Current through August 26, 2024
Financial assurances for closure, long-term care and remedial
actions where required, shall be established separately. The owner shall
specify, as part of the plan of operation submittal, which method of providing
proof of financial responsibility will be used for closure and for long-term
care. To provide proof of financial responsibility, the applicant shall use
only one of the following methods for each account:
(1) PERFORMANCE OR FORFEITURE BOND.
(a) If the owner chooses to submit a bond, it
shall be in the amount determined according to s.
NR 520.08(1) (b), (2) (b) or (3) (b), if
required, conditioned upon faithful performance by the owner and any successor
in interest, of all closure or long-term care requirements of the approved plan
of operation or subsequent remedial actions required by the department. Bonds
for closure or long-term care shall be delivered to the department as part of
the initial operating license application. All bonds shall be established using
forms supplied by the department.
(b) Bonds 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 the obligee of
the bond. Surety companies may have the opportunity to complete the closure or
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 closure or 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 closure or long-term care
requirements of the approved plan of operation have been carried out.
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. Copies are available for inspection at the offices of the
department of natural resources, the secretary of state, and the legislative
reference bureau.
(c) Each
bond shall provide that, as long as any obligation of the owner for closure or
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
such 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 operations shall immediately cease and the
bond shall remain in effect as long as any obligation of the owner remains for
closure or long-term care. The surety may discharge its obligation under the
bond at anytime by paying the unused portion of the bond to the
department.
(d) 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 closure or long-term
care.
(2) DEPOSIT WITH
THE DEPARTMENT. If the owner chooses to deposit cash, certificates of deposit
or U.S. government securities with the department, the amount of the deposit
shall be determined according to s.
NR 520.08(1) (a), (2) (a) or (3) (a), if
required, and deposits for closure or long-term care shall be submitted as part
of the initial license application. 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 closure or 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 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 notification, the department shall, prior to using the funds,
hold a hearing for the purpose of determining whether or not the closure or
long-term care requirements of the approved plan of operation have been carried
out.
(3) ESCROW ACCOUNT. If the
owner establishes an escrow account, the amount shall be determined according
to s.
NR 520.08(1) (a), (2) (a) or (3) (a), if
required, and the account shall be with a bank or financial institution located
within the state of Wisconsin which is examined and regulated by the state or a
federal agency. The assets in the escrow account shall consist of cash,
certificates of deposit, or U.S. government securities. A total of no more than
$100,000 in cash and certificates of deposit may be placed into escrow accounts
or trust accounts established by the owner in the same bank or financial
institution for the purposes of providing financial assurance to the
department. U.S. government securities shall be used in these escrow or trust
accounts for amounts in excess of $100,000. All interest or coupon payments
shall accumulate in the account. A duplicate original of the escrow agreement
for closure or long-term care, with original signatures shall be submitted to
the department as part of the initial operating license application. Escrow
account forms shall be supplied by the department. The department shall be a
party to the escrow agreement, which shall provide that there shall be no
withdrawals from the escrow account except as authorized in writing by the
department. The escrow agreement shall further provide that the department
shall have the right to withdraw and use part or all of the funds in the escrow
account to carry out the closure or 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 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 closure or long-term care
requirements of the approved plan of operation have been carried out.
(4) IRREVOCABLE TRUST. If the owner creates
an irrevocable trust, it shall be exclusively for the purpose of ensuring that
the owner or any successor in interest will comply with the closure or
long-term care requirements of the approved plan of operation. The trust
agreement shall designate the department as sole beneficiary. The trustee shall
be a bank or other financial institution located within the state of Wisconsin
which has the authority to act as a trustee and whose trust operations are
regulated and examined by the state or a federal agency. The trust corpus shall
consist of cash, certificates of deposit, or U.S. government securities in the
amount determined according to s.
NR 520.08(1) (a), (2) (a) or (3) (a), if
required. A total of no more than $100,000 in cash and certificates of deposit
may be placed into escrow accounts or trust accounts established by the owner
in the same bank or financial institution for the purposes of providing
financial assurance to the department. U.S. government securities shall be used
in these escrow or trust accounts for amounts in excess of $100,000. All
interest or coupon payments shall accumulate in the account. A duplicate
original of the trust agreement for closure or long-term care, with original
signatures shall be submitted to the department for approval as part of the
initial operating license application. Trust forms shall be supplied by the
department. The trust agreement shall provide that there shall be no withdrawal
from the trust fund except as authorized in writing by the department. The
trust agreement shall further provide that sufficient monies shall be paid from
the trust fund to the beneficiary in the event that the owner or any successor
in interest fails to complete the closure or long-term care requirements of the
approved plan of operation. The department shall mail notification of its
intent to use 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 closure or long-term care requirements of the approved plan
of operation have been carried out.
