Current through Register Vol. 48, No. 38, September 20, 2024
a)
Coverage for Sudden Accidental Occurrences. An owner or operator of a hazardous
waste treatment, storage, or disposal facility, or a group of such facilities,
must demonstrate financial responsibility for bodily injury and property damage
to third parties caused by sudden accidental occurrences arising from
operations of the facility or group of facilities. The owner or operator must
have and maintain liability coverage for sudden accidental occurrences in the
amount of at least $1 million per occurrence with an annual aggregate of at
least $2 million, exclusive of legal defense costs. This liability coverage may
be demonstrated, as specified in subsections (a)(1) through (a)(6):
1) An owner or operator may demonstrate the
required liability coverage by having liability insurance, as specified in this
subsection (a)(1).
A) Each insurance policy
must be amended by attachment of the Hazardous Waste Facility Liability
Endorsement or evidenced by a Certificate of Liability Insurance. The wording
of the endorsement and of the certificate of insurance must be as specified in
35 Ill. Adm. Code
724.251.
The owner or operator must submit a signed duplicate original of the
endorsement or the certificate of insurance to the Agency. If requested by the
Agency, the owner or operator must provide a signed duplicate original of the
insurance policy.
B) Each insurance
policy must be issued by an insurer that is licensed by the Illinois Department
of Financial and Professional Regulation, Division of Insurance.
2) An owner or operator may meet
the requirements of this Section by passing a financial test or using the
guarantee for liability coverage, as specified in subsections (f) and
(g).
3) An owner or operator may
meet the requirements of this Section by obtaining a letter of credit for
liability coverage, as specified in subsection (h).
4) An owner or operator may meet the
requirements of this Section by obtaining a surety bond for liability coverage,
as specified in subsection (i).
5)
An owner or operator may meet the requirements of this Section by obtaining a
trust fund for liability coverage, as specified in subsection (j).
6) An owner or operator may demonstrate the
required liability coverage through the use of combinations of insurance,
financial test, guarantee, letter of credit, surety bond, and trust fund,
except that the owner or operator may not combine a financial test covering
part of the liability coverage requirement with a guarantee unless the
financial statement of the owner or operator is not consolidated with the
financial statement of the guarantor. The amounts of coverage demonstrated must
total at least the minimum amounts required by this Section. If the owner or
operator demonstrates the required coverage through the use of a combination of
financial assurances pursuant to this subsection (a)(6), the owner or operator
must specify at least one such assurance as "primary" coverage, and must
specify other such assurance as "excess" coverage.
7) An owner or operator must notify the
Agency within 30 days whenever one of the following occurs:
A) A claim results in a reduction in the
amount of financial assurance for liability coverage provided by a financial
instrument authorized in subsections (a)(1) through (a)(6);
B) A Certification of Valid Claim for bodily
injury or property damages caused by sudden or non-sudden accidental occurrence
arising from the operation of a hazardous waste treatment, storage, or disposal
facility is entered between the owner or operator and third-party claimant for
liability coverage pursuant to subsections (a)(1) through (a)(6); or
C) A final court order establishing a
judgment for bodily injury or property damage caused by a sudden or non-sudden
accidental occurrence arising from the operation of a hazardous waste
treatment, storage, or disposal facility is issued against the owner or
operator or an instrument that is providing financial assurance for liability
coverage pursuant to subsections (a)(1) through (a)(6).
b) Coverage for Nonsudden
Accidental Occurrences. An owner or operator of a surface impoundment,
landfill, or land treatment facility that is used to manage hazardous waste, or
a group of such facilities, must demonstrate financial responsibility for
bodily injury and property damage to third parties caused by nonsudden
accidental occurrences arising from operations of the facility or group of
facilities. The owner or operator must have and maintain liability coverage for
nonsudden accidental occurrences in the amount of at least $3 million per
occurrence with an annual aggregate of at least $6 million, exclusive of legal
defense costs. An owner or operator meeting the requirements of this Section
may combine the required per-occurrence coverage levels for sudden and
nonsudden accidental occurrences into a single per-occurrence level, and
combine the required annual aggregate coverage levels for sudden and nonsudden
accidental occurrences into a single annual aggregate level. An owner or
operator that combines coverage levels for sudden and nonsudden accidental
occurrences must maintain liability coverage in the amount of at least $4
million per occurrence and $8 million annual aggregate. This liability coverage
may be demonstrated, as specified in subsections (b)(1) through (b)(6):
1) An owner or operator may demonstrate the
required liability coverage by having liability insurance, as specified in this
subsection (b)(1).
A) Each insurance policy
must be amended by attachment of the Hazardous Waste Facility Liability
Endorsement or evidenced by a Certificate of Liability Insurance. The wording
of the endorsement must be as specified in 35 Ill. Adm. Code 724.251. The
wording of the certificate of insurance must be as specified in 35 Ill. Adm.
