Ohio Administrative Code
Title 3745 - Ohio Environmental Protection Agency
Chapter 3745-503 - Financial Assurance
Section 3745-503-10 - Financial assurance for post-closure care
Universal Citation: OH Admin Code 3745-503-10
Current through all regulations passed and filed through September 16, 2024
(A) [Reserved.]
(B)
(1)
The owner or operator shall execute, fund, and maintain
financial assurance in an amount not less than the current post-closure care
cost estimate in accordance with paragraph (E) of this rule.
(2)
Financial
assurance may be released only in accordance with paragraph (O) of this
rule.
(C) [Reserved.]
(D) [Reserved.]
(E) The owner or operator shall select a post-closure care financial assurance mechanism from the list of mechanisms specified in paragraphs (F), (G), (H), (I), (J), (K), and (L) of this rule, except as otherwise specified by this rule, provided the owner or operator satisfies the criteria for use of that mechanism.
(F) Post-closure care trust fund.
(1)
The owner or
operator may satisfy the requirements of this rule by establishing a
post-closure care trust fund that conforms to the requirements of this
paragraph and by sending an originally signed duplicate of the trust agreement
to the director prior to license issuance and by submitting a copy into the
operating record, if applicable. The trustee shall 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.
(2)
The wording of
the trust agreement shall be identical to the wording specified in paragraph
(A)(1) of rule
3745-503-20 of the
Administrative Code on forms prescribed by the director and the trust agreement
shall be accompanied by a formal certification of acknowledgment. "Schedule A"
of the trust agreement shall be updated not later than sixty days after a
change in the amount of the current post-closure care cost estimate provided
for in the agreement.
(3)
A post-closure care trust fund shall be established to
secure an amount at least equal to the current post-closure care cost estimate,
except as provided in paragraph (M) of this rule. Except for payments made in
accordance with paragraphs (F)(4) of this rule, payments to the trust fund
shall be made annually by the owner or operator during the pay-in period. The
pay-in period shall be the anticipated life of the sanitary landfill facility
as calculated using the authorized maximum daily waste receipt and the approved
volume of the sanitary landfill facility as shown in the approved permit. The
first payment into the post-closure care trust fund shall be made in accordance
with this rule. Subsequent payments to the post-closure care trust fund shall
be made as follows:
(a)
A receipt from the trustee for each payment shall be
submitted by the owner or operator to the director. The first payment shall be
at least equal to the current post-closure care cost estimate divided by the
number of years in the pay-in period, except as provided in paragraph (M) of
this rule. Subsequent payments shall be made not later than thirty days after
each anniversary date of the first payment. The amount of each subsequent
payment shall be determined by performing the following calculation:
Next payment = (CE - CV) / Y
Where CE is the current post-closure care cost estimate, CV is the current value of the trust fund, and Y is the number of years remaining in the pay-in period.
(b)
If the owner or
operator establishes a trust fund, as specified in this rule, and the value of
the trust fund is less than any revised current post-closure care cost estimate
made during the pay-in period, the amount of the current post-closure care cost
estimate still to be paid into the trust fund shall be paid in over the pay-in
period, as defined in paragraph (F)(3) of this rule. Payments shall continue to
be made not later than thirty days after each anniversary date of the first
payment pursuant to paragraph (F)(3)(a) of this rule. The amount of each
payment shall be determined by performing the following calculation:
Next payment = (CE - CV) / Y
Where CE is the current post-closure care cost estimate, CV is the current value of the trust fund, and Y is the number of years remaining in the pay-in period.
(c)
The owner or
operator may make the first installment required under paragraph (F)(3)(a) or
(F)(3)(b) of this rule by providing alternative financial insurance using one
of the mechanisms specified in paragraph (G), (I), or (J) of this rule in an
amount at least equal to the first installment. On the anniversary date of the
first installment, the owner or operator shall pay into the trust an amount at
least equal to the first and second installments required under paragraph
(F)(3)(a) or (F)(3)(b) of this rule or select an alternative financial
assurance mechanism.
(4)
The owner or
operator may accelerate payments into the trust fund, or the owner or operator
may deposit the full amount of the current post-closure care cost estimate at
the time the fund is established. However, the owner or operator shall maintain
the value of the fund at no less than the value the fund would have if annual
payments were made as specified in paragraph (F)(3) of this
rule.
(5)
If the owner or operator establishes a post-closure
care trust fund after having begun funding post-closure care under any
mechanism specified in this rule, the post-closure care trust fund shall be
established by depositing the total value of all prior mechanisms into the
newly established trust fund. The subsequent annual payments shall be made as
specified in paragraph (F)(3) of this rule.
(6)
After the pay-in
period of a trust fund has ended and the current post-closure care cost
estimate changes, the owner or operator shall compare the revised post-closure
care cost estimate to the trustee's most recent annual valuation of the trust
fund. If the value of the trust fund is less than the amount of the revised
post-closure care cost estimate, the owner or operator shall, not later than
sixty days after the change in the post-closure care cost estimate, either
deposit a sufficient amount into the trust fund so that its value after payment
at least equals the amount of the current post-closure care cost estimate, or
obtain alternative financial assurance as specified in this rule to compensate
for the difference.
