Fla. Admin. Code Ann. R. 62-701.630 - Financial Assurance
(1) Owner or
operator.
(a) "Owner or operator" means, in
addition to the usual meanings of the term, any owner of record of any interest
in land whereon a landfill is or has been located and any person or corporation
which owns a majority interest in any other corporation which is the owner or
operator of a landfill.
(b) The
owner or operator identified on financial assurance documentation shall be the
same individual, registered business entity (not a fictitious name) or
government entity as the permit applicant. If there are multiple permittees,
only one need be identified on the financial assurance
documentation.
(2)
Applicability.
(a) A government-owned
landfill closed on or before October 1, 1988, shall not be required to comply
with this rule.
(b) As a condition
for the issuance of a landfill permit, or permit modification authorizing
expansion, the owner or operator shall provide the Department with closure cost
estimates for the permitted portions of the landfill as part of the
application. Proof of financial assurance issued in favor of the Florida
Department of Environmental Protection in the amount of the approved current
dollar closing and long-term care cost estimates for each permitted disposal
unit as determined pursuant to subsection
62-701.630(3),
F.A.C., shall be provided at least 60 days prior to the planned initial receipt
of waste at such unit. The owner or operator shall maintain financial assurance
through the design period of the landfill and through any corrective action
period. The financial mechanism shall either be:
1. If the landfill is owned or operated by a
government agency, a landfill management escrow agreement pursuant to
subsection (5) of this section, or an alternate financial mechanism pursuant to
subsection (6), or
2. If the
landfill is not owned or operated by a government agency, an alternate
financial mechanism pursuant to subsection (6) of this
rule.
(c) No solid waste
shall be stored or disposed of at a solid waste disposal unit until the
permittee has received written approval of the financial assurance mechanism
from the Department.
(d) Owners or
operators of existing Class I landfills receiving waste after October 9, 1993,
that are required to undertake a corrective action program in accordance with
subsection 62-701.510(6),
F.A.C., shall submit proof of financial assurance to the Department no later
than 120 days after the corrective action remedy has been
selected.
(3) Cost
estimates for closure.
(a) For the purpose of
determining the amount of proof of financial assurance that is required for
closure by this section, the owner or operator shall estimate the total cost of
closure in current dollars for the time period in the landfill operation when
the extent and manner of its operation make closing most expensive. The owner
or operator shall submit the estimates, together with all necessary
justification, to the Department as part of the permit application. Except as
allowed in paragraph 62-701.630(3)(d),
F.A.C., the costs shall be estimated and certified by a professional engineer
for a third party performing the work, on a per unit basis, with the source of
estimates indicated.
(b) Closing
costs shall be based on the nature and characteristics of the wastes disposed
of at the site and shall include estimated costs of cover material, topsoil,
seeding, fertilizing, mulching, labor, and any other costs of compliance with
rules 62-701.600 -.610,
F.A.C.
(c) Long-term care costs
shall include land surface care; gas monitoring; leachate pumping,
transportation, management and treatment; water quality monitoring, collection
and analysis; and any other costs of compliance with rule
62-701.620, F.A.C. The annual
cost of long-term care shall be estimated, listed separately, and multiplied by
the number of years required in the long-term care period.
(d) The owner or operator of a landfill may
use onsite soils, rather than off-site soils, as part of the facility's final
cover, as fill, or for other closure construction purposes, when calculating
the facility's closure costs provided that:
1. A professional engineer certifies the
designated on-site soils are of a sufficient quantity and have been determined
to have suitable properties for their proposed use,
2. The owner or operator, and real property
owner where different, shall enter into a covenant, easement, trust, or other
legal agreement with the Department, in any combination thereof that may be
needed and which shall be recorded and run with the land, to ensure that the
designated on-site soils will be available and accessible for the benefit of
the Department for the proposed closure related uses; and,
3. The facility's permit is modified to
include the requirements of this subsection.
(e) Cost estimates required in this section
shall be prepared and submitted on Form
62-701.900(28),
Closure Cost Estimating Form for Solid Waste Facilities, effective date January
6, 2010, hereby adopted and incorporated by reference. Copies of this form are
available from a local District Office or by writing to the Department of
Environmental Protection, Solid Waste Section, MS #4565, 2600 Blair Stone Road,
Tallahassee, Florida 32399-2400.
(f) The owner or operator shall keep the
latest closure cost estimate at the facility. When this estimate has been
adjusted in accordance with paragraph (4)(a) of this rule, the latest adjusted
closure cost estimate shall also be kept at the facility.
(4) Cost adjustments for closure.
(a) Every owner or operator of a landfill
shall annually adjust the closure cost estimate for inflation and submit
updated information to the Department. Closing and long-term care costs shall
be listed separately. For owners or operators using an alternate financial
mechanism, this statement shall be submitted between January 1 and March 1 of
each year. For owners or operators using an escrow account, this statement
shall be submitted between July 1 and September 1 of each year. This paragraph
does not prohibit an owner or operator from submitting other information
updating the closure cost estimate at other times of the year. Such adjustments
shall be made either by:
1. Recalculating the
total cost of closure or long-term care, in current dollars, as specified in
subsection (3) of this rule, or
2.
Using an inflation factor derived from the most recent Implicit Price Deflator
for Gross National Product published by the U.S. Department of Commerce in its
Survey of Current Business as specified in sub-subparagraphs (4)(a)2.a. and b.
of this rule. The inflation factor is the result of dividing the latest
published annual Deflator by the Deflator for the previous year.
a. The first adjustment is made by
multiplying the closure or long-term care cost estimate by the inflation
factor. The result is the adjusted closure or long-term care cost
estimate.
b. Subsequent adjustments
are made by multiplying the latest adjusted closure or long-term care cost
estimate by the latest inflation factor.
(b) At the time of permit renewal, or every
fifth year when a permit is issued with a duration greater than 5 years, the
owner or operator shall revise the cost estimate. Revisions shall be made by
recalculating the total cost of closure or long-term care, in current dollars,
as specified in subsection (3) of this rule.
