Subchapter D. FINANCIAL ASSURANCES REQUIREMENTS


GENERAL


271.301.    Scope.

BOND AND TRUST REQUIREMENTS—GENERAL


271.311.    New facilities.
271.312.    Existing facilities.
271.313.    Form, terms and conditions of the bond or trust.
271.314.    Duration of liability.

BOND AND TRUST REQUIREMENTS—TYPES


271.321.    Special terms and conditions for surety bonds.
271.322.    General terms and conditions for collateral bonds.
271.323.    Collateral bonds—letters of credit.
271.324.    Collateral bonds—certificates of deposit.
271.325.    Collateral bonds—negotiable bonds.
271.326.    Phased deposit of collateral.
271.327.    Surety/collateral combination bond.
271.328.    Trust fund for municipally operated landfills.

BOND AND TRUST REQUIREMENTS—AMOUNT


271.331.    Bond and trust amount determination.
271.332.    Bond and trust amount adjustments.
271.333.    Failure to maintain adequate bond.

BOND AND TRUST REQUIREMENTS—RELEASE


271.341.    Release of bonds.
271.342.    Final closure certification.
271.343.    Withdrawals from municipal trust.

BOND AND TRUST REQUIREMENTS—FORFEITURE


271.351.    Forfeiture determination.
271.352.    Forfeiture procedures.
271.353.    Certification procedures for municipally operated landfills.
271.354.    Miscellaneous provisions for municipal trusts.

BOND AND TRUST REQUIREMENTS—OTHER PROVISIONS


271.361.    Replacement of existing bond.
271.362.    Reissuance of permit.
271.363.    Incapacity of operators or financial institutions.
271.364.    Preservation of remedies.

PUBLIC LIABILITY INSURANCE REQUIREMENTS


271.371.    Insurance requirement.
271.372.    Conditions of insurance.
271.373.    Minimum insurance coverage.
271.374.    Proof of insurance coverage.
271.375.    Additional insurance coverage.
271.376.    Maintenance of insurance coverage.
271.377.    Insurance pool.
271.378.    Self-insurance.
271.379.    Combination of financial assurance requirements.

ENVIRONMENTAL IMPAIRMENT LIABILITY
FINANCIAL ASSURANCES


271.381.    Financial assurances requirements.
271.382.    Forms of financial assurances—municipalities and municipal
authorities.

271.383.    Commercial insurance; general requirements—municipalities and
municipal authorities.

271.384.    Commercial insurance; coverage—municipalities and municipal
authorities.

271.385.    Commercial insurance; proof of coverage—municipalities and
municipal authorities.

271.386.    Environmental impairment trust funds; general—municipalities and
municipal authorities.

271.387.    Trust fund; management—municipalities and municipal authorities.
271.388.    Insurance pool—municipalities and municipal authorities.
271.389.    Self-insurance—municipalities and municipal authorities.

OTHER PERSONS


271.391.    Forms of financial assurances—persons other than municipalities
and municipal authorities.

271.392.    Commercial insurance; general requirements—persons other than
municipalities and municipal authorities.

271.393.    Commercial insurance; coverage—persons other than municipalities
and municipal authorities.

271.394.    Commercial insurance; proof of coverage—persons other than
municipalities and municipal authorities.

271.395.    Environmental impairment trust funds; general—persons other than
municipalities and municipal authorities.

271.396.    Trust fund management—persons other than municipalities and
municipal authorities.

271.397.    Self-insurance—persons other than municipalities and municipal
authorities.

Cross References

   This subchapter cited in 25 Pa. Code §  271.103 (relating to permit-by-rule for municipal waste processing facilities other than for regulated medical or chemotherapeutic waste; qualifying facilities; general requirements); 25 Pa. Code §  271.113 (relating to closure plan); 25 Pa. Code §  271.212 (relating to conditions of permits); 25 Pa. Code §  271.221 (relating to permit reissuance); 25 Pa. Code §  271.411 (relating to when a penalty will be assessed); 25 Pa. Code §  271.502 (relating to relationship to other requirements); 25 Pa. Code §  271.801 (relating to scope); 25 Pa. Code §  271.821 (relating to application for general permits); 25 Pa. Code §  271.832 (relating to waiver and modification of requirements); 25 Pa. Code §  273.131 (relating to basic requirements); 25 Pa. Code §  273.133 (relating to map and grid requirements); 25 Pa. Code §  277.131 (relating to basic requirements); 25 Pa. Code §  277.133 (relating to map and grid requirements); 25 Pa. Code §  279.103 (relating to maps and related information); 25 Pa. Code §  281.112 (relating to maps and related information); 25 Pa. Code §  283.103 (relating to maps and related information); and 25 Pa. Code §  284.2 (relating to permits-by-rule for regulated medical or chemotherapeutic waste processing facilities; qualifying facilities; general requirements).

GENERAL


§ 271.301. Scope.

 (a)  This subchapter sets forth minimum requirements for demonstrating sufficient financial responsibility for the operation of municipal waste processing or disposal facilities by providing for bond guarantees for the operation of those facilities, and by providing for minimum standards for insurance protection for personal injury and property damage to third parties arising from the operation of the facilities.

 (b)  This subchapter applies to a person or municipality that operates the facility but is not a permit applicant or permittee when the person or municipality submits a bond or provides insurance. Nothing in this subchapter excuses the applicant or permittee from complying with this subchapter.

 (c)  A municipality operating a municipal waste landfill solely for the disposal of municipal waste may satisfy the requirements of this subchapter by establishing a trust fund under §  271.328 (relating to trust fund for municipally operated landfills) and this subchapter. A municipality that disposes, has disposed or proposes to dispose of residual waste at a municipal waste landfill that it operates may not satisfy the requirements of this subchapter by establishing a trust fund and shall file a bond under this subchapter.

 (d)  A department or agency of the United States or the Commonwealth which owns and operates a municipal waste processing or disposal facility shall satisfy the requirements of this subchapter. The department or agency of the United States or the Commonwealth may satisfy financial assurance requirements by using applicable forms of financial assurance under this subchapter or by other means of financial assurance approved by the Department.

 (e)  When an application for the land application of sewage sludge is made by a municipality of a municipal authority, the filing of a bond with the Department is not required as a condition for issuance of a permit to the municipality or municipal authority for the application of the sewage sludge for land reclamation or agricultural utilization purposes.

Source

   The provisions of this §  271.301 adopted April 8, 1988, effective April 9, 1988, 18 Pa.B. 1681; amended September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179; amended December 22, 2000, effective December 23, 2000, 30 Pa.B. 6685. Immediately preceding text appears at serial pages (226016) and (208063).

Cross References

   This section cited in 25 Pa. Code §  271.312 (relating to existing facilities); 25 Pa. Code §  271.321 (relating to special terms and conditions for surety bonds); 25 Pa. Code §  271.341 (relating to release of bonds); 25 Pa. Code §  271.351 (relating to forfeiture determination); 25 Pa. Code §  271.353 (relating to certification procedures for municipally operated landfills); 25 Pa. Code §  271.362 (relating to reissuance of permit); and 25 Pa. Code §  272.106 (relating to termination of trust).

BOND AND TRUST REQUIREMENTS—GENERAL


§ 271.311. New facilities.

 (a)  The Department will not approve a new, reissued, renewed or modified permit for the processing or disposal of municipal waste, unless the applicant first submits to the Department a bond under this subchapter, and the bond is approved by the Department.

 (b)  The bond shall be submitted under this subchapter on a form prepared by the Department, shall be made payable to the Department and shall provide for continuous liability from the initiation of operations at the facility. The amount of the bond shall be determined under §  271.331 (relating to bond and trust amount determination).

 (c)  A municipality operating a municipal waste landfill solely for the disposal of municipal waste, and which receives a permit from the Department under the act after September 26, 1988, shall establish a trust fund under §  271.328 (relating to trust fund for municipally operated landfills) and this subchapter prior to the operation of the landfill, unless the municipality posts another bond consistent with this subchapter. The landfill may not accept waste or initiate operation prior to the establishment of the trust fund.

 (d)  A department or agency of the United States or the Commonwealth applying for a permit to operate a municipal waste processing or disposal facility shall satisfy the requirements of this section by filing a bond with the Department under §  271.313(a) (relating to form, terms and conditions of the bond or trust) or by another means of financial assurance approved by the Department which satisfies the terms and conditions for bonds under §  271.313(b)—(e) and this subchapter. The facility may not accept waste or initiate operation prior to the approval by the Department of the financial assurances required by this section.

Source

   The provisions of this §  271.311 adopted April 8, 1988, effective April 9, 1988, 18 Pa.B. 1681; amended September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179. Immediately preceding text appears at serial pages (126138) and (151735).

Cross References

   This section cited in 25 Pa. Code §  271.333 (relating to failure to maintain adequate bond).

§ 271.312. Existing facilities.

 (a)  Except as provided in §  271.301(c) (relating to scope), a person or municipality operating a municipal waste landfill or construction/demolition waste landfill on or after April 9, 1988, who has not filed a bond under the act, shall file a bond with the Department within 90 days by July 8, 1988. Nothing in this section prevents the Department from requiring a bond to be submitted as required by the act for another facility operating after April 9, 1988.

 (b)  A person or municipality that possesses a municipal waste landfill permit or a demolition waste landfill permit under the act, or a permit for an impoundment used for municipal waste disposal issued under The Clean Streams Law (35 P. S. § §  691.1—691.1001), which permit was issued by the Department prior to April 9, 1988, shall submit an updated bond in an approved bond amount as required by the Department, prior to Departmental approval of a closure plan submitted under §  271.113 (relating to closure plan). Nothing in this section prevents the Department from requiring a bond to be an updated bond under this chapter for another facility operating after April 9, 1988.

 (c)  A municipality operating a municipal waste landfill solely for the disposal of municipal waste, and which received a permit from the Department under the act before September 26, 1988, shall establish a trust fund under §  271.328 (relating to trust fund for municipally operated landfills) and this subchapter or post another bond consistent with this subchapter as of November 25, 1988.

 (d)  The bond required by this section shall be submitted under the requirements of this subchapter, on a form prepared by the Department, shall be made payable to the Department and shall provide for continuous liability from the initiation of operations at the facility. The amount of the bond shall be determined in accordance with §  271.331 (relating to bond and trust amount determination).

 (e)  The trust required by this section shall be submitted under the requirements of this subchapter, on a form approved by the Department, and shall provide for continuous liability from the initiation of operations at the facility. The amount of the trust shall be determined in accordance with §  271.331.

 (f)  A department or agency of the United States or the Commonwealth which owns and operates a municipal waste processing or disposal facility shall satisfy the requirements of this section by filing a bond with the Department under §  271.313(a) (relating to form, terms and conditions of the bond or trust) or by another means of financial assurance approved by the Department which satisfies the terms and conditions for bonds under §  271.313(b)—(e) and this subchapter.

Notes of Decisions

   A land owner who operated a landfill for 15 years even though it had never been permitted could be required to post a closure bond. T. C. Inman, Inc. v. Department of Environmental Resources, 608 A.2d 1112 (Pa. Cmwlth. 1992).

Source

   The provisions of this §  271.312 adopted April 8, 1988, effective April 9, 1988, 18 Pa.B. 1681; amended September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179; amended December 22, 2000, effective December 23, 2000, 30 Pa.B. 6685. Immediately preceding text appears at serial pages (208064) to (208065).

§ 271.313. Form, terms and conditions of the bond or trust.

 (a)  The Department will accept the following types of bonds or trusts:

   (1)  A surety bond as provided in §  271.321 (relating to special terms and conditions for surety bonds).

   (2)  A collateral bond as provided in § §  271.322—271.325.

   (3)  A combination of surety and collateral bonds as provided in §  271.327 (relating to surety/collateral combination bond).

   (4)  For a facility with a permit term of at least 10 years, a phased deposit of collateral bond as provided in §  271.326 (relating to phased deposit of collateral).

   (5)  A trust fund as provided in §  271.328 (relating to trust fund for municipally operated landfills), for a municipal waste landfill operated by a municipality solely for the disposal of municipal waste.

 (b)  A person or municipality submitting a bond or trust shall comply with Department guidelines, which can be obtained from the Bureau of Waste Management, Division of Enforcement, Post Office Box 2063, Harrisburg, Pennsylvania 17105-2063, establishing minimum criteria for execution and completion of the bond or trust forms and related documents and on calculation of total bond or trust liability.

 (c)  Bonds and trusts shall be conditioned on compliance with the act, the environmental protection acts, this title, Department orders relating to operation of municipal waste processing and disposal facilities, the terms and conditions of the permit, and amendments, revisions and changes to the act, the environmental protection acts, the regulations and the permit. The liability of the operator under the bond or trust is absolute and unconditional to ensure compliance by the operator with requirements for the operation of a municipal waste processing or disposal facility.

 (d)  Liability on the bond shall cover the operation of municipal waste disposal or processing activities conducted from the initiation of the activities until the bond is released. The Department may accept a bond executed by an operator who is not the permittee or permit applicant, in lieu of a bond executed by the permittee or permit applicant, only if the liability on the bond meets the requirement of this subchapter. A bond executed by an operator who is not the permittee or permit applicant does not meet the requirements of this subchapter if liability on the bond is limited to the municipal waste management activities of that operator.

 (e)  Bonds will be reviewed for legality and form according to established Department procedures.

 (f)  Liability under the trust shall cover the operation of municipal waste disposal or processing activities conducted from the initiation of the activities until the trust is terminated. The Department will not accept a trust executed by an operator who is not the permittee or permit applicant, in lieu of a bond executed by the permittee or permit applicant.

Source

   The provisions of this §  271.313 adopted April 8, 1988, effective April 9, 1988, 18 Pa.B. 1681; amended September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179. Immediately preceding text appears at serial pages (151735) to (151736).

Cross References

   This section cited in 25 Pa. Code §  271.311 (relating to new facilities); 25 Pa. Code §  271.312 (relating to existing facilities); and 25 Pa. Code §  284.641 (relating to bond requirement).

§ 271.314. Duration of liability.

 (a)  The liability under a bond filed with the Department under this subchapter shall continue for the period of operations of the facility, and for 10 years after final closure certification of the facility under §  271.342 (relating to final closure certification), unless released in whole or in part by the Department, in writing, prior thereto as provided by §  271.341 (relating to release of bonds).

 (b)  The liability under a trust fund under this subchapter shall continue for the period of operations of the facility, until final closure certification under §  271.342, unless released in whole or in part by the Department, in writing, prior thereto as provided by §  271.341.

Source

   The provisions of this §  271.314 adopted April 8, 1988, effective April 9, 1988, 18 Pa.B. 1681; amended September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179. Immediately preceding text appears at serial page (151736).

Notes of Decisions

   Ten-year duration of liability runs from final closure. Commonwealth v. Mayer, 569 A.2d 415 (Pa. Cmwlth. 1990).

BOND AND TRUST REQUIREMENTS—TYPES


§ 271.321. Special terms and conditions for surety bonds.

 (a)  The Department will not accept the bond of a surety company that has failed or unreasonably delayed, as determined by the Department, in making payment on a forfeited surety bond.

 (b)  The Department will accept only the bond of a surety licensed or authorized to do business in this Commonwealth. In addition, for facilities permitted after December 23, 2000, the Department will accept only the bond of a surety which is listed in Circular 570 of the United States Department of Treasury. If a surety is removed from Circular 570 or is no longer authorized to do business in this Commonwealth, the bond of the surety shall be replaced.

 (c)  The bond shall provide that full payment shall be made under the bond within 30 days of receipt of the Department’s declaration of forfeiture notwithstanding judicial or administrative appeal of the forfeiture.

 (d)  The surety may cancel the bond by sending written notice of cancellation to the Department, the operator and the principal on the bond, only under the following conditions:

   (1)  The notice of cancellation shall be sent by certified mail, return receipt requested. Cancellation may not take effect until 120 days after receipt of the notice of cancellation by the Department, the operator and the principal on the bond as evidenced by return receipts.

