NR 664.0141(8)(b)
(b) “Legal defense costs" means any expenses that an insurer incurs in defending against claims of third parties brought under the terms and conditions of an insurance policy.
NR 664.0141(8)(c)
(c) “Nonsudden accidental occurrence" means an occurrence which takes place over time and involves continuous or repeated exposure.
NR 664.0141(8)(d)
(d) “Sudden accidental occurrence" means an occurrence which is not continuous or repeated in nature.
NR 664.0141(9)
(9) “Substantial business relationship" means the extent of a business relationship necessary under applicable state law to make a guarantee contract issued incident to that relationship valid and enforceable. A substantial business relationship shall arise from a pattern of recent or ongoing business transactions, in addition to the guarantee itself, such that a currently existing business relationship between the guarantor and the owner or operator is demonstrated to the satisfaction of the department.
NR 664.0141 History
History: CR 05-032: cr.
Register July 2006 No. 607, eff. 8-1-06.
NR 664.0142(1)(a)
(a) The estimate shall equal the cost of final closure at the point in the facility's active life when the extent and manner of its operation would make closure the most expensive, as indicated by its closure plan (see s.
NR 664.0112 (2)).
NR 664.0142(1)(b)
(b) The closure cost estimate shall be based on the costs to the owner or operator of hiring a third party to close the facility. A third party is a party who is neither a parent corporation nor a subsidiary of the owner or operator. The owner or operator may use costs for on-site disposal if the owner or operator can demonstrate that on-site disposal capacity will exist at all times over the life of the facility.
NR 664.0142(1)(c)
(c) The closure cost estimate may not incorporate any salvage value that may be realized with the sale of hazardous wastes, or non-hazardous wastes if applicable under s.
NR 664.0113 (4), facility structures or equipment, land or other assets associated with the facility at the time of partial or final closure.
NR 664.0142(1)(d)
(d) The owner or operator may not incorporate a zero cost for hazardous wastes, or non-hazardous wastes if applicable under s.
NR 664.0113 (4), that might have economic value.
NR 664.0142(2)
(2) During the active life of the facility, the owner or operator shall adjust the closure cost estimate for inflation within 60 days prior to the anniversary date of the establishment of the financial instrument(s) used to comply with s.
NR 664.0143. For owners and operators of disposal facilities using the net worth test, the closure cost estimate shall be updated for inflation as specified in s.
289.41 (5) (d), Stats. The adjustment may be made by recalculating the maximum costs of closure in current dollars, or by using an inflation factor derived from the most recent implicit price deflator for gross domestic product published by the U.S. department of commerce in its
Survey of Current Business, as specified in pars.
(a) and
(b). The inflation factor is the result of dividing the latest published annual deflator by the deflator for the previous year.
NR 664.0142(2)(a)
(a) The first adjustment shall be made by multiplying the closure cost estimate by the inflation factor. The result is the adjusted closure cost estimate.
NR 664.0142(2)(b)
(b) Subsequent adjustments shall be made by multiplying the latest adjusted closure cost estimate by the latest inflation factor.
NR 664.0142(3)
(3) During the active life of the facility, the owner or operator shall revise the closure cost estimate no later than 30 days after the department has approved the request to modify the closure plan, if the change in the closure plan increases the cost of closure. The revised closure cost estimate shall be adjusted for inflation as specified in sub.
(2).
NR 664.0142(4)
(4) The owner or operator shall keep the following at the facility during the operating life of the facility: The latest closure cost estimate prepared in accordance with subs.
(1) and
(3) and, when this estimate has been adjusted in accordance with sub.
(2), the latest adjusted closure cost estimate.
NR 664.0142 History
History: CR 05-032: cr.
Register July 2006 No. 607, eff. 8-1-06.
NR 664.0143
NR 664.0143 Financial assurance for closure. An owner or operator of each facility shall establish financial assurance for closure of the facility. The owner or operator shall choose from the options as specified in subs.
(1) to
(8).
