June 4, 2013, Introduced by Senators BRANDENBURG, SCHUITMAKER, ROBERTSON, PAPPAGEORGE and MARLEAU and referred to the Committee on Finance.
A bill to amend 1994 PA 451, entitled
"Natural resources and environmental protection act,"
by amending sections 11504, 11523, 11523a, 11525, and 11525b (MCL
324.11504, 324.11523, 324.11523a, 324.11525, and 324.11525b),
sections 11504 and 11523 as amended and section 11523a as added by
1996 PA 359, section 11525 as amended by 2003 PA 153, and section
11525b as added by 1996 PA 358.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 11504. (1) "Health officer" means a full-time
administrative officer of a certified city, county, or district
department of health.
(2) "Inert material" means a substance that will not
decompose, dissolve, or in any other way form a contaminated
leachate upon contact with water, or other liquids determined by
the department as likely to be found at the disposal area,
percolating through the substance.
(3) "Insurance" means insurance that conforms to the
requirements
of 40 C.F.R. CFR 258.74(d) provided by an insurer who
has
a certificate of authority from the Michigan commissioner
director of insurance and financial services to sell this line of
coverage. An applicant for an operating license shall submit
evidence of the required coverage by submitting both of the
following to the department:
(a) A certificate of insurance that uses wording approved by
the department.
(b) A certified true and complete copy of the insurance
policy.
(4) "Landfill" means a disposal area that is a sanitary
landfill.
(5) "Letter of credit" means an irrevocable letter of credit
that
complies with 40 C.F.R. CFR
258.74(c).
(6)
"Medical waste" means that term as it is defined in part
138
section 13805 of the public health code, Act No. 378 of the
Public
Acts of 1978, being sections 333.13801 to 333.13831 of the
Michigan
Compiled Laws.1978 PA 368,
MCL 333.13805.
(7) "Municipal solid waste incinerator" means an incinerator
that is owned or operated by any person, and meets all of the
following requirements:
(a) The incinerator receives solid waste from off site and
burns only household waste from single and multiple dwellings,
hotels, motels, and other residential sources, or this household
waste together with solid waste from commercial, institutional,
municipal, county, or industrial sources that, if disposed of,
would not be required to be placed in a disposal facility licensed
under part 111.
(b) The incinerator has established contractual requirements
or
other notification or inspection procedures sufficient to assure
ensure that the incinerator receives and burns only waste referred
to in subdivision (a).
(c) The incinerator meets the requirements of this part and
the rules promulgated under this part.
(d) The incinerator is not an industrial furnace as defined in
40
C.F.R. CFR 260.10.
(e) The incinerator is not an incinerator that receives and
burns only medical waste or only waste produced at 1 or more
hospitals.
(8) "Municipal solid waste incinerator ash" means the
substances remaining after combustion in a municipal solid waste
incinerator.
(9) "Perpetual care fund" means a perpetual care fund provided
for in section 11525.
(10) "Perpetual care fund bond" means a surety bond, an
irrevocable letter of credit, or a combination of these instruments
in favor of the department by which a perpetual care fund is
established.
(11) (10)
"Trust fund" means a
trust fund held by a trustee
which has the authority to act as a trustee and whose trust
operations are regulated and examined by a federal or state agency.
A trust fund shall comply with section 11523b.
Sec. 11523. (1) The department shall not issue a license to
operate a disposal area unless the applicant has filed, as a part
of the application for a license, evidence of the following
financial assurance:
(a) Financial assurance established for a type III landfill or
a preexisting unit at a type II landfill and until April 9, 1997,
existing and new type II landfills shall be in the form of a bond
in an amount equal to $20,000.00 per acre of licensed landfill
within the solid waste boundary. However, the amount of the bond
shall not be less than $20,000.00 or more than $1,000,000.00. Each
bond shall provide assurance for the maintenance of the finished
landfill site for a period of 30 years after the landfill or any
approved portion is completed. In addition to this bond, a
perpetual care fund shall be maintained under section 11525.
(b)
Financial assurance for a type II landfill which that is
an existing unit or a new unit shall be in an amount equal to the
cost, in current dollars, of hiring a third party, to conduct
closure, postclosure maintenance and monitoring, and if necessary,
corrective
action. An application for a type II landfill which that
is an existing unit or new unit shall demonstrate financial
assurance in accordance with section 11523a.
