South Carolina Code of Regulations
Chapter 61 - DEPARTMENT OF HEALTH AND ENVIRONMENTAL CONTROL
Subchapter 61-107 - Solid Waste Management
Subchapter 61-107.19 - SOLID WASTE. MANAGEMENT: SOLID WASTE LANDFILLS AND STRUCTURAL FILL
Part I - General Requirements
Section 61-107.19.I.E - Financial Assurance Criteria

Universal Citation: SC Code Regs 61-107.19.I.E

Current through Register Vol. 48, No. 9, September 27, 2024

The requirements of this Section apply to all: Class One landfills, except landfills owned and operated by local government or a region comprised of local governments, State or Federal government; Class Two landfills, except landfills owned and operated by local government or a region comprised of local governments, State or Federal government; and, Class Three landfills, except landfills owned and operated by State or Federal government entities whose debts and liabilities are the debts and liabilities of the State or the United States.

1. Financial Assurance for Closure.

a. The permittee shall have a detailed written estimate, in current dollars, of the cost of hiring a third party to close the largest area of the landfill ever requiring a final cover at any time during the active life in accordance with the closure plan. The permittee shall submit a copy of the estimate to the Department for review and approval.

(1) The cost estimate shall equal the cost of closing the largest area of the landfill ever requiring a final cover at any time during the active life when the extent and manner of its operation would make closure the most expensive, as indicated by its closure plan.

(2) During the active life of the landfill, the permittee shall annually adjust the closure cost estimate for inflation.

(3) The permittee shall increase the closure cost estimate and the amount of financial assurance provided if changes to the closure plan or landfill conditions increase the maximum cost of closure at any time during the remaining active life.

(4) The permittee may reduce the closure cost estimate and the amount of financial assurance provided for proper closure if the cost estimate exceeds the maximum cost of closure at any time during the remaining life of the landfill. The permittee shall submit justification for the reduction of the closure cost estimate and the amount of financial assurance to the Department for review and approval.

b. The permittee of each landfill shall establish financial assurance for closure of the landfill as required by this regulation using an allowable mechanism. The permittee shall provide continuous coverage for closure until released from financial assurance requirements, pursuant to this regulation.

2. Financial Assurance for Post-closure Care.

a. The permittee shall have a detailed written estimate, in current dollars, of the cost of hiring a third party to conduct post-closure care for the landfill in compliance with the applicable post-closure plan. The post-closure cost estimate used to demonstrate financial assurance shall account for the total costs of conducting post-closure care, including annual and periodic costs as described in the post-closure plan over the entire post-closure care period. The permittee shall submit a copy of the estimate to the Department for review and approval.

(1) The cost estimate for post-closure care shall be based on the most expensive costs of post-closure care during the post-closure care period.

(2) During the post-closure care period, the permittee shall annually adjust the post-closure cost estimate for inflation.

(3) The permittee shall increase the post-closure care cost estimate and the amount of financial assurance provided if changes in the post-closure plan or landfill conditions increase the maximum costs of post-closure care.

(4) The permittee may reduce the post-closure cost estimate and the amount of financial assurance provided if the cost estimate exceeds the maximum costs of post-closure care remaining over the post-closure care period. The permittee shall submit justification for the reduction of the post-closure cost estimate and the amount of financial assurance to the Department for review and approval.

b. The permittee of each landfill shall establish financial assurance for the costs of post-closure care as required by this regulation using an allowable mechanism. The permittee shall provide continuous coverage for post-closure care until released from financial assurance requirements for post-closure care.

3. Financial Assurance for Corrective Action.

a. A permittee of a landfill required to undertake a corrective action, pursuant to this regulation, shall have a detailed written estimate, in current dollars, of the cost of hiring a third party to perform the corrective action in accordance with the corrective action plan. The corrective action cost estimate shall account for the total costs of corrective action activities as described in the corrective action plan for the entire corrective action period. The permittee shall submit a copy of the estimate to the Department for review and approval.

(1) The permittee shall annually adjust the estimate for inflation until the corrective action program is completed, pursuant to this regulation.

(2) The permittee shall increase the corrective action cost estimate and the amount of financial assurance provided if changes in the corrective action program or landfill conditions increase the maximum costs of corrective action.

(3) The permittee may reduce the amount of the corrective action cost estimate and the amount of financial assurance provided in Section E.3.b. below, if the cost estimate exceeds the maximum remaining costs of corrective action. The permittee shall submit justification for the reduction of the corrective action cost estimate and the amount of financial assurance to the Department for review and approval.

b. The permittee of each landfill required to undertake a corrective action program, pursuant to this regulation, shall establish financial assurance for the most recent corrective action program using an allowable mechanism. The permittee shall provide continuous coverage for corrective action until released from financial assurance requirements for corrective action in accordance with this regulation.