NR 664.0143(1)(a)(a) An owner or operator may satisfy the requirements of this section by establishing a closure trust fund which conforms to the requirements of this subsection and submitting an originally signed duplicate of the trust agreement to the department. An owner or operator of a new facility shall submit the originally signed duplicate of the trust agreement to the department at least 60 days before the date on which hazardous waste is first received for treatment, storage or disposal. The trustee shall be an entity which has the authority to act as a trustee and whose trust operations are regulated and examined by a federal or state agency.
NR 664.0143(1)(b)
(b) The wording of the trust agreement shall be identical to the wording on the department form specified in s.
NR 664.0151 (1) (a) and the trust agreement shall be accompanied by a formal certification of acknowledgment as specified in s.
NR 664.0151 (1) (b). Schedule A of the trust agreement shall be updated within 60 days after a change in the amount of the current closure cost estimate covered by the agreement.
NR 664.0143(1)(c)
(c) Payments into the trust fund shall be made annually by the owner or operator over the term of the initial license or over the remaining operating life of the facility as estimated in the closure plan, whichever period is shorter. For the purposes of this section, this period is referred to as the “pay-in period." The payments into the closure trust fund shall be made as follows:
NR 664.0143(1)(c)1.
1. For a new facility, the first payment shall be made before the initial receipt of hazardous waste for treatment, storage or disposal. A receipt from the trustee for this payment shall be submitted by the owner or operator to the department before this initial receipt of hazardous waste. The first payment shall be at least equal to the current closure cost estimate, except as provided in sub.
(9), divided by the number of years in the pay-in period. Subsequent payments shall be made no later than 30 days after each anniversary date of the first payment. The amount of each subsequent payment shall be determined by this formula:
where CE is the current closure cost estimate, CV is the current value of the trust fund and Y is the number of years remaining in the pay-in period.
NR 664.0143(1)(c)2.
2. If an owner or operator establishes a trust fund as specified in this subsection, and the value of that trust fund is less than the current closure cost estimate when a license is awarded for the facility, the amount of the current closure cost estimate still to be paid into the trust fund shall be paid in over the pay-in period as defined in par.
(c)(intro). Payments shall continue to be made no later than 30 days after each anniversary date of the first payment made pursuant to ch.
NR 665. The amount of each payment shall be determined by this formula:
where CE is the current closure cost estimate, CV is the current value of the trust fund and Y is the number of years remaining in the pay-in period.
NR 664.0143(1)(d)
(d) The owner or operator may accelerate payments into the trust fund or may deposit the full amount of the current closure 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 that the fund would have if annual payments were made as specified in par.
(c).
NR 664.0143(1)(e)
(e) If the owner or operator establishes a closure trust fund after having used one or more alternate mechanisms specified in this section or in s.
NR 665.0143, the first payment shall be in at least the amount that the fund would contain if the trust fund were established initially and annual payments made according to specifications of this subsection and s.
NR 665.0143 (1), as applicable.
NR 664.0143(1)(f)
(f) After the pay-in period is completed, whenever the current closure cost estimate changes, the owner or operator shall compare the new estimate with the trustee's most recent annual valuation of the trust fund. If the value of the fund is less than the amount of the new estimate, the owner or operator, within 60 days after the change in the cost estimate, shall either deposit an amount into the fund so that its value after this deposit at least equals the amount of the current closure cost estimate, or obtain other financial assurance as specified in this section to cover the difference.
NR 664.0143(1)(g)
(g) If the value of the trust fund is greater than the total amount of the current closure cost estimate, the owner or operator may submit a written request to the department for release of the amount in excess of the current closure cost estimate.
NR 664.0143(1)(h)
(h) If an owner or operator substitutes other financial assurance as specified in this section for all or part of the trust fund, the owner or operator may submit a written request to the department for release of the amount in excess of the current closure cost estimate covered by the trust fund.
NR 664.0143(1)(i)
(i) Within 60 days after receiving a request from the owner or operator for release of funds as specified in par.
(g) or
(h), the department will instruct the trustee to release to the owner or operator funds as the department specifies in writing.
