Current through Register Vol. 38, No. 18, March 15, 2024
(a)
Pursuant to
G.S.
130A-295.2, owners and operators of solid
waste management facilities that are required to establish financial assurance
in accordance with this Section shall choose one of the mechanisms or a
combination of mechanisms in Paragraph (e) of this Rule to cover the cost of
closure, post-closure care, corrective action programs, and potential
assessment and corrective action.
(b) When multiple financial assurance
mechanisms are established, no more than one allowable mechanism shall be
provided by the same financial institution or its corporate entities. The
corporate financial test provided by a corporation and the corporate guarantee
provided by a corporate parent, sibling, or grandparent shall not be combined
if the financial statements of the two firms are consolidated. A surety bond
mechanism guaranteeing performance shall not be combined with other mechanisms.
The mechanisms shall be submitted to the Division as original signed hard
copies, and the language of each mechanism shall be identical to the language
specified in Rule .1806 of this Section for that mechanism.
(c) A corporate seal shall be required to
complete the financial assurance mechanism as part of the certification of
acknowledgement required in the mechanism language in Rule .1806 of this
Section for a corporate owner or operator using a trust fund, surety bond
guaranteeing payment or performance, corporate financial test, and corporate
guarantee as set forth in Paragraph (e) of this Rule. When a corporate seal is
required to certify a financial assurance mechanism but the corporation does
not have a corporate seal, a member of the corporation's senior management or a
representative of the board of directors shall submit to the Division a copy of
the corporation's bylaws, a corporate ownership organization chart describing
the relationship of the facility owner and operator to the corporation and its
parent companies, contact information for the board of directors or senior
management for the corporation, and a statement on corporate letterhead stating
the signee has the authority to execute correspondence and financial assurance
mechanisms on behalf of the corporation, pursuant to
G.S.
130A-295.2(f). The
documentation shall be submitted to the Division of Waste Management, Solid
Waste Section at 1646 Mail Service Center, Raleigh, NC 27699. Senior management
for the corporation shall be one of the following positions: the Chief
Executive Officer or President, the Chief Operating Officer or Vice President,
or the Chief Financial Officer or Treasurer.
(d) The July 1, 2010 edition of
40 CFR
258.74 is incorporated by reference and can
be obtained free of charge from the Division's website at
http://go.ncdenr.gov/fa. When used in
40 CFR
258.74, except where the context requires
references to remain without substitution, "United States" and "State" shall
mean the State of North Carolina; "Agency" shall mean the Department of
Environmental Quality; "Director" shall mean the Secretary of the Department of
Environmental Quality; "municipal solid waste landfills facility(ies)",
"MSWLF(s)", or "MSWLF unit(s)" shall mean solid waste management facility or
facilities; and "owner or operator" shall mean the owner and operator of a
solid waste management facility.
(e) The following mechanisms may be used to
meet the requirements of this Section for financial assurance.
(1) A trust fund as set forth in
40 CFR
258.74(a), including the
following requirements.
(A) The trust fund
may be elected as a standby trust mechanism to accompany the surety bond
mechanism in Subparagraph (2) of this Paragraph, or the letter of credit
mechanism in Subparagraph (3) of this Paragraph; or may be elected as a
standalone funded trust mechanism.
(B)
40 CFR
258.74(a)(7) is revised to
state: "The owner or operator, or other person authorized to conduct closure,
post-closure care, or corrective action activities may request reimbursement
from the trustee for these expenditures. Requests for reimbursement shall be
granted only if sufficient funds are remaining in the trust fund to cover the
remaining costs of closure, post-closure care, corrective action programs, or
potential assessment and corrective action, and if justification and
documentation of the cost is submitted to the Division and placed in the
operating record."
(C) The trust
agreement shall be accompanied by a certification of acknowledgement as
specified following the language of the trust agreement in Rule .1806(1) of
this Section.
(D) Schedule A of the
trust agreement shall be updated no less than 60 days after any change in the
amount of the current cost estimate covered by the agreement.
(2) Surety bonds guaranteeing
payment or performance as set forth in
40 CFR
258.74(b) including the
following requirements.
(A) The surety
company issuing the bond shall be licensed to do business in North
Carolina.
