(1) METHODS OF
PROVIDING PROOF OF FINANCIAL RESPONSIBILITY. The owner shall specify, as part
of the plan of operation submittal, which method of providing proof of
financial responsibility will be used for long-term care in compliance with ss.
289.41 and
293.51(1g),
Stats. To provide proof of financial responsibility, the owner may use any of
the following methods to provide proof of financial responsibility under this
section:
(a)
Performance or forfeiture
bond.
1. If the owner chooses to
submit a bond, it shall be in the amount determined according to sub. (3) (b),
conditioned upon faithful performance by the owner and any successor in
interest, of all long-term care requirements of the approved plan of operation.
The bond for long term care shall be delivered to the department as part of the
initial operating license application submitted under s. NR 182.111. Bond forms
shall be supplied by the department.
2. All bonds submitted under this paragraph
shall be issued by a surety company among those listed as acceptable sureties
for federal bonds in Circular 570 of the U.S. department of the treasury. At
the option of the owner a performance bond or a forfeiture bond may be filed.
The department shall be designated as the obligee of the bond. Surety companies
may have the opportunity to complete the long-term care of the facility in lieu
of cash payment to the department if the owner or any successor in interest
fails to carry out the long-term care requirements of the approved plan of
operation. The department shall mail notification of its intent to use the
funds for that purpose to the last known address of the owner. If the owner
submits a written request for a hearing to the secretary of the department
within 20 days after the mailing of the notification, the department shall,
prior to using the funds, hold a hearing for the purpose of determining
whether, or not, the owner has fulfilled the long-term care requirements of the
approved plan of operation.
Note: Copies of Circular 570, "Companies Holding
Certificates of Authority as Acceptable Sureties on Federal Bonds and as
Acceptable Reinsuring Companies" can be obtained from surety bond branch,
financial management service, department of the treasury, Washington D.C.
20227, phone (202) 874-6850.
3. Each bond shall provide that, as long as
any obligation of the owner for long-term care remains, the bond may not be
canceled by the surety unless a replacement bond or other proof of financial
responsibility under this section is provided to the department by the owner.
If the surety proposes to cancel a bond, the surety shall provide notice to the
department and to the owner in writing by registered or certified mail not less
than 90 days prior to the proposed cancellation date. Not less than 30 days
prior to the expiration of the 90-day notice period, the owner shall deliver to
the department a replacement bond or other proof of financial responsibility
under this section, in the absence of which all disposal operation shall
immediately cease and the bond shall remain in effect as long as any obligation
of the owner remains for long-term care. The surety may discharge its
obligation under the bond at any time by paying the unused portion of the bond
to the department.
4. If the surety
company becomes bankrupt or insolvent or if its authorization to do business is
revoked or suspended, the owner shall, within 30 days after receiving written
notice, deliver to the department a replacement bond or other proof of
financial responsibility under this section, in the absence of which all
disposal operations shall immediately cease, and the bond shall remain in
effect as long as any obligation of the owner remains for long-term
care.
(b)
Deposit
with the department. An owner may deposit cash, certificates of
deposit, or U.S. government securities with the department. The amount of the
deposit shall be determined according to sub. (3) and shall be submitted to the
department as part of the initial license application under s. NR 182.111. Cash
deposits placed with the department shall be segregated and invested in an
interest-bearing account. All interest payments shall be accumulated in the
account. The department shall have the right to use part, or all of, the funds
to carry out the long-term care requirements of the approved plan of operation
if the owner fails to do so. The department shall mail notification of its
intent to use the funds to carry out the long-term care requirements of the
approved plan of operation to the last known address of the owner. If the owner
submits a written request for a hearing to the secretary of the department
within 20 days after the mailing of the notification, the department shall,
prior to using the funds, hold a hearing for the purpose of determining
whether, or not, the owner has fulfilled the long-term care requirements of the
approved plan of operation.
(c)
Insurance.
1. If the owner
chooses to submit an insurance policy for long-term care, a policy shall be
issued for the maximum risk limit determined according to sub. (3) (b). A
certificate of insurance for long-term care shall be delivered to the
department as part of the initial operating license application under s. NR 182.111. Certificate of insurance forms shall be supplied by the
department.
2. Except for captive
insurance companies, the insurer that issues the policy under this paragraph
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
department, after conferring with the office of the commissioner of insurance,
shall determine the acceptability of a surplus lines insurer or captive
insurance company to provide coverage for proof of financial responsibility.
The department shall ask the office of the commissioner of insurance to provide
a financial analysis of the insurer including a recommendation as to the
insurer's ability to provide the required coverage. The department shall be the
beneficiary of the insurance policy. The department may require a periodic
review of the acceptability of a surplus lines insurer or captive insurance
company.