(c) Financial assurance established for a solid waste transfer
facility, incinerator, processing plant, other solid waste handling
or disposal facility, or a combination of these utilized in the
disposal of solid waste shall be in the form of a bond in an amount
equal to 1/4 of 1% of the construction cost of the facility, but
shall not be less than $4,000.00, and shall be continued in effect
for a period of 2 years after the disposal area is closed.
(2) The owner or operator of a landfill may post a cash bond
with the department instead of other bonding mechanisms to fulfill
the
remaining financial assurance requirements of this section. A
minimum
amount equal to the remaining financial assurance
requirement
divided by the term of the operating license shall be
paid
to the department prior to licensure. Subsequent payments to
the
department shall be made annually in an amount equal to the
remaining
financial assurance requirement divided by the number of
years
remaining until the operating license expires, until the
required
amount is attained. An owner or
operator of a disposal
area who elects to post cash as a bond shall accrue interest on
that bond at the annual rate of 6%, to be accrued quarterly, except
that the interest rate payable to an owner or operator shall not
exceed the rate of interest accrued on the state common cash fund
for the quarter in which an accrual is determined. Interest shall
be paid to the owner or operator upon release of the bond by the
department. Any interest greater than 6% shall be deposited in the
state treasury to the credit of the general fund and shall be
appropriated to the department to be used by the department for
administration of this part.
(3) An owner or operator of a disposal area that is not a
landfill who has accomplished closure in a manner approved by the
department and in accordance with this part and the rules
promulgated under this part, may request a 50% reduction in the
bond during the 2-year period after closure. At the end of the 2-
year period, the owner or operator may request that the department
terminate the bond. The department shall approve termination of the
bond
within 60 days of such after
the request provided is made if
all waste and waste residues have been removed from the disposal
area
and that closure is certified.
(4) The department may utilize a bond required under this
section for the closure and postclosure monitoring and maintenance
of a disposal area if the owner or operator fails to comply with
the closure and postclosure monitoring and maintenance requirements
of this part and the rules promulgated under this part to the
extent
necessary to correct such violations. following issuance of
At least 7 days before utilizing the bond, the department shall
issue
a notice of violation or other order by
the department which
that
alleges violation of this part and or rules
promulgated under
this
part and provides 7 days' notice and provide an opportunity
for a hearing. This subsection does not apply to a perpetual care
fund bond.
(5)
Under the terms of a surety bond, letter of credit, or
insurance policy, or perpetual care fund bond, the issuing
institution shall notify both the department and the owner or
operator at least 120 days before the expiration date or any
cancellation of the bond. If the owner or operator does not extend
the effective date of the bond, or establish alternate financial
assurance within 90 days after receipt of an expiration or
cancellation
notice by from the issuing institution, the department
may draw on the bond.
(6) The department shall not issue a construction permit or a
new license to operate a disposal area to an applicant that is the
subject of a bankruptcy action commenced under title 11 of the
United
States Code, 11 U.S.C. USC
101 to 1330, 1532, or
any other
predecessor or successor statute.
(7) A person required under this section to provide financial
assurance in the form of a bond for a landfill may request a
reduction
in the bond based upon the value amount of the perpetual
care fund established under section 11525. A person requesting a
bond
reduction shall do so on a form consistent with this part as
prepared
and provided by the department. The department shall grant
this request unless there are sufficient grounds for denial and
those reasons are provided in writing. The department shall grant
or deny a request for a reduction of the bond within 60 days after
the request is made. If the department grants a request for a
reduced bond, the department shall require a bond in an amount such
that
for type III landfills, and type II landfills which that are
preexisting
units, the amount of money in the perpetual care fund
plus the amount of the reduced bond equals the maximum amount
required in a perpetual care fund in section 11525(2).
(8) The department shall release the bond required by this
section
if the amount in of the perpetual care fund exceeds the
amount of the financial assurance required under subsection (1).
(9) Prior to closure of a landfill, if money is disbursed from
the perpetual care fund, then the department may require a
corresponding increase in the amount of bonding required to be
provided
if necessary to meet the requirement requirements of this
section.