   (2)  Within 60 days after receipt of a notice of cancellation, the operator shall provide the Department with a replacement bond under §  271.361 (relating to replacement of existing bond). If the operator fails to submit a replacement bond acceptable to the Department within the 60-day period, the Department will issue a notice of violation to the operator requiring that the bond be replaced within 30 days of the notice of violation. If the bond is not replaced within that 30-day period, the Department may issue a cessation order for the permits of the operator and related parties, and thereafter take action as may be appropriate.

   (3)  Failure of the operator to submit a replacement bond within 30 days after the notice of violation constitutes grounds for forfeiture of the bond, and other bonds submitted by the operator, under §  271.351 (relating to forfeiture determination). If the Department declares the bond forfeited before the expiration of the 120-day period, the notice of cancellation is void.

 (e)  Upon receipt of notice of cancellation by a surety, the Department will notify every municipality in which the facility or part of the facility is located. The Department may provide copies of notices of violation, cease orders and other relevant correspondence regarding the surety cancellation, to the governmental units.

 (f)  The Department will not accept surety bonds from a surety company when the total bond liability to the Department on bonds filed by the operator, the principal and related parties exceeds the surety company’s single risk limit as provided by The Insurance Company Law of 1921 (40 P. S. § §  341—991).

 (g)  The bond shall provide that the surety and the principal are jointly and severally liable for payment of the bond amount.

 (h)  The Department will provide in the bond that the amount shall be confessed to judgment and execution upon forfeiture.

 (i)  The Department will retain, during the term of the bond, and upon forfeiture of the bond, a property interest in the surety’s guarantee of payment under the bond which may not be affected by the bankruptcy, insolvency or other financial incapacity of the operator or principal on the bond.

 (j)  Moneys collected on bonds posted under this subchapter or trusts established under §  271.301 (relating to scope) shall be deposited with the State Treasurer, who will hold the same in the name of the Commonwealth in trust as cash collateral until the Department determines one of the following:

   (1)  Bonds or trust funds would otherwise be released under §  271.341 (relating to release of bonds).

   (2)  There are other grounds for forfeiture under §  271.351 or collection under the terms and conditions of the bond or trust.

   (3)  Other bonds or collateral acceptable to the Department have been posted.

 (k)  If the bonds are releasable under §  271.341, the moneys shall be returned to the surety or the operator as determined by the Department.

 (l)  If there are other grounds for forfeiture under §  271.351, or collection under the terms and conditions of the bond or trust, the State Treasurer or the Department will deposit the collected moneys into the Solid Waste Abatement Fund for the purpose specified in §  271.352 (relating to forfeiture procedures). Funds from trusts for municipally operated landfills under §  271.301 shall only be used for closure, abatement, postclosure care, monitoring and other remedial measures necessary for that particular municipally operated landfill.

Source

   The provisions of this §  271.321 adopted April 8, 1988, effective April 9, 1988, 18 Pa.B. 1681; amended September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179; amended December 22, 2000, effective December 23, 2000, 30 Pa.B. 6685. Immediately preceding text appears at serial pages (208067) to (208069).

Cross References

   This section cited in 25 Pa. Code §  271.313 (relating to form, terms and conditions of the bond or trust).

§ 271.322. General terms and conditions for collateral bonds.

 (a)  The operator shall execute the collateral bond.

 (b)  The operator shall submit a collateral bond with one or more of the following types of collateral acceptable to the Department:

   (1)  Cash.

   (2)  Certified checks, cashier’s checks or treasurer’s checks which are issued, drawn on or certified by a state-chartered or National financial institution chartered or authorized to conduct the business of banking in the United States and which are examined by a State or Federal agency.

   (3)  Automatically renewable and assignable certificates of deposit from state-chartered or National financial institutions chartered or authorized to conduct the business of banking in the United States and which are examined by a state or Federal agency.

   (4)  Automatically renewable, irrevocable standby letters of credit from state-chartered or National financial institutions chartered or authorized to conduct the business of banking in the United States and which are examined by a state or Federal agency.

   (5)  Negotiable bonds of the United States Government, the Commonwealth, the Turnpike Commission, the General State Authority, the State Public School Building Authority or a municipality within this Commonwealth.

 (d)  The Department will place collateral submitted under this subchapter with the State Treasurer, who is responsible for its custody and safekeeping until released or collected and deposited in the Solid Waste Abatement Fund by the Department under this chapter.

 (e)  Collateral shall be in the name of the operator, and shall be pledged and assigned to the Department free and clear of claims or rights. The pledge or assignment shall vest in the Department a property interest in the collateral which shall remain until release under the terms of this subchapter and may not be affected by the bankruptcy, insolvency or other financial incapacity of the operator.

 (f)  The Department will ensure its ownership interest in collateral posted on a bond under this section is of a type that the collateral is readily available to the Department upon forfeiture of the bond. The Department may require proof of ownership or enter into other agreements it determines to be necessary to ensure its ownership interest is fully protected and may take actions under the law it deems necessary to protect the ownership interest.

Source

   The provisions of this §  271.322 adopted April 8, 1988, effective April 9, 1988, 18 Pa.B. 1681; amended September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179. Immediately preceding text appears at serial pages (126142) to (126143).

Cross References

   This section cited in 25 Pa. Code §  271.313 (relating to form, terms and conditions of the bond or trust); and 25 Pa. Code §  284.641 (relating to bond requirement).

§ 271.323. Collateral bonds—letters of credit.

 (a)  Letters of credit submitted as collateral for collateral bonds are subject to the following conditions:

   (1)  The letter of credit shall be a standby or guarantee letter of credit issued by a Federally insured or equivalently protected state-chartered or National financial institution chartered or authorized to conduct the business of banking in the United States and examined by a state or Federal agency. The letter of credit may not be issued without a credit analysis substantially equivalent to a credit analysis applicable to a potential borrower in an ordinary loan situation. A letter of credit so issued shall be supported by the customer’s unqualified obligation to reimburse the issuer for moneys paid under the letter of credit.

   (2)  The letter of credit shall be irrevocable and shall be so designated. The Department may accept a letter of credit for which a limited time period is stated if the following conditions are met and are stated in the letter:

     (i)   The letter of credit is automatically renewable for additional time periods unless the bank gives at least 90 days prior written notice to both the Department and the operator 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 this time period, if the operator fails to replace the letter of credit with other acceptable bond guarantees within 60 days of the bank’s notice to terminate the credit.

   (3)  The Department will not accept letters of credit issued for a customer when the amount of the letter of credit, aggregated with other loans and credits extended to the customer, exceeds the issuer’s legal lending limit for that customer as defined in the United States Banking Code (12 U.S.C.A. § §  21—220).

   (4)  Letters of credit shall name the Department as the beneficiary and shall 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 does not require documentary or other proof by the Department that the customer has violated the conditions of the bond, the permit or another requirement.

   (5)  Letters of credit are subject to letters of credit or the equivalent article or division of 13 Pa.C.S. (relating to the Uniform Commercial Code) in effect in the state of and which governs the bank issuing the letter of credit and the latest edition of Uniform Customs and Practice for Documentary Credits, published by the International Chamber of Commerce.

   (6)  The Department will not accept letters of credit from a bank which has failed or delayed in making payment on a letter of credit previously submitted as collateral to the Department.

   (7)  The issuing bank shall waive the rights of setoff or liens which it has or might have against the letter of credit.

 (b)  If the Department collects an amount under the letter of credit due to failure of the operator to replace the letter of credit after demand by the Department, the Department will hold the proceeds as cash collateral as provided by this subchapter.

 (c)  Upon notice by the bank of its intent to terminate the letter of credit, the Department will notify every municipality in which the facility or a part of the facility is located, of the Department’s receipt of notice of the bank’s intent to terminate the letter of credit. The Department may provide the notice by submitting a copy of the Department’s notice to the operator requiring replacement collateral or surety guarantee to the governmental unit.

Source

   The provisions of this §  271.323 adopted April 8, 1988, effective April 9, 1988, 18 Pa.B. 1681; amended September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179. Immediately preceding text appears at serial pages (126143) to (126145).

Cross References

   This section cited in 25 Pa. Code §  271.313 (relating to form, terms and conditions of the bond or trust); 25 Pa. Code §  284.641 (relating to bond requirement); and 25 Pa. Code §  285.341 (relating to bond requirement).

§ 271.324. Collateral bonds—certificates of deposit.

 Certificates of deposit submitted as collateral for collateral bonds are subject to the following conditions:

   (1)  The certificate of deposit shall be made payable to the operator and shall be assigned to the Department by the operator, in writing, containing terms and conditions required by the Department and on forms prepared and approved by the Department. The assignment shall be recorded upon the books of the bank issuing the certificate.

   (2)  The certificate of deposit shall be issued by a federally-insured or equivalently protected state-chartered or National financial institution which is authorized to conduct the business of banking in the United States and examined by a state or Federal agency.

   (3)  The Department will not accept certificates of deposit from a state-chartered or National financial institution when the accumulated total of certificates of deposit issued by the bank or banking institution for the operator is in excess of $100,000, or the maximum insurable amount as determined by the Federal Deposit Insurance Corporation if the state-chartered or National financial institution is insured by the Federal Deposit Insurance Corporation. If it is insured by an equivalent method administered by the Commonwealth, similar limits apply. If the operator is a political subdivision, the accumulated total of certificates of deposit for the operator may be in an amount secured by a pledge of assets by a depository institution under the act of August 6, 1971 (P. L. 281, No. 72) (72 P. S. § §  3836-1—3836-8). The depository shall pledge the assets securing the amount of certificates of deposit offered under this subsection on a pooled basis in conformance with section 3 of the act of August 6, 1971 (P. L. 281, No. 72) (72 P. S. §  3836-3). A certificate of deposit will not be acceptable if there is an agreement between the operator, the depository and the custodian providing the custodian discretion to surrender the pledged assets in its possession to a receiver or other successor in interest of the depository.

   (4)  The certificate of deposit shall state that the bank issuing it waives the rights of setoff or liens which it has or might have against the certificate.

   (5)  The certificate of deposit shall be automatically renewable and fully assignable to the Department. Certificates of deposit shall state on the face that they are automatically renewable.

   (6)  The operator shall submit certificates of deposit in amounts which will allow the Department to liquidate the certificates prior to maturity, for the full amount of the bond without penalty to the Department.

   (7)  The Department will not accept certificates of deposit from banks which have failed or unduly delayed in making payment on certificates of deposit which have previously been submitted as collateral to the Department.

   (8)  The operator is not entitled to interest accruing on the certificates of deposit after forfeiture is declared by the Department, until the forfeiture declaration is ruled invalid by a court having jurisdiction over the Department, and the ruling is final.

Source

   The provisions of this §  271.324 adopted April 8, 1988, effective April 9, 1988, 18 Pa.B. 1681; amended September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179. Immediately preceding text appears at serial pages (126145) to (126146).

Cross References

   This section cited in 25 Pa. Code §  271.313 (relating to form, terms and conditions of the bond or trust); 25 Pa. Code §  284.641 (relating to bond requirement); and 25 Pa. Code §  285.341 (relating to bond requirement).

§ 271.325. Collateral bonds—negotiable bonds.

 Negotiable bonds submitted and pledged as collateral for collateral bonds are subject to the following conditions:

   (1)  The Department may determine the current market value of governmental securities for the purpose of establishing the value of the securities for bond deposit.

   (2)  The current market value shall be at least equal to the amount of the required bond.

   (3)  The Department may periodically revalue the securities and will require additional amounts if the then current market value is insufficient to satisfy the bond amount requirements for the facility.

   (4)  The Department will not accept government securities unless they are rated at least ‘‘A’’ by Standard and Poor’s or ‘‘A’’ by Moody’s.

   (5)  The operator may request and receive the interest accruing on governmental securities held by the Department as the interest becomes due and payable. The operator is not entitled to interest accruing on the securities after forfeiture is declared by the Department, unless the forfeiture declaration is ruled invalid by a court having jurisdiction over the Department and the ruling is final. The Department has the authority to receive interest accruing after declaration of forfeiture and during any period of appeal and hold the interest pending final determination of the Department’s declaration of forfeiture.

   (6)  When negotiable bonds mature or are called, the State Treasurer, at the request of the permittee and upon Department approval, shall convert the negotiable bonds into other negotiable bonds of the classes specified in this subchapter, as designated by the permittee.

Source

   The provisions of this §  271.325 adopted April 8, 1988, effective April 9, 1988, 18 Pa.B. 1681; amended September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179. Immediately preceding text appears at serial page (126146).

Cross References

   This section cited in 25 Pa. Code §  271.313 (relating to form, terms and conditions of the bond or trust); and 25 Pa. Code §  284.641 (relating to bond requirement).

§ 271.326. Phased deposit of collateral.

 (a)  If the Department determines, based upon the approved facility operation plan, that the facility will be accepting municipal waste for a period of at least 10 years from the date of permit issuance or the commencement of acceptance of municipal waste, whichever is later, prior to closure of the facility, a person or municipality may post a collateral bond according to the following requirements:

   (1)  The operator shall submit a collateral bond to the Department, accompanied by sufficient collateral required in this subchapter, and a schedule for deposit of the remaining required collateral.

   (2)  The operator shall deposit with the Department $10,000 or 25% of the total amount of bond determined in this subchapter, whichever is greater, in approved collateral prior to issuance of the permit.

   (3)  The operator shall submit a schedule agreeing to deposit 10% of the remaining amount of bond in approved collateral in each of the next 10 years, or in proportions so that final payment is made by the date required by the Department. The entire bond amount shall be submitted by the operator no later than the actual or expected closure of the facility. Annual payments shall become due on the anniversary date of the issuance of the permit, unless otherwise established by the Department. Payments shall be accompanied by appropriate bond documents required by the Department.

   (4)  Failure or refusal to make annual payments on or before the due date is grounds for forfeiture of the bond.

   (5)  The Department may require additional bonding if the Department determines that a higher bond amount is necessary. The increase in the total bond amount required shall proportionately increase the remaining annual payments. The operator shall submit a new schedule, and the increased portions of payments already made, within 30 days of notice by the Department of the increase in the total bond amount.

 (b)  The operator shall deposit the full amount of bond required for the facility within 30 days of receipt of a written demand by the Department to accelerate deposit of the bond. The Department may make the demand when one of the following occurs:

   (1)  The operator has failed to make a deposit of bond amount when required according to the schedule for the deposits.

   (2)  The operator has violated the requirements of the act, the environmental protection acts, this title, the terms or conditions of the permit or orders of the Department.

   (3)  The actual or expected closure of the facility will occur prior to the expiration of the 10-year period determined under this section.

 (c)  The operator shall survey the facility annually to determine the remaining permitted capacity, and shall notify the Department if the actual or expected closure of the facility will occur prior to the expiration of the 10-year period under this section, or if the facility will reach 50% capacity within 5 years after commencement of acceptance of municipal waste at the facility.

 (d)  The Department will not accept phased deposit of collateral as bond for a facility if one of the following occurs:

   (1)  The operator has failed to pay to the Department, when due, permit fees, fines, penalties or other payments, or has failed to deposit bond amounts with the Department when due.

   (2)  The operator has a pattern or history of violations of the act, the environmental protection acts, this title, the terms and conditions of the permit or orders of the Department which even if later corrected, demonstrates a lack of ability or intention to comply with these requirements.

 (e)  Interest earned by collateral on deposit shall be accumulated and become part of the bond amount until the operator completes deposit of the requisite bond amount in accordance with the schedule of deposit. After the operator completes deposit of the requisite bond amount in accordance with the schedule of deposit, the operator may request the Department for a return of accumulated interest. The Department may return accumulated interest if the return of accumulated interest does not reduce the amount of collateral below the required bond amount.

Source

   The provisions of this §  271.326 adopted April 8, 1988, effective April 9, 1988, 18 Pa.B. 1681; amended September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179. Immediately preceding text appears at serial pages (126146) to (126148).

