Ohio Admin. Code 3745-27-18 - Corrective measures financial assurance for a sanitary landfill facility
(A) Applicability.
Except as provided in paragraph (B)(6)
the
requirements of this rule. For the purposes of this rule, "required to
undertake corrective measures" means one of the following:
(1) The director selects a corrective measure
in accordance with paragraph (F)(10) of rule
3745-27-10
of the Administrative Code.
(2) The
director requires the owner or operator to undertake interim measures to
protect human health or the environment in accordance with paragraph (F)(6) of
rule
3745-27-10
of the Administrative Code.
(3) The
director requires corrective measures as a condition of a permit.
(B) Implementation.
(1) If the sanitary landfill facility is
"required to undertake corrective measures" pursuant to a selection or
designation of a plan in accordance with paragraph (A)(1) or
(2)
(A)(2) of
this rule, the owner or operator shall do the following:
(a)
Within
Not later than
ninety days after being required to undertake
corrective actions in accordance with paragraph (A) of this rule , execute
a corrective measures financial assurance instrument, deliver the originally
signed corrective measures financial assurance instrument to the director by
certified mail or any other form of mail accompanied by a receipt, and place a
copy of the corrective measures financial assurance instrument into the
operating record in accordance with rule
3745-27-09
of the Administrative Code.
(b)
Within
Not later
than one hundred twenty days after being required
to undertake corrective actions in accordance with paragraph (A) of this
rule , fund the corrective measures financial assurance
instrument.
(2) If the
owner or operator of a sanitary landfill facility is "required to undertake
corrective measures" pursuant to rule
3745-27-10
of the Administrative Code as a condition of permit issuance, the owner or
operator shall do the following:
(a) Upon
permit issuance, comply with this rule.
(b)
No
Not later than
the date of permit issuance, execute the
corrective measures financial assurance instrument, and prior to receipt of
solid wastes in the unit(s)
units
authorized by the permit, fund the corrective measures financial assurance
instrument.
(C)
The
requirements of this
This rule
do
does not
apply to the following:
(1) Residual solid
waste landfill facilities subject to the requirements of Chapter 3745-30 of the
Administrative Code.
(2) Industrial
solid waste landfill facilities subject to the requirements of Chapter 3745-29
of the Administrative Code.
(3)
Sanitary landfill facilities that ceased acceptance of solid waste prior to
June 1, 1994 as evidenced by the notification required to be submitted by
paragraph (E) of rule
3745-27-11
of the Administrative Code.
(D) Corrective measures financial assurance
instrument.
The corrective measures financial assurance instrument shall
contain an itemized written estimate, in current dollars, of the total cost of
corrective measures activities as described in the corrective measures plan for
the entire corrective measures period for all unit(s)
(E) Review of corrective measures financial
assurance instrument. The owner or operator of a sanitary landfill facility
shall submit to the director, by certified
mail or any other form of mail accompanied by a receipt, the most recently
adjusted corrective measures cost estimate prepared in accordance with this
paragraph. The owner or operator of a sanitary landfill facility shall
do the following :
(1) Annually review and analyze the
corrective measures cost estimate and shall make any appropriate revisions to
these estimates and to the financial assurance instrument whenever a change in
the corrective measures activities increases the cost of corrective measures.
Any revised corrective measures cost estimate must be adjusted for inflation as
specified in paragraph (E)(2) of this rule.
(2) Annually adjust the corrective measures
cost estimate for inflation. The adjustment shall be made as specified in this
paragraph, using an
the preceding February inflation factor derived from
the annual implicit price deflator for gross domestic product as published by
the U.S. department of commerce in its February
issue of "Survey of Current Business." 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 measures cost estimate by the inflation factor. The
result is the adjusted corrective measures cost estimate.
(b) Subsequent adjustments are made by
multiplying the most recently adjusted corrective measures cost estimate by the
most recent inflation factor.
(F) The owner or operator, who is required to
undertake corrective measures shall select a corrective measures financial
assurance mechanism from the list of mechanisms specified in paragraphs
(G), (H), (I), (J), (K), (L), and
to (M) of this rule, provided the owner or
operator satisfies the criteria for use of that mechanism.
(G) Corrective measures trust fund.
(1) The owner or operator may satisfy
the requirements of this rule by
establishing a corrective measures trust fund which conforms to
the requirements of this paragraph,
and by sending an originally signed duplicate of
the trust agreement to the director by certified mail or any other form of mail
accompanied by a receipt within the time period outlined in paragraph (B) of
this rule, and submitting a copy of the trust agreement into the operating
record of the facility in accordance with rule
3745-27-09
of the Administrative Code. The trustee shall be an entity that has the
authority to act as a trustee and which trust operations are regulated and
examined by a federal or state agency.
(2) The wording of the trust agreement shall
be identical to the wording specified in paragraph (A)(1) of rule
3745-27-17
of the Administrative Code on forms prescribed by the director and the trust
agreement shall be accompanied by a formal certification of acknowledgment.
Schedule A of the trust agreement shall be updated not later than sixty days
after a change in the amount of the current corrective measures cost estimate
provided for in the agreement.
