Current through Register Vol. 41, No. 3, September 23, 2024
A. An owner or
operator and/or guarantor, may satisfy the requirements of
9VAC25-590-40
by passing a financial test as specified in this section. To pass the financial
test of self-insurance, the owner or operator and/or guarantor shall meet the
requirements of subsection B or C and subsection D of this section based on
year-end financial statements for the latest completed financial reporting
year.
B.
1. The owner or operator and/or guarantor
shall have a tangible net worth at least equal to the total of:
a. The applicable aggregate financial
responsibility amount required by
9VAC25-590-40
B for which a financial test is used to demonstrate financial responsibility,
except as provided in
9VAC25-590-210;
and
b. The aggregate aboveground
storage tank financial responsibility amount required under 9VAC25-640, for
which a financial test is used to demonstrate financial
responsibility.
2. In
addition to the requirements set forth in subdivision 1 of this subsection, the
owner or operator and/or guarantor shall also have a tangible net worth of at
least 10 times:
a. The sum of the corrective
action cost estimates, the current closure and postclosure care cost estimates,
and amount of liability coverage for which a financial test for self-insurance
is used in each state of business operations to demonstrate financial
responsibility to the EPA under
40 CFR
§§
264.101(b),
264.143,
264.145,
265.143,
265.145,
264.147,
and
265.147,
to another state implementing agency under a state program authorized by EPA
under 40 CFR Part 271 or the Virginia Waste Management Board under
40 CFR
264.143,
264.145
and
264.147
(as incorporated by reference in
9VAC20-60-264)
and
40 CFR
265.143,
265.145
and
265.147
(as incorporated by reference in
9VAC20-60-265)
of the Virginia Hazardous Waste Management Regulations; and
b. The sum of current plugging and
abandonment cost estimates for which a financial test for self-insurance is
used in each state of business operations to demonstrate financial
responsibility to EPA under
40 CFR
144.63 or to a state implementing agency
under a state program authorized by EPA under 40 CFR Part 145 (Underground
Injection Control Program).
3. The owner or operator, and/or guarantor
shall comply with either subdivision a or b of this subdivision:
a.
(1) The
financial reporting year-end financial statements of the owner or operator
and/or guarantor shall be examined by an independent certified public
accountant and be accompanied by the accountant's report of the examination;
and
(2) The financial reporting
year-end financial statements of the owner or operator and/or guarantor cannot
include an adverse auditor's opinion, a disclaimer of opinion, or a "going
concern" qualification.
b.
(1)
(a) File financial statements annually with
the U.S. Securities and Exchange Commission, the Energy Information
Administration, or the Rural Utilities Service; or
(b) Report annually the tangible net worth of
the owner or operator and/or guarantor to Dun and Bradstreet, and Dun and
Bradstreet shall have assigned a financial strength rating which at least
equals the amount of financial responsibility required by the owner or operator
under subdivisions 1 and 2 of this subsection. Relevant Dun and Bradstreet
ratings are as follows (current Dun and Bradstreet ratings will be used for
demonstration requirements which exceed the annual aggregate amounts listed
below):
|
Annual Aggregate Requirement
|
Dun and Bradstreet Rating
|
|
$20,000
|
EE ($20,000 to $34,999)
|
|
$40,000
|
DC ($50,000 to $74,999)
|
|
$80,000
|
CB ($125,000 to $199,999)
|
|
$150,000
|
BB ($200,000 to $299,999)
|
|
$200,000
|
BB ($200,000 to $299,999)
|
|
$300,000
|
BA ($300,000 to $499,999)
|
|
$500,000
|
1A ($500,000 to $749,999)
|
|
$750,000
|
2A ($750,000 to $999,999)
|
|
$1,000,000
|
3A ($1,000,000 to 9,999,999); and
|
(2) The financial reporting year-end
financial statements of the owner or operator and/or guarantor, if,
independently audited, cannot include an adverse auditor's opinion, a
disclaimer of opinion, or a "going concern" qualification.
4. The owner or operator and/or
guarantor shall have a letter signed by the chief financial officer worded
identically as specified in Appendix I/Alternative I or Appendix XI.
