Ohio Admin. Code 3745-66-47 - Liability requirements
(A) Coverage for sudden accidental
occurrences. An owner or operator of a hazardous waste treatment, storage, or
disposal facility, or a group of such facilities, shall demonstrate financial
responsibility for bodily injury and property damage to third parties caused by
sudden accidental occurrences arising from operations of the facility or group
of facilities. The owner or operator shall have and maintain liability coverage
for sudden accidental occurrences in the amount of at least one million dollars
per occurrence with an annual aggregate of at least two million dollars,
exclusive of legal defense costs. This liability coverage may be demonstrated
as specified in paragraph (A)(1), (A)(2), (A)(3), (A)(4), (A)(5), or (A)(6) of
this rule:
.
(1) An owner or operator may demonstrate the
required liability coverage by having liability insurance as specified in
paragraphs
paragraph (A) to
(A)(7)(c) of this rule.
(a) Each
insurance policy shall be amended by attachment of the "Hazardous Waste
Facility Liability Endorsement" or evidenced by a "Certificate of Liability
Insurance." The wording of the endorsement shall be identical to the wording
specified in paragraph (I) of rule
3745-55-51
of the Administrative Code. The wording of the certificate of insurance shall
be identical to the wording specified in paragraph (J) of rule
3745-55-51
of the Administrative Code. The owner or operator shall submit an originally
signed duplicate of the endorsement or the certificate of insurance to the
director. If requested by the director, an owner or operator shall provide an
originally signed duplicate of the insurance policy.
(b) Each insurance policy shall be issued by
an insurer which, at a minimum, is licensed to transact the business of
insurance, or eligible to provide insurance as an excess or surplus lines
insurer, in one or more states.
(2) An owner or operator may meet the
requirements of this rule by passing a financial test or using the guarantee
for liability coverage as specified in paragraphs (F) and (G) of this
rule.
(3) An owner or operator may
meet the requirements of this rule by obtaining a letter of credit for
liability coverage as specified in paragraph (H) of this rule.
(4) An owner or operator may meet the
requirements of this rule by obtaining a surety bond for liability coverage as
specified in paragraph (I) of this rule.
(5) An owner or operator may meet the
requirements of this rule by obtaining a trust fund for liability coverage as
specified in paragraph (J) of this rule.
(6) An owner or operator may demonstrate the
required liability coverage through the use of combinations of insurance,
financial test, guarantee, letter of credit, surety bond, and trust fund,
except that the owner or operator may not combine a financial test covering
part of the liability coverage requirement with a guarantee unless the
financial statement of the owner or operator is not consolidated with the
financial statement of the guarantor. The amounts of coverage demonstrated
shall total at least the minimum amounts required by this rule. If the owner or
operator demonstrates the required coverage through the use of a combination of
financial assurances under paragraphs
paragraph (A) to
(A)(7)(c) of this rule, the owner or operator shall specify at least
one such assurance as "primary" coverage and shall specify other assurance as
"excess" coverage.
(7) An owner or
operator shall notify the director in writing within thirty days whenever any
of the following occurs:
(a) A claim results
in a reduction in the amount of financial assurance for liability coverage
provided by a financial instrument authorized in paragraphs (A)(1) to (A)(6) of
this rule.
(b) A "Certification of
Valid Claim" for bodily injury or property damages caused by a sudden or
nonsudden accidental occurrence arising from the operation of a hazardous waste
treatment, storage, or disposal facility is entered between the owner or
operator and third-party claimant for liability coverage under paragraphs
(A)(1) to (A)(6) of this rule.
(c)
A final court order establishing a judgement for bodily injury or property
damages
damage
caused by a sudden or nonsudden accidental occurrence arising from the
operation of a hazardous waste treatment, storage, or disposal facility is
issued against the owner or operator or an instrument that is providing
financial assurance for liability coverage under paragraphs (A)(1) to (A)(6) of
this rule.