NR 664.0143(1)(j)
(j) After beginning partial or final closure, an owner or operator or another person authorized to conduct partial or final closure may request reimbursements for partial or final closure expenditures by submitting itemized bills to the department. The owner or operator may request reimbursements for partial closure only if sufficient funds are remaining in the trust fund to cover the maximum costs of closing the facility over its remaining operating life. Within 60 days after receiving bills for partial or final closure activities, the department will instruct the trustee to make reimbursements in those amounts as the department specifies in writing, if the department determines that the partial or final closure expenditures are in accordance with the approved closure plan, or otherwise justified. If the department has reason to believe that the maximum cost of closure over the remaining life of the facility will be significantly greater than the value of the trust fund, the department may withhold reimbursements of amounts as the department deems prudent until the department determines, in accordance with sub.
(11) that the owner or operator is no longer required to maintain financial assurance for final closure of the facility. If the department does not instruct the trustee to make the reimbursements, the department will provide the owner or operator with a detailed written statement of reasons.
NR 664.0143(1)(k)
(k) The department will agree to termination of the trust when one of the following applies:
NR 664.0143(1)(k)1.
1. An owner or operator substitutes alternate financial assurance as specified in this section.
NR 664.0143(1)(k)2.
2. The department releases the owner or operator from the requirements of this section in accordance with sub.
(11).
NR 664.0143(2)
(2)
Surety bond guaranteeing payment into a closure trust fund. NR 664.0143(2)(a)(a) An owner or operator may satisfy the requirements of this section by obtaining a surety bond which conforms to the requirements of this subsection and submitting the bond to the department. An owner or operator of a new facility shall submit the bond to the department at least 60 days before the date on which hazardous waste is first received for treatment, storage or disposal. The bond shall be effective before this initial receipt of hazardous waste. 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.
NR 664.0143(2)(c)
(c) The owner or operator who uses a surety bond to satisfy the requirements of this section shall also establish a standby trust fund. Under the terms of the bond, all payments made shall be deposited by the surety directly into the standby trust fund in accordance with instructions from the department. This standby trust fund must meet the requirements specified in sub.
(1) except for all of the following:
NR 664.0143(2)(c)1.
1. An originally signed duplicate of the trust agreement must be submitted to the department with the surety bond.
NR 664.0143(2)(c)2.
2. Until the standby trust fund is funded pursuant to the requirements of this section, all of the following are not required:
NR 664.0143(2)(c)2.b.
b. Updating of Schedule A of the trust agreement (see Form 4430-022) to show current closure cost estimates.
NR 664.0143(2)(d)
(d) The bond must guarantee that the owner or operator shall do any of the following:
NR 664.0143(2)(d)1.
1. Fund the standby trust fund in an amount equal to the penal sum of the bond before the beginning of final closure of the facility.
NR 664.0143(2)(d)2.
2. Fund the standby trust fund in an amount equal to the penal sum within 15 days after an administrative order to begin final closure issued by the department becomes final or within 15 days after an order to begin final closure is issued.
NR 664.0143(2)(d)3.
3. Provide alternate financial assurance as specified in this section, and obtain the department's written approval of the assurance provided, within 90 days after receipt by both the owner or operator and the department of a notice of cancellation of the bond from the surety.
NR 664.0143(2)(e)
(e) 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.
NR 664.0143(2)(f)
(f) The penal sum of the bond shall be in an amount at least equal to the current closure cost estimate, except as provided in sub.
(9).
NR 664.0143(2)(g)
(g) Whenever the current closure cost estimate increases to an amount greater then the penal sum, the owner or operator, within 60 days after the increase, shall either cause the penal sum to be increased to an amount at least equal to the current closure cost estimate and submit evidence of the increase to the department, or obtain other financial assurance as specified in this section to cover the increase. Whenever the current closure cost estimate decreases, the penal sum may be reduced to the amount of the current closure cost estimate following written approval by the department.
