Current through Register Vol. 41, No. 3, September 23, 2024
An owner or operator may satisfy the requirements for
financial assurance by demonstrating that he passes a financial test as
specified in this section. To pass this test the owner or operator shall meet
the following criteria:
1. Financial
component.
a. The owner or operator shall
satisfy one of the following three conditions:
(1) Supply documentation demonstrating that
the owner or operator has 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;
(2) A ratio of
less than 1.5 comparing total liabilities to net worth; or
(3) 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 owner or
operator shall be greater than the sum of the current closure, post-closure
care, corrective action cost estimates and any other environmental obligations
covered by a financial test plus $10 million.
c. The owner or operator 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 in subdivision 3 of this
section.
2. Reporting
requirements.
a. To demonstrate that he meets
the financial component, the owner or operator shall submit the following items
to the director and place copies of the items in the facility's operating
record:
(1) An original letter signed by the
owner's or operator's chief financial officer and worded as specified in
9VAC20-70-290 F.
(2) A copy of the independent certified
public accountant's unqualified opinion of the owner's or operator's financial
statements for the latest completed fiscal year except as provided in
subdivision 2 a (2) (a) of this section:
(a)
To be eligible to use the financial test, the owner's or operator's financial
statements referenced in subdivision 2 of this section 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. The director may evaluate qualified opinions on a case
by case basis and allow use of the financial test in cases where the director
deems that the matters which form the basis for the qualification are
insufficient to warrant disallowance of the test. If the director does not
allow use of the test, the owner or operator shall provide alternate financial
assurance as specified in this article.
(b) (Reserved.)
(3) A copy of the owner's or operator's
audited financial statements for the latest completed fiscal year.
(4) If the chief financial officer's letter
providing evidence of financial assurance includes financial data that are
different from data in the audited financial statements referred to in
subdivision 2 a (2) of this section or any other audited financial statement or
data filed with the Securities Exchange Commission (SEC), a special report from
the owner's or operator's independent certified public accountant to the owner
or operator is required stating that:
(a) He
has compared 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; and
(b) In connection with that examination, no
matters came to his attention which caused him to believe that the data in the
chief financial officer's letter should be adjusted.
(5) A certification from the corporation's
chief financial officer stating the method for funding closure and post-closure
costs, and the amount currently designated for closure and post-closure costs
in the corporation's financial statements worded as specified in
9VAC20-70-290 H.
b. An owner or operator shall
submit the items specified in subdivision 2 of this section before the initial
receipt of waste or before January 7, 1998, whichever is later in the case of
closure; post-closure care, or no later than 120 days after the corrective
action remedy has been selected. If the owner or operator changes the financial
assurance mechanism to corporate financial test from any other mechanism, the
owner or operator shall submit the items specified in subdivision 2 of this
section at least 60 days before the date that the former assurance
expires.
c. After the initial
submission of items specified in subdivision 2 of this section, the owner or
operator shall update the information and submit updated information to the
director within 90 days following the close of the owner or operator's fiscal
year. This information must consist of all five items specified in subdivision
2 of this section.
d. The owner or
operator is no longer required to submit the items specified in subdivision 2
of this section when:
(1) He substitutes
alternate financial assurance as specified in this article; or
(2) He is released from the requirements of
this article by the director.
e. If the owner or operator no longer meets
the requirements of subdivision 1 of this section, the owner or operator shall,
within 120 days following the close of the owner or operator's fiscal year,
obtain alternative financial assurance that meets the requirements of this
article, notify the director that the owner or operator no longer meets the
criteria of the financial test and submit the alternate assurance
documentation.
f. The director may,
based on a reasonable belief that the owner or operator may no longer meet the
requirement of this article, require reports of financial condition at any time
from the owner or operator in addition to those specified in subdivision 2 of
this section. If the director finds, on the basis of such reports or other
information, that the owner or operator no longer meets the requirements of
subdivision 1 of this section, the owner or operator shall provide alternate
financial assurance as specified in this article within 30 days after
notification of such a finding.
g.
The director may disallow use of this test on the basis of qualifications in
the opinion expressed by the independent certified public accountant in his
report on examination of the owner's or operator's financial statements (see
subdivision 2 a (2) of this section). An adverse opinion or a disclaimer of
opinion will be cause for disallowance. The director will evaluate other
qualifications on an individual basis. The owner or operator shall provide
alternate financial assurance as specified in this article within 30 days after
notification of the disallowance.
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 referred to
in subdivision 1 of this section, the owner or operator must 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 underground injection control (UIC) facilities under
40 CFR
144.62, petroleum underground storage tank
facilities under
9VAC25-590-10 et seq., above ground
storage tank facilities under
9VAC25-640-10 et seq.),
polychlorinated biphenyls (PCB) storage facilities under 40 CFR Part 761, and
hazardous waste treatment, storage, and disposal facilities under 40 CFR Parts
264 and 265.
4. During the period
of post-closure care, the director may approve a decrease in the current
post-closure cost estimate for which this test demonstrates financial assurance
if the owner or operator demonstrates to the director that the amount of the
cost estimate exceeds the remaining cost of the post-closure care.
§§ 10.1-1402 and 10.1-1410 of the Code of
Virginia.
