CHAPTER Env-Sw 1400 FINANCIAL ASSURANCE
Statutory
Authority: RSA 149-M:7, RSA 149-M:9
Revision Note:
Document
#8459, effective 10-28-05, readopted with amendments, renumbered, and
redesignated former Chapter Env-Wm 3100 as Env-Sw
1400, pursuant to a rules reorganization plan for Department rules approved by
the Director of the Office of Legislative Services on 9-7-05. The source notes for each section of Env-Sw 1400 identify the former subtitle Env-Wm and number for
the respective rule prior to Document #8459.
PART Env-Sw 1401 PURPOSE AND APPLICABILITY
Env-Sw 1401.01 Purpose. The purpose of the rules in this chapter is
to identify requirements and procedures for providing and maintaining a
financial assurance plan to guarantee the cost of closing a facility, including
post-closure care, and for a facility subject to 40
Source. #6619-B, eff 10-29-97; (See Revision
Note at chapter heading for Env-Sw 1400); ss by
#8459, eff 10-28-05 (formerly Env-Wm 3101.01); ss by #10599, eff 7-1-14; ss by
#14068, eff 9-3-24
Env-Sw 1401.02 Applicability.
(a) The rules in this chapter shall apply to all
facilities, except as provided by (b) below.
(b) The rules in this chapter shall not apply to a:
(1)
Permit-exempt facility;
(2)
Permit-by-notification facility;
(3)
Emergency permit facility;
(4)
Limited private non-landfill facility; or
(5)
Limited public non-landfill facility.
Source. #6619-B, eff 10-29-97; (See Revision
Note at chapter heading for Env-Sw 1400); ss by
#8459, eff 10-28-05 (formerly Env-Wm 3101.02); ss by #10599, eff 7-1-14; ss by
#14068, eff 9-3-24
PART Env-Sw 1402 DEFINITIONS
Env-Sw 1402.01 “Binding
commitment” means a signed loan agreement between the permittee and the state
of New Hampshire and approved by the governor and council.
Source. #6619-B, eff 10-29-97; (See Revision
Note at chapter heading for Env-Sw 1400); ss by
#8459, eff 10-28-05 (formerly Env-Wm 3102.01); ss by #10599, eff 7-1-14; ss by
#14068, eff 9-3-24
Env-Sw 1402.02 “Call” means an action
by the department to draw on the monies guaranteed in a financial assurance
mechanism.
Source. #14068, eff 98-3-24
Env-Sw 1402.03 “Debt
service” means the amount of principal and interest due on a loan in the
current year.
Source. #6619-B, eff 10-29-97; (See Revision
Note at chapter heading for Env-Sw 1400); ss by
#8459, eff 10-28-05 (formerly Env-Wm 3102.03); ss by #10599, eff 7-1-14; ss by
#14068, eff 9-3-24 (formerly Env-Sw 1402.02)
Env-Sw 1402.04 “Deficit”
means a negative balance calculated by taking the beginning fund balance plus
annual revenue minus total annual expenditures.
Source. #6619-B, eff 10-29-97; (See Revision
Note at chapter heading for Env-Sw 1400); ss by
#8459, eff 10-28-05 (formerly Env-Wm 3102.04); ss by #10599, eff 7-1-14; ss by
#14068, eff 9-3-24 (formerly Env-Sw 1402.03)
Env-Sw 1402.05 “Local
government” means a legally-recognized political subdivision in the state of
New Hampshire, including solid waste districts.
Source. #6619-B, eff 10-29-97; (See Revision Note at chapter heading for Env-Sw 1400); ss by #8459, eff 10-28-05 (formerly Env-Wm
3102.05); ss by #10599, eff 7-1-14; ss by #14068, eff 9-3-24 (formerly Env-Sw 1402.04)
Env-Sw 1402.06
“Nonaffiliated” means entities which are not controlled by or under common control of, and are not part of any group acting in concert which
controls, directly or indirectly, the applicable entity.
Source. #14068, eff 9-3-24
Env-Sw 1402.07 “Total
annual revenue” means proceeds from all taxes and fees
collected by the local government responsible for landfill closure,
but does not include the proceeds from borrowing or asset sales or
proceeds earned from funds managed by a local government on behalf of a
specific third party.