(7)
The owner or operator may submit a written request to
the director for release of funds from the trust as specified in this
paragraph. Upon receipt of a written request, the director shall instruct the
trustee to release to the owner or operator such funds as the director
specifies in writing, if one of the following occurs:
(a)
The value of the
trust fund is greater than the total amount of the current post-closure care
cost estimate.
(b)
The owner or operator substitutes any of the
alternative financial assurance mechanisms specified in this rule for all or
part of the trust fund.
(8)
Reimbursement for
post-closure care at solid waste facilities. After beginning post-closure care,
the owner or operator, or any other person authorized by the owner, operator,
or director to perform post-closure care, may request reimbursement for
post-closure care expenditures by submitting itemized bills to the director.
After receiving itemized bills for post-closure care activities, the director
shall determine whether the post-closure care expenditures are in accordance
with the closure/post-closure care plan, permit or registration requirements,
or applicable rules, or are otherwise justified, and if so, will instruct the
trustee to make reimbursement in such amounts as the director specifies in
writing. If the director determines that the cost of post-closure care will be
greater than the value of the trust fund, the director may withhold
reimbursement of such amounts as deemed prudent until the director determines,
in accordance with paragraph (O) of this rule, that the owner or operator is no
longer required to maintain financial assurance for post-closure care of the
facility.
(9)
The director will agree to termination of the trust
fund when one of the following occurs:
(a)
The owner or
operator substitutes alternative financial assurance for postclosure care as
specified in paragraph (F)(6) of this rule.
(b)
The director
notifies the owner or operator, in accordance with paragraph (O) of this rule
that the owner or operator is no longer required by this rule to maintain
financial assurance for post-closure care of the facility.
(G) Surety bond guaranteeing payment into a post-closure care trust fund.
(1)
The owner or operator may satisfy the requirements of
this rule by obtaining a surety bond that conforms to the requirements of this
paragraph and by delivering the originally signed bond to the director by
certified mail or any other form of mail accompanied by a receipt prior to
license issuance and by submitting a copy into the operating record, if
applicable. The surety company issuing the bond shall at a minimum be among
those listed as acceptable sureties on federal bonds in the most recent listing
of approved sureties as published by the U.S. department of the
treasury.
(2)
The wording of the surety bond shall be identical to
the wording specified in paragraph (B) of rule
3745-503-20 of the
Administrative Code on forms prescribed by the director.
(3)
The owner or
operator who uses a surety bond to satisfy the requirements of this rule shall
also establish a standby trust fund not later than when the bond is obtained.
Under the terms of the surety bond, all payments made thereunder will be
deposited by the surety directly into the standby trust fund in accordance with
instructions from the director. The standby trust fund shall meet the
requirements specified in paragraph (F) of this rule, except as follows:
(a)
An originally
signed duplicate of the standby trust agreement shall be delivered to the
director with the surety bond and a copy of the standby trust agreement shall
be placed in the operating record, if applicable.
(b)
Until the standby
trust fund is funded, pursuant to the requirements of this rule, the following
are not required:
(i)
Payments into the trust fund as specified in paragraph
(F) of this rule.
(ii)
Revisions of "Schedule A" of the trust agreement to
show current post-closure care cost estimate.
(iii)
Annual
valuations as specified in the trust agreement.
(iv)
Notices of
nonpayment as specified in the trust agreement.
(4)
The
bond shall guarantee that the surety shall become liable on the bond obligation
unless the owner or operator does one of the following, as applicable:
(a)
Funds the standby
trust fund in an amount equal to the penal sum of the bond before the beginning
of post-closure care.
(b)
Funds the standby trust fund in an amount equal to the
penal sum of the bond not later than fifteen days after post-closure care is
triggered in accordance with the closure/post-closure care plan, permit
requirements, and applicable rules.
(c)
Provides
alternative financial assurance as specified in this rule, and obtain the
director's written approval of the alternative financial assurance provided,
not later than ninety days after both the owner or operator and the director
receive notice of cancellation of the bond from the surety.
(5)
Under
the terms of the bond, the surety shall become liable on the bond obligation
when the owner or operator fails to perform as guaranteed by the
bond.
(6)
The penal sum of the bond shall be in an amount at
least equal to the current postclosure care cost estimate except as provided in
paragraph (M) of this rule.
(7)
Whenever the
current post-closure care cost estimate increases to an amount greater than the
penal sum of the bond, the owner or operator shall, not later than sixty days
after the increase in the estimate, either cause the penal sum of the bond to
be increased to an amount at least equal to the current post-closure care cost
estimate and submit evidence of such increase to the director, and into the
operating record if applicable, or obtain alternative financial assurance, as
specified in this rule, to compensate for the increase. Whenever the current
post-closure care cost estimate decreases, the penal sum may be reduced to the
amount of the current post-closure care cost estimate following written
approval by the director. Notice of an increase or a proposed decrease in the
penal sum shall be sent to the director not later than sixty days after the
change.