Code 724.251. The owner or operator must submit a signed duplicate original of
the endorsement or the certificate of insurance to the Agency. If requested by
the Agency, the owner or operator must provide a signed duplicate original of
the insurance policy.
B) Each
insurance policy must be issued by an insurer that is licensed by the Illinois
Department of Financial and Professional Regulation, Division of
Insurance.
2) An owner
or operator may meet the requirements of this Section by passing a financial
test or using the guarantee for liability coverage, as specified in subsections
(f) and (g).
3) An owner or
operator may meet the requirements of this Section by obtaining a letter of
credit for liability coverage, as specified in subsection (h).
4) An owner or operator may meet the
requirements of this Section by obtaining a surety bond for liability coverage,
as specified in subsection (i).
5)
An owner or operator may meet the requirements of this Section by obtaining a
trust fund for liability coverage, as specified in subsection (j).
6) An owner or operator may demonstrate the
required liability coverage through the use of combinations of insurance,
financial test, guarantee, letter of credit, surety bond, and trust fund,
except that the owner or operator may not combine a financial test covering
part of the liability coverage requirement with a guarantee unless the
financial statement of the owner or operator is not consolidated with the
financial statement of the guarantor. The amounts of coverage demonstrated must
total at least the minimum amounts required by this Section. If the owner or
operator demonstrates the required coverage through the use of a combination of
financial assurances pursuant to this subsection (b)(6), the owner or operator
must specify at least one such assurance as "primary" coverage, and must
specify other such assurance as "excess" coverage.
7) An owner or operator must notify the
Agency within 30 days whenever one of the following occurs:
A) A claim results in a reduction in the
amount of financial assurance for liability coverage provided by a financial
instrument authorized in subsections (b)(1) through (b)(6);
B) A Certification of Valid Claim for bodily
injury or property damages caused by sudden or non-sudden accidental occurrence
arising from the operation of a hazardous waste treatment, storage, or disposal
facility is entered between the owner or operator and third-party claimant for
liability coverage pursuant to subsections (b)(1) through (b)(6); or
C) A final court order establishing a
judgment for bodily injury or property damage caused by a sudden or non-sudden
accidental occurrence arising from the operation of a hazardous waste
treatment, storage, or disposal facility is issued against the owner or
operator or an instrument that is providing financial assurance for liability
coverage pursuant to subsections (b)(1) through (b)(6).
c) Request for Adjusted Level of
Required Liability Coverage. If an owner or operator demonstrates to the Agency
that the levels of financial responsibility required by subsection (a) or (b)
are not consistent with the degree and duration of risk associated with
treatment, storage, or disposal at the facility or group of facilities, the
owner or operator may obtain an adjusted level of required liability coverage
from the Agency. The request for an adjusted level of required liability
coverage must be submitted in writing to the Agency. If granted, the Agency's
action must take the form of an adjusted level of required liability coverage,
such level to be based on the Agency assessment of the degree and duration of
risk associated with the ownership or operation of the facility or group of
facilities. The Agency may require an owner or operator that requests an
adjusted level of required liability coverage to provide such technical and
engineering information as is necessary to determine a level of financial
responsibility other than that required by subsection (a) or (b). The Agency
must process any request for an adjusted level of required liability coverage
as if it were a permit modification request pursuant to 35 Ill. Adm. Code
703.271(e)(3)
and
705.128.
Notwithstanding any other provision, the Agency must hold a public hearing
whenever it finds, on the basis of requests, a significant degree of public
interest in a tentative decision to grant an adjusted level of required
liability insurance. The Agency may also hold a public hearing at its
discretion whenever such a hearing might clarify one or more issues involved in
the tentative decision.
d)
Adjustments by the Agency. If the Agency determines that the levels of
financial responsibility required by subsection (a) or (b) are not consistent
with the degree and duration of risk associated with treatment, storage, or
disposal at the facility or group of facilities, the Agency must adjust the
level of financial responsibility required pursuant to subsection (a) or (b) as
may be necessary to adequately protect human health and the environment. This
adjusted level must be based on the Agency's assessment of the degree and
duration of risk associated with the ownership or operation of the facility or
group of facilities. In addition, if the Agency determines that there is a
significant risk to human health and the environment from non-sudden accidental
occurrences resulting from the operations of a facility that is not a surface
impoundment, landfill or land treatment facility, the Agency may require that
an owner or operator of the facility comply with subsection (b). An owner or
operator must furnish to the Agency, within a time specified by the Agency in
the request, which must not be less than 30 days, any information that the
Agency requests to determine whether cause exists for such adjustments of level
or type of coverage. The Agency must process any request for an adjusted level
of required liability coverage as if it were a permit modification request
pursuant to 35 Ill. Adm. Code
703.271(e)(3)
and 705.128. Notwithstanding any other provision, the Agency must hold a public
hearing whenever it finds, on the basis of requests, a significant degree of
public interest in a tentative decision to grant an adjusted level of required
liability insurance. The Agency may also hold a public hearing at its
discretion whenever such a hearing might clarify one or more issues involved in
the tentative decision.
