R 299.9709 Financial test and corporate guarantee for closure or postclosure.

Rule 709. (1) An owner or operator may satisfy the requirements of this part by demonstrating that the owner or operator passes a financial test as specified in this rule. To pass this test, the owner or operator shall meet the criteria of 1 of the following: (a) The owner or operator shall have all the following: (i) Two of the following 3 ratios: (A) A ratio of total liabilities to net worth less than 2.0. (B) A ratio of the sum of net income plus depreciation, depletion, and amortization to total liabilities of more than 0.1. (C) A ratio of current assets to current liabilities of more than 1.5. (ii) Net working capital and tangible net worth each not less than 6 times the sum of the current closure and postclosure cost estimates and other obligations covered by a financial test. (iii) Tangible net worth of not less than $10,000,000.00. (iv) Assets in the United States amounting to not less than 90% of the owner's or operator's total assets or not less than 6 times the sum of the current closure and postclosure cost estimates and other obligations covered by a financial test. (v) Total assets in this state of not less than $50,000,000.00, excluding the value of any land used for hazardous waste disposal or have total assets in this state that are not less than 6 times the sum of the approved closure and postclosure cost estimates for facilities subject to these rules, whichever is larger. (b) The owner or operator shall have all the following: (i) A current rating for its senior unsecured debt of AAA, AA, A, or BBB, as issued by Standard and Poor's, or Aaa, Aa, A, or Baa as issued by Moody's. (ii) Tangible net worth not less than 6 times the sum of the current closure and postclosure cost estimates and other obligations covered by a financial test. (iii) Tangible net worth of not less than $10,000,000.00. (iv) Assets located in the United States amounting to not less than 90% of the owner's or operator's total assets or not less than 6 times the sum of the current closure and postclosure cost estimates and any other obligations covered by a financial test. (v) Have total assets in this state of not less than $50,000,000.00, excluding the value of any land used for hazardous waste disposal, or have total assets in this state that are not less than 6 times the sum of the approved closure and postclosure cost estimates for facilities subject to these rules, whichever is larger. (2) The phrase "current closure and postclosure cost estimates," as used in subrule (1) of this rule, means the cost estimates required under R 299.9702 and equivalent or substantially equivalent federal or state regulations. The phrase "other obligations covered by a financial test," as used in subrule (1) of this rule, means the financial assurance for solid waste management facilities under part 115 and equivalent or substantially equivalent federal or state regulations, the financial assurance for injection wells under 40 CFR part 144, the financial assurance for underground storage tanks under 40 CFR part 280 and equivalent or substantially equivalent state regulations, the financial assurance for polychlorinated biphenol facilities regulated under 40 CFR part 761 and equivalent or substantially equivalent state regulations, the financial assurance for remediation costs under part 201 and equivalent federal or state regulations, and the financial assurance for corrective action under R 299.9713 and equivalent or substantially equivalent federal or state regulations. (3) To demonstrate that the owner or operator meets this test, the owner or operator shall submit all the following items to the director: (a) A letter signed by the owner or operator's chief financial officer and worded as specified by the director. (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 on comparison of the data presented in the chief financial officer's letter to the independently audited, year-end financial statements. The special report must describe the agreed-upon procedures performed and related findings, including if there were any discrepancies found. (4) An owner or operator of a new facility shall submit the items specified in subrule (3) of this rule to the director not less than 60 days before the date on which hazardous waste is first received for treatment, storage, or disposal. (5) After the initial submission of the items specified in subrule (3) of this rule, the owner or operator shall send updated information to the director within 90 days after the close of each succeeding fiscal year. This information must consist of all items specified in subrule (3) of this rule. (6) If the owner or operator no longer meets the requirements of subrule (1) of this rule, the owner or operator shall send notice to the director of the intent to establish alternate financial assurance as specified in this part. The notice must be sent, by certified mail, within 90 days after the end of the fiscal year for which the yearend financial data show that the owner or operator no longer meets the requirements. The owner or operator shall provide the alternate financial assurance within 120 days after the end of the fiscal year. (7) The director may, based on a reasonable belief that the owner or operator might no longer meet the requirements of subrule (1) of this rule, require reports of financial condition at any time from the owner or operator in addition to that information required of the owner or operator in subrule (3) of this rule. If the director finds, on the basis of the reports or other information, that the owner or operator no longer meets the requirements of subrule (1) of this rule, the owner or operator shall provide alternate financial assurance as specified in this part within 30 days after notification of a finding. (8) The director may disallow use of a financial test to meet the requirements of this part 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. An adverse opinion or a disclaimer of opinion shall be cause for disallowance. The director shall evaluate other qualifications on an individual basis. The owner or operator shall provide alternate financial assurance as specified in this rule within 30 days after notification of the disallowance. (9) The owner or operator is no longer required to submit the items specified in subrule (3) of this rule when one of the following occurs: (a) An owner or operator substitutes alternate financial assurance as specified in this rule. (b) The director releases the owner or operator from the requirements of this part in accordance with R 299.9703(5). (10) An owner or operator may meet the requirements of this rule by obtaining a written guarantee, hereafter referred to as "corporate guarantee." The guarantor shall be the parent corporation of the owner or operator. The guarantor shall meet the requirements for owners or operators in subrules (1) to (8) of this rule and comply with the terms of the corporate guarantee. The wording of the corporate guarantee must be identical to wording provided by the director. The corporate guarantee must accompany the items sent to the director as specified in subrule (3) of this rule. The terms of the corporate guarantee must provide for all the following: (a) If the owner or operator fails to perform final closure or postclosure care of a facility covered by the corporate guarantee in accordance with the closure and postclosure plans and other operating license requirements when required to do so, the guarantor shall do so or establish a trust fund as specified in R 299.9704 in the name of the owner or operator. (b) The corporate guarantee must remain in force unless the guarantor sends notice of cancellation, by certified mail, to the owner or operator and to the director. Cancellation must not occur, however, during the 120 days beginning on the date of receipt of the notice of cancellation by both the owner or operator and the director, as evidenced by the return receipts. (c) If the owner or operator fails to provide alternate financial assurance as specified in this part and obtain the written approval of the alternate assurance from the director within 90 days after receipt by the owner or operator and the director of a notice of cancellation of the corporate guarantee from the guarantor, the guarantor shall provide the alternative financial assurance in the name of the owner or operator. (d) In the case of corporations that are incorporated outside of this state, the guarantor shall identify and maintain a registered agent for service of process in this state.