Wisconsin Administrative Code
Department of Natural Resources
NR 600-699 - Environmental Protection - Hazardous Waste Management
Chapter NR 667 - Standards For Owners And Operators Of Hazardous Waste Facilities Operating Under A Standardized License
Subchapter H - Financial Requirements
Section NR 667.0147 - Liability requirements
Universal Citation: WI Admin Code ยง NR 667.0147
Current through August 26, 2024
(1) COVERAGE FOR SUDDEN ACCIDENTAL OCCURRENCES. An owner or operator of a hazardous waste treatment or storage facility, or a group of such 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 one million dollars per occurrence with an annual aggregate of at least $2,000,000, exclusive of legal defense costs. This liability coverage may be demonstrated as specified in pars. (a) to (g):
(a)
Trust fund for liability coverage. An owner or operator may
meet the requirements of this section by obtaining a trust fund for liability
coverage as specified in s.
NR 664.0147(10).
(b)
Surety bond for liability
coverage. An owner or operator may meet the requirements of this
section by obtaining a surety bond for liability coverage as specified in s.
NR 664.0147(9).
(c)
Letter of credit for liability
coverage. An owner or operator may meet the requirements of this
section by obtaining a letter of credit for liability coverage as specified in
s.
NR 664.0147(8).
(d)
Insurance for liability
coverage. An owner or operator may meet the requirements of this
section by obtaining liability insurance as specified in s.
NR 664.0147(1)
(a).
(e)
Financial test for liability
coverage. An owner or operator may meet the requirements of this
section by passing a financial test as specified in sub. (6).
(f)
Guarantee for liability
coverage. An owner or operator may meet the requirements of this
section by obtaining a guarantee as specified in sub. (7).
(g)
Combination of
mechanisms. An owner or operator may demonstrate the required
liability coverage through the use of combinations of mechanisms as allowed by
s.
NR 664.0147(1)
(f).
(h) An owner or operator shall notify the
department in writing within 30 days whenever any of the following occurs:
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 (g).
2. A certification of valid claim for bodily
injury or property damages caused by a 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 (g).
3. A final court order establishing a
judgment for bodily injury or property damage caused by a 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.
(5) PERIOD OF COVERAGE. Within 60 days after receiving certifications from the owner or operator and an independent registered professional engineer that final closure has been completed according to the approved closure plan, the department shall notify the owner or operator in writing that the owner or operator is no longer required by this section to maintain liability coverage from 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. An owner or operator that satisfies the requirements of this subsection may demonstrate financial assurance for liability up to the amount specified in this subsection.
(a)
Financial component.
1. If using the financial test for only
liability coverage, the owner or operator shall have tangible net worth greater
than the sum of the liability coverage to be demonstrated by this test plus
$10,000,000.
2. The owner or
operator shall have assets located in the United States amounting to at least
the amount of liability covered by this financial test.
3. An owner or operator who is demonstrating
coverage for liability and any other environmental obligations, including
closure under s.
NR 667.0143(6), through a financial test
shall meet the requirements of s.
NR 667.0143(6).
(b)
Recordkeeping and reporting
requirements.
1. The owner or
operator shall submit the following items to the department:
a. A letter signed by the owner's or
operator's chief financial officer that provides evidence demonstrating that
the firm meets the conditions of par. (a) 1. and 2. If the firm is providing
only liability coverage through a financial test for a facility or facilities
with a license under this chapter, the letter should use the wording in s.
NR 667.0151(2). If the firm is providing
only liability coverage through a financial test for facilities regulated under
this chapter and also ch. NR 664 or 665, it shall use the letter in s.
NR 664.0151(7). If the firm is providing
liability coverage through a financial test for a facility or facilities with a
license under this chapter, and it assures closure costs or any other
environmental obligations through a financial test, it shall use the letter in
s.
