Section 811.715  Self-Insurance for Non-Commercial Sites

a)                  Definitions.  The following definitions are intended to assist in the understanding of this Part and are not intended to limit the meanings of terms in any way that conflicts with generally accepted accounting principles:

"Assets" means all existing and all probable future economic benefits obtained or controlled by a particular entity.

"Current assets" means cash or other assets or resources commonly identified as those that are reasonably expected to be realized in cash or sold or consumed during the normal operating cycle of the business.

"Current liabilities" means obligations whose liquidation is reasonably expected to require the use of existing resources properly classifiable as current assets or the creation of other current liabilities.

"Generally accepted accounting principles" means the accounting and auditing standards of the American Institute of Certified Public Accountants and the Governmental Accounting Standards Board that are incorporated by reference in 35 Ill. Adm. Code 810.104.

"Gross Revenue" means total receipts less returns and allowances.

"Independently audited" refers to an audit performed by an independent certified public accountant in accordance with generally accepted auditing standards.

"Liabilities" means probable future sacrifices of economic benefits arising from present obligations to transfer assets or provide services to other entities in the future as a result of past transactions or events.

"Net working capital" means current assets minus current liabilities.

"Net worth" means total assets minus total liabilities and is equivalent to owner's equity.

"Tangible net worth" means tangible assets less liabilities; tangible assets to not include intangibles such as goodwill and rights to patents or royalties.

b)         Information to be Filed.  An owner or operator may satisfy the financial assurance requirements of this Part by providing the following:

1)         Bond without surety promising to pay the cost estimate (subsection (c)).

2)         Proof that the owner or operator meets the gross revenue test (subsection (d)).

3)         Proof that the owner or operator meets the financial test (subsection (e)).

c)         Bond Without Surety.  An owner or operator utilizing self-insurance must provide a bond without surety on the forms specified in Appendix A, Illustration G.  The owner or operator must promise to pay the current cost estimate to the Agency unless the owner or operator provides closure and post-closure care in accordance with the closure and post-closure care plans.

d)         Gross Revenue Test.  The owner or operator must demonstrate that less than one-half of its gross revenues are derived from waste disposal operations. Revenue is "from waste disposal operations" if it would stop upon cessation of the owner or operator's waste disposal operations.

e)         Financial Test

1)         To pass the financial test, the owner or operator must meet the criteria of either subsection (e)(1)(A) or (e)(1)(B):

A)        The owner or operator must have:

i)          Two of the following three ratios:  a ratio of total liabilities to net worth of less than 2.0; a ratio of the sum of net income plus depreciation, depletion and amortization to total liabilities of greater than 0.1; or a ratio of current assets to current liabilities of greater than 1.5;

ii)         Net working capital and tangible net worth each at least six times the current cost estimate;

iii)        Tangible net worth of at least $10 million; and

iv)        Assets in the United States amounting to at least 90 percent of the owner's or operator's total assets and at least six times the current cost estimate.

B)        The owner or operator must have:

i)          A current rating of AAA, AA, A, or BBB for its most recent bond issuance as issued by Standard and Poor, or a rating of Aaa, Aa, A, or Baa, as issued by Moody;

ii)         Tangible net worth at least six times the current cost estimate;

iii)        Tangible net worth of at least $10 million; and

iv)        Assets located in the United States amounting to at least 90 percent of its total assets or at least six times the current cost estimate.

2)         To demonstrate that it meets this test, the owner or operator must submit the following items to the Agency:

A)        A letter signed by the owner or operator's chief financial officer and worded as specified in Appendix A, Illustration I;

B)        A copy of the independent certified public accountant's report on examination of the owner or operator's financial statements for the latest completed fiscal year; and

C)        A special report from the owner or operator's independent certified public accountant to the owner or operator stating the following:

i)          The accountant has compared the data that 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

ii)         In connection with that procedure, no matters came to the accountant's attention that caused the accountant to believe that the specified data should be adjusted.

f)         Updated Information

1)         After the initial submission of items specified in subsections (d) and (e), the owner or operator must send updated information to the Agency within 90 days after the close of each succeeding fiscal year.

2)         If the owner or operator no longer meets the requirements of subsections (d) and (e), the owner or operator must send notice to the Agency of intent to establish alternative financial assurance.  The notice must be sent by certified mail within 90 days after the end of the fiscal year for which the year-end financial data show that the operator no longer meets the requirements.

g)         Qualified Opinions.  If the opinion required by subsections (e)(2)(B) and (e)(2)(C) includes an adverse opinion or a disclaimer of opinion, the Agency must disallow the use of self-insurance.  If the opinion includes other qualifications, the Agency must disallow the use of self-insurance if:

1)         The qualifications relate to the numbers that are used in the gross revenue test or the financial test; and

2)         In light of the qualifications, the owner or operator has failed to demonstrate that it meets the gross revenue test or financial test.

h)         Parent Corporation.  An owner or operator may satisfy the financial assurance requirements of this Part by either of the following means:

1)         Demonstrating that a corporation that owns an interest in the owner or operator meets the requirements of this Section; and

2)         Providing a bond to the Agency with the parent corporation as surety on a form specified in Appendix A, Illustration H in accordance with Section 811.711(d), (e), (f), and (g).

(Source:  Amended at 42 Ill. Reg. 21330, effective November 19, 2018)