WAC 173-351-600
Financial assurance criteria. (1)
Applicability and effective date.
(a) The requirements of this section apply to owners and
operators of all MSWLF units.
(b) The requirements of this section are effective on the
effective date of this rule, except as provided herein.
(2) Financial assurance for closure.
(a) The owner or operator must have a detailed written
estimate, in current dollars, of the cost of hiring a third party
to close the largest area of all MSWLF units ever requiring a
final cover as required under WAC 173-351-500(1), Closure
criteria, at any time during the active life in accordance with
the closure plan. The owner or operator must place the detailed
written estimate in the application for a permit under WAC 173-351-700 in order for the jurisdictional health department to
determine whether a solid waste permit should be issued.
(i) The cost estimate must equal the cost of closing the
largest area of the MSWLF unit or MSWLF units ever requiring a
final cover at any time during the active life when the extent
and manner of its operation would make closure the most
expensive, as indicated by its closure plan see WAC 173-351-500
(1)(c)(ii).
(ii) During the active life of the MSWLF unit or MSWLF
units, the owner or operator must annually adjust the closure
cost estimate for inflation.
(iii) The owner or operator must increase the closure cost
estimate and the amount of financial assurance provided under (b)
of this subsection if changes to the closure plan or MSWLF unit
conditions increase the maximum cost of closure at any time
during the remaining active life.
(iv) The owner or operator may reduce the closure cost
estimate and the amount of financial assurance provided under (b)
of this subsection if the cost estimate exceeds the maximum cost
of closure at any time during the remaining life of the MSWLF
unit or all MSWL units. The owner or operator must submit
justification for the reduction of the closure cost estimate and
the amount of financial assurance to the jurisdictional health
department for approval as a condition of the solid waste permit.
(b) The owner or operator of each MSWLF unit or all MSWLF
units must establish financial assurance for closure of the MSWLF
unit or all MSWLF units in compliance with WAC 173-351-600(5),
Allowable mechanisms. The owner or operator must provide
continuous coverage for closure until released from financial
assurance requirements by demonstrating compliance with WAC 173-351-500 (1)(h) and (i).
(3) Financial assurance for post-closure care.
(a) The owner or operator must have a detailed written
estimate, in current dollars, of the cost of hiring a third party
to conduct post-closure care for the MSWLF unit or all MSWLF
units in compliance with the post-closure plan developed under
WAC 173-351-500(2). The post-closure cost estimate used to
demonstrate, during the permit process of WAC 173-351-700,
financial assurance in (b) of this subsection must account for
the total costs of conducting post-closure care, including annual
and periodic costs as described in the post-closure plan over the
entire post-closure care period. The owner or operator must
place the detailed written estimate in the application for a
permit under WAC 173-351-700 in order for the jurisdictional
health department to determine whether a solid waste permit
should be issued.
(i) The cost estimate for post-closure care must be based on
the most expensive costs of post-closure care during the
post-closure care period.
(ii) During the active life of the MSWLF unit or all MSWLF
units and during the post-closure care period, the owner or
operator must annually adjust the post-closure cost estimate for
inflation.
(iii) The owner or operator must increase the post-closure
care cost estimate and the amount of financial assurance provided
under (b) of this subsection if changes in the post-closure plan
or MSWLF unit conditions increase the maximum costs of
post-closure care.
(iv) The owner or operator may reduce the post-closure cost
estimate and the amount of financial assurance provided under (b)
of this subsection if the cost estimate exceeds the maximum costs
of post-closure care remaining over the post-closure care period.
The owner or operator must submit justification for the
reduction of the post-closure cost estimate and the amount of
financial assurance to the jurisdictional health department for
approval as a condition of the solid waste permit.
(b) The owner or operator of each MSWLF unit or all MSWLF
units must establish, in a manner in accordance with subsection
(5) of this section, financial assurance for the costs of
post-closure care as required under WAC 173-351-500(2). The
owner or operator must provide continuous coverage for
post-closure care until released from financial assurance
requirements for post-closure care by demonstrating compliance
with WAC 173-351-500 (2)(e).