4. Allowable Mechanisms. The mechanisms used to demonstrate financial assurance under this section shall ensure that the funds necessary to meet the costs of closure, post-closure care, and corrective action for known releases will be available whenever they are needed. Owners/operators shall choose from the options outlined herein. Payments made into the standby trust fund by the provider of the financial assurance pursuant to the Department instruction shall be transferred to the Trustee and are referred to as the Fund, together with all earnings and profits thereon, less any payments or distributions made by the Trustee. An originally signed duplicate of the standby trust agreement shall be submitted to the Department with documentation of the selected mechanism(s).

a. Trust Fund.

(1) A permittee may satisfy the requirements of this section by establishing a trust fund that conforms to the requirements of this regulation.

(a) 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.

(b) The text of the trust agreement shall be provided by the Department.

(c) The original trust agreement signed by the permittee and the trustee shall be submitted to the Department for review and approval. The trust agreement shall be accompanied by:

i. Schedule A. This information shall be in a format approved by the Department, updated within 60 days of each change in cost estimate, and include, at a minimum, the following about the facility:

(aa) Permit number, if available;

(bb) Name of the permittee;

(cc) Address of the facility;

(dd) Current closure cost estimate; and,

(ee) Current post-closure cost estimate, if appropriate.

ii. Schedule B. This information shall be in a format approved by the Department and include, at a minimum:

(aa) The amount of funds or property used to initially establish the trust fund; and,

(bb) The account number in which the funds are being held.

iii. A Certificate of Acknowledgment for Solid Waste Management Facility Trust Fund Agreement in a format approved by the Department to include, at a minimum, the:

(aa) Name of the trustee; and,

(bb) Name of the permittee.

(d) The trust fund shall be irrevocable and can not be changed or recalled without written agreements from the Department.

(2) Payments into the trust fund for closure and post-closure care shall be made annually by the permittee for five years or over the remaining life of the landfill, whichever is shorter. This period is referred to as the pay-in period. In the case of a trust fund for corrective action of known releases, the pay-in period shall consists of one-half ( 1/2) of the estimated length of the corrective action program.

(3) For a trust 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 Section E.4.a. (2) above. The amount of subsequent payments shall be determined by the following formula:

Next Payment = CE-CV

-----

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 trust fund, and Y is the number of years remaining in the pay-in period.

(4) For a trust fund used to demonstrate financial assurance for corrective action, the first payment into the trust fund shall be at least equal to one-half of the current cost estimate for corrective action, except as provided in Section E.4.h., divided by the number of years in the corrective action pay-in period as defined in Section E.4.a. (2) above. The amount of subsequent payments shall be determined by the following formula:

Next Payment = RB-CV

-----

where RB is the most recent estimate of the required trust fund balance for corrective action (i.e., the total costs that will be incurred during the second half of the corrective action period), CV is the current value of the trust fund, and Y is the number of years remaining on the pay-in period.

(5) The initial payment into the trust fund shall be made before the initial receipt of waste in the case of closure and post-closure care, or no later than 120 days after the corrective action remedy has been selected.

(6) If the permittee establishes a trust fund after having used one or more alternate mechanisms, the initial payment into the trust fund shall be at least the amount that the fund would contain if the trust fund were established initially and annual payments made according to the applicable specifications.

(7) The permittee, 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 by the trustee only if sufficient funds are remaining in the trust fund to cover the most recent Department-approved cost estimate for closure, post-closure care, or corrective action, and if justification and documentation of the cost is placed in the operating record. The permittee shall notify the Department that the documentation of the justification for reimbursement has been placed in the operating record and that reimbursement has been received.

(8) The trust fund account shall contain, at a minimum, the amount of funds needed to complete final closure of the facility at any given time during the life of the facility. An annual statement shall be provided to the Department at least 30 days prior to the anniversary date of establishment of the fund that confirms the value of the trust fund account to include all payments made into the account and all reimbursements paid from the account during the previous year.

(9) The trust fund may be terminated by the permittee only if the permittee substitutes alternate acceptable financial assurance or if he is no longer required to demonstrate financial responsibility in accordance with this regulation.

b. Surety Bond Guaranteeing Payment or Performance.