(10) If an owner or operator of a disposal area fulfills the
financial assurance requirements of this part by obtaining a bond,
including, but not limited to, a perpetual care fund bond, and the
surety company, insurer, trustee, bank, or financial or other
institution that issued or holds the bond becomes the subject of a
bankruptcy action or has its authority to issue or hold the bond or
to act as an escrow agent or trustee suspended or revoked, the
owner or operator shall, within 60 days after receiving notice of
that event, establish alternate financial assurance under this
part.
Sec. 11523a. (1) Effective April 9, 1997, the department shall
not issue a license to operate a type II landfill unless the
applicant demonstrates that for any new unit or existing unit at
the facility, the combination of the perpetual care fund
established under section 11525, bonds required under section
11523, and the financial capability of the applicant as evidenced
by a financial test, provides financial assurance in an amount not
less than that required by this section. An applicant may utilize a
financial test for an amount up to, but not exceeding 70% of the
closure, postclosure, and corrective action cost estimate.
(2) An applicant may demonstrate compliance with this section
by
submitting evidence, with a form consistent with this part ,
as
prepared
and provided by the department, that the applicant has
financial assurance for any existing unit or new unit in an amount
equal to or greater than the sum of the following standardized
costs:
(a) A standard closure cost estimate. The standard closure
cost estimate shall be based upon the sum of the following costs in
1996 dollars, adjusted for inflation and partial closures, if any,
as specified in subsections (4) and (5):
(i) A base cost of $20,000.00 per acre to construct a compacted
soil final cover using on-site material.
(ii) A supplemental cost of $20,000.00 per acre, to install a
synthetic cover liner, if required by rules under this part.
(iii) A supplemental cost of $5,000.00 per acre, if low
permeability soil must be transported from off-site to construct
the
final cover or if a bentonite geocomposite liner is used in
lieu
instead of low permeability soil in a composite cover.
(iv) A supplemental cost of $5,000.00 per acre, to construct a
passive gas collection system in the final cover, unless an active
gas collection system has been installed at the facility.
(b) A standard postclosure cost estimate. The standard
postclosure cost estimate shall be based upon the sum of the
following costs, adjusted for inflation as specified in section
11525(2):
(i) A final cover maintenance cost of $200.00 per acre per
year.
(ii) A leachate disposal cost of $100.00 per acre per year.
(iii) A leachate transportation cost of $1,000.00 per acre per
year, if leachate is required to be transported off-site for
treatment.
(iv) A groundwater monitoring cost of $1,000.00 per monitoring
well per year.
(v) A gas monitoring cost of $100.00 per monitoring point per
year, for monitoring points used to detect landfill gas at or
beyond the facility property boundary.
(c) The corrective action cost estimate, if any. The
corrective action cost estimate shall be a detailed written
estimate, in current dollars, of the cost of hiring a third party
to perform corrective action in accordance with this part.
(3)
In lieu Instead of using some or all of the standardized
costs
specified in subsection (2), of this section, an applicant
may estimate the site specific costs of closure or postclosure
maintenance and monitoring. A site specific cost estimate shall be
a written estimate, in current dollars, of the cost of hiring a
third
party to perform the activity. A third party is a party who
is
neither a For the purposes of
this subsection, a parent
corporation or a subsidiary of the owner or operator is not a third
party. Site specific cost estimates shall be based on the
following:
(a) For closure, the cost to close the largest area of the
landfill ever requiring a final cover at any time during the active
life, when the extent and manner of its operation would make
closure the most expensive, in accordance with the approved closure
plan. The closure cost estimate may not incorporate any salvage
value that may be realized by the sale of structures, land,
equipment, or other assets associated with the facility at the time
of final closure.
(b) For postclosure, the cost to conduct postclosure
maintenance and monitoring in accordance with the approved
postclosure plan for the entire postclosure period.
(4) The owner or operator of a landfill subject to this
section shall, during the active life of the landfill and during
the postclosure care period, annually adjust the financial
assurance cost estimates and corresponding amount of financial
assurance for inflation. Cost estimates shall be adjusted for
inflation by multiplying the cost estimate by an inflation factor
derived from the most recent United States department of the
interior, bureau of reclamation composite index published by the
United States department of commerce or another index that is more
representative of the costs of closure and postclosure monitoring
and maintenance as determined appropriate by the department. The
owner or operator shall document the adjustment on a form
consistent with this part as prepared by the department and shall
place
such the documentation in the operating record of the
facility.
