A permitted hazardous waste facility can meet EPA’s closure and post-closure financial assurance rules with a performance bond. If the owner or operator fails to close the facility or carry out post-closure care, the surety either does the work or pays the guaranteed amount into a standby trust fund. The wording is fixed by 40 CFR 264.151(c).
| Title / common name | Performance Bond — surety bond guaranteeing performance of closure and/or post-closure care, 40 CFR 264.151(c) |
|---|---|
| Bond type | Commercial — environmental financial assurance (RCRA Subtitle C) |
| Industry / license category | Environmental / hazardous waste closure |
| Jurisdiction | United States (federal) → U.S. EPA → RCRA hazardous waste rules, 40 CFR part 264 subpart H (permitted facilities) |
| Obligee | U.S. Environmental Protection Agency, acting through the EPA Regional Administrator for each Region where a bonded facility is located The bond text reads “firmly bound to the U.S. Environmental Protection Agency (hereinafter called EPA)”. In a state with an authorized RCRA program, the state agency is the regulator and the authorized state-equivalent wording applies (EPA Surety Bond Fact Sheet). EPA reports that 49 states, the District of Columbia and Guam are authorized for the base RCRA program — see EPA state authorization. |
| Typical penal sum | At least the current closure cost estimate and/or current post-closure cost estimate for each facility § 264.143(c)(6) and § 264.145(c)(6). If an estimate rises above the penal sum, the owner or operator has 60 days to raise it or obtain other assurance; a decrease needs the Regional Administrator’s written approval. During post-closure care the Regional Administrator may approve a lower penal sum if it exceeds the remaining cost (§ 264.145(c)(8)). A performance bond cannot be combined with other mechanisms for the same estimate (§ 264.143(g), § 264.145(g)). |
| Who needs it | Owners and operators of permitted hazardous waste TSDFs that choose a performance bond for closure and/or post-closure care The bond recites that the principal must have a RCRA permit, and part 265 offers interim-status facilities no performance bond option. EPA’s fact sheet says performance bonds are “allowed only at permitted facilities”. A new facility submits the bond at least 60 days before first receiving hazardous waste. The surety must, at a minimum, be listed in U.S. Treasury Circular 570. |
| What it covers | Performance of closure under the closure plan and permit, and of post-closure care under the post-closure plan and permit, as those plans, permits and laws are amended If the Regional Administrator finds the principal in violation, the surety either performs the closure or post-closure care itself or places the guaranteed amount into the standby trust fund. Under § 264.143(c)(5) and § 264.145(c)(5) this follows a final administrative determination under RCRA section 3008. If the principal does not replace a cancelled bond within 90 days, the surety funds the trust. The surety waives notice of amendments to plans, permits and laws. |
| Standby trust | Required. The surety pays only into a standby trust fund, as the Regional Administrator directs An originally signed duplicate of the trust agreement (40 CFR 264.151(a) wording) is submitted with the bond. Until the trust is funded, the owner or operator does not have to make trust payments, update Schedule A, obtain annual valuations or send nonpayment notices (§ 264.143(b)(3), (c)(3); § 264.145(b)(3), (c)(3)). |
| Form number / edition | No form number · wording prescribed by regulation and must be identical § 264.143(c)(2) and § 264.145(c)(2) require wording identical to § 264.151(c). eCFR is current as of 2026-10-15; paragraph (c) is unchanged by the January 22, 2025 eCFR version, which corrected paragraph (l) only. |
| Effective / cancellation | Effective date stated on the bond; the surety may cancel only on 120 days’ notice Notice goes by certified mail to the owner or operator and the Regional Administrator(s); the 120 days run from receipt by both. The principal can terminate only with the Regional Administrator’s written authorization, given when substitute assurance is in place or the facility is released after certified closure or post-closure care (§ 264.143(i), § 264.145(i)). The surety is not liable for deficiencies after that release (§ 264.143(c)(10), § 264.145(c)(11)). |
| Source | eCFR — 40 CFR 264.151, Wording of the instruments (official regulation text · paragraph (c) · current as of 2026-10-15) Also: 40 CFR 264.143 (closure) and 40 CFR 264.145 (post-closure care) for penal sum, standby trust and cancellation rules; EPA Surety Bond Fact Sheet (PDF); EPA — Financial assurance requirements for TSDFs |
| Status | current |
| Last verified | 2026-10-19 |
From 40 CFR 264.151(c): on notice that the principal has violated the closure requirements, “the Surety(ies) shall either perform closure in accordance with the closure plan and other permit requirements or place the closure amount guaranteed for the facility into the standby trust fund as directed by the EPA Regional Administrator.”
And: “The surety(ies) hereby waive(s) notification of amendments to closure plans, permits, applicable laws, statutes, rules, and regulations and agrees that no such amendment shall in any way alleviate its (their) obligation on this bond.”
The performance bond gives the surety a choice to perform or pay; the EPA RCRA financial guarantee bond (40 CFR 264.151(b)) only pays into the trust. Interim-status facilities can use only the financial guarantee bond, and only the financial guarantee bond can be combined with trust funds, letters of credit or insurance. Construction sureties will recognize the perform-or-pay structure from the federal SF 25 performance bond, but here the obligee is a regulator, not a project owner.
Post-closure care continues for 30 years after a unit closes (40 CFR 264.117(a)(1)), and the bond follows the plan and permit as they are amended. That long tail is why sureties look hard at indemnity and collateral on environmental bonds — see reclamation bonds and personal guaranties in Lexon v. Justice. For regulator-held closure security in Canada, compare Alberta AER Directive 068 demand forfeiture bonds.
Open the Source link above for the official regulation text on eCFR. We summarize field facts and quote short key clauses rather than reproducing the complete bond body. Authorized states may use their own equivalent wording, so confirm with the state agency.