e) Period
of Coverage. Within 60 days after receiving certifications from the owner or
operator and a qualified Professional Engineer that final closure has been
completed in accordance with the approved closure plan, the Agency must notify
the owner or operator in writing that the owner or operator is no longer
required by this Section to maintain liability coverage for that facility,
unless the Agency determines that closure has not been in accordance with the
approved closure plan.
f) Financial
Test for Liability Coverage
1) An owner or
operator may satisfy the requirements of this Section by demonstrating that the
owner or operator passes a financial test, as specified in this subsection
(f)(1). To pass this test the owner or operator must meet the criteria of
subsection (f)(1)(A) or (f)(1)(B):
A) The
owner or operator must have each of the following:
i) Net working capital and tangible net worth
each at least six times the amount of liability coverage to be demonstrated by
this test;
ii) Tangible net worth
of at least $10 million; and
iii)
Assets in the United States amounting to either: at least 90 percent of total
assets; or at least six times the amount of liability coverage to be
demonstrated by this test.
B) The owner or operator must have each of
the following:
i) A current rating for the
owner or operator's most recent bond issuance of AAA, AA, A, or BBB, as issued
by Standard and Poor's, or Aaa, Aa, A, or Baa, as issued by Moody's;
ii) Tangible net worth of at least $10
million;
iii) Tangible net worth at
least six times the amount of liability coverage to be demonstrated by this
test; and
iv) Assets in the United
States amounting to either of the following: at least 90 percent of total
assets or at least six times the amount of liability coverage to be
demonstrated by this test.
2) The phrase "amount of liability coverage",
as used in subsection (f)(1), refers to the annual aggregate amounts for which
coverage is required pursuant to subsections (a) and (b).
3) To demonstrate that the owner or operator
meets this test, the owner or operator must submit each of the following three
items to the Agency:
A) A letter signed by
the owner's or operator's chief financial officer and worded as specified in 35
Ill. Adm. Code 724.251. If an owner or operator is using the financial test to
demonstrate both assurance for closure or post-closure care, as specified by 35
Ill. Adm. Code
724.243(f)
and
724.245(f),
or by Sections
725.243(e)
and
725.245(e),
and liability coverage, it must submit the letter specified in 35 Ill. Adm.
Code
724.251
to cover both forms of financial responsibility; a separate letter, as
specified in 35 Ill. Adm. Code
724.251
is not required.
B) A copy of the
independent certified public accountant's report on examination of the owner's
or operator's financial statements for the latest completed fiscal
year.
C) A special report from the
owner's or operator's independent certified public accountant to the owner or
operator stating as follows:
i) That the
accountant has compared the data that the letter from the chief financial
officer specifies as having been derived from the independently audited,
year-end financial statements for the latest fiscal year with the amounts in
such financial statements; and
ii)
In connection with that procedure, that no matters came to the accountant's
attention that caused the accountant to believe that the specified data should
be adjusted.
5) After the initial submission of items
specified in subsection (f)(3), the owner or operator must send updated
information to the Agency within 90 days after the close of each succeeding
fiscal year. This information must consist of all three items specified in
subsection (f)(3).
6) If the owner
or operator no longer meets the requirements of subsection (f)(1), the owner or
operator must obtain insurance, a letter of credit, a surety bond, a trust
fund, or a guarantee for the entire amount of required liability coverage, as
specified in this Section. Evidence of insurance must be submitted to the
Agency within 90 days after the end of the fiscal year for which the year-end
financial data show that the owner or operator no longer meets the test
requirements.
7) The Agency may
disallow use of this test on the basis of qualifications in the opinion
expressed by the independent certified public accountant in the accountant's
report on examination of the owner's or operator's financial statements (see
subsection (f)(3)(B)). An adverse opinion or a disclaimer of opinion is cause
for disallowance. The Agency must evaluate other qualifications on an
individual basis. The owner or operator must provide evidence of insurance for
the entire amount of required liability coverage, as specified in this Section,
within 30 days after notification of disallowance.