Cross References

   This section cited in 25 Pa. Code §  271.313 (relating to form, terms and conditions of the bond or trust); 25 Pa. Code §  271.332 (relating to bond and trust amount adjustments); and 25 Pa. Code §  271.333 (relating to failure to maintain adequate bond).

§ 271.327. Surety/collateral combination bond.

 The Department may accept a bond which is comprised of surety and collateral bond instruments otherwise allowed by this subchapter. The instruments shall be construed as part of the entire bond for the facility. The Department may refuse to accept the bond if it determines that the financial guarantee of the bond is unacceptable, or for another reason does not meet the purposes of the act, this article or orders of the Department.

Source

   The provisions of this §  271.327 adopted April 8, 1988, effective April 9, 1988, 18 Pa.B. 1681.

Cross References

   This section cited in 25 Pa. Code §  271.313 (relating to form, terms and conditions of the bond or trust).

§ 271.328. Trust fund for municipally operated landfills.

 (a)  A trust fund established under this subchapter shall meet the following requirements:

   (1)  The trust fund shall be established for the sole purpose of providing funding for completion of final closure of the municipal waste landfill and for the taking of measures that may be necessary for the abatement and prevention of adverse effects on the environment, as required by the Department, in accordance with the act, the environmental protection acts, this title, the terms and conditions of the permit and orders issued by the Department and the closure plan.

   (2)  The trustee shall be a state-chartered or National bank or a financial institution with trust powers or trust company with offices in this Commonwealth and whose trust activities are examined or regulated by a state or Federal agency. The trustee shall have an office located in the county in which the municipality or municipal authority is operating the municipal waste landfill for which the trust fund is established.

     (i)   The trustee may resign by sending written notice to the Department and the municipality or municipal authority, by certified mail, return receipt requested, of its intention to resign. The resignation will not take effect until the following conditions are met:

       (A)   The expiration of a 120-day period after the trustee has provided written notice of its intention to resign.

       (B)   The municipality or municipal authority has appointed a successor trustee and the successor trustee accepts the appointment.

     (ii)   If the municipality or municipal authority fails to appoint a successor trustee or a successor trustee fails to accept the appointment at the expiration of the 120-day period, the trustee may apply to a court of competent jurisdiction for instructions.

   (3)  The trust fund shall be established by the municipality or municipal authority. The trust shall provide that the municipality or municipal authority and the Department are co-beneficiaries under the trust.

   (4)  The trust shall be irrevocable and shall continue until terminated at the written agreement of the municipality or the municipal authority and the Department. A settlor municipality seeking trust termination shall comply with §  271.343 (relating to withdrawals from municipal trust). If the municipality or municipal authority fails or refuses to enter into the written agreement for the termination of the trust, the Department will have the sole power to terminate the trust as provided in §  271.343.

   (5)  The corpus of the trust fund shall be an amount equal to the cost of completing final closure and shall be calculated according to § §  271.331 and 271.332 (relating to bond and trust amount determination; and bond and trust amount adjustments). The trust shall be funded by moneys paid quarterly by the municipality or municipal authority in an amount, determined by the Department, computed on the basis of the cost of completing final closure and levied on each ton or cubic yard of solid waste received at the landfill for the quarter for which the payment is being made.

     (i)   It is not the duty of the trustee to collect from the municipality or municipal authority a quarterly payment required under this section, nor is the trustee responsible for the amount or adequacy of a quarterly payment made by the municipality or municipal authority. The trustee shall send the Department, in writing on a quarterly basis, a statement of the trust account transactions including the amounts received from the municipality or municipal authority and paid into the trust corpus. If the trustee does not receive a quarterly payment within 15 days after the payment is due, the trustee shall promptly notify the Department that it has not received the payment.

     (ii)   Payments made by the municipality or the municipal authority shall consist of cash, bank checks, bank wire transfers or other means of payment acceptable to the trustee.

 (b)  The trustee is authorized to invest and reinvest the principal and income of the trust fund and keep the fund invested as a single fund, without distinction between principal and income. In investing, reinvesting and otherwise managing the trust fund, the trustee shall discharge its duties solely in the interest of the beneficiaries. The trustee shall manage the trust fund with that degree of judgment, skill and care under the circumstances then prevailing which persons of prudence, discretion and intelligence, who are familiar with these matters, exercise in the management of their own affairs not in regard to speculation, but in regard to the permanent disposition of the funds, considering the probable income to be derived therefrom as well as the probable safety of their capital.

 (c)  For purposes of investing or reinvesting the moneys in the trust fund, the trustee is authorized to:

   (1)  Purchase United States Treasury Bills.

   (2)  Purchase short-term obligations of the United States Government or its agencies or instrumentalities.

   (3)  Purchase obligations of the United States of America or its agencies or instrumentalities backed by the full faith and credit of the United States.

   (4)  Purchase obligations of the Commonwealth or its agencies or instrumentalities backed by the full faith and credit of the Commonwealth.

   (5)  Purchase obligations of political subdivisions of the Commonwealth or its agencies or instrumentalities backed by the full faith and credit of the political subdivision.

   (6)  Purchase shares of an investment company registered under the Investment Company Act of 1940 (15 U.S.C.A. § §  80a-1—80a-64), whose shares are registered under the Securities Act of 1933 (15 U.S.C.A. § §  77a—77aa), if the investments of the investment company are those described in this subsection.

   (7)  Invest in time or demand deposits of the trustee to the extent insured by an agency of the Federal or State Government.

 (d)  The trustee may, when a municipality which established the trust fund is a city of the first or second class, purchase commercial paper and prime commercial paper defined as follows:

   (1)  Commercial paper means unsecured promissory notes issued at a discount from par or on an interest bearing basis by an industrial, common carrier, public utility, finance company, real estate investment trust, commercial bank holding companies, or corporations whose credit has been approved by Moody’s Investors Service, Incorporated; Standard and Poor’s Corporation; Fitch Investors Services, Incorporated; or their successors.

   (2)  The trustee may not purchase commercial paper without first determining or obtaining the following:

     (i)   The commercial paper is rated Prime-1, Prime 1-LOC or Prime 1 by Moody’s Investors Service, A-1 or A-2 by Standard and Poor’s, Fitch 1 by Fitch Investors Service, or the equivalent.

     (ii)   The certification or other evidence the commercial paper proposed to be delivered is not subordinate to other debt of the issuer.

     (iii)   The certification or other evidence there is no litigation pending or threatened that would affect the commercial paper.

     (iv)   The certification or other evidence the issuer is not in default as to payment of principal and interest on its outstanding obligations.

     (v)   The certification or other evidence the issuer is incorporated in the United States, is transacting business within the United States and has assets of $1 billion or more, or is a wholly owned subsidiary of a corporation which is incorporated in the United States, which is transacting business within the United States and has assets of $1 billion or more.

 (e)  The trustee is authorized to hold cash awaiting investment or distribution for a reasonable period of time.

 (f)  The trust agreement shall be provided by the municipality or municipal authority to the trustee. The wording of the trust agreement shall be submitted to the municipality or municipal authority on a form prepared and approved by the Department. An original of the trust agreement shall be submitted to the Department, accompanied by a formal certification of acknowledgement.

 (g)  The trustee shall annually, at least 30 days prior to the anniversary date of the establishment of the trust fund, furnish to the municipality or municipal authority and the Department a statement confirming the value of the trust fund, and the dates and amounts of the payments into the trust from the municipality and withdrawals for administration or a purpose other than investment or reinvestment. The trustee shall value securities in the trust fund at the lesser of market or par value as of no more than 60 days prior to the anniversary date.

Source

   The provisions of this §  271.328 adopted September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179.

Cross References

   This section cited in 25 Pa. Code §  271.301 (relating to scope); 25 Pa. Code §  271.311 (relating to new facilities); 25 Pa. Code §  271.312 (relating to existing facilities); 25 Pa. Code §  271.313 (relating to form, terms and conditions of the bond or trust); and 25 Pa. Code §  271.354 (relating to miscellaneous provisions for municipal trusts).

BOND AND TRUST REQUIREMENTS—AMOUNT


§ 271.331. Bond and trust amount determination.

 (a)  The total corpus amount of the trust established for a municipally operated landfill under this subchapter shall be calculated in the same manner as a bond under this subchapter. A person or municipality shall calculate the proposed amount of total bond liability or the total corpus amount of the trust established for a municipality operated landfill based upon the total estimated cost to the Commonwealth for the following:

   (1)  To complete final closure of the facility under the act, the environmental protection acts, this title, the terms and conditions of the permit and orders issued by the Department.

   (2)  To take measures necessary to prevent adverse effects upon public health and safety, public welfare and the environment, during operation and after closure, until released as provided by this subchapter.

 (b)  A person or municipality required to file a bond or establish a trust under this subchapter, shall prepare a written estimate of the cost of closing the facility under this article, and other related costs necessary to comply with the requirements of this article, for the purpose of determining the bond or trust corpus amount required by this subchapter. The related costs shall include direct and indirect expenses for taking measures during the period preceding final closure to prevent and correct adverse environmental affects from the operation of the facility.

   (1)  The cost estimate shall incorporate the likely increase in cost in the future, including inflation, as required by the Department.

   (2)  The Department may require adjustments to the cost estimate to meet the requirements of this chapter.

   (3)  The operator shall revise the cost estimate when a change in the closure plan or in the measures necessary to prevent adverse environmental affects increase the prior cost estimate.

   (4)  The written cost estimate shall be submitted to the Department on a form prepared by the Department.

   (5)  Within 90 days after closure of the facility, the operator shall prepare an updated written cost estimate. A new bond shall be submitted to the Department within 90 days after closure if the updated cost estimate indicates an increase from the prior estimate required by the Department. The bond shall reflect the updated cost estimate.

 (c)  The bond and trust corpus amount shall be calculated using guidelines prepared by the Department and shall be based on factors which include, but are not limited to, the following:

   (1)  The costs to the Commonwealth to conduct closure and postclosure care activities at the point in the life of the facility when costs to the Commonwealth would be greatest, as determined by the cost estimate for closure and postclosure care under this section, as well as costs of monitoring, sampling and analysis, soil and leachate analysis, facility security measures, remedial abatement measures and postclosure restoration and maintenance measures.

   (2)  The nature and size of the facility and type of operation.

   (3)  The quantity, type and nature of the waste to be managed at the facility.

   (4)  The costs related to size of the surface area, the topography and geology of the area and the land uses around the facility.

   (5)  The additional estimated costs to the Department which may arise from applicable public contracting requirements or the need to bring personnel and equipment to the permit area after its abandonment by the operator to perform restoration and abatement work.

   (6)  The additional estimated costs incident to or necessary and proper for the satisfactory completion of the requirements of the act, the environmental protection acts, this title, the terms and conditions of the permit and orders of the Department.

   (7)  The additional estimated cost for at least the next 3 years which is anticipated to be caused by inflation, determined by averaging the annual Implicit Price Deflator for Gross National Product published by the United States Commerce Department, or a superseding standard, for at least the prior 3 years.

   (8)  The compliance history of the operator, applicant, permittee and related parties, in § §  271.124 and 271.125 (relating to identification of interests; and compliance information).

 (d)  The bond and trust corpus amount shall cover areas where municipal waste disposal or processing activities are to be conducted.

 (e)  The minimum bond or trust corpus amount is $10,000.

 (f)  The Department will review the bond and trust corpus amount calculated by the operator and will not issue a permit, approve a closure plan or otherwise authorize operation of municipal waste processing or disposal facilities under this article prior to approval of the bond or trust corpus amount.

Source

   The provisions of this §  271.331 adopted April 8, 1988, effective April 9, 1988, 18 Pa.B. 1681; amended September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179. Immediately preceding text appears at serial pages (126148) to (126150).

Cross References

   This section cited in 25 Pa. Code §  271.311 (relating to new facilities); 25 Pa. Code §  271.312 (relating to existing facilities); 25 Pa. Code §  271.328 (relating to trust fund for municipally operated landfills); 25 Pa. Code §  271.332 (relating to bond and trust amount adjustments); 25 Pa. Code §  271.341 (relating to release of bonds); 25 Pa. Code §  271.343 (relating to withdrawals from municipal trust); 25 Pa. Code §  272.104 (relating to withdrawals from trust fund); 25 Pa. Code §  273.313 (relating to annual operation report); 25 Pa. Code §  275.222 (relating to annual operation report); 25 Pa. Code §  277.312 (relating to annual operation report); 25 Pa. Code §  279.252 (relating to annual operation report); 25 Pa. Code §  281.272 (relating to annual operation report); and 25 Pa. Code §  283.262 (relating to annual operation report).

§ 271.332. Bond and trust amount adjustments.

 (a)  The operator shall submit bond documents required by the Department to increase the total bond liability, and deposit additional bond amounts, upon demand by the Department under §  271.333 (relating to failure to maintain adequate bond), or if additional bond amounts are required under this chapter, including § §  271.326 and 271.331 (relating to phased deposit of collateral; and bond and trust amount determination).

 (b)  The Department will require an operator to deposit additional bond or trust corpus amounts when the existing bond or trust corpus does not meet the requirements of this subchapter, including, but not limited to, the following:

   (1)  Inflationary cost factors have resulted in a new cost estimate which exceeds the estimate used for the original bond amount determination.

   (2)  The permit is to be renewed or reissued, or is subject to a major permit modification or the bond on deposit is to be replaced.

   (3)  The Department otherwise determines that the existing total bond liability amount does not meet the purposes of the act, the environmental protection acts, this title, the permit or orders of the Department.

 (c)  Periodically after the date on which the bond was required to be submitted under this subchapter, the Department may determine the adequacy of bond amount requirements for municipal waste processing or disposal facilities and, if necessary, require additional bond amounts.

 (d)  A request for reduction of the required bond will be considered a request for bond release under §  271.341 (relating to release of bonds).

Source

   The provisions of this §  271.332 adopted April 8, 1988, effective April 9, 1988, 18 Pa.B. 1681; amended September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179; amended December 22, 2000, effective December 23, 2000, 30 Pa.B. 6685. Immediately preceding text appears at serial page (208081).

Cross References

   This section cited in 25 Pa. Code §  271.328 (relating to trust funds for municipally operated landfills); and 25 Pa. Code §  271.341 (relating to release of bonds).

§ 271.333. Failure to maintain adequate bond.

 (a)  The operator shall maintain a bond in an amount and with sufficient guarantees as provided by this subchapter.

 (b)  If a permittee fails to post additional bond within 90 days after receipt of a demand by the Department for additional bond amounts under this subchapter or fails to make timely deposits of bond under the schedule submitted under §  271.326 (relating to phased deposit of collateral), the Department will take appropriate enforcement action, including issuing of a notice of violation to the operator. If the operator fails to deposit the required bond amount within 15 days of a notice of violation, the Department will issue a cessation order for the municipal waste processing and disposal activities conducted by the operator. The Department may take additional actions that are appropriate, including suspending or revoking permits and assessment of civil penalties.

 (c)  Failure of the operator to maintain adequate bond under this chapter constitutes grounds for forfeiture of the existing bonds filed with the Department. Monies collected on bonds forfeited under this section shall be deposited with the Treasurer of the Commonwealth, who shall hold the same in the name of the Commonwealth until the Department determines that the bonds would otherwise be released under §  271.341 (relating to release of bonds), or that there are other grounds for forfeiture under §  271.351 (relating to forfeiture determination).

   (1)  If the bonds are releasable, the moneys may be returned to the surety, banking institution or operator, as appropriate, in a manner and under conditions determined by the Department.

   (2)  If there are other grounds for forfeiture, the Department will deposit the collected monies into the Solid Waste Abatement Fund for the purposes specified in §  271.352 (relating to forfeiture procedures).