(1) A permittee may demonstrate financial assurance for closure or post-closure care by obtaining a payment or performance surety bond which conforms to the requirements of this regulation. A permittee may demonstrate financial assurance for corrective action by obtaining a performance bond which conforms to the requirements of this regulation. The bond shall be effective before the initial receipt of waste in the case of closure and post-closure care, or no later than 120 days after the corrective action remedy has been selected in accordance with this regulation. The permittee shall submit a copy of the bond to the Department. The surety company issuing the bond shall, at a minimum, be among those listed as acceptable sureties on Federal bonds in Circular 570 of the U.S. Department of the Treasury. The text of the surety bond shall be provided by the Department.

(2) In addition to the surety bond, the permittee shall establish a standby trust fund, to receive payments using a trustee that has the authority to act as a trustee and that is regulated and examined by a Federal or State agency. The text of the standby trust shall be provided by the Department.

(3) The following documents shall be submitted to the Department:

(a) The original surety bond signed by the Surety and the permittee; and,

(b) The original standby trust agreement signed by the permittee and the trustee.

(4) The penal sum of the bond shall be in an amount at least equal to the current closure, post-closure care or corrective action cost estimate, whichever is applicable, except as provided in Section E.4.j.

(5) Under the terms of the bond, the surety shall become liable on the bond obligation when the permittee fails to perform as guaranteed by the bond.

(6) The permittee shall establish a standby trust fund. The standby trust fund shall meet the requirements for a trust fund as defined in Section E.4.a. except the requirements for initial payment and subsequent annual payments specified in Section E.4.a. (2) through (5) above.

(7) Payments made under the terms of the bond shall be deposited by the surety directly into the standby trust fund. Payments from the trust fund shall be approved by the trustee.

(8) Under the terms of the bond, the surety may cancel the bond by sending notice of cancellation by certified mail to the permittee and to the Department 120 days in advance of cancellation. If the surety cancels the bond, the permittee shall obtain alternate financial assurance as specified in this section.

(9) The permittee may cancel the bond only if alternate financial assurance is substituted as specified in this section or if the permittee is no longer required to demonstrate financial responsibility in accordance with this regulation.

c. Letter of Credit.

(1) A permittee may satisfy the requirements of this section by obtaining an irrevocable standby letter of credit which conforms to the requirements of this regulation. The letter of credit shall be effective before the initial receipt of waste in the case of closure and post-closure care, or no later than 120 days after the corrective action remedy has been selected in accordance with this regulation. The issuing institution shall be an entity which has the authority to issue letters of credit and whose letter-of-credit operations are regulated and examined by a Federal or State agency. The text of the letter of credit shall be provided by the Department.

(2) The original letter of credit shall be submitted to the Department.

(3) The letter of credit shall be irrevocable and issued for a period of at least one (1) year in an amount at least equal to the current cost estimate for closure, post-closure care or corrective action, whichever is applicable, except as provided in Section E.4.a.. The letter of credit shall provide that the expiration date will be automatically extended for a period of at least one year unless the issuing institution has canceled the letter of credit by sending notice of cancellation by certified mail to the permittee and to the Department 120 days in advance of cancellation. If the letter of credit is canceled by the issuing institution, the permittee shall obtain alternate financial assurance.

(4) The permittee may cancel the letter of credit only if alternate financial assurance is substituted as specified in this section or if the permittee is no longer required to demonstrate financial responsibility in accordance with this regulation.

d. Insurance.

(1) A permittee may demonstrate financial assurance for closure and post-closure care by obtaining insurance that conforms to the requirements of this regulation. The insurance shall be effective before the initial receipt of waste in the case of closure and post-closure care, or no later than 120 days after the corrective action remedy has been selected in accordance with the requirements of this regulation. 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. The permittee shall submit a copy of the insurance policy to the Department for review and approval. Once approved, the permittee shall submit a copy of the effective insurance policy including all endorsements and attachments to the Department.

(2) The closure or post-closure care insurance policy shall guarantee that funds will be available to close the landfill whenever final closure occurs or to provide post-closure care for the landfill whenever the post-closure care period begins, whichever is applicable. The policy shall also guarantee that once closure or post-closure care begins, the insurer shall be responsible for the paying out of funds to the permittee or other person authorized to conduct closure or post-closure care, up to an amount equal to the face amount of the policy.

(3) The insurance policy shall be issued for a face amount at least equal to the current cost estimate for closure or post-closure care, whichever is applicable, except as provided in the section that addresses the use of multiple financial mechanisms. The term "face amount" means the total amount the insurer is obligated to pay under the policy. Actual payments by the insurer shall not change the face amount, although the insurer's future liability will be lowered by the amount of the payments.

