§ 66264.147. Liability Requirements.
22 CA ADC § 66264.147Barclays Official California Code of RegulationsEffective: January 1, 2024
Barclays California Code of Regulations
Title 22. Social Security
Division 4.5. Environmental Health Standards for the Management of Hazardous Waste
Chapter 14. Standards for Owners and Operators of Hazardous Waste Transfer, Treatment, Storage, and Disposal Facilities
Article 8. Financial Requirements
Effective: January 1, 2024
22 CCR § 66264.147
§ 66264.147. Liability Requirements.
(a) Coverage for sudden accidental occurrences. An owner or operator of a hazardous waste transfer, treatment, storage, or disposal facility, or a group of such facilities, shall demonstrate to the Department financial responsibility for bodily injury and property damage to third parties caused by sudden accidental occurrences arising from operations of the facility or group of facilities. The owner or operator shall have and maintain liability coverage for sudden accidental occurrences in the amount of at least $1 million per occurrence with an annual aggregate of at least $2 million, exclusive of legal defense costs. This liability coverage may be demonstrated as specified in subsections (a)(1) through (7) of this section.
2. a nonadmitted carrier eligible to provide insurance as an excess or surplus lines insurer in California. Any excess or surplus insurance relied upon by the owner or operator to meet the requirements of this subsection shall be underwritten by a surplus lines insurer that is on the California Department of Insurance's List of Approved Surplus Line Insurers as being eligible to cover risks in California, or the Quarterly Listing of Alien Insurers maintained by the International Insurers Department of the National Association of Insurance Commissioners and is licensed as an insurer in its domiciliary jurisdiction.
(B) Each insurance policy shall be amended by attachment of the Hazardous Waste Facility Liability Endorsement or evidenced by a Certificate of Liability Insurance. If requested by the Department, the owner or operator shall provide the Department with a copy of the insurance policy containing original signatures.
(E) An owner or operator of a new facility shall submit the liability endorsement or certificate of insurance to the Department at least 60 days before the date on which hazardous waste is first received for transfer, treatment, storage, or disposal. The insurance shall be effective before this initial receipt of hazardous waste.
(6) An owner or operator may demonstrate the required liability coverage through use of combinations of insurance, financial test, guarantee, letter of credit, payment bond and trust fund, except that the owner or operator may not combine a financial test covering part of the liability coverage requirement with a guarantee unless the financial statement of the owner or operator is not consolidated with the financial statement of the guarantor. The amounts of coverage demonstrated shall total at least the minimum amounts required by this section. If the owner or operator demonstrates the required coverage through the use of a combination of financial assurances under this subsection, the owner or operator shall specify at least one such assurance as “primary” coverage and shall specify the other assurance as “excess” coverage.
(B) a Certification of Valid Claim for bodily injury or property damages caused by a sudden or non-sudden accidental occurrence arising from the operation of a hazardous waste transfer, treatment, storage or disposal facility is entered between the owner or operator and third-party claimant for liability coverage under subsections (a)(1) through (a)(7) of this section; or
(C) a final court order establishing a judgment for bodily injury or property damage caused by a sudden or non-sudden accidental occurrence arising from the operation of a hazardous waste treatment, storage, or disposal facility is issued against the owner or operator or an instrument that is providing financial assurance for liability coverage under subsection (a)(1) through (a)(7) of this section.
(b) Coverage for nonsudden accidental occurrences. An owner or operator of a surface impoundment, as defined in section 66260.10, landfill, as defined in section 66260.10, land treatment facility, as defined in section 66260.10, or disposal miscellaneous unit that is used to manage hazardous waste, or a group of such facilities, shall demonstrate to the Department financial responsibility for bodily injury and property damage to third parties caused by nonsudden accidental occurrences arising from operations of the facility or group of facilities. The owner or operator shall have and maintain liability coverage for nonsudden accidental occurrences in the amount of at least $3 million per occurrence, as defined in section 66260.10, with an annual aggregate of at least $6 million, exclusive of legal defense costs. An owner or operator who must meet the requirements of this section may combine the required per-occurrence coverage levels for sudden and nonsudden accidental occurrences into a single per-occurrence level, and combine the required annual aggregate coverage levels for sudden and nonsudden accidental occurrences into a single annual aggregate level. Owners or operators who combine coverage levels for sudden and nonsudden accidental occurrences must maintain liability coverage in the amount of at least $4 million per occurrence and $8 million annual aggregate. This liability coverage may be demonstrated, as specified in subsections (b)(1) through (b)(7) of this section.