 (d)  If a surety company that had provided surety bonds, or a bank that had provided certificates of deposit or letters of credit for an operator, fails in business, enters into bankruptcy or liquidation, has its license suspended or revoked or for other reasons indicates an inability or unwillingness to provide an adequate financial guarantee of the obligations under the bond, the Department will take appropriate enforcement action, including issuance of a notice of violation to the operator requiring that acceptable replacement bonds be submitted for affected permits under this subchapter. If the operator fails to correct the violation within 45 days of notice, the Department will issue a cessation order for the operator’s and related parties’ permits. The Department may take other action as is appropriate. This subsection does not excuse the operator from the requirements of this subchapter, including the requirement to file a bond approved by the Department prior to conducting municipal waste disposal or processing activities under §  271.311 (relating to new facilities).

Source

   The provisions of this §  271.333 adopted April 8, 1988, effective April 9, 1988, 18 Pa.B. 1681.

Cross References

   This section cited in 25 Pa. Code §  271.332 (relating to bond and trust amount adjustments).

BOND AND TRUST REQUIREMENTS—RELEASE


§ 271.341. Release of bonds.

 (a)  An operator seeking a termination of a trust for a municipally operated landfill established under §  271.301(c) (relating to scope) or release of a bond previously submitted to the Department shall file a written request with the Department for termination of the trust or for release of all or part of the bond amount posted for the facility as part of a request for bond or trust adjustment under §  271.332 (relating to bond and trust amount adjustments), or after certification of closure of the facility. Requests for trust termination or for withdrawals from trusts for municipally operated landfills established under §  271.301(c) shall comply with the requirements of §  271.343 (relating to withdrawals from municipal trust).

 (b)  The application for a bond release shall contain the following:

   (1)  The name of the operator and identification of the facility for which the bond release is sought.

   (2)  The total amount of bond in effect for the facility and the amount for which release is sought.

   (3)  A detailed explanation of why the bond release is requested, including, but not limited to, completion of a measure carried out in preparation for closure as defined in the closure plan or otherwise discernible upon inspection of the facility, closure of the facility, completion of postclosure measures, abatement measures taken and amendments to the permit or changes in the facts or assumptions made during the bond amount determination which demonstrate and would authorize a release of part or all of the bond deposited for the facility.

   (4)  A revised cost estimate for closure and postclosure care under §  271.331 (relating to bond and trust amount determination).

 (c)  Upon receipt of a written request for bond release under this section, the Department will inspect the facility to verify the accuracy of the information provided in the application for the bond release by the operator, as required by §  271.342 (relating to final closure certification).

 (d)  The Department will evaluate the bond release request as if it were a request for a new bond amount determination under §  271.331. If the new bond amount determination would require less bond amount for the facility than the amount already on deposit, the Department may release the portion of the bond amount which is not required for the facility, subject to the public notice and comment provisions of this chapter. If the new bond amount determination requires an additional amount of bond for the facility, the Department will require the additional amount to be deposited for the facility.

 (e)  A request for a bond release under this section upon final closure, or anytime after final closure, shall be, for the purpose of providing public notice and comment, considered a major permit modification and shall satisfy the public notice and comment requirements for major permit modifications under § §  271.141—271.143 (relating to public notice by applicant; public notice by Department; and public comments) unless waived, in writing, by the Department. The Department may waive the public notice and comment requirement for a particular bond release when a definite schedule of bond release has been set forth in an approved closure plan, a permit or an order of the Department, and the closure plan, permit or order has met the public notice and comment requirements of this chapter.

 (f)  Upon receipt of a written request for a bond release under this section, the Department will, within 12 months prior to the expiration of the 10-year period following final closure, conduct a final inspection of the facility. The purpose of the inspection is to determine compliance with the act, the environmental protection acts, this title, the terms and conditions of the permit, orders of the Department and the terms and conditions of the bond. Based upon this determination, the Department will either forfeit the bond prior to the expiration of the 10-year period following final closure or release the bond at the expiration of the 10-year period following final closure.

 (g)  The following apply with regard to bond release:

   (1)  The Department will not release a bond amount deposited for a facility if the release would reduce the total remaining amount of bond to an amount which would be insufficient for the Department to complete closure and postclosure care, including long term maintenance of remediation measures, and to take measures that are necessary to prevent adverse effects upon the environment or public health, safety or welfare under the act, the environmental protection acts, this title, the terms and conditions of the permits and orders of the Department.

   (2)  The release of a bond by the Department does not constitute a waiver or release of other liability provided in law, nor does it abridge or alter rights of action or remedies of a person or municipality presently or prospectively existing in equity or under criminal and civil common or statutory law. The release of a bond does not discharge an owner or an operator from liability to restore the groundwater to remediation standards and to maintain groundwater quality, at a minimum, at those levels.

   (3)  The Department may grant bond releases immediately upon final closure, for facilities other than landfills, if it is clearly demonstrated that further monitoring, restoration or maintenance is not necessary to protect the public health, safety and welfare and the environment.

Source

   The provisions of this §  271.341 adopted April 8, 1988, effective April 9, 1988, 18 Pa.B. 1681; amended September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179; amended December 22, 2000, effective December 23, 2000, 30 Pa.B. 6685. Immediately preceding text appears at serial pages (208083) to (208084).

Notes of Decisions

   Ten-year duration of liability runs from final closure. Commonwealth v. Mayer, 569 A.2d 415 (Pa. Cmwlth. 1990).

Cross References

   This section cited in 25 Pa. Code §  271.314 (relating to duration of liability); 25 Pa. Code §  271.321 (relating to special terms and conditions for surety bonds); 25 Pa. Code §  271.332 (relating to bond and trust amount adjustments); and 25 Pa. Code §  271.333 (relating to failure to maintain adequate bond).

§ 271.342. Final closure certification.

 (a)  If the operator of a municipal waste processing or disposal facility believes that closure and postclosure requirements applicable to the facility have been met, the operator may file a request for final closure certification with the Department.

 (b)  The Department will not issue a final closure certification unless the operator demonstrates that:

   (1)  The applicable operating requirements of the act, the environmental protection acts, this title, the permit, the approved closure plan and orders of the Department have been complied with.

   (2)  For a municipal waste landfill permitted on or after December 23, 2000, one of the following remediation standards is met and maintained at and beyond 150 meters of the perimeter of the permitted disposal area or at and beyond the property boundary, whichever is closer:

     (i)   For constituents for which an MCL has been promulgated under the Federal Safe Drinking Water Act or the Pennsylvania Safe Drinking Water Act (42 U.S.C.A. § §  300f—300j-18; and 35 P. S. § §  721.1—721.17), the MCL for that constituent.

     (ii)   For constituents for which MCLs have not been promulgated, the background standard for the constituent.

     (iii)   For constituents for which the background standard is higher than the MCL or alternative groundwater protection standard identified under subparagraph (iv), the background standard.

     (iv)   For constituents for which MCLs have not been established, an alternative groundwater protection standard that satisfies the following criteria:

       (A)   The level is derived in a manner consistent with Department guidelines for assessing the health risks of environmental pollutants.

       (B)   The level is based on scientifically valid studies conducted in accordance with good laboratory practice standards (40 CFR Part 792 (relating to good laboratory practice standards)) promulgated under the Toxic Substances Control Act (15 U.S.C.A. § §  2601—2692) or other scientifically valid studies approved by the Department.

       (C)   For carcinogens, the level represents a concentration associated with an excess lifetime cancer risk level (due to continuous lifetime exposure) within the 1 x 10-4 to 1 x 10-6 range.

       (D)   For systemic toxicants, the level represents a concentration to which the human population (including sensitive subgroups) could be exposed on a daily basis that is likely to be without appreciable risk of deleterious effects during a lifetime. For purposes of this clause, systemic toxicants include toxic chemicals that cause effects other than cancer or mutation.

   (3)  For a municipal waste landfill that received waste between October 9, 1993, and December 23, 2000, one of the following is met and maintained:

     (i)   Groundwater remediation standards, including points of compliance, identified in a closure plan approved prior to December 23, 2000.

     (ii)   Groundwater remediation standards identified in paragraph (2), including the points of compliance.

   (4)  For other facilities, one of the following groundwater remediation standards is met and maintained at the identified compliance points:

     (i)   The Statewide health standard at and beyond the property boundary.

     (ii)   The background standard at each well selected to determine the extent of contamination, as identified in §  273.286(c)(1) (relating to groundwater assessment plan).

     (iii)   The site-specific standard at and beyond the property boundary.

   (5)  No further remedial action, maintenance or other activity by the operator is necessary to continue compliance with the act, the environmental protection acts, this title, the permit, the approved closure plan and orders of the Department.

   (6)  The facility is not causing adverse effects on the environment and it is not causing a nuisance.

 (c)  For facilities other than municipal waste landfills, the Department may approve a compliance point beyond the property boundary up to a water source for measuring compliance with secondary contaminants under subsection (b)(4)(i) or (iii).

 (d)  Upon a request for final closure certification, the Department will inspect the facility to verify that final closure has been completed as provided in subsection (b).

 (e)  The date of the Department’s final closure certification shall be the date of commencement of the 10-year bond liability period following final closure.

 (f)  The final closure certification is not a guarantee of future performance nor does it constitute a waiver or release of bond liability or other liability existing in law or equity for adverse environmental effects or conditions of noncompliance existing at the time of the notice or which might occur at a future time, for which the operator remains expressly liable. The issuance of a final closure certification does not discharge an owner or operator from liability to restore the groundwater to remediation standards and to maintain groundwater quality, at a minimum, at those levels.

 (g)  If after the issuance of a certification of final closure, the Department determines that additional postclosure measures are required to abate or prevent adverse effects upon the environment or the public health, safety and welfare, the Department will issue a written notice to the operator setting forth the schedule of measures to be taken to bring the facility into compliance. The measures include, but are not limited to, the applicable requirements of this article.

 (h)  If, after the issuance of a certification of final closure, the Department determines that the level of risk is increased beyond the acceptable range at a facility due to substantial changes in exposure conditions, such as in a change in land use from a nonresidential to a residential use, or new information is obtained about a substance associated with the facility which revises exposure assumptions beyond the acceptable range, additional remediation shall be required.

 (i)  For purposes of this section, “property boundary” is the delineation of the parcel of land as described in the deed existing on the date the facility ceases to accept waste.

Source

   The provisions of this §  271.342 adopted April 8, 1988, effective April 9, 1988, 18 Pa.B. 1681; amended December 22, 2000, effective December 23, 2000, 30 Pa.B. 6685. Immediately preceding text appears at serial pages (208085) to (208086).

Cross References

   This section cited in 25 Pa. Code §  271.113 (relating to closure plan); 25 Pa. Code §  271.314 (relating to duration of liability); 25 Pa. Code §  271.341 (relating to release of bonds); 25 Pa. Code §  271.343 (relating to withdrawals from municipal trust); 25 Pa. Code §  271.372 (relating to conditions of insurance); 25 Pa. Code §  271.381 (relating to financial assurances requirements); 25 Pa. Code §  272.106 (relating to termination of trust); 25 Pa. Code §  277.322 (relating to closure); 25 Pa. Code §  279.262 (relating to cessation of operations); 25 Pa. Code §  281.282 (relating to cessation of operations); and 25 Pa. Code §  283.272 (relating to cessation of operations).

§ 271.343. Withdrawals from municipal trust.

 (a)  Except for purposes of investing and reinvesting the moneys in the trust fund by the trustee, no withdrawals may be made from the trust fund prior to certification by the Department of the abandonment of the landfill under §  271.351 (relating to forfeiture determination) or prior to the certification of closure of the landfill under §  273.203(a)(10) (relating to certification). The Department will provide the trustee with a copy of the certification of abandonment.

 (b)  The trustee shall withdraw and pay over moneys from the trust fund only upon receipt of a written request of the municipality or municipal authority. The trustee may not honor the written request of the municipality or municipal authority unless it has been approved by the Department.

 (c)  Written requests to the Department to withdraw and pay over moneys from the trust fund to the operator shall include the following:

   (1)  The name of the operator and the identification of the facility for which withdrawal is sought.

   (2)  The total amount of the trust corpus for the facility, the amount of the withdrawal request and the balance remaining in the trust.

   (3)  A detailed explanation of why the withdrawal is requested, including, but not limited to, completion of a stage of postclosure as defined in the closure plan or otherwise discernible upon inspection of the facility, completion of postclosure remedial measures, abatement measures taken and amendments to the permit or changes in the facts or assumptions made during the trust corpus amount determination.

   (4)  A revised cost estimate for closure and postclosure care under §  271.331 (relating to bond and trust amount determination) based on the costs to complete final closure after the completion of the activities specified in the request as detailed in paragraph (3).

 (d)  Written requests made of the trustee to withdraw and pay over moneys from the trust fund shall include the following:

   (1)  The name of the operator and the identification of the facility for which withdrawal is sought.

   (2)  The total amount of the trust corpus for the facility, the amount of the withdrawal request and the balance remaining in trust.

   (3)  A copy of the Department’s written approval.

 (e)  When a written request to terminate or withdraw and pay over moneys from the trust fund is received by the trustee or the Department, the recipient shall immediately provide a copy of the request to the municipality in which the landfill is located.

 (f)  The trustee, immediately on preparation, shall provide a copy of a document effectuating a withdrawal from the trust fund to the Department and to the municipality in which the landfill is located.

 (g)  The Department will notify the trustee, in writing, of the Department’s certification of final closure of the landfill under §  271.342 (relating to final closure certification). Upon receipt of this notification, the trustee shall take the necessary steps to terminate the trust fund. Upon termination of the trust fund, remaining trust property, less final trust administration expenses of the trustee, shall be returned to the settlor municipality or municipal authority.

Source

   The provisions of §  271.343 adopted September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179; amended December 22, 2000, effective December 23, 2000, 30 Pa.B. 6685. Immediately preceding text appears at serial pages (208086) to (208087).

Cross References

   This section cited in 25 Pa. Code §  271.328 (relating to trust fund for municipally operated landfills); and 25 Pa. Code §  271.341 (relating to release of bonds).

BOND AND TRUST REQUIREMENTS—FORFEITURE


§ 271.351. Forfeiture determination.

 The Department will forfeit a collateral or surety bond, or certify the abandonment of a municipally operated landfill for which a trust has been established under §  271.301(c) (relating to scope) and this subchapter, when it determines that one of the following has occurred:

   (1)  The operator has violated or continues to violate the terms or conditions of the bond.

   (2)  The operator fails or refuses to comply with the act, the environmental protection acts, this title, an order of the Department, the terms or conditions of the permit or the closure plan.

   (3)  The permit for the facility under bond or trust has been suspended or revoked.

   (4)  The operator has failed to comply with a compliance schedule in an adjudicated proceeding, consent order or agreement approved by the Department under the act.

   (5)  The Department determines that the operator cannot demonstrate or prove its intention or ability to continue to operate in compliance with the act, the environmental protection acts, this title or the conditions of the permit.

   (6)  The operator has failed or continues to fail to take measures determined necessary by the Department to prevent adverse effects upon the environment.

   (7)  The operator has abandoned the facility without providing closure or postclosure care, or has otherwise failed to properly achieve final closure of the facility under the act, the environmental protection acts, this title, the terms and conditions of the permit or orders of the Department.

   (8)  The operator fails or refuses to comply with postclosure measures according to schedules or plans approved by the Department.

   (9)  The operator or financial institution has become insolvent, failed in business, had a delinquency proceeding initiated under Article V of The Insurance Department Act of one thousand nine hundred and twenty-one (40 P. S. § §  221.1—221.63), had a receiver appointed by the court or had action initiated to suspend, revoke or refuse to renew the license or certificate of authority of the financial institution, or a creditor of the permittee has attached or executed a judgment against the permittee’s equipment, materials or facilities at the permit area or on the collateral pledged to the Department; and the operator or financial institution cannot demonstrate or prove the ability to continue to operate in compliance with, or otherwise meet the requirements of the act, the environmental protection acts, this title, the terms and conditions of the permit and orders of the Department.

