Wisconsin Legislative Council
ACT MEMO
One Ea st Ma in Stre e t, Suite 401 • Ma dison, W I 53703 • (608) 266-1304 • le g.council@le gis.wisconsin.gov • http://www.le gis.wisconsin.gov/lc
Prepared by: Patrick Ward, Staff Attorney March 21, 2024
2023 Wisconsin Act 107
[2023 Senate Bill 624]
Establishing Proof of Financial
Responsibility for Municipal
Solid Waste Facilities
BACKGROUND
Under current law, the owner or operator of a hazardous waste storage, treatment, or disposal facility
must maintain proof of financial responsibility that ensures the availability of funds for closure and
long-term care requirements and any required corrective action. For a business operated for profit and
certain public utilities, the proof of financial responsibility requirement may be satisfied by either the
standard method, through obtaining certain financial instruments, or by the net worth method, through
proving the company is worth a certain amount and is financially sound. A municipality that owns or
operates a solid waste facility may only use the standard method for proving financial responsibility.
2023 WISCONSIN ACT 107
2023 Wisconsin Act 107 allows a municipality owner or operator of a solid waste facility to establish
financial responsibility through an alternative method. Under this alternative method, a municipality
may satisfy the proof of financial responsibility requirement by meeting minimum financial
requirements established in administrative rule by the Department of Natural Resources (DNR) and
both of the following requirements:
If the municipality has any outstanding, rated, general obligation bonds, none have been rated
lower than “Baa” as issued by Moody’s Investors Services or “BBB” as issued by Standard & Poor’s
Corporation.
The municipality’s most recent audited annual financial statement shows a ratio of cash plus
marketable securities to total expenditures of not less than 0.05, and a ratio of annual debt service
to total expenditures of not greater than 0.20.
The act requires DNR to promulgate rules establishing these minimum financial requirements no later
than the first day of the seventh month beginning after the act’s effective date. The rules must reflect the
two requirements above and the requirements established in the local government financial test in the
federal law relating to municipal solid waste landfills.
If DNR determines that a municipality does not meet these minimum financial requirements, the
municipality is required to establish proof of financial responsibility using the standard method within
45 days of DNR’s determination. If more than one municipality owns or operates a solid waste facility,
any of the municipalities may establish financial responsibility for itself and the other municipalities.
The act also allows DNR to pay costs associated with closure, long-term care requirements, and
corrective action for a facility that has established proof of financial responsibility through either the
alternative method or the net worth method. DNR may expend moneys for this purpose if the owner or - 2 -
operator of the facility has failed to comply with closure, long-term care, or corrective action
requirements, and any of the following apply:
The owner or operator’s failure to comply is due to bankruptcy, insolvency, or other inability to pay
the costs.
DNR determines that the failure to comply presents an imminent or substantial danger to human
health or the environment.
In order to pay these costs, the act allows DNR to transfer money from the existing waste management
fund to a new appropriation account dedicated to this purpose. The act requires that the Joint
Committee on Finance (JCF) be notified of a transfer that does not exceed $300,000, and any transfer
that exceeds $300,000 must be approved by JCF.
Effective date: March 16, 2024
For a full history of the bill, visit the Legislature’s bill history page.
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