Section NR 182.117 - Financial responsibility for long-term care(1) METHODS OF PROVIDING PROOF OF FINANCIAL RESPONSIBILITY. The owner shall specify, as part of the plan of operation submittal, which method of providing proof of financial responsibility will be used for long-term care in compliance with ss. 289.41 and 293.51(1g), Stats. To provide proof of financial responsibility, the owner may use any of the following methods to provide proof of financial responsibility under this section:(a)Performance or forfeiture bond.1. If the owner chooses to submit a bond, it shall be in the amount determined according to sub. (3) (b), conditioned upon faithful performance by the owner and any successor in interest, of all long-term care requirements of the approved plan of operation. The bond for long term care shall be delivered to the department as part of the initial operating license application submitted under s. NR 182.111. Bond forms shall be supplied by the department.2. All bonds submitted under this paragraph shall be issued by a surety company among those listed as acceptable sureties for federal bonds in Circular 570 of the U.S. department of the treasury. At the option of the owner a performance bond or a forfeiture bond may be filed. The department shall be designated as the obligee of the bond. Surety companies may have the opportunity to complete the long-term care of the facility in lieu of cash payment to the department if the owner or any successor in interest fails to carry out the long-term care requirements of the approved plan of operation. The department shall mail notification of its intent to use the funds for that purpose to the last known address of the owner. If the owner submits a written request for a hearing to the secretary of the department within 20 days after the mailing of the notification, the department shall, prior to using the funds, hold a hearing for the purpose of determining whether, or not, the owner has fulfilled the long-term care requirements of the approved plan of operation. Note: Copies of Circular 570, "Companies Holding Certificates of Authority as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring Companies" can be obtained from surety bond branch, financial management service, department of the treasury, Washington D.C. 20227, phone (202) 874-6850.
3. Each bond shall provide that, as long as any obligation of the owner for long-term care remains, the bond may not be canceled by the surety unless a replacement bond or other proof of financial responsibility under this section is provided to the department by the owner. If the surety proposes to cancel a bond, the surety shall provide notice to the department and to the owner in writing by registered or certified mail not less than 90 days prior to the proposed cancellation date. Not less than 30 days prior to the expiration of the 90-day notice period, the owner shall deliver to the department a replacement bond or other proof of financial responsibility under this section, in the absence of which all disposal operation shall immediately cease and the bond shall remain in effect as long as any obligation of the owner remains for long-term care. The surety may discharge its obligation under the bond at any time by paying the unused portion of the bond to the department.4. If the surety company becomes bankrupt or insolvent or if its authorization to do business is revoked or suspended, the owner shall, within 30 days after receiving written notice, deliver to the department a replacement bond or other proof of financial responsibility under this section, in the absence of which all disposal operations shall immediately cease, and the bond shall remain in effect as long as any obligation of the owner remains for long-term care.(b)Deposit with the department. An owner may deposit cash, certificates of deposit, or U.S. government securities with the department. The amount of the deposit shall be determined according to sub. (3) and shall be submitted to the department as part of the initial license application under s. NR 182.111. Cash deposits placed with the department shall be segregated and invested in an interest-bearing account. All interest payments shall be accumulated in the account. The department shall have the right to use part, or all of, the funds to carry out the long-term care requirements of the approved plan of operation if the owner fails to do so. The department shall mail notification of its intent to use the funds to carry out the long-term care requirements of the approved plan of operation to the last known address of the owner. If the owner submits a written request for a hearing to the secretary of the department within 20 days after the mailing of the notification, the department shall, prior to using the funds, hold a hearing for the purpose of determining whether, or not, the owner has fulfilled the long-term care requirements of the approved plan of operation.(c)Insurance.1. If the owner chooses to submit an insurance policy for long-term care, a policy shall be issued for the maximum risk limit determined according to sub. (3) (b). A certificate of insurance for long-term care shall be delivered to the department as part of the initial operating license application under s. NR 182.111. Certificate of insurance forms shall be supplied by the department.2. Except for captive insurance companies, the insurer that issues the policy under this paragraph shall be licensed to transact the business of insurance or eligible to provide insurance as an excess or surplus lines insurer in one or more states. The department, after conferring with the office of the commissioner of insurance, shall determine the acceptability of a surplus lines insurer or captive insurance company to provide coverage for proof of financial responsibility. The department shall ask the office of the commissioner of insurance to provide a financial analysis of the insurer including a recommendation as to the insurer's ability to provide the required coverage. The department shall be the beneficiary of the insurance policy. The department may require a periodic review of the acceptability of a surplus lines insurer or captive insurance company.3. The insurance policy under this paragraph shall provide either that the unused proceeds of the policy shall be payable in full to the department upon expiration of the policy or that, as long as any obligation of the owner for long-term care remains the insurance policy may not be canceled by the insurer unless a replacement insurance policy or other proof of financial responsibility under