(a) An owner or operator may satisfy the requirements of financial assurance by obtaining an irrevocable standby letter of credit which conforms to the requirements of this section, in addition to the requirements specified in Subchapters A and B of this chapter (relating to General Financial Assurance Requirements and Financial Assurance Requirements for Closure, Post Closure, and Corrective Action), and submit an originally signed irrevocable standby letter of credit to the executive director.
(b) The financial institution issuing the irrevocable standby letter of credit shall be an entity that has the authority to issue irrevocable standby letters of credit and whose operations are regulated and examined by a federal or state agency.
(c) The wording of the irrevocable standby letter of credit must be identical to the wording specified in §37.331 of this title (relating to Irrevocable Standby Letter of Credit).
(d) The originally signed irrevocable standby letter of credit must be accompanied by a letter from the owner or operator referring to the irrevocable standby letter of credit by number, issuing institution, and date, and providing the following information for each facility: the permit number, name and physical and mailing addresses of the facility, and the amount of funds assured for closure, post closure, or corrective action by the irrevocable standby letter of credit.
(e) The letter of credit must be irrevocable and issued for a period of at least one year. The irrevocable standby letter of credit must provide that the expiration date shall 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 owner or operator and the executive director by certified mail of a decision not to extend the expiration date. Under the terms of the irrevocable standby letter of credit, the 120 days shall begin on the date when both the owner or operator and the executive director have received the notice, as evidenced by the return receipts.
(f) The irrevocable standby letter of credit must be issued in an amount at least equal to the current cost estimate, except as provided in §37.41 of this title (relating to Use of Multiple Financial Assurance Mechanisms), §37.51 of this title (relating to Use of a Financial Assurance Mechanism for Multiple Facilities), or §37.52 of this title (relating to Use of a Universal Financial Assurance Mechanism for Multiple Facilities and Program Areas).
(g) Following a determination that the owner or operator has failed to perform closure or post closure in accordance with the closure plan, post closure plan, and other applicable requirements of the permit, or has failed to perform corrective action in accordance with the permit or other applicable requirements, the executive director may draw on the irrevocable standby letter of credit.
(h) If the owner or operator does not establish alternate financial assurance as specified in this subchapter and obtain written approval of such alternate assurance from the executive director within 90 days after receipt by both the owner or operator and the executive director of a notice from the issuing institution that it has decided not to extend the irrevocable standby letter of credit beyond the current expiration date, the executive director shall draw on the irrevocable standby letter of credit. The executive director may delay the drawing if the issuing institution grants an extension of the term of the letter of credit. During the last 30 days of any such extension, the executive director shall draw on the irrevocable standby letter of credit if the owner or operator has failed to provide alternate financial assurance as specified in this subchapter and obtain written approval of such assurance from the executive director.
(i) Upon termination, in accordance with §37.61 of this title (relating to Termination of Mechanisms), the executive director shall return the irrevocable standby letter of credit to the issuing institution.

Source Note: The provisions of this §37.231 adopted to be effective December 30, 1996, 21 TexReg 12297; amended to be effective March 21, 2000, 25 TexReg 2347