Current through Register Vol. 50, No. 9, 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 LAC 33:V.3715.A.1, 2, 3, 4, 5, or 6. For any
facility that treats, stores, or disposes by land treatment (i.e., surface
impoundment, waste pile, landfarm, or landfill) any acute hazardous waste (see
LAC 33:V.4901, Table 3), or any toxic waste listed because of toxicity or
reactivity (see LAC 33:V.4901, Table 4) the liability coverage must be at least
$5 million per occurrence, with an annual aggregate of at least $5 million
exclusive of legal defense costs.
1. An owner
or operator may demonstrate the required liability coverage by having liability
insurance as specified in this Paragraph.
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 identical to the wording
specified in LAC 33:V.3719.I. The wording of the certificate of insurance must
be identical to the wording specified in LAC 33:V.3719.J. The owner or operator
must submit a signed duplicate original of the endorsement or the certificate
of insurance to the Office of Environmental Services. If requested by the
administrative authority, the owner or operator must provide a signed duplicate
original of the insurance policy. An owner or operator of a new facility must
submit the signed duplicate original of the Hazardous Waste Facility Liability
Endorsement or the certificate of liability insurance to the administrative
authority at least 60 days before the date on which hazardous waste is first
received for treatment, storage, or disposal. The insurance must be effective
before this initial receipt of hazardous waste.
b. Each insurance policy must be issued by an
insurer which, at a minimum, is licensed to transact the business of insurance,
or eligible to provide insurance as an excess or surplus lines insurer, in one
or more states, and authorized to transact business in Louisiana.
2. An owner or operator may meet
the requirements of this Section by passing a financial test or using the
corporate guarantee for liability coverage as specified in Subsections F and G
of this Section.
3. An owner or
operator may meet the requirements of this Section by obtaining a letter of
credit for liability coverage as specified in LAC 33:V.3715.H.
4. An owner or operator may meet the
requirements of this Section by obtaining a surety bond for liability coverage
as specified in LAC 33:V.3715.I.
5.
An owner or operator may meet the requirements of this Section by obtaining a
trust fund for liability coverage as specified in LAC 33:V.3715.J.
6. An owner or operator may demonstrate the
required liability coverage through use of combinations of financial test,
insurance, 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 under this Paragraph, the owner or operator shall specify
at least one such assurance as "primary" coverage and shall specify other
assurances as "excess" coverage.
7.
An owner or operator shall notify the Office of Environmental Services in
writing within 30 days whenever:
a. a claim
results in a reduction in the amount of financial assurance for liability
coverage provided by a financial instrument authorized in LAC 33:V.3715.A.1-6;
or
b. a Certification of Valid
Claim for bodily injury or property damages caused by a 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 under LAC
33:V.3715.A.1-6; or
c. a final
court order establishing a judgement 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 under LAC 33:V.3715.A.1-6.
B. Coverage for
Non-Sudden Accidental Occurrences. An owner or operator of a surface
impoundment, landfill, land treatment facility, or miscellaneous disposal unit
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 non-sudden accidental occurrences arising from
operations of the facility or group of facilities. The owner or operator must
have and maintain liability coverage for non-sudden 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 who
must meet the requirements of this Section may combine the required
per-occurrence coverage levels for sudden and non-sudden accidental occurrence
into a single per-occurrence level, and combine the required annual aggregate
coverage levels for sudden and non-sudden accidental occurrences into a single
annual aggregate level. Owners or operators who combine coverage levels for
sudden and non-sudden accidental occurrences must maintain liability coverage
in the amount of at least $5 million per occurrence and $10 million annual
aggregate. This liability coverage may be demonstrated as specified in LAC
33:V.3715.B.1, 2, 3, 4, 5, or 6.
1. An owner
or operator may demonstrate the required liability coverage by having liability
insurance as specified in this Paragraph.
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 identical to the wording
specified in LAC 33:V.3719.I. The wording of the certificate of insurance must
be identical to the wording specified in LAC 33:V.3719.J. The owner or operator
must submit a signed duplicate original of the endorsement or the certificate
of insurance to the Office of Environmental Services. If requested by the
administrative authority, the owner or operator must provide a signed duplicate
original of the insurance policy. An owner or operator of a new facility must
submit the signed duplicate original of the Hazardous Waste Facility Liability
Endorsement or the certificate of liability insurance to the administrative
authority at least 60 days before the date on which hazardous waste is first
received for treatment, storage, or disposal. The insurance must be effective
before this initial receipt of hazardous waste.
b. Each insurance policy must be issued by an
insurer which, at a minimum, is licensed to transact the business of insurance,
or eligible to provide insurance as an excess or surplus lines insurer in one
or more states and authorized to transact business in Louisiana.