this section is provided to the department by the owner. If the insurer proposes to cancel an insurance policy, the insurer shall provide notice to the department in writing by registered or certified mail not less than 90 days prior to the proposed cancellation date. Not less than 30 days prior to the expiration of the 90-day notice period, the owner shall deliver to the department a replacement insurance policy or other proof of financial responsibility under this section, in the absence of which all disposal operations shall immediately cease, and either the policy shall remain in effect as long as any obligation of the owner remains for long-term care or the proceeds of the policy shall be payable in full to the department.4. If the insurance company who issues the policy under this paragraph becomes bankrupt or insolvent or if the company receives an unfavorable evaluation under s. 618.41(6) (d), Stats., the owner shall, within 30 days after receiving written notice of the bankruptcy, insolvency, or unfavorable evaluation, deliver to the department a replacement insurance policy or other proof of financial responsibility under this section, in the absence of which all disposal operations shall immediately cease, and the policy shall either remain in effect as long as any obligation of the owner remains for long-term care or be payable in full to the department.5. The insurance policy under this paragraph shall provide that funds, up to an amount equal to the maximum risk limit of the policy, will be available to the department to carry out the long-term care requirements of the approved plan of operation if the owner fails to do so. The department shall mail notification of its intent to use the funds for that purpose to the last known address of the owner. If the insurer or owner submits a written request for a hearing to the secretary of the department within 20 days after the mailing of the notification, the department shall, prior to using the funds, hold a hearing for the purpose of determining whether, or not, the owner fulfilled the long-term care requirements of the approved plan of operation.6. Each insurance policy under this paragraph shall contain a provision allowing assignment of the policy to a successor owner or operator. Such assignment may be conditioned upon the consent of the insurer, provided that the insurer's consent is not unreasonably refused.(2) COST ESTIMATES. (a) For the purpose of calculating under sub. (3) the amount of proof of financial responsibility that is required under sub. (1), the owner shall estimate the annual cost of long-term care of the facility in current dollars for each year of the long-term care proof of owner responsibility period for the facility and submit the estimated long-term care costs, together with all necessary justification, to the department for approval as part of the plan of operation submitted under s. NR 182.109. The costs shall be based on the assumption that a third party performs the work and shall be reported on a per unit basis. The source of estimates shall be indicated.(b) The owner shall prepare and submit to the department a new cost estimate for long-term care during the active life of the facility as follows: 1. Once every 10 years following issuance of the initial operating license for the waste facility, using current dollars, unless the costs are revised under subd. 2. within the 10-year period.2. Within 60 days of the written approval by the department of a change in site design or operation for the facility.(c)1. At a minimum, long-term care cost estimates under this subsection shall include all of the following when applicable:b. Unsaturated zone monitoring.c. Leachate pumping, transportation, monitoring, and treatment.d. Groundwater monitoring, including sample collection and analysis.e. Leachate collection line cleaning, on an annual basis.f. Annual cost of electricity for maintaining the closed site.g. A 10 percent contingency.2. For the purposes of preparing the long-term care cost estimates under this subsection, all monitoring requirements specified in the plan of operation shall be assumed to apply over the entire long-term care period. Leachate quantity and strength shall be assumed to remain constant over time and the calculation of leachate generation volumes shall be performed assuming that the waste is at field capacity unless an alternative method is approved by the department in writing. Only detailed performance data shall be considered when evaluating estimates for leachate strengths and leachate generation volumes. Leachate treatment costs shall be based on those available from a municipal wastewater treatment plant capable of accepting the leachate in accordance with the applicable requirements of a permit issued under ch. 283, Stats., authorizing discharge from the municipal wastewater facility. The expected operating life of all pumps, manholes, blowers, extraction wells, and other engineering design features shall be specified in the plan of operation, and as each design feature reaches the end of its anticipated operating life, the cost of its replacement shall be added to the cost estimate for the appropriate year of the long-term care period.(d) The rates of inflation applied to cost estimates under this subsection approved by the department in previous years shall be the annual gross domestic product implicit price deflator published in the survey of current business by the bureau of economic analysis, U.S. department of commerce for the appropriate years. The projected rate of inflation to be applied in proof of financial responsibility calculations for all future years shall be equal to the annual gross domestic product implicit price deflator for the last full calendar year.