3. The insurance policy
under this paragraph shall provide either that the unused proceeds of the
policy shall be payable in full to the department upon expiration of the policy
or that, as long as any obligation of the owner for long-term care remains the
insurance policy may not be canceled by the insurer unless a replacement
insurance policy or other proof of financial responsibility under this section
is provided to the department by the owner. If the insurer proposes to cancel
an insurance policy, the insurer shall provide notice to the department in
writing by registered or certified mail not less than 90 days prior to the
proposed cancellation date. Not less than 30 days prior to the expiration of
the 90-day notice period, the owner shall deliver to the department a
replacement insurance policy or other proof of financial responsibility under
this section, in the absence of which all disposal operations shall immediately
cease, and either the policy shall remain in effect as long as any obligation
of the owner remains for long-term care or the proceeds of the policy shall be
payable in full to the department.
4. If the insurance company who issues the
policy under this paragraph becomes bankrupt or insolvent or if the company
receives an unfavorable evaluation under s.
618.41(6) (d), Stats., the owner shall, within 30 days
after receiving written notice of the bankruptcy, insolvency, or unfavorable
evaluation, deliver to the department a replacement insurance policy or other
proof of financial responsibility under this section, in the absence of which
all disposal operations shall immediately cease, and the policy shall either
remain in effect as long as any obligation of the owner remains for long-term
care or be payable in full to the department.
5. The insurance policy under this paragraph
shall provide that funds, up to an amount equal to the maximum risk limit of
the policy, will be available to the department to carry out the long-term care
requirements of the approved plan of operation if the owner fails to do so. The
department shall mail notification of its intent to use the funds for that
purpose to the last known address of the owner. If the insurer or owner submits
a written request for a hearing to the secretary of the department within 20
days after the mailing of the notification, the department shall, prior to
using the funds, hold a hearing for the purpose of determining whether, or not,
the owner fulfilled the long-term care requirements of the approved plan of
operation.
6. Each insurance policy
under this paragraph shall contain a provision allowing assignment of the
policy to a successor owner or operator. Such assignment may be conditioned
upon the consent of the insurer, provided that the insurer's consent is not
unreasonably refused.
(2) COST ESTIMATES.
(a) For the purpose of calculating under sub.
(3) the amount of proof of financial responsibility that is required under sub.
(1), the owner shall estimate the annual cost of long-term care of the facility
in current dollars for each year of the long-term care proof of owner
responsibility period for the facility and submit the estimated long-term care
costs, together with all necessary justification, to the department for
approval as part of the plan of operation submitted under s. NR 182.109. The
costs shall be based on the assumption that a third party performs the work and
shall be reported on a per unit basis. The source of estimates shall be
indicated.
(b) The owner shall
prepare and submit to the department a new cost estimate for long-term care
during the active life of the facility as follows:
1. Once every 10 years following issuance of
the initial operating license for the waste facility, using current dollars,
unless the costs are revised under subd. 2. within the 10-year
period.
2. Within 60 days of the
written approval by the department of a change in site design or operation for
the facility.
(c)
1. At a minimum, long-term care cost
estimates under this subsection shall include all of the following when
applicable:
a. Land surface care.
b. Unsaturated zone monitoring.
c. Leachate pumping, transportation,
monitoring, and treatment.
d.
Groundwater monitoring, including sample collection and analysis.
e. Leachate collection line cleaning, on an
annual basis.
f. Annual cost of
electricity for maintaining the closed site.
g. A 10 percent contingency.
2. For the purposes of preparing
the long-term care cost estimates under this subsection, all monitoring
requirements specified in the plan of operation shall be assumed to apply over
the entire long-term care period. Leachate quantity and strength shall be
assumed to remain constant over time and the calculation of leachate generation
volumes shall be performed assuming that the waste is at field capacity unless
an alternative method is approved by the department in writing. Only detailed
performance data shall be considered when evaluating estimates for leachate
strengths and leachate generation volumes. Leachate treatment costs shall be
based on those available from a municipal wastewater treatment plant capable of
accepting the leachate in accordance with the applicable requirements of a
permit issued under ch. 283, Stats., authorizing discharge from the municipal
wastewater facility. The expected operating life of all pumps, manholes,
blowers, extraction wells, and other engineering design features shall be
specified in the plan of operation, and as each design feature reaches the end
of its anticipated operating life, the cost of its replacement shall be added
to the cost estimate for the appropriate year of the long-term care
period.
(d) The rates of
inflation applied to cost estimates under this subsection approved by the
department in previous years shall be the annual gross domestic product
implicit price deflator published in the survey of current business by the
bureau of economic analysis, U.S. department of commerce for the appropriate
years. The projected rate of inflation to be applied in proof of financial
responsibility calculations for all future years shall be equal to the annual
gross domestic product implicit price deflator for the last full calendar
year.
(3) CALCULATING THE
AMOUNT OF THE PROOF OF FINANCIAL RESPONSIBILITY. The owner shall, as part of
the plan of operation submitted under s. NR 182.109, calculate the amounts of
the proof of financial responsibility required under sub. (1) for long-term
care based on the chosen methods for providing proof of financial
responsibility, subject to all of the following:
(a) Proof of financial responsibility for
long-term care deposited as cash, certificates of deposit, or U.S. government
securities under sub. (1) (b) shall be provided in accordance with all of the
following:
1. Annual payments shall be made
into the account at the beginning of each year of site life. All estimated
annual expenditures during the long-term care proof of financial responsibility
period shall be assumed to occur at the end of each year of the proof
period.