(4) A permittee, or any other person authorized to conduct closure or post-closure care, may receive reimbursements for closure or post-closure expenditures, whichever is applicable. Requests for reimbursement shall be granted by the insurer only if the remaining value of the policy is sufficient to cover the remaining costs of closure or post-closure care, and if justification and documentation of the cost is submitted to and approved by the Department.

(5) Each policy shall contain a provision allowing assignment of the policy to a successor permittee. Such assignment may be conditional upon consent of the insurer, provided that such consent is not unreasonably refused.

(6) The insurance policy shall provide that the insurer may not cancel, terminate or fail to renew the policy except for failure to pay the premium. The automatic renewal of the policy shall, at a minimum, 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 cancel the policy by sending notice of cancellation by certified mail to the permittee and to the Department 120 days in advance of cancellation. If the insurer cancels the policy, the permittee shall obtain alternate financial assurance.

(7) For insurance policies providing coverage for post-closure care, the insurer shall annually increase the face amount of the policy beginning on the date that liability to make payments is initiated. Such increase shall be equivalent to the face amount of the policy, less any payments made, multiplied by an amount equivalent to 85% of the most recent investment rate or of the equivalent coupon-issue yield announced by the U.S. Treasury for 26-week Treasury securities.

(8) The permittee may cancel the insurance policy only if alternate acceptable financial assurance is substituted, or if the permittee is no longer required to demonstrate financial responsibility in accordance with this regulation.

e. Corporate Financial Test. A permittee that satisfies the requirements of this section may demonstrate financial assurance up to the amount specified below:

(1) Financial component.

(a) The permittee shall satisfy one of the following three conditions:

i. A current rating for its senior unsubordinated debt of AAA, AA, A, or BBB as issued by Standard and Poor's or Aaa, Aa, A or Baa as issued by Moody's; or,

ii. A ratio of less than 1.5 comparing total liabilities to net worth; or,

iii. A ratio of greater than 0.10 comparing the sum of net income plus depreciation, depletion and amortization, minus $10 million, to total liabilities.

(b) The tangible net worth of the permittee shall be greater than:

i. The sum of the current closure, post-closure care, corrective action cost estimates and any other environmental obligations, including guarantees, covered by a financial test plus $10 million, except as provided in paragraph E.4.e. (1)(b)ii. below.

ii. $10 million in net worth plus the amount of any guarantees that have not been recognized as liabilities on the financial statements provided all of the current closure, post-closure care, and corrective action costs and any other environmental obligations covered by a financial test are recognized as liabilities on the owner's or operator's audited financial statements, and subject to the approval of the Department.

(c) The Permittee shall have assets located in the United States amounting to at least the sum of current closure, post-closure care, corrective action cost estimates and any other environmental obligations covered by a financial test as described herein.

(2) Record keeping and reporting requirements.

(a) The permittee shall place the following items into the facility's operating record and submit a copy to the Department:

i. A letter signed by the permittee's chief financial officer that:

(aa) Lists all the current cost estimates covered by a financial test, including, but not limited to, cost estimates required for municipal solid waste management facilities under 40 CFR Part 258, cost estimates required for UIC facilities under 40 CFR part 144, if applicable, cost estimates required for petroleum underground storage tank facilities under 40 CFR part 280, if applicable, cost estimates required for PCB storage facilities under 40 CFR part 761, if applicable, and cost estimates required for hazardous waste treatment, storage, and disposal facilities under 40 CFR parts 264 and 265, if applicable; and,

(bb) Provides evidence demonstrating that the firm meets the conditions outlined above for either the current rating for its senior unsubordinated debt, or compliance with the ratio comparing total liabilities to net worth, or the ratio comparing net income to total liabilities as outlined in Section E.4.e. (1)(a) above, and the tangible net worth requirements in Section E.4.e. (1)(b) above and assets as outlined in Section E.4.e. (1)(c) above.

ii. A copy of the independent certified public accountant's unqualified opinion of the permittee'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 shall 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 permittee shall provide alternate financial assurance that meets the requirements of this section.

iii. If the chief financial officer's letter providing evidence of financial assurance includes financial data showing that the permittee satisfies either the ratio comparing total liabilities to net worth in Section E.4.e. (1)(a)ii. above, or the ratio comparing net income to total liabilities in Section E.4.e. (1)(a)iii. above that is different from data in the audited financial statements in the independent certified public accountant's financial statements for the latest complete fiscal year, referred to in Section E.4.e. (2)(a)ii. above, or any other audited financial statement or data filed with the SEC, then a special report from the permittee's independent certified public accountant to the permittee 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.

iv. If the chief financial officer's letter provides a demonstration that the firm has assured for environmental obligations as provided in paragraph E.4.e. (1)(b)ii. above, then the letter shall include a report from the independent certified public accountant that verifies that all of the environmental obligations covered by a financial test have been recognized as liabilities on the audited financial statements, how these obligations have been measured and reported, and that the tangible net worth of the firm is at least $10 million plus the amount of any guarantees provided.