(4) Financial assurance for corrective action.
(a) An owner or operator of a MSWLF unit or all MSWLF units
required to undertake a corrective action program under WAC 173-351-440(6) must have a detailed written estimate, in current
dollars, of the cost of hiring a third party to perform the
corrective action in accordance with the program required under
WAC 173-351-440(6). The corrective action cost estimate must
account for the total costs of corrective action activities as
described in the corrective action plan for the entire corrective
action period. The owner or operator must submit the corrective
action cost estimate to the jurisdictional health department for
approval.
(i) The owner or operator must annually adjust the estimate
for inflation until the corrective action program is completed in
accordance with WAC 173-351-440(6).
(ii) The owner or operator must increase the corrective
action cost estimate and the amount of financial assurance
provided under (b) of this subsection if changes in the
corrective action program or MSWLF unit conditions increase the
maximum costs of corrective action.
(iii) The owner or operator may reduce the amount of the
corrective action cost estimate and the amount of financial
assurance provided under (b) of this subsection if the cost
estimate exceeds the maximum remaining costs of corrective
action. The owner or operator must submit justification for the
reduction of the corrective action cost estimate and the amount
of financial assurance to the jurisdictional health department
for approval.
(b) The owner or operator of each MSWLF unit or all MSWLF
units required to undertake a corrective action program under WAC 173-351-440(6), must establish, in a manner in accordance with
subsection (5) of this section, financial assurance for the most
recent corrective action program. The owner or operator must
provide continuous coverage for corrective action until released
from financial assurance requirements for corrective action under
the Model Toxics Control Act regulation, chapter 173-340 WAC.
(c) The requirements of this subsection become effective
April 9, 1994.
(5) Allowable mechanisms. The mechanisms used to
demonstrate financial assurance under WAC 173-351-600 must ensure
that the funds necessary to meet the costs of closure,
post-closure care, and corrective action for known releases will
be available whenever they are needed. Except as otherwise
provided herein, owners and operators of MSWLF units must use the
financial mechanisms specified in (a) or (b) of this subsection.
(a) For MSWLF units owned or operated by municipal
corporations, the closure, post-closure, and corrective action
reserve account shall be handled in one of the following ways:
(i) Reserve account. Cash and investments accumulated and
restricted for closure, post-closure, and corrective action for
known releases with an equivalent amount of fund balance reserved
in the fund accounting for solid waste activity; or
(ii) The cash and investments held in a nonexpendable trust
fund as specified in (c) of this subsection.
(b) For MSWLF units owned by private disposal companies, the
closure, post-closure, and corrective action for known releases
financial assurance account shall be a trust account as spelled
out in (c) of this subsection, except that established financial
assurance accounts shall not constitute an asset of the facility
owner or operator.
(c) Trust fund.
An owner or operator may satisfy the requirements of this
section by establishing a trust fund which conforms to the
requirements of (c)(i) through (xi) of this subsection.
(i) The trustee must 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. The owner or operator
must place a copy of the trust agreement in the application for a
permit under WAC 173-351-700 in order for the jurisdictional
health department to determine whether a solid waste permit
should be issued.
(ii) Payments into the trust fund must be made annually by
the owner or operator over the duration (as defined in WAC 173-351-750) of the initial permit or over the remaining life of
the MSWLF unit or all MSWLF units, whichever is shorter, in the
case of a trust fund for closure or post-closure care, or over
one-half of the estimated length of the corrective action program
in the case of corrective action for known releases. This period
is referred to as the pay-in period.
(iii) For a trust fund used to demonstrate financial
assurance for closure and post-closure care, the first payment
into each fund must be at least equal to the current cost
estimate for closure or post-closure care, except as provided in
(d) of this subsection, divided by the number of years in the
pay-in period as defined in (c) of this subsection. The amount
of subsequent payments must be determined by the following
formula:
where CE is the current cost estimate for closure or post-closure
care (updated for inflation or other changes), CV is the current
value of the trust fund, and Y is the number of years remaining
in the pay-in period.