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 LAC 33:V.3715.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 LAC 33:V.3715.H.
4. An owner or operator may meet the
requirements of this Section by obtaining a surety bond for liability coverage
as specified in LAC 33:V.3715.I.
5.
An owner or operator may meet the requirements of this Section by obtaining a
trust fund for liability coverage as specified in LAC 33:V.3715.J.
6. An owner or operator may demonstrate the
required liability coverage through use of combinations of financial test,
insurance, 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 under this Paragraph, the owner or operator shall specify
at least one such assurance as "primary" coverage and shall specify other
assurance as "excess" coverage.
7.
An owner or operator shall notify the Office of Environmental Services in
writing within 30 days whenever:
a. a claim
results in a reduction in the amount of financial assurance for liability
coverage provided by a financial instrument authorized in LAC 33:V.3715.B.1-6;
or
b. a Certification of Valid
Claim for bodily injury or property damages caused by a 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 under LAC
33:V.3715.B.1-6; 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 under LAC 33:V.3715.B.1-6.
C. Request for Variance. If an owner or
operator can demonstrate to the satisfaction of the administrative authority
that the levels of financial responsibility required by Subsections A and B of
this Section 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 a variance from the administrative authority.
The request for a variance must be submitted to the administrative authority as
part of the application under LAC 33:V.Chapter 5 for a facility that does not
have a permit, or pursuant to the procedures for permit modification under LAC
33:V.Chapter 3 for a facility that has a permit. If granted, the variance will
take the form of an adjusted level of required liability coverage, such level
to be based on the administrative authority's assessment of the degree and
duration of risk associated with the ownership or operation of the facility or
group of facilities. The administrative authority may require an owner or
operator who requests a variance to provide such technical and engineering
information as is deemed necessary by the administrative authority to determine
a level of financial responsibility other than that required by Subsections A
and B of this Section. Any request for a variance for a permitted facility will
be treated as a request for a permit modification under LAC 33:V.321.
D. Adjustments by the Administrative
Authority. If the administrative authority determines that the levels of
financial responsibility required by Subsection A or B of this Section are not
consistent with the degree and duration of risk associated with treatment,
storage, or disposal at the facility or group of facilities, the administrative
authority may adjust the level of financial responsibility required by
Subsections A and B of this Section as may be necessary to protect human health
and the environment. This adjusted level will be based on the administrative
authority'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 administrative authority 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, he may require that an owner or operator
of the facility comply with Subsection B of this Section. An owner or operator
must furnish to the Office of Environmental Services, within a reasonable time,
any information that the administrative authority requests to determine whether
cause exists for such adjustments of level or type of coverage. Any adjustment
of the level or type of coverage for a facility that has a permit will be
treated as a permit modification under LAC 33:V.321.
E. Period of Coverage. Within 60 days after
receiving certifications from the owner or operator and an independent,
qualified professional engineer that final closure has been completed in
accordance with the approved closure plan, the administrative authority will
notify the owner or operator in writing that he is no longer required by this
Section to maintain liability coverage for that facility, unless the
administrative authority has reason to believe 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 he passes a financial test
as specified in this Subsection. To pass this test the owner or operator must
meet the criteria of either LAC 33:V.3715.F.1.a or b below.
a. The owner or operator must have:
i. net working capital and tangible net worth
each at least six times the amount of liability coverage to be demonstrated by
the test; and
ii. tangible net
worth of at least $10 million; and
iii. assets located in the United States
amounting to either at least 90 percent of his 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:
i. a current rating for
his 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; and
ii.
tangible net worth of at least $10 million; and
iii. tangible net worth at least six times
the amount of liability coverage to be demonstrated by this test; and
iv. assets located 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.
2. The phrase amount of
liability coverage as used in LAC 33:V.3715.F.1 refers to the annual aggregate
amounts for which coverage is required under LAC 33:V.3715.A and B.
3. To demonstrate that he meets this test,
the owner or operator must submit the following three items to the Office of
Environmental Services:
a. a letter signed by
the owner's or operator's chief financial officer and worded as specified in
LAC 33:V.3719.G. If an owner or operator is using the financial test to
demonstrate both assurance for closure or post-closure care, as specified by
LAC 33:V.3707.F, 3711.F, 4403.E, and 4407.E, and liability coverage, he must
submit the letter specified in LAC 33:V.3719.G to cover both forms of financial
responsibility; a separate letter as specified in LAC 33:V.3719.F 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 that:
i. he has compared the
data which 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, no
matters came to his attention which caused him to believe that the specified
data should be adjusted.
4. An owner or operator of a new facility
must submit the items specified in Paragraph F.3 of this Section to the Office
of Environmental Services at least 60 days before the date on which hazardous
waste is first received for treatment, storage, or disposal.
