Financial Assurance for Solid Waste Management Facilities
*** Financial Assurance Memo October 12, 2010 ***
The Financial Assurance Program is based on the Financial Assurance Rule .1628, which requires owners/operators of municipal solid waste landfills (MSWLFs), operating after April 9, 1994, to demonstrate that the owner/operator will have the funds necessary to properly close, provide 30 years of post-closure maintenance, and fund any corrective action costs for the permitted landfill. The rules describe seven different "mechanisms" that owners/operators of MSWLFs can use to demonstrate financial assurance. The seven mechanisms are as follows:
Municipal Solid Waste Landfill (MSWLF) .1600 Rule Mechanisms:
- Local Government Financial Test The local government financial test consists of three components: a financial component, public notice component, and a record-keeping and reporting component.
- Corporate Test and Corporate Guarantee Guidance and 40 CFR Reference for Corporate Test and Corporate Guarantee
- Trust Fund (also used for Standby Trust Agreement)
- Surety Bond Guaranteeing Payment or Surety Bond Guaranteeing Performance
- Letter of Credit
- Insurance
- Capital Reserve Fund
Mechanisms for all other solid waste management facilities:
- Local Government Financial Test The local government financial test consists of three components: a financial component, public notice component, and a record-keeping and reporting component.
- Corporate Test and Corporate Guarantee Guidance and 40 CFR Reference for Corporate Test and Corporate Guarantee
- Trust Fund (also used for Standby Trust Agreement)
- Surety Bond Guaranteeing Payment or Surety Bond Guaranteeing Performance
- Letter of Credit
- Insurance
- Capital Reserve Fund
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Effective April 1, 2019, the INFLATION FACTOR PRICE DEFLATOR/MULTIPLIER = 1.022
Due to the recent federal shutdown, the annual factor has not been determined and may not be released until April 2019. Facilities that have adjustment deadlines between January 2019 and March 2019 are to use the inflation factor price deflator/multiplier of 1.018.
Effective January 1, 2018, the INFLATION FACTOR PRICE DEFLATOR/MULTIPLIER = 1.018
Effective January 1, 2017, the INFLATION FACTOR PRICE DEFLATOR/MULTIPLIER = 1.013
Effective January 1, 2016, the INFLATION FACTOR PRICE DEFLATOR/MULTIPLIER = 1.010
Effective January 1, 2015, the INFLATION FACTOR PRICE DEFLATOR/MULTIPLIER = 1.014
Effective January 1, 2014, the INFLATION FACTOR PRICE DEFLATOR/MULTIPLIER = 1.015
Each year's "Financial Assurance Mechanism" must contain, when applicable, inflation adjusted cost estimates for closure, post-closure care, and corrective action or a new cost estimate. If an inflation adjusted cost estimate is to be used, it must be based on U.S. Department of Commerce, Bureau of Economic Analysis' Gross Domestic Product implicit price deflator.
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