Current through Register Vol. 49, No. 13, September 23, 2024
Subpart 1.
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 $1,000,000 per
occurrence with an annual aggregate of at least $2,000,000, exclusive of legal
defense costs. This liability coverage may be demonstrated as specified in
items A to E:
A. An owner or operator
may demonstrate the required liability coverage by having liability insurance
as specified in subitems (1) and (2):
(1)
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 part
7045.0524, subpart 9. The wording
of the certificate of insurance must be identical to the wording specified in
part
7045.0524, subpart 10. The owner
or operator must submit a signed duplicate original of the endorsement or the
certificate of insurance to the commissioner. If requested by the commissioner,
the owner or operator shall provide a signed duplicate original of the
insurance policy.
(2) Each
insurance policy must be issued by an insurer which 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.
B. An owner or operator may meet the
requirements of this part by passing a financial test or using the corporate
guarantee for liability coverage as specified in subparts
5 and
6.
C. An owner or operator may meet the
requirements of this part by obtaining a letter of credit for liability
coverage as specified in subpart
7.
D. An owner or operator may meet the
requirements of this part by obtaining a trust fund for liability coverage as
specified in subpart
8.
E. An owner or operator may demonstrate the
required liability coverage through the use of combinations of insurance,
financial test, corporate guarantee, letter of credit, 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 part. If the owner or operator
demonstrates the required coverage through the use of a combination of
financial assurances under this item, the owner or operator must specify at
least one such assurance as "primary" coverage and must specify other assurance
as "excess" coverage.
F. An owner
or operator must notify the commissioner in writing within 30 days whenever:
(1) a claim results in a reduction in the
amount of financial assurance for liability coverage provided by a financial
instrument authorized in items A to E;
(2) a certification of valid claim for bodily
injury or property damage caused by a sudden or nonsudden 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 items A to E; or
(3) a final court order establishing a
judgment for bodily injury or property damage caused by a sudden or nonsudden
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 items A to E.
Subp. 2.
Coverage for nonsudden
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 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 $3,000,000 per occurrence with an annual
aggregate of at least $6,000,000, exclusive of legal defense costs. An owner or
operator who must meet the requirements of this part 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. Owners or operators who combine coverage levels for
sudden and nonsudden accidental occurrences must maintain liability coverage in
the amount of at least $4,000,000 per occurrence and $8,000,000 annual
aggregate. This liability coverage may be demonstrated as specified in items A
to E:
A. An owner or operator may
demonstrate the required liability coverage by having liability insurance as
specified in subitems (1) and (2):
(1) 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 part
7045.0524, subpart 9. The wording
of the certificate of insurance must be identical to the wording specified in
part
7045.0524, subpart 10. The owner
or operator shall submit a signed duplicate original of the endorsement or the
certificate of insurance to the commissioner. If requested by the commissioner,
the owner or operator shall provide a signed duplicate original of the
insurance policy.
(2) Each
insurance policy must be issued by an insurer which 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.
B. An owner or operator may meet the
requirements of this part by passing a financial test or using the corporate
guarantee for liability coverage as specified in subparts
5 and
6.
C. An owner or operator may meet the
requirements of this part by obtaining a letter of credit for liability
coverage as specified in subpart
7.
D. An owner or operator may meet the
requirements of this part by obtaining a trust fund for liability coverage as
specified in subpart
8.
E. An owner or operator may demonstrate the
required liability coverage through use of combinations of insurance, financial
test, corporate guarantee, letter of credit, 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 part. If the owner or operator demonstrates
the required coverage through the use of a combination of financial assurances
under this item, the owner or operator shall specify at least one such
assurance as "primary" coverage and shall specify other assurance as "excess"
coverage.
F. An owner or operator
shall notify the commissioner in writing within 30 days whenever:
(1) a claim results in a reduction in the
amount of financial assurance for liability coverage provided by a financial
instrument authorized in items A to E;
(2) a certification of valid claim for bodily
injury or property damage caused by a sudden or nonsudden 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 items A to E; or
(3) a final court order establishing a
judgment for bodily injury or property damage caused by a sudden or nonsudden
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 items A to E.
Subp. 3.
Adjustment of liability
requirements.