Source

   The provisions of this §  271.351 adopted April 8, 1988, effective April 9, 1988, 18 Pa.B. 1681; amended September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179. Immediately preceding text appears at serial pages (126155) to (126156).

Cross References

   This section cited in 25 Pa. Code §  271.321 (relating to special terms and conditions for surety bonds); 25 Pa. Code §  271.333 (relating to failure to maintain adequate bond); 25 Pa. Code §  271.343 (relating to withdrawals from municipal trust); 25 Pa. Code §  271.353 (relating to certification procedures for municipally operated landfills); and 25 Pa. Code §  271.376 (relating to maintenance of insurance coverage).

§ 271.352. Forfeiture procedures.

 (a)  If the Department declares a bond forfeit, it will:

   (1)  Send written notification to the operator, the surety on the bond, and every municipality in which a part of the facility is located, of the Department’s determination to declare the bond forfeit and the reasons for the forfeiture.

   (2)  Advise the operator and surety of the right to appeal to the Environmental Hearing Board under section 1921-A of The Administrative Code of 1929 (71 P. S. §  510-21).

   (3)  Proceed to collect on the bond as provided by applicable laws for the collection of defaulted bonds or other debts.

 (b)  If the Department declares a collateral bond forfeited, it will pay, or direct the State Treasurer to pay, the collateral funds into the Solid Waste Abatement Fund. If upon proper demand and presentation, the banking institution or other person or municipality which issued the collateral refuses to pay the Department the proceeds of a collateral undertaking such as a certificate of deposit, letter of credit or government negotiable bond, the Department will take appropriate steps to collect the proceeds.

 (c)  If the Department declares a surety bond forfeited, it will certify the forfeiture to the Office of Attorney General which will proceed to enforce and collect the amount forfeited. This amount will, upon collection, be paid into the Solid Waste Abatement Fund.

 (d)  Moneys received from the forfeiture of bonds, and interest accrued, will be used first to accomplish final closure of, and to take steps necessary and proper to remedy and prevent adverse environmental effects from, the municipal waste processing or disposal facility upon which liability was charged on the bonds. Excess monies may be used for other purposes consistent with the Solid Waste Abatement Fund and the act.

Source

   The provisions of this §  271.352 adopted April 8, 1988, effective April 9, 1988, 18 Pa.B. 1681.

Cross References

   This section cited in 25 Pa. Code §  271.321 (relating to special terms and conditions for surety bonds); and 25 Pa. Code §  271.333 (relating to failure to maintain adequate bond).

§ 271.353. Certification procedures for municipally operated landfills.

 (a)  For municipally operated landfills for which a trust is posted under §  271.301(c) (relating to scope) and this subchapter, the Department will certify to the trustee, in writing, that the trust has been abandoned under §  271.351 (relating to forfeiture determination). The Department will not make the certification sooner than 30 days after the Department has provided written notice to the municipality or municipal authority and the trustee of the Department’s intention to make the certification.

 (b)  Upon the trustee’s receipt of the certification, all rights, title and interest in the property of the trust shall be vested in the Department. The Department may direct the trustee to make disbursements from the trust fund as may be necessary to complete final closure of the landfill and prevent or abate adverse effect on the environment, or direct the trustee to take the necessary steps to terminate the trust and pay to the Department moneys remaining in the trust together with other property of the trust, less the trustee’s final administration expenses. This amount will be paid into the Solid Waste Abatement Fund, to be used solely for abatement, remediation, closure, postclosure care, monitoring and related costs for that particular landfill.

Source

   The provisions of this §  271.353 adopted September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179.

§ 271.354. Miscellaneous provisions for municipal trusts.

 Under §  271.328(a)(5) (relating to trust fund for municipally operated landfills), if the trustee notifies the Department that the quarterly payment due from the municipality or municipal authority has not been received by the trustee, the Department will immediately, in writing, notify the municipality or municipal authority that it shall pay to the trustee the quarterly payment due within 15 days of the Department’s notification. If the municipality or municipal authority fails or refuses to pay to the trustee the quarterly payment at the expiration of the 15-day period, the Department will proceed to collect the quarterly payment in a manner provided by law.

Source

   The provisions of this §  271.354 adopted September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179.

BOND AND TRUST REQUIREMENTS—OTHER PROVISIONS


§ 271.361. Replacement of existing bond.

 (a)  The Department may allow an operator to replace an existing surety or collateral bond with another surety or collateral bond, if the liability which has accrued against the bond, the operator and the facility is transferred to the replacement bond. The replacement bond shall include an endorsement by the operator acknowledging the retroactivity of the liability to the date of issue of the original municipal waste management permit or a prior date determined by the Department. The bond amount for this replacement bond will be determined under this subchapter, but may not be less than the amount on deposit with the Department.

 (b)  The Department will not release existing bonds until the operator has submitted and the Department has approved acceptable replacement bonds. A replacement of bonds under this section does not constitute a release of bond under this subchapter.

Source

   The provisions of this §  271.361 adopted April 8, 1988, effective April 9, 1988, 18 Pa.B. 1681.

Cross References

   This section cited in 25 Pa. Code §  271.321 (relating to special terms and conditions for surety bonds).

§ 271.362. Reissuance of permit.

 (a)  Before an existing permit is reissued under §  271.221 (relating to permit reissuance), the applicant for permit reissuance shall submit an approved bond, in an appropriate amount determined by the Department under this subchapter but not less than the amount of bond on deposit with the Department, assuming accrued liability for the facility. The bond shall include an endorsement acknowledging the retroactivity of liability upon the bond to the date of issue of the original permit, or a prior date determined by the Department.

 (b)  An applicant for permit reissuance under §  271.221 which is not a municipality or municipal authority applying to operate an existing municipal waste landfill shall comply with bond requirements of this subchapter, even if a trust under §  271.301(c) (relating to scope) and this subchapter has previously been established for the facility.

 (c)  An applicant for permit reissuance under §  271.221 which is a municipality or municipal authority applying to operate an existing municipal waste landfill which has never received residual or other nonmunicipal waste for disposal, and for which a bond has previously been posted under §  271.301(c) and this subchapter, may either post a bond or establish a trust under this subchapter.

Source

   The provisions of this §  271.362 adopted April 8, 1988, effective April 9, 1988, 18 Pa.B. 1681; amended September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179. Immediately preceding text appears at serial page (126158).

§ 271.363. Incapacity of operators or financial institutions.

 (a)  An operator shall notify the Department by certified mail within 10 days after commencement of a voluntary or involuntary proceeding under 11 U.S.C.A. § §  101—1330, known as the Federal Bankruptcy Act, naming the operator as debtor.

 (b)  A financial institution which issues a surety bond, letter of credit or certificate of deposit under this subchapter shall notify the Department, when permissible under the law, by certified mail within 10 business days after:

   (1)  The financial institution has been declared insolvent and a receiver appointed by a state or Federal regulatory authority having jurisdiction in the matter or the commencement of a voluntary or involuntary proceeding under 11 U.S.C.A. § §  101—1330, known as the Federal Bankruptcy Act.

   (2)  An action alleging violation of regulatory requirements which could result in suspension or revocation of the authority of the financial institution to issue the instruments or to continue in business.

 (c)  Notice to the Department shall be by certified mail and shall be given by the financial institution within 10 days of the receipt of the notice by the financial institution from a regulatory agency having jurisdiction over the financial institution.

Source

   The provisions of this §  271.363 adopted April 8, 1988, effective April 9, 1988, 18 Pa.B. 1681; amended September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179. Immediately preceding text appears at serial page (126158).

§ 271.364. Preservation of remedies.

 Remedies provided or authorized by law for violation of statutes, including but not limited to, the act, the applicable environmental protection acts, this title and terms and conditions of permits and orders of the Department, are expressly preserved. Nothing in this subchapter is an exclusive penalty or remedy for the violations. No action taken under this subchapter waives or impairs another remedy or penalty provided in law or equity.

Source

   The provisions of this §  271.364 adopted April 8, 1988, effective April 9, 1988, 18 Pa.B. 1681.

PUBLIC LIABILITY INSURANCE REQUIREMENTS


§ 271.371. Insurance requirement.

 (a)  A person or municipality that has not submitted proof of insurance under the act may not dispose or process municipal waste unless the person or municipality has in effect financial assurances providing for ordinary liability and covering third-party claims for property damage and bodily injury as provided by this section.

 (b)  An applicant for a permit to conduct municipal waste processing or disposal activities, and a person or municipality that submits a closure plan under §  271.113 (relating to closure plan), shall submit to the Department proof that it has in effect financial assurances providing for ordinary liability covering third-party claims for property damage and bodily injury.

   (1)  The insurance policy shall be effective prior to the initiation of municipal waste processing or disposal activities under the permit, or, for a closure plan submitted under §  271.113, prior to the initiation of the closure plan.

   (2)  The Department may accept as proof of insurance an insurance policy issued to a person or municipality that operates the facility who is not the permittee, in lieu of a policy issued to the permittee, if the insurance policy meets the requirements of this subchapter.

 (c)  An applicant for a permit for a municipal waste processing or disposal facility shall fulfill the requirement under this section by means of commercial insurance as specified in this section and § §  271.372—271.376. An applicant which is a municipality or municipal authority, applying for a permit for a municipal waste processing or disposal facility which will be owned and operated by the applicant may fulfill the requirement under this section by either of the following additional means:

   (1)  An insurance pool, as specified in §  271.377 (relating to insurance pool).

   (2)  Self-insurance, as specified in §  271.378 (relating to self-insurance).

 (d)  An applicant for a permit for a municipal waste processing or disposal facility owned and operated by a department or an agency of the United States or the Commonwealth may fulfill the requirement under this section by means of commercial insurance as specified in this section and § §  271.372—271.376, self-insurance allowed by Federal or state law, or additional means approved by the Department. The minimum amount of liability coverage for departments and agencies of the Commonwealth may not exceed the liability limits of 42 Pa.C.S. Chapter 85 (relating to matters affecting government units).

 (e)  Permit applications for new facilities shall certify that the applicant has in force, or will, prior to initiation of operations, financial assurance that complies with the requirements of this subchapter.

Source

   The provisions of this §  271.371 adopted April 8, 1988, effective April 9, 1988, 18 Pa.B. 1681; amended September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179. Immediately preceding text appears at serial pages (126158) to (126159).

Cross References

   This section cited in 25 Pa. Code §  271.377 (relating to insurance pool); 25 Pa. Code §  271.378 (relating to self-insurance); 25 Pa. Code §  271.379 (relating to combination of financial assurance requirements); 25 Pa. Code §  271.388 (relating to insurance pool—municipalities and municipal authorities); 25 Pa. Code §  271.392 (relating to commercial insurance; general requirements—persons other than municipalities and municipal authorities); 25 Pa. Code §  273.313 (relating to annual operation report); 25 Pa. Code §  275.222 (relating to annual operation report); 25 Pa. Code §  277.312 (relating to annual operation report); 25 Pa. Code §  279.252 (relating to annual operation report); 25 Pa. Code §  281.272 (relating to annual operation report); and 25 Pa. Code §  283.262 (relating to annual operation report).

§ 271.372. Conditions of insurance.

 (a)  Except for operators of municipal waste agricultural utilization sites under Chapter 275 (relating to land application of sewage sludge), the operator shall maintain financial assurances during operation of the facility and until the Department issues a final closure certification under §  271.342 (relating to final closure certification) which satisfy the following conditions:

   (1)  Commercial insurance provided to satisfy the financial assurance requirement of this section shall follow the standard commercial or comprehensive general liability policy forms approved by the Insurance Department, and shall include coverage for property damage and bodily injury to third persons.

   (2)  The insurance policy shall specify that per occurrence and aggregate limits apply to property damage and bodily injury combined.

   (3)  An insurance policy shall be issued by an insurer having a certificate of authority and a licensed agent authorized to transact the business of insurance in this Commonwealth by the Insurance Department. Insurance may be provided by an excess or surplus lines insurer if the insurer is approved by the Insurance Department.

   (4)  The full policy amount shall be applicable to each facility covered and operated by the operator. There may be no proration of the policy amount of coverage among facilities.

   (5)  The insurance policy shall provide that the insurer shall notify the Department by certified mail whenever a substantive change is made in the policy, including policy amounts, scope of coverage, tail period, claims procedures, definitions of occurrences or claims, or another provision related to the requirements of this subchapter.

   (6)  The amount of coverage provided for property damage and bodily injury may be exclusive or inclusive of legal defense costs.

   (7)  The insurance policy shall provide for the payment of claims up to the full amount of coverage required under this subchapter, regardless of a deductible amount applicable to the policy. If the policy provides the insurer with a right of reimbursement by the insured for payment of a deductible amount, the policy shall provide that the insurer is liable for payment of the deductible amount. If the policy does not provide the insurer with a right of reimbursement or similar method of recoupment, the insured shall provide additional coverage amounts to meet the requirements of this section by the purchase of excess coverage for the deductible amount.

 (b)  The operator of a municipal waste agricultural utilization site shall maintain liability coverage during the operation of the permitted area and until the Department issues a final closure certification under this chapter. The operator shall submit a certificate from an insurance company licensed or authorized to do business in this Commonwealth, certifying that the operator has a comprehensive general liability insurance in force covering the operator’s municipal waste land application activities which include, but are not limited to, vehicular activities. The certificate shall provide for third-party bodily injury and property damage protection. Minimum coverage for bodily injury and property damage shall be $500,000. Coverage provided under this subsection shall comply with the following:

   (1)  The insurance policy shall follow the standard commercial or comprehensive general liability policy forms approved by the Insurance Department, and shall include coverage for property damage and bodily injury to third persons.

   (2)  The insurance policy shall have property damage and bodily injury combined within the per occurrence and aggregate minimum coverage amounts and may be either claims made or occurrence type.

   (3)  Each insurance policy shall be issued by an insurer having a certificate of authority and a licensed agent authorized to transact the business of insurance in this Commonwealth by the Insurance Department. Insurance may be provided by an excess or surplus lines insurer approved by the Insurance Department.

   (4)  The full policy amount shall be applicable to each facility covered and operated by the operator. There may not be proration of the policy amount of coverage among facilities.

   (5)  The insurance policy shall provide that the insurer shall notify the Department by certified mail whenever a substantive change is made in the policy, including policy amounts, scope of coverage, tail period, claims procedures, definitions of occurrences or claims or another provision related to the requirements of this subchapter.

   (6)  The insurance coverage may be exclusive or inclusive of legal defense costs. When the coverage is inclusive of legal defense costs, the policy shall state that the amount reserved for payment of claims, exclusive of legal defense and claims administration expenses, is not less than the minimum coverage amount for property damage and bodily injury combined.

Source

   The provisions of this §  271.372 adopted April 8, 1988, effective April 9, 1988, 18 Pa.B. 1681; amended September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179. Immediately preceding text appears at serial pages (126159) to (126160).

Cross References

   This section cited in 25 Pa. Code §  271.371 (relating to insurance requirement); 25 Pa. Code §  271.373 (relating to minimum insurance coverage); 25 Pa. Code §  271.377 (relating to insurance pool); 25 Pa. Code §  271.388 (relating to insurance pool—municipalities and municipal authorities); and 25 Pa. Code §  271.392 (relating to commercial insurance; general requirements—persons other than municipalities and municipal authorities).

§ 271.373. Minimum insurance coverage.

 For coverage described under §  271.372(a)(2) (relating to conditions of insurance), the following minimum amounts apply:

   (1)  For coverage which is exclusive of legal defense costs, the minimum amount of coverage for property damage and bodily injury combined is $500,000 per occurrence, with an annual aggregate of $1 million.

   (2)  For coverage which is inclusive of legal defense costs, the minimum amount of coverage for property damage and bodily injury combined is $500,000 per occurrence, with an annual aggregate of $1 million, which shall be reserved for the payment of claims. The minimum amounts of coverage reserved for the payment of claims may not be reduced for legal defense or claims administration costs.