(B)
Coverage for nonsudden accidental occurrences. An owner or operator of a
surface impoundment, landfill, or land treatment facility which is used to
manage hazardous waste, or a group of such facilities, shall demonstrate
financial responsibility for bodily injury and property damage to third parties
caused by nonsudden accidental occurrences arising from operations of the
facility or group of facilities. An owner or operator shall have and maintain
liability coverage for nonsudden accidental occurrences in the amount of at
least three million dollars per occurrence with an annual aggregate of at least
six million dollars, exclusive of legal defense costs. The owner or operator
who shall meet the requirements of this rule may combine the required
per-occurrence coverage levels for sudden and nonsudden accidental occurrences
into a single per-occurrence level, and combine the required annual aggregate
coverage levels for sudden and nonsudden accidental occurrences into a single
annual aggregate level. Owners or operators who combine coverage levels for
sudden and nonsudden accidental occurrences shall maintain liability coverage
in the amount of at least four million dollars per occurrence and eight million
dollars annual aggregate. This liability coverage may be demonstrated as
specified in paragraph (B) (1), (B)(2), (B)(3), (B)(4), (B)(5), or (B)(6) of
this rule:
(1) An owner or operator may
demonstrate the required liability coverage by having liability insurance as
specified in paragraphs
paragraph (B) to
(B)(7)(c) of this rule.
(a) Each
insurance policy shall be amended by attachment of the "Hazardous Waste
Facility Liability Endorsement" or evidenced by a "Certificate of Liability
Insurance." The wording of the endorsement shall be identical to the wording
specified in paragraph (I) of rule
3745-55-51
of the Administrative Code. The wording of the certificate of insurance shall
be identical to the wording specified in paragraph (J) of rule
3745-55-51
of the Administrative Code. The owner or operator shall submit an originally
signed duplicate of the endorsement or the certificate of insurance to the
director. If requested by the director, the owner or operator shall provide an
originally signed duplicate of the insurance policy.
(b) Each insurance policy shall be issued by
an insurer which, at a minimum, is licensed to transact the business of
insurance, or eligible to provide insurance as an excess or surplus lines
insurer, in one or more states.
(2) An owner or operator may meet the
requirements of this rule by passing a financial test or using the guarantee
for liability coverage as specified in paragraphs (F) and (G) of this
rule.
(3) An owner or operator may
meet the requirements of this rule by obtaining a letter of credit for
liability coverage as specified in paragraph (H) of this rule.
(4) An owner or operator may meet the
requirements of this rule by obtaining a surety bond for liability coverage as
specified in paragraph (I) of this rule.
(5) An owner or operator may meet the
requirements of this rule by obtaining a trust fund for liability coverage as
specified in paragraph (J) of this rule.
(6) An owner or operator may demonstrate the
required liability coverage through the use of combinations of insurance,
financial test, guarantee, letter of credit, surety bond, and trust fund,
except that the owner or operator may not combine a financial test covering
part of the liability coverage requirement with a guarantee unless the
financial statement of the owner or operator is not consolidated with the
financial statement of the guarantor. The amounts of coverage demonstrated
shall total at least the minimum amount required by this rule. If the owner or
operator demonstrates the required coverage through the use of a combination of
financial assurances under paragraphs
paragraph (B) to
(B)(7)(c) of this rule, the owner or operator shall specify at least
one such assurance as "primary" coverage and shall specify other assurance as
"excess" coverage.
(7) An owner or
operator shall notify the director in writing within thirty days whenever any
of the following occurs:
(a) A claim results
in a reduction in the amount of financial assurance for liability coverage
provided by a financial instrument authorized in paragraphs (B)(1) to (B)(6) of
this rule.
(b) A "Certification of
Valid Claim" for bodily injury or property damages caused by a sudden or
nonsudden accidental occurrence arising from the operation of a hazardous waste
treatment, storage, or disposal facility is entered between the owner or
operator and third-party claimant for liability coverage under paragraphs
(B)(1) to (B)(6) of this rule.
(c)
A final court order establishing a judgement for bodily injury or property
damages
damage
caused by a sudden or nonsudden accidental occurrence arising from the
operation of a hazardous waste treatment, storage, or disposal facility is
issued against the owner or operator or an instrument that is providing
financial assurance for liability coverage under paragraphs (B)(1) to (B)(6) of
this rule.
(C)
Request for variance. If an owner or operator can demonstrate to the
satisfaction of the director that the levels for financial responsibility
required by paragraph (A) or (B) of this rule are not consistent with the
degree and duration of risk associated with the treatment, storage, or disposal
at each
the
facility or group of facilities, the owner or operator may obtain a variance
from the director. The request for a variance shall be submitted
by certified mail
in
writing to the director. If granted, the variance will take the form of
an adjusted level of required liability coverage, such level to be based on the
director's assessment of the degree and duration of risk associated with the
ownership or operation of each
the facility or group of facilities. The director may
require an owner or operator who requests a variance to provide such technical
and engineering information as is deemed necessary by the director to determine
a level of financial responsibility other than that required by paragraph (A)
or (B) of this rule. The director will process a variance request as if
it
the variance
request were a permit modification request under rule
3745-50-51
of the Administrative Code. Notwithstanding any other provision, the director
may hold a public hearing at the director's discretion or whenever the director
finds, on the basis of requests for a public hearing, a significant degree of
public interest in a tentative decision to grant a variance.