(5) LETTER OF CREDIT.
(a) If the owner chooses to submit a letter
of credit, it shall be in the amount determined according to s.
NR 520.08(1) (b), (2) (b) or (3) (b), if
required, and available exclusively for the purpose of assuring that all
closure or long-term care requirements of the approved plan of operation will
be complied with. The original letter of credit for closure or long-term care
shall be delivered to the department as part of the initial operating license
application. Letter of credit forms shall be supplied by the
department.
(b) Letters of credit
shall be issued by a bank or financial institution which has the authority to
issue letters of credit and whose letter of credit operations are examined and
regulated by a federal agency, or in the case of a bank or financial
institution located within the state of Wisconsin, which is examined and
regulated by the state or a federal agency. The department shall be the
beneficiary of the letter of credit.
(c) The letter of credit shall provide either
that the unused portion of the letter of credit shall be payable in full to the
department upon the expiration of the letter of credit or that as long as any
obligation of the owner for closure or long-term care remains, the letter of
credit may not be canceled by the bank or financial institution, unless a
replacement letter of credit or other proof of financial responsibility under
this section is provided to the department by the owner. If the bank or
financial institution proposes to cancel a letter of credit, the bank or
financial institution shall provide notice to the department and 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 date
of the 90-day notice period, the owner shall deliver to the department a
replacement letter of credit or other proof of financial responsibility under
this section, in the absence of which all disposal operations shall immediately
cease and either the letter of credit shall remain in effect as long as any
obligation of the owner remains for closure or long-term care or the unused
portion of the letter of credit shall be payable in full to the
department.
(d) If the bank or
financial institution 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 letter of
credit or other proof of financial responsibility under this section, in the
absence of which all disposal operations shall immediately cease and the letter
of credit shall either remain in effect as long as any obligation of the owner
remains for closure or long-term care or be payable in full to the
department.
(e) The letter of
credit shall further provide that the department has the right to withdraw and
use part or all of the funds to carry out the closure or long-term care
requirements of the 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 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 closure
or long-term care requirements of the approved plan of operation have been
carried out.
(6) NET
WORTH TEST.
(a) Only a company that meets the
definition in s.
289.41(1) (b), Stats., may use the net worth method of
providing proof of financial responsibility.
(b) The company shall comply with the net
worth test requirements of s.
289.41(4) and (6) or (7), Stats., and the minimum security
requirements of s.
289.41(9),
Stats., whichever is applicable.
(c) A company using the net worth test to
provide proof of financial responsibility for more than one facility shall use
the total cost of compliance for all facilities in determining the net worth to
closure and long-term care cost ratio.
(d) The department determinations under the
net worth test shall be done in accordance with s.
289.41(5),
Stats.
(7) INSURANCE.
(a) If the owner chooses to submit an
insurance policy for closure or long-term care, it shall be issued for the
maximum risk limit determined according to s.
NR 520.08(1) (b), (2) (b) or (3) (b), if
required. A certificate of insurance for closure or long-term care shall be
delivered to the department as part of the initial operating license
application. Certificate of insurance forms shall be supplied by the
department.
(b) Except for captive
insurance companies, 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 department, after conferring with the
Wisconsin insurance commissioner, shall determine the acceptability of a
surplus lines or captive insurance company to provide coverage for proof of
financial responsibility. The department shall ask the insurance commissioner
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 or captive insurance
company.
(c) The insurance policy
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 closure or 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 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 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 closure or long-term care or the proceeds of the policy
shall be payable in full to the department.
(d) If the insurance company 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, 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 closure or long-term care or be payable in full to the
department.
(e) The insurance
policy shall further 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
closure and 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 funds, hold a hearing for the purpose of
determining whether or not the closure or long-term care requirements of the
approved plan of operation have been carried out.
(f) Each insurance policy shall contain a
provision allowing assignment of the policy to a successor owner or operator.
Assignment may be conditioned upon the consent of the insurer, provided consent
is not unreasonably refused.
Note: These forms may be obtained from the Department of
Natural Resources, Bureau of Waste Management, P.O. Box 7921, Madison, WI 53707
or any DNR region office.
(8) OTHER METHODS. The department shall
consider other financial commitments made payable to or established for the
benefit of the department to ensure the owner or operator will comply with the
closure and long-term care requirements of the approved plan of operation. The
department shall review the request of any owner or operator to establish proof
of financial responsibility to determine whether the proposed method provides a
degree of assurance that is comparable to that provided by the methods listed
in this section. The owner shall submit the request and all supporting
information as part of the plan of operation.
