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.4411.A.1-6.
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.
b. Each
insurance policy must be issued by an insurer which, at a minimum, is
authorized to transact business in Louisiana and in one or more states and is
licensed to transact the business of insurance or is 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.4411.F-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.4411.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.4411.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.4411.J.
6. An owner or operator may demonstrate the
required liability coverage through the 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.4411.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.4411.A.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.4411.A.1-6.
B. Coverage for Non-Sudden Accidental
Occurrences. An owner or operator of a surface impoundment, landfill, or land
treatment facility which 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
occurrences 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 $4 million per occurrence and $8 million
annual aggregate. This liability coverage may be demonstrated as specified in
LAC 33:V.4411.B.1-6.
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.
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 LAC 33:V.4411.B by passing a financial test or using the
corporate guarantee for liability coverage as specified in LAC 33:V.4411.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.4411.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 33:4411.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.4411.J.
6. An owner or operator may demonstrate the
required liability coverage through use of combinations of the 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.4411.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.4411.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.4411.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 LAC 33:V.4411.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 a variance from the administrative authority. The
request for a variance must be submitted in writing to the administrative
authority. 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 LAC 33:V.4411.A or B. The
administrative authority will process a variance request as if it were a permit
modification request. Notwithstanding any other provision, the administrative
authority may hold a public hearing at his discretion or whenever he finds, on
the basis of requests for a public hearing, a significant degree of public
interest in a tentative decision to grant a variance.
D. Adjustments by the Administrative
Authority. If the administrative authority determines that the levels of
financial responsibility required by LAC 33:V.4411.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 administrative authority
may adjust the level of financial responsibility required by LAC 33:V.4411.A or
B 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 nonsudden 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
LAC 33:V.4411.B. An owner or operator must furnish to the administrative
authority, within a reasonable time, any information which the administrative
authority requests to determine whether cause exists for such adjustments of
level or type of coverage. The administrative authority will process an
adjustment of the level of required coverage as if it were a permit
modification. Notwithstanding any other provision, the administrative authority
may hold a public hearing at his discretion or whenever he finds, on the basis
of requests for a public hearing, a significant degree of public interest in a
tentative decision to adjust the level or type of required coverage.
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 LAC 33:V.4411.F. To pass this test the owner or operator must
meet the criteria of LAC 33:V.4411.F.1.a or b.
a. The owner or operator must have:
i. net working capital and tangible net worth
at least six times the amount of liability coverage to be demonstrated by this
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 his 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.4411.F.1 refers to the annual aggregate
amounts for which coverage is required under LAC 33:V.4411.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. The owner or operator may obtain a
one-time extension of the time allowed for submission of the documents
specified in Paragraph F.3 of this Section if the fiscal year of the owner or
operator ends during the 90 days prior to the effective date of these
regulations and if the year-end financial statements for that fiscal year will
be audited by an independent certified public accountant. The extension will
end no later than 90 days after the end of the owner's or operator's fiscal
year. To obtain the extension, the chief financial officer for the owner or
operator must send a letter to the Office of Environmental Services . This
letter from the chief financial officer must:
a. request the extension;
b. certify that he has grounds to believe
that the owner or operator meets the criteria of the financial test;
c. specify for each facility to be covered by
the test the EPA identification number, name, address, the amount of liability
coverage and, when applicable, current closure and post-closure cost estimates
to be covered by the test;
d.
specify the date ending the owner's or operator's last complete fiscal year
before the effective date of these regulations;
e. specify the date, no later than 90 days
after the end of such fiscal year, when he will submit the documents specified
in LAC 33:V.4411.F.3; and
f.
certify that the year-end financial statement of the owner or operator for such
fiscal year will be audited by an independent certified public
accountant.
5. After the
initial submission of items specified in Paragraph F.3 of this Section, the
owner or operator must send updated information to the Office of Environmental
Services within 90 days after the close of each succeeding fiscal year. This
information must consist of all three items specified in Paragraph F.3 of this
Section.
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.4411.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. The owner or operator
must provide evidence of insurance for the entire amount of required liability
coverage as specified in LAC 33:V.4411 within 30 days after notification of
disallowance.
G.
Guarantee for Liability Coverage
1. Subject
to LAC 33:V.4411.G.2, an owner or operator may meet the requirements of this
Section by obtaining a written 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.4411.F.1-6. The wording of the guarantee must be identical to the wording
specified in LAC 33:V.3719.H.2. A certified copy of the guarantee must
accompany the items sent to the administrative authority as specified in LAC
33:V.4411.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.
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 non-sudden accidental occurrences or both, arising from the operation
of facilities covered by this corporate guarantee or fails to pay an amount
agreed upon 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. Reserved.
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 if 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 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 that 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
commissioners of the state in which the surety is incorporated and the attorney
general or insurance commissioner of Louisiana have submitted written
statements to the department 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 Subsection 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.Chapter 43, 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.