(B) Bonding companies may
write bonds with a penal sum over their underwriting limitation if they protect
the excess amount with reinsurance, coinsurance, or other methods as specified
at 31 CFR
223.10-11 and submit documentation to the
Division. The owner and operator shall provide the Division with current
contact information for the surety company for the life of the mechanism.
31 CFR
223.10-11 is incorporated by reference
including subsequent amendments and editions and can be accessed free of charge
at the U.S. Government Publishing Office website at
www.ecfr.gov.
(C) The penal sum of the surety bond shall be
adjusted for inflation or any increase or decrease in the amount of financial
assurance in accordance with Rule .1802(b), Rule .1803(b), or .1804(b) of this
Section.
(D) The bonded liability
limit shall not be less than the penal sum of the surety bond and shall be
adjusted annually for inflation or any increase or decrease in the amount of
financial assurance in accordance with Rule .1802(b), Rule .1803(b), or
.1804(b) of this Section.
(E) If
the owner and operator is no longer required to demonstrate financial
responsibility, the owner and operator may cancel the surety bond in accordance
with the requirements of Rules .1802(c), .1803(c), or .1804(c) of this
Section.
(3) A letter of
credit as set forth in 40
CFR 258.74(c) including the
following requirements.
(A) The owner and
operator shall establish a standby trust fund. The standby trust fund shall
meet the requirements of 40
CFR 258.74(a) except the
requirements for initial payment and subsequent annual payments specified in
40 CFR
258.74(a)(2), (3), (4), and
(5). Payments made under the terms of the
letter of credit shall be deposited by the financial institution directly into
the standby trust fund.
(B) No
payments shall be made from the trust fund unless approved by the trustee and
the Division.
(C) The letter of
credit shall be adjusted for inflation or any increase or decrease in the
amount of financial assurance in accordance with Rule .1802(b), Rule .1803(b),
or .1804(b) of this Section.
(D) If
the owner and operator is no longer required to demonstrate financial
responsibility, the owner and operator may cancel the letter of credit in
accordance with the requirements of Rules .1802(c), .1803(c), or .1804 (c) of
this Section.
(4)
Insurance as set forth in 40
CFR 258.74(d), and if the
owner and operator is no longer required to demonstrate financial
responsibility, the owner and operator may cancel the insurance policy in
accordance with the requirements of Rules .1802(c), .1803(c), or .1804(c) of
this Section.
(5) A corporate
financial test as set forth in
40 CFR
258.74(e) including the
following requirements.
(A) The corporate
financial test shall be adjusted for inflation or any increase or decrease in
the amount of financial assurance in accordance with Rule .1802(b), Rule
.1803(b), or .1804(b) of this Section.
(B) If the owner and operator is no longer
required to demonstrate financial responsibility, the owner and operator may
cancel the test in accordance with the requirements of Rules .1802(c),
.1803(c), or .1804(c) of this Section.
(6) A local government financial test as set
forth in 40 CFR
258.74(f) including the
following requirements.
(A) Owner and
operators submitting a local government financial test that utilizes the bond
rating indicator of financial strength shall submit a copy of the bond showing
proof of the current bond rating of the most recent issuance and name of rating
service, date of issuance of the bond, and date of maturity of the
bond.
(B) The local government test
shall be adjusted for inflation or any increase or decrease in the amount of
financial assurance in accordance with Rule .1802(b), Rule .1803(b), or
.1804(b) of this Section.
(C) If
the owner and operator is no longer required to demonstrate financial
responsibility, the owner and operator may cancel the test in accordance with
the requirements of Rules .1802(c), .1803(c), or .1804(c) of this
Section.
(7) A corporate
guarantee as set forth in 40
CFR 258.74(g) including the
following requirements.
(A) The owner and
operator shall submit a corporate ownership organization chart describing the
relationship of the owner and operator to the guarantor as defined in
40 CFR
258.74(g)(1) when financial
assurance is initially established, and annually thereafter.
(B) The corporate guarantee shall be adjusted
for inflation or any increase or decrease in the amount of financial assurance
in accordance with Rule .1802(b), Rule .1803(b), or .1804(b) of this
Section.