(8)
Under the terms of the bond, the bond shall remain in
force unless the surety sends written notice of cancellation by certified mail
or any other form of mail accompanied by a receipt to the owner or operator and
to the director. Cancellation cannot occur, however, during the one hundred
twenty day period beginning on the first day that both the owner or operator
and the director have received the notice of cancellation, as evidenced by the
return receipts.
(9)
The owner or operator may cancel the bond if the
director has given prior written consent. The director will provide such
written consent to the surety bond company when one of the following
occurs:
(a)
The
owner or operator substitutes alternative financial assurance for postclosure
care of a facility as specified in this rule.
(b)
The director
notifies the owner or operator in accordance with paragraph (O) of this rule
that the owner or operator is no longer required to maintain financial
assurance for post-closure care of a facility.
(H) Surety bond guaranteeing performance of post-closure care.
(1)
The owner or
operator may satisfy the requirements of this rule by obtaining a surety bond
that conforms to the requirements of this paragraph and by delivering the
originally signed bond to the director prior to license issuance and by
submitting a copy into the operating record, if applicable. The surety company
issuing the bond shall at a minimum be among those listed as acceptable
sureties on federal bonds in the most recent listing of approved sureties as
published by the U.S. department of the treasury.
(2)
The wording of
the surety bond shall be identical to the wording specified in paragraph (C) of
rule 3745-503-20 of the
Administrative Code on forms prescribed by the director.
(3)
The owner or
operator who uses a surety bond to satisfy the requirements of this rule shall
also establish a standby trust fund. Under the terms of the surety bond, all
payments made thereunder will be deposited by the surety directly into the
standby trust fund in accordance with instructions from the director. The
standby trust fund shall meet the requirements specified in paragraph (F) of
this rule except as follows:
(a)
An originally signed duplicate of the standby trust
agreement shall be delivered to the director with the surety bond and a copy of
the standby trust agreement placed in the operating record, if
applicable.
(b)
Unless the standby trust fund is funded pursuant to
this rule, the following are not required:
(i)
Payments into the
trust fund as specified in paragraph (F) of this rule.
(ii)
Revisions of
"Schedule A" of the trust agreement to show the current post-closure care cost
estimate.
(iii)
Annual valuations as required by the trust
agreement.
(iv)
Notices of nonpayment as required by the trust
agreement.
(4)
The bond shall
guarantee that the surety will become liable on the bond obligation unless the
owner or operator does one of the following, as applicable:
(a)
Performs
post-closure care in accordance with the post-closure care plan, permit or
registration requirements, and applicable rules.
(b)
Provides
alternative financial assurance as specified in this rule, and obtains the
director's written approval of the alternative financial assurance provided,
not later than ninety days after both the owner or operator and the director
receive notice of cancellation of the bond from the surety.
(5)
Under
the terms of the bond, the surety will become liable on the bond obligation
when the owner or operator fails to perform as guaranteed by the bond.
Following a determination by the director that the owner or operator of the
solid waste facility has failed to perform post-closure care activities in
accordance with the closure/post-closure care plan, permit or registration
requirements, and applicable rules, the surety shall perform post-closure care
in accordance with the closure/post-closure care plan, permit or registration
requirements, and applicable rules, or will deposit the amount of the penal sum
into the standby trust fund.
(6)
The penal sum of
the bond shall be in an amount at least equal to the current postclosure care
cost estimate.
(7)
Whenever the current post-closure care cost estimate
increases to an amount greater than the penal sum of the bond, the owner or
operator shall, not later than sixty days after the increase in the estimate,
either cause the penal sum of the bond to be increased to an amount at least
equal to the current post-closure care cost estimate and submit evidence of
such increase to the director, and into the operating record, if applicable, or
obtain alternative financial assurance, as specified in this rule, to
compensate for the increase. Whenever the current post-closure care cost
estimate decreases, the penal sum may be reduced to the amount of the current
post-closure care cost estimate following written approval by the director.
Notice of an increase or a proposed decrease in the penal sum shall be sent to
the director by certified mail or any other form of mail accompanied by a
receipt not later than sixty days after the change.
(8)
Under the terms
of the bond, the bond shall remain in force unless the surety sends written
notice of cancellation by certified mail or any other form of mail accompanied
by a receipt to the owner or operator and to the director. Cancellation cannot
occur, however, during the one hundred twenty day period beginning on the first
day that both the owner or operator and the director have received the notice
of cancellation as evidenced by the return receipts.
(9)
The owner or
operator may cancel the bond if the director has given prior written consent.
The director shall provide such written consent to the surety bond company when
one of the following occurs:
(a)
The owner or operator substitutes alternative financial
assurance for postclosure care of a facility as specified in this
rule.
(b)
The director notifies the owner or operator, in
accordance with paragraph (O) of this rule that the owner or operator is no
longer required by this rule to maintain financial assurance for post-closure
care of a facility.
(10)
The surety shall
not be liable for deficiencies in the completion of post-closure care of a
facility by the owner or operator after the owner or operator has been notified
by the director, in accordance with this rule, that the owner or operator is no
longer required to maintain financial assurance for post-closure care of a
facility.
(I) Post-closure care letter of credit.
