# Wis. Admin. Code Department of Natural Resources § NR 520.08 - Calculating the amount of the proof of financial responsibility

The owner shall, as part of the plan of operation submittal, calculate the necessary amounts of proof of financial responsibility for both closure and long-term care based on the chosen methods of providing proof of financial responsibility.

(1) CLOSURE.

(a) For escrow, trust or department accounts,
proof of financial responsibility for closure shall be equal to the estimated
cost of closure in current dollars multiplied by the quantity of one plus the
projected annual rate of inflation expressed as a decimal, and divided by the
quantity of one plus the weighted average annual rate of return of the
investments in the account expressed as a decimal.

(b) For bonds, letters of credit and
insurance, proof of financial responsibility for closure shall be equal to the
estimated cost of closure in current dollars multiplied by the quantity of one
plus the projected annual rate of inflation expressed as a decimal.

(2) LONG-TERM CARE.

(a) For escrow, trust or department accounts,
proof of financial responsibility for long-term care shall be provided in
accordance with the following:

1. Annual
payments shall be made into the account at the beginning of each year of site
life. All estimated annual expenditures during the long-term care proof of
financial responsibility period shall be assumed to occur at the end of each
year of the proof period.

2. Annual
payments shall be made in equal dollar amounts or in dollar amounts that
increase each year by no more than the projected rate of inflation. However,
payments in excess of these minimum amounts may be made in any year, thereby
reducing the amounts of subsequent annual payments for the remainder of the
site life.

3. The amount of the
annual payments shall be calculated and made such that, at the end of the
projected facility life, the minimum dollar value of the account is equal to
the sum of all estimated long-term care expenditures for the entire long-term
care proof of financial responsibility period where the expenditure for each
year has first been expressed in future dollars and then brought to present
value using a discount rate equal to the projected rate of inflation plus
2%.

4. In estimating future
earnings on these accounts, the weighted average rate of return of the
investments held in the account may be used for a period of time not to exceed
the weighted average maturity of the investments held in the account rounded to
the nearest whole year. Earnings for years beyond the weighted average maturity
of the investments in the account shall be calculated based on a projected rate
of return equal to the projected rate of inflation plus 2%.

5. If an annual payment is missed or made
late, the subsequent annual payment shall be increased so that the end of year
balances originally calculated based on beginning of year payments are
maintained.

(b) For
bonds, letters of credit or insurance, proof of financial responsibility for
long-term care shall be equal to the sum of the costs in current dollars of
performing each of the years of long-term care for the required long-term care
proof of financial responsibility period.

(3) REMEDIAL ACTIONS.

(a) For escrow, trust or department accounts,
proof of financial responsibility for remedial actions shall be provided in
accordance with the following:

1. Annual
payments shall be made into the account at the beginning of each year of the
first half of the remedial action period. All estimated annual expenditures
during the remedial action proof of financial responsibility period shall be
assumed to occur at the end of each year of the proof period.

2. Annual payments shall be made in equal
dollar amounts or in dollar amounts that increase each year by no more than the
projected rate of inflation. However, payments in excess of these minimum
amounts may be made in any year, thereby reducing the amounts of subsequent
payments.

3. The amount of these
payments shall be calculated and made such that, half way through the period of
time the remedial action is estimated to take to complete, the minimum dollar
value of the account is equal to the sum of each annual cost which is estimated
to occur in the second half of the remedial action period where the expenditure
for each year has first been expressed in future dollars and then brought to
present value using a discount rate equal to the projected rate of inflation
plus 2%.

4. Determination of
earnings and procedures to follow in the case of missed or late payments shall
be in accordance with sub. (2) (a) 2. and 3.

(b) For bonds or letters of credit, remedial
action proof of financial responsibility shall be provided in an amount equal
to the sum of the remedial action costs estimated to occur in the second half
of the remedial action period expressed in current dollars.

## Notes

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