(5) The owner or operator of a landfill subject to this
section may request that the department authorize a reduction in
the approved cost estimates and corresponding financial assurance
for
the landfill by submitting a form consistent with this part as
prepared
and provided by the department certifying completion of
any of the following activities:
(a) Partial closure of the landfill. The current closure cost
estimate for partially closed portions of a landfill unit may be
reduced by 80%, if the maximum waste slope on the unclosed portions
of the unit does not exceed 25%. The percentage of the cost
estimate reduction approved by the department for the partially
closed portion shall be reduced 1% for every 1% increase in the
slope of waste over 25% in the active portion. An owner or operator
requesting a reduction in financial assurance for partial closure
shall enclose with the request a certification under the seal of a
licensed professional engineer that certifies both of the
following:
(i) A That
a portion of the licensed landfill unit
has reached
final grades and has had a final cover installed in compliance with
the approved closure plan and rules promulgated under this part.
(ii) The maximum slope of waste in the active portion of the
landfill unit at the time of partial closure.
(b) Final closure of the landfill. An owner or operator
requesting a cost estimate reduction for final closure shall submit
a certification under the seal of a licensed professional engineer
that closure of that landfill unit has been fully completed in
accordance with the approved closure plan for the landfill. Within
60 days of receiving a certification under this subsection, the
department shall perform a consistency review of the submitted
certification .
If that review is approved, the department shall
and do 1 of the following:
(i) Approve the certification and notify the owner or operator
that
he or she may reduce the closure cost
estimate by 100%. The
department
shall provide within 60 days to
zero.
(ii) Disapprove the certification and provide the owner or
operator with a detailed written statement of the reasons why the
department has determined that closure certification has not been
conducted in accordance with this part, the rules promulgated under
this part, or an approved closure plan.
(c) Postclosure maintenance and monitoring. The owner or
operator of a landfill unit who has completed final closure of the
unit may request a reduction in the postclosure cost estimate and
corresponding financial assurance for 1 year or more of postclosure
maintenance and monitoring if the landfill has been monitored and
maintained in accordance with the approved postclosure plan. The
department shall, within 60 days of receiving a cost estimate
reduction request grant written approval or issue a written denial
stating the reason for denial. The department shall grant the
request and the owner or operator may reduce the postclosure cost
estimate to reflect the number of years remaining in the
postclosure
period unless the department provided in writing denies
the request and the written denial states that the owner or
operator has not performed the specific tasks consistent with this
part, rules promulgated under this part, and an approved plan.
(6) The owner or operator of a landfill subject to this
section may request a reduction in the amount of one or more of the
financial assurance mechanisms in place. If the combined value of
the remaining financial assurance mechanisms equals the amount
required
amount under section 11523a, under
this section, the
department shall approve the request.
(7) An owner or operator requesting that the department
approve
a financial assurance reduction for performance of the
activities
specified in subsection (5) or due to excess financial
assurance
specified in subsection under
subsection (5) or (6) shall
do
so on a form consistent with this part as prepared and provided
by the department. The department shall grant written approval or,
within 60 days of receiving a financial assurance reduction
request, issue a written denial stating the reason for the denial.
Sec. 11525. (1) The owner or operator of a landfill shall
establish and maintain a perpetual care fund for a period of 30
years after final closure of the landfill as specified in this
section.
A perpetual care fund may be established as a trust, or
an
escrow account, or a perpetual care fund bond and may be used to
demonstrate financial assurance for type II landfills under section
11523 and section 11523a.
(2) Except as otherwise provided in this section, the owner or
operator
of a landfill shall deposit into increase the amount of
his or her perpetual care fund 75 cents for each ton or portion of
a ton or 25 cents for each cubic yard or portion of a cubic yard of
solid waste that is disposed of in the landfill after June 17, 1990
.