(c) In addition to the requirements of
paragraphs (a) and (b) of this subsection, the owner or operator shall revise
the closure cost estimate by recalculating the total cost of closure or
long-term care, in current dollars, as specified in subsection (3) of this
rule, in the following situations:
1. Prior
to any changes to the closing or long-term care plan,
2. Within 30 days of discovery that any of
the anticipated costs that formed the basis of the current approved closure
cost estimate have changed significantly, or
3. Within 30 days of issuance of an order by
the Department finding that the facility has exceeded any of its permitted
dimensions.
(d) If the
value of the alternative funding mechanism is less than the total amount of the
current closure cost estimate, the owner or operator shall revise the funding
mechanisms to reflect the new estimate within the time frames outlined in 40
C.F.R. Part 264, subpart H.
(5) Landfill management escrow account.
(a) The owner or operator of a landfill that
is owned or operated by a government agency shall establish a fee, or a
surcharge on existing fees, or other appropriate revenue-producing mechanism,
to ensure the availability of financial resources for the proper closing and
long-term care of the landfill.
(b)
The revenue-producing mechanism shall produce revenue at a rate sufficient to
generate funds to meet state landfill closure requirements.
(c) The revenue shall be deposited in an
interest-bearing escrow account with a financial institution such as a bank or
trust whose operations are regulated and examined by a federal or state agency,
or deposited in a Department-approved investment pool, created by the State of
Florida or local governments that has as its primary objective liquidity and
preservation of principle. The owner or operator shall file with the Department
a signed duplicate original of the escrow agreement and an annual audit of the
account. The audit shall be conducted by an independent Certified Public
Accountant and shall be filed no later than March 31 of the following year. The
audit shall identify where funds are on deposit, give the landfill management
escrow account balance as of the end of the fiscal year and itemize, by
facility, amounts restricted for closing and long-term care. The audit shall
reference subsection 62-701.630(5),
F.A.C., and the escrow agreement, and shall also include a list by date of all
deposits and withdrawals made.
(d)
Payments into the landfill management escrow account shall be made by the owner
or operator at least annually.
1. The first
payment must be made before the end of the first fiscal year after the initial
receipt of solid waste into the landfill. A notice of such payment shall be
submitted to the Department. Subsequent payments must be made over the term of
the active life of the landfill. The calculations for such annual payment shall
be determined using one of the following methods:
a. "Pay-in" method: payment = (CE - CV)/Y,
where CE is the current dollar closing cost estimate at the beginning of the
fiscal year (or later, if submitted pursuant to paragraph (4)(c), of this
rule), CV is the current value of the escrow account at the beginning of the
fiscal year, and Y is the number of remaining years in the design life of the
landfill at the beginning of the fiscal year, or
b. "Balance" method: the minimum fiscal year
end account balance = [CE x (DE/DL)] - E, where CE is the approved current
dollar closing cost estimate (by solid waste disposal unit or group of units)
at the beginning of the fiscal year (or later, if submitted pursuant to
paragraph (4)(c) of this rule); DE, the design life exhausted (by solid waste
disposal unit or group of units), is the period of time between the initial
receipt of waste and the current fiscal year end (i.e., the year audited); DL,
the design life (by solid waste disposal unit or group of units), is the period
of time between initial receipt of waste and planned end of receipt of waste
and must be reassessed annually in the Closure Cost Estimating Form when an
escrow account or trust fund pay-in period is used; and E, all documented
closing expenditures to date (by solid waste disposal unit or group of units),
are expenses identified by the fiscal year end audit(s) as being incurred
closing or maintaining the landfill identified in the closure plan. The choice
of use of this formula requires the continued use throughout the remaining
design life of the landfill or phase. In the event the fiscal year end audited
account balance exceeds the minimum required balance, the owner or operator may
remove the excess funds.
2. For government-owned landfills, the owner
or operator shall deposit into the escrow account, at the time of closing and
each year thereafter, sufficient funds to cover the following year's long-term
care costs. In addition, the owner or operator must document specifically how
it intends to finance the long-term care of the landfill as part of its closure
plan.
3. For landfills not owned by
a governmental agency, the long-term care costs shall be included in the
closing cost estimates as specified in subparagraph 1., above; long-term care
costs must be fully funded when the landfill closes.
4. The owner or operator may accelerate
payments into the landfill management escrow account or may deposit the full
amount of the current closure cost estimate at the time that the account is
established.
(e) The
owner or operator may make expenditures from the account and its accumulated
interest only for the purpose of landfill closing and long-term care and, if
such expenditures do not deplete the fund to the detriment of eventual closing
and long-term care, for planning and construction of resource recovery or
landfill facilities. If the owner or operator does not operate a landfill, any
funds remaining in the account after paying for proper and complete closing and
long-term care, as determined by the Department, shall be deposited by the
owner or operator into the general fund of the local government of
jurisdiction.
(f) The revenue
generated under this subsection and any accumulated interest thereon may be
applied to the payment of, or pledged as security for, the payment of revenue
bonds issued in whole or in part for the purpose of complying with state
landfill closing and long-term care requirements. Such application or pledge
may be made directly in the proceedings authorizing such bonds or in an
agreement with an insurer of bonds to assure such insurer of additional
security therefore.
(g) The owner
or operator of any landfill that had established an escrow account prior to
January 1, 2007, may continue to use that escrow account to provide financial
assurance for closure of that landfill, even if that landfill is not owned or
operated by a government agency.
(6) Alternate proof of financial assurance.
