Current through Register Vol. 24-06, March 15, 2024
(1) Applicability.
(a) For the purposes of this regulation
private landfill disposal facilities are privately owned facilities that do not
accept waste from the general public and dispose of only their own generated
waste.
(b) These standards apply to
all new and expanded landfill disposal facilities, and to existing landfill
disposal facilities that have not been closed on or before November 27, 1989.
Landfill disposal facilities include:
(i)
Facilities operated as surface impoundments under WAC
173-304-430 that are closed with
waste remaining in place and therefore required to meet the requirements of WAC
173-304-407; and
(ii) Woodwaste landfills operated under WAC
173-304-462.
(2) Cost estimates for closure and
post-closure.
(a) Each owner or operator shall
prepare separate written closure and post-closure cost estimates as part of the
facility closure and post-closure plans. The cost estimates shall be in current
dollars and represent the cost of closing or post-closure care of the facility
for a period of twenty years in accordance with the closure requirements in WAC
173-304-407.
(i) The cost estimate shall be based on a
reasonable cost estimate for completing design, purchase, construction, and
other activities as identified in the facility closure or post-closure plan as
required under WAC
173-304-407;
(ii) The closure and post-closure plans shall
project intervals for withdrawal of funds from the closure or post-closure
financial assurance instrument to complete the activities identified in the
approved closure or post-closure plan;
(iii) The closure and post-closure cost
estimate shall not be reduced by allowance for salvage value of equipment,
waste, or the resale value of property or land.
(b) Each owner or operator shall prepare a
new closure or post-closure cost estimate in accordance with (a) and (c) of
this subsection whenever:
(i) Changes in
operating plans or facility design affect the closure or post-closure
plans;
(ii) There is a change in
the expected year of closure that affects the closure plan; or
(iii) The jurisdictional health department
directs the owner or operator to revise the closure or post-closure plan or
closure or post-closure cost estimate.
(c) Each owner or operator shall review the
closure and post-closure cost estimate thirty days prior to the anniversary
date of the date on which the first closure and post-closure cost estimate was
prepared. The review shall examine all factors, including inflation, involved
in estimating the closure and post-closure cost. Any cost changes shall be
factored into a revised closure or post-closure cost estimate and submit the
revised cost estimate to the jurisdictional health department and the
department of ecology.
(d) During
the operating life of the facility, the owner or operator must keep the latest
closure and post-closure cost estimate prepared in accordance with (a) and (b)
of this subsection, and when this estimate has been adjusted in accordance with
(c) of this subsection, available for review.
(e) The department of ecology will evaluate
each cost estimate for completeness, and may accept, or require a revision of
the cost estimate in accordance with its evaluation.
(3) Financial assurance mechanism for closure
and post-closure. Each owner or operator of an applicable landfill disposal
facility shall establish financial assurance mechanisms in an amount equal to
the closure cost estimate and post-closure cost estimate prepared in accordance
with subsection (2) of this section.
(a)
Applicable landfill disposal facilities shall provide one or more of the
following financial assurance instruments:
(i)
Closure and post-closure trust funds established with an entity which has
authority to act as a trustee and whose trust operations are regulated and
examined by a federal or state agency. The wording of the trust agreement must
be acceptable to the department of ecology. The purpose of the closure and
post-closure trust funds is to receive and manage any funds paid by the owner
or operator and to disburse those funds only for closure or post-closure
activities as identified in the approved closure and post-closure
plan;
(ii) Surety bond guaranteeing
payment into a closure and post-closure trust fund issued by a surety company
listed as acceptable in Circular 570 of the United States Treasury Department
or as hereafter amended. The wording of the surety bond(s) must be acceptable
to the department. A standby closure and post-closure trust fund must also be
established by the permittee. The purpose of the standby closure or
post-closure trust fund is to receive any funds that may be paid by the
operator or surety company. The bond must guarantee that the permittee will
either fund the standby closure or post-closure trust in an amount equal to the
penal sum of the bond before the site stops receiving waste. The surety shall
become liable on the bond obligation if the permittee fails to perform as
guaranteed by the bond. The surety may not cancel the bond until at least one
hundred twenty days after the notice of cancellation has been received by both
the permittee and the local health department. If the permittee has not
provided alternate financial assurance acceptable under this section within
ninety days of the cancellation notice, the surety must pay the amount of the
bond into the standby closure or post-closure trust account;
(iii) Surety bond guaranteeing performance of
closure or post-closure issued by a surety company listed as acceptable in
Circular 570 of the United States Treasury Department or as hereafter amended.