NR 667.0151(1) for the facilities issued
a license under this chapter.
b. A
copy of the independent certified public accountant's unqualified opinion of
the owner's or operator's financial statements for the latest completed fiscal
year. To be eligible to use the financial test, the owner's or operator's
financial statements shall receive an unqualified opinion from the independent
certified public accountant. An adverse opinion, disclaimer of opinion or other
qualified opinion will be cause for disallowance, with the potential exception
for qualified opinions provided in the next sentence. The department may
evaluate qualified opinions on a case-by-case basis and allow use of the
financial test in cases where the department deems that the matters which form
the basis for the qualification are insufficient to warrant disallowance of the
test. If the department does not allow use of the test, the owner or operator
shall provide alternate financial assurance that meets the requirements of this
section within 30 days after the notification of disallowance.
c. If the chief financial officer's letter
providing evidence of financial assurance includes financial data showing that
the owner or operator satisfies pars. (a) 1. and 2. that are different from
data in the audited financial statements referred to in subd. 1. b. or any
other audited financial statement or data filed with the Securities and
Exchange Commission, then a special report from the owner's or operator's
independent certified public accountant to the owner or operator is required.
The special report shall be based upon an agreed upon procedures engagement
according to professional auditing standards and shall describe the procedures
performed in comparing the data in the chief financial officer's letter derived
from the independently audited, year-end financial statements for the latest
fiscal year with the amounts in such financial statements, the findings of that
comparison, and the reasons for any differences
2. The owner or operator of a new facility
shall submit the items specified in subd. 1. to the department at least 60 days
before placing waste in the facility.
3. After the initial submission of items
specified in subd. 1., the owner or operator shall send updated information to
the department within 90 days following the close of the owner or operator's
fiscal year. The department may provide up to an additional 45 days for an
owner or operator who can demonstrate that 90 days is insufficient time to
acquire audited financial statements. The updated information shall consist of
all items specified in subd. 1.
4.
The owner or operator is no longer required to submit the items specified in
this paragraph or comply with the requirements of this paragraph when either:
a. The owner or operator substitutes
alternate financial assurance as specified in this section that is not subject
to these recordkeeping and reporting requirements.
b. The department releases the owner or
operator from the requirements of this section in accordance with s.
NR 667.0143(10).
5. An owner or operator who no longer meets
the requirements of par. (a) may not use the financial test to demonstrate
financial assurance. An owner or operator who no longer meets the requirements
of par. (a) shall:
a. Send notice to the
department of intent to establish alternate financial assurance as specified in
this section. The owner or operator shall send this notice by certified mail
within 90 days following the close of the owner or operator's fiscal year for
which the year-end financial data show that the owner or operator no longer
meets the requirements of this section.
b. Provide alternative financial assurance
within 120 days after the end of such fiscal year.
6. The department may, based on a reasonable
belief that the owner or operator may no longer meet the requirements of par.
(a), require at any time the owner or operator to provide reports of its
financial condition in addition to or including current financial test
documentation as specified in this paragraph. If the department finds that the
owner or operator no longer meets the requirements of par. (a), the owner or
operator shall provide alternate financial assurance that meets the
requirements of this section.
(7) GUARANTEE FOR LIABILITY COVERAGE.
(a) Subject to par. (b) of this section, an
owner or operator may meet the requirements of this section by obtaining a
written guarantee, hereinafter 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
sub. (6) (a) and (b). The wording of the guarantee shall be identical to the
wording specified in s.
NR 664.0151(8)
(b). A certified copy of the guarantee shall
accompany the items sent to the department as specified in sub. (6) (b). 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. 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 accidental occurrences arising from
the operation guarantee or fails to pay an amount agreed to in settlement of
claims arising from or alleged to arise from such injury or damage, the
guarantor shall 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 state in which the guarantor is incorporated,
and each state in which a facility covered by the guarantee is located, have
submitted a written statement to the department that a guarantee executed as
described in this section and s.
NR 664.0151(8) (b) is a legally valid and enforceable
obligation in that state.
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:
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)
(b) is a legally valid and enforceable
obligation in that state.
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