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25 Pa. Code § 271.321. Special terms and conditions for surety bonds.


§ 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.


   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).

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