(3)
A corrective measures trust fund shall be established to secure an amount at
least equal to the current corrective measures cost estimate, except as
provided in paragraph (N) of this rule. Payments to the trust fund shall be
made quarterly, except as permitted by paragraph (G)(4) of this rule, by the
owner or operator over the term of the projected corrective measures period as
outlined in the applicable authorizing document, including permit to install or
plan approval, this period is hereafter referred to as the pay-in period. The
first payment into the corrective measures trust fund shall be made in
accordance with paragraph (B) of this rule. Subsequent payments to the
corrective measures trust fund shall be made as follows:
(a) A receipt from the trustee for each
payment shall be submitted by the owner or operator to the director. The first
payment shall be at least equal to the current corrective measures cost
estimate divided by the number of quarters in the pay-in period, except as
provided in paragraph (N) of this rule. Subsequent payments shall be made not
later than thirty days after each quarter following the first payment. The
amount of each subsequent payment shall be determined by performing the
following calculation:
Where CE is the current corrective measures cost estimate, CV is the current value of the trust fund, and Q is the number of quarters remaining in the pay-in period.
(b) If the owner or operator establishes a
trust fund, as specified in this rule, and the value of the trust fund is less
than any revised current corrective measures cost estimate made during the
pay-in period, the amount of the current corrective measures cost estimate
still to be paid into the trust fund shall be paid in over the pay-in period,
as defined in paragraph (G)(3) of this rule. Payments shall continue to be made
not later than thirty days after each quarter following the first payment
pursuant to paragraph (G)(3)(a) of this rule. The amount of each payment shall
be determined by performing the following calculation:
(4) The owner or operator may accelerate
payments into the trust fund or the owner or operator may deposit the full
amount of the current corrective measures cost estimate at the time the fund is
established. However, the owner or operator shall maintain the value of the
fund at no less than the value the fund would have if quarterly payments were
made as specified in paragraphs (G)(3) of this rule.
(5) If the owner or operator establishes a
corrective measures trust fund after having begun funding corrective measures
under any mechanism(s)
mechanisms specified in this rule, the corrective
measures trust fund shall be established by depositing the total value of all
prior mechanisms into the newly established trust fund. The subsequent
quarterly payments shall be made as specified in paragraph (G)(3) of this
rule.
(6) After the pay-in period
of a trust fund has ended and the current corrective measures cost estimate
changes, the owner or operator shall compare the revised estimate to the
trustee's most recent annual valuation of the trust fund. If the value of the
trust fund is less than the amount of the revised estimate, the owner or
operator shall, not later than sixty days after the change in the cost
estimate, either deposit a sufficient amount into the trust fund so that its
value after payment at least equals the amount of the current corrective
measures cost estimate, or obtain alternate financial assurance as specified in
this rule to compensate for the difference.
(7) The director shall instruct the trustee
to release to the owner or operator such funds as the director specifies in
writing, after receiving one of the following requests from the owner or
operator for a release of funds:
(a)
The owner or operator may submit a
A written request to the director for the release of
the amount in excess of the current corrective measures cost estimate, if the
value of the trust fund is greater than the total amount of the current
corrective measures cost estimate.
(b)
The owner or
operator may submit a
A written request
to the director for release of the amount in the trust fund that exceeds the
amount required as a result of such substitution, if the owner or operator
substitutes any of the alternate financial assurance mechanism(s)
mechanisms specified in this rule for all or part of
the trust fund.
(8)
Reimbursement for corrective measures.
After beginning corrective measures, the owner or operator, or
any other person authorized by the owner, operator, or director to perform
corrective measures, may request reimbursement for corrective measures
expenditures by submitting itemized bills to the director. After receiving
itemized bills for corrective measures activities, the director shall determine
whether the corrective measures expenditures are in accordance with the
applicable authorizing document, including permit to install or plan approval,
or are otherwise justified, and if so, will instruct the trustee to make
reimbursement in such amounts as the director specifies in writing. If the
director determines that the cost of corrective measures care will be greater
than the value of the trust fund, he
he
he
(9) The director will agree to termination of
a trust when one of the following occurs:
(a)
The owner or operator substitutes alternate financial assurance for corrective
measures as specified in paragraph (G)(6) of this rule.
(b) The director notifies the owner or
operator, in accordance with paragraph (P) of this rule, that the owner or
operator is no longer required by this rule to maintain financial assurance for
corrective measures.
(H) Surety bond guaranteeing payment into a
corrective measures trust fund.
(1) The owner
or operator may satisfy the requirements of
this rule by obtaining a surety bond that conforms to
the requirements of this paragraph and by
delivering the originally signed bond to the director by certified mail or any
other form of mail accompanied by a receipt within the time period outlined in
paragraph (B) of this rule by submitting a copy of the bond into the operating
record in accordance with rule
3745-27-09
of the Administrative Code. The surety company issuing the bond shall, at a minimum,
be among those listed as acceptable sureties on federal bonds in "Circular 570"
of the U.S. department of the treasury.
[Comment: "Circular 570" is
published in the "Federal Register" annually on the first day of July; interim
changes in the circular are also published in the "Federal
Register."]
(2)
The wording of the surety bond shall be identical to the wording specified in
paragraph (B) of rule
3745-27-17
of the Administrative Code on forms prescribed by the director.
(3) The owner or operator who uses a surety
bond to satisfy the requirements of this
rule shall also establish a standby trust fund not later than when the bond is
obtained. Under the terms of the surety bond, all payments made thereunder will
be deposited by the surety directly into the standby trust fund in accordance
with instructions from the director. This standby trust fund shall meet
the requirements specified in paragraph (G)
of this rule, except that
as follows :
(a) An
originally signed duplicate of the trust agreement shall be delivered to the
director with the surety bond and placed in the operating record in accordance
with rule
3745-27-09
of the Administrative Code.