(b) A permittee shall place all records and reports required by this section in the operating record and notify the Department that these items have been placed in the operating record before the initial receipt of waste for closure and post-closure care, and within 120 days after a corrective action remedy has been selected in accordance with this regulation.

(c) After all required records and reports have been placed in the operating record, the permittee shall annually update the information and place updated information in the operating record within 90 days following the close of the permittee's fiscal year. The Department may allow an additional 45 days for a permittee who can demonstrate that 90 days is insufficient time to acquire audited financial statements. The updated information shall encompass all required reports and records.

(d) The record keeping and reporting requirements are no longer applicable when the permittee:

i. Substitutes alternate financial assurance that is not subject to the Record keeping and reporting requirements; or,

ii. Is released from the requirements of providing financial assurance for closure, post-closure, and corrective action pursuant to this regulation.

(e) If the requirements of the financial component in Section E.4.e. (1) above are no longer met, within 120 days following the end of the facility's fiscal year, the permittee shall:

i. Obtain alternative financial assurance that meets the requirements of this section;

ii. Place the required submissions for that assurance in the operating record; and,

iii. Notify the Department that the permittee no longer meets the criteria of the financial test and that alternate assurance has been obtained.

(f) Based on a reasonable belief that the requirements of the financial component are no longer met, at any time the Department may require the submittal of reports of its financial condition in addition to or including current financial test documentation pursuant to this regulation. If the Department finds that the permittee no longer meets the requirements of the financial component, the permittee shall provide alternate financial assurance that meets the requirements of this regulation.

(3) Calculation of costs to be assured. When calculating the current cost estimates for closure, post-closure care, corrective action, or the sum of the combination of such costs to be covered, and any other environmental obligations assured by a financial test pursuant to this regulation, the permittee shall include cost estimates required for municipal solid waste management facilities under this part, as well as cost estimates required for the following environmental obligations, if it assures them through a financial test: obligations associated with UIC facilities under 40 CFR part 144, petroleum underground storage tank facilities under 40 CFR part 280, PCB storage facilities under 40 CFR part 761, and hazardous waste treatment, storage, and disposal facilities under 40 CFR parts 264 and 265.

f. Local Government Financial Test. A permittee that satisfies the requirements of Sections E.4.f. (1) through (3) may demonstrate financial assurance up to the amount specified in Section E.4.f. (4) below:

(1) Financial Component.

(a) The permittee shall satisfy one of the following two conditions:

i. If the permittee has outstanding, rated, general obligation bonds that are not secured by insurance, a letter of credit, or other collateral or guarantee, it shall have a current rating of Aaa, Aa, A, or Baa, as issued by Moody's, or AAA, AA, A, or BBB, as issued by Standard and Poor's on all such general obligation bonds; or,

ii. The permittee shall satisfy each of the following financial ratios based on the permittee's most recent audited annual financial statement:

(aa) A ratio of cash plus marketable securities to total expenditures greater than or equal to 0.05; and,

(bb) A ratio of annual debt service to total expenditures less than or equal to 0.20.

(b) The permittee shall prepare its financial statements in conformity with Generally Accepted Accounting Principles for governments and have its financial statements audited by an independent certified public accountant (or appropriate State agency).

i. Is currently in default on any outstanding general obligation bonds; or,

ii. Has any outstanding general obligation bonds rated lower than Baa as issued by Moody's or BBB as issued by Standard and Poor's; or,

iii. Operated at a deficit equal to 5% or more of total annual revenue in each of the past two fiscal years; or,

iv. Receives an adverse opinion, disclaimer of opinion, or other qualified opinion from the independent certified public accountant (or appropriate State agency) auditing its financial statement as required in Section E.4.f. (1)(b) above. However, 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 the qualification insufficient to warrant disallowance of use of the test.

(d) The following terms used in this Paragraph are defined as follows:

i. "Deficit" equals total annual revenues minus total annual expenditures;

ii. "Total revenues" include revenues from all taxes and fees but does not include the proceeds from borrowing or asset sales, excluding revenue from funds managed by local government on behalf of a specific third party;

iii. "Total expenditures" include all expenditures excluding capital outlays and debt repayment;

iv. "Cash plus marketable securities" is all the cash plus marketable securities held by the local government on the last day of a fiscal year, excluding cash and marketable securities designated to satisfy past obligations such as pensions; and,

v. "Debt service" is the amount of principal and interest due on a loan in a given time period, typically the current year.