(1)
The owner or
operator may satisfy the requirements of this rule by obtaining an irrevocable
standby letter of credit ("letter of credit") that conforms to the requirements
of this paragraph and by having the originally signed letter of credit
delivered to the director by certified mail or any other form of mail
accompanied by a receipt prior to license issuance and by submitting a copy of
the letter of credit into the operating record, if applicable. The issuing
institution shall 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.
(2)
The wording of the letter of credit shall be identical
to the wording specified in paragraph (D) of rule
3745-503-20 of the
Administrative Code on forms prescribed by the director.
(3)
An owner or
operator who uses a letter of credit to satisfy the requirements of this rule
shall also establish a standby trust fund. Under the terms of the letter of
credit, all amounts paid pursuant to a draft by the director shall be deposited
promptly and directly by the issuing institution into the standby trust fund in
accordance with instructions from the director. The standby trust fund shall
meet the requirements of the trust fund specified in paragraph (F) of this
rule, except as follows:
(a)
An originally signed duplicate of the standby trust
agreement shall be delivered to the director with the letter of credit and a
copy of the standby trust agreement placed in the operating record, if
applicable.
(b)
Unless the standby trust fund is funded pursuant to the
requirements of this rule, the following are not required:
(i)
Payments into the
trust fund as specified in paragraph (F) of this rule.
(ii)
Updating of
"Schedule A" of the trust agreement to show current postclosure care cost
estimate.
(iii)
Annual valuations as required by the trust
agreement.
(iv)
Notices of nonpayment as required by the trust
agreement.
(4)
The letter of
credit shall be accompanied by a letter from the owner or operator referring to
the letter of credit by number, issuing institution, and date, and providing
the following information: the names and addresses of the facility and the
owner and the operator and the amount of funds assured for post-closure care of
the facility by the letter of credit.
(5)
The letter of
credit shall be irrevocable and issued for a period of at least one year. The
letter of credit shall provide that the expiration date will be automatically
extended for a period of at least one year unless, not later than one hundred
twenty days prior to the current expiration date, the issuing institution
notifies both the owner and operator and the director by certified mail or any
other form of mail accompanied by a receipt of a decision not to extend the
expiration date. Under the terms of the letter of credit, the one hundred
twenty day period shall begin on the day when both the owner or operator and
the director have received the notice, as evidenced by the return
receipts.
(6)
The letter of credit shall be issued in an amount at
least equal to the current postclosure care cost estimate except as provided in
paragraph (M) of this rule.
(7)
Whenever the
current post-closure care cost estimate increases to an amount greater than the
amount of the credit, the owner or operator shall, not later than sixty days
after the increase, either cause the amount of the credit to be increased to an
amount at least equal to the current post-closure care cost estimate and submit
evidence of such increase to the director, and into the operating record, if
applicable, or obtain alternative financial assurance, as specified in this
rule, to compensate for the increase. Whenever the current post-closure care
cost estimate decreases, the letter of credit may be reduced to the amount of
the current post-closure care cost estimate following written approval by the
director. Notice of an increase or a proposed decrease in the amount of the
letter of credit shall be sent to the director by certified mail or any other
form of mail accompanied by a receipt not later than sixty days after the
change.
(8)
Under the terms of the letter of credit, the director
may draw on the letter of credit following a determination that the owner or
operator has failed to do the following:
(a)
Perform
post-closure care in accordance with the closure/post-closure care plan, permit
or registration requirements, and applicable rules.
(b)
Provide
alternative financial assurance as specified in this rule and obtain written
approval of such alternative financial assurance from the director not later
than ninety days after the owner and operator and the director have received
notice from the issuing institution that it will not extend the letter of
credit beyond the current expiration date. The director may delay the drawing
if the issuing institution grants an extension of the term of the credit.
During the thirty days of any such extension the director shall draw on the
letter of credit if the owner or operator has failed to provide alternative
financial assurance as specified in this rule and has failed to obtain written
approval of such alternative financial assurance from the
director.
(9)
The director shall return the original letter of credit
to the issuing institution for termination when either of the following
occur:
(a)
The
owner or operator substitutes alternative financial assurance for postclosure
care of a facility as specified in this rule.
(b)
The director
notifies the owner or operator, in accordance with paragraph (O) of this rule
that the owner or operator is no longer required to maintain financial
assurance for post-closure care of a facility.
(J) Post-closure care insurance.
(1)
The owner or
operator may satisfy the requirements of this rule by obtaining postclosure
care insurance that conforms to the requirements of this paragraph and by
submitting an originally signed certificate of such insurance to the director
by certified mail or any other form of mail accompanied by a receipt prior to
license issuance, and by submitting a copy of the certificate of insurance into
the operating record, if applicable. At a minimum, the insurer shall be
licensed to transact the business of insurance, or eligible to provide
insurance as an excess or surplus lines insurer, in one or more
states.
(2)
The owner or operator using insurance as a financial
assurance mechanism shall submit documentation stating whether the insurer is a
subsidiary or has a corporate, legal, or financial affiliation with the owner
or operator. If the post-closure care insurance is issued by a subsidiary or
affiliate, the owner or operator shall include a detailed written description
of the relationship between the insurer and the owner and the
operator.