(b)
Until the standby trust fund is funded, pursuant to the requirements of this rule, the following are
not required:
(i) Payments into the trust
fund as specified in paragraph (G) of this rule.
(ii) Revisions of Schedule A of the trust
agreement to show current corrective measures cost estimate.
(iii) Annual valuations as required by the
trust agreement;
(iv) Notices of
nonpayment as required by the trust agreement.
(4) The bond shall guarantee that the surety
will become liable on the bond obligation unless the owner or operator does one
of the following, as applicable:
(a) Fund the
standby trust fund in an amount equal to the penal sum of the bond before the
beginning of the corrective measures period.
(b) Fund the standby trust fund in an amount
equal to the penal sum of the bond not later than fifteen days after corrective
measures are required pursuant to rule
3745-27-10
of the Administrative Code.
(c)
Provide alternate financial assurance as specified in this rule, and obtain the
director's written approval of the alternative financial assurance provided,
not later than ninety days after both the owner or operator and the director
receive notice of cancellation of the bond from the surety.
(5) Under the terms of the bond,
the surety shall become liable on the bond obligation when the owner or
operator fails to perform as guaranteed by the bond.
(6) The penal sum of the bond shall be in an
amount at least equal to the current corrective measures cost estimate except
as provided in paragraph (N) of this rule.
(7) Whenever the current corrective measures
cost estimate increases to an amount greater than the penal sum of the bond,
the owner or operator shall, not later than sixty days after the increase in
the estimate, either cause the penal sum of the bond to be increased to an
amount at least equal to the current corrective measures cost estimate and
submit evidence of such increase to the director, and into the operating record
in accordance with rule
3745-27-09
of the Administrative Code, or obtain alternate financial assurance, as specified in this rule, to compensate for the increase. Whenever the
current corrective measures cost estimate decreases, the penal sum may be
reduced to the amount of the current corrective measures cost estimate
following written approval by the director. Notice of an increase or a proposed
decrease in the penal sum shall be sent to the director not later than sixty
days after the change.
(8) Under
the terms of the bond, the bond shall remain in force unless the surety sends
written notice of cancellation by certified mail or any other form of mail
accompanied by a receipt to the owner or operator and to the director.
Cancellation cannot occur, however, during the one hundred twenty day period
beginning on the first day that both the owner or operator and the director
have received the notice of cancellation, as evidenced by the return
receipts.
(9) The owner or operator
may cancel the bond if the director has given prior written consent. The
director will provide such written consent to the surety bond company when one
of the following occurs:
(a) The owner or
operator substitutes alternate financial assurance for corrective measures as
specified in this rule.
(b) The
director notifies the owner or operator, in
accordance with paragraph (P) of this rule that the owner or operator is no
longer required to maintain financial assurance for corrective measures.
(I) Surety
bond guaranteeing performance of corrective measures.
(1) The owner or operator may satisfy
the requirements of this rule by obtaining
a surety bond which conforms to the requirements
of this paragraph and by delivering the originally signed bond to the
director within the time period outlined in paragraph (B) of this rule by
submitting a copy of the surety bond into the operating record of the facility
in accordance with rule
3745-27-09
of the Administrative Code. The surety company issuing the bond shall, at a minimum,
be among those listed as acceptable sureties on federal bonds in "Circular 570"
of the U.S. department of the treasury.
[Comment: "Circular 570" is
published in the "Federal Register" annually on the first day of July; interim
changes in the circular are also published in the "Federal
Register."]
(2)
The wording of the surety bond shall be identical to the wording specified in
paragraph (C) of rule
3745-27-17
of the Administrative Code on forms prescribed by the director.
(3) The owner or operator who uses a surety
bond to satisfy the requirements of this
rule shall also establish a standby trust fund. Under the terms of the surety
bond, all payments made thereunder will be deposited by the surety directly
into the standby trust fund in accordance with instructions from the director.
This standby trust fund shall meet the requirements specified in paragraph (G)
of this rule except that:
(a) An originally
signed duplicate of the trust agreement shall be delivered to the director with
the surety bond and placed in the operating record in accordance with rule
3745-27-09
of the Administrative Code.
(b)
Unless the standby trust fund is funded pursuant to the requirements of this rule, the following are
not required:
(i) Payments into the trust
fund as specified in paragraph (G) of this rule.
(ii) Revisions of Schedule A of the trust
agreement to show current corrective measures cost estimate.
(iii) Annual valuations as required by the
trust agreement.
(iv) Notices of
nonpayment as required by the trust agreement.
(4) The bond shall guarantee that the surety
will become liable on the bond obligation unless the owner or operator does one
of the following, as applicable:
(a) Performs
corrective measures in accordance with the applicable authorizing document,
including the permit to install or plan
approval.
(b) Provides alternate
financial assurance as specified in this rule, and obtain
obtains the
director's written approval of the alternate financial assurance provided, not
later than ninety days after both the owner or operator and the director
receive notice of cancellation of the bond from the surety.