Source. #14068, eff 9-3-24 (formerly Env-Sw 1402.05)
PART Env-Sw
1403 FINANCIAL ASSURANCE REQUIREMENTS
Env-Sw 1403.01 Financial
Assurance Plan
Preparation and Submittal.
(a) A permittee shall establish, implement, and
maintain an approved financial assurance plan to guarantee the cost of facility
closure, including post-closure as required by the facility permit and the
solid waste rules.
(b) A financial assurance plan shall include:
(1)
A closure cost estimate prepared in accordance with Env-Sw 1403.02;
(2)
Provisions for guaranteeing the cost of facility closure based on one or
any combination of the options specified in Env-Sw
1403.03 through Env-Sw 1403.05;
(3)
For the options specified in Env-Sw 1403.03,
the identity and
contact information of the financial institution providing the
guarantee; and
(4)
For a local government proposing to use the state approved local government financial
test to assure its obligations, as provided in Env-Sw
1403.05:
a.
A letter signed by the local government’s chief financial officer which:
1. Identifies all current cost estimates covered
by a financial test, as described in Env-Sw 1403.05;
and
2. Provides evidence of and certifies that the
local government meets the conditions of Env-Sw
1403.05(a) through (h);
b.
The local government’s year-end financial statements for the latest
fiscal year, audited by an independent, certified public accountant (CPA) who
conducts comprehensive audits, with:
1. The unqualified opinion of the auditor; or
2.
The qualified opinion of and a written explanation by the auditor as to why the
qualification should be deemed insufficient to warrant disallowance of the
financial test;
c.
A report to the local government by the local government’s independent
CPA, as follows:
1. The report shall be based on performing a
review of the financial ratios required by Env-Sw
1403.05(a)(3), if applicable, and the requirements of Env-Sw
1403.05(b) and Env-Sw 1403.05(c)(3) and (4); and
2. The report shall state the procedures
performed and the CPA’s findings; and
d.
A copy of the comprehensive annual financial report (CAFR) used to
comply with Env-Sw 1403.05(d) or certification that
the requirements of Statement No. 18 of the Governmental Accounting Standards
Board, “Accounting for Municipal Solid Waste Landfill Closure and Postclosure Care Costs”, NO. 101-A, published August, 1993, available as noted in Appendix B, have been
met.
(c) A proposed financial assurance plan shall be:
(1)
Submitted by the permittee in accordance with Env-Sw
303; and
(2)
Reviewed and approved by the department pursuant to Env-Sw 1404.
Source. #6619-B, eff 10-29-97; (See Revision
Note at chapter heading for Env-Sw 1400); ss by
#8459, eff 10-28-05 (formerly Env-Wm 3103.01); ss by #10599, eff 7-1-14; ss by
#14068, eff 9-3-24
Env-Sw 1403.02 Closure
Cost Estimation.
(a) The dollar amount guaranteed by a financial
assurance plan shall be no less than the estimated total closure, including
post-closure costs determined pursuant to (b) through (h), below.
(b) The closure cost estimate shall be figured
based on representative current market rates for having a nonaffiliated third party perform all required closure
activities at the point in the facility’s active life when the extent and
manner of facility operations in compliance with permit conditions and
applicable laws and rules makes closure the most expensive, as indicated by the
approved facility closure plan.
(c)
For landfills, the closure cost estimate shall also include the cost of having
a nonaffiliated third party perform all required post-closure activities for a
period of 30 years from the date of the most recent estimate which is required
to be updated pursuant to Env-Sw 1405.02, unless
the post-closure period has been modified pursuant to Env-Sw
807.05(d).
(d) For a landfill constructed in phases, the
permittee may figure closure costs in accordance with (b) and (c) above based
on the constructed area of the facility only, instead of the entire permitted
footprint.
(e) Any facility subject to the corrective action
requirements specified in 40
(f) The cost of removing and disposing of all wastes not permitted to remain at the facility following
closure shall be included in the closure cost estimate, excluding actively
managed processed recyclable materials as defined in
Env-Sw 104.