2. a nonadmitted carrier eligible to provide insurance as an excess or surplus lines insurer in California. Any excess or surplus insurance relied upon by the owner or operator to meet the requirements of this subsection shall be underwritten by a surplus lines insurer that is on the California Department of Insurance's List of Approved Surplus Line Insurers as being eligible to cover risks in California, or the Quarterly Listing of Alien Insurers maintained by the International Insurers Department of the National Association of Insurance Commissioners and is licensed as an insurer in its domiciliary jurisdiction.
(B) Each insurance policy shall be amended by attachment of the Hazardous Waste Facility Liability Endorsement or evidenced by a Certificate of Liability Insurance. If requested by the Department, the owner or operator shall provide to the Department a copy of the insurance policy containing original signatures.
(E) An owner or operator of a new facility shall submit the liability endorsement or certificate of insurance to the Department at least 60 days before the date on which hazardous waste is first received for transfer, treatment, storage, or disposal. The insurance shall be effective before this initial receipt of hazardous waste.
(6) An owner or operator may demonstrate the required liability coverage through the use of combinations of insurance, financial test, guarantee, letter of credit, payment bond and trust fund, except that the owner or operator may not combine a financial test covering part of the liability coverage requirement with a guarantee unless the financial statement of the owner or operator is not consolidated with the financial statement of the guarantor. The amounts of coverage demonstrated shall total at least the minimum amount required by this section. If the owner or operator demonstrates the required coverage through the use of a combination of financial assurances under this subsection, the owner or operator shall specify at least one such assurance as “primary” coverage and shall specify another assurance as “excess” coverage.
(B) a Certification of Valid Claim for bodily injury or property damages caused by a sudden or non-sudden accidental occurrence arising from the operation of a hazardous waste transfer, treatment, storage or disposal facility is entered between the owner or operator and third-party claimant for liability coverage under subsections (b)(1) through (b)(7) of this section; or
(C) a final court order establishing a judgment for bodily injury or property damage caused by a sudden or non-sudden accidental occurrence arising from the operation of a hazardous waste treatment, storage, or disposal facility is issued against the owner or operator or an instrument that is providing financial assurance for liability coverage under subsections (b)(1) through (b)(7) of this section.
(c) Request for variance. If an owner or operator can demonstrate to the satisfaction of the Department that the levels of financial responsibility required by subsection (a) or (b) of this section are not consistent with the degree and duration of risk associated with transfer, treatment, storage or disposal at the facility or group of facilities, the owner or operator may obtain a variance from the Department. The request for a variance shall be submitted to the Department as part of the application under section 66270.14 of this division for a facility that does not have a permit, or pursuant to the procedures for permit modification under section 66271.4 of this division for a facility that has a permit. If granted, the variance shall take the form of an adjusted level of required liability coverage, such level to be based on the Department's assessment of the degree and duration of risk associated with the ownership or operation of the facility or group of facilities. The Department may require an owner or operator who requests a variance to provide such technical and engineering information as is deemed necessary by the Department to determine a level of financial responsibility other than that required by subsection (a) or (b) of this section. Any request for a variance for a permitted facility will be treated as a request for a permit modification under section 66270.41, subsection (a)(5) and section 66271.4.
(d) Adjustments by the Department. If the Department determines that the levels of financial responsibility required by subsection (a) or (b) of this section are not consistent with the degree and duration of risk associated with transfer, treatment, storage or disposal at the facility or group of facilities, the Department may adjust the level of financial responsibility required under subsection (a) or (b) of this section as may be necessary to protect human health and the environment. This adjusted level shall be based on the Department's assessment of the degree and duration of risk associated with the ownership or operation of the facility or group of facilities. In addition, if the Department determines that there is a significant risk to human health and the environment from nonsudden accidental occurrences resulting from the operations of a facility that is not a surface impoundment, landfill or land treatment facility, the Department shall require that an owner or operator of the facility comply with subsection (b) of this section. An owner or operator shall furnish to the Department, within a reasonable time, any information which the Department requests to determine whether cause exists for such adjustments of level or type of coverage. Any adjustment of the level or type of coverage for a facility that has a permit will be treated as a permit modification under section 66270.41, subsection (a)(5) and section 66271.4.
(e) Period of coverage. Within 60 days after receiving certifications from the owner or operator and an independent registered professional engineer that final closure has been completed in accordance with the approved closure plan, the Department shall notify the owner or operator in writing that he or she is no longer required by this section to maintain liability coverage for that facility, unless the Department has reason to believe that closure has not been in accordance with the approved closure plan.