5. After the initial submission of items
specified in LAC 33:V.3715.F.3, the owner or operator must send updated
information to the administrative authority within 90 days after the close of
each succeeding fiscal year. This information must consist of all three items
specified in LAC 33:V.3715.F.3.
6.
If the owner or operator no longer meets the requirements of Paragraph F.1 of
this Section, he 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 liability coverage must be submitted
to the Office of Environmental Services 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 administrative authority may disallow
use of this test on the basis of qualifications in the opinion expressed by the
independent certified public accountant in his report on examination of the
owner's or operator's financial statements (see LAC 33:V.3715.F.3). An adverse
opinion or a disclaimer of opinion will be cause for disallowance. The
administrative authority will evaluate other qualifications on an individual
basis. Based on the application, the circumstances and the accessibility of the
applicant's assets, the administrative authority may disallow the use of this
test. The owner or operator must provide evidence of insurance for the entire
amount of required liability coverage as specified in this Part within 30 days
after notification of disallowance.
8. The corporate guarantee authorized for use
to demonstrate financial assurance for closure and/or post-closure may not be
used to demonstrate financial assurance for liability coverage.
G. Guarantee for Liability
Coverage. Subject to LAC 33:V.3715.G.2, an owner or operator may meet the
requirements of this Section by obtaining a written guarantee, hereinafter
referred to as 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 or operators in
LAC 33:V.3715.F.1-7. The wording of the guarantee must be identical to the
wording specified in LAC 33:V.3719. A certified copy of the guarantee must
accompany the items sent to the administrative authority as specified in LAC
33:V.3715.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.
1. If the owner or operator fails to satisfy
a judgement based on a determination of liability for bodily injury or property
damage to third parties caused by sudden or non-sudden 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.
2. In the case of corporations incorporated
in the United States, a guarantee may be used to satisfy the requirements of
this Section only if the attorney general or insurance commissioner of the
state in which the guarantor is incorporated and the attorney general or
insurance commissioner of Louisiana have submitted written statements to the
department that a guarantee executed as described in this Section and LAC
33:V.3719.H.2 is a legally valid and enforceable obligation in that
state.
3. In the case of
corporations incorporated outside the United States, a guarantee may be used to
satisfy the requirements of this Section only if the non-U.S. corporation has
identified a registered agent for service of process in Louisiana and in the
state in which it has its principal place of business, and the attorney general
or insurance commissioner of Louisiana and the state in which the guarantor
corporation has its principal place of business have submitted written
statements to the department that a corporate guarantee executed as described
in this Section and LAC 33:V.3719.H.2 is a legally valid and enforceable
obligation in that state.
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 Office of Environmental Services.
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 a
federal or state agency.
3. The
wording of the letter of credit must be identical to the wording specified in
LAC 33:V.3719.K.
4. An owner or
operator who uses a letter of credit to satisfy the requirements of this
Section may also establish a standby 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 which has the authority to act as a
trustee and whose trust operations are regulated and examined by a federal or
state agency.
5. The wording of the
standby trust fund must be identical to the wording specified in LAC
33:V.3719.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 and submitting a copy
of the bond to the Office of Environmental Services.
2. The surety company issuing the bond must
be among those listed as acceptable sureties on federal bonds in the most
recent Circular 570 of the U.S. Department of the Treasury.
3. The wording of the surety bond must be
identical to the wording specified in LAC 33:V.3719.L.
4. A surety bond may be used to satisfy the
requirements of this Section only if the attorney general or insurance
commissioner of the state in which the surety is incorporated and the attorney
general or insurance commissioner of Louisiana have submitted a written
statement to EPA that a surety bond executed as described in this Section and
LAC 33:V.3719.L is a legally valid and enforceable obligation in that
state.
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 Paragraph and submitting an originally
signed duplicate of the trust agreement to the Office of Environmental
Services.
2. The trustee must 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.
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 the liability coverage to be
provided, the owner or operator, by the anniversary date of the 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 Paragraph, the full amount of the liability
coverage to be provided means the amount of coverage for sudden and/or
non-sudden 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
identical to the wording specified in LAC 33:V.3719.M.
K. Notwithstanding any other provision of LAC
33:V.Subpart 1, an owner or operator using liability insurance to satisfy the
requirements of this Section may use, until October 16, 1982, a Hazardous Waste
Facility Liability Endorsement or Certificate of Liability Insurance that does
not certify that the insurer is licensed to transact the business of insurance,
or eligible as an excess or surplus lines insurer, in one or more
states.
AUTHORITY NOTE:
Promulgated in accordance with
R.S.
30:2180 et
seq.