(g) Salvage value from the sale of facility
structures, equipment, or other assets associated with the facility and profits
from the sale of recyclable materials shall not be treated as a credit to
reduce total closure costs.
(h) The closure cost estimate shall:
(1)
Be itemized and documented to show the unit cost and quantity of each
item, service, and activity required to close the facility in accordance with
the solid waste rules and the approved facility closure plan;
(2) Be submitted with documentation, including
nonaffiliated third-party cost estimates, that support the unit cost of each
item, service, and activity required to close the facility in accordance with
the solid waste rules and the approved facility closure plan.
(i) A permittee of a
collection, storage, and transfer facility, or processing and treatment
facility shall complete a “Cost Estimate Form for
Closure of Solid Waste Collection, Storage, and Transfer Facility or Processing
and Treatment Facility”, NHDES-S-05-024, August 2024, available at: https://onlineforms.nh.gov/?formtag=nhdes-s-05-024.
(j) A permittee of a closed landfill shall
complete a “Cost Estimate Form for Post-Closure
Care of a Solid Waste Landfill”, NHDES-S-05-025, August 2024, available at: https://onlineforms.nh.gov/?formtag=nhdes-s-05-025.
(k) A permittee of an
operating landfill shall complete a:
(1) “Cost
Estimate Form for Closure of a Solid Waste
Landfill”, NHDES-S-05-023, August 2024, available at: https://onlineforms.nh.gov/?formtag=nhdes-s-05-023; and
(2) “Cost
Estimate Form for Post-Closure Care of a Solid
Waste Landfill”, NHDES-S-05-025, August 2024, available at: https://onlineforms.nh.gov/?formtag=nhdes-s-05-025.
(l) For
landfills, the permittee shall ensure that the forms required by (j) and (k)
above bear the signature and seal of a qualified professional engineer.
(m) The
permittee or authorized contact shall sign and date the closure cost estimate
form(s).
(n) Completed closure cost estimate form(s) shall
be submitted in accordance with Env-Sw 1405.02.
Source. #6619-B, eff 10-29-97; (See Revision
Note at chapter heading for Env-Sw 1400); ss by
#8459, eff 10-28-05 (formerly Env-Wm 3103.02); ss by #10599, eff 7-1-14; ss by
#14068, eff 9-3-24
Env-Sw 1403.03 Financial
Assurance Mechanisms.
(a) Financial assurance shall be provided in one,
or any combination, of the following forms:
(1)
An irrevocable letter of credit issued for a period of at least one year
from an institution whose operations are regulated and examined by a federal or
New Hampshire state agency and found to be in good standing;
(2)
A claims incurred insurance policy, except that
insurance issued by an affiliated captive insurance company shall not be
acceptable;
(3)
A surety bond issued by a surety company listed as an acceptable surety
on federal bonds in the version of the U.S. Department of the Treasury Circular
570 that is current as of the date the bond is acquired;
(4)
A trust fund established in accordance with the laws of the state of New
Hampshire;
(5)
For a landfill, a binding commitment between the permittee and the state
of New Hampshire for a state revolving fund loan designated for closure of the
landfill; or
(6)
Another mechanism that meets the criteria provided in 40
(b) If using a surety bond, insurance policy, or
letter of credit, the permittee shall also establish a standby trust to receive
the proceeds of the surety bond, insurance policy, or letter of credit.
(c) The standby trust shall be established with a
financial institution that has the authority to act as a trustee and whose
operations are regulated and examined by a federal or New Hampshire state
agency.
(d) Each financial assurance instrument specified
in (a) and (b) above, except (a)(5), shall specifically identify the state of
New Hampshire as the beneficiary.
(e) Funds held in trust accounts may be invested, but shall provide for the preservation of
principal.
(f) Financial assurance documents, including a
standby trust, shall be as specified by 40
(1)
The phrase “hazardous waste” shall be replaced with the phrase “solid
waste”;
(2)
The phrase “EPA administrator” shall be replaced with the phrase
“department on behalf of the state of New Hampshire”;
(3)
All cites to “40
(4)
The term “RCRA C” shall be omitted.
