North Dakota Administrative Code
Title 33.1 - Department of Environmental Quality
Article 33.1-24 - Hazardous Waste Management
Chapter 33.1-24-05 - Standards for Treatment, Storage, and Disposal Facilities and for the Management of Specific Hazardous Wastes and Specific Types of Hazardous Waste Management Facilities
STANDARDS FOR FACILITIES OPERATING UNDER A STANDARDIZED PERMIT
Section 33.1-24-05-1067 - Liability requirements
Universal Citation: ND Admin Code § 33.1-24-05-1067
Current through Supplement No. 395, January, 2025
1. Coverage for sudden accidental occurrences. An owner or operator of a hazardous waste treatment or storage 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 one million dollars per occurrence with an annual aggregate of at least two million dollars, exclusive of legal defense costs. This liability coverage may be demonstrated as specified in subdivisions a through g:
a. Trust fund for liability coverage. An
owner or operator may meet the requirements of this section by obtaining a
trust fund for liability coverage as specified in subsection 10 of section
33.1-24-05-79.
b. Surety bond for liability coverage. An
owner or operator may meet the requirements of this section by obtaining a
surety bond for liability coverage as specified in subsection 9 of section
33.1-24-05-79.
c. Letter of credit for liability coverage.
An owner or operator may meet the requirements of this section by obtaining a
letter of credit for liability coverage as specified in subsection 8 of section
33.1-24-05-79.
d. Insurance for liability coverage. An owner
or operator may meet the requirements of this section by obtaining liability
insurance as specified in subdivision a of subsection 1 of section
33.1-24-05-79.
e. Financial test for liability coverage. An
owner or operator may meet the requirements of this section by passing a
financial test as specified in subsection 6.
f. Guarantee for liability coverage. An owner
or operator may meet the requirements of this section by obtaining a guarantee
as specified in subsection 7.
g.
Combination of mechanisms. An owner or operator may demonstrate the required
liability coverage through the use of combinations of mechanisms as allowed by
subdivision f of subsection 1 of section
33.1-24-05-79.
h. An owner or operator shall notify the
department in writing within thirty 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 subdivisions a through g;
(2) A certification of valid claim for bodily
injury or property damages caused by a 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 subdivisions a through g; or
(3) A final court order establishing a
judgment for bodily injury or property damage caused by a 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 subdivisions
a through g.
2. [Reserved].
3. [Reserved].
4. [Reserved].
5. Period of coverage. Within sixty 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 department will notify the owner or operator in writing that the owner or operator is no longer required by this section to maintain liability coverage from that facility, unless the department has reason to believe that closure has not been in accordance with the approved closure plan.
6. Financial test for liability coverage. An owner or operator that satisfies the requirements of this subsection may demonstrate financial assurance for liability up to the amount specified in this subsection:
a. Financial component.
(1) If using the financial test for only
liability coverage, the owner or operator must have tangible net worth greater
than the sum of the liability coverage to be demonstrated by this test plus ten
million dollars.
(2) The owner or
operator must have assets located in the United States amounting to at least
the amount of liability covered by this financial test.
(3) An owner or operator who is demonstrating
coverage for liability and any other environmental obligations, including
closure under subsection 6 of section
33.1-24-05-1063, through a
financial test must meet the requirements of subsection 6 of section
33.1-24-05-1063.
b. Recordkeeping and reporting requirements.
(1) The owner or operator must submit the
following items to the department:
(a) A
letter signed by the owner's or operator's chief financial officer that
provides evidence demonstrating that the firm meets the conditions of
paragraphs 1 and 2 of subdivision a. If the firm is providing only liability
coverage through a financial test for a facility or facilities with a permit
under sections
33.1-24-05-950 through
33.1-24-05-1149, the letter
should use the wording in subsection 2 of section
33.1-24-05-1071. If the firm is
providing only liability coverage through a financial test for facilities
regulated under sections
33.1-24-05-950 through
33.1-24-05-1149 and also
sections
33.1-24-05-01 through
33.1-24-05-190,
33.1-24-05-300 through
33.1-24-05-524,
33.1-24-05-550 through
33.1-24-05-559, and
33.1-24-05-800 through
33.1-24-05-819 or subsection 5
of section
33.1-24-06-16, the firm should
use the letter in subsection 7 of section
33.1-24-05-81. If the firm is
providing liability coverage through a financial test for a facility or
facilities with a permit under sections
33.1-24-05-950 through
33.1-24-05-1149, and the firm
assures closure costs or any other environmental obligations through a
financial test, the firm must use the letter in subsection 1 of section
33.1-24-05-1071 for the
facilities issued a permit under sections
33.1-24-05-950 through
33.1-24-05-1149.