2. Annual payments shall be
made in equal dollar amounts or in dollar amounts that increase each year by no
more than the projected rate of inflation. However, payments in excess of these
minimum amounts may be made in any year, thereby reducing the amounts of
subsequent annual payments for the remainder of the site life.
3. The amount of the annual payments shall be
calculated and made such that, at the end of the projected facility life, the
minimum dollar value of the account is equal to the sum of all estimated
long-term care expenditures for the entire long-term care proof of financial
responsibility period when the expenditure for each year has first been
expressed in future dollars and then brought to present value using a discount
rate equal to the projected rate of inflation plus 2 percent.
4. In estimating future earnings on cash,
certificates, and securities deposited as proof of financial responsibility for
long-term care, the weighted average rate of return of the investments held in
the account may be used for a period of time not to exceed the weighted average
maturity of the investments held in the account rounded to the nearest whole
year. Earnings for years beyond the weighted average maturity of the
investments in the account shall be calculated based on a projected rate of
return equal to the projected rate of inflation plus 2 percent.
5. If an annual payment is missed or made
late, the subsequent annual payment shall be increased so that the end of year
balances originally calculated based on beginning of year payments are
maintained.
(b) Proof of
financial responsibility for long-term care provided in the form of a
performance or forfeiture bond under sub. (1) (a) or insurance under sub. (1)
(c) shall be equal to the sum of the costs in current dollars of performing
each of the years of long-term care for the required long-term care proof of
financial responsibility period.
(4) CHANGING METHODS OF PROOF OF FINANCIAL
RESPONSIBILITY. The owner of an approved mining waste facility may change from
one method of providing proof of financial responsibility under sub. (1) to
another, but not more than once per year. A change may only be made on the
anniversary of the submittal of the original method of providing proof of
financial responsibility. The amount of the new method of providing proof of
financial responsibility shall be in the amount that is equal to the amount
that would have accumulated had the new method been used as the original
method.
(5) ADJUSTMENT OF FINANCIAL
RESPONSIBILITY. The owner of a facility for the land disposal of mining waste
shall prepare a new long-term care cost estimate whenever a substantial change
in the long-term care requirements in the approved plan of operation affects
the cost of long-term care. Proof of the increase in the amount of all bonds or
other approved methods established under this section shall be submitted
annually to the department. The department may adjust the amount of the
required proof of financial responsibility for long-term care based upon
prevailing or projected interest and inflation rates and the latest cost
estimates and may annually require the owner to adjust the amount of proof of
financial responsibility accordingly.
(6) ACCESS AND DEFAULT. Whenever on the basis
of any reliable information, and after opportunity for a hearing, the
department determines that an owner or operator of an approved mining waste
facility is in violation of any of the requirements for long-term care
specified in the approved plan of operation, the department and its designees
shall have the right to enter upon the facility and carry out the long-term
care requirements. The department may use part, or all of the money deposited
as cash, certificates of deposit or government securities, performance or
forfeiture bonds, or insurance under sub. (1) to carry out the long-term care
requirements.
(7) AUTHORIZATION TO
RELEASE FUNDS. One year after closure, and annually thereafter for the period
of owner responsibility under s.
289.41(1m) (g), Stats., the owner, who has carried out
all necessary long-term care during the preceding year, may make application to
the department for reimbursement from deposits with the department, or for
reduction of the bond or insurance equal to the estimated costs for long-term
care for that year. The application shall be accompanied by an itemized list of
costs incurred. Upon determination that the expenditures incurred are in
accordance with the long-term care requirements anticipated in the approved
plan of operation, the department may authorize in writing the release of funds
or approve a reduction in the bond or insurance. Prior to authorizing a release
of the funds or a reduction of the bond or insurance, the department shall
determine that adequate funds exist to complete required long-term care work
for the remaining period of owner responsibility. For facilities using deposits
with the department, the department may authorize the release and return of up
to 75 percent of the expected cost of long-term care for the current year.
Determinations shall be made within 90 days of the application. Any funds
remaining in deposits with the department at the termination of the period of
owner responsibility shall be released to the owner.
(8) TERMINATION OF REQUIREMENT TO POST PROOF
OF FINANCIAL RESPONSIBILITY. The owner of an approved mining facility may
apply, at any time at least 40 years after the closing of the facility, to the
department for termination of the owner's obligation to maintain proof of
financial responsibility for long-term care of the facility. The department
shall process the application in accordance with the notice, hearing, and all
other requirements under s.
289.41(1m) (g), Stats.
(9) SUCCESSORS IN INTEREST. Any person
acquiring rights of ownership, possession, or operation of a licensed facility
shall be subject to all requirements of the license for the facility and shall
provide any required proof of financial responsibility to the department in
accordance with this section. The previous owner is responsible for long-term
care, and shall maintain any required proof of financial responsibility, until
the person acquiring ownership, possession, or operation of the facility
establishes any required proof of financial responsibility.
