maintain or restore the engineering control as prescribed by section 49-152.02, if the owner fails to do so.

5. The amount of the financial assurance shall be adjusted to account for inflation.

6. On approval by the department, an owner may amend a financial assurance mechanism or may substitute a financial assurance mechanism with another.

C. At least five days before the sale or transfer of a property that is subject to a declaration of environmental use restriction because of an engineering control:

1. The owner of the property shall provide written notice of the sale or transfer to the department. The notice shall identify the buyer or transferee.

2. The buyer or transferee shall provide to the department a written commitment to comply with the requirements of the engineering control plan and to maintain or replace the financial assurance mechanism. The financial assurance obligations of the seller are not relieved until the buyer or transferee demonstrates financial assurance to the satisfaction of the department.