(3)
An insurer issuing an insurance policy in satisfaction
of this rule shall be licensed to transact the business of insurance, or
eligible to provide insurance as an excess or surplus lines insurer, in one or
more states. The owner or operator shall submit to the director the following
information regarding the insurer's qualifications:
(a)
The most recent
A.M. Best rating of the insurer.
(b)
Documentation
demonstrating that the insurer is domiciled in the United
States.
(c)
The most recent report on examination from the
insurance department from the insurer's state of domicile.
(d)
Documentation
demonstrating that the insurer has capital and surplus of at least one hundred
million dollars.
(e)
Documentation demonstrating that the insurer received
an unqualified opinion of the insurer's annual financial statements from an
independent certified public accountant.
(4)
The director may
disallow use of the insurer by the owner or operator on the basis of one or
more of the following:
(a)
The A.M. Best rating is less than A-.
(b)
The report on
examination does not demonstrate that the status of the insurer is
satisfactory.
(c)
The opinion expressed by the independent certified
public accountant in the report on examination of the insurer's financial
statements.
(5)
The wording of the certificate of insurance shall be
identical to the wording specified in paragraph (E) of rule
3745-503-20 of the
Administrative Code on forms prescribed by the director.
(6)
The post-closure
care insurance policy shall be issued for a face amount at least equal to the
current post-closure care cost estimate, except as provided in paragraph (M) of
this rule. Actual payments by the insurer will not change the face amount,
although the insurer's future liability will be lowered by the amount of the
payments.
(7)
Guaranteeing of funds. The post-closure care insurance
policy shall guarantee that funds will be available to perform post-closure
care whenever mandated. The policy shall also guarantee that once post-closure
care begins, the insurer will be responsible for paying out funds, up to an
amount equal to the face amount of the policy, upon the direction of the
director, to such party or parties as the director specifies.
(8)
Reimbursement for
post-closure care. The owner or operator, or any other person authorized by the
owner, operator, or director to perform post-closure care, may request
reimbursement for post-closure care expenditures by submitting itemized bills
to the director. After receiving itemized bills for post-closure care
activities, the director shall determine whether the post-closure care
expenditures are in accordance with the closure/post-closure care plan, permit
or registration requirements, and applicable rules, or are otherwise justified,
and if so, shall instruct the insurer to make reimbursement in such amounts as
the director specifies in writing. If the director has reason to believe that
the cost of post-closure care will be greater than the face amount of the
policy, the director may withhold reimbursement of such amounts as deemed
prudent until the director determines, in accordance with paragraph (O) of this
rule that the owner or operator is no longer required to maintain financial
assurance for postclosure care of the facility.
(9)
The owner or
operator shall maintain the policy in full force and effect until the director
consents to termination of the policy by the owner or operator as specified in
paragraph (J)(13) of this rule. Failure to pay the premium, without
substitution of alternative financial assurance as specified in this rule, will
constitute a violation of these rules, warranting such remedy as the director
deems necessary. Such violation shall be deemed to begin upon receipt by the
director of a notice of future cancellation, termination, or failure to renew
due to nonpayment of the premium, rather than upon the date of
expiration.
(10)
Each policy shall contain a provision allowing
assignment of the policy to a successor owner or operator. Such assignment may
be conditional upon consent of the insurer, provided such consent is not
unreasonably refused.
(11)
The policy shall provide that the insurer may not
cancel, terminate, or fail to renew the policy except for failure to pay the
premium. At a minimum, the automatic renewal of the policy shall provide the
insured with the option of renewal at the face amount of the expiring policy.
If there is a failure to pay the premium, the insurer may elect to cancel,
terminate, or fail to renew the policy by sending notice by certified mail or
any other form of mail accompanied by a receipt to the owner or operator and to
the director not later than one hundred twenty days prior to the date of
cancellation. The one hundred and twenty days shall begin with the date of
receipt of the cancellation notice by both the director and the owner or
operator, as evidenced by the return receipts.
(12)
Whenever the
current post-closure care cost estimate increases to an amount greater than the
face amount of the policy, the owner or operator shall, not later than sixty
days after the increase, either cause the face amount to be increased to an
amount at least equal to the current post-closure care cost estimate and submit
evidence of such increase to the director, and into the operating record, if
applicable, or obtain alternative financial assurance as specified in this rule
to compensate for the increase. Whenever the current post-closure care cost
estimate decreases, the face amount may be reduced to the amount of the current
post-closure care cost estimate following written approval by the
director.
(13)
The director may give written consent to the owner or
operator to terminate the insurance policy when either of the following
occurs:
(a)
The
owner or operator substitutes alternative financial assurance for postclosure
care of a facility as specified in this rule.
(b)
The director
notifies the owner or operator, in accordance with paragraph (O) of this rule
that the owner or operator is no longer required to maintain financial
assurance for post-closure care of a facility.
(K) Financial test and corporate guarantee for post-closure care of a facility.
