Section NR 520.08 - Calculating the amount of the proof of financial responsibilityThe owner shall, as part of the plan of operation submittal, calculate the necessary amounts of proof of financial responsibility for both closure and long-term care based on the chosen methods of providing proof of financial responsibility.
(1) CLOSURE. (a) For escrow, trust or department accounts, proof of financial responsibility for closure shall be equal to the estimated cost of closure in current dollars multiplied by the quantity of one plus the projected annual rate of inflation expressed as a decimal, and divided by the quantity of one plus the weighted average annual rate of return of the investments in the account expressed as a decimal.(b) For bonds, letters of credit and insurance, proof of financial responsibility for closure shall be equal to the estimated cost of closure in current dollars multiplied by the quantity of one plus the projected annual rate of inflation expressed as a decimal.(2) LONG-TERM CARE. (a) For escrow, trust or department accounts, proof of financial responsibility for long-term care shall be provided in accordance with 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 where 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%.4. In estimating future earnings on these accounts, 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%.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) For bonds, letters of credit or insurance, proof of financial responsibility for long-term care 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.(3) REMEDIAL ACTIONS. (a) For escrow, trust or department accounts, proof of financial responsibility for remedial actions shall be provided in accordance with the following: 1. Annual payments shall be made into the account at the beginning of each year of the first half of the remedial action period. All estimated annual expenditures during the remedial action 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 payments.3. The amount of these payments shall be calculated and made such that, half way through the period of time the remedial action is estimated to take to complete, the minimum dollar value of the account is equal to the sum of each annual cost which is estimated to occur in the second half of the remedial action period where 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%.4. Determination of earnings and procedures to follow in the case of missed or late payments shall be in accordance with sub. (2) (a) 2. and 3.(b) For bonds or letters of credit, remedial action proof of financial responsibility shall be provided in an amount equal to the sum of the remedial action costs estimated to occur in the second half of the remedial action period expressed in current dollars.Wis. Admin. Code Department of Natural Resources NR 520.08
Cr. Register, January, 1988, No. 385, eff. 2-6-88; r. and recr., Register, June, 1996, No. 486, eff. 7-1-96.