(g) Letters of credit shall include a provision
to automatically extend the expiration date by at least one year
unless, at least 120 days before the current expiration date, the issuing
institution notifies the permittee and the department by certified mail, return
receipt requested, of a decision to not extend the expiration date.
(h) Insurance policies and surety bonds shall
include a provision to prohibit any cancellation without prior notice of
cancellation being sent to the permittee and the department by certified mail,
return receipt requested, at least 120 days before the effective date of
cancellation.
Source. #6619-B, eff 10-29-97; (See Revision
Note at chapter heading for Env-Sw 1400); ss by
#8459, eff 10-28-05 (formerly Env-Wm 3103.03); ss by #10599, eff 7-1-14; ss by
#14068, eff 9-3-24
Env-Sw 1403.04 Financial
Assurance Mechanisms, Public Facilities. A
public landfill subject to 40 CFR 258 shall provide financial assurance by:
(a) Any of the mechanisms identified in Env-Sw 1403.03;
(b) A capital reserve fund that shall be funded
in a manner to provide sufficient funds for closure and post-closure care at
the scheduled time of closure; or
(c) The local government financial test specified
in Env-Sw 1403.05, for a facility owned and operated
by a single municipality.
Source. #6619-B, eff 10-29-97; (See Revision
Note at chapter heading for Env-Sw 1400); ss by
#8459, eff 10-28-05 (formerly Env-Wm 3103.04); ss by #10599, eff 7-1-14; ss by
#14068, eff 9-3-24
Env-Sw 1403.05 Local
Government Financial Test.
(a) A local government proposing to assure its
obligations under the state approved local government financial test shall meet
the following requirements as applicable:
(1)
If the local government has outstanding, rated, general obligation bonds
not secured by insurance, a letter of credit, or other collateral or guarantee,
all such general obligation bonds shall have a current rating of Aaa, Aa, A, or Baa, as issued by Moody’s, or AAA, AA, A, or
BBB, as issued by Standard and Poor’s;
(2)
The local government shall be included in an outstanding bond issue
through the New Hampshire municipal bond bank and shall not be in default; or
(3)
The local government shall satisfy each of the following financial
ratios based on the local government’s most recent audited annual financial
statement:
a.
The ratio of cash plus marketable securities to total expenditures shall
be greater than or equal to 0.05, using available cash and marketable
securities held by the local government on the last day of the fiscal year,
excluding cash and marketable securities designated to satisfy past obligations
or special purposes other than landfill closure such as pensions and capital
reserve funds not held for landfill closure purposes; and
b.
The ratio of annual debt service to total expenditures shall be less
than or equal to 0.20, where total expenditures shall exclude capital outlays,
debt repayment, capital reserve funds not expended for landfill closure
purposes, trust funds, and pension funds.
(b) The local government proposing
to assure its obligations under the state approved local government financial
test shall:
(1)
Prepare its financial statements in conformity with generally accepted
accounting principles for governments; and
(2)
Have its financial statements audited by an
independent certified public accountant.
(c) A local government shall not be eligible to
assure its obligations under the state approved local government financial test
if it:
(1) Is currently in default on any
outstanding general obligation bonds or outstanding bonds with the New
Hampshire municipal bond bank;
(2)
Has any outstanding general obligation bonds rated lower than Baa as
issued by Moody’s or BBB as issued by Standard and Poor’s;
(3)
Operated at a deficit equal to 5% or more of total annual revenue in
each of the past 2 fiscal years; or
(4)
Receives an adverse opinion, disclaimer of opinion, or other qualified
opinion from the independent certified public accountant auditing its financial
statement and negatively impacting the current financial position of the local
government.
(d) A local government shall disclose in each
comprehensive annual financial report (CAFR) all closure and post-closure care
costs and corrective action costs, if any, which the local government has
assured through the financial test provisions in 40 CFR 258.74(f).
(e) Disclosure pursuant to (d) above shall
include:
(1)
The nature and source of the closure and post-closure care requirements;
(2)
The reported liability at the balance sheet date;
(3)
The estimated total closure and post-closure care costs remaining to be
recognized;
(4)
The percentage of landfill capacity used to date; and
(5)
The estimated landfill life in years.