Source

   The provisions of this §  271.373 adopted April 8, 1988, effective April 9, 1988, 18 Pa.B. 1681; amended September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179. Immediately preceding text appears at serial pages (126160) to (126161).

Cross References

   This section cited in 25 Pa. Code §  271.371 (relating to insurance requirement); 25 Pa. Code §  271.377 (relating to insurance pool); 25 Pa. Code §  271.379 (relating to combination of financial assurance requirements); and 25 Pa. Code §  271.392 (relating to commercial insurance; general requirements—persons other than municipalities and municipal authorities).

§ 271.374. Proof of insurance coverage.

 (a)  The operator shall submit proof of insurance coverage, which at a minimum shall consist of a certificate of liability insurance. The certificate shall:

   (1)  State the name of the insurance company, the insured operator and the facility covered by the policy.

   (2)  Identify the kinds of coverage provided by the policy and the amounts of coverage.

   (3)  Identify the beginning and ending dates for the policy.

   (4)  Specify that 60 days prior written notice shall be given by the insurer to the Department and the operator, by certified mail, before cancellation or termination of the insurance policy becomes effective. The 60-day notice period does not apply for specific reasons for cancellation or termination if a shorter period of notice for cancellation or termination has been authorized by the Insurance Department.

   (5)  State that the insurance coverage provided by the policy is for the purpose of satisfying the requirements of this subchapter.

   (6)  State that the insurer is liable for payment on the policy without regard for the bankruptcy or insolvency of the insured.

   (7)  Be signed by an authorized agent of the insurance company.

 (b)  The operator shall also submit an authenticated copy of the public liability insurance policy.

 (c)  The Department will review the certificate of insurance coverage submitted by the operator to determine if the coverage provided satisfies the insurance coverage required by the Department under this subchapter for the facility. The Department may require additional proof, such as a copy of the policy, additional endorsements to the policy or statements of intent from the insurer on the scope of coverage, to establish to the Department’s satisfaction that the coverage provided is that which is required under this subchapter.

 (d)  An operator shall be deemed to be without the required liability coverage in the event of bankruptcy or insolvency of the issuing institution, or a suspension or revocation of the issuing institution’s license or authority to do business in this Commonwealth. The operator shall establish other liability coverage within 10 days after receiving notice that the issuing institution is bankrupt, insolvent or its license or authority to do business in this Commonwealth has been suspended or revoked.

Source

   The provisions of this §  271.374 adopted April 8, 1988, effective April 9, 1988, 18 Pa.B. 1681; amended September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179. Immediately preceding text appears at serial pages (126161) to (126162).

Cross References

   This section cited in 25 Pa. Code §  271.371 (relating to insurance requirement); 25 Pa. Code §  271.376 (relating to maintenance of insurance coverage); 25 Pa. Code §  271.377 (relating to insurance pool); 25 Pa. Code §  271.392 (relating to commercial insurance; general requirements—persons other than municipalities and municipal authorities); 25 Pa. Code §  273.313 (relating to annual operation report); 25 Pa. Code §  275.222 (relating to annual operation report); 25 Pa. Code §  277.312 (relating to annual operation report); 25 Pa. Code §  279.252 (relating to annual operation report); 25 Pa. Code §  281.272 (relating to annual operation report); and 25 Pa. Code §  283.262 (relating to annual operation report).

§ 271.375. Additional insurance coverage.

 (a)  The Department may require the operator to obtain and provide proof of coverage for additional liability insurance if one of the following applies:

   (1)  The permit is renewed, reissued or is subject to a major permit modification.

   (2)  The Department determines that additional amounts of insurance coverage are required to protect public health or safety, or public welfare or the environment from the risk of injury or damage from the operation of the facility.

 (b)  The Department may review the adequacy of insurance requirements for applicable facilities and, if necessary, require additional amounts of insurance coverage.

Source

   The provisions of this §  271.375 adopted April 8, 1988, effective April 9, 1988, 18 Pa.B. 1681.

Cross References

   This section cited in 25 Pa. Code §  271.371 (relating to insurance requirement); 25 Pa. Code §  271.376 (relating to maintenance of insurance coverage); 25 Pa. Code §  271.377 (relating to insurance pool); and 25 Pa. Code §  271.392 (relating to commercial insurance; general requirements—persons other than municipalities and municipal authorities).

§ 271.376. Maintenance of insurance coverage.

 (a)  The operator shall maintain insurance policy coverage in full force continuously during operation of the municipal waste processing or disposal facility until final closure certification.

 (b)  The operator shall submit proof of insurance under §  271.374 (relating to proof of insurance coverage) 30 days prior to the expiration of the current policy, or annually on the anniversary date of the issuance of a permit or other authorization to operate the facility, whichever is sooner. If the operator fails to submit adequate proof of insurance coverage, the Department may issue a notice of violation to the operator 30 days prior to the expiration date or anniversary date of the permit or other authorization, requiring submittal of proof of insurance under §  271.374 within 15 days of the notice.

 (c)  The insurer may cancel or otherwise terminate an insurance policy by sending 60 days, or another period as may be authorized by the Insurance Department, prior written notice to the Department and the operator of the insurer’s intention to cancel or otherwise terminate the insurance policy. The notice shall be sent to the Department and the insured by certified mail, return receipt requested. Prior to the cancellation or termination becoming effective, the operator shall provide the Department with proof of a replacement insurance policy sufficient to meet the requirements of this subchapter.

 (d)  If the operator fails to submit acceptable proof of insurance under §  271.375 (relating to additional insurance coverage) or this section within the stated time periods, the Department may take the following actions:

   (1)  Issue a notice of violation of the requirement to maintain insurance.

   (2)  Issue an order requiring the operator to submit proof of insurance.

   (3)  Issue a cease order to the operator.

   (4)  Forfeit the existing bonds under §  271.351 (relating to forfeiture determination). The proceeds of the forfeited bonds will be held by the Department in an appropriate account established by the Department for the purposes of the insurance requirement under this subchapter, until the operator submits acceptable proof of insurance coverage or the insurance requirement does not apply, whichever is earlier. Upon submittal of proof of insurance acceptable to the Department, the operator may apply to the Department for return of the proceeds of the forfeited bonds held by the Department. Nothing in this subsection relieves the operator of its duty to maintain in full force a bond as required by this subchapter and acceptable proof of an insurance policy as required by this subchapter.

Source

   The provisions of this §  271.376 adopted April 8, 1988, effective April 9, 1988, 18 Pa.B. 1681; amended September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179. Immediately preceding text appears at serial pages (126162) to (126163).

Cross References

   This section cited in 25 Pa. Code §  271.371 (relating to insurance requirement); 25 Pa. Code §  271.377 (relating to insurance pool); and 25 Pa. Code §  271.392 (relating to commercial insurance; general requirements—persons other than municipalities and municipal authorities).

§ 271.377. Insurance pool.

 An applicant which is a municipality or municipal authority may enter an insurance pool in accordance with 42 Pa.C.S. §  8564(d) (relating to liability insurance and self-insurance) which shall meet with the following requirements:

   (1)  If the insurance pool is such that the applicant is a co-insured under a master policy issued by a commercial insurer, the master policy shall meet the conditions of § §  271.371—271.376.

   (2)  If the insurance pool is such that the applicant is a participant in a trust fund, established to meet the requirements of §  271.371 (relating to insurance requirement), the trust fund shall be established in accordance with 42 Pa.C.S. §  8564(d) and shall contain terms and conditions so that the coverage provided meets the requirements of §  271.373 (relating to minimum insurance coverage). § §  691.5(a), 691.304 and 691.402); and sections 1917-A and 1920-A of the act of April 9, 1929 (P. L. 177, No. 175) (71 P. S. § §  510-17 and 510-20).

Source

   The provisions of this §  271.377 adopted September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179.

Cross References

   This section cited in 25 Pa. Code §  271.371 (relating to insurance requirement).

§ 271.378. Self-insurance.

 (a)  An applicant which is a municipality or municipal authority may self-insure by meeting the requirements of this subsection and subsections (b)—(f). The applicant may appropriate funds to establish a reserve to meet the requirements of §  271.371 (relating to insurance requirement). Funds so appropriated shall be placed in a special account, separate and distinct from all other funds and accounts, for the sole purpose of paying ordinary public liability claims to third parties for damage arising from the applicant’s operation of a municipal waste processing or disposal facility.

 (b)  An applicant’s self-insurance program shall provide procedures the applicant will make available to the public for processing claims filed for property damage and bodily injury. The procedures shall contain, at a minimum, the following:

   (1)  An initial contact point for claims information or the filing of a claim, located at each of the applicant’s self-insured facilities.

   (2)  A mechanism to provide to a claimant necessary information to pursue the claim, including the information required of a claimant to document proof of loss.

   (3)  A mechanism for the acknowledgement of notification of a claim, in writing, within a reasonable time.

   (4)  A reasonable time for investigation of a claim with a referral mechanism to inform a claimant if the investigation cannot be completed within the initial investigation period.

   (5)  A reasonable time for acceptance or denial of a claim. A denial shall state the specific reasons for the denial.

   (6)  A mechanism for a claimant to challenge a denial of a claim.

 (c)  The applicant may not be self-insured until the applicant has appropriated and placed in a special account, an amount of $1 million. A minimum of $1 million shall be continuously maintained in the account, and may not be reduced by the payment of claims.

 (d)  The applicant shall provide the Department with a copy of the resolution or ordinance making the appropriation funding self-insurance and establishing the special account.

 (e)  An applicant may comply with this section by utilizing an existing self-insurance reserve, if the applicant can demonstrate to the satisfaction of the Department, that the existing self-insurance reserve contains an amount of $1 million dedicated solely for the purpose of satisfying ordinary public liability claims to third parties for damages arising from the operation of the applicant’s municipal waste processing or disposal facility and the applicant has in place the procedures required by subsection (b).

 (f)  An applicant may cancel or otherwise terminate the self-insurance coverage by sending a written notice of the termination or cancellation, by certified mail, to the Department. The cancellation or termination may not take effect until 60 days of receipt of the notice to cancel or terminate by the Department, as evidenced by the return receipts.

 (g)  An applicant which is not a municipality or municipal authority may self-insure to meet the requirements of §  271.371 by complying with § §  267.52—267.58 (Reserved).

Source

   The provisions of this §  271.378 adopted September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179.

Cross References

   This section cited in 25 Pa. Code §  271.371 (relating to insurance requirement).

§ 271.379. Combination of financial assurance requirements.

 An applicant may combine the financial assurance requirements of § §  271.371, 271.381 and 271.393 (relating to insurance requirement; financial assurances requirements; and commercial insurance; coverage—persons other than municipalities and municipal authorities) by using the forms of financial assurance authorized by §  271.371(c) and § §  271.382 and 271.391 (relating to forms of financial assurances—municipalities and municipal authorities; and forms of financial assurances—persons other than municipalities and municipal authorities), if appropriate. This section does not relieve the applicant of meeting the minimum insurance requirements of §  271.373, §  271.384 or §  271.393 (relating to minimum insurance coverage; commercial insurance; coverage—municipalities and municipal authorities; and commercial insurance; coverage—persons other than municipalities and municipal authorities).

Source

   The provisions of this §  271.379 adopted September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179.

ENVIRONMENTAL IMPAIRMENT LIABILITY
FINANCIAL ASSURANCES


§ 271.381. Financial assurances requirements.

 (a)  A person or municipality that has not submitted proof of environmental impairment liability financial assurances under this subchapter may not operate a municipal waste landfill or resource recovery facility. After September 26, 1988, a municipal waste landfill or resource recovery facility may not accept wastes or initiate operation prior to receipt from the Department of approval of financial assurance. Initiation of operation will not be construed to mean activities associated with the planning, development or construction of the landfill or facility.

 (b)  An applicant for a permit to operate a municipal waste landfill or resource recovery facility shall submit proof of environmental impairment liability financial assurances for satisfying claims of bodily injury and property damage to third parties caused by or relating to pollution occurrences arising from the operation of a municipal waste landfill or a resource recovery facility.

 (c)  An applicant for a permit for a municipal waste processing or disposal facility owned and operated by a department or an agency of the United States or the Commonwealth may fulfill the requirement under this section by means of commercial insurance as specified in § §  271.383—271.385 (relating to commercial insurance; general requirements—municipalities and municipal authorities; commercial insurance; coverage—municipalities and municipal authorities; and commercial insurance; proof of coverage—municipalities and municipal authorities) or § §  271.392—271.394 (relating to commercial insurance; general requirements—persons other than municipalities and municipal authorities; commercial insurance; coverage—persons other than municipalities and municipal authorities; and commercial insurance; proof of coverage—persons other than municipalities and municipal authorities); self-insurance allowed by Federal or State law; or additional means approved by the Department. The minimum amount of liability coverage for departments and agencies of the Commonwealth may not exceed the liability limits of 42 Pa.C.S. Chapter 85 (relating to matters affecting government units).

 (d)  Financial assurance shall be continuously maintained in full force from the date waste is first accepted or the initiation of operations until the effective date of closure certification under §  271.342 (relating to final closure certification). If, upon certification of closure, the Department determines the landfill or facility may continue to present a significant risk to public health, safety and welfare or to the environment, the Department will require the continuation of environmental impairment liability financial assurances, in full force, for a period beyond the effective date of closure as determined by the Department.

Source

   The provisions of this §  271.381 adopted September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179.

Cross References

   This section cited in 25 Pa. Code §  271.379 (relating to combination of financial assurance requirements); 25 Pa. Code §  271.382 (relating to forms of financial assurances—municipalities and municipal authorities); 25 Pa. Code §  271.386 (relating to environmental impairment trust funds; general—municipalities and municipal authorities); 25 Pa. Code §  271.388 (relating to insurance pool—municipalities and municipal authorities); 25 Pa. Code §  271.389 (relating to self-insurance—municipalities and municipal authorities); 25 Pa. Code §  271.391 (relating to forms of financial assurances—persons other than municipalities and municipal authorities); and 25 Pa. Code §  271.395 (relating to environmental impairment trust funds; general—persons other than municipalities and municipal authorities).

§ 271.382. Forms of financial assurances—municipalities and municipal authorities.

 A permit applicant that is a municipality or a municipal authority shall satisfy the financial assurances requirement under §  271.381 (relating to financial assurances requirements) by using one or more of the following forms of financial assurance, either singly or in combination:

   (1)  Commercial insurance, as specified in § §  271.383—271.385 (relating to commercial insurance; general requirements—municipalities and municipal authorities; commercial insurance; coverage—municipalities and municipal authorities; and commercial insurance; proof of coverage—municipalities and municipal authorities).

   (2)  A trust fund, as specified in § §  271.386 and 271.387 (relating to environmental impairment trust funds; general—municipalities and municipal authorities; and trust fund; management—municipalities and municipal authorities).

   (3)  An insurance pool, as specified in §  271.388 (relating to insurance pool—municipalities and municipal authorities).

   (4)  Self-insurance, as specified in §  271.389 (relating to self-insurance—municipalities and municipal authorities).

Source

   The provisions of this §  271.382 adopted September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179.

Cross References

   This section cited in 25 Pa. Code §  271.379 (relating to combination of financial assurance requirements).

§ 271.383. Commercial insurance; general requirements—municipalities and municipal authorities.

 (a)  Commercial pollution liability insurance policies submitted as proof of financial assurance shall be issued by:

   (1)  A primary insurer including coinsurers who have a certificate of authority to transact the business of insurance in this Commonwealth.

   (2)  A registered Pennsylvania resident broker. The insurance may be provided by an excess or surplus lines insurer approved by the Insurance Department or by a risk retention group as defined in the Product Liability Risk Retention Act of 1981 (15 U.S.C.A. § §  3901—3906), amended by the Liability Risk Retention Act of 1986 (15 U.S.C.A. § §  3901—3903). The primary insurer may reinsure with secondary insurers/reinsurers who are licensed or authorized to do business in any state of the United States, Canada, West Germany, Switzerland, Great Britain or France.