(C) If the owner and
operator is no longer required to demonstrate financial responsibility, the
owner and operator may cancel the guarantee in accordance with the requirements
of Rules .1802(c), .1803(c), or .1804(c) of this Section.
(8) A capital reserve fund that meets the
following requirements.
(A) An owner and
operator of a solid waste management facility that is a unit of local
government or public authority may satisfy the requirements of this Rule by
establishing a capital reserve fund which conforms to the requirements of this
Subparagraph. The unit of local government or public authority shall be an
entity which has the authority to establish a capital reserve fund under
authority of G.S. 159 Part 2 and whose financial operations are regulated and
examined by a State agency. The capital reserve fund shall be established
consistent with auditing, budgeting, and government accounting practices as
prescribed in
G.S.
159-30 and by the Local Government
Commission. A copy of the capital reserve fund ordinance or resolution with a
certified copy of the meeting minutes and a copy of documentation of initial
and subsequent years' deposits shall be submitted to the Division and placed in
the facility's operating record.
(B) Payments into the capital reserve fund
shall be made annually by the unit of local government or public authority over
the term of the initial permit or over the remaining life of the facility for
closure or post-closure care, or over one-half of the estimated length of the
corrective action program when a corrective action program is required in
accordance with Rules .0545 or .1637 of this Subchapter. This period is
referred to as the "pay-in period".
(C) For a capital reserve fund used to
demonstrate financial assurance for closure and post-closure care, the first
payment into the fund shall be at least equal to the current cost estimate for
closure or post-closure care, divided by the number of years in the pay-in
period as defined in Part (B) of this Subparagraph. The amount of subsequent
payments shall be determined by the following formula:
Next Payment = [CE-CV]/Y
where CE is the current cost estimate for closure or
post-closure care (updated for inflation or other changes), CV is the current
value of the capital reserve fund, and Y is the number of years remaining in
the pay-in period.
(D) For a
capital reserve fund used to demonstrate financial assurance for a corrective
action program, the first payment into the capital reserve fund shall be at
least equal to one-half of the current cost estimate for the corrective action
program. The total cost of the second half of the corrective action program
period shall be divided into subsequent payments determined by the following
formula:
Next Payment = [RB-CV]/Y
where RB is the most recent cost estimate for the
corrective action program, updated for inflation or other changes (i.e. the
total cost that will be incurred during the second half of the corrective
action period), CV is the current value of the capital reserve fund, and Y is
the number of years remaining in the pay-in period.
(E) The initial payment into the capital
reserve fund shall be made before the initial receipt of waste in the case of
closure and post-closure care, or no later than 120 calendar days after the
corrective action remedy has been selected in accordance with the requirements
of this Subchapter. Subsequent payments shall be made no later than 30 calendar
days after each anniversary date of the first payment.
(F) If the unit of local government or public
authority establishes a capital reserve fund after having used one or more
alternate mechanisms specified in this Rule, the initial payment into the
capital reserve fund shall be at least the amount that the fund would contain
if the capital reserve fund had been established on the initial date that the
alternate mechanism was established, and annual payments to the fund had been
made according to the specifications of this Subparagraph.
(G) The unit of local government or public
authority authorized to conduct closure, post-closure care, or corrective
action programs may expend capital reserve funds to cover the remaining costs
of closure, post-closure care, corrective action programs, or for the debt
service payments on financing arrangements for closure, post-closure care, or
corrective action programs. Monies in the capital reserve fund shall only be
used for these purposes unless the fund is terminated in accordance with Part
(I) of this Subparagraph. The unit of local government or public authority
shall document expenditures and provide a written justification for each
expenditure and shall submit a copy to the Division and place a copy in the
operating record.
(H) The unit of
local government or public authority shall adjust for inflation or any increase
or decrease in the amount of financial assurance in accordance with Rule
.1802(b), .1803(b), or .1804(b) of this Section.
(I) To maintain financial assurance, a unit
of local government or public authority may only terminate a capital reserve
fund if it substitutes alternate financial assurance as specified in this Rule
or if no longer required to demonstrate financial responsibility in accordance
with the requirements of Rules .1802(c), .1803(c), or .1804(c) of this
Section.