If an owner or operator can demonstrate to the satisfaction
of the commissioner that the levels of financial responsibility required by
subpart
1 or
2 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
adjustment from the commissioner. The request for an adjustment must be
submitted in writing to the commissioner. If granted, the adjustment takes the
form of an adjusted level of required liability coverage, such level to be
based on the commissioner's assessment of the degree and duration of risk
associated with the ownership or operation of the facility or group of
facilities. The commissioner may require an owner or operator who requests an
adjustment to provide technical and engineering information deemed necessary by
the commissioner, to determine a level of financial responsibility other than
that required by subpart
1 or
2.
If the commissioner determines that the levels of financial
responsibility required by subpart
1 or
2 are not consistent with the
degree and duration of risk associated with treatment, storage, or disposal at
the facility or group of facilities, the commissioner may adjust the level of
financial responsibility required under subpart
1 or
2, as may be necessary to
protect human health and the environment. This adjusted level will be based on
the commissioner'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 commissioner 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, the commissioner may require that an
owner or operator of the facility comply with subpart
2. An owner or operator shall
furnish to the commissioner, within a reasonable time, any information which
the commissioner requests to determine whether cause exists for adjustments of
level or type of coverage.
The commissioner shall process an adjustment of the level of
required coverage as if it were a permit modification in accordance with the
agency's permitting procedures in chapter 7001. Notwithstanding any other
provision, the commissioner may hold a public information meeting at his or her
discretion or whenever the commissioner finds, on the basis of requests for a
public information meeting, a significant degree of public interest in a
tentative decision to adjust the level or type of required coverage.
Subp. 4.
Period of
coverage.
An owner or operator shall continuously provide liability
coverage for a facility as required by this part, until certifications of
closure of the facility, as specified in part
7045.0596, are received by the
commissioner. Within 60 days after receiving such certifications from the owner
or operator and an independent registered professional engineer, the
commissioner shall notify the owner or operator in writing that he or she is no
longer required by this part to maintain liability coverage for that facility,
unless the commissioner has reason to believe that closure has not been in
accordance with the approved closure plan.
Subp. 5.
Financial test for liability
coverage.
The financial test for liability coverage is as
follows:
A. An owner or operator may
satisfy the requirements of this part, by demonstrating that he or she passes a
financial test as specified in items A to I. To pass this test the owner or
operator shall meet the criteria of item B or C.
B. The owner or operator shall have:
(1) net working capital and tangible net
worth each at least six times the amount of liability coverage to be
demonstrated by this test;
(2)
tangible net worth of at least $10,000,000; and
(3) assets in the United States amounting to
either at least 90 percent of his or her total assets, or at least six times
the amount of liability coverage to be demonstrated by this test.
C. The owner or operator shall
have:
(1) a current rating for the 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;
(2) tangible net worth at least
$10,000,000;
(3) tangible net worth
at least six times the amount of liability coverage to be demonstrated by this
test; and
(4) 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.
D. The phrase
"amount of liability coverage" as used in items A to C, refers to the annual
aggregate amounts for which coverage is required under subparts
1 and
2.
E. To demonstrate that he or she meets this
test, the owner or operator shall submit the following three items to the
commissioner:
(1) A letter signed by the
owner's or operator's chief financial officer and worded as specified in part
7045.0524, subpart
7. If an owner or operator is
using the financial test to demonstrate both assurance for closure or
postclosure care, as specified by parts
7045.0504, subpart
7; 7045.0508, subpart
7; 7045.0612, subpart
6; and 7045.0616, subpart
6; and liability coverage, he
or she shall submit the letter specified in part
7045.0524, subpart
7, to cover both forms of
financial responsibility; a separate letter as specified in part
7045.0524, subpart
6, is not required.
(2) 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.
(3) A special report from the owner's or
operator's independent certified public accountant to the owner or operator
stating that he or she 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 the financial statements, and in connection with that procedure, no
matters came to his or her attention which caused him or her to believe that
the specified data should be adjusted.
F. The owner or operator of a facility which
is not required to have liability insurance under Code of Federal Regulations,
title 40, section 265.147(1983) may obtain a one-time extension of the time
allowed for submission of the documents specified in item E if the fiscal year
of the owner or operator ends during the 90 days prior to July 16, 1984, 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 owner's or operator's chief financial officer shall send, by
July 16, 1984, a letter to the commissioner. This letter from the chief
financial officer must:
(1) request the
extension;
(2) certify that he or
she has grounds to believe that the owner or operator meets the criteria of the
financial test;
(3) specify for
each facility to be covered by the test the identification number, name,
address, the amount of liability coverage and, when applicable, current closure
and postclosure cost estimates to be covered by the test;
(4) specify the date ending the owner's or
operator's last complete fiscal year before July 16, 1984;
(5) specify the date, no later than 90 days
after the end of the fiscal year, when he or she will submit the documents
specified in item E; and
(6)
certify that the year-end financial statements of the owner or operator for the
fiscal year will be audited by an independent certified public
accountant.