g) Guarantee for Liability Coverage
1) Subject to subsection (g)(2), an owner or
operator may meet the requirements of this Section by obtaining a written
guarantee, referred to as a "guarantee". The guarantor must be the direct or
higher-tier parent corporation of the owner or operator, a firm whose parent
corporation is also the parent corporation of the owner or operator, or a firm
with a "substantial business relationship" with the owner or operator. The
guarantor must meet the requirements for owners and operators in subsections
(f)(1) through (f)(6). The wording of the guarantee must be as specified in 35
Ill. Adm. Code 724.251. A certified copy of the guarantee must accompany the
items sent to the Agency as specified in subsection (f)(3). One of these items
must be the letter from the guarantor's chief financial officer. If the
guarantor's parent corporation is also the parent corporation of the owner or
operator, this letter must describe the value received in consideration of the
guarantee. If the guarantor is a firm with a "substantial business
relationship" with the owner or operator, this letter must describe this
"substantial business relationship" and the value received in consideration of
the guarantee. The terms of the guarantee must provide as follows:
A) If the owner or operator fails to satisfy
a judgment based on a determination of liability for bodily injury or property
damage to third parties caused by sudden or nonsudden accidental occurrences
(or both as the case may be), arising from the operation of facilities covered
by this guarantee, or fails to pay an amount agreed to in settlement of claims
arising from or alleged to arise from such injury or damage, the guarantor will
do so up to the limits of coverage.
B) The guarantee remains in force unless the
guarantor sends notice of cancellation by certified mail to the owner or
operator and to the Agency. The guarantee must not be terminated unless and
until the Agency approves alternate liability coverage complying with Section
725.247 or 35 Ill. Adm. Code
724.247.
2) The guarantor must execute the
guarantee in Illinois. The guarantee must be accompanied by a letter signed by
the guarantor that states as follows:
A) The
guarantee was signed in Illinois by an authorized agent of the
guarantor;
B) The guarantee is
governed by Illinois law; and
C)
The name and address of the guarantor's registered agent for service of
process.
3) The
guarantor must have a registered agent pursuant to Section 5.05 of the Business
Corporation Act of 1983 [
805 ILCS
5/5.05] or Section 105.05 of the General
Not-for-Profit Corporation Act of 1986 [
805 ILCS
105/105.05] .
h) Letter of Credit for Liability Coverage
1) An owner or operator may satisfy the
requirements of this Section by obtaining an irrevocable standby letter of
credit that conforms to the requirements of this subsection, and submitting a
copy of the letter of credit to the Agency.
2) The financial institution issuing the
letter of credit must be an entity that has the authority to issue letters of
credit and whose letter of credit operations are regulated and examined by the
Illinois Commissioner of Banks and Trust Companies.
3) The wording of the letter of credit must
be as specified in 35 Ill. Adm. Code 724.251.
4) An owner or operator that uses a letter of
credit to satisfy the requirements of this Section may also establish a trust
fund. Under the terms of such a letter of credit, all amounts paid pursuant to
a draft by the trustee of the standby trust will be deposited by the issuing
institution into the standby trust in accordance with instructions from the
trustee. The trustee of the standby trust fund must be an entity that has the
authority to act as a trustee and whose trust operations are regulated and
examined by the Illinois Commissioner of Banks and Trust Companies, or that
complies with the Corporate Fiduciary Act [ 205 ILCS 620 ].
5) The wording of the standby trust fund must
be identical to the wording specified in 35 Ill. Adm. Code
724.251(n).
i) Surety Bond for Liability
Coverage
1) An owner or operator may satisfy
the requirements of this Section by obtaining a surety bond that conforms to
the requirements of this subsection (i) and submitting a copy of the bond to
the Agency.
2) The surety company
issuing the bond must be licensed by the Illinois Department of Financial and
Professional Regulation, Division of Insurance.
3) The wording of the surety bond must be as
specified in 35 Ill. Adm. Code 724.251.
j) Trust Fund for Liability Coverage
1) An owner or operator may satisfy the
requirements of this Section by establishing a trust fund that conforms to the
requirements of this subsection and submitting a signed, duplicate original of
the trust agreement to the Agency.
2) The trustee must be an entity that has the
authority to act as a trustee and whose trust operations are regulated and
examined by the Illinois Commissioner of Banks and Trust Companies, or that
complies with the Corporate Fiduciary Act [ 205 ILCS 620 ].
3) The trust fund for liability coverage must
be funded for the full amount of the liability coverage to be provided by the
trust fund before it may be relied upon to satisfy the requirements of this
Section. If at any time after the trust fund is created the amount of funds in
the trust fund is reduced below the full amount of liability coverage to be
provided, the owner or operator, by the anniversary of the date of
establishment of the fund, must either add sufficient funds to the trust fund
to cause its value to equal the full amount of liability coverage to be
provided, or obtain other financial assurance, as specified in this Section, to
cover the difference. For purposes of this subsection, "the full amount of the
liability coverage to be provided" means the amount of coverage for sudden and
nonsudden accidental occurrences required to be provided by the owner or
operator by this Section, less the amount of financial assurance for liability
coverage that is being provided by other financial assurance mechanisms being
used to demonstrate financial assurance by the owner or operator.
4) The wording of the trust fund must be as
specified in 35 Ill. Adm. Code 724.251.