NR 664.0143(2)(h)
(h) Under the terms of the bond, the surety may cancel the bond by sending notice of cancellation by certified mail to the owner or operator and to the department. Cancellation may not occur, however, during the 120 days beginning on the date of receipt of the notice of cancellation by both the owner or operator and the department, as evidence by the return receipts. Not less than 30 days prior to the expiration of the 120 day notice period, the owner shall deliver to the department a replacement bond or other proof of financial responsibility under this section, in the absence of which all storage, treatment or disposal operations shall immediately cease and the bond shall remain in effect as long as any obligation of the owner remains for closure.
NR 664.0143(2)(i)
(i) The owner or operator may cancel the bond if the department has given prior written consent based on the department's receipt of evidence of alternate financial assurance as specified in this section.
NR 664.0143(3)(a)(a) An owner or operator may satisfy the requirements of this section by obtaining a surety bond which conforms to the requirements of this subsection and submitting the bond to the department. An owner or operator of a new facility shall submit the bond to the department at least 60 days before the date on which hazardous waste is first received for treatment, storage or disposal. The bond shall be effective before this initial receipt of hazardous waste. 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.
NR 664.0143(3)(d)
(d) The bond shall guarantee that the owner or operator will do one of the following:
NR 664.0143(3)(d)1.
1. Perform final closure in accordance with the closure plan and other requirements of the license for the facility whenever required to do so.
NR 664.0143(3)(d)2.
2. Provide alternate financial assurance as specified in this section, and obtain the department's written approval of the assurance provided, within 90 days after receipt by both the owner or operator and the department of a notice of cancellation of the bond from the surety.
NR 664.0143(3)(e)
(e) 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 department or EPA pursuant to
42 USC 6928 that the owner or operator has failed to perform final closure in accordance with the approved closure plan and other license requirements when required to do so, under the terms of the bond the surety will perform final closure as guaranteed by the bond or shall pay the penal sum of the bond to the department.
NR 664.0143(3)(f)
(f) The penal sum of the bond shall be in an amount at least equal to the current closure cost estimate.
NR 664.0143(3)(g)
(g) Whenever the current closure cost estimate increases to an amount greater than the penal sum, the owner or operator, within 60 days after the increase, shall either cause the penal sum to be increased to an amount at least equal to the current closure cost estimate and submit evidence of the increase to the department, or obtain other financial assurance as specified in this section. Whenever the current closure cost estimate decreases, the penal sum may be reduced to the amount of the current closure cost estimate following written approval by the department.
NR 664.0143(3)(h)
(h) Under the terms of the bond, the surety may cancel the bond by sending notice of cancellation by certified mail to the owner or operator and to the department. Cancellation may not occur, however, during the 120 days beginning on the date of receipt of the notice of cancellation by both the owner or operator and the department, as evidenced by the return receipts. Not less than 30 days prior to the expiration of the 120-day notice period, the owner shall deliver to the department a replacement bond or other proof of financial responsibility under this section, in the absence of which all storage, treatment or disposal operations shall immediately cease and the bond shall remain in effect as long as any obligation of the owner remains for closure.
NR 664.0143(3)(i)
(i) The owner or operator may cancel the bond if the department has given prior written consent. The department will provide written consent when any of the following apply:
NR 664.0143(3)(i)1.
1. An owner or operator substitutes alternate financial assurance as specified in this section.
NR 664.0143(3)(i)2.
2. The department releases the owner or operator from the requirements of this section in accordance with sub.
(11).
NR 664.0143(3)(j)
(j) The surety will not be liable for deficiencies in the performance of closure by the owner or operator after the department releases the owner or operator from the requirements of this section in accordance with sub.
(11).
NR 664.0143(4)(a)
(a) An owner or operator may satisfy the requirements of this section by obtaining an irrevocable letter of credit which conforms to the requirements of this subsection and submitting the letter to the department. An owner or operator of a new facility shall submit the letter of credit to the department at least 60 days before the date on which hazardous waste is first received for treatment, storage or disposal. The letter of credit shall be effective before this initial receipt of hazardous waste. 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.
NR 664.0143(4)(d)
(d) 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 EPA identification number, name and address of the facility, and the amount of funds assured for closure of the facility by the letter of credit.
