South Carolina Solid Waste Management Facility Bond: A Comprehensive Guide
August 29, 2022
This guide provides information for insurance agents to help their customers obtain a South Carolina Solid Waste Management Facility bond.
At a Glance:
- Average Cost: Will typically cost 5% of the bond amount per year
- Bond Amount: Determined on a case-by-case basis (more on this later)
- Who Needs it: All solid waste management facilities operating in South Carolina
- Purpose: To ensure the state will receive compensation for financial harm if the facility fails to clean and restore the land after closing down
- Who Regulates Solid Waste Management Facilities in South Carolina: The South Carolina Department of Health and Environmental Control
South Carolina Statute 44-96-290 requires all solid waste management facilities operating in the state to obtain a permit from the Department of Health and Environmental Control. The South Carolina legislature enacted the permitting requirement to ensure that solid waste management facilities engage in ethical business practices. To provide financial security for the enforcement of the permitting law, solid waste management facilities must purchase and maintain a surety bond to be eligible for a permit.
What is the Purpose of the South Carolina Solid Waste Management Facility Bond?
South Carolina requires solid waste management facilities to purchase a surety bond as part of the application process to obtain a permit. The bond ensures that the state will receive compensation for financial harm if the facility fails to abide by the regulations outlined in South Carolina Statute 44-96-290. Specifically, the bond protects the state if the facility fails to properly maintain itself and does not clean up and restore the land after closing down. In short, the bond is a type of insurance that protects the State of South Carolina if the facility violates the terms of its permit.
How Can an Insurance Agent Obtain a South Carolina Solid Waste Management Facility Surety Bond?
BondExchange makes obtaining a South Carolina Solid Waste Management Facility bond easy. Simply login to your account and use our keyword search to find the “Solid Waste” bond in our database. Don’t have a login? Enroll now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.
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How is the Bond Amount Determined?
South Carolina Statute 44-96-290 dictates that the bond must be in an amount large enough to pay for the closure costs if the facility fails to properly shut down and restore the land when its ceases operations. The Department of Health and Environmental Control will determine the bond amount on a case-by-case basis based on their estimated closure and/or post-closure cost.
Is a Credit Check Required for the South Carolina Solid Waste Management Facility Bond?
Surety companies will run a credit check on the owners of the solid waste management facility to determine eligibility and pricing for the South Carolina Closure Care of Solid Waste bond. Owners with excellent credit and work experience can expect to receive the best rates. Owners with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the owner’s credit.
How Much Does the South Carolina Solid Waste Management Facility Cost?
South Carolina Solid Waste Management Facility bonds will typically cost 5% of the bond amount per year. However, surety companies may provide your customers with a different rate depending on their credit score, years of business experience, and financial statements.
Who is Required to Purchase the Bond?
South Carolina requires solid waste management facilities to purchase a surety bond as a prerequisite to obtaining a business license. To paraphrase South Carolina Statute 44-96-40, a solid waste management facility is a place that stores, collects, transports, treats, utilizes, processes, recycles, or disposes of solid waste.
Exemptions to this definition include:
- Recovered materials processing facilities
- Facilities that use of ship recovered materials (except the portion of the facility that manages solid waste)
Additionally, “solid waste” does not include:
- Domestic sewage
- Recovered materials
- Solid or dissolved materials in irrigation return flows or industrial charges subject to NPDES permits
- Special nuclear material or its by-products
- Fertilizer and animal manure
- Steel slag that is part of the electric arc furnace steelmaking process
How Do Solid Waste Management Facilities Apply for a Permit in South Carolina?
Solid waste management facilities in South Carolina must navigate several steps to obtain a permit. Below are the general guidelines, but facilities should refer to the permitting statute and the South Carolina Department of Health and Environmental Control’s solid waste page for details on the process.
Step 1 – Submit a Demonstration-of-Need Request
South Carolina requires applicants seeking to construct new solid waste management facilities or expand their existing ones to submit a demonstration-of-need which the Department of Health and Environmental Control will use to determine if there is a need for the construction or expansion of the facility. The following facility types are required to submit a demonstration-of-need application:
- Class 2 landfills
- Class 3 landfills
- Class 3 incinerators
- Commercial solid waste processing facilities that handle waste that will be disposed of at Class 3 solid waste landfills
The department states that there may not be more than 2 commercial (any facility that manages waste other than its own) solid waste management facilities within one planning area, and defines as planning area as:
To apply for a demonstration-of-need, facilities must contact the Department of Health and Environmental Control. The Department will walk the facility through the application process, answer any questions they have, and provide them with all required application forms.
Step 2 – Ensure Compliance With Local Ordinances
Facilities must obtain documents from their local municipal authority verifying that the proposed facility or expansion complies with all applicable ordinances. Applications that do not contain these documents will be rejected.
Step 3 – Complete the Application
Do South Carolina Solid Waste Management Facilities Need to Renew Their Permits?
South Carolina Solid Waste Management Facilities are not required to renew their permits, as all permits last for as long as the facility is operating. However, once every 5 years the Department of Health and Environmental Control will review the facility’s environmental compliance and may revoke their permit if they have grounds to do so.
What are the Insurance Requirements for a South Carolina Solid Waste Management Facility Permit?
The South Carolina Department of Health and Environmental Control does not require solid waste management facilities to obtain any form of liability insurance as a prerequisite to obtaining a permit. However, facilities may be required to purchase insurance from their local municipal authority. All facilities must purchase and maintain a surety bond in an amount equal to the estimated closure and/or post-closure cost.
How do South Carolina Solid Waste Management Facilities File Their Bonds?
Solid waste management facilities should submit their completed bond forms, including the power of attorney, to the following address:
Division of Mining and Solid Waste Management
Bureau of Land and Waste Management
2600 Bull Street
Columbia, SC 29201-1708
The surety bond requires signatures from both the surety company that issues the bond and from a representative of the facility. The surety company should include the following information on the bond form:
- Legal name, address, phone number, state of incorporation, and organizational structure of the entity/individual(s) buying the bond
- Surety company’s name, address, phone number and state of incorporation
- Bond amount
- Date of the bond goes into effect
What Can South Carolina Solid Waste Management Facilities do to Avoid Claims Made Against Their Bonds?
To avoid claims against their bonds, solid waste management facilities in South Carolina must follow all permit regulations in the state, including some of the most important issues below that tend to cause claims:
- Properly maintain the facility
- Properly close down the facility when it ceases operations
What Other Insurance Products Can Agents Offer Solid Waste Management Facilities in South Carolina?
Most reputable solid waste management facilities will purchase liability insurance. Bonds are our only business at BondExchange, so we do not issue any other types of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.
How Can Insurance Agents Prospect for South Carolina Solid Waste Management Facility Customers?
South Carolina conveniently provides a list of active solid waste management facilities in the state Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.