(A) a letter signed by the owner's or operator's chief financial officer and worded as specified in section 66264.151, subsection (g). The letter shall be on the official letterhead stationary of the owner or operator, and shall contain an original signature. An owner or operator may use the financial test to demonstrate both assurance for closure or postclosure care, as specified by sections 66264.143, subsection (f), 66264.145, subsection (f), 66265.143, subsection (e) and 66265.145, subsection (e), and liability coverage as specified in subsections (a) and (b) of this section. If an owner or operator is using the financial test to cover both forms of financial responsibility, a separate letter is not required;
1. a statement that the independent certified public accountant has compared the data which 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 such financial statements; and
(5) After the initial submission of items specified in subsection (f)(3) of this section, the owner or operator shall send updated information to the Department within 90 days after the close of each succeeding fiscal year. This information shall consist of all items specified in subsection (f)(3) of this section.
(6) If the owner or operator no longer meets the requirements of subsection (f)(1) of this section, liability coverage shall be obtained for the entire amount of coverage as described in this section by use of the financial mechanisms described in this section. Notice shall be sent to the Department of the owner's or operator's intent to obtain the required coverage; notice shall be sent by either registered mail or by certified mail within 90 days after any occurrence that prevents the owner or operator from meeting the test requirements. Evidence of liability coverage shall be submitted to the Department within 90 days after any occurrence that prevents the owner or operator from meeting the requirements.
(7) The Department may, based on a reasonable belief that the owner or operator no longer meets the requirements of subsection (f)(1) of this section, require reports of financial condition at any time from the owner or operator in addition to those specified in subsection (f)(3) of this section. If the Department finds, on the basis of such reports or other information, that the owner or operator no longer meets the requirements of subsection (f)(1) of this section, the owner or operator shall provide alternate financial assurance for closure and postclosure care and evidence of the required liability coverage as specified in this section within 30 days after notification of such a finding.
(8) The Department may disallow use of this test on the basis of qualifications in the opinion expressed by the independent certified public accountant in his or her report on examination of the owner's or operator's financial statements (see subsection (f)(3)(B) of this section). An adverse opinion or a disclaimer of opinion will be cause for disallowance. The Department will evaluate other qualifications on an individual basis. The owner or operator shall provide evidence of liability coverage for the amount required as specified in this section within 30 days after notification of disallowance.
(1) Subject to subsection (g)(2) of this section, an owner or operator may meet the requirements of this section by obtaining a written guarantee, hereafter referred to as “guarantee.” The guarantor shall 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, or a firm with a “substantial business relationship” with the owner or operator. The guarantor shall meet the requirements for owners or operators in subsections (f)(1) through (f)(6) of this section. The wording of the guarantee shall be identical to the wording specified in section 66264.151, subsection (h)(2) and shall have original signatures. A certified copy of the guarantee shall accompany the items sent to the Department as specified in subsection (f)(3) of this section. One of these items must be 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, this letter shall describe the value received in consideration of the guarantee. If the guarantor is a firm with a “substantial business relationship” with the owner or operator, this letter shall describe this “substantial business relationship” and the value received in consideration of the guarantee. The terms of the guarantee shall provide that:
(A) if the owner or operator fails to satisfy a judgment based on a determination of liability for bodily injury or property damage to third parties caused by sudden or nonsudden accidental occurrences (or both as the case may be), arising from the operation of facilities covered by this guarantee, or fails to pay an amount agreed to in settlement of claims arising from or alleged to arise from such injury or damage, the guarantor shall do so up to the limits of coverage;
(B) the guarantee shall remain in force unless the guarantor sends notice of cancellation by certified mail to the owner or operator and to the Department. This guarantee shall not be terminated unless and until the Department approve(s) alternate liability coverage complying with section 66264.147 and/or section 66265.147.
2. the Attorney General or Insurance Commissioner of the State in which a facility covered by the guarantee is located and the State in which the guarantor corporation has its principal place of business, has submitted a written statement to the Department that a guarantee executed as described in this section is a legally valid and enforceable obligation in this State.
(3) The wording of the letter of credit shall be identical to the wording specified in section 66264.151, subsection (k) of this article. The letter of credit shall contain original signatures and shall be accompanied by a letter from the owner or operator referring to the letter of credit by number, issuing institution, effective date, and providing the following information; the hazardous waste facility identification number, name and address of the facility, and the amount of funds assured for valid third party liability claims of the facility by the letter of credit.