The deposits shall be made not less than semiannually until the
fund reaches the maximum required fund amount. As of July 1, 1996,
the maximum required fund amount is $1,156,000.00. This amount
shall be annually adjusted for inflation and rounded to the nearest
thousand. The department shall adjust the maximum required fund
amount for inflation annually by multiplying the amount by an
inflation factor derived from the most recent bureau of reclamation
composite index published by the United States department of
commerce or another index more representative of the costs of
closure and postclosure monitoring and maintenance as determined
appropriate by the department. Increases to the amount of a
perpetual care fund required under this subsection shall be
calculated based on solid waste disposed of in the landfill as of
the end of the state fiscal year and shall be made within 30 days
after the end of each state fiscal year.
(3) The owner or operator of a landfill that is used for the
disposal
of the following materials shall deposit into increase the
amount of the perpetual care fund 7.5 cents for each ton or cubic
yard or portion of a ton or cubic yard of the following materials
that are disposed of in the landfill after June 17, 1990:
(a) Coal ash, wood ash, or cement kiln dust that is disposed
of in a landfill that is used only for the disposal of coal ash,
wood ash, or cement kiln dust, or a combination of these materials,
or that is permanently segregated in a landfill.
(b) Wastewater treatment sludge or sediments from wood pulp or
paper producing industries that is disposed of in a landfill that
is used only for the disposal of wastewater treatment sludge and
sediments from wood pulp or paper producing industries, or that is
permanently segregated in a landfill.
(c) Foundry sand or other material that is approved by the
department for use as daily cover at an operating landfill, that is
disposed of in a landfill that is used only for the disposal of
foundry sand, or that is permanently segregated in a landfill.
(4) The owner or operator of a landfill that is used only for
the disposal of a mixture of 2 or more of the materials described
in subsection (3)(a) to (c) or in which a mixture of 2 or more of
these
materials are permanently segregated shall deposit into
increase the amount of the perpetual care fund 7.5 cents for each
ton or cubic yard or portion of a ton or cubic yard of these
materials that are disposed of in the landfill after July 1, 1996.
(5)
Money is not required to be deposited into The amount of a
perpetual care fund is not required to be increased for materials
that are regulated under part 631.
(6)
The owner or operator of a landfill may contribute
additional
amounts into increase the
amount of the perpetual care
fund above the amount otherwise required by this section at his or
her discretion.
(7) The custodian of a perpetual care fund shall be a bank or
other financial institution that has the authority to act as a
custodian and whose account operations are regulated and examined
by a federal or state agency. Until the perpetual care fund reaches
the maximum required fund amount, the custodian of a perpetual care
fund shall credit any interest and earnings of the perpetual care
fund
to the perpetual care fund. However, upon the direction of the
owner
or operator, the custodian may utilize the interest and
earnings
of the perpetual care fund to pay the solid waste
management
program administration fee or the surcharge required by
section
11525a for the landfill for which the perpetual care fund
was
established. After the perpetual
care fund reaches the maximum
required fund amount, any interest and earnings shall be
distributed as directed by the owner or operator. The agreement
governing the operation of the perpetual care fund shall be
executed
on a form consistent with this part as prepared and
provided by the department. The custodian may be compensated from
the fund for reasonable fees and costs incurred for his or her
responsibilities
as custodian. The Not more
than 60 days after the
end of each state fiscal year, the custodian of a perpetual care
fund
established as a trust or escrow
account shall annually make
an
accounting to the department within 30 days following of the
perpetual care fund as of the close of the state fiscal year.
(8) The custodian of a perpetual care fund shall not disburse
any funds to the owner or operator of a landfill for the purposes
of the perpetual care fund except upon the prior written approval
of the department. However, the custodian shall ensure the filing
of all required tax returns for which the perpetual care fund is
liable and shall disburse funds to pay lawfully due taxes owed by
the
perpetual care fund without permission of the department. ,
and
may
disburse interest and earnings of the perpetual care fund to
pay
the solid waste management program administration fee or the
surcharge
required by section 11525a as provided in subsection (7).
The owner or operator of the landfill shall provide notice of
requests for disbursement and denials and approvals to the
custodian of the perpetual care fund. Requests for disbursement
from a perpetual care fund shall be submitted not more frequently
than semiannually. The owner or operator of a landfill may request
disbursement of funds from a perpetual care fund whenever the
amount of money in the fund exceeds the maximum required fund
amount.
The department shall approve the disbursement provided if
the total amount of financial assurance maintained meets the
requirements of sections 11523 and 11523a. As used in this
subsection, "maximum required fund amount" means:
(a) For those landfills containing only those materials
specified in subsection (3), an amount equal to 1/2 of the maximum
required fund amount specified in subsection (2).
