Current through August 26, 2024
(1) COVERAGE FOR
SUDDEN ACCIDENTAL OCCURRENCES. An owner or operator of a hazardous waste
treatment, storage or disposal facility, or a group of facilities, shall
demonstrate financial responsibility for bodily injury and property damage to
third parties caused by sudden accidental occurrences arising from operations
of the facility or group of facilities. The owner or operator shall have and
maintain liability coverage for sudden accidental occurrences in the amount of
at least $1 million per occurrence with an annual aggregate of at least $2
million, exclusive of legal defense costs. This liability coverage may be
demonstrated as specified in par. (a), (b), (c), (d), (e) or (f):
(a) An owner or operator may demonstrate the
required liability coverage by having liability insurance as specified in this
subsection.
1. Each insurance policy shall be
amended by attachment of the hazardous waste facility liability endorsement, or
evidenced by a certificate of liability insurance. The wording of the
endorsement shall be identical to the wording specified in s.
NR 664.0151(9). The wording of the
certificate of insurance shall be identical to the wording specified in s.
NR 664.0151(10). The owner or operator
shall submit a signed duplicate original of the endorsement or the certificate
of insurance to the department. If the facilities are located in more than one
state, identical evidence of financial assurance shall be submitted to and
maintained with the state agency regulating hazardous waste or with the
appropriate EPA regional administrator if the facilities are located in
unauthorized states. If requested by a regional administrator or the
department, the owner or operator shall provide a signed duplicate original of
the insurance policy.
2. Each
insurance policy shall be issued by an insurer which, at a minimum, is licensed
to transact the business of insurance, or eligible to provide insurance as an
excess or surplus lines insurer, in one or more States.
3. 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 may
require a periodic review of the acceptability of a surplus lines or captive
insurance company.
(b)
An owner or operator may meet the requirements of this section by passing a
financial test or using the guarantee for liability coverage as specified in
subs. (6) and (7).
(c) An owner or
operator may meet the requirements of this section by obtaining a letter of
credit for liability coverage as specified in sub. (8).
(d) An owner or operator may meet the
requirements of this section by obtaining a surety bond for liability coverage
as specified in sub. (9).
(e) An
owner or operator may meet the requirements of this section by obtaining a
trust fund for liability coverage as specified in sub. (10).
(f) An owner or operator may demonstrate the
required liability coverage through the use of combinations of insurance,
financial test, guarantee, letter of credit, surety bond and trust fund, except
that the owner or operator may not combine a financial test covering part of
the liability coverage requirement with a guarantee unless the financial
statement of the owner or operator is not consolidated with the financial
statement of the guarantor. The amounts of coverage demonstrated shall total at
least the minimum amounts required by this section. If the owner or operator
demonstrates the required coverage through the use of a combination of
financial assurances under this subsection, the owner or operator shall specify
at least one assurance as "primary" coverage and shall specify other assurance
as "excess" coverage.
(g) An owner
or operator shall notify the department in writing within 30 days whenever any
of the following occur:
1. A claim results in
a reduction in the amount of financial assurance for liability coverage
provided by a financial instrument authorized in pars. (a) to (f).
2. A Certification of Valid Claim for bodily
injury or property damages caused by a sudden or non-sudden accidental
occurrence arising from the operation of a hazardous waste treatment, storage
or disposal facility is entered between the owner or operator and third-party
claimant for liability coverage under pars. (a) to (f).
3. A final court order establishing a
judgment for bodily injury or property damage caused by a sudden or non-sudden
accidental occurrence arising from the operation of a hazardous waste
treatment, storage or disposal facility is issued against the owner or operator
or an instrument that is providing financial assurance for liability coverage
under pars. (a) to (f).
(2) COVERAGE FOR NONSUDDEN ACCIDENTAL
OCCURRENCES. An owner or operator of a surface impoundment or landfill which is
used to manage hazardous waste, or a group of facilities, shall demonstrate
financial responsibility for bodily injury and property damage to third parties
caused by nonsudden accidental occurrences arising from operations of the
facility or group of facilities. The owner or operator shall have and maintain
liability coverage for nonsudden accidental occurrences in the amount of at
least $3 million per occurrence with an annual aggregate of at least $6
million, exclusive of legal defense costs. An owner or operator who shall meet
the requirements of this section may combine the required per-occurrence
coverage levels for sudden and nonsudden accidental occurrences into a single
per-occurrence level, and combine the required annual aggregate coverage levels
for sudden and nonsudden accidental occurrences into a single annual aggregate
level. Owners or operators who combine coverage levels for sudden and nonsudden
accidental occurrences shall maintain liability coverage in the amount of at
least $4 million per occurrence and $8 million annual aggregate. This liability
coverage may be demonstrated as specified in par. (a), (b), (c), (d), (e) or
(f):
(a) An owner or operator may demonstrate
the required liability coverage by having liability insurance as specified in
this subsection.