(4) An owner or operator who uses a letter of credit to satisfy the requirements of this section may also establish a standby trust fund. Under the terms of the letter of credit, all amounts paid pursuant to a draft by the trustee of the standby trust shall be deposited by the issuing institution directly into the standby trust fund in accordance with instructions from the trustee. The trustee of the standby trust fund shall be an entity which has the authority to act as a trustee and whose trust operations are regulated and examined by a Federal or State agency. This standby trust fund shall meet all of the requirements of the trust fund specified in subsection (j) of this section.
(6) The letter of credit shall be irrevocable and issued for a period of at least one (1) year. The letter of credit shall provide that the expiration date will be automatically extended for a period of at least one (1) year, unless, at least 120 days before the current expiration date, the issuing institution notifies both the owner or operator and the Department by certified mail of a decision not to extend the expiration date. Under the terms of the letter of credit, the 120 days shall begin on the date when both the owner or operator and the Department have received the notice, as evidenced by the return receipts.
(3) The trust fund for liability coverage shall be funded for the full amount of the liability coverage to be provided by the trust fund before it may be relied upon to satisfy the requirements of this section. If at any time after the trust fund is created the amount of funds in the trust fund is reduced below the full amount of the liability coverage to be provided, the owner or operator, by the anniversary date of the establishment of the fund, shall either add sufficient funds to the trust fund to cause its value to equal the full amount of liability coverage to be provided, or obtain other financial assurance as specified in this section to cover the difference. For purposes of this subsection, “the full amount of the liability coverage to be provided” means the amount of coverage for sudden and/or nonsudden occurrences required to be provided by the owner or operator by this section, less the amount of financial assurance for liability coverage that is being provided by other financial assurance mechanisms being used to demonstrate financial assurance by the owner or operator.
(1) An owner or operator of facilities which manage solely non-RCRA hazardous waste may demonstrate the required liability coverage by means of a mechanism other than as specified provided that prior to its use the proposed mechanism has been submitted to and approved by the Department. The mechanism shall be at least equivalent to the mechanisms specified in subsections (a), (b), (f) through (j) of this section. The Department shall evaluate the equivalency of a mechanism principally in terms of:
(5) If a proposed mechanism is found acceptable except for the amount of coverage, the owner or operator shall either increase the coverage or obtain other liability coverage as specified in subsections (a) and (b) of this section. The amount of coverage available through the combination of mechanisms shall at least equal the amounts required by subsections (a) and (b) of this section.
Credits
Note: Authority cited: Sections 25150, 25159, 25159.5, 25200.21, 25245, 58004 and 58012, Health and Safety Code. Reference: Sections 25200.1 and 25245, Health and Safety Code; 40 CFR Section 264.147.
History
1. New section filed 5-24-91; operative 7-1-91 (Register 91, No. 22).
2. Change without regulatory effect amending section filed 8-17-95 pursuant to section 100, title 1, California Code of Regulations (Register 95, No. 33).
3. Amendment of Note filed 10-13-98; operative 11-12-98 (Register 98, No. 42).
4. Amendment of subsections (a) and (b) and amendment of Note filed 10-19-98; operative 11-18-98 (Register 98, No. 43).
5. Change without regulatory effect amending subsections (b)(3), (f)(3)-(f)(3)(B), (g)(3)(A), (g)(8), (g)(10)(B), (h)(1), (h)(2)(A)-(B), (i)(2)-(3), (i)(4)(A), (i)(5), (j)(3)-(4), (k)(4), (l)(1), (l)(1)(B) and (l)(3) filed 11-6-2001 pursuant to section 100, title 1, California Code of Regulations (Register 2001, No. 45).
6. Change without regulatory effect amending subsection (b)(3) filed 7-1-2004 pursuant to section 100, title 1, California Code of Regulations (Register 2004, No. 27).
7. Change without regulatory effect amending section filed 12-19-2005 pursuant to section 100, title 1, California Code of Regulations (Register 2005, No. 51).
8. Change without regulatory effect amending subsection (g)(1) filed 3-20-2006 pursuant to section 100, title 1, California Code of Regulations (Register 2006, No. 12).
9. Amendment of section and Note filed 10-24-2018; operative 1-1-2019 (Register 2018, No. 43).
10. Amendment of subsections (a)(1)(A)2. and (b)(1)(A)2. filed 11-30-2023; operative 1-1-2024 (Register 2023, No. 48).
This database is current through 5/10/24 Register 2024, No. 19.
Cal. Admin. Code tit. 22, § 66264.147, 22 CA ADC § 66264.147
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