(5) Under the terms of the bond,
the surety will become liable on the bond obligation when the owner or operator
fails to perform as guaranteed by the bond. Following a determination by the
director that the owner or operator of the sanitary landfill facility has
failed to perform corrective measures activities in accordance with the
applicable authorizing document, including the
permit to install or plan approval, the surety shall perform corrective
measures in accordance with the applicable authorizing document, including
the permit to install or plan approval, or will
deposit the amount of the penal sum into the standby trust fund.
(6) The penal sum of the bond shall be in an
amount at least equal to the current corrective measures cost
estimate.
(7) Whenever the current
corrective measures cost estimate increases to an amount greater than the penal
sum of the bond, the owner or operator shall, not later than sixty days after
the increase in the estimate, either cause the penal sum of the bond to be
increased to an amount at least equal to the current corrective measures cost
estimate and submit evidence of such increase to the director, and into the
operating record in accordance with rule
3745-27-09
of the Administrative Code, or obtain alternate financial assurance, as
specified in this rule, to compensate for the increase. Whenever the current
corrective measures cost estimate decreases, the penal sum may be reduced to
the amount of the current corrective measures cost estimate following written
approval by the director. Notice of an increase or a proposed decrease in the
penal sum shall be sent to the director by certified mail or any other form of
mail accompanied by a receipt not later than sixty days after the
change.
(8) Under the terms of the
bond, the bond shall remain in force unless the surety sends written notice of
cancellation by certified mail or any other form of mail accompanied by a
receipt to the owner or operator and to the director. Cancellation cannot
occur, however, during the one hundred twenty day period beginning on the first
day that both the owner or operator and the director have received the notice
of cancellation, as evidenced by the return receipts.
(9) The owner or operator may cancel the bond
if the director has given prior written consent. The director will provide such
written consent to the surety bond company when one of the following occurs:
(a) The owner or operator substitutes
alternate financial assurance for corrective measures as specified in this
rule.
(b) The director notifies the
owner or operator, in accordance with paragraph (P) of this rule that the owner
or operator is no longer required by this rule to maintain financial assurance
for corrective measures.
(10) The surety shall not be liable for
deficiencies in the completion of corrective measures activities by the owner
or operator after the owner or operator has been notified by the director, in
accordance with this rule, that the owner or operator is no longer required to
maintain financial assurance for corrective measures.
(J) Corrective measures letter of credit.
(1) The owner or operator may satisfy
the requirements of this rule by obtaining
an irrevocable standby letter of credit ("letter of credit") which conforms to
the requirements of this paragraph and by
having the originally signed letter of credit delivered to the director by
certified mail or any other form of mail accompanied by a receipt within the
time period outlined in paragraph (B) of this rule and by submitting a copy of
the letter of credit into the operating record of the facility in accordance
with rule
3745-27-09
of the Administrative Code. The issuing institution shall be an entity which
has the authority to issue letters of credit and whose letter of credit
operations are regulated and examined by a federal or state agency.
(2) The wording of the letter of credit shall
be identical to the wording specified in paragraph (D) of rule
3745-27-17
of the Administrative Code on forms prescribed by the director.
(3) An owner or operator who uses a letter of
credit to satisfy the requirements of this
rule shall also establish a standby trust fund. Under the terms of the letter
of credit, all amounts paid pursuant to a draft by the director shall be
deposited promptly and directly by the issuing institution into the standby
trust fund in accordance with instructions from the director. The standby trust
fund shall meet the requirements of the trust fund specified in paragraph (G)
of this rule, except that
as follows :
(a) An
originally signed duplicate of the trust agreement shall be delivered to the
director with the letter of credit, and a copy of the letter placed in the
operating record in accordance with rule
3745-27-09
of the Administrative Code.
(b)
Unless the standby trust fund is funded pursuant to the requirements of this rule, the following are
not required:
(i) Payments into the trust
fund as specified in paragraph (G) of this rule.
(ii) Updating of Schedule A of the trust
agreement to show current corrective measures cost estimate.
(iii) Annual valuations as required by the
trust agreement.
(iv) Notices of
nonpayment as required by the trust agreement.
(4) The letter of credit shall be accompanied
by a letter from the owner or operator referring to the letter of credit by
number, issuing institution, and date, and providing the following information:
the names and addresses of the sanitary landfill facility and the owner and the
operator and the amount of funds assured for corrective measures by the letter
of credit.
(5) The letter of credit
shall be irrevocable and issued for a period of at least one year. The letter
of credit shall provide that the expiration date will be automatically extended
for a period of at least one year unless, at least one hundred twenty days
prior to the current expiration date, the issuing institution notifies both the
owner and operator and the director by certified mail or any other form of mail
accompanied by a receipt of a decision not to extend the expiration date. Under
the terms of the letter of credit, the one hundred twenty day period shall
begin on the day when both the owner or operator and the director have received
the notice, as evidenced by the return receipts.
(6) The letter of credit shall be issued in
an amount at least equal to the current corrective measures cost estimate,
except as provided in paragraph (N) of this rule.
(7) Whenever the current corrective measures
cost estimate increases to an amount greater than the amount of the credit, the
owner or operator shall, not later than sixty days after this increase, either
cause the amount of the credit to be increased to an amount at least equal to
the current corrective measures cost estimate and submit evidence of such
increase to the director, and into the operating record in accordance with rule
3745-27-09
of the Administrative Code, or obtain alternate financial assurance, as
specified in this rule, to compensate for the increase. Whenever the current
corrective measures cost estimate decreases, the letter of credit may be
reduced to the amount of the current corrective measures cost estimate
following written approval by the director. Notice of an increase or a proposed
decrease in the amount of the letter of credit shall be sent to the director by
certified mail or any other form of mail accompanied by a receipt not later
than sixty days after the change.