(1)
The owner or operator may satisfy the requirements of
this rule by demonstrating that the owner or operator passes a financial test
as specified in this paragraph. The owner or operator who uses this test shall
be operating for a minimum of five years. To pass this test the owner or
operator shall demonstrate that less than fifty per cent of the parent
corporation's gross revenues are derived from solid waste disposal facility
operations, or if there is no parent corporation, the owner or operator shall
demonstrate that less than fifty per cent of its gross revenues are derived
from solid waste disposal facility operations and shall satisfy the
requirements of paragraph (K)(1)(a) or (K)(1)(b) of this rule.
(a)
The owner or
operator shall have the following:
(i)
Satisfaction of at least two of the following ratios: a
ratio of total liabilities to net worth less than 2.0; a ratio of the sum of
net income plus depreciation, depletion, and amortization minus ten million
dollars to total liabilities greater than 0.1; a ratio of current assets to
current liabilities greater than 1.5.
(ii)
Net working
capital and tangible net worth each at least six times the sum of the current
closure and current post-closure care cost estimates, any corrective actions
cost estimates, and any other obligations assured by a financial
test.
(iii)
Tangible net worth of at least ten million
dollars.
(iv)
Assets in the United States amounting to at least
ninety per cent of total assets or at least six times the sum of the current
closure and current post-closure care cost estimates, any current corrective
actions cost estimates, and any other obligations assured by a financial
test.
(b)
The owner or operator shall have the following:
(i)
Issued a
corporate bond for which the owner or operator, as the issuing entity, has not
received a current rating of less than BBB as issued by "Standard and Poor's"
or Baa as issued by "Moody's." Owners or operators using bonds that are secured
by collateral or a guarantee shall meet the minimum rating without that
security.
(ii)
Tangible net worth at least six times the sum of the
current closure and current post-closure care cost estimates, any corrective
actions cost estimates, and any other obligations assured by a financial
test.
(iii)
Tangible net worth of at least ten million
dollars.
(iv)
Assets in the United States amounting to at least
ninety per cent of total assets or at least six times the sum of the current
closure and current post-closure care cost estimates, any current corrective
actions cost estimates, and any other obligations assured by a financial
test.
(2)
Current closure
and current post-closure care cost estimates, any current corrective actions
cost estimates, and any other obligations assured by a financial test as used
in paragraph (K)(1) of this rule refers to the cost estimates shown in the
letter from the owner's or operator's chief financial officer.
(3)
To demonstrate
that requirements of this test are met, the owner or operator shall submit the
following items to the director, and into the operating record, if
applicable:
(a)
A letter signed by the owner's or operator's chief financial
officer and worded as specified in paragraph (F) of rule
3745-503-20 of the
Administrative Code on forms prescribed by the director.
(b)
A copy of a
report by an independent certified public accountant examining the owner's or
the operator's financial statements for the most recently completed fiscal
year.
(c)
A special report from the owner's or the operator's
independent certified public accountant, in the form of an agreed-upon
procedures report, to the owner or operator stating the following:
(i)
The independent
certified public accountant has compared the data that the letter from the
chief financial officer specifies as having been derived from the independently
audited year-end financial statements for the most recent fiscal year with the
amounts in such financial statements.
(ii)
In connection
with the agreed-upon procedures report, the independent certified public
accountant states that the independent certified public accountant agrees the
specified data is accurate.
(4)
After the initial
submission of the items specified in paragraph (K)(3) of this rule, the owner
or operator shall send updated information to the director, and submit updated
information into the operating record, if applicable, not later than ninety
days after the close of each succeeding fiscal year. This information shall
include all of the items specified in paragraph (K)(3) of this
rule.
(5)
If the owner or operator no longer meets the
requirements of paragraph (K)(1) of this rule, the owner or operator shall send
notice to the director of the intent to establish alternative financial
assurance as specified in this rule by certified mail or any other form of mail
accompanied by a receipt not later than ninety 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 requirements. A copy of the notice shall also be placed in the
operating record, if applicable. The owner or operator shall provide
alternative financial assurance not later than one hundred twenty days after
the end of such fiscal year.
(6)
The director may,
based on a reasonable belief that the owner or operator no longer meets the
requirements of paragraph (K)(1) of this rule, require reports of financial
condition at any time from the owner or operator in addition to those specified
in paragraph (K)(3) of this rule. If the director finds, on the basis of such
reports or other information, that the owner or operator no longer meets the
requirements of paragraph (K)(1) of this rule, the owner or operator shall
provide alternative financial assurance as specified in this rule not later
than thirty days after notification of such a finding.
(7)
The director may
disallow use of this test on the basis of qualifications in the opinion
expressed by the independent certified public accountant in the report on
examination of the owner's or operator's financial statements. An adverse
opinion or disclaimer of opinion will be cause for disallowance. The director
shall evaluate other qualifications on an individual basis. The owner or
operator shall provide alternative financial assurance as specified in this
rule not later than thirty days after notification of the
disallowance.
(8)
The owner or operator is no longer required to submit
the items specified in paragraph (K)(3) of this rule when either of the
following occur:
(a)
The owner or operator substitutes alternate financial
assurance for postclosure care of a facility as specified in this
rule.
(b)
The director notifies the owner or operator, in
accordance with paragraph (O) of this rule that the owner or operator is no
longer required to maintain financial assurance for post-closure care of a
facility.