(a) The appropriate parts of Form
62-701.900(5),
Financial Mechanisms for Solid Waste Management Facilities Requiring Closure
and/or Corrective Action,
Solid Waste Facility Irrevocable Letter of Credit, http://www.flrules.org/Gateway/reference.asp?No=Ref-05021,
Solid Waste Facility Financial Guarantee Bond, http://www.flrules.org/Gateway/reference.asp?No=Ref-05022,
Solid Waste Facility Perfomance Bond, http://www.flrules.org/Gateway/reference.asp?No=Ref-05023,
Solid Waste Facility Insurance Certificate, http://www.flrules.org/Gateway/reference.asp?No=Ref-05024,
Solid Waste Facility Financial Test, http://www.flrules.org/Gateway/reference.asp?No=Ref-05025,
Solid Waste Facility Corporate Guarantee, http://www.flrules.org/Gateway/reference.asp?No=Ref-05026,
Solid Waste Facility Trust Fund Agreement, http://www.flrules.org/Gateway/reference.asp?No=Ref-05027,
Solid Waste Facility Standby Trust Fund Agreement, http://www.flrules.org/Gateway/reference.asp?No=Ref-05028, effective date February 15, 2015, hereby adopted and incorporated by reference, shall be used, and originally signed duplicates submitted, when demonstrating proof of financial assurance under this section. Copies of this form are available from a local District Office or by writing to the Department of Environmental Protection, Solid Waste Section, MS #4565, 2600 Blair Stone Road, Tallahassee, Florida 32399-2400, or at http://www.dep.state.fl.us/waste/quick_topics/forms/pages/62-701.htm. Proof of financial assurance under this subsection shall include surety bonds, certificates of deposit, securities, letters of credit, trust fund agreements, closure insurance (excluding independent procurement), or financial tests and corporate guarantees, showing that the owner or operator has sufficient financial resources to cover, at a minimum, the costs of complying with all state landfill closing and long-term care requirements, and, if applicable, costs for corrective action. If such proof of financial assurance is surety bonds, letters of credit, trust fund agreements, closure insurance or financial tests and corporate guarantees, such proof shall be submitted on forms provided by the Department in accordance with the requirements of paragraphs (b) through (d) of this subsection. If proof of financial assurance is securities or certificates of deposit, these instruments must be used in conjunction with a trust fund and shall be submitted directly to the trustee. The owner or operator shall estimate such costs pursuant to subsections (3) and (4) of this rule. The financial institutions must include their legal entity name (not just trademark or fictitious names) on financial assurance forms.
(b) 40 C.F.R. Part 264 subpart H which
contains EPA's rules on financial requirements for owners and operators of
hazardous waste facilities are hereby adopted as financial requirements for
purposes of this section incorporated by reference as those rules appear in 40
C.F.R. Part 264, revised as of July 1, 2013, except:
1. The following sections of 40 C.F.R. Part
264, subpart H are specifically not adopted as part of this rule:
a. 264.140(a); 264.140(b); 264.140(d);
264.141(a); 264.141(e); 264.142(b); 264.142(c); 264.143(b)(3)(ii)(C);
264.143(c)(3)(ii)(C); 264.143(d)(3)(ii)(C), 264.143(f)(1); 264.144(b);
264.144(c); 264.145(b)(3)(ii)(C); 264.145(c)(3)(ii)(C); 264.145(d)(3)(ii)(C),
264.145(f)(1); 264.147; 264.149; 264.150; and 264.151.
b. All references to 40 C.F.R. Part
265.
c. All references to sections
or subparts of 40 C.F.R. Part 264 not contained in subpart H.
d. All references to EPA Regions.
e. All references to RCRA.
f. 264.140(c) when referring to landfills
owned or operated by a government agency.
2. References to
40 C.F.R.
264.143(f)(1) and
264.145(f)(1)
shall mean paragraph 62-701.630(6)(c),
F.A.C. References in 40 C.F.R. Part 264, subpart H to the United States
Environmental Protection Agency (EPA) shall mean the State of Florida
Department of Environmental Protection (DEP); to Regional Administrator shall
mean the Secretary of the Department or the Secretary's written designee; to
RCRA permits shall mean solid waste management permits; to Post-Closure shall
mean Long-Term or Long-Term Care, as applicable; to EPA identification number
shall mean the Department identification number; to hazardous waste shall mean
solid waste; to hazardous waste treatment, storage or disposal facilities shall
mean landfills; to Section 3008 of RCRA shall mean FDEP Agency Action; to
Circular 570 of the U.S. Department of the Treasury shall mean Circular 570 of
the U.S. Department of the Treasury and licensed to do business in the State of
Florida; to must also establish shall mean must also establish and maintain; to
both closure and post-closure shall mean closing, long-term care and corrective
action, or any combination thereof; and to one or more states shall mean in the
State of Florida.
3. Financial
assurance, when reimbursed, will go towards covering all or any part of the
costs for a facility's "Required Action" (closing, long-term care, and/or
corrective action) as identified on the first page of the trust fund or
insurance certificate regardless of actual cost estimate
calculations.
4. When the
Department directs financial institutions to make a payment or reimbursement,
the payment or reimbursement shall be sent within 30 days of receipt of the
Department's direction, unless communication from the Department authorizes a
delay.
5. The trust fund pay-in
period shall not exceed 5 years. Schedule A of the trust agreement must be
updated only during the pay-in period.
6. When Corrective Action is selected on any
part of Form 62-701.900(5),
40 C.F.R.
264.145 references to post-closure shall mean
corrective action, as applicable.
(c) An owner or operator may satisfy the
requirements of this subsection by passing a financial test using Form
62-701.900(5)(e).
The financial test shall cover the latest approved estimate or any subsequent
estimate that is higher. To pass this test the owner or operator must meet the
criteria of either subparagraph 1. or 2. as follows:
1. The owner or operator must have:
a. One of the two following ratios: A ratio
of less than 1.5 comparing total liabilities to net worth; or a ratio of
greater than 0.10 comparing the sum of net income plus depreciation, depletion
and amortization, minus $10, 000, 000.00 million, to total
liabilitiesm
b. Net working capital
of at least three times the sum of the required actionm
c. Tangible net worth greater than the sum of
the required action plus $10, 000, 000.00 million, or at least three times the
sum of the required action, whichever is greater; and,
d. Assets located in the United States
amounting to at least three times the sum of the required
action.