(8) Under the terms of the letter of credit,
the director may draw on the letter of credit following a determination that
the owner or operator has failed to do the
following :
(a) Perform corrective
measures activities in accordance with the applicable authorizing document,
including the permit to install or plan
approval.
(b) Provide alternate
financial assurance as specified in this rule and obtain written approval of
such alternate financial assurance from the director not later than ninety days
after the owner and operator and the director have received notice from the
issuing institution that it will not extend the letter of credit beyond the
current expiration date, the director shall draw on the letter of credit. The
director may delay the drawing if the issuing institution grants an extension
of the term of the credit. During the final thirty days of any such extension
the director shall draw on the letter of credit if the owner or operator has
failed to provide alternate financial assurance as specified in this rule and
has failed to obtain written approval of such alternate financial assurance
from the director.
(9)
The director shall return the original letter of credit to the issuing
institution for termination when either of the following occurs:
(a) The owner or operator substitutes
alternate financial assurance for corrective measures as specified in this
rule.
(b) The director notifies the
owner or operator, in accordance with paragraph (P) of this rule that the owner
or operator is no longer required to maintain financial assurance for
corrective measures.
(K) Corrective measures insurance.
(1) The owner or operator may satisfy
the requirements of this rule by obtaining
corrective measures insurance which conforms to the
requirements of this paragraph and by submitting a originally signed
certificate of such insurance to the director by certified mail or any other
form of mail accompanied by a receipt within the time period outlined in
paragraph (B) of this rule, and by submitting a copy of the certificate of
insurance into the operating record of the facility in accordance with rule
3745-27-09
of the Administrative Code. At a minimum, the insurer shall be licensed to
transact the business of insurance, or eligible to provide insurance as an
excess or surplus lines insurer, in one or more states.
(2) The wording of the certificate of
insurance shall be identical to the wording specified in paragraph (E) of rule
3745-27-17
of the Administrative Code on forms described by the director.
(3) The corrective measures insurance policy
shall be issued for a face amount at least equal to the current corrective
measures cost estimate except as provided in paragraph (N) of this rule. Face
amount means the total amount the insurer is obligated to pay under the policy.
Actual payments by the insurer will not change the face amount, although the
insurer's future liability will be lowered by the amount of the
payments.
(4) The corrective
measures insurance policy shall guarantee that funds will be available to
perform corrective measures whenever mandated. The policy shall also guarantee
that once corrective measures begins, the insurer will be responsible for
paying out funds, up to an amount equal to the face amount of the policy, upon
the direction of the director, to such party or parties as the director
specifies.
(5) Reimbursement for
corrective measures.
After beginning corrective measures, the owner or operator, or
any other person authorized by the owner, operator, or director to perform
corrective measures, may request reimbursement for corrective measures
expenditures by submitting itemized bills to the director. After receiving
itemized bills for corrective measures activities, the director shall determine
whether the corrective measures expenditures are in accordance with the
applicable authorizing document, including he
he
deems
he determines
(6) The owner or operator shall maintain the
policy in full force and effect until the director consents to termination of
the policy by the owner or operator as specified in paragraph (K)(8) of this
rule. Failure to pay the premium, without substitution of alternate financial
assurance as specified in this rule, will constitute a violation of these
rules, warranting such remedy as the director deems necessary. Such violation
shall be deemed to begin upon receipt by the director of a notice of future
cancellation, termination, or failure to renew due to nonpayment of the
premium, rather than upon the date of expiration.
(7) Each policy shall contain a provision
allowing assignment of the policy to a successor owner or operator. Such
assignment may be conditional upon consent of the insurer, provided such
consent is not unreasonably refused.
(8) The policy shall provide that the insurer
may not cancel, terminate, or fail to renew the policy except for failure to
pay the premium. The automatic renewal of the policy shall, at a minimum,
provide the insured with the option of renewal at the face amount of the
expiring policy. If there is a failure to pay the premium, the insurer may
elect to cancel, terminate, or fail to renew the policy by sending notice by
certified mail or any other form of mail accompanied by a receipt to the owner
or operator and to the director. Cancellation, termination, or failure to renew
may not occur, and the policy will remain in full force and effect unless on or
before the date of expiration:
(a) Corrective
measures activities required in the applicable authorizing document, including
permit to install or plan approval have occurred.
(b) The owner or operator is named as debtor
in a voluntary or involuntary proceeding under title 11 (bankruptcy), U.S.
Code.
(c) The premium due is
paid.
(9) Whenever the
current corrective measures cost estimate increases to an amount greater than
the face amount of the policy, the owner or operator shall, not later than
sixty days after the increase, either cause the face amount to be increased to
an amount at least equal to the current corrective measures cost estimate and
submit evidence of such increase to the director, and into the operating record
in accordance with rule
3745-27-09
of the Administrative Code, or obtain alternate financial assurance as
specified in this rule to compensate for the increase. Whenever the current
corrective measures cost estimate decreases, the face amount may be reduced to
the amount of the current corrective measures cost estimate following written
approval by the director.
(10) The
director will give written consent to the owner or operator that owner or
operator may terminate the insurance policy when either of the following
occurs:
(a) The owner or operator substitutes
alternate financial assurance for corrective measures as specified in this
rule;
.