(9)
The owner or operator may meet the requirements of this
rule by obtaining a written guarantee, hereafter referred to as a corporate
guarantee. The guarantor shall be the parent corporation of the owner or
operator. The guarantor shall meet the requirements for an owner or operator in
paragraphs (K)(1) to (K)(7) of this rule and shall comply with the terms of the
corporate guarantee. The wording of the corporate guarantee shall be identical
to the wording specified in paragraph (G) of rule
3745-503-20 of the
Administrative Code on forms prescribed by the director. The corporate
guarantee shall accompany the items sent to the director as specified in
paragraph (K)(3) of this rule. The terms of the corporate guarantee shall
provide the following:
(a)
The owner or operator shall perform post-closure care
provided for by the corporate guarantee in accordance with the
closure/post-closure care plan, permit or registration requirements, and
applicable rules.
(b)
The guarantor shall perform the activities in paragraph
(K)(9)(a) of this rule or shall establish a trust fund in the name of the owner
or operator as specified in paragraph (F) of this rule if the owner or operator
fails to perform those activities.
(c)
The corporate
guarantee shall remain in force unless the guarantor sends notice of
cancellation by certified mail or any other form of mail accompanied by a
receipt to the owner or operator and to the director. Cancellation may not
occur, however, during the one hundred twenty day period beginning on the first
day that both the owner or operator and the director have received notice of
cancellation, as evidenced by the return receipts.
(d)
If the owner or
operator fails to provide alternative financial assurance as specified in this
rule, and fails to obtain the written approval of such alternative financial
assurance from the director not later than ninety days after both the owner or
operator and the director have received notice of cancellation of the corporate
guarantee from the guarantor, the guarantor shall provide such alternative
financial assurance in the name of the owner or operator.
(L) Local government financial test for post-closure care.
(1)
In
order to satisfy the requirements of this rule, a local government shall, by
resolution, establish a restricted "Local Government Financial Test" (LGFT)
fund specifically for funding the estimated cost of post-closure care. The LGFT
fund shall be established to accumulate an amount at least equal to the current
estimate of the cost of post-closure care. To maintain compliance with this
rule, a local government shall annually submit to Ohio EPA an affidavit
affirming the continued existence of the LGFT fund and the balance in the LGFT
fund as of the end of the fiscal year. A copy of the current estimate of the
cost of post-closure care and the calculated amount of the annual payment shall
also be provided to Ohio EPA.
(2)
A local
government shall satisfy the requirements of this rule by demonstrating that
the local government passes a financial test as specified in this paragraph.
This test consists of a financial component, a public notice component, and a
record-keeping and reporting component. In order to satisfy the financial
component of the test, a local government shall meet the following
criteria:
(a)
A
local government's financial statements shall be prepared in accordance with
generally accepted accounting principles for local governments.
(b)
A local
government shall not have operated at a deficit equal to five per cent or more
of total annual revenue in either of the past two fiscal years.
(c)
A local
government shall not currently be in default on any outstanding general
obligation bonds.
(d)
A local government shall not have any outstanding
general obligation bonds rated lower than BBB as issued by "Standard and
Poor's" or Baa as issued by "Moody's." Local governments using bonds that are
secured by collateral or a guarantee shall meet the minimum rating without that
security.
(3)
A local government shall satisfy the requirements of
paragraph (L)(3)(a) or (L)(3)(b) of this rule.
(a)
A local
government shall demonstrate the following:
(i)
A ratio of cash
plus marketable securities to total expenditures greater than or equal to
0.05.
(ii)
A ratio of annual debt service to total expenditures
less than or equal to 0.20.
(iii)
A ratio of long
term debt issued and outstanding to capital expenditures less than or equal to
2.00.
(iv)
A ratio of the current cost estimates for closure,
post-closure care, corrective actions, and any other obligations assured by a
financial test, to total revenue less than or equal to 0.43.
(b)
A
local government shall demonstrate the following:
(i)
Outstanding
general obligation bonds for which the local government, as the issuing entity,
has not received a current rating of less than BBB as issued by "Standard and
Poor's" or Baa as issued by "Moody's." Local governments using bonds that are
secured by collateral or a guarantee shall meet the minimum rating without that
security.
(ii)
A ratio of the current cost estimates for closure,
post-closure care, corrective actions, and any other obligations assured by a
financial test, to total revenue less than or equal to 0.43.
(4)
In order to satisfy the public notice component of the
test, a local government shall in each year that the test is used, identify the
current cost estimates in either its budget or its comprehensive annual
financial report. The solid waste facility covered, the categories of
expenditures, including closure, post-closure care, corrective actions, the
corresponding cost estimate for each expenditure, and the anticipated year of
the required activity shall be recorded. If the financial assurance obligation
is to be included in the budget, it should either be listed as an approved
budgeted line item, if the obligation will arise during the budget period, or
in an appropriate supplementary data section, if the obligation will not arise
during the budget period. If the information is to be included in the
comprehensive annual financial report, it is to be included in the financial
section as a footnote to the annual financial statements.