2. The owner or
operator must have:
a. A bond issuance,
secured or unsecured, having a redemption date with at least five years
remaining. An unsecured bond rating must maintain a rating of BBB or better as
issued by Standard and Poor's bond rating service or Baa2 or better as issued
by Moody's bond rating service. A facility using an insured or secured bond
must demonstrate to the Department the underlying or senior unsecured bond
rating as assigned by Standard and Poor's is BBB or better, or as assigned by
Moody's is Baa2 or better,
b.
Tangible net worth greater than the sum of the required action plus $10
million, or at least three times the sum of the required action, whichever is
greater; and,
c. Assets located in
the United States amounting to at least three times the sum of the required
action.
(d)
Government-owned facilities providing proof of financial assurance using a
financial test must send updated information outlined in
40 C.F.R.
264.143(f)(5) and
264.145(f)(5) to
the Department within 180 days after the close of each succeeding fiscal
year.
(e) An owner or operator
using an insurance policy for financial assurance must establish and maintain a
standby trust fund that meets the requirements of
40 C.F.R.
264.143(b)(3) and/or
264.145(b)(3). The insurance policy must provide that, upon written direction
from the Secretary of the Department or the Secretary's written designee, the
entire face amount of the policy, less any amounts previously paid out under
requirements of 40 C.F.R. Part 264 subpart H, will be placed into the trust
fund to be used by the Department for closure and/or corrective action
activities. Once closure and/or corrective action is complete, any money
remaining in the trust fund will be returned to the insurer. Direction to make
payment into the trust fund must be preceded by one or more of the following:
1. FDEP deems the facility abandoned,
2. The permit is terminated or
revoked or a new permit is denied,
3. Closure is ordered by the FDEP or a U.S.
district court or other court of competent jurisdiction,
4. The owner or operator is named as debtor
in a voluntary or involuntary proceeding under Title 11 (Bankruptcy), U.S.
Code, or
5. The insurer elected to
submit a cancellation, termination, or failure to renew the policy notice in
accordance with the provisions of
40 C.F.R.
264.143(e)(8) or
264.145(e)(8) and
the insured failed to provide alternate financial assurance within 90 days
after the date of notice of cancellation, termination or failure to renew the
policy was received by both the insured and the FDEP Secretary, or
designee.
(7)
Cost estimates for corrective action. An owner or operator of a landfill
required to establish financial assurance for a corrective action program
pursuant to paragraph (2)(d) of this rule, shall have a detailed written
estimate in current dollars, estimated and certified by a professional
engineer, of the cost of hiring a third party to perform the corrective action
in accordance with subsection
62-701.510(6),
F.A.C. The corrective action cost estimate must account for the total cost of
corrective action activities as described in the corrective action plan for the
entire corrective action period. The owner or operator shall submit the
estimate, together with all necessary justification including source of the
estimates indicated, to the Department for approval along with proof of
financial assurance.
(8) Cost
adjustments for corrective action.
(a) The
owner or operator shall annually adjust the estimate for inflation and changes
in the corrective action plan until the corrective action program is completed
in accordance with subsection
62-701.510(6),
F.A.C. Inflation adjusted estimates shall be submitted in the timeframes
designated by paragraph (4)(a) of this rule. The adjustment shall be made
either by:
1. Recalculating the maximum cost
of corrective action, in current dollars, as specified in subsection (7) of
this rule, or
2. By using an
inflation factor derived from the most recent Implicit Price Deflator for Gross
National Product published by the U.S. Department of Commerce in its Survey of
Current Business as specified in subparagraphs a. and b. as follows. The
inflation factor is the result of dividing the latest published annual Deflator
by the Deflator for the previous year.
a. The
first adjustment is made by multiplying the corrective action cost estimate by
the inflation factor. The result is the adjusted corrective action cost
estimate.
b. Subsequent adjustments
are made by multiplying the latest adjusted corrective action cost estimate by
the latest inflation factor.
(b) At the time of permit renewal, or every
fifth year when a permit is issued with a duration greater than five years, or
if the corrective action plan is modified during the corrective action period,
the owner or operator shall revise the corrective action cost estimate.
Revisions shall be made and submitted as specified in subparagraph (8)(a)1. of
this rule. The use of cost estimates that are submitted in accordance with this
subsection and used as the basis for comparison against the balance of the
funding mechanisms specified in subsection (9) of this rule, does not
constitute estimate approval.
(c)
The owner or operator shall keep the latest corrective action cost estimate
and, when this estimate has been adjusted in accordance with paragraph (8)(a)
of this rule, the latest adjusted corrective action cost estimate at the
facility until the corrective action is complete.
(9) Financial assurance for corrective
action.
(a) For government owned landfills,
the owner or operator shall demonstrate proof of financial assurance for
corrective action with the Department by identifying a revenue source and
establishing an escrow account as specified in paragraph (5)(c) of this rule,
or by using one of the approved alternate mechanisms specified in subsection
(6) of this rule. Payments into the landfill management escrow account shall be
made by the owner or operator according to one of the following methods:
1. The owner or operator shall deposit into
the landfill management escrow the full cost associated with the corrective
action remedy within 120 days after the corrective action remedy has been
selected, or
2. If the local
government can document a specific non-general revenue source adequate to cover
the total corrective action cost, then only that portion of the corrective
action to be undertaken the following year need be funded.
(b) For privately owned landfills, the owner
or operator shall demonstrate proof of financial assurance for corrective
action with the Department by using one of the approved alternate mechanisms
specified in subsection (6) of this rule. If a trust fund is used, the first
payment into the trust must be at least equal to one-half of the current cost
estimate for corrective action. The amount of subsequent payments must be
determined by the following formula: Next payment = [RB - CV]/Y, where RB is
the most recent estimate of the required trust fund balance for corrective
action (i.e., the total costs that will be incurred during the second half of
the corrective action period), CV is the current value of the trust fund, and Y
is the number of years remaining in the pay-in period. The pay-in period is
one-half of the estimated length of the corrective action
program.
(10) If
long-term care is extended because the permittee has failed to perform all
required monitoring and maintenance, financial assurance shall continue to be
required during the extended long-term care. If the long-term care is extended
for any other reason, financial assurance is not required during the extended
long-term care period, except as may be required in subsections (7) through (9)
of this rule.
