The N.C. Hazardous Waste Section’s Financial Assurance Program is responsible for ensuring that hazardous waste management facility owners and operators provide adequate resources to pay for costs associated with environmental activities and damages arising from operations at hazardous waste management facilities. The Resource Conservation Recovery Act (RCRA) financial assurance regulations are adopted by reference, with some changes, in the North Carolina Hazardous Waste Management Rules codified at 15A NCAC 13A. Hazardous waste management facility owners and operators with permits or interim status are required to demonstrate financial assurance (also known as financial responsibility) for the cleanup of known releases of hazardous contaminants at these facilities. Financial assurance rules address three major aspects of financial responsibility for hazardous waste facilities: closure and post-closure requirements, liability coverage and corrective action.
Closure and Post-Closure Requirements
First, a company must provide financial assurance for the cost of closing a hazardous waste facility (closure) at the end of its useful life or sooner due to some other event, such as sale of the facility. Closure funding is based on a detailed plan and cost estimates for waste removal, decontamination of structures and equipment by a contractor. Second, facilities managing hazardous wastes must have adequate funds to pay for the annual cost required for groundwater monitoring and maintenance for land-based units during the 30-year post-closure period (post-closure).
Liability Requirements for Accidents
In addition to the financial assurance component of financial responsibility, operating hazardous waste facility owners and operators must also provide and maintain pollution liability coverage. Owners and operators of hazardous waste facilities must be able to compensate third parties such as citizens for bodily injury or property damages third parties from accidental releases arising from the operations conducted at a hazardous waste facility.
Corrective Action Requirements
Accidents or other activities at hazardous waste facilities have sometimes resulted in releases of hazardous waste or hazardous constituents to soil, groundwater, surface water or air. Corrective action financial assurance must be demonstrated by owners and operators to remediate these releases. The intent of the financial responsibility for corrective action is to assure that funds will be available when needed to conduct the necessary corrective action measures.
A variety of financial mechanisms such as a trust fund, surety bond, insurance, letter of credit, financial test and corporate guarantee can be used to comply with financial assurance requirements. Without financial assurance, costs for environmental cleanups can be transferred from facility owners and operators to the public if these facilities become insolvent or are abandoned.
The N.C. Hazardous Waste Section’s Financial Assurance Program is also responsible for performing financial analyses to determine an owner or operator’s financial capacity to pay enforcement penalties, processing bankruptcy claims and providing technical assistant to hazardous waste facilities, the regulated community, other state and local agencies and the public on areas regarding RCRA financial assurance regulations.