1. Each insurance policy
shall be amended by attachment of the hazardous waste facility liability
endorsement or evidenced by a certificate of liability insurance. The wording
of the endorsement shall be identical to the wording specified in s.
NR 664.0151(9). The wording of the
certificate of insurance shall be identical to the wording specified in s.
NR 664.0151(10). The owner or operator
shall submit a signed duplicate original of the endorsement or the certificate
of insurance to the department. If the facilities are located in more than one
state, identical evidence of financial assurance shall be submitted to and
maintained with the state agency regulating hazardous waste or with the
appropriate EPA regional administrator if the facilities are located in an
unauthorized state. If requested by the department, the owner or operator shall
provide a signed duplicate original of the insurance policy.
2. Each insurance policy shall be issued by
an insurer which, at a minimum, is licensed to transact the business of
insurance, or eligible to provide insurance as an excess or surplus lines
insurer, in one or more States.
3.
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 may require a periodic review of
the acceptability of a surplus lines or captive insurance company.
(b) An owner or operator may meet
the requirements of this section by passing a financial test or using the
guarantee for liability coverage as specified in subs. (6) and (7).
(c) An owner or operator may meet the
requirements of this section by obtaining a letter of credit for liability
coverage as specified in sub. (8).
(d) An owner or operator may meet the
requirements of this section by obtaining a surety bond for liability coverage
as specified in sub. (9).
(e) An
owner or operator may meet the requirements of this section by obtaining a
trust fund for liability coverage as specified in sub. (10).
(f) An owner or operator may demonstrate the
required liability coverage through the use of combinations of insurance,
financial test, guarantee, letter of credit, surety bond and trust fund, except
that the owner or operator may not combine a financial test covering part of
the liability coverage requirement with a guarantee unless the financial
statement of the owner or operator is not consolidated with the financial
statement of the guarantor. The amounts of coverage demonstrated shall total at
least the minimum amounts required by this section. If the owner or operator
demonstrates the required coverage through the use of a combination of
financial assurances under this subsection, the owner or operator shall specify
at least one assurance as "primary" coverage and shall specify other assurance
as "excess" coverage.
(g) An owner
or operator shall notify the department in writing within 30 days whenever any
of the following occur:
1. A claim results in
a reduction in the amount of financial assurance for liability coverage
provided by a financial instrument authorized in pars. (a) to (f).
2. A certification of valid claim for bodily
injury or property damages caused by a sudden or non-sudden accidental
occurrence arising from the operation of a hazardous waste treatment, storage
or disposal facility is entered between the owner or operator and third-party
claimant for liability coverage under pars. (a) to (f).
3. A final court order establishing a
judgment for bodily injury or property damage caused by a sudden or non-sudden
accidental occurrence arising from the operation of a hazardous waste
treatment, storage or disposal facility is issued against the owner or operator
or an instrument that is providing financial assurance for liability coverage
under pars. (a) to (f).
(3) REQUEST FOR VARIANCE. If an owner or
operator can demonstrate to the satisfaction of the department that the levels
of financial responsibility required by sub. (1) or (2) are not consistent with
the degree and duration of risk associated with treatment, storage or disposal
at the facility or group of facilities, the owner or operator may obtain a
variance from the department. The request for a variance shall be submitted in
writing to the department. If granted, the variance will take the form of an
adjusted level of required liability coverage, the level to be based on the
department's assessment of the degree and duration of risk associated with the
ownership or operation of the facility or group of facilities. The department
may require an owner or operator who requests a variance to provide the
technical and engineering information as is deemed necessary by the department
to determine a level of financial responsibility other than that required by
sub. (1) or (2). The department will process a variance request as if it were a
license modification request under s.
NR 670.041(1) (e) and subject to the
procedures of s.
NR 670.405. Notwithstanding any other provision, the
department may hold a public hearing at the department's discretion or whenever
the department finds, on the basis of requests for a public hearing, a
significant degree of public interest in a tentative decision to grant a
variance.
(4) ADJUSTMENTS BY THE
DEPARTMENT. If the department determines that the levels of financial
responsibility required by sub. (1) or (2) are not consistent with the degree
and duration of risk associated with treatment, storage or disposal at the
facility or group of facilities, the department may adjust the level of
financial responsibility required under sub. (1) or (2) as may be necessary to
protect human health and the environment. This adjusted level will be based on
the department's assessment of the degree and duration of risk associated with
the ownership or operation of the facility or group of facilities. In addition,
if the department determines that there is a significant risk to human health
and the environment from nonsudden accidental occurrences resulting from the
operations of a facility that is not a surface impoundment, or landfill, the
department may require that an owner or operator of the facility comply with
sub. (2). An owner or operator shall furnish to the department, within a
reasonable time, any information which the department requests to determine
whether cause exists for adjustments of level or type of coverage. The
department will process an adjustment of the level of required coverage as if
it were a license modification under s.