(D) Adjustments by the director. If the
director determines that the levels of financial responsibility required by
paragraphs (A) and (B) of this rule are not consistent with the degree and
duration of risk associated with treatment, storage, or disposal at the
facility or group of facilities, the director may adjust the level of financial
responsibility required under paragraph (A) or (B) of this rule as may be
necessary to protect human health and the environment. This adjusted level will
be based on the director's assessment of the degree and duration of risk
associated with the ownership or operation of the facility or group of
facilities. In addition, if the director determines that there is a significant
risk to human health and the environment from nonsudden accidental occurrences
resulting from the operations of a facility that is not a surface impoundment,
landfill, or land treatment facility, the director may require that an owner or
operator of the facility comply with paragraph (B) of this rule. The owner or
operator shall furnish to the director, within a reasonable time, any
information which the director requests to determine whether cause exists for
such adjustments of level or type of coverage. The director will process an
adjustment of the level or type of required coverage as a permit modification
request under rule
3745-50-51
of the Administrative Code. Notwithstanding any other provisions, the director
may hold a public hearing at the director's discretion or whenever the director
finds, on the basis of requests for a public hearing, a significant degree of
public interest in a tentative decision to adjust the level or type of required
coverage.
(E) Period of coverage.
Within sixty days after receiving certifications from the owner or operator and
a qualified professional engineer that final closure has been completed in
accordance with the approved closure plan, the director will notify the owner
or operator in writing that the owner or operator is no longer required by this
rule to maintain liability coverage for that facility, unless the director has
reason to believe that closure has not been in accordance with the approved
closure plan.
(F) Financial test
for liability coverage.
(1) An owner or
operator may satisfy the requirements of this rule by demonstrating that the
owner or operator passes a financial test as specified in
paragraphs
paragraph (F) to
(F)(7) of this rule. To pass this test, the owner or operator shall
meet the criteria of paragraph (F)(1)(a) or (F)(1)(b) of this rule.
(a) The owner or operator shall have:
(i) Net working capital and tangible net
worth each at least six times the amount of liability coverage to be
demonstrated by this test.
; and
(ii)
Tangible net worth of at least ten million dollars.
; and
(iii) Assets in the United States amounting
to either:
(a) At least ninety per cent of the
owner's or operator's total assets.
; or
(b)
At least six times the amount of liability coverage to be demonstrated by this
test.
(b) The
owner or operator shall have:
(i) A current
rating for the owner's or operator's most recent bond issuance of "AAA, AA, A,
or BBB" as issued by "Standard and Poor's" or "Aaa, Aa, A, or Baa" as issued by
"Moody's.";
and
(ii) Tangible net worth
of at least ten million dollars.
; and
(iii) Tangible net worth of at least six
times the amount of liability coverage to be demonstrated by this test.
; and
(iv) Assets in the United States amounting to
either:
(a) At least ninety per cent of the
owner's or operator's total assets.
; or
(b)
At least six times the amount of liability coverage to be demonstrated by this
test.
(2) The phrase "amount of liability coverage"
as used in paragraph (F)(1) of this rule refers to the annual aggregate amounts
for which coverage is required under paragraphs (A) and (B) of this
rule.
(3) To demonstrate that the
owner or operator meets this test, the owner or operator shall submit the
following three items to the director:
(a) A
letter signed by the owner's or operator's chief financial officer and worded
as specified in paragraph (G) of rule
3745-55-51
of the Administrative Code. If an owner or operator is using the financial test
to demonstrate both assurance for closure or post-closure care, as specified by
paragraph (F) of rule
3745-55-43,
paragraph (F) of rule
3745-55-45,
paragraph (E) of rule
3745-66-43,
and paragraph (E) of rule
3745-66-45
of the Administrative Code, and liability coverage, the owner or operator shall
submit the letter specified in paragraph (G) of rule
3745-55-51
of the Administrative Code to cover both forms of financial responsibility. A
separate letter as specified in paragraph (F) of rule
3745-55-51
of the Administrative Code is not required.
(b) 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.
(c) A special report from the owner's or
operator's independent certified public accountant to the owner or operator
stating that:
(i) The accountant has compared
the data which 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 such financial statements;
and
(ii) In connection with that
procedure, no matters came to the accountant's attention which caused the
accountant to believe that the specified data should be adjusted.