(2) Public Notice Component. The local government permittee shall place a reference to the closure and post-closure care costs assured through the financial test into its next comprehensive annual financial report (CAFR) after the effective date of this section or prior to the initial receipt of waste at the facility, whichever is later. Disclosure shall include the nature and source of closure and post-closure care requirements, the reported liability at the balance sheet date, the estimated total closure and post-closure care cost remaining to be recognized, the percentage of landfill capacity used to date, and the estimated landfill life in years. A reference to corrective action costs shall be placed in the CAFR not later than 120 days after the corrective action remedy has been selected in accordance with this regulation. For the first year the financial test is used to assure costs at a particular facility, the reference may instead be placed in the operating record until issuance of the next available CAFR if timing does not permit the reference to be incorporated into the most recently issued CAFR or budget. For closure and post-closure costs, conformance with Government Accounting Standards Board Statement 18 assures compliance with this public notice component.

(3) Record Keeping and Reporting Requirements.

(a) The local government permittee shall place the following items in the facility's operating record and submit a copy to the Department:

i. A letter signed by the local government's chief financial officer that:

(aa) Lists all the current cost estimates covered by a financial test as required;

(bb) Provides evidence and certifies that the local government meets the conditions of either the required rating for general obligation bonds or satisfies the required financial ratios pursuant to Section E.4.f. (1)(a) above, and financial statements and audits as required in Section E.4.f. (1)(b) above, and meets the criteria outlined in Section E.4.f. (1)(c) above regarding eligibility to assure its obligations; and,

(cc) Certifies that the local government meets the requirements established for public notification pursuant to Section E.4.f. (2) above, and the calculation of costs to be assured pursuant to Section E.4.f. (4) below;

ii. The local government's independently audited year-end financial statements for the latest fiscal year (except for local governments where audits are required every two years and where unaudited statements may be used in years when audits are not required), including the unqualified opinion of the auditor who shall be an independent, certified public accountant or an appropriate State agency that conducts equivalent comprehensive audits;

iii. A report to the local government from the local government's independent certified public accountant (CPA) or the appropriate State agency based on performing an agreed upon procedures engagement relative to the financial ratios required by Section E.4. f. (1)(a)ii. of this section, if applicable, and the requirements for financial statements pursuant to Section E.4.f. (1)(b), and assuring obligations outlined in Sections E.4.f. (1)(c)iii. and iv. The CPA or State agency's report should state the procedures performed and the CPA or State agency's findings; and,

iv. A copy of the comprehensive annual financial report (CAFR) used to comply with the public notice requirements in Section E.4.f. (2) above or certification that the requirements of General Accounting Standards Board Statement 18 have been met.

(b) The record keeping and reporting requirements outlined in Section E.4.f. (3)(a) above shall be placed in the facility operating record and a copy submitted to the Department:

i. In the case of closure and post-closure care, prior to the initial receipt of waste at the facility; or,

ii. In the case of corrective action, not later than 120 days after the corrective action remedy is selected in accordance with the requirements of this regulation.

(c) After the initial placement of the items in the facility's operating record, the local government permittee shall update the information and place the updated information in the operating record and submit a copy to the Department within 180 days following the close of the permittee's fiscal year.

(d) The local government permittee is no longer required to meet the record keeping and reporting requirements outlined in Section E.4.f. (3) above when:

i. The permittee substitutes alternate financial assurance as specified in this section; or,

ii. The permittee is released from the requirements of this section in accordance with this regulation.

(e) A local government shall satisfy the requirements of the financial test at the close of each fiscal year. If the local government permittee no longer meets the requirements of the local government financial test it shall, within 210 days following the close of the permittee's fiscal year, obtain alternative financial assurance that meets the requirements of this section, place the required submissions for that assurance in the operating record, and notify the Department that the permittee no longer meets the criteria of the financial test and that alternate assurance has been obtained.

(f) The Department, based on a reasonable belief that the local government permittee may no longer meet the requirements of the local government financial test, may require additional reports of financial condition from the local government at any time. If the Department finds, on the basis of such reports or other information, that the permittee no longer meets the requirements of the local government financial test, the local government shall provide alternate financial assurance in accordance with this section.