Notes
Rulemaking Authority 403.704 FS. Law Implemented 403.704, 403.707, 403.7125(5) FS.
New 7-1-85, Formerly 17-7.076, Amended 11-28-89, Formerly 17-701.076, Amended 1-6-93, 1-2-94, 5-19-94, Formerly 17-701.630, Amended 5-27-01, 1-6-10, 8-12-12, 2-15-15.
State regulations are updated quarterly; we currently have two versions available. Below is a comparison between our most recent version and the prior quarterly release. More comparison features will be added as we have more versions to compare.
(1) Owner or operator.
(a) "Owner or operator" means, in addition to the usual meanings of the term, any owner of record of any interest in land whereon a landfill is or has been located and any person or corporation which owns a majority interest in any other corporation which is the owner or operator of a landfill.
(b) The owner or operator identified on financial assurance documentation shall be the same individual, registered business entity (not a fictitious name) or government entity as the permit applicant. If there are multiple permittees, only one need be identified on the financial assurance documentation.
(2) Applicability.
(a) A government-owned landfill closed on or before October 1, 1988, shall not be required to comply with this rule.
(b) As a condition for the issuance of a landfill permit, or permit modification authorizing expansion, the owner or operator shall provide the Department with closure cost estimates for the permitted portions of the landfill as part of the application. Proof of financial assurance issued in favor of the Florida Department of Environmental Protection in the amount of the approved current dollar closing and long-term care cost estimates for each permitted disposal unit as determined pursuant to subsection 62-701.630(3), F.A.C., shall be provided at least 60 days prior to the planned initial receipt of waste at such unit. The owner or operator shall maintain financial assurance through the design period of the landfill and through any corrective action period. The financial mechanism shall either be:
1. If the landfill is owned or operated by a government agency, a landfill management escrow agreement pursuant to subsection (5) of this section, or an alternate financial mechanism pursuant to subsection (6), or
2. If the landfill is not owned or operated by a government agency, an alternate financial mechanism pursuant to subsection (6) of this rule.
(c) No solid waste shall be stored or disposed of at a solid waste disposal unit until the permittee has received written approval of the financial assurance mechanism from the Department.
(d) Owners or operators of existing Class I landfills receiving waste after October 9, 1993, that are required to undertake a corrective action program in accordance with subsection 62-701.510(6), F.A.C., shall submit proof of financial assurance to the Department no later than 120 days after the corrective action remedy has been selected.
(3) Cost estimates for closure.
(a) For the purpose of determining the amount of proof of financial assurance that is required for closure by this section, the owner or operator shall estimate the total cost of closure in current dollars for the time period in the landfill operation when the extent and manner of its operation make closing most expensive. The owner or operator shall submit the estimates, together with all necessary justification, to the Department as part of the permit application. Except as allowed in paragraph 62-701.630(3)(d), F.A.C., the costs shall be estimated and certified by a professional engineer for a third party performing the work, on a per unit basis, with the source of estimates indicated.
(b) Closing costs shall be based on the nature and characteristics of the wastes disposed of at the site and shall include estimated costs of cover material, topsoil, seeding, fertilizing, mulching, labor, and any other costs of compliance with rules 62-701.600 -.610, F.A.C.
(c) Long-term care costs shall include land surface care; gas monitoring; leachate pumping, transportation, management and treatment; water quality monitoring, collection and analysis; and any other costs of compliance with rule 62-701.620, F.A.C. The annual cost of long-term care shall be estimated, listed separately, and multiplied by the number of years required in the long-term care period.
(d) The owner or operator of a landfill may use onsite soils, rather than off-site soils, as part of the facility's final cover, as fill, or for other closure construction purposes, when calculating the facility's closure costs provided that:
1. A professional engineer certifies the designated on-site soils are of a sufficient quantity and have been determined to have suitable properties for their proposed use,
2. The owner or operator, and real property owner where different, shall enter into a covenant, easement, trust, or other legal agreement with the Department, in any combination thereof that may be needed and which shall be recorded and run with the land, to ensure that the designated on-site soils will be available and accessible for the benefit of the Department for the proposed closure related uses; and,
3. The facility's permit is modified to include the requirements of this subsection.
(e) Cost estimates required in this section shall be prepared and submitted on Form 62-701.900(28), Closure Cost Estimating Form for Solid Waste Facilities, effective date January 6, 2010, hereby adopted and incorporated by reference. Copies of this form are available from a local District Office or by writing to the Department of Environmental Protection, Solid Waste Section, MS #4565, 2600 Blair Stone Road, Tallahassee, Florida 32399-2400.
(f) The owner or operator shall keep the latest closure cost estimate at the facility. When this estimate has been adjusted in accordance with paragraph (4)(a) of this rule, the latest adjusted closure cost estimate shall also be kept at the facility.
(4) Cost adjustments for closure.
(a) Every owner or operator of a landfill shall annually adjust the closure cost estimate for inflation and submit updated information to the Department. Closing and long-term care costs shall be listed separately. For owners or operators using an alternate financial mechanism, this statement shall be submitted between January 1 and March 1 of each year. For owners or operators using an escrow account, this statement shall be submitted between July 1 and September 1 of each year. This paragraph does not prohibit an owner or operator from submitting other information updating the closure cost estimate at other times of the year. Such adjustments shall be made either by:
1. Recalculating the total cost of closure or long-term care, in current dollars, as specified in subsection (3) of this rule, or
2. Using an inflation factor derived from the most recent Implicit Price Deflator for Gross National Product published by the U.S. Department of Commerce in its Survey of Current Business as specified in sub-subparagraphs (4)(a)2.a. and b. of this rule. The inflation factor is the result of dividing the latest published annual Deflator by the Deflator for the previous year.
a. The first adjustment is made by multiplying the closure or long-term care cost estimate by the inflation factor. The result is the adjusted closure or long-term care cost estimate.
b. Subsequent adjustments are made by multiplying the latest adjusted closure or long-term care cost estimate by the latest inflation factor.