(4) The owner or
operator may obtain a one-time extension of the time allowed for submittal of
the documents specified in paragraph (F)(3) of this rule if the fiscal year of
the owner or operator ends during the ninety days prior to August 26, 1983 and
if the year-end financial statements for that fiscal year will be audited by an
independent certified public accountant. The extension will end no later than
ninety days after the end of the owner's or operator's fiscal year. To obtain
the extension, by August 26, 1983, the owner's or
operator's chief financial officer shall send, by
August 26, 1983, a letter to the director. This letter from the chief
financial officer shall do the following:
(a)
Request the extension.
(b) Certify
that the owner's or operator's chief financial officer has grounds to believe
that the owner or operator meets the criteria of the financial test.
(c) Specify for each facility to be covered
by the test the U.S. EPA identification number, name, address, the amount of
liability coverage and, when applicable, current closure and post-closure cost
estimates to be covered by the test.
(d) Specify the date ending the owner's or
operator's last complete fiscal year before August 26, 1983.
(e) Specify the date, no later than ninety
days after the end of such fiscal year, when the owner's or operator's chief
financial officer will submit the documents specified in paragraph (F)(3) of
this rule.
(f) Certify that the
year-end financial statements of the owner or operator for such fiscal year
will be audited by an independent certified public accountant.
(5) After the initial submittal of
items specified in paragraph (F)(3) of this rule, the owner or operator shall
send updated information to the director within ninety days after the close of
each succeeding fiscal year. This information shall consist of all three items
specified in paragraph (F)(3) of this rule.
(6) If the owner or operator no longer meets
the requirements of paragraph (F)(1) of this rule, the owner or operator shall
obtain insurance, a letter of credit, a surety bond, a trust fund, or a
guarantee for the entire amount of required liability coverage as specified in
this rule. Evidence of liability coverage shall be submitted to the director
within ninety days after the end of the fiscal year for which the year-end
financial data show that the owner or operator no longer meets the test
requirements.
(7) The director may
disallow use of this test on the basis of qualifications in the opinion
expressed by the independent certified public accountant in
such
the
accountant's report on examination of the owner's or operator's financial
statements [see paragraph (F)(3)(b) of this rule]. An adverse opinion or a
disclaimer of opinion will be cause for disallowance. The director will
evaluate other qualifications on an individual basis.
The
Within thirty
days after notification of disallowance, the owner or operator shall
provide evidence of insurance for the entire amount of required liability
coverage as specified in this rule within thirty
days after notification of disallowance.
(G) Guarantee for liability coverage.
(1) Subject to paragraph (G)(2) of this rule,
an owner or operator may meet the requirements
of
comply with this rule by obtaining a
written guarantee, hereinafter referred to as "guarantee." The guarantor shall
be the direct or higher-tier parent corporation of the owner or operator, a
firm whose parent corporation is also the parent corporation of the owner or
operator, or firm with a "substantial business relationship" with the owner or
operator. The guarantor shall meet the requirements for owners or operators in
paragraphs (F)(1) to (F)(6) of this rule. The wording of the guarantee shall be
identical to the wording specified in paragraph (H)(2) of rule
3745-55-51
of the Administrative Code. A certified copy of the guarantee shall accompany
the items sent to the director as specified in paragraph (F)(3) of this rule.
One of these items shall be 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, this letter shall describe the value received in
consideration of the guarantee. If the guarantor is a firm with a "substantial
business relationship" with the owner or operator, this letter shall describe
this "substantial business relationship" and the value received in
consideration of the guarantee.
(a) If the
owner or operator fails to satisfy a judgment based on a determination of
liability for bodily injury or property damage to third parties caused by
sudden or nonsudden accidental occurrences (or both as the case may be),
arising from the operation of facilities covered by this corporate guarantee,
or fails to pay an amount agreed to in settlement of claims arising from or
alleged to arise from such injury or damage, the guarantor will do so up to the
limits of coverage.
(b)
[Reserved.]
(2) In the
case of corporations incorporated in Ohio, a guarantee executed as described in
this rule and paragraph (H)(2) of rule
3745-55-51
of the Administrative Code may be used to satisfy the requirements of this
rule. In the case of a corporation incorporated in a state other than Ohio, a
guarantee may be used to satisfy the requirements of this rule only if the
attorney general or insurance commissioners of that state have submitted a
written statement to the director that a guarantee executed as described in
this rule and paragraph (H)(2) of rule
3745-55-51
of the Administrative Code is a legally valid and enforceable obligation in
that state.