(4) Calculation of Costs to be Assured. The portion of the closure, post-closure, and corrective action costs for which a permittee can assure under this Section is determined as follows:

(a) If the local government permittee does not assure other environmental obligations through a financial test, it may assure closure, post-closure, and corrective action costs that equal up to 43% of the local government's total annual revenue.

(b) If the local government assures other environmental obligations through a financial test, including those associated with UIC facilities under 40CFR144.62, petroleum underground storage tank facilities under 40CFR280, PCB storage facilities under 40CFR761, and hazardous waste treatment, storage, and disposal facilities under 40CFR264 and 265, it shall add those costs to the closure, post-closure, and corrective action costs it seeks to assure under this Item.

g. Local Government Guarantee. A permittee may demonstrate financial assurance for closure, post-closure, and corrective action, as required in this regulation, by obtaining a written guarantee provided by a local government. The guarantor shall meet the requirements of the Local Government Financial Test in Section E.4.f. above, and shall comply with the terms of a written guarantee.

(1) Terms of the Written Guarantee. The guarantee shall be effective before the initial receipt of waste, in the case of closure, post-closure care, or no later than 120 days after the corrective action remedy has been selected in accordance with this regulation. The guarantee shall provide the following:

(a) If the permittee fails to perform closure, post-closure care, and/or corrective action of a facility covered by the guarantee, the guarantor shall:

i. Perform, or pay a third party to perform, closure, post-closure care, and/or corrective action as required; or,

ii. Establish a fully funded trust fund as specified in Section E.4.a. above in the name of the permittee.

(b) The guarantee shall remain in force unless the guarantor sends notice of cancellation by certified mail to the permittee and to the Department. Cancellation may not occur, however, during the 120 days beginning on the date of receipt of the notice of cancellation by both the permittee and the Department, as evidenced by the return receipts.

(c) If a guarantee is canceled, the permittee shall, within 90 days following receipt of the cancellation notice by the permittee and the Department, obtain alternate financial assurance, place evidence of that alternate financial assurance in the facility operating record, and notify the Department. If the permittee fails to provide alternate financial assurance within the 90 day period, the guarantor shall provide that alternate assurance within 120 days following the guarantor's notice of cancellation, place evidence of the alternate assurance in the facility operating record, and notify the Department.

(2) Record Keeping and Reporting.

(a) The permittee shall place a certified copy of the guarantee along with the items required in Section E.4.f. (3) above, into the facility's operating record and submit a copy to the Department before the initial receipt of waste in the case of closure, and post-closure care, or no later than 120 days after the corrective action remedy has been selected in accordance with this regulation.

(b) The permittee is no longer required to maintain the records specified in Section E.4.g. (2) above for the guarantee when:

i. The permittee substitutes alternate financial assurance as specified in this section; or,

ii. The permittee is released from the requirements of this section pursuant to the requirements for proper closure, completion of the post-closure care period, or completion of the corrective action remedy.

(c) If a local government guarantor no longer meets the requirements of the Local Government Financial Test in Section E.4.f. above, the permittee shall, within 90 days, obtain alternative assurance, place evidence of the alternate assurance in the facility operating record, and notify the Department. If the permittee fails to obtain alternate financial assurance within that ninety (90) day period, the guarantor shall provide that alternate assurance within the next 30 days.

h. State Approved Mechanism. A permittee may satisfy the requirements of this section by obtaining any other mechanism that meets the criteria for the language of the mechanism as specified in Section E.4.k. below, and that is approved by the Department.

i. Certificates of Deposit.

(1) A permittee may demonstrate financial assurance, wholly or in part, by assigning all rights, title and interest of a Certificate of Deposit (Certificate) to the Department, conditioned so that the permittee shall comply with the closure, post-closure care, or corrective action plan filed for the site. The amount of the Certificate shall be in an amount at least equal to the current closure, post-closure care, or corrective action cost estimate, whichever is applicable, for the site for which the permit application has been filed or any part thereof not covered by other financial assurance mechanisms. The permittee shall maintain the Certificate until proper final closure, post-closure care, or corrective action is completed. The original assignment of the Certificate of deposit shall be submitted to the Department to prove that the Certificate has been obtained and meets the requirements of this section. The Certificate shall be in the sole name of the South Carolina Department of Health and Environmental Control and shall be issued by a financial institution that is insured by the Federal Deposit Insurance Corporation or Federal Savings and Loan Insurance Corporation. The Certificate may not have a maturity date of less than six (6) months. Those Certificates with a maturity date of less than one year shall provide for automatic renewal. In those instances where renewal is not automatic, the permittee shall renew or replace the instrument no less than 60 days before the maturity date.