(b) The
director notifies the owner or operator, in accordance with paragraph (P) of
this rule that owner or operator is no longer required to maintain financial
assurance for corrective measures.
(L) Financial test and corporate guarantee
for corrective measures.
(1) The owner or
operator may satisfy the requirements of
this rule by demonstrating that the owner or operator passes a financial test
as specified in this paragraph. To pass this test the owner or operator shall
demonstrate that less than fifty per cent of the parent corporation's gross
revenues are derived from solid waste disposal, solid waste transfer facility
operations, or scrap tire transporter operations, or if there is no parent
corporation, the owner or operator shall demonstrate that less than fifty per
cent of its gross revenues are derived from solid waste facility, solid waste
transfer facility, or scrap tire transporter operations and either:
(a) The owner or operator shall have
the following :
(i) Satisfaction of at least two of the
following ratios: a ratio of total liabilities to net worth less than 2.0; a
ratio of the sum of net income plus depreciation, depletion, and amortization
minus $10 million to total liabilities greater than 0.1; a ratio of current
assets to current liabilities greater than 1.5;
.
(ii) Net working capital and tangible net
worth each at least six times the sum of the current final closure and current
post-closure care cost estimates, scrap tire transporter final closure cost
estimates, any corrective measures cost estimates, and any other obligations
assured by a financial test;
.
(iii)
Tangible net worth of at least ten million dollars;
.
(iv) Assets in the United States amounting to
at least ninety per cent of total assets or at least six times the sum of the
current final and current post-closure care cost estimates, scrap tire
transporter final closure cost estimates, any current corrective measures cost
estimates, and any other obligations assured by a financial test.
(b) The owner or operator shall
have the following :
(i) Issued a corporate bond for which the
owner or operator, as the issuing entity, has not received a current rating of
less than BBB as issued by "Standard and Poor's" or Baa as issued by "Moody's".
Owner and operators using bonds that are secured by collateral or a guarantee
must meet the minimum rating without that security.
(ii) Tangible net worth at least six times
the sum of the current final and current post-closure care cost estimates,
scrap tire transporter final closure cost estimates, any corrective measures
cost estimates, and any other obligations assured by a financial test;
.
(iii) Tangible net worth of at least ten
million dollars;
.
(iv)
Assets located in the United States amounting to at least ninety per cent of
total assets or at least six times the sum of the current final closure and
current post-closure care cost estimates, scrap tire transporter final closure
cost estimates, any current corrective measures cost estimates, and any other
obligations assured by a financial test.
(2) Current final closure and current
post-closure care cost estimates, scrap tire transporter final closure cost
estimates, current corrective measures cost estimates, and any other
obligations assured by a financial test as used in paragraph (L)(1) of this
rule refers to the cost estimates required to be shown in the letter from the
owner's or operator's chief financial officer.
(3) To demonstrate that requirements of this
test are met, the owner or operator shall submit the following items to the
director, and into the operating record in accordance with rule
3745-27-09
of the Administrative Code:
(a) A letter
signed by the owner's or operator's chief financial officer and worded as
specified in paragraph (F) of rule
3745-27-17
of the Administrative Code on forms prescribed by the director;
(b) A copy of a report by an independent
certified public accountant examining the owner's or the operator's financial
statements for the most recently completed fiscal year;
(c) A special report from the owner's or the
operator's independent certified public accountant, in the form of an
agreed-upon procedures report, to the owner or operator stating
that
the
following :
(i)
He
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 most recent fiscal
year with the amounts in such financial statements;
.
(ii) In connection with the agreed-upon
procedures report, he
the independent certified public accountant states
that he
the
independent certified public accountant agrees the specified data is
accurate.
(4)
After the initial submission of the items specified in paragraph (L)(3) of this
rule, the owner or operator shall send updated information to the director, and
submit updated information into the operating record in accordance with rule
3745-27-09
of the Administrative Code, not later than ninety days after the close of each
succeeding fiscal year. This information shall include all three items
specified in paragraph (L)(3) of this rule.
(5) If the owner or operator no longer meets
the requirements of paragraph (L)(1) of
this rule, notice shall be sent to the director of the intent to establish
alternate financial assurance as specified in this rule. The notice must be
sent by certified mail or any other form of mail accompanied by a receipt not
later than ninety 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
requirements. A copy of the notice shall also be placed in the operating
record. The owner or operator shall provide alternate financial assurance not
later than one hundred twenty days after the end of such fiscal year.
(6) The director may, based on a
reasonable belief that the owner or operator no longer meets
the requirements of paragraph (L)(1) of
this rule, require reports of financial condition at any time from the owner or
operator in addition to those specified in paragraph (L)(3) of this rule. If
the director finds, on the basis of such reports or other information, that the
owner or operator no longer meets the requirements
of paragraph (L)(1) of this rule, the owner or operator shall provide
alternate financial assurance as specified in this rule not later than thirty
days after notification of such a finding.
(7) The director may disallow use of this
test on the basis of qualifications in the opinion expressed by the independent
certified public accountant in his/her
the independent certified public accountant's report
on examination of the owner's or operator's financial statements. An adverse
opinion or disclaimer of opinion will be cause for disallowance. The director
shall evaluate other qualifications on an individual basis. The owner or
operator shall provide alternate financial assurance as specified in this rule
not later than thirty days after notification of the disallowance.