(3) CALCULATING THE AMOUNT OF THE PROOF OF FINANCIAL RESPONSIBILITY. The owner shall, as part of the plan of operation submitted under s. NR 182.109, calculate the amounts of the proof of financial responsibility required under sub. (1) for long-term care based on the chosen methods for providing proof of financial responsibility, subject to all of the following: (a) Proof of financial responsibility for long-term care deposited as cash, certificates of deposit, or U.S. government securities under sub. (1) (b) shall be provided in accordance with all of the following:1. Annual payments shall be made into the account at the beginning of each year of site life. All estimated annual expenditures during the long-term care proof of financial responsibility period shall be assumed to occur at the end of each year of the proof period.2. Annual payments shall be made in equal dollar amounts or in dollar amounts that increase each year by no more than the projected rate of inflation. However, payments in excess of these minimum amounts may be made in any year, thereby reducing the amounts of subsequent annual payments for the remainder of the site life.3. The amount of the annual payments shall be calculated and made such that, at the end of the projected facility life, the minimum dollar value of the account is equal to the sum of all estimated long-term care expenditures for the entire long-term care proof of financial responsibility period when the expenditure for each year has first been expressed in future dollars and then brought to present value using a discount rate equal to the projected rate of inflation plus 2 percent.4. In estimating future earnings on cash, certificates, and securities deposited as proof of financial responsibility for long-term care, the weighted average rate of return of the investments held in the account may be used for a period of time not to exceed the weighted average maturity of the investments held in the account rounded to the nearest whole year. Earnings for years beyond the weighted average maturity of the investments in the account shall be calculated based on a projected rate of return equal to the projected rate of inflation plus 2 percent.5. If an annual payment is missed or made late, the subsequent annual payment shall be increased so that the end of year balances originally calculated based on beginning of year payments are maintained.(b) Proof of financial responsibility for long-term care provided in the form of a performance or forfeiture bond under sub. (1) (a) or insurance under sub. (1) (c) shall be equal to the sum of the costs in current dollars of performing each of the years of long-term care for the required long-term care proof of financial responsibility period.(4) CHANGING METHODS OF PROOF OF FINANCIAL RESPONSIBILITY. The owner of an approved mining waste facility may change from one method of providing proof of financial responsibility under sub. (1) to another, but not more than once per year. A change may only be made on the anniversary of the submittal of the original method of providing proof of financial responsibility. The amount of the new method of providing proof of financial responsibility shall be in the amount that is equal to the amount that would have accumulated had the new method been used as the original method.(5) ADJUSTMENT OF FINANCIAL RESPONSIBILITY. The owner of a facility for the land disposal of mining waste shall prepare a new long-term care cost estimate whenever a substantial change in the long-term care requirements in the approved plan of operation affects the cost of long-term care. Proof of the increase in the amount of all bonds or other approved methods established under this section shall be submitted annually to the department. The department may adjust the amount of the required proof of financial responsibility for long-term care based upon prevailing or projected interest and inflation rates and the latest cost estimates and may annually require the owner to adjust the amount of proof of financial responsibility accordingly.(6) ACCESS AND DEFAULT. Whenever on the basis of any reliable information, and after opportunity for a hearing, the department determines that an owner or operator of an approved mining waste facility is in violation of any of the requirements for long-term care specified in the approved plan of operation, the department and its designees shall have the right to enter upon the facility and carry out the long-term care requirements. The department may use part, or all of the money deposited as cash, certificates of deposit or government securities, performance or forfeiture bonds, or insurance under sub. (1) to carry out the long-term care requirements.(7) AUTHORIZATION TO RELEASE FUNDS. One year after closure, and annually thereafter for the period of owner responsibility under s. 289.41(1m) (g), Stats., the owner, who has carried out all necessary long-term care during the preceding year, may make application to the department for reimbursement from deposits with the department, or for reduction of the bond or insurance equal to the estimated costs for long-term care for that year. The application shall be accompanied by an itemized list of costs incurred. Upon determination that the expenditures incurred are in accordance with the long-term care requirements anticipated in the approved plan of operation, the department may authorize in writing the release of funds or approve a reduction in the bond or insurance. Prior to authorizing a release of the funds or a reduction of the bond or insurance, the department shall determine that adequate funds exist to complete required long-term care work for the remaining period of owner responsibility. For facilities using deposits with the department, the department may authorize the release and return of up to 75 percent of the expected cost of long-term care for the current year. Determinations shall be made within 90 days of the application. Any funds remaining in deposits with the department at the termination of the period of owner responsibility shall be released to the owner.(8) TERMINATION OF REQUIREMENT TO POST PROOF OF FINANCIAL RESPONSIBILITY. The owner of an approved mining facility may apply, at any time at least 40 years after the closing of the facility, to the department for termination of the owner's obligation to maintain proof of financial responsibility for long-term care of the facility. The department shall process the application in accordance with the notice, hearing, and all other requirements under s. 289.41(1m) (g), Stats.(9) SUCCESSORS IN INTEREST. Any person acquiring rights of ownership, possession, or operation of a licensed facility shall be subject to all requirements of the license for the facility and shall provide any required proof of financial responsibility to the department in accordance with this section. The previous owner is responsible for long-term care, and shall maintain any required proof of financial responsibility, until the person acquiring ownership, possession, or operation of the facility establishes any required proof of financial responsibility.Wis. Admin. Code Department of Natural Resources NR 182.117
Adopted by, CR 20-043: cr. Register December 2021 No. 792, eff. 1-1-22; correction in (1) (intro.), (c) 3. made under s. 35.17, Stats., and correction in (1) (c) 2. made under s. 13.92(4) (b) 6, Stats., Register December 2021 No. 792, eff. 1/1/2022