Pennsylvania Code › Title 25 - ENVIRONMENTAL PROTECTION › Part VIII - Underground Storage Tank Indemnification Board › Chapter 977 - UNDERGROUND STORAGE TANK INDEMNIFICATION BOARD › Subchapter B - FEES AND COLLECTION PROCEDURES › Section 977.17 - Security for payment of gallon fee

Current through Register Vol. 54, No. 28, July 13, 2024
(a) The value of the security posted by a
				  distributor shall be calculated by multiplying the gallon fee as established
				  under §
										977.12(a) and
				  (b)(2) (relating to owner and operator fees)
				  by the number of gallons of regulated substance (except heating oil and diesel
				  fuel products) distributed over the 3-month period in the past calendar year in
				  which the distributor distributed the greatest volume of regulated
				  substance.
(b) The Fund will accept
				  only payment bonds issued by surety companies licensed to do business in this
				  Commonwealth.
(c) Negotiable
				  securities of the United States or the Commonwealth may be used in lieu of a
				  surety bond if the face value of the security is not less than the amount of
				  the security required. The securities shall be held by the State
				  Treasurer.
(d) Bank letters of
				  credit submitted as collateral shall be 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 bank or banking institution authorized to do business in this
				  Commonwealth.
(2) The letter of
				  credit shall be irrevocable and shall be so designated. The letter of credit
				  shall name the Fund as the beneficiary and shall be payable to the Fund. The
				  Fund 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 Fund and the owner or operator, of its intent
				  to terminate the letter of credit at the end of the current time
				  period.
(ii) The Fund may draw upon
				  the letter of credit before the end of its time period, if the distributor is
				  required to post security under §
												977.16 (relating to posting and
				  collecting security) and has failed to replace the letter of credit with other
				  acceptable means of compliance in accordance with section 215 of the Oil and
				  Gas Act (58 P. S. §
													601.215)
				  within 30 days of the bank's notice to terminate the letter of
				  credit.
(iii) A distributor will
				  notify the Fund within 30 days of the bank's notice to terminate the letter of
				  credit.
(3) The letter of
				  credit shall be governed by the
Uniform Custom and Priorities for
				  Accounting Credits
, International Chamber of Commerce, Publication
				  Number 400 (1983 edition), and the laws of the Commonwealth, including
				  13 Pa.C.S. §
												5101
				  (relating to letters of credit).
(4) The Fund will not accept a letter of
				  credit from a bank, which has failed or refused to pay, in full, on a letter of
				  credit previously submitted as collateral to the Fund.
(5) The Fund will not accept a letter of
				  credit that contains rights of set-off, or liens in favor of the issuing
				  bank.