(b) For all other landfills, an amount equal to the maximum
required fund amount specified in subsection (2).
(9) If the owner or operator of a landfill refuses or fails to
conduct closure, postclosure monitoring and maintenance, or
corrective action as necessary to protect the public health,
safety, or welfare, or the environment or fails to request the
disbursement of money from a perpetual care fund when necessary to
protect the public health, safety, or welfare, or the environment,
or fails to pay the solid waste management program administration
fee or the surcharge required under section 11525a, then the
department
may require the disbursement of money from draw on the
perpetual care fund and may expend the money for closure,
postclosure monitoring and maintenance, and corrective action, as
necessary.
The department may assess draw
on a perpetual care fund
for administrative costs associated with actions taken under this
subsection.
(10) Upon approval by the department of a request to terminate
financial assurance for a landfill under section 11525b, any money
in the perpetual care fund for that landfill shall be disbursed by
the custodian to the owner of the landfill unless a contract
between the owner and the operator of the landfill provides
otherwise.
(11) The owner of a landfill shall provide notice to the
custodian of the perpetual care fund for that landfill if there is
a change of ownership of the landfill. The custodian shall maintain
records
of ownership of a landfill during the time in which a
period
of existence of the perpetual care fund. is
established.
(12) This section does not relieve an owner or operator of a
landfill of any liability that he or she may have under this part
or as otherwise provided by law.
(13) This section does not create a cause of action at law or
in equity against a custodian of a perpetual care fund other than
for errors or omissions related to investments, accountings,
disbursements, filings of required tax returns, and maintenance of
records required by this section or the applicable perpetual care
fund.
(14) As used in this section, "custodian" means the trustee or
escrow agent of a perpetual care fund that is established as a
trust or escrow account, or the issuing institution of a perpetual
care fund bond.
(15) A trust or escrow account established as a perpetual care
fund may be replaced with a perpetual care fund bond that complies
with this section and, upon such replacement, the director shall
authorize the custodian of the trust or escrow account to disburse
the money in the trust or escrow account to the owner of the
landfill unless a contract between the owner and operator of the
landfill specifies otherwise.
(16) An owner or operator of a landfill who uses a perpetual
care fund bond to satisfy the requirements of this section shall
also establish a standby trust. All payments made under the terms
of the perpetual care fund bond shall be deposited by the custodian
directly into the standby trust in accordance with instructions
from the director. The standby trust must meet the requirements for
a trust established as a perpetual care fund under subsection (1),
except that until the standby trust is funded pursuant to the
requirements of this subsection, the following are not required:
(a) Payments into the standby trust as specified in subsection
(2).
(b) Annual accounting valuations as required in subsection
(7).
Sec. 11525b. (1) The owner or operator of a disposal area
shall provide continuous financial assurance coverage until
released from these requirements by the department under the
provisions of this part.
(2) The owner or operator of a landfill who has completed
postclosure maintenance and monitoring of the landfill in
accordance with this part, rules promulgated under this part, and
approved postclosure plan may request that financial assurance
required by sections 11523 and 11523a be terminated. A person
requesting termination of bonding and financial assurance shall
submit to the department a statement that the landfill has been
monitored and maintained in accordance with this part, rules
promulgated under this part, and the approved postclosure plan for
the postclosure period specified in section 11523 and shall certify
that the landfill is not subject to corrective action under section
11515. Within 60 days of receiving a statement under this
subsection, the department shall perform a consistency review of
the
submitted statement , and if approved, shall and do 1 of the
following:
(a) Approve the statement, notify the owner or operator that
he or she is no longer required to maintain financial assurance,
shall
return or release all financial
assurance mechanisms, and,
shall
if the perpetual care fund is
established as a trust or
escrow account, notify the custodian of the perpetual care fund
that money from the fund shall be disbursed as provided in section
11525(10).
The department shall provide within 60 days
(b) Disapprove the statement and provide the owner or operator
with a detailed written statement of the reasons why the department
has determined that postclosure maintenance and monitoring and
corrective action, if any, have not been conducted in accordance
with this part, the rules promulgated under this part, or an
approved postclosure plan.