(iv) For a trust fund used to demonstrate financial
assurance for corrective action, the first payment into the trust
fund must be at least equal to one-half of the current cost
estimate for corrective action, except as provided in (d) of this
subsection, divided by the number of years in the corrective
action pay-in period as defined in (c)(ii) of this subsection. The amount of subsequent payments must be determined by the
following formula:
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.
(v) The initial payment into the trust fund must be made
before the initial receipt of waste or before the effective date
of this section, whichever is later, in the case of closure and
post-closure care, or no later than one hundred twenty days after
the corrective action remedy has been selected in accordance with
the requirements of WAC 173-351-480 (6) and (7).
(vi) If a municipal corporation owning or operating MSWLF
units establishes a trust fund after having used cash and
investments held in a nonexpendable reserve account specified in
(a)(i) of this subsection, the initial payment into the trust
fund must be at least the amount that the fund would contain if
the trust fund were established initially and annual payments
made according to the specifications of this paragraph and (c) of
this subsection as applicable.
(vii) The owner or operator, or other person authorized to
conduct closure, post-closure care, or corrective action
activities may request reimbursement from the trustee for these
expenditures. Requests for reimbursement will be granted by the
trustee only if:
(A) Sufficient funds are remaining in the trust fund to
cover the remaining costs of closure, post-closure care, or
corrective action;
(B) If justification and documentation of the cost is
submitted to the jurisdictional health department for review and
approval; and
(C) The owner or operator has a post-closure permit in
effect according to WAC 173-351-730 (4)(c).
(viii) The trust fund may be terminated by the owner or
operator only if:
(ix) In the case of a municipal corporation owning or
operating MSWLF units, the municipal corporation substitutes a
reserve account as specified in (a)(i) of this subsection; or
(x) Any owner or operator is no longer required to
demonstrate financial responsibility in accordance with the
requirements of subsection (2)(b), (3)(b), or (4)(b) of this
section.
(d) Use of multiple financial mechanisms. A municipal
corporation owning or operating MSWLF units may satisfy the
requirements of this section by establishing more than one
financial mechanism per facility. The mechanisms must be as
specified in (a) and (b) of this subsection, except that it is
the combination of mechanisms, rather than the single mechanism,
which must provide financial assurance for an amount at least
equal to the current cost estimate for closure, post-closure care
or corrective action, whichever is applicable.
(e) For MSWLF units undergoing corrective action, allowable
financial assurance mechanisms include:
(i) Any method approved by EPA under 40 CFR 258.74(f);
(ii) An interlocal agreement entered into under the
Interlocal Cooperation Act, chapter 39.34 RCW, obligating the
participating local governments to pay for the corrective action.
(f) The language of the mechanisms listed in (a) and (b) of
this subsection must ensure that the instruments satisfy the
following criteria:
(i) The financial assurance mechanisms must ensure that the
amount of funds assured is sufficient to cover the costs of
closure, post-closure care, and corrective action for known
releases when needed;
(ii) The financial assurance mechanisms must ensure that
funds will be available in a timely fashion when needed;
(iii) The financial assurance mechanisms must be obtained by
the owner or operator by the effective date of these requirements
or prior to the initial receipt of solid waste, whichever is
later, in the case of closure and post-closure care, and no later
than one hundred twenty days after the corrective action remedy
has been selected in accordance with the requirements of WAC 173-351-460, until the owner or operator is released from the
financial assurance requirements under subsection (2)(b), (3)(b),
or (4)(b) of this section.
(g) The financial assurance mechanisms must be legally
valid, binding, and enforceable under state and federal law.
[Statutory Authority: Chapter 70.95 RCW and 40 CFR 258. 93-22-016, § 173-351-600, filed 10/26/93, effective 11/26/93.]