Section 329 IAC 3.1-14-9 - Financial test and guarantee for corrective action or closure optionAuthority: 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.Solid Waste Management Board; 329 IAC 3.1-14-9; filed Jan 24, 1992, 2:00 p.m.: 15 IR 952; filed Apr 1, 1996, 11:00 a.m.: 19 IR 1977; errata filed Apr 30, 1996, 10:00 a.m.: 19 IR 2289; readopted filed Jan 10, 2001, 3:25 p.m.: 24 IR 1535Filed 5/11/2021, 12:38 p.m.: 20210609-IR-329140287FRA