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Financial Assurance

Ensuring solid waste facilities have sufficient funds to cover all closure costs.

Some solid waste facilities are required to provide financial assurance to guarantee that there will be sufficient funds to properly close the facility when business operations are terminated and to cover the cost of post-closure monitoring and maintenance. Financial assurance must be provided prior to commencing facility operations and updated regularly to reflect current permit and facility conditions.

Cost Estimates

NHDES requires permittees of solid waste facilities to prepare one closure cost estimate per facility in accordance with Env-Sw 1403.02. NHDES cost estimate forms are intended to fit the needs of the majority of facilities, but in some cases, additional information may need to be attached to complete the cost estimate forms.

Cost estimates are to be submitted to NHDES no later than March 31 of the third calendar year after submitting an initial closure cost estimate or the last updated cost estimate. If you are unsure of when your facility’s closure cost estimate needs to be submitted, please contact us.

Financial Assurance Mechanisms

Financial assurance for the closure and post-closure care of a permitted solid waste facility can be met by using one or a combination of the mechanisms listed in Env-Sw 1403.03. Per Title 40 of the Code of Federal Regulations (40 CFR 264.151) and the NH Solid Waste Rules, NHDES is required to use specific wording for some of the mechanisms and the following templates are available:

The dollar amount guaranteed by a financial assurance mechanism shall be no less than the estimated total closure costs determined by a facility’s closure cost estimate. All original financial assurance documents must be filed with and approved by NHDES before operational approval is issued.

If using a surety bond, letter of credit or insurance policy, a standby trust agreement must be established to receive the funds, if necessary. The standby trust shall be established with a financial institution that has the authority to act as a trustee and whose operations are regulated and examined by a federal or New Hampshire state agency.

Local Government (LOGO) Financial Test

Publicly-owned landfills that choose to use the Local Government (LOGO) Financial Test to fulfill their financial assurance obligations are required to annually update and place in the facility’s operating record all required documentation to support a LOGO financial test within 180 days of the close of the city’s or town’s fiscal year. NHDES is not given the authority through federal regulations to waive any of the requirements or extend the date of filing. Therefore, financial information should be filed in a timely manner to ensure that the LOGO form is completed before the end of the city's or town's fiscal year.

NHDES created a form for municipalities to report LOGO information for publicly-owned landfills that are inactive or capped. Permittees are no longer required to submit the form or supporting documentation to NHDES, however the permittee is required to maintain all documentation on file as part of the facility's record. NHDES reserves the right to randomly inspect facility records to ensure that LOGO information is being reported and that accurate documentation is being kept on file as required.

FAQs

Do all permitted solid waste facilities have to have financial assurance?

Financial assurance is required of all permitted solid waste facilities except:

  • Permit-exempt facilities.
  • Permit-by-notification facilities.
  • Facilities for which the closure cost estimate is $3,000 or less.
  • Emergency permit facilities.
  • Limited private non-landfill facilities.
  • Publicly-owned non-landfill facilities.
  • Facilities having coverage under Env-Sw 1900.

     
How much financial assurance does my facility need?

Financial assurance shall be in an amount that is no less than the total closure and post-closure costs that are determined based on an estimate approved by NHDES using representative current market rates. For example, if your facility's cost estimate is in the amount of $50,000.00, the financial assurance mechanism must be at least $50,000.00.

 

What is the cost estimate based on?

The amount of financial assurance is based on:

  • Representative current market rates.
  • Having a third party perform all required closure and post-closure activities.
  • The point in the facility's active life when closure would be most expensive.
  • The extent and manner of facility operations in compliance with permit conditions and applicable laws and rules.

     
Does NHDES have model documents for facilities to use?

Yes. Model documents are available for letters of credit, surety bonds, standby trust agreements, and trust agreements. Municipalities using the state approved local government (LOGO) financial test to satisfy financial assurance requirements for an unlined landfill may now use a one-page document to report information.

 

May I use any surety bond company?

No. If choosing to use a surety bond to satisfy the financial assurance requirement, a facility must use a company that is licensed in the state of New Hampshire to issue surety bonds. Please review the US Department of Treasury's Listing of Approved Sureties (Circular 570).