(3) In the case of
corporations incorporated outside the United States, a guarantee may be used to
satisfy the requirements of this rule only if:
(a) The non-U.S. corporation has identified a
registered agent for service of process in Ohio and in the state in which the
principal place of business of the guarantor corporation is located.
; and
(b) The attorney general or insurance
commissioner of the state in which the principal place of business of the
guarantor corporation is located has submitted a written statement to the
director that a guarantee executed as described in this rule and paragraph
(H)(2) of rule
3745-55-51
of the Administrative Code is a legally valid and enforceable obligation in
that state.
(H)
Letter of credit for liability coverage.
(1)
An owner or operator may satisfy the requirements of this rule by obtaining an
irrevocable standby letter of credit that conforms to the requirements of
paragraphs
paragraph (H) to
(H)(5) of this rule, and submitting a copy of the letter of credit to
the director.
(2) The financial
institution issuing the letter of credit shall be an entity that has the
authority to issue letters of credit and whose letter of credit operations are
regulated and examined by a federal or state agency.
(3) The wording of the letter of credit shall
be identical to the wording specified in paragraph (K) of rule
3745-55-51
of the Administrative Code.
(4) An
owner or operator who uses a letter of credit to satisfy the requirements of
this rule also may also establish a standby trust fund. Under the
terms of such a letter of credit, all amounts paid pursuant to a draft by the
trustee of the standby trust will be deposited by the issuing institution into
the standby trust in accordance with instructions from the trustee. The trustee
of the standby trust fund 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.
(5) The wording of
the standby trust fund shall be identical to the wording specified in paragraph
(N)(1) of rule
3745-55-51
of the Administrative Code.
(I) Surety bond for liability coverage.
(1) An owner or operator may satisfy the
requirements of this rule by obtaining a surety bond that conforms to the
requirements of paragraphs
paragraph (I) to (I)
(4) of this rule, and submitting a copy of the bond to the
director.
(2) The surety company
issuing the bond shall be among those listed as acceptable sureties on federal
bonds in the most recent "Circular 570" of the U.S. department of the
treasury.
(3) The wording of the
surety bond shall be identical to the wording specified in paragraph (L) of
rule
3745-55-51
of the Administrative Code.
(4) A
surety bond may be used to satisfy the requirements of this rule only if the
attorney general or insurance commissioners of the state in which the surety is
incorporated, and each state in which a facility covered by the surety bond is
located, have submitted a written statement to Ohio EPA that a surety bond
executed as described in this rule and paragraph (L) of rule
3745-55-51
of the Administrative Code, and is legally valid and enforceable obligation in
that state.
(J) Trust
fund for liability coverage.
(1) An owner or
operator may satisfy the requirements of this rule by establishing a trust fund
that conforms to the requirements of paragraphs
paragraph
(J) to (J)(4) of this rule, and submitting
an originally signed duplicate of the trust agreement to the
director.
(2) 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.
(3) The trust fund for liability coverage
shall be funded for the full amount of the liability coverage to be provided by
the trust fund before the trust fund may be relied upon to satisfy the
requirements of this rule. If at any time after the trust fund is created the
amount of funds in the trust fund is reduced below the full amount of the
liability coverage to be provided, the owner or operator, by the anniversary
date of the establishment of the trust fund,
either shall either add sufficient funds to the trust fund to
cause the value of the trust fund to equal the full amount of liability
coverage to be provided, or obtain other financial assurance as specified in
this rule to cover the difference. For purposes of paragraphs
paragraph
(J) to (J)(4) of this rule, "the full
amount of the liability coverage to be provided" means the amount of coverage
for sudden and nonsudden occurrences required to be provided by the owner or
operator by this rule, less the amount of financial assurance for liability
coverage that is being provided by other financial assurance mechanism being
used to demonstrate financial assurance by the owner or operator.
(4) The wording of the trust fund shall be
identical to the wording specified in paragraph (M) of rule
3745-55-51
of the Administrative Code.
[Comment: For dates of non-regulatory government publications, publications of recognized organizations and associations, federal rules, and federal statutory provisions referenced in this rule, see rule 3745-50-11 of the Administrative Code titled "Incorporated by reference."]
Notes
Promulgated Under: 119.03
Statutory Authority: 3734.12
Rule Amplifies: 3734.12
Prior Effective Dates: 08/26/1983 (Emer.), 11/29/1983, 08/30/1984, 12/28/1987, 12/08/1988, 12/30/1989, 06/29/1990, 04/15/1993, 02/14/1995, 09/02/1997, 12/07/2004, 09/05/2010, 03/24/2017
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