(8) During the period of corrective measures,
the director may approve in writing a decrease in the current corrective
measures cost estimate, if the owner or operator demonstrates, to the
satisfaction of the director, that the amount of the corrective measures cost
estimate exceeds the cost of the remaining corrective measures activities.
Whenever the current corrective measures cost estimate decreases, the amount
listed on the chief financial officer's letter may be reduced to the amount of
the current corrective measures cost estimate following written approval by the
director.
(9) The owner or operator
is no longer required to submit the items specified in paragraph (L)(3) of this
rule when either of the following occur:
(a)
The owner or operator substitutes alternate financial assurance for corrective
measures as specified in this rule.
(b) The director notifies the owner or
operator, in accordance with paragraph (P) of this rule that the owner or
operator is no longer required to maintain financial assurance for corrective
measures.
(10) The owner
or operator may meet the requirements of
this rule by obtaining a written guarantee, hereafter referred to as a
corporate guarantee. The guarantor shall be a parent corporation of the owner
or operator. The guarantor shall meet the requirements for an owner or operator
in paragraphs (L)(1) to (L)(7) of this rule and shall comply with the terms of
the corporate guarantee. The wording of the corporate guarantee shall be
identical to the wording specified in paragraph (G) of rule
3745-27-17
of the Administrative Code on forms prescribed by the director. The corporate
guarantee shall accompany the items sent to the director as specified in
paragraph (L)(3) of this rule. The terms of the corporate guarantee shall
provide that
the
following :
(a) The owner or operator
shall perform corrective measures of a facility provided for by the corporate
guarantee in accordance with the applicable authorizing document, including
permit to install or plan approval.
(b) The guarantor shall perform the
activities in paragraph (L)(10)(a) of this rule or shall establish a trust fund
in the name of the owner or operator as specified in paragraph (G) of this rule
if the owner or operator fails to performs those activities.
(c) The corporate guarantee shall remain in
force unless the guarantor sends notice of cancellation by certified mail or
any other form of mail accompanied by a receipt to the owner or operator and to
the director. Cancellation may not occur, however, during the one hundred
twenty day period beginning on the first day that both the owner or operator
and the director have received notice of cancellation, as evidenced by the
return receipts.
(d) If the owner
or operator fails to provide alternate financial assurance as specified in this
rule, and fails to obtain the written approval of such alternate financial
assurance from the director not later than ninety days after both the owner or
operator and the director have received notice of cancellation of the corporate
guarantee from the guarantor, the guarantor shall provide such alternate
financial assurance in the name of the owner or operator.
(M) Local government financial
test for corrective measures.
(1) For the
purposes of this rule, local government means a subdivision of the state of
Ohio including, but not limited to, a municipal corporation, a county, a township, a
single or joint county solid waste management district, or a solid waste
management authority.
(2) A local
government may satisfy the requirements of
this rule by demonstrating that the local government passes a financial test as
specified in this paragraph. This test consists of a financial component, a
public notice component, and a record-keeping and reporting component. In order
to satisfy the financial component of the test, a local government
must
shall
meet the following criteria:
(a) A local
government's financial statements shall be prepared in accordance with
"Generally Accepted Accounting Principles" for local governments.
(b) A local government
must
shall not
have operated at a deficit equal to five per cent or more of total annual
revenue in either of the past two fiscal years.
(c) A local government
must
shall not
currently be in default on any outstanding general obligation bonds.
(d) A local government
must
shall not
have any outstanding general obligation bonds rated lower than BBB as issued by
"Standard and Poor's" or Baa as issued by "Moody's." Local governments using
bonds that are secured by collateral or a guarantee must
shall meet the
minimum rating without that security.
(3) In addition to satisfy the financial
component of the test, a local government must
shall meet either
of the following criteria:
(a) The local
government must
shall have the
following :
(i) A ratio of cash plus
marketable securities to total expenditures greater than or equal to
0.05;
.
(ii) A
ratio of annual debt service to total expenditures less than or equal to
0.20;
.
(iii) A
ratio of long term debt issued and outstanding to capital expenditures less
than or equal to 2.00;
.
(iv) A
ratio of the current cost estimates for final closure, post-closure care,
corrective measures, scrap tire transporter final closure, and any other
obligations assured by a financial test, to total revenue less than or equal to
0.43.
(b) The local
government shall have the following :
(i) Outstanding general obligation bonds for
which the local government, as the issuing entity, has not received a current
rating of less than BBB as issued by "Standard and Poor's" or Baa as issued by
"Moody's". Local governments using bonds that are secured by collateral or a
guarantee must meet the minimum rating without that security.
(ii) A ratio of the current cost estimates
for final closure, post-closure care, corrective measures, scrap tire
transporter final closure, and any other obligations assured by a financial
test, to total revenue less than or equal to 0.43.
(4) In order to satisfy the public
notice component of the test, a local government must
shall in each
year that the test is used, identify the current cost estimates in either its
budget or its comprehensive annual financial report. The facility covered, the
categories of expenditures, including final closure, post-closure care,
corrective measures, scrap tire transporter final closure, the corresponding
cost estimate for each expenditure, and the anticipated year of the required
activity must be recorded. If the financial assurance obligation is to be
included in the budget, it should either be listed as an approved budgeted line
item, if the obligation will arise during the budget period, or in an
appropriate supplementary data section, if the obligation will not arise during
the budget period. If the information is to be included in the comprehensive
annual financial report, it is to be included in the financial section as a
footnote to the annual financial statements.