(f) Conformance with Governmental Accounting
Standards Board Statement No.18, 1993 Edition, available as noted in Appendix
B, shall be deemed in compliance with (d) above.
(g) Subject to (h) below, a local government may
use the state approved local government financial test to assure closure,
post-closure, and corrective action costs that equal up to 43% of the local
government’s total annual revenue.
(h) If the local government assures other
environmental obligations through a financial test, including those associated
with underground injection control wells (
(1)
Add those costs to the closure, post-closure, and corrective action
costs it seeks to assure through use of the state approved local government financial
test; and
(2)
Ensure that the total shall not exceed 43% of the local government’s
total annual revenue.
(i) A local
government shall obtain an alternate financial assurance instrument as
specified in Env-Sw 1403.03 for those costs that
exceed the limits set in (g) and (h) above.
Source. #6619-B, eff 10-29-97; (See Revision
Note at chapter heading for Env-Sw 1400); ss by
#8459, eff 10-28-05 (formerly Env-Wm 3103.05); ss by #10599, eff 7-1-14; ss by
#14068, eff 9-3-24
PART Env-Sw 1404 REVIEW AND APPROVAL
Env-Sw 1404.01 Review. The department shall review a proposed
financial assurance plan as part of the permit application or
closure plan review process, as applicable.
Source. #6619-B, eff 10-29-97; (See Revision
Note at chapter heading for Env-Sw 1400); ss by
#8459, eff 10-28-05 (formerly Env-Wm 3104.01); ss by #10599, eff 7-1-14; ss by
#14068, eff 9-3-24
Env-Sw 1404.02 Approval. A proposed financial assurance shall
not be approved if the department determines that the proposed plan does not:
(a) Meet the requirements for financial assurance
specified in this part; or
(b) Satisfy the requirements of RSA 149-M:9, X.
Source. #6619-B, eff 10-29-97; (See Revision
Note at chapter heading for Env-Sw 1400); ss by
#8459, eff 10-28-05 (formerly Env-Wm 3104.02); ss by #10599, eff 7-1-14; ss by
#14068, eff 9-3-24
PART Env-Sw 1405 ADJUSTMENTS AND CHANGES
Env-Sw
1405.01 Modifications.
(a)
An approved financial assurance plan shall not be modified unless the
permittee obtains written approval from the department.
(b)
To obtain written approval to modify an approved financial assurance
plan, the permittee shall apply for a permit modification pursuant to Env-Sw 315.
(c)
Applications to modify an approved financial assurance plan shall
include all of the information required by Env-Sw 1403.01.
Source. #6619-B, eff 10-29-97; (See Revision
Note at chapter heading for Env-Sw 1400); ss by
#8459, eff 10-28-05 (formerly Env-Wm 3105.01); ss by #10599, eff 7-1-14; ss by
#14068, eff 9-3-24
Env-Sw 1405.02 Updates.
(a) A permittee shall submit at least one update
of the facility’s closure cost estimate to the department no later than March
31 of the third calendar year after submitting an initial closure cost estimate
or the most recent updated closure cost estimate, as applicable.
(b) During the years in which submittal of a
closure cost estimate is not required by (a), above, lined landfills subject to
40 CFR 258 operated on or after October 9, 1993, collection,
storage, and transfer facilities with an unlimited service area as defined in
Env-Sw 104, and processing/treatment
facilities as defined in Env-Sw 104,
shall obtain an updated cost estimate and place it in the facility’s
operating record.
(c) If a permittee obtains an updated closure cost estimate that
exceeds both the most recent estimate and
the total cost is greater $15,000, the permittee shall modify its
financial assurance mechanism in an amount consistent with the most recent
closure cost estimate, pursuant to Env-Sw 1405.01.
(d) If a permittee obtains an updated closure
cost estimate that exceeds the most recent estimate, but the total cost is
below $15,000, the permittee shall continue to complete and submit updated
closure cost estimates in accordance with Env-Sw 1405.02, but is not subject to the financial assurance
provisions in Env-Sw 1403.03.