NR 670.041(1) (e) and subject to the
procedures of s.
NR 670.405. Notwithstanding any other provision, the
department may hold a public hearing at the department's discretion or whenever
the department finds, on the basis of requests for a public hearing, a
significant degree of public interest in a tentative decision to adjust the
level or type of required coverage.
(5) PERIOD OF COVERAGE. Within 60 days after
receiving certifications from the owner or operator and a qualified
professional engineer that final closure has been completed in accordance with
the approved closure plan, the department will notify the owner or operator in
writing that the owner or operator is no longer required to maintain liability
coverage for that facility, unless the department has reason to believe that
closure has not been in accordance with the approved closure plan.
(6) FINANCIAL TEST FOR LIABILITY COVERAGE.
(a) An owner or operator may satisfy the
requirements of this section by demonstrating that the owner or operator passes
a financial test as specified in this subsection. To pass this test the owner
or operator shall meet the criteria of subd. 1. or 2.:
1. The owner or operator shall have all of
the following:
a. Net working capital and
tangible net worth each at least 6 times the amount of liability coverage to be
demonstrated by this test.
b.
Tangible net worth of at least $10 million.
c. Assets in the United States amounting to
either:
1) At least 90 percent of the owner
or operator's total assets.
2) At
least 6 times the amount of liability coverage to be demonstrated by this
test.
2. The
owner or operator shall have all of the following:
a. A current rating for the owner or
operator's most recent bond issuance of AAA, AA, A or BBB as issued by Standard
and Poor's, or Aaa, Aa, A or Baa as issued by Moody's.
b. Tangible net worth of at least $10
million.
c. Tangible net worth at
least 6 times the amount of liability coverage to be demonstrated by this
test.
d. Assets in the United
States amounting to either:
1) At least 90
percent of the owner or operator's total assets.
2) At least 6 times the amount of liability
coverage to be demonstrated by this test.
(b) The phrase "amount of
liability coverage" as used in par. (a) refers to the annual aggregate amounts
for which coverage is required under subs. (1) and (2).
(c) To demonstrate that the owner or operator
meets this test, the owner or operator shall submit the following 3 items to
the department:
1. A letter signed by the
owner's or operator's chief financial officer and worded as specified in s.
NR 664.0151(7).
2. A copy of the independent certified public
accountant's report on examination of the owner's or operator's financial
statements for the latest completed fiscal year.
3. A special report from the owner's or
operator's independent certified public accountant to the owner or operator
stating all of the following:
a. The
independent certified public accountant has compared the data which the letter
from the 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 the financial statements.
b. In connection with that procedure, no
matters came to the attention of the independent certified public accountant
which would provide cause to believe that the specified data should be
adjusted.
(e)
After the initial submission of items specified in par. (c), the owner or
operator shall send updated information to the department within 90 days after
the close of each succeeding fiscal year. This information shall consist of all
3 items specified in par. (c).
(f)
If the owner or operator no longer meets the requirements of par. (a), the
owner or operator shall obtain insurance, a letter of credit, a surety bond, a
trust fund or a guarantee for the entire amount of required liability coverage
as specified in this section. Evidence of liability coverage shall be submitted
to the department within 90 days after the end of the fiscal year for which the
year-end financial data show that the owner or operator no longer meets the
test requirements.
(g) The
department may disallow use of this test on the basis of qualifications in the
opinion expressed by the independent certified public accountant in the
accountant's report on examination of the owner's or operator's financial
statements (see par. (c) 2.). An adverse opinion or a disclaimer of opinion
will be cause for disallowance. The department will evaluate other
qualifications on an individual basis. The owner or operator shall provide
evidence of insurance for the entire amount of required liability coverage as
specified in this section within 30 days after notification of
disallowance.
(7)
GUARANTEE FOR LIABILITY COVERAGE.
(a) Subject
to par. (b), an owner or operator may meet the requirements of this section by
obtaining a written guarantee, referred to as "guarantee." The guarantor shall
be the direct or higher-tier parent corporation of the owner or operator, a
firm whose parent corporation is also the parent corporation of the owner or
operator, or a firm with a substantial business relationship with the owner or
operator. The guarantor shall meet the requirements for owners or operators in
subs. (6) (a) to (f). The wording of the guarantee shall be identical to the
wording specified in s.
NR 664.0151(8). A certified copy of the
guarantee shall accompany the items sent to the department as specified in sub.