(5)
To demonstrate
that the local government meets the requirements of this test, the following
three items shall be provided to the director, and submitted into the operating
record, if applicable:
(a)
A letter signed by the local government's chief
financial officer and worded as specified in paragraph (H) of rule
3745-503-20 of the
Administrative Code on forms prescribed by the director that does the
following:
(i)
Lists all current cost estimates covered by a financial
test.
(ii)
Certifies that the local government meets the
conditions of paragraph (L)(2) of this rule.
(iii)
Provides
evidence and certifies that the local government meets the conditions of either
paragraph (L)(3)(a) or (L)(3)(b) of this rule.
(b)
A copy of the
local government's independently audited year-end financial statements for the
latest fiscal year, including the unqualified opinion of the auditor. The
auditor shall be an independent, certified public accountant or auditor of
state. This may be provided in written form or in electronic
format.
(c)
A special report, provided in written form or in
electronic format, from the independent certified public accountant or auditor
of state, in the form of an agreed-upon procedures report, to the local
government stating the following:
(i)
The certified public accountant or auditor of state has
compared the data that the letter from the chief financial officer specifies as
having been derived from the independently audited year-end financial
statements for the most recent fiscal year with the amounts in such financial
statements.
(ii)
In connection with the agreed-upon procedures report,
the public accountant states that the public accountant agrees the specified
data is accurate.
(6)
After the initial
submission of the items specified in this rule, a local government shall send
updated information to the director on forms prescribed by the director, and
submit updated information into the operating record, if applicable, not later
than one hundred eighty days after the close of each succeeding fiscal year.
This information shall include all items specified in this
rule.
(7)
If a local government no longer meets the requirements
of this rule, the owner or operator shall send notice to the director of the
intent to establish alternative financial assurance as specified in this rule
by certified mail or any other form of mail accompanied by a receipt not later
than one hundred fifty days after the end of the fiscal year for which the
year-end financial data show that the local government no longer meets the
requirements. A copy of the notice shall also be placed in the operating
record, if applicable. The local government shall provide alternative financial
assurance not later than one hundred eighty days after the end of such fiscal
year.
(8)
The director may, based on a reasonable belief that the
local government no longer meets the requirements of this rule, require reports
of financial condition at any time from the local government in addition to
those specified in this rule. If the director finds, on the basis of such
reports or other information, that the local government no longer meets the
requirements of this rule, the local government shall provide alternative
financial assurance as specified in this rule not later than thirty days after
notification of such a finding.
(9)
The director may
disallow use of this test on the basis of qualifications in the opinion
expressed by the independent certified public accountant or auditor of state in
the report on examination of the local government's financial statements. An
adverse opinion or disclaimer of opinion will be cause for disallowance. The
director shall evaluate other qualifications on an individual basis. The local
government shall provide alternative financial assurance as specified in this
rule not later than thirty days after notification of the
disallowance.
(10)
A local government is no longer required to submit the
items specified in this rule when one of the following occur:
(a)
The local
government substitutes alternative financial assurance for postclosure care as
specified in this rule.
(b)
The director notifies the local government, in
accordance with paragraph (O) of this rule, that the local government is no
longer required to maintain financial assurance for post-closure care of a
facility.
(M) Use of multiple financial assurance mechanisms. The owner or operator may satisfy the requirements of this rule by establishing more than one financial assurance mechanism for each facility. These mechanisms are limited to a trust fund, surety bond guaranteeing payment into a closure trust fund, letter of credit, insurance, and the local government financial test. The mechanisms shall be as specified in paragraphs (F), (G), (I), (J), and (L) respectively of this rule, except that it is the combination of mechanisms, rather than each single mechanism, which shall provide financial assurance for an amount at least equal to the current post-closure care cost estimate. If an owner or operator uses a trust fund in combination with a surety bond or a letter of credit, the owner or operator may use the trust fund as the standby trust fund for the other mechanisms. A single standby trust fund may be established for two or more mechanisms. The director may invoke use of any or all of the mechanisms, in accordance with paragraphs (F), (G), (I), (J), and (L) of this rule, to provide for post-closure care of the facility.
(N) Use of a financial assurance mechanism for multiple facilities. The owner or operator may use a financial assurance mechanism specified in this rule to meet the requirements of this rule for more than one facility. Evidence of financial assurance submitted to the director shall include a list showing, for each facility, the name, address, and the amount of funds for post-closure care assured by the financial assurance mechanism. The amount of funds available through the financial assurance mechanism shall be no less than the sum of the funds that would be available if a separate financial assurance mechanism had been established and maintained for each facility.
(O) Release of the owner or operator of a solid waste facility from the requirements of this rule. The director shall notify the owner or operator in writing that the owner or operator is no longer required by this rule to maintain financial assurance for post-closure care of the facility, unless the director has reason to believe that postclosure care has not been completed in accordance with applicable requirements, or the closure/post-closure care plan after receiving certifications from the owner or operator and an independent professional skilled in the appropriate discipline that post-closure care has been completed in accordance with the closure/post-closure care plan, permit or registration requirements, and applicable rules.
[Comment: The notice releases the owner or operator only from the requirements for financial assurance for post-closure care of the facility; it does not release the owner or operator from legal responsibility for meeting the post-closure care standards or corrective measures, if applicable.]
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