(b) A copy of the independent certified
public accountant's unqualified opinion of the owner's or operator's financial
statements for the latest completed fiscal year. To be eligible to use the
financial test, the owner's or operator's financial statements must receive an
unqualified opinion from the independent certified public accountant. An
adverse opinion, disclaimer of opinion, or other qualified opinion will be
cause for disallowance, with the potential exception for qualified opinions
provided in the next sentence. The department may evaluate qualified opinions
on a case-by-case basis and allow use of the financial test in cases where the
department deems that the matters which form the basis for the qualification
are insufficient to warrant disallowance of the test. If the department does
not allow use of the test, the owner or operator must provide alternate
financial assurance that meets the requirements of this section within thirty
days after the notification of disallowance.
(c) If the chief financial officer's letter
providing evidence of financial assurance includes financial data showing that
the owner or operator satisfies paragraphs 1 and 2 of subdivision a that are
different from data in the audited financial statements referred to in
subparagraph b or any other audited financial statement or data filed with the
securities and exchange commission, then a special report from the owner's or
operator's independent certified public accountant to the owner or operator is
required. The special report shall be based upon an agreed upon procedures
engagement in accordance with professional auditing standards and shall
describe the procedures performed in comparing the data in the chief financial
officer's letter derived from the independently audited, year-end financial
statements for the latest fiscal year with the amounts in such financial
statements, the findings of that comparison, and the reasons for any
differences.
(2) The
owner or operator of a new facility must submit the items specified in
paragraph 1 to the department at least sixty days before placing waste in the
facility.
(3) After the initial
submission of items specified in paragraph 1, the owner or operator must send
updated information to the department within ninety days following the close of
the owner's or operator's fiscal year. The department may provide up to an
additional forty-five days for an owner or operator who can demonstrate that
ninety days is insufficient time to acquire audited financial statements. The
updated information must consist of all items specified in paragraph
1.
(4) The owner or operator is no
longer required to submit the items specified in this subdivision or comply
with the requirements of this subsection when:
(a) The owner or operator substitutes
alternate financial assurance as specified in this section that is not subject
to these recordkeeping and reporting requirements; or
(b) The department releases the owner or
operator from the requirements of this subsection in accordance with subsection
5.
(5) An owner or
operator who no longer meets the requirements of subdivision a cannot use the
financial test to demonstrate financial assurance. An owner's or operator who
no longer meets the requirements of subdivision a, must:
(a) Send notice to the department of intent
to establish alternate financial assurance as specified in this section. The
owner or operator must send this notice by certified mail within ninety days
following the close of the owner or operator's fiscal year for which the
year-end financial data show that the owner or operator no longer meets the
requirements of this subsection.
(b) Provide alternative financial assurance
within one hundred twenty days after the end of such fiscal year.
(6) The department may, based on a
reasonable belief that the owner or operator may no longer meet the
requirements of subdivision a, require at any time the owner or operator to
provide reports of its financial condition in addition to or including current
financial test documentation as specified in subdivision b. If the department
finds that the owner or operator no longer meets the requirements of
subdivision a, the owner or operator must provide alternate financial assurance
that meets the requirements of this section.
7. Guarantee for liability coverage.
a. Subject to subdivision b, 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
subdivisions a and b of subsection 6. The wording of the guarantee must be
identical to the wording specified in subdivision b of subsection 8 of section
33.1-24-05-81. A certified copy
of the guarantee must accompany the items sent to the department as specified
in subdivision b of subsection 6. 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 judgment based on a determination of liability for bodily injury or property
damage to third parties caused by sudden accidental occurrences 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.
(2)
[Reserved].
b. The
following applies:
(1) 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 attorneys general or
insurance commissioners of the state in which the guarantor is incorporated,
and each state in which a facility covered by the guarantee is located, have
submitted a written statement to the department that a guarantee executed as
described in this section and subdivision b of subsection 8 of section
33.1-24-05-81 is a legally valid
and enforceable obligation in that state.
(2) In the case of corporations incorporated
outside the United States, a guarantee may be used to satisfy the requirements
of this section only if:
(a) 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
(b) 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 department that a
guarantee executed as described in this section and subdivision b of subsection
8 of section
33.1-24-05-81 is a legally valid
and enforceable obligation in that
state.
General Authority: NDCC 23.1-04-03; S.L. 2017, ch. 199, § 1
Law Implemented: NDCC 23.1-04-03, 23.1-04-05, 23.1-04-08; S.L. 2017, ch. 199, § 19
Disclaimer: These regulations may not be the most recent version. North Dakota may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.