(6) (c). One of these items shall be the letter from the guarantor's chief
financial officer. If the guarantor's parent corporation is also the parent
corporation of the owner or operator, this letter shall describe the value
received in consideration of the guarantee. If the guarantor is a firm with a
substantial business relationship with the owner or operator, this letter shall
describe this substantial business relationship and the value received in
consideration of the guarantee. The guarantee shall remain in force unless the
guarantor sends notice of cancellation by certified mail to the owner or
operator and to the department. This guarantee may not be terminated unless and
until the department approves alternate liability coverage complying with this
section. If the owner or operator fails to satisfy a judgment based on a
determination of liability for bodily injury or property damage to third
parties caused by sudden or nonsudden accidental occurrences (or both as the
case may be), arising from the operation of facilities covered by this
corporate guarantee, or fails to pay an amount agreed to in settlement of
claims arising from or alleged to arise from the injury or damage, the
guarantor will do so up to the limits of coverage.
(b)
1. In
the case of corporations incorporated in the United States, a guarantee may be
used to satisfy the requirements of this section only if the attorneys general
or insurance commissioners of the following states have submitted a written
statement to the department that a guarantee executed as described in this
section and s.
NR 664.0151(8),
40 CFR
264.151(h)(2) or other state
requirements that are equivalent to
40 CFR
264.151(h)(2) is a legally
valid and enforceable obligation in that state:
a. The state in which the guarantor is
incorporated.
b. Each state in
which a facility covered by the guarantee is located.
2. In the case of corporations incorporated
outside the United States, a guarantee may be used to satisfy the requirements
of this section only if all of the following conditions are met:
a. The non-U.S. corporation has identified a
registered agent for service of process in each state in which a facility
covered by the guarantee is located and in the state in which it has its
principal place of business.
b. The
attorney general or insurance commissioner of each state in which a facility
covered by the guarantee is located and the state in which the guarantor
corporation has its principal place of business, has submitted a written
statement to the department that a guarantee executed as described in this
section and s.
NR 664.0151(8),
40 CFR
264.151(h)(2) or other state
requirements that are equivalent to
40 CFR
264.151(h)(2) is a legally
valid and enforceable obligation in that state.
(8) LETTER OF CREDIT FOR LIABILITY
COVERAGE.
(a) An owner or operator may satisfy
the requirements of this section by obtaining an irrevocable letter of credit
that conforms to the requirements of this subsection and submitting a copy of
the letter of credit to the department.
(b) The financial institution issuing the
letter of credit shall be an entity that has the authority to issue letters of
credit and whose letter of credit operations are regulated and examined by a
federal or state agency.
(c) The
wording of the letter of credit shall be identical to the wording specified in
s.
NR 664.0151(11).
(9) SURETY BOND FOR LIABILITY COVERAGE.
(a) An owner or operator may satisfy the
requirements of this section by obtaining a surety bond that conforms to the
requirements of this subsection and submitting a copy of the bond to the
department.
(b) The surety company
issuing the bond shall be among those listed as acceptable sureties on federal
bonds in the most recent circular 570 of the U.S. department of the
treasury.
(c) The wording of the
surety bond shall be identical to the wording specified in s.
NR 664.0151(12).
(d) A surety bond may be used to satisfy the
requirements of this section only if the attorneys general or insurance
commissioners of the following states have submitted a written statement to the
department that a surety bond executed as described in this section and s.
NR 664.0151(12),
40 CFR
264.151(l) or other state
requirements that are equivalent to
40 CFR
264.151(l) is a legally
valid and enforceable obligation in that state:
1. The state in which the surety is
incorporated.
2. Each state in
which a facility covered by the surety bond is located.
(10) TRUST FUND FOR LIABILITY
COVERAGE.
(a) An owner or operator may satisfy
the requirements of this section by establishing a trust fund that conforms to
the requirements of this subsection and submitting an originally signed
duplicate of the trust agreement to the department.
(b) The trustee shall be an entity which has
the authority to act as a trustee and whose trust operations are regulated and
examined by a federal or state agency.
(c) The trust fund for liability coverage
shall be funded for the full amount of the liability coverage to be provided by
the trust fund before it may be relied upon to satisfy the requirements of this
section. If at any time after the trust fund is created the amount of funds in
the trust fund is reduced below the full amount of the liability coverage to be
provided, the owner or operator, by the anniversary date of the establishment
of the fund, shall either add sufficient funds to the trust fund to cause its
value to equal the full amount of liability coverage to be provided, or obtain
other financial assurance as specified in this section to cover the difference.
For purposes of this subsection, "the full amount of the liability coverage to
be provided" means the amount of coverage for sudden or nonsudden occurrences,
or both, required to be provided by the owner or operator by this section, less
the amount of financial assurance for liability coverage that is being provided
by other financial assurance mechanisms being used to demonstrate financial
assurance by the owner or operator.
(d) The wording of the trust fund shall be
identical to the wording specified in s.
NR 664.0151(13).