NR 664.0143(4)(e)
(e) 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 120 days before the current expiration date, the issuing institution notifies both the owner or operator and the department by certified mail of a decision not to extend the expiration date. Under the terms of the letter of credit, the 120 days will begin on the date when both the owner or operator and the department have received the notice, as evidenced by the return receipts.
NR 664.0143(4)(f)
(f) The letter of credit shall be issued in an amount at least equal to the current closure cost estimate, except as provided in sub.
(9).
NR 664.0143(4)(g)
(g) Whenever the current closure cost estimate increases to an amount greater than the amount of the credit, the owner or operator, within 60 days after the increase, shall either cause the amount of the credit to be increased so that it at least equals the current closure cost estimate and submit evidence of the increase to the department, or obtain other financial assurance as specified in this section to cover the increase. Whenever the current closure cost estimate decreases, the amount of the credit may be reduced to the amount of the current closure cost estimate following written approval by the department.
NR 664.0143(4)(h)
(h) Following a determination by the department or EPA pursuant to
42 USC 6928 that the owner or operator has failed to perform final closure in accordance with the closure plan and other license requirements when required to do so, the department may draw on the letter of credit.
NR 664.0143(4)(i)
(i) If the owner or operator does not establish alternate financial assurance as specified in this section and obtain written approval of the alternate assurance from the department within 90 days after receipt by both the owner or operator and the department of a notice from issuing institution that it has decided not to extend the letter of credit beyond the current expiration date, the department will draw on the letter of credit. The department may delay the drawing if the issuing institution grants an extension of the term of the credit. During the last 30 days of any extension the department will draw on the letter of credit if the owner or operator has failed to provide alternate financial assurance as specified in this section and obtain written approval of the assurance from the department.
NR 664.0143(4)(j)
(j) The department will authorize the release of the letter of credit when any of the following apply:
NR 664.0143(4)(j)1.
1. An owner or operator substitutes alternate financial assurance as specified in this section.
NR 664.0143(4)(j)2.
2. The department releases the owner or operator from the requirements of this section in accordance with sub.
(11).
NR 664.0143(5)(a)(a) An owner or operator may satisfy the requirements of this section by obtaining closure insurance which conforms to the requirements of this subsection and submitting a certificate of the insurance to the department. An owner or operator of a new facility shall submit the certificate of insurance to the department at least 60 days before the date on which hazardous waste is first received for treatment, storage or disposal. The insurance shall be effective before this initial receipt of hazardous waste. 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. The department, after conferring with the Wisconsin insurance commissioner, shall determine the acceptability of a surplus lines or captive insurance company to provide coverage for proof of financial responsibility. The department shall ask the insurance commissioner to provide a financial analysis of the insurer including a recommendation as to the insurer's ability to provide the required coverage. The department may require a periodic review of the acceptability of a surplus lines or captive insurance company.
NR 664.0143(5)(c)
(c) The closure insurance policy shall be issued for a face amount at least equal to the current closure cost estimate, except as provided in sub.
(9). The term “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.
NR 664.0143(5)(d)
(d) The closure insurance policy shall guarantee that funds will be available to close the facility whenever final closure occurs. The policy shall also guarantee that once final closure 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 department, to the party or parties as the department specifies.
NR 664.0143(5)(e)
(e) After beginning partial or final closure, an owner or operator or any other person authorized to conduct closure may request reimbursements for closure expenditures by submitting itemized bills to the department. The owner or operator may request reimbursements for partial closure only if the remaining value of the policy is sufficient to cover the maximum costs of closing the facility over its remaining operating life. Within 60 days after receiving bills for closure activities, the department will instruct the insurer to make reimbursements in the amounts as the department specifies in writing, if the department determines that the partial or final closure expenditures are in accordance with the approved closure plan or otherwise justified. If the department has reason to believe that the maximum cost of closure over the remaining life of the facility will be significantly greater than the face amount of the policy, the department may withhold reimbursements of the amounts as the department deems prudent until the department determines, in accordance with sub.
(11), that the owner or operator is no longer required to maintain financial assurance for final closure of the facility. If the department does not instruct the insurer to make the reimbursements, the department will provide the owner or operator with a detailed written statement of reasons.