 (b)  The insurance policy shall provide coverage for bodily injury and property damage to third parties arising from sudden and nonsudden accidental pollution occurrences.

 (c)  The insurance policy shall have property damage and bodily injury combined within the per occurrence and aggregate minimum coverage amounts.

 (d)  The amount of coverage provided for bodily injury and property damage may be exclusive or inclusive of legal defense and claims administration costs.

 (e)  The insurance policy shall provide for the payment of claims up to the full amount of coverage required for bodily injury and property damage regardless of any deductible amount applicable to the policy. The policy shall provide the insurer is liable for the payment of any amount within a deductible which may apply to the policy, with a right of reimbursement by the insured or, in the alternative, the insurer includes within the policy a provision to pay on behalf of the insured any deductible amount.

 (f)  The policy shall:

   (1)  Provide that the full amount of coverage is applicable to each facility covered by the policy. There may be no proration of the coverage amounts among facilities.

   (2)  Specify the insurer shall give 60 days, or another period as required by the Insurance Department, prior written notice, by certified mail, return receipt requested, to the Department and the insured before cancellation, termination or expiration of the policy period, if upon expiration of the policy period the policy will not be renewed. The policy may not be canceled or terminated before the expiration of the 60 day or other notice period.

   (3)  Specify the beginning and ending dates, including retroactive or tail periods, for the policy.

   (4)  State that bankruptcy or insolvency of the insured does not relieve the insurer of its obligations under the policy.

   (5)  Be signed by an authorized agent of the insurer.

   (6)  State the facility covered by the policy.

   (7)  Provide that the insurer shall notify the Department, by certified mail, whenever a substantive change is made to the policy, including limits of liability, scope of coverage, coverage dates, claims procedure, definitions of occurrences or events or other provisions as may relate to the requirements of this section.

Source

   The provisions of this §  271.383 adopted September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179.

Cross References

   This section cited in 25 Pa. Code §  271.381 (relating to financial assurances requirements); 25 Pa. Code §  271.382 (relating to forms of financial assurances—municipalities and municipal authorities); 25 Pa. Code §  271.384 (relating to commercial insurance; coverage—municipalities and municipal authorities); and 25 Pa. Code §  271.388 (relating to insurance pool—municipalities and municipal authorities).

§ 271.384. Commercial insurance; coverage—municipalities and
municipal authorities.

 For coverage described in §  271.383 (relating to commercial insurance; general requirements—municipalities and municipal authorities), the following minimum amounts apply:

   (1)  For coverage which is exclusive of legal defense costs, the minimum amount of coverage for property damage and bodily injury combined shall be $500,000 per occurrence, with an annual aggregate of $2 million.

   (2)  For coverage which is inclusive of legal defense costs, the minimum amount of coverage for property damage and bodily injury combined shall be $500,000 per occurrence, with an annual aggregate of $2 million and shall be reserved for the payment of claims. The minimum amounts of coverage reserved for the payment of claims may not be reduced for legal defense or claims administration costs.

Source

   The provisions of this §  271.384 adopted September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179.

Cross References

   This section cited in 25 Pa. Code §  271.379 (relating to combination of financial assurance requirements); 25 Pa. Code §  271.381 (relating to financial assurances requirements); and 25 Pa. Code §  271.382 (relating to forms of financial assurances—municipalities and municipal authorities).

§ 271.385. Commercial insurance; proof of coverage—municipalities and municipal authorities.

 (a)  The applicant shall submit proof of insurance coverage which shall consist of an authenticated copy of the insurance policy, including endorsements thereto, evidencing the insurance coverage for the facilities.

 (b)  The Department will review the authentication copy of the insurance policy submitted by the applicant to determine if the coverage provided satisfies the insurance coverage requirements of this section. The Department may require additional proof, such as additional endorsements to the policy, or statements of intent from the insurer on the scope of coverage, to establish to the Department’s satisfaction that the coverage provided is that which is required under this section.

 (c)  An applicant shall be deemed to be without the required pollution liability coverage in the event of bankruptcy or insolvency of the issuing institution, or the suspension or revocation of the issuing institution’s license or authorization to conduct the business of insurance in this Commonwealth, or in the case of risk retention groups, in the state which licensed, chartered or authorized the risk retention group. The applicant shall establish other pollution liability coverage within 30 days after receiving notice that its issuing institution is bankrupt, insolvent or its license or authorization to conduct the business of insurance, in this Commonwealth or in the state which licensed, chartered or authorized to conduct the business of insurance, has been suspended or revoked.

Source

   The provisions of this §  271.385 adopted September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179.

Cross References

   This section cited in 25 Pa. Code §  271.381 (relating to financial assurances requirements); and 25 Pa. Code §  271.382 (relating to forms of financial assurances—municipalities and municipal authorities).

§ 271.386. Environmental impairment trust funds; general—
municipalities and municipal authorities.

 (a)  A trust fund may be established by the applicant to provide for payment of third-party claims for bodily injury and property damage resulting from sudden and nonsudden accidental pollution occurrences arising from the operation of municipal waste landfills or resource recovery facilities, to comply with §  271.381 (relating to financial assurances requirements).

 (b)  The trust agreement shall be provided by the applicant to the trustee. The wording of the trust agreement shall be in a form prepared and approved by the Department. The applicant is not in compliance with this section until a fully executed original of the trust agreement has been submitted to the Department and the principal amount required by subsection (d) has been placed in the trust fund corpus. The trustee shall advise the Department, in writing, when the principal amount has been placed in the trust fund.

 (c)  The trust fund established under subsection (a) shall meet the following requirements:

   (1)  The trust fund shall be established for the express purpose of paying claims to third parties for bodily injury or property damage from sudden or nonsudden accidental pollution occurrences arising from the applicant’s operation of a municipal waste landfill or resource recovery facility.

   (2)  The trustee shall be an entity whose trust activities are examined and regulated by a state or Federal agency.

   (3)  The trust shall be irrevocable and shall continue until termination at the written agreement of the applicant and the trustee, except that the trust may not be terminated until 120 days after receipt by the Department of written notice to terminate the trust. The written notice shall be sent to the Department by certified mail, return receipt requested.

   (4)  The trust shall be established as a spendthrift trust and may not be subject to assignment, alienation, pledge, attachment, garnishment, sequestration, other legal process or to the claims of creditors.

 (d)  The trust fund shall be initially established in a principal amount of $2 million, exclusive of trustee compensation, fees for legal services rendered to the trustee and other charges or expenses of the trustee in administering the trust fund. The trust fund shall be maintained at least $2 million principal amount, and may not be reduced by the payment of claims.

   (1)  Payments made to establish the trust fund shall consist of cash or securities acceptable to the trustee.

   (2)  The trustee is not under a duty to collect from the applicant payments to establish the trust fund. The trustee is not responsible for the amount or adequacy of, nor is it the duty of the trustee to collect from the applicant, payments necessary to maintain the required principal amount in the trust fund.

 (e)  Money may not be paid out of the trust fund for third-party claims without the prior written order of the applicant. It is not the duty or responsibility of the trustee to determine the validity of a claim for which the applicant presents its written order to pay.

 (f)  The operator shall, without delay and with due diligence, investigate claims presented to or made against it by third parties for bodily injury or property damage from pollution occurrences arising out of the operation of the operator’s municipal waste landfill or resource recovery facility. Upon the reduction of a claim to a final settlement or final judgment, the operator shall, without delay, give to the trustee its written order to pay.

 (g)  Claims made against or paid by the trust fund may not include the following:

   (1)  Administrative, investigative, legal defense or other costs incurred by the operator’s investigating or settling third-party claims.

   (2)  Damage to the operator’s property, whether or not damage arose from the pollution occurrence or from the operator’s efforts to mitigate the damage and irrespective of whether the mitigation efforts were taken pursuant to the orders, demands or requests of a government or regulatory authority having jurisdiction.

   (3)  Bodily injury to operator’s employes, to the extent that the bodily injury is covered by Workers’ Compensation or other insurance.

Source

   The provisions of this §  271.386 adopted September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179.

Cross References

   This section cited in 25 Pa. Code §  271.382 (relating to forms of financial assurances—municipalities and municipal authorities).

§ 271.387. Trust fund; management—municipalities and municipal authorities.

 (a)  The trustee shall invest and reinvest the principal and income of the trust fund and keep the fund invested as a single fund, without distinction between principal and income. In investing, reinvesting, exchanging, selling and otherwise managing the trust fund, the trustee shall discharge its duties solely in the interest of third-party claimants and with care to avoid loss or diminution of the trust fund capital. The trustee shall manage the trust fund with that degree of judgment, skill and care under the circumstances then prevailing which persons of prudence, discretion and intelligence, who are familiar with these matters, exercise in the management of their own affairs, not in regard to speculation, but in regard to the permanent disposition of funds, considering the probable income to be derived therefrom as well as the probable safety of their capital.

 (b)  For the purposes of investing or reinvesting the moneys in the trust fund, the trustee is authorized to:

   (1)  Purchase direct obligations of the United States Government, the Commonwealth, its municipalities, municipal authorities or school districts, the Pennsylvania Turnpike Commission, the General State Authority and the State Public School Building Authority.

   (2)  Invest in time or demand deposits of the trustee, to the extent insured by an agency of the Federal or a State government.

   (3)  Purchase shares in an investment company registered under the Investment Company Act of 1940 (15 U.S.C.A. § §  80a-1—80a-64).

   (4)  Purchase of prime commercial paper. Commercial paper is defined as unsecured promissory notes issued at a discount from par or on an interest bearing bond by an industrial, common carrier, public utility, finance company, real estate investment trust, commercial bank holding company or corporations whose credit shall have been approved by Moody’s Investors Service Incorporated or their successors. The trustee may not purchase commercial paper under this provision unless the commercial paper proposed to be purchased is rated Prime-1 or Prime 1-LOC or Prime-2 by Moody’s Investors Service Incorporated, A-1 or A-2 by Standard and Poor’s Corporation or Fitch 1 by Fitch Investors Services, Incorporated.

   (5)  Hold cash awaiting investment or distribution for a reasonable period of time without liability for the payment of interest thereon.

   (6)  Transfer assets of the trust fund to a common, commingled or collective trust fund which may be created by the trustee.

 (c)  The trustee shall annually, at least 30 days prior to the anniversary date of the establishment of the trust, furnish to the operator and the Department a statement confirming the value of the trust fund. The trustee shall value securities in the trust fund at the lesser of market or face value as of no more than 60 days prior to the anniversary date of the establishment of the trust fund. If the results of the valuation require additional capital to be paid into the trust fund so that the principal amount of $2 million may be maintained, the trustee shall require the operator, in writing, to make the payment by the anniversary date of the establishment of the trust fund. The trustee shall notify the Department, in writing, at the expiration of 30 days after the anniversary date, if no payments are received from the operator.

 (d)  The trustee may resign or the operator may replace the trustee, but the resignation or replacement may not be effective until the successor trustee has been appointed and the successor trustee has been approved by the Department and has accepted the appointment. In the event of resignation of the trustee and the operator or the Department failed to act, the trustee may apply to a court of competent jurisdiction for instructions.

 (e)  An operator may from time to time request and receive, on the written order of the Department, funds of the trust fund which are in excess of the principal amount required to be maintained in the trust fund. The Department will, in evaluating the request, consider the claims experience of the operator, the earnings and disbursement experience of the trust fund, losses and the need to maintain in the trust fund an amount in excess of the principal amount in order to meet third-party claims. The trustee may not disburse funds under this section without the written authorization of the Department. Nothing in this subsection relieves the operator of its duty to maintain at all times in the trust fund the principal amount required by this section.

 (f)  Under subsection (c), if the trustee notifies the Department that the operator has failed to make payments the trustee requested to maintain the principal amount of the trust fund, the Department will notify the operator that it will pay the trustee the amount required to maintain the principal amount of the trust fund within 15 days of the notification. If the operator fails or refuses to pay at the expiration of the 15 day period, the Department will proceed to collect the payment due in any manner provided by law.

Source

   The provisions of this §  271.387 adopted September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179.

Cross References

   This section cited in 25 Pa. Code §  271.382 (relating to forms of financial assurances—municipalities and municipal authorities).

§ 271.388. Insurance pool—municipalities and municipal authorities.

 An applicant may enter an insurance pool in accordance with 42 Pa.C.S. §  8564(d) (relating to liability insurance and self-insurance) which meets the following requirements:

   (1)  If the insurance pool is of the type that the applicant is coinsured under a master policy issued by a commercial insurer, the master policy shall meet the requirements of § §  271.371 and 271.372 (relating to insurance requirement; and conditions of insurance).

   (2)  If the insurance pool is of the type that the applicant is a participant in a trust fund, established to meet the requirements of §  271.381 (relating to financial assurances requirements), the trust fund shall be established in accordance with 42 Pa.C.S. §  8564(d) and shall contain terms and conditions so that the coverage provided meets the requirements of §  271.383 (relating to commercial insurance; general requirements—municipalities and municipal authorities).

Source

   The provisions of this §  271.388 adopted September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179.

Cross References

   This section cited in 25 Pa. Code §  271.382 (relating to forms of financial assurances—municipalities and municipal authorities).

§ 271.389. Self-insurance—municipalities and municipal authorities.

 (a)  An applicant which is a municipality or a municipal authority may self-insure by appropriating funds to establish a reserve to meet the requirements §  271.381 (relating to financial assurances requirements). Funds so appropriated shall be placed in a special account, separate and distinct from other funds and accounts, for the sole purpose of paying claims to third parties for bodily injury and property damage caused by or relating to pollution occurrences arising from the applicant’s operation of a municipal waste landfill or resource recovery facility.

 (b)  An applicant’s self-insurance program shall provide procedures the applicant will make available to the public for processing claims filed for property damage and bodily injury. The procedures shall contain at a minimum the following:

   (1)  An initial contact point for claims information or the filing of a claim, located at each of the applicant’s self-insured facilities.

   (2)  A mechanism to provide a claimant necessary information to pursue the claim, including the information required of a claimant to document proof of loss.

   (3)  A mechanism to acknowledge notification of a claim, in writing, within a reasonable time.

   (4)  A reasonable period of time for investigation of a claim with a referral mechanism to inform a claimant if the investigation cannot be completed within the initial investigation period.

   (5)  A reasonable period of time for acceptance or denial of a claim. Denial shall state the specific reasons for the denial.

   (6)  A mechanism for a claimant to challenge a denial of a claim.

 (c)  The applicant may not be self-insured until the applicant has appropriated and placed in a special account, an amount of $2 million.

 (d)  The applicant shall provide the Department with a copy of the resolution or ordinance making the appropriation funding self-insurance and establishing the special account.

 (e)  An applicant may comply with this section by utilizing an existing self-insurance reserve, if the applicant can demonstrate to the satisfaction of the Department, that the existing self-insurance reserve contains an amount of $2 million dedicated solely for the purpose of satisfying claims to third parties for bodily injury and property damage from sudden and nonsudden accidental pollution occurrences arising from the operation of the municipal waste landfill or resource recovery facility.

 (f)  An applicant may cancel or otherwise terminate the self-insurance coverage by sending a written notice of the termination or cancellation, by certified mail, to the Department. The cancellation or termination may not take effect until 60 days of receipt of the notice to cancel or terminate by the Department, as evidenced by the return receipts.

Source

   The provisions of this §  271.389 adopted September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179.

Cross References

   This section cited in 25 Pa. Code §  271.382 (relating to forms of financial assurances—municipalities and municipal authorities).

OTHER PERSONS


§ 271.391. Forms of financial assurances—persons other than municipalities and municipal authorities.

 (a)  A permit applicant, other than a municipality or municipal authority or a department or agency of the United States or the Commonwealth, shall satisfy the financial assurances requirement under §  271.381 (relating to financial assurances requirements) by using one or more of the following forms of financial assurance, either singly or in combination:

   (1)  Commercial insurance, as specified in § §  271.392—271.394 (relating to commercial insurance; general requirements—persons other than municipalities and municipal authorities; commercial insurance; coverage—persons other than municipalities and municipal authorities; and commercial insurance; proof of coverage—persons other than municipalities and municipal authorities).