C.
1. The owner or operator and/or guarantor
shall have a tangible net worth at least equal to the total of:
a. The applicable aggregate amount required
by
9VAC25-590-40
B for which a financial test is used to demonstrate financial responsibility,
except as provided in
9VAC25-590-210;
and
b. The aggregate aboveground
storage tank financial responsibility amount required under 9VAC25-640 for
which a financial test is used to demonstrate financial
responsibility.
2. In
addition to the requirements set forth in subdivision 1 of this subsection, the
owner or operator and/or guarantor shall also have a tangible net worth of at
least six times:
a. The financial test
requirements for self insurance of the corrective action cost estimates, the
current closure and post-closure care cost estimates, and amount of liability
coverage in each state of business operations to the EPA under
40 CFR
264.101(b),
264.143,
264.145,
265.143,
265.145,
264.147,
and
265.147,
to another state implementing agency under a state program authorized by EPA
under 40 CFR Part 271 or the Virginia Waste Management Board under
40 CFR
264.143,
264.145
and
264.147
(as incorporated by reference in
9VAC20-60-264)
and
40 CFR
265.143,
265.145,
and
265.147
(as incorporated by reference in
9VAC20-60-265)
of the Virginia Hazardous Waste Management Regulations; and
b. The financial test requirements for
self-insurance of current plugging and abandonment cost estimates in each state
of business operations to EPA under
40 CFR
144.63 or to a state implementing agency
under a state program authorized by EPA under 40 CFR Part 145 (Underground
Injection Control Program).
3. The financial reporting year-end financial
statements of the owner or operator and/or guarantor shall be examined by an
independent certified public accountant and be accompanied by the accountant's
report of the examination.
4. The
financial reporting year-end financial statements of the owner or operator
and/or guarantor cannot include an adverse auditor's opinion, a disclaimer of
opinion, or a "going concern" qualification.
5. If the financial statements of the owner
or operator and/or guarantor are not submitted annually to the U.S. Securities
and Exchange Commission, the Energy Information Administration or the Rural
Utilities Service, the owner or operator and/or guarantor shall obtain a
special report by an independent certified public accountant stating that:
a. The accountant has compared the data that
the letter from the chief financial officer specified as having been derived
from the latest financial reporting year-end financial statements of the owner
or operator and/or guarantor with the amounts in such financial statements;
and
b. In connection with that
comparison, no matters came to the accountant's attention which caused him to
believe that the specified data should be adjusted.
6. The owner or operator and/or guarantor
shall have a letter signed by the chief financial officer, worded identically
as specified in Appendix I/Alternative II or Appendix XI.
D. To meet the financial demonstration test
under subsection B or C of this section, the chief financial officer of the
owner or operator and/or guarantor shall sign, within 120 days of the close of
each financial reporting year, as defined by the 12-month period for which
financial statements used to support the financial test are prepared, a letter
worded identically as specified in Appendix I with the appropriate alternative
or Appendix XI, except that the instructions in brackets are to be replaced by
the relevant information and the brackets deleted.
E. If an owner or operator using the
financial test to provide financial assurance finds that he no longer meets the
requirements of the financial test based on the financial reporting year-end
financial statements, the owner or operator shall obtain alternative coverage
within 150 days of the end of the year for which financial statements have been
prepared.
F. The department may
require reports of financial condition at any time from the owner or operator
and/or guarantor. If the department finds, on the basis of such reports or
other information, that the owner or operator and/or guarantor no longer meets
the financial test requirements of subsection B or C and subsection D of this
section, the owner or operator shall obtain alternate coverage within 30 days
after notification of such finding.
G. If the owner or operator fails to obtain
alternate assurance within 150 days of finding that he no longer meets the
requirements of the financial test based on the financial reporting year-end
financial statements, or within 30 days of notification by the department that
he or she no longer meets the requirements of the financial test, the owner or
operator shall notify the department of such failure within 10 days.
Statutory Authority: §§ 62.1-44.15 and
62.1-44.34:9 of the Code of Virginia;
42 USC §
6901 et seq.; 40 CFR Parts 280 and
281.