The wording of the surety bond must be acceptable to the department of ecology.
A standby closure and post-closure trust fund must also be established by the
permittee. The purpose of the standby closure or post-closure trust fund is to
receive any funds that may be paid by the surety company. The bond must
guarantee that the permittee will perform final closure or post-closure
activities. The surety shall become liable on the bond obligation if the
permittee fails to perform as guaranteed by the bond. The surety may not cancel
the bond until at least one hundred twenty days after the notice of
cancellation has been received by the permittee and the local health
department. If the permittee has not provided alternative financial assurance
acceptable under this section within ninety days of the cancellation notice,
the surety must pay the amount of the bond into the standby closure or
post-closure trust account;
(iv)
Closure or post-closure irrevocable letter of credit issued by 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 wording
of the letter of credit must be acceptable to the department. Standby closure
and post-closure trust funds must also be established by the permittee. The
purpose of the standby trust funds is to receive any funds deposited by the
issuing institution resulting from a draw on the letter of credit. The letter
of credit must be irrevocable and issued for a period of at least one year
unless the issuing institution notifies both the permittee and the local health
department at least one hundred twenty days before the current expiration date.
If the permittee fails to perform closure and post-closure activities according
to the closure or post-closure plan and permit requirements, or if the
permittee fails to provide alternate financial assurance acceptable to the
department within ninety days after notification that the letter of credit will
not be extended, the local health department may draw from the letter of
credit;
(v) Closure and
post-closure insurance policies issued by an insurer who is licensed to
transact the business of insurance or is eligible as an excess or surplus lines
insurer in one or more states. The working of the certificate of insurance must
be acceptable to the department. Each insurance policy must guarantee that the
funds will be available to complete those activities identified in the approved
closure and post-closure plans. The policy must also guarantee that the insurer
will be responsible for paying out funds for activities identified in either
the closure or post-closure plan. The policy must provide that the insurance is
automatically renewable and that the insurer may not cancel, terminate, or fail
to renew the policy except for failure to pay the premium. If there is a
failure to pay the premium, the insurer may not terminate the policy until at
least one hundred twenty days after the notice of cancellation has been
received by both the permittee and the local health department. Termination of
the policy may not occur and the policy must remain in full force and effect
if: The local health department determines the facility has been abandoned; or
closure has been ordered by the local health department or a court of competent
jurisdiction, or the permittee has been named as debtor in a voluntary or
involuntary proceeding under
Title
11 U.S.C. (Bankruptcy); or the
premium due is paid. The permittee is required to maintain the policy in full
force and until an alternative financial assurance guarantee is provided or
when the permit is terminated.
(vi)
Financial test and corporate guarantee for closure and post-closure. A private
corporation meeting the financial test may provide a corporate guarantee that
closure and post-closure activities will be completed according to the approved
closure and post-closure plans and permit requirements. To qualify, a private
corporation must meet the criteria of either (a)(vi)(A) or (B) of this
subsection:
(A) Financial test. To pass the
financial test the permit must have:
(I) Two
of the following three 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 to total liabilities greater than 0.1; or 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 post-closure
cost estimates;
(III) Tangible net
worth of at least ten million dollars; and
(IV) Assets in the United States amounting to
at least ninety percent of its total assets or at least six times the sum of
the current closure and post-closure cost estimates.
(B) Alternative financial test. To pass the
alternative financial test, the permittee must have:
(I) A current rating of AAA, AA, A, or BBB as
issued by Standard and Poor's or Aaa, Aa, A, or Bbb as issued
by Moody's;
(II)
Tangible net worth at least six times the sum of the current closure and
post-closure cost estimates;
(III)
Tangible net worth of at least ten million dollars; and
(IV) Assets in the United States amounting to
at least ninety percent of its total assets or at least six times the sum of
the current closure and post-closure cost estimates.