   (2)  A trust fund, as specified in § §  271.395 and 271.396 (relating to environmental impairment trust funds; general—persons other than municipalities and municipal authorities; and trust fund management—persons other than municipalities and municipal authorities).

   (3)  Self-insurance, as specified in §  271.397 (relating to self-insurance—persons other than municipalities and municipal authorities).

 (b)  A department or agency of the United States or the Commonwealth shall satisfy the financial assurances requirement under §  271.381 by using commercial insurance, as specified in § §  271.392—271.394 or other means of financial assurance approved by the Department.

Source

   The provisions of this §  271.391 adopted September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179.

Cross References

   This section cited in 25 Pa. Code §  271.379 (relating to combination of financial assurance requirements).

§ 271.392. Commercial insurance; general requirements—persons other than municipalities and municipal authorities.

 (a)  Commercial pollution liability insurance policies submitted as proof of financial assurance shall be issued by:

   (1)  A primary insurer including coinsurers who have a certificate of authority to transact the business of insurance in this Commonwealth.

   (2)  A registered Pennsylvania resident broker. The insurance may be provided by an excess or surplus lines insurer approved by the Insurance Department or by a Risk Retention Group as defined in the Product Liability Risk Retention Act of 1981 (15 U.S.C.A. § §  3901—3906), as amended by the Liability Risk Retention Act of 1986 (15 U.S.C.A. § §  3901—3903). The primary insurer may reinsure with secondary insurers—reinsurers—who are licensed or authorized to do business in a state of the United States, Canada, West Germany, Switzerland, Great Britain or France.

 (b)  The requirements of this section shall be construed together with § §  271.371—271.376 to provide coverage for bodily injury and property damage to third parties from both pollution and risks associated with the operation of municipal waste landfills and resource recovery facilities.

 (c)  The insurance policy shall provide coverage for bodily injury and property damage to third parties arising from sudden and nonsudden accidental pollution occurrences arising from the insured’s operation of the landfill or resource recovery facility.

 (d)  The insurance policy shall have property damage and bodily injury combined within the per occurrence and aggregate minimum coverage amounts and may be either claims made or occurrence types.

 (e)  The amount of coverage provided for bodily injury and property damage may be exclusive or inclusive of legal defense and claims administration costs.

 (f)  The insurance policy shall provide for the payment of claims up to the full amount of coverage required for bodily injury and property damage regardless of any deductible amount applicable to the policy. The policy shall provide the insurer is liable for the payment of an amount within a deductible which may apply to the policy, with a right of reimbursement by the insured or, in the alternative, the insurer includes within the policy a provision to pay on behalf of the insured a deductible amount.

 (g)  The policy shall:

   (1)  Provide that the full amount of coverage is applicable to each facility covered by the policy. There may be no proration of the coverage amounts among facilities.

   (2)  Specify the insurer shall give 60 days, or another period as required by the Insurance Department, prior written notice, certified mail, return receipt requested, to the Department and the insured before cancellation, termination or expiration of the policy period, if upon expiration of the policy period the policy will not be renewed. The policy may not be canceled or terminated before the expiration of the 60-day notice period.

   (3)  Specify the beginning and ending dates, including retroactive or tail periods, for the policy.

   (4)  State that bankruptcy or insolvency of the insured does not relieve the insurer of its obligations under the policy.

   (5)  Be signed by an authorized agent of the insurer.

   (6)  State the facility covered by the policy.

   (7)  Provide that the insurer shall notify the Department, by certified mail, whenever a substantive change is made to the policy, including limits of liability, scope of coverage, dates, claims procedure, definitions of occurrences or events, or other provisions as may relate to this section.

Source

   The provisions of this §  271.392 adopted September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179.

Cross References

   This section cited in 25 Pa. Code §  271.381 (relating to financial assurances requirements); 25 Pa. Code §  271.391 (relating to forms of financial assurances—persons other than municipalities and municipal authorities); and 25 Pa. Code §  271.393 (relating to commercial insurance; coverage—persons other than municipalities and municipal authorities).

§ 271.393. Commercial insurance; coverage—persons other than municipalities and municipal authorities.

 For coverage described in §  271.392(d) (relating to commercial insurance; general requirements—persons other than municipalities and municipal authorities), the following minimum amounts apply:

   (1)  For coverage which is exclusive of legal defense costs, the minimum amount of coverage for property damage and bodily injury combined shall be $500,000 per occurrence, with an annual aggregate of $2 million.

   (2)  For coverage which is inclusive of legal defense costs, the minimum amount of coverage for property damage and bodily injury combined shall be $500,000 per occurrence, with an annual aggregate of $2 million which shall be reserved for the payment of claims. The minimum amounts of coverage reserved for the payment of claims may not be reduced for legal defense or claims administration costs.

Source

   The provisions of this §  271.393 adopted September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179.

Cross References

   This section cited in 25 Pa. Code §  271.379 (relating to combination of financial assurance requirements); 25 Pa. Code §  271.381 (relating to financial assurances requirements); and 25 Pa. Code §  271.391 (relating to forms of financial assurances—persons other than municipalities and municipal authorities).

§ 271.394. Commercial insurance; proof of coverage—persons other than municipalities and municipal authorities.

 (a)  The applicant shall submit proof of insurance coverage which shall consist of an authenticated copy of the insurance policy, including endorsements thereto, evidencing the insurance coverage for the facility.

 (b)  The Department will review the authentication copy of the insurance policy submitted by the applicant to determine if the coverage provided satisfies the insurance coverage requirements of this section. The Department may require additional proof, such as additional endorsements to the policy, or statements of intent from the insurer on the scope of coverage, to establish to the Department’s satisfaction that the coverage provided is that which is required under this section.

 (c)  An applicant will be deemed to be without the required pollution liability coverage in the event of bankruptcy or insolvency of the issuing institution, or the suspension or revocation of the issuing institution’s license or authorization to conduct the business of insurance in this Commonwealth, or in the case of risk retention groups, in the state which licensed, chartered or authorized the risk retention group. The applicant shall establish other pollution liability coverage within 30 days after received notice that its issuing institution is bankrupt, insolvent or its license or authorization to conduct the business of insurance, in this Commonwealth or in the state which licensed, chartered or authorized to conduct the business of insurance, has been suspended or revoked.

Source

   The provisions of this §  271.394 adopted September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179.

Cross References

   This section cited in 25 Pa. Code §  271.381 (relating to financial assurances requirements); and 25 Pa. Code §  271.391 (relating to forms of financial assurances—persons other than municipalities and municipal authorities).

§ 271.395. Environmental impairment trust funds; general—persons other than municipalities and municipal authorities.

 (a)  A trust fund may be established by the applicant to provide for payment of third party claims for bodily injury and property damage resulting from sudden and nonsudden accidental pollution occurrences arising from the operation of municipal waste landfills or resource recovery facilities, in compliance with §  271.381 (relating to financial assurances requirements).

 (b)  The trust agreement shall be provided by the applicant to the trustee. The wording of the trust agreement shall be in a form prepared and approved by the Department. The applicant will not be in compliance with this subchapter until a fully executed original of the trust agreement has been submitted to the Department and the principal amount required by this subchapter has been placed in the trust fund. The trustee shall advise the Department, in writing, when the principal amount has been placed in the trust fund.

 (c)  The trust fund established in subsection (a) shall meet the following requirements:

   (1)  The trust fund shall be established for the express purpose of paying claims to third parties for bodily injury or property damage from sudden or nonsudden accidental pollution occurrences arising from the operation of the municipal waste landfill or resource recovery facility.

   (2)  The trustee shall be an entity whose trust activities are examined and regulated by a State or Federal agency.

   (3)  The trust shall be irrevocable and shall continue until terminated at the written agreement of the operator and the trustee, except that the trust may not be terminated until 120 days after receipt by the Department of written notice to terminate the trust. The written notice shall be sent to the Department by certified mail, return receipt requested.

   (4)  The trust shall be established as a spendthrift trust and may not be subject to assignment, alienation, pledge, attachment, garnishment, sequestration, other legal process or to the claims of creditors.

 (d)  The trust fund shall be initially established in a principal amount of $2 million, exclusive of trustee compensation, fees for legal services rendered to the trustee and other charges or expenses of the trustee in administering the trust fund. The trust fund shall be thereafter maintained at not less than the $2 million principal amount.

   (1)  Payments made to establish the trust fund shall consist of cash or securities acceptable to the trustee.

   (2)  The trustee is not under a duty to collect from the applicant payments to establish the trust fund. The trustee is not responsible for the amount or adequacy of, nor is it the duty of the trustee to collect from the applicant, payments necessary to maintain the required principal amount in the trust fund.

 (e)  Money may not be paid out of the trust fund for third-party claims without the prior written order of the operator. It is not the duty or responsibility of the trustee to determine the validity of a claim for which the operator presents its written order to pay.

 (f)  The operator shall, without delay and with due diligence, investigate claims presented to or made against it by third parties for bodily injury or property damage from pollution occurrences arising out of the operation of the operator’s municipal waste landfill or resource recovery facility. Upon the reduction of a claim to a final settlement or judgment, the operator shall, without delay, give to the trustee its written order to pay.

 (g)  Claims made against or paid from the trust fund may not include the following:

   (1)  Administrative, investigative, legal defence or other costs incurred by the application investigating and settling third-party claims.

   (2)  Damage to the operator’s property, whether or not the damage arose from the pollution occurrence or from the operator’s efforts to mitigate the damage and irrespective of whether the mitigation efforts were taken under the orders, demands or requests of a governmental or regulatory authority having jurisdiction.

   (3)  Bodily injury to operator’s employes, to the extent that the bodily injury is covered by Workers’ Compensation or other insurance.

Source

   The provisions of this §  271.395 adopted September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179.

Cross References

   This section cited in 25 Pa. Code §  271.391 (relating to forms of financial assurances—persons other than municipalities and municipal authorities).

§ 271.396. Trust fund management—persons other than municipalities and municipal authorities.

 (a)  The trustee may invest and reinvest the principal and income of the trust fund and keep the fund invested as a single fund, without distinction between principal and income. In investing, reinvesting, exchanging, selling and otherwise managing the trust fund, the trustee shall discharge its duties solely in the interest of third-party claimants and with care to avoid loss or diminution of the trust fund capital. The trustee shall manage the trust fund with that degree of judgement, skill and care under the circumstances then prevailing which persons of prudence, discretion and intelligence, who are familiar with such matters, exercise in the management of their own affairs, not in regard to speculation, but in regard to the permanent disposition of funds, considering the probable income to be derived therefrom as well as the probable safety of their capital.

 (b)  For purposes of investing or reinvesting the moneys in the trust fund, the trustee is authorized to do the following:

   (1)  Purchase direct obligations of the United States Government, the Commonwealth, its municipalities, municipal authorities or school districts, the Turnpike Commission, the General State Authority and the State Public School Building Authority.

   (2)  Invest in time or demand deposits of the trustee, to the extent insured by an agency of the Federal or a State government.

   (3)  Purchase shares in an investment company registered under the Investment Company Act of 1940 (15 U.S.C.A. § §  80a-1—80a-64).

   (4)  Purchase prime commercial paper. Commercial paper is defined as unsecured promissory notes issued at a discount from par or on an interest bearing bond by an industrial, common carrier, public utility, finance company, real estate investment trust, commercial bank holding company or corporations whose credit shall have been approved by Moody’s Investors Service Incorporated or their successors. The trustee may not purchase commercial paper under this provision unless the commercial paper proposed to be purchased is rated Prime-1 or Prime 1-LOC or Prime-2 by Moody’s Investors Service Incorporated, A-1 or A-2 by Standard and Poor’s Corporation or Fitch 1 by Fitch Investors Services, Incorporated.

   (5)  Purchase repurchase agreements with respect to direct obligation of the United States or its agencies or instrumentalities backed by the full faith and credit of the United States and obligations of an agency or instrumentality of the United States if entered into with a bank, trust company or a broker or dealer—as defined by section 3 of the Securities Exchange Act of 1934 (15 U.S.C.A. §  78c.) The broker or dealer shall be a dealer in government bonds who reports to, trades with, is recognized as a primary dealer by a Federal reserve bank and is a member of the Securities Investors Protection Corporation. Obligations that are the subject of repurchase agreements under this subsection shall meet the following criteria:

     (i)   The obligations that are the subject of the repurchase agreement shall be either delivered to the trustee or supported by a safekeeping receipt issued by a depository satisfactory to the trustee.

     (ii)   The repurchase agreement shall provide that the value of the underlying obligation shall be maintained at a current market value, calculated no less frequently than monthly, of not less than the purchase price of the obligation.

     (iii)   The trustee has been granted a prior perfected security interest in the obligation.

     (iv)   The obligation shall be free and clear of adverse third-party claims.

   (6)  Hold cash awaiting investment or distribution for a reasonable period of time.

   (7)  Transfer assets of the trust fund to a common, commingled or collective trust fund which may be created by the trustee.

 (c)  The trustee shall annually, at least 30 days prior to the anniversary date of the establishment of the trust, furnish to the operator and the Department a statement confirming the value of the trust fund. The trustee shall value securities in the trust fund at the lesser of market or face value as of no more than 60 days prior to the anniversary date of the establishment of the trust fund. If the results of the valuation require additional capital to be paid into the trust fund so that the principal amount of $2 million may be maintained, the trustee shall request the operator, in writing, to make payment by the anniversary date of the establishment of the trust fund. The trustee shall notify the Department, in writing, at the expiration of 30 days after the anniversary date, if no payments are received from the operator.

 (d)  The trustee may resign or the operator may replace the trustee, but the resignation or replacement will not be effective until the successor trustee has been appointed and the successor trustee has been approved by the Department and has accepted the appointment. If the trustee resigns and the operator or the Department fails to act, the trustee may apply to a court of competent jurisdiction for instructions.

 (e)  An operator may from time to time request of the Department and receive, on the written order of the Department, funds of the trust fund which are in excess of the principal amount required to be maintained in the trust fund. The Department will, in evaluating a request, consider the claims experience of the operator, the earnings and disbursement experience of the trust fund, losses and the need to maintain in the trust fund an amount in excess of the principal amount to meet third-party claims. The trustee may not disburse funds under this subsection without the written authorization of the Department. Nothing in this subsection relieves the operator of its duty to maintain in the trust fund the principal amount required by this section.

 (f)  Under subsection (d), if the trustee notifies the Department that the operator has failed to make payments as the trustee requested to maintain the principal amount of the trust fund, the Department will notify the operator that it shall pay the trustee the amount required to maintain the principal amount of the trust fund within 15 days of the notification. If the operator fails or refuses to pay at the expiration of the 15-day period, the Department will, and the trustee may, proceed to collect the payment due in a manner provided by law.

Source

   The provisions of this §  271.396 adopted September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179.

Cross References

   This section cited in 25 Pa. Code §  271.391 (relating to forms of financial assurances—persons other than municipalities and municipal authorities).

§ 271.397. Self-insurance—persons other than municipalities and
municipal authorities.

 An applicant that is not a municipality or municipal authority may use self-insurance to meet the environmental impairment liability financial assurance requirements of this subchapter. An applicant may qualify for self-insurance by complying with § §  267.52—267.58 (Reserved).

Source

   The provisions of this §  271.397 adopted September 13, 1991, effective September 14, 1991, 21 Pa.B. 4179.

Cross References

   This section cited in 25 Pa. Code §  271.391 (relating to forms of financial assurances—persons other than municipalities and municipal authorities).



No part of the information on this site may be reproduced for profit or sold for profit.

This material has been drawn directly from the official Pennsylvania Code full text database. Due to the limitations of HTML or differences in display capabilities of different browsers, this version may differ slightly from the official printed version.