Subchapter E. BONDING AND INSURANCE
REQUIREMENTS
SCOPE Sec.
287.301. Scope.
BONDING REQUIREMENTS
287.311. New facilities.
287.312. Existing facilities.
287.313. Form, terms and conditions of the bond.
287.314. Duration of bond liability.
TYPES OF BONDS
287.321. Special terms and conditions for surety bonds.
287.322. General terms and conditions for collateral bonds.
287.323. Collateral bonds; letters of credit.
287.324. Collateral bonds; certificates of deposit.
287.325. Collateral bonds; negotiable bonds.
287.326. Phased deposit of collateral.
287.327. Surety/collateral combination bond.
BOND AMOUNT
287.331. Bond amount determination.
287.332. Bond amount adjustments.
287.333. Failure to maintain adequate bond.
BOND RELEASE
287.341. Release of bonds.
287.342. Final closure certification.
BOND FORFEITURE
287.351. Forfeiture determination.
287.352. Forfeiture procedures.
MISCELLANEOUS PROVISIONS
287.361. Replacement of existing bond.
287.362. Reissuance of permit.
287.363. Incapacity of operators or financial institutions.
287.364. Preservation of remedies.
PUBLIC LIABILITY INSURANCE REQUIREMENTS
287.371. Insurance requirement.
287.372. Conditions of insurance.
287.373. Proof of insurance coverage.
287.374. Additional insurance coverage.
287.375. Maintenance of insurance coverage.
Cross References This subchapter cited in 25 Pa. Code § 287