(2) In addition to the certificate of deposit, the owners/operators shall establish a standby trust fund to receive payments using a trustee that has the authority to act as a trustee and that is regulated and examined by a Federal or State agency. The text of the standby trust fund shall be provided by the Department.

(3) The permittee shall be entitled to demand, receive, and recover the interest and income from the Certificate as it becomes due and payable as long as the market value of the Certificate plus any other mechanisms used continue to at least equal the amount of the estimated current closure, post-closure care, or corrective action cost.

(4) Whenever the approved closure or post-closure maintenance care cost estimates or corrective action cost estimate increases to an amount greater than the amount of the certificate of deposit, the permittee shall, within 60 days of the increase, cause the amount of the certificate of deposit to be increased to an amount at least equal to the new estimate or obtain other financial assurance pursuant to this regulation to cover the increase. Anytime the cost estimate decreases, the permittee may reduce the amount of the certificate of deposit to the new estimate following written approval by the Department. The permittee shall submit a certificate of deposit and assignment reflecting the new cost estimate within 60 days of the change in the cost estimate.

(5) The Department will return the original assignment and certificate of deposit, if applicable, to the issuing institution for termination when the permittee substitutes acceptable alternate financial assurance or if the permittee is no longer required to maintain financial assurance in accordance with this regulation.

j. Use of Multiple Financial Mechanisms. A permittee may demonstrate financial assurance for closure, post-closure, and corrective action, as required in this regulation by establishing more than one financial mechanism per facility except that mechanisms guaranteeing performance rather than payment, may not be combined with other instruments. The mechanisms shall be as specified in Sections E.4.a., b., c., d., e., f., g., h. and i., except that financial assurance for an amount at least equal to the current cost estimate for closure, post-closure care, and/or corrective action may be provided by a combination of mechanisms rather than a single mechanism.

k. The language of the mechanisms listed in Sections E.4. a., b., c., d., e., f., g., h. and i. of this section shall ensure that the instruments satisfy the following criteria:

(1) The financial assurance mechanisms shall ensure that the amount of funds assured is sufficient to cover the costs of closure, post-closure care, and corrective action for known releases when needed;

(2) The financial assurance mechanisms shall ensure that funds will be available in a timely fashion when needed;

(3) The financial assurance mechanisms shall be obtained by the permittee by the effective date of these requirements or prior to the initial receipt of solid waste, whichever is later, in the case of closure and post-closure care, and no later than 120 days after the corrective action remedy has been selected in accordance with the requirements of this regulation until the permittee is released from the financial assurance requirements pursuant to this regulation;

(4) The financial assurance mechanisms shall be legally valid, binding, and enforceable under State and Federal law.

5. Discounting. The Department may allow discounting of closure cost estimates, post-closure cost estimates, and/or corrective action costs up to the rate of return for essentially risk free investments, net of inflation, under the following conditions:

a. The Department determines that the cost estimates are complete and accurate and the permittee has submitted a statement from a S.C. Registered Professional Engineer so stating;

b. The Department finds the facility in compliance with applicable and appropriate permit conditions;

c. The Department determines that the closure date is certain and the permittee certifies that there are no foreseeable factors that will change the estimate of site life; and,

d. Discounted cost estimates shall be adjusted annually to reflect inflation and years of remaining life.

6. Incapacity of Permittee or Financial Institution.

a. A permittee shall notify the Department by certified mail within 10 days of the commencement of a voluntary or involuntary proceeding under Title 11 (Bankruptcy), U.S. Code, naming the permittee as debtor.

b. In the event of bankruptcy of the trustee or issuing institution, or a suspension or revocation of the authority of the trustee or institution, that issues a surety bond, letter of credit, certificate of deposit, or insurance policy pursuant to this regulation, the permittee shall be deemed in violation of the financial assurance requirements. The permittee shall establish with Department approval other financial assurance within 60 days of such event.

7. Default by Permittee.

a. The Department may take possession of a financial assurance fund if the permittee fails to:

(1) Complete closure or post-closure maintenance care in accordance with the Department approved facility plan;

(2) Complete corrective action; or,

(3) Renew or provide alternate acceptable financial assurance as required.

b. Prior to taking possession of a financial assurance funds, the Department shall:

(1) Issue a notice of violation or order alleging that the permittee has failed to perform closure or post-closure care in accordance with the closure or post-closure care plan or permit requirements; and,

(2) Provide the permittee seven days notice and an opportunity for a hearing.

Disclaimer: These regulations may not be the most recent version. South Carolina 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.