(e) A local government using the state
approved local government financial test shall:
(1)
Annually update and place in the facility’s operating record all
documentation required by Env-Sw 1403.01(b)(4) within
180 days following the close of the local government's fiscal year; and
(2) Produce its financial
records for inspection by the department upon request.
Source. #6619-B, eff 10-29-97; (See Revision
Note at chapter heading for Env-Sw 1400); ss by
#8459, eff 10-28-05 (formerly Env-Wm 3105.02); ss by #10599, eff 7-1-14; ss by
#14068, eff 9-3-24
Env-Sw 1405.03 Replacement.
(a) A permittee
shall submit a revised financial assurance plan for approval pursuant to Env-Sw 1405.01 within 30 days of learning that any portion of
its financial assurance mechanism shall be canceled or not
renewed by the issuer.
(b) The permittee shall demonstrate that it has obtained
replacement financial assurance promptly upon receiving the department’s
approval of a revised plan, but no later than 30 days before the cancellation
or expiration date of the existing financial assurance mechanism.
(c)
A local government using the state approved local government financial test to
assure its obligations shall satisfy the requirements of the financial test at
the close of each fiscal year. If the
local government no longer meets the requirements of the local government
financial test it shall, within 210 days following the close
of the local government’s fiscal year, obtain alternative financial assurance
as specified in Env-Sw 1403.03.
Source. #6619-B, eff 10-29-97; (See Revision
Note at chapter heading for Env-Sw 1400); ss by
#8459, eff 10-28-05 (formerly Env-Wm 3105.03); ss by #10599, eff 7-1-14; ss by
#14068, eff 9-3-24
Env-Sw 1405.04 Release of Financial Assurance Obligation. An approved financial assurance plan, or any
part thereof, shall remain in effect unless:
(a) A facility
meets the requirements in Env-Sw 1405.02(d);
(b)
The facility is no longer defined as a facility in accordance with Env-Sw 103 and has completed the general closure requirements
specified in Env-Sw 1006.02, Env-Sw
1106, Env-Sw 1205, and other rules as
applicable; or
(c) The
permittee obtains written approval from the department to replace a financial
assurance mechanism specified in Env-Sw 1403.03(a),
Env-Sw 1403.03(b), Env-Sw
1403.04(b), or Env-Sw
1403.04(c).
Source. #14068, eff 9-3-24
PART Env-Sw
1406 CALLING A
FINANCIAL ASSURANCE MECHANISM
Env-Sw 1406.01 Calling a Financial Assurance Mechanism. The
department shall call a financial assurance mechanism when:
(a) The permittee declares or
files for bankruptcy;
(b) The permittee does not replace their
financial assurance mechanism in accordance with Env-Sw
1405.03;
(c) The permittee fails to conduct closure
obligations;
(d) The facility’s permit is revoked or suspended
in accordance with Env-Sw 306.04; or
(e) One or more of the trigger events for closure
as specified in Env-Sw 1006.01 exist.
Source. #14068, eff 9-3-24
Appendix a: state and federal
statutes implemented
|
Rule |
State
Statute(s) Implemented |
Federal
Regulations Implemented |
|
Env-Sw 1400 |
RSA 149-M:7, II,
RSA 149-M:9, X |
40 CFR 258 |
APPENDIX B:
INCORPORATED REFERENCE
|
Rule |
Reference
(Date/Edition) |
Obtain From
(Cost) |
|
Env-Sw 1403.01(b)(4)d. Env-Sw 1403.05(f) |
Statement
No. 18 of the Governmental Accounting Standards Board, Accounting for
Municipal Solid Waste Landfill Closure and Postclosure
Care Costs, NO. 101-A (August 1993) |
Free online:
https://gasb.org/page/ShowPdf?path=GASBS-18.pdf&title=GASB%20STATEMENT%20NO.%2018,%20ACCOUNTING%20FOR%20MUNICIPAL%20SOLID%20WASTE%20LANDFILL%20CLOSURE%20AND%20POSTCLOSURE%20CARE%20COSTS |