(b) At the time of permit renewal, or every fifth year when a permit is issued with a duration greater than 5 years, the owner or operator shall revise the cost estimate. Revisions shall be made by recalculating the total cost of closure or long-term care, in current dollars, as specified in subsection (3) of this rule.
(c) In addition to the requirements of paragraphs (a) and (b) of this subsection, the owner or operator shall revise the closure cost estimate by recalculating the total cost of closure or long-term care, in current dollars, as specified in subsection (3) of this rule, in the following situations:
1. Prior to any changes to the closing or long-term care plan,
2. Within 30 days of discovery that any of the anticipated costs that formed the basis of the current approved closure cost estimate have changed significantly, or
3. Within 30 days of issuance of an order by the Department finding that the facility has exceeded any of its permitted dimensions.
(d) If the value of the alternative funding mechanism is less than the total amount of the current closure cost estimate, the owner or operator shall revise the funding mechanisms to reflect the new estimate within the time frames outlined in 40 C.F.R. Part 264, subpart H.
(5) Landfill management escrow account.
(a) The owner or operator of a landfill that is owned or operated by a government agency shall establish a fee, or a surcharge on existing fees, or other appropriate revenue-producing mechanism, to ensure the availability of financial resources for the proper closing and long-term care of the landfill.
(b) The revenue-producing mechanism shall produce revenue at a rate sufficient to generate funds to meet state landfill closure requirements.
(c) The revenue shall be deposited in an interest-bearing escrow account with a financial institution such as a bank or trust whose operations are regulated and examined by a federal or state agency, or deposited in a Department-approved investment pool, created by the State of Florida or local governments that has as its primary objective liquidity and preservation of principle. The owner or operator shall file with the Department a signed duplicate original of the escrow agreement and an annual audit of the account. The audit shall be conducted by an independent Certified Public Accountant and shall be filed no later than March 31 of the following year. The audit shall identify where funds are on deposit, give the landfill management escrow account balance as of the end of the fiscal year and itemize, by facility, amounts restricted for closing and long-term care. The audit shall reference subsection 62-701.630(5), F.A.C., and the escrow agreement, and shall also include a list by date of all deposits and withdrawals made.
(d) Payments into the landfill management escrow account shall be made by the owner or operator at least annually.
1. The first payment must be made before the end of the first fiscal year after the initial receipt of solid waste into the landfill. A notice of such payment shall be submitted to the Department. Subsequent payments must be made over the term of the active life of the landfill. The calculations for such annual payment shall be determined using one of the following methods:
a. "Pay-in" method: payment = (CE - CV)/Y, where CE is the current dollar closing cost estimate at the beginning of the fiscal year (or later, if submitted pursuant to paragraph (4)(c), of this rule), CV is the current value of the escrow account at the beginning of the fiscal year, and Y is the number of remaining years in the design life of the landfill at the beginning of the fiscal year, or
b. "Balance" method: the minimum fiscal year end account balance = [CE x (DE/DL)] - E, where CE is the approved current dollar closing cost estimate (by solid waste disposal unit or group of units) at the beginning of the fiscal year (or later, if submitted pursuant to paragraph (4)(c) of this rule); DE, the design life exhausted (by solid waste disposal unit or group of units), is the period of time between the initial receipt of waste and the current fiscal year end (i.e., the year audited); DL, the design life (by solid waste disposal unit or group of units), is the period of time between initial receipt of waste and planned end of receipt of waste and must be reassessed annually in the Closure Cost Estimating Form when an escrow account or trust fund pay-in period is used; and E, all documented closing expenditures to date (by solid waste disposal unit or group of units), are expenses identified by the fiscal year end audit(s) as being incurred closing or maintaining the landfill identified in the closure plan. The choice of use of this formula requires the continued use throughout the remaining design life of the landfill or phase. In the event the fiscal year end audited account balance exceeds the minimum required balance, the owner or operator may remove the excess funds.
2. For government-owned landfills, the owner or operator shall deposit into the escrow account, at the time of closing and each year thereafter, sufficient funds to cover the following year's long-term care costs. In addition, the owner or operator must document specifically how it intends to finance the long-term care of the landfill as part of its closure plan.
3. For landfills not owned by a governmental agency, the long-term care costs shall be included in the closing cost estimates as specified in subparagraph 1., above; long-term care costs must be fully funded when the landfill closes.
4. The owner or operator may accelerate payments into the landfill management escrow account or may deposit the full amount of the current closure cost estimate at the time that the account is established.
(e) The owner or operator may make expenditures from the account and its accumulated interest only for the purpose of landfill closing and long-term care and, if such expenditures do not deplete the fund to the detriment of eventual closing and long-term care, for planning and construction of resource recovery or landfill facilities. If the owner or operator does not operate a landfill, any funds remaining in the account after paying for proper and complete closing and long-term care, as determined by the Department, shall be deposited by the owner or operator into the general fund of the local government of jurisdiction.
(f) The revenue generated under this subsection and any accumulated interest thereon may be applied to the payment of, or pledged as security for, the payment of revenue bonds issued in whole or in part for the purpose of complying with state landfill closing and long-term care requirements. Such application or pledge may be made directly in the proceedings authorizing such bonds or in an agreement with an insurer of bonds to assure such insurer of additional security therefore.
(g) The owner or operator of any landfill that had established an escrow account prior to January 1, 2007, may continue to use that escrow account to provide financial assurance for closure of that landfill, even if that landfill is not owned or operated by a government agency.
(6) Alternate proof of financial assurance.
