SB 714

This bill provides an alternative method for a municipality to establish the

proof of financial responsibility required for a solid or hazardous waste facility.

Under current law, the owner or operator of a solid or hazardous waste storage,

treatment, or disposal facility (owner or operator) must maintain proof of financial

responsibility to ensure the availability of funds for compliance with closure and

long-term care requirements and, if necessary, for taking any required corrective

action in the event of a spill or leak. The standard method for proving financial

responsibility is to obtain, for example, a bond, deposit, escrow account, or

irrevocable trust that is payable to or established for the benefit of the Department

of Natural Resources.

Alternatively, current law allows an owner or operator that is a for-profit

business or a public heat, light, water, or power utility to establish proof of financial

responsibility to ensure compliance with closure and long-term care requirements

using a net worth test. The net worth test requires, among other things, a certain

level of net worth, liabilities to net worth ratio, and credit worthiness.

This bill allows an owner or operator that is a municipality to use an alternative

method to establish proof of financial responsibility to ensure compliance with

closure and long-term care requirements, similar to that allowed for local

governments under federal law. Under the bill, a municipality may prove financial

responsibility by showing either that all of its outstanding general obligation bonds

have a rating of at least “Baa” if issued by Moody's or at least “BBB” if issued by

Standard & Poor's, or that its ratio of cash plus marketable securities to total

expenditures is 0.05 or greater and that its ratio of annual debt service to total

expenditures is 0.20 or lower. Under the bill, if a facility is owned or operated by more

than one municipality, any of the municipalities may establish proof of financial

responsibility on behalf of itself and the other owners or operators. The bill also

requires DNR to establish additional rules relating to the alternative method

established under this bill.