G. After the
initial submission of items specified in item E, the owner or operator shall
send updated information to the commissioner within 90 days after the close of
each succeeding fiscal year. This information must consist of all three items
specified in item E.
H. If the
owner or operator no longer meets the requirements of item A, he or she must
obtain insurance, a letter of credit, a trust fund, or a corporate guarantee
for the entire amount of required liability coverage as specified in this part.
Evidence of liability coverage must be submitted to the commissioner 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.
I. The commissioner
may disallow use of this test on the basis of qualifications in the opinion
expressed by the independent certified public accountant in his or her report
on examination of the owner's or operator's financial statements required by
item E, subitem (2). An adverse opinion or a disclaimer of opinion will be
cause for disallowance. The commissioner shall evaluate other qualifications on
an individual basis. The owner or operator shall provide evidence of insurance
for the entire amount of required liability coverage as specified in this part
within 30 days after notification of disallowance.
Subp. 6.
Corporate guarantee for
liability coverage.
The corporate guarantee for liability coverage is as
follows:
A. Subject to item B, an
owner or operator may meet the requirements of this part by obtaining a written
corporate guarantee. The guarantor must be the parent corporation of the owner
or operator. The guarantor must meet the requirements for owners or operators
in subpart
5. The wording of the
corporate guarantee must be identical to the wording specified in part
7045.0524, subpart 8a. The
guarantee must be signed by two corporate officers of the parent corporation. A
corporate resolution authorizing the parent corporation to provide the
corporate guarantee for the subsidiary must be attached to the guarantee. A
certified copy of the corporate guarantee must accompany the items sent to the
commissioner as specified in subpart
5, item E. The terms of the
corporate guarantee must provide that:
(1) 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 corporate 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; and
(2) the
corporate guarantee will remain in force unless the guarantor sends notice of
cancellation by certified mail to the owner or operator and to the
commissioner. This guarantee may not be terminated unless and until the
commissioner approves alternate liability coverage complying with this part
and/or part
7045.0518.
B. A corporate guarantee may be used to
satisfy the requirements of this part only if:
(1) in the case of corporations incorporated
in the United States, the attorney general or insurance commissioner of the
state in which the guarantor is incorporated and of each state in which a
facility covered by the guarantee is located has submitted a written statement
to the commissioner and the United States Environmental Protection Agency that
a corporate guarantee executed as described in this part and part
7045.0524, subpart 8a, is a
legally valid and enforceable obligation in that state; and
(2) in the case of corporations incorporated
outside the United States, the non-United States corporation has identified a
registered agent for service of process in each state in which a facility
covered by the guarantee is located and in the state in which it has its
principal place of business, and the attorney general or insurance commissioner
of each state in which a facility covered by the guarantee is located and the
state in which the guarantor corporation has its principal place of business,
has submitted a written statement to the commissioner and the United States
Environmental Protection Agency that a corporate guarantee executed as
described in this part and part
7045.0524, subpart 8a, is a
legally valid and enforceable obligation in that state.
Subp. 7.
Letter of credit
for liability coverage.
A. An owner or
operator may satisfy the requirements of this part by obtaining an irrevocable
standby letter of credit that conforms to the requirements of this subpart and
submitting a copy of the letter of credit to the commissioner.
B. 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.
C. The
wording of the letter of credit must be identical to the wording in part
7045.0524, subpart 11.
D. An owner or operator who uses a letter of
credit to satisfy the requirements of this part may also establish a standby
trust fund. Under the terms of 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.
E. The wording of the standby trust fund must
be identical to the wording in part
7045.0524, subpart 13.
Subp. 8.
Trust fund for
liability coverage.
A. An owner or
operator may satisfy the requirements of this part by establishing a trust fund
that conforms to the requirements of this subpart and submitting an originally
signed duplicate of the trust agreement to the commissioner.
B. The trustee 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.
C. 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
part. 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 part to cover the difference.
For purposes of this subpart, "the full amount of the liability coverage to be
provided" means the amount of coverage for sudden or nonsudden occurrences
required to be provided by the owner or operator by this part, 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.
D. The
wording of the trust fund must be identical to the wording in part
7045.0524, subpart 12.
Statutory Authority: MS s
14.07;
116.07