(a) The appropriate parts of Form 62-701.900(5), Financial Mechanisms for Solid Waste Management Facilities Requiring Closure and/or Corrective Action,
Solid Waste Facility Irrevocable Letter of Credit, http://www.flrules.org/Gateway/reference.asp?No=Ref-05021,
Solid Waste Facility Financial Guarantee Bond, http://www.flrules.org/Gateway/reference.asp?No=Ref-05022,
Solid Waste Facility Perfomance Bond, http://www.flrules.org/Gateway/reference.asp?No=Ref-05023,
Solid Waste Facility Insurance Certificate, http://www.flrules.org/Gateway/reference.asp?No=Ref-05024,
Solid Waste Facility Financial Test, http://www.flrules.org/Gateway/reference.asp?No=Ref-05025,
Solid Waste Facility Corporate Guarantee, http://www.flrules.org/Gateway/reference.asp?No=Ref-05026,
Solid Waste Facility Trust Fund Agreement, http://www.flrules.org/Gateway/reference.asp?No=Ref-05027,
Solid Waste Facility Standby Trust Fund Agreement, http://www.flrules.org/Gateway/reference.asp?No=Ref-05028, effective date February 15, 2015, hereby adopted and incorporated by reference, shall be used, and originally signed duplicates submitted, when demonstrating proof of financial assurance under this section. Copies of this form are available from a local District Office or by writing to the Department of Environmental Protection, Solid Waste Section, MS #4565, 2600 Blair Stone Road, Tallahassee, Florida 32399-2400, or at http://www.dep.state.fl.us/waste/quick_topics/forms/pages/62-701.htm. Proof of financial assurance under this subsection shall include surety bonds, certificates of deposit, securities, letters of credit, trust fund agreements, closure insurance (excluding independent procurement), or financial tests and corporate guarantees, showing that the owner or operator has sufficient financial resources to cover, at a minimum, the costs of complying with all state landfill closing and long-term care requirements, and, if applicable, costs for corrective action. If such proof of financial assurance is surety bonds, letters of credit, trust fund agreements, closure insurance or financial tests and corporate guarantees, such proof shall be submitted on forms provided by the Department in accordance with the requirements of paragraphs (b) through (d) of this subsection. If proof of financial assurance is securities or certificates of deposit, these instruments must be used in conjunction with a trust fund and shall be submitted directly to the trustee. The owner or operator shall estimate such costs pursuant to subsections (3) and (4) of this rule. The financial institutions must include their legal entity name (not just trademark or fictitious names) on financial assurance forms.
(b) 40 C.F.R. Part 264 subpart H which contains EPA's rules on financial requirements for owners and operators of hazardous waste facilities are hereby adopted as financial requirements for purposes of this section incorporated by reference as those rules appear in 40 C.F.R. Part 264, revised as of July 1, 2013, except:
1. The following sections of 40 C.F.R. Part 264, subpart H are specifically not adopted as part of this rule:
a. 264.140(a); 264.140(b); 264.140(d); 264.141(a); 264.141(e); 264.142(b); 264.142(c); 264.143(b)(3)(ii)(C); 264.143(c)(3)(ii)(C); 264.143(d)(3)(ii)(C), 264.143(f)(1); 264.144(b); 264.144(c); 264.145(b)(3)(ii)(C); 264.145(c)(3)(ii)(C); 264.145(d)(3)(ii)(C), 264.145(f)(1); 264.147; 264.149; 264.150; and 264.151.
b. All references to 40 C.F.R. Part 265.
c. All references to sections or subparts of 40 C.F.R. Part 264 not contained in subpart H.
d. All references to EPA Regions.
e. All references to RCRA.
f. 264.140(c) when referring to landfills owned or operated by a government agency.
2. References to 40 C.F.R. 264.143(f)(1) and 264.145(f)(1) shall mean paragraph 62-701.630(6)(c), F.A.C. References in 40 C.F.R. Part 264, subpart H to the United States Environmental Protection Agency (EPA) shall mean the State of Florida Department of Environmental Protection (DEP); to Regional Administrator shall mean the Secretary of the Department or the Secretary's written designee; to RCRA permits shall mean solid waste management permits; to Post-Closure shall mean Long-Term or Long-Term Care, as applicable; to EPA identification number shall mean the Department identification number; to hazardous waste shall mean solid waste; to hazardous waste treatment, storage or disposal facilities shall mean landfills; to Section 3008 of RCRA shall mean FDEP Agency Action; to Circular 570 of the U.S. Department of the Treasury shall mean Circular 570 of the U.S. Department of the Treasury and licensed to do business in the State of Florida; to must also establish shall mean must also establish and maintain; to both closure and post-closure shall mean closing, long-term care and corrective action, or any combination thereof; and to one or more states shall mean in the State of Florida.
3. Financial assurance, when reimbursed, will go towards covering all or any part of the costs for a facility's "Required Action" (closing, long-term care, and/or corrective action) as identified on the first page of the trust fund or insurance certificate regardless of actual cost estimate calculations.
4. When the Department directs financial institutions to make a payment or reimbursement, the payment or reimbursement shall be sent within 30 days of receipt of the Department's direction, unless communication from the Department authorizes a delay.
5. The trust fund pay-in period shall not exceed 5 years. Schedule A of the trust agreement must be updated only during the pay-in period.
6. When Corrective Action is selected on any part of Form 62-701.900(5), 40 C.F.R. 264.145 references to post-closure shall mean corrective action, as applicable.
(c) An owner or operator may satisfy the requirements of this subsection by passing a financial test using Form 62-701.900(5)(e). The financial test shall cover the latest approved estimate or any subsequent estimate that is higher. To pass this test the owner or operator must meet the criteria of either subparagraph 1. or 2. as follows:
1. The owner or operator must have:
a. One of the two following ratios: A ratio of less than 1.5 comparing total liabilities to net worth; or a ratio of greater than 0.10 comparing the sum of net income plus depreciation, depletion and amortization, minus $10, 000, 000.00 million, to total liabilitiesm
b. Net working capital of at least three times the sum of the required actionm
c. Tangible net worth greater than the sum of the required action plus $10, 000, 000.00 million, or at least three times the sum of the required action, whichever is greater; and,
d. Assets located in the United States amounting to at least three times the sum of the required action.
2. The owner or operator must have:
a. A bond issuance, secured or unsecured, having a redemption date with at least five years remaining. An unsecured bond rating must maintain a rating of BBB or better as issued by Standard and Poor's bond rating service or Baa2 or better as issued by Moody's bond rating service. A facility using an insured or secured bond must demonstrate to the Department the underlying or senior unsecured bond rating as assigned by Standard and Poor's is BBB or better, or as assigned by Moody's is Baa2 or better,
b. Tangible net worth greater than the sum of the required action plus $10 million, or at least three times the sum of the required action, whichever is greater; and,
c. Assets located in the United States amounting to at least three times the sum of the required action.
