Current through Register Vol. 54, No. 44, November 2, 2024
(a) The
Department obtains possession and keeps custody of collateral deposited by the
owner or operator until authorized for release or replacement as provided in
this subchapter.
(b) The Department
values governmental securities for both current market value and face value.
For the purpose of establishing the value of the securities for bond deposit,
the Department uses the lesser of current market value or face value.
Government securities shall be rated at least BBB by Standard and Poor's or Baa
by Moody's.
(c) Collateral bonds
pledging Pennsylvania bank certificates of deposit are subject to the following
conditions:
(1) The Department requires that
certificates of deposit be assigned to the Department, in writing, and the
assignment recorded upon the books of the issuing institution.
(2) The Department may accept an individual
certificate of deposit for the maximum insurable amount as determined by the
Federal Deposit Insurance Corporation (FDIC) and which is otherwise secured
under Pennsylvania law.
(3) The
Department requires the issuing institution to waive all rights of setoff or
liens which it has or might have against the certificates.
(4) The Department only accepts
automatically-renewable certificates of deposit.
(5) The Department requires that the
certificates of deposit be assigned to the Department to assure that the
Department can liquidate the certificates prior to maturity, upon forfeiture,
for the amount of the bond determined under this subchapter.
(6) The Department only accepts certificates
of deposit only from banks or banking institutions licensed, chartered or
otherwise authorized to do business in the United States.
(7) The Department does not accept
certificates of deposit from banks that failed or delayed to make payment on
defaulted certificates of deposit.
(d) Collateral bonds pledging a letter of
credit are subject to the following conditions:
(1) The letter of credit is a standby letter
of credit issued only by a bank organized or authorized to do business in the
United States, examined by a state or Federal agency and Federally insured or
equivalently protected.
(2) The
letter of credit may not be issued without a credit analysis substantially
equivalent to that of a potential borrower in an ordinary loan situation. A
letter of credit so issued is supported by the customer's unqualified
obligation to reimburse the issuer for moneys paid under the letter of
credit.
(3) The letter of credit
may not be issued when the amount of the letter of credit, aggregated with
other loans and credits extended to the owner or operator, exceeds the issuer
legal lending limits for that owner or operator as defined in the United States
Banking Code (12 U.S.C.A.
§§
21-220).
(4) The letter of credit is irrevocable and
is so designated. The Department may accept a letter of credit for which at
least a 1 year period is stated if the following conditions are met and are
stated in the credit:
(i) The letter of
credit is automatically renewable for additional time periods of at least 1
year, unless the bank gives at least 120 days prior written notice by certified
mail to the Department and the customer of its intent to terminate the credit
at the end of the current time period.
(ii) The Department has the right to draw
upon the credit before the end of the time period, if the customer fails to
replace the letter of credit with other acceptable bond guarantee within 30
days of the bank's notice to terminate the credit.
(5) Letters of credit shall name the
Department as the beneficiary and be payable to the Department, upon demand, in
part or in full, upon presentation of the Department's drafts at sight. The
Department's right to draw upon the letter of credit will not require
documentary or other proof by the Department that the customer has violated the
conditions of the bond, the permit or another requirement of this
subchapter.
(6) Letters of credit
are subject to 13 Pa.C.S. (relating to the Uniform Commercial Code) and the
latest revision of the Uniform Customs and Practice for Documentary Credits,
published by the International Chamber of Commerce. The Department may accept
13 Pa.C.S. Division 5 (relating to letters of credit) in effect in the state of
the issuer.
(7) The issuing bank
waives the rights to setoff or liens it has or might have against the letter of
credit.
(8) The Department will not
accept letters of credit from a bank that failed or delayed in making payment
on a letter of credit previously submitted as collateral to the
Department.
(e) Bonds
pledging a financial test or corporate guarantee for closure shall be subject
to the requirements of 40
CFR 265.143(e) (relating to
financial test and corporate guarantee for closure) and
40 CFR
265.145(e) (relating to
financial assurance for post-closure care) except for the provision of
40 CFR
265.143(e)(10)(i) (relating
to financial assurance for closure) as specified in §
264a.143(a)
(relating to financial assurance for closure). This is replaced by the
procedures of §
265a.168 (relating to bond
forfeiture).
The provisions of this §265a.156 amended under sections
105, 402 and 501 of the Solid Waste Management Act (35 P. S. §§
6018.105,
6018.402 and
6018.501); sections 303 and
305(e)(2) of the Hazardous Sites Cleanup Act (35 P. S. §§
6020.303 and
6020.305(e)(2)); section 5,
402 and 501 of The Clean Streams Law (35 P. S. §§
691.5,
691.402 and
691.501); and section 1920-A
of The Administrative Code of 1929 (71 P. S. §§
510-20).
