Ohio Administrative Code
Title 3796:4 - Testing Laboratories
Chapter 3796:4-1 - Generally
Section 3796:4-1-05 - Testing laboratory financial responsibility
Universal Citation: OH Admin Code 3796:4-1-05
Current through all regulations passed and filed through September 16, 2024
(A) A provisional licensee shall provide evidence of financial responsibility before a certificate of operation can be issued, which may be payable to the department for any of the following reasons:
(1)
A testing laboratory fails to adhere to the security
plan approved by the department or otherwise operates the facility in a manner
that allows for or results in theft, loss, or diversion of medical
marijuana;
(2)
A testing laboratory engages in activities prohibited
under rule
3796:4-2-08
of the Administrative Code; or
(3)
A testing
laboratory has its certification of operation fined, suspended, or revoked,
resulting from activities prohibited under rule
3796:5-6-02
of the Administrative Code.
(B) Evidence of financial responsibility shall be provided by the following:
(1)
Providing and
maintaining at its own expense any insurance coverage and terms of insurance
required and approved by the department, including, but not limited to,
products liability and general liability, prior to the issuance of a
certificate of operation, if such products are in existence at the time of
issuance or the time of renewal for the certificate of operation;
and
(2)
Establishing and maintaining an escrow account in a
chartered financial institution in Ohio in the amount of seventy-five thousand
dollars, with escrow terms, approved by the department, that it shall be
payable to the department in the event of circumstances outlined in paragraph
(A) of this rule. A financial institution may not return money in an escrow or
surety account to the testing laboratory that established the account or a
representative of the testing laboratory unless the testing laboratory or
representative presents a statement issued by the department indicating that
the account may be released; or
(3)
Providing a
surety bond naming the testing laboratory as principal of the bond, upon terms
approved by the department, in the amount of seventy-five thousand dollars,
payable to the department in the event of circumstances outlined in paragraph
(A) of this rule. Bond terms include the following:
(a)
The business name
and registration number on the bond must correspond exactly with the business
name and registration number in the department's records.
(b)
A copy of the
bond must be received by the department before a certificate of operation is
issued.
(c)
The bond shall not be canceled by a surety on less than
thirty days' notice in writing to the department. If a bond is canceled and the
testing laboratory fails to file a new bond with the department in the required
amount on or before the effective date of cancellation, the testing
laboratory's license shall be revoked. The total and aggregate liability of the
surety on the bond is limited to the amount specified on the
bond.
(4)
The department shall permit a testing laboratory to
reduce the escrow or surety bond by twenty-five thousand dollars upon the
successful achievement of each of the following milestones, resulting in a
potential elimination of the escrow account or surety bond:
(a)
A determination
by the department that the testing laboratory remained fully operational
without substantial interruption and demonstrates an ability to comply with the
requirements of Chapter 3796. of the Revised Code and the rules promulgated in
accordance with Chapter 3796, as determined by the department, for a period of
one year;
(b)
A determination by the department that the testing
laboratory remained fully operational without substantial interruption and
demonstrates an ability to comply with the requirements of Chapter 3796. of the
Revised Code and the rules promulgated in accordance with Chapter 3796, as
determined by the department, for two consecutive years; and
(c)
A determination
by the department that the testing laboratory remained fully operational
without substantial interruption and demonstrates an ability to comply with the
requirements of Chapter 3796. of the Revised Code and the rules promulgated in
accordance with Chapter 3796 of the Revised Code, as determined by the
department, for three consecutive years.
(5)
A testing
laboratory will not be held in default should the failure to comply be the
direct result of an event or effect that cannot be reasonably anticipated or
controlled, such as an act of God or nature and not the result of a lack of
good faith effort.
(C) The required insurance policy and surety bond shall be written by an insurance company formed, licensed or eligible, and authorized or approved to write such insurance in the state of Ohio under Title XXXIX of the Revised Code.
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