329 IAC 3.1-14-19 - Financial test and guarantee for post-closure care option
Authority: IC 13-14-8; IC 13-22-2; IC 13-22-8-1; IC 13-22-9-7
Affected: IC 13-22
Sec. 19.
(a) An owner
or operator may satisfy the requirements of sections 14 through 18 of this
rule, this section, and sections 20 through 22 of this rule by demonstrating
that the owner or operator passes a financial test in accordance with this
section. To pass the financial test, the owner or operator shall meet the
criteria of either subdivision (1) or (2) as follows:
(1) The owner or operator shall have the
following:
(A) Two (2) of the following three
(3) ratios:
(i) A ratio of total liabilities
to net worth less than two (2.0).
(ii) Ratio of the sum of net income plus
depreciation, depletion, and amortization to total liabilities greater than
one-tenth (0.1).
(iii) A ratio of
current assets to current liabilities greater than one and five-tenths
(1.5).
(B) Net working
capital and tangible net worth each at least six (6) times the sum of the
current corrective action, closure, and post-closure cost estimates.
(C) Tangible net worth of at least ten
million dollars ($10,000,000).
(D)
Assets located in the United States amounting to at least:
(i) ninety percent (90%) of the total assets;
or
(ii) six (6) times the sum of
the current corrective action, closure, and post-closure cost
estimates.
(2)
The owner or operator shall have the following:
(A) A current rating for the most recent bond
issuance of:
(i) AAA, AA, A, or BBB as issued
by Standard and Poor's; or
(ii)
Aaa, Aa, A, or Baa as issued by Moody's.
(B) Tangible net worth at least six (6) times
the sum of the current corrective action, closure, and post-closure cost
estimates.
(C) Tangible net worth
of at least ten million dollars ($10,000,000).
(D) Assets located in the United States
amounting to at least:
(i) ninety percent
(90%) of the total assets; or
(ii)
six (6) times the sum of the current corrective action, closure, and
post-closure cost estimates.
(b) As used in subsection (a), "current
corrective action, closure, and post-closure cost estimates" refers to the cost
estimates required to be shown in the letter from the owner's or operator's
chief financial officer in section 31 of this rule.
(c) To demonstrate that the owner or operator
meets the financial test, the owner or operator shall submit the following
items to the commissioner:
(1) A letter signed
by the owner's or operator's chief financial officer and worded as specified in
section 31 of this rule.
(2) A copy
of the independent certified public accountant's report on examination of the
owner's or operator's financial statements for the latest completed fiscal
year.
(3) A special report from the
owner's or operator's independent certified public accountant to the owner or
operator stating the following:
(A) The
independent certified public accountant has compared the data that the letter
from the chief financial officer specifies as having been derived from the
independently audited, year-end financial statements for the latest fiscal year
with the amounts in the financial statements.
(B) In the comparison in clause (A), no
matters came to the attention of the independent certified public accountant
that caused the independent certified public accountant to believe that the
specified data should be adjusted.
(d) After the initial submission of items
specified in subsection (c), the owner or operator shall send updated
information to the commissioner within ninety (90) days after the close of each
succeeding fiscal year. This information must consist of all three (3) items
specified in subsection (c).
(e) If
the owner or operator no longer meets the requirements of subsection (a), the
owner or operator shall send notice to the commissioner of intent to establish
alternate financial assurance in accordance with sections 15 through 18 of this
rule and this section. The notice must be sent by certified mail within ninety
(90) days after the end of the fiscal year for which the year-end financial
data reflects that the owner or operator no longer meets the requirements. The
owner or operator shall provide the alternate financial assurance within one
hundred twenty (120) days after the end of the fiscal year.
(f) The commissioner may, based on a
reasonable belief that the owner or operator may no longer meet the
requirements of subsection (a), require reports of financial condition at any
time from the owner or operator in addition to those specified in subsection
(c). If the commissioner finds, on the basis of the reports or other
information, that the owner or operator no longer meets the requirements of
subsection (a), the owner or operator shall provide alternate financial
assurance in accordance with sections 15 through 18 of this rule and this
section within thirty (30) days after notification of the finding.
(g) The commissioner may disallow use of the
financial test on the basis of qualifications in the opinion expressed by the
independent certified public accountant in the report on examination of the
owner's or operator's financial statements required in subsection (c)(2). An
adverse opinion or a disclaimer of opinion is cause for disallowance. The
commissioner shall evaluate other qualifications on an individual basis. The
owner or operator shall provide alternate financial assurance in accordance
with sections 15 through 18 of this rule and this section within thirty (30)
days after notification of the disallowance.
(h) During the period of post-closure care,
the commissioner may approve a decrease in the current post-closure cost
estimate for which the financial test demonstrates financial assurance if the
owner or operator demonstrates to the commissioner that the amount of the cost
estimate exceeds the remaining cost of post-closure care.
(i) The owner or operator is no longer
required to submit the items specified in subsection (c) when:
(1) the owner or operator substitutes
alternate financial assurance in accordance with sections 15 through 18 of this
rule and this section; or
(2) the
commissioner releases the owner or operator from the requirements of section 14
of this rule in accordance with section 22 of this rule.
(j) An owner or operator may meet the
requirements of sections 14 through 18 of this rule, this section, and sections
20 through 21 of this rule by obtaining a written guarantee. The guarantor must
be the direct or higher tier parent corporation of the owner or operator or a
firm whose parent corporation is also the parent corporation of the owner or
operator. The guarantor shall meet the requirements for owners or operators in
subsections (a) through (h) and shall comply with the terms of the guarantee.
The wording of the guarantee must be identical to the wording specified in
section 33 of this rule. The guarantee must accompany the items sent to the
commissioner in accordance with subsection (c). One (1) of these items must
include the letter from the guarantor's chief financial officer. If the
guarantor's parent corporation is also the parent corporation of the owner or
operator, the letter must describe the value received in consideration of the
guarantee. The terms of the guarantee must provide the following:
(1) If the owner or operator fails to perform
post-closure care of a facility covered by the guarantee in accordance with the
post-closure plan and other interim status requirements whenever required to do
so, the guarantor shall perform post-closure care in accordance with the
post-closure plan and other interim status requirements or establish a trust
fund in accordance with section 15 of this rule in the name of the owner or
operator.
(2) The guarantee must
remain in force unless the guarantor sends notice of cancellation by certified
mail to the owner or operator and the commissioner. Cancellation may not occur
during the one hundred twenty (120) days beginning on the date of receipt of
the notice of cancellation by both the owner or operator and the commissioner
as evidenced by the return receipts.
(3) The guarantor shall provide alternate
financial assurance in the name of the owner or operator if the owner or
operator fails to:
(A) provide alternate
financial assurance in accordance with sections 15 through 18 of this rule and
this section; and
(B) obtain the
written approval of alternate assurance from the commissioner within ninety
(90) days after receipt by both the owner or operator and the commissioner of a
notice of cancellation of the guarantee from the guarantor.
Notes
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