329 IAC 3.1-14-9 - Financial test and guarantee for corrective action or closure 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. 9.
(a) An owner
or operator may satisfy the requirements of sections 4 through 8 of this rule,
this section, and sections 10 through 11 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)
A 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 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 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 accordance with 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 4 through 8 of this
rule, this section, and sections 10 through 11 of this rule. 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 5 through 8 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 4 through 8 of this rule, this section, and sections 10 through
11 of this rule within thirty (30) days after notification of the
disallowance.
(h) 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 5 through 8 of this
rule and this section; or
(2) the
commissioner releases the owner or operator from the requirements of sections 4
through 8 of this rule, this section, and sections 10 through 11 of this rule
in accordance with section 12 of this rule.
(i) An owner or operator may meet the
requirements of sections 4 through 8 of this rule, this section, and sections
10 through 11 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 (g) 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
corrective action or final closure of a facility covered by the guarantee in
accordance with the corrective action or closure plan and other interim status
requirements whenever required to do so, the guarantor shall perform corrective
action or final closure in accordance with the corrective action or closure
plan and other interim status requirements or establish a trust fund in
accordance with section 5 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 to 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 4 through 8 of this rule, this
section, and sections 10 through 11 of this rule; 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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