(C) The permittee shall demonstrate that it
passes the financial test at the time the closure plan is filed and reconfirm
that annually ninety days after the end of the corporation's fiscal year by
submitting the following items to the department of ecology:
(I) A letter signed by the permittee's chief
financial officer that provides the information necessary to document that the
permittee passes the financial test; that guarantees that the funds to finance
closure and post-closure activities according to the closure or post-closure
plan and permit requirements are available; that guarantees that the closure
and post-closure will be completed according to the closure or post-closure
plan and permit requirements; that guarantees that within thirty days after
written notification from the jurisdictional health department that the
permittee no longer meets the criteria of the financial test the permittee
shall provide an alternative form of financial assurance consistent with the
requirements of this section; that guarantees that the permittee's chief
financial officer will notify the jurisdictional health department within
fifteen days any time that the permittee no longer meets the criteria of the
financial test or is named as debtor in a voluntary or involuntary proceeding
under Title 11 U.S.C.
(Bankruptcy); and that acknowledges that the corporate guarantee is a binding
obligation on the corporation and that the chief financial officer has the
authority to bind the corporation to the guarantee;
(II) A copy of the independent certified
public accountant's report on examination of the permittee's financial
statements for the latest completed fiscal year;
(III) A special report from the permittee's
independent certified public accountant (CPA) stating that the CPA has compared
the data which the letter from the permittee's chief financial officer
specifies as having been derived from the independently audited year end
financial statements for the latest fiscal year with the amounts in such
financial statement and that no matters came to the CPA's attention which
caused the CPA to believe that the specified data should be adjusted;
(IV) The jurisdictional health department
may, based on a reasonable belief that the permittee no longer meets the
criteria of the financial test, require reports of the financial condition at
any time from the permittee in addition to the annual report. If the
jurisdictional health department finds, on the basis of such reports or other
information that the permittee no longer meets the criteria of the financial
test, the permittee shall provide an alternative form of financial assurance
consistent with the requirements of this section, within thirty days after
notification by the jurisdictional health department.
(b) For applicable
disposal facilities of this section, any income in excess of the cost
estimate(s) accruing to the established closure or post-closure financial
assurance account will be at the owner's discretion as to the use of said
surplus funds.
(c) A permittee may
meet the requirements of this section by obtaining a written guarantee from the
parent corporation of the permittee. The guarantor must meet one of the
financial tests described in (a)(vi)(A) or (B) of this subsection, and must
provide the documentation required by (a)(vi)(C) of this subsection. The terms
of the guarantee must provide that:
(i) If
the permittee fails to perform final closure and, where required, provide
post-closure care of a facility covered by the guarantee in accordance with the
approved closure and post-closure plans, the guarantor will do so or establish
a trust fund as specified in (a)(i) of this subsection in the name of the
permittee.
(ii) The guarantee will
remain in force unless the guarantor sends notice of cancellation by certified
mail to the permittee, to the jurisdictional health department and to the
department of ecology. Cancellation may not occur, however, during the one
hundred twenty days beginning on the date of receipt of the notice of
cancellation by both the permittee and the department of ecology, as evidenced
by the return receipts.
(iii) If
the permittee fails to provide alternate financial assurance as specified in
this section and obtain the written approval of such alternate assurance from
the jurisdictional health department or the department of ecology within ninety
days after receipt by both the permittee, the jurisdictional health department,
and the department of ecology of a notice of cancellation of the guarantee from
the guarantor, the guarantor will provide such alternative financial assurance
in the name of the permittee.
(4) Closure/post-closure trust fund account
establishment and reporting.
(a) Each owner
or operator shall file with the local health department an annual audit of the
financial assurance accounts established for closure and post-closure
activities.
(b) Annual audits shall
be conducted by a certified public accountant licensed in the state of
Washington, and shall be filed with the department of ecology no later than
March 31 of each year for the previous calendar year, including each of the
post-closure care years.
(c) The
audit shall also include calculations demonstrating the proportion of closure
completed during the preceding year as specified in the closure and
post-closure plans.
(5)
Authorization for financial assurance account fund withdrawal for closure and
post-closure activities.
(a) Each owner or
operator shall withdraw funds from the closure and/or post-closure financial
assurance instrument as specified in the approved closure/post-closure
plans;
(b) If the withdrawal of
funds from the financial assurance instrument exceeds by more than five percent
the withdrawal schedule stated in the approved closure and/or post-closure plan
the closure and/or post-closure plan shall be amended.
Statutory Authority:
RCW
70.95.215. 88-20-066 (Order 88-28), §
173-304-468, filed 10/4/88.