(d) Government-owned facilities providing proof of financial assurance using a financial test must send updated information outlined in 40 C.F.R. 264.143(f)(5) and 264.145(f)(5) to the Department within 180 days after the close of each succeeding fiscal year.
(e) An owner or operator using an insurance policy for financial assurance must establish and maintain a standby trust fund that meets the requirements of 40 C.F.R. 264.143(b)(3) and/or 264.145(b)(3). The insurance policy must provide that, upon written direction from the Secretary of the Department or the Secretary's written designee, the entire face amount of the policy, less any amounts previously paid out under requirements of 40 C.F.R. Part 264 subpart H, will be placed into the trust fund to be used by the Department for closure and/or corrective action activities. Once closure and/or corrective action is complete, any money remaining in the trust fund will be returned to the insurer. Direction to make payment into the trust fund must be preceded by one or more of the following:
1. FDEP deems the facility abandoned,
2. The permit is terminated or revoked or a new permit is denied,
3. Closure is ordered by the FDEP or a U.S. district court or other court of competent jurisdiction,
4. The owner or operator is named as debtor in a voluntary or involuntary proceeding under Title 11 (Bankruptcy), U.S. Code, or
5. The insurer elected to submit a cancellation, termination, or failure to renew the policy notice in accordance with the provisions of 40 C.F.R. 264.143(e)(8) or 264.145(e)(8) and the insured failed to provide alternate financial assurance within 90 days after the date of notice of cancellation, termination or failure to renew the policy was received by both the insured and the FDEP Secretary, or designee.
(7) Cost estimates for corrective action. An owner or operator of a landfill required to establish financial assurance for a corrective action program pursuant to paragraph (2)(d) of this rule, shall have a detailed written estimate in current dollars, estimated and certified by a professional engineer, of the cost of hiring a third party to perform the corrective action in accordance with subsection 62-701.510(6), F.A.C. The corrective action cost estimate must account for the total cost of corrective action activities as described in the corrective action plan for the entire corrective action period. The owner or operator shall submit the estimate, together with all necessary justification including source of the estimates indicated, to the Department for approval along with proof of financial assurance.
(8) Cost adjustments for corrective action.
(a) The owner or operator shall annually adjust the estimate for inflation and changes in the corrective action plan until the corrective action program is completed in accordance with subsection 62-701.510(6), F.A.C. Inflation adjusted estimates shall be submitted in the timeframes designated by paragraph (4)(a) of this rule. The adjustment shall be made either by:
1. Recalculating the maximum cost of corrective action, in current dollars, as specified in subsection (7) of this rule, or
2. By using an inflation factor derived from the most recent Implicit Price Deflator for Gross National Product published by the U.S. Department of Commerce in its Survey of Current Business as specified in subparagraphs a. and b. as follows. The inflation factor is the result of dividing the latest published annual Deflator by the Deflator for the previous year.
a. The first adjustment is made by multiplying the corrective action cost estimate by the inflation factor. The result is the adjusted corrective action cost estimate.
b. Subsequent adjustments are made by multiplying the latest adjusted corrective action cost estimate by the latest inflation factor.
(b) At the time of permit renewal, or every fifth year when a permit is issued with a duration greater than five years, or if the corrective action plan is modified during the corrective action period, the owner or operator shall revise the corrective action cost estimate. Revisions shall be made and submitted as specified in subparagraph (8)(a)1. of this rule. The use of cost estimates that are submitted in accordance with this subsection and used as the basis for comparison against the balance of the funding mechanisms specified in subsection (9) of this rule, does not constitute estimate approval.
(c) The owner or operator shall keep the latest corrective action cost estimate and, when this estimate has been adjusted in accordance with paragraph (8)(a) of this rule, the latest adjusted corrective action cost estimate at the facility until the corrective action is complete.
(9) Financial assurance for corrective action.
(a) For government owned landfills, the owner or operator shall demonstrate proof of financial assurance for corrective action with the Department by identifying a revenue source and establishing an escrow account as specified in paragraph (5)(c) of this rule, or by using one of the approved alternate mechanisms specified in subsection (6) of this rule. Payments into the landfill management escrow account shall be made by the owner or operator according to one of the following methods:
1. The owner or operator shall deposit into the landfill management escrow the full cost associated with the corrective action remedy within 120 days after the corrective action remedy has been selected, or
2. If the local government can document a specific non-general revenue source adequate to cover the total corrective action cost, then only that portion of the corrective action to be undertaken the following year need be funded.
(b) For privately owned landfills, the owner or operator shall demonstrate proof of financial assurance for corrective action with the Department by using one of the approved alternate mechanisms specified in subsection (6) of this rule. If a trust fund is used, the first payment into the trust must be at least equal to one-half of the current cost estimate for corrective action. The amount of subsequent payments must be determined by the following formula: Next payment = [RB - CV]/Y, where RB is the most recent estimate of the required trust fund balance for corrective action (i.e., the total costs that will be incurred during the second half of the corrective action period), CV is the current value of the trust fund, and Y is the number of years remaining in the pay-in period. The pay-in period is one-half of the estimated length of the corrective action program.
(10) If long-term care is extended because the permittee has failed to perform all required monitoring and maintenance, financial assurance shall continue to be required during the extended long-term care. If the long-term care is extended for any other reason, financial assurance is not required during the extended long-term care period, except as may be required in subsections (7) through (9) of this rule.
Notes
Rulemaking Authority 403.704 FS. Law Implemented 403.704, 403.707, 403.7125(5) FS.
New 7-1-85, Formerly 17-7.076, Amended 11-28-89, Formerly 17-701.076, Amended 1-6-93, 1-2-94, 5-19-94, Formerly 17-701.630, Amended 5-27-01, 1-6-10, 8-12-12, 2-15-15.