(5) To demonstrate that a local government
meets the requirements of this test, the following three items must be
submitted to the director, and into the operating record in accordance with
rule
3745-27-09
of the Administrative Code:
(a) A letter
signed by the local government's chief financial officer and worded as
specified in paragraph (H) of rule
3745-27-17
of the Administrative Code on forms prescribed by the director
that
as
follows :
(i) Lists all the current cost
estimates covered by a financial test.
(ii) Certifies that the local government
meets the conditions of paragraph (M)(1) of this rule.
(iii) Provides evidence and certifies that
the local government meets the conditions of either paragraph (M)(2)(a) or
(M)(2)(b) of this rule.
(b) A copy of the local government's
independently audited year-end financial statements for the latest fiscal year,
including the unqualified opinion of the auditor. The auditor must be an
independent, certified public accountant or auditor of state;
.
(c) A
special report from the independent certified public accountant or auditor of
state, in the form of an agreed-upon procedures report, to the local government
stating that
the
following :
(i) The
independent certified public accountant or
auditor of state 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 most recent fiscal year with the
amounts in such financial statements;
.
(ii) In
connection with the agreed-upon procedures report, he
the independent certified
public account or auditor of the state states that
he
the independent
certified public account or auditor of the state agrees the specified
data is accurate.
(6) After the initial submission of the items
specified in this rule, a local government shall send updated information to
the director on forms prescribed by the director, and submit updated
information into the operating record in accordance with rule
3745-27-09
of the Administrative Code, not later than one hundred eighty days after the
close of each succeeding fiscal year. This information shall include all items
specified in this rule.
(7) If a
local government no longer meets the requirements
of this rule, notice shall be sent to the director of the intent to
establish alternate financial assurance as specified in this rule. The notice
must
shall be
sent by certified mail or any other form of mail accompanied by a receipt not
later than one hundred fifty days after the end of the fiscal year for which
the year-end financial data show that the local government no longer meets the
requirements. A copy of the notice shall also be placed in the operating
record. The local government shall provide alternate financial assurance not
later than one hundred eighty days after the end of such fiscal year.
(8) The director may, based on a reasonable
belief that the local government no longer meets the
requirements of this rule, require reports of financial condition at
any time from the local government in addition to those specified in this rule.
If the director finds, on the basis of such reports or other information, that
the local government no longer meets the requirements of this rule, the local
government shall provide alternate financial assurance as specified in this
rule not later than thirty days after notification of such a finding.
(9) The director may disallow use of this
test on the basis of qualifications in the opinion expressed by the independent
certified public accountant or auditor of state in his/her
the report on
examination of the local government's financial statements. An adverse opinion
or disclaimer of opinion will be cause for disallowance. The director shall
evaluate other qualifications on an individual basis. The local government
shall provide alternate financial assurance as specified in this rule not later
than thirty days after notification of the disallowance.
(10) The local government is no longer
required to submit the items specified in this rule when one of the following
occur:
(a) The local government substitutes
alternate financial assurance for corrective measures as specified in this
rule.
(b) The director notifies the
local government, in accordance with paragraph (P) of this rule, that the local
government is no longer required to maintain financial assurance for corrective
measures of the facility.
(N) Use of multiple financial assurance
mechanisms.
The owner or operator may satisfy the requirements of this rule by establishing more
than one financial assurance mechanism for each facility. These mechanisms are
limited to a trust fund, surety bond guaranteeing payment into a corrective
measures trust fund, letter of credit, insurance, and the local government
financial test. The mechanisms shall be as specified in paragraphs (G), (H),
(J), (K), and (M) respectively of this rule, except that it is the combination
of mechanisms, rather than each single mechanism, which shall provide financial
assurance for an amount at least equal to the current corrective measures cost
estimate. If an owner or operator uses a trust fund in combination with a
surety bond or a letter of credit, the owner or operator may use the trust fund
as the standby trust fund for the other mechanisms. A single standby trust fund
may be established for two or more mechanisms. The director may invoke use of
any or all of the mechanisms, in accordance with paragraphs (G), (H), (J), (K),
and (M) of this rule, to provide for corrective measures.
(O) Use of a financial mechanism for multiple
facilities.
The owner or operator may use a financial assurance mechanism
specified in this rule to meet the requirements
of this rule for more than one facility. Evidence of financial
assurance submitted to the director shall include a list showing, for each
facility, the name, address, and the amount of funds for corrective measures
assured by the financial assurance mechanism. The amount of funds available
through the financial assurance mechanism shall be no less than the sum of the
funds that would be available if a separate financial assurance mechanism had
been established and maintained for each facility.
(P) Release of the owner or operator of a
solid waste facility from the requirements of this rule.
The
The
director shall notify the owner or operator in writing that he is no longer
required, by this rule, to maintain financial assurance for corrective measures
at a particular facility, unless the director has reason to believe that
corrective measures have not been completed in accordance with the requirements
of the applicable authorizing document, including permit to install or plan
approval.
Notes
Promulgated Under: 119.03
Statutory Authority: 3734.02
Rule Amplifies: 3734.02, 3734.12, 3734.71, 3734.72, 3734.73, 3734.74
Prior Effective Dates: 6/01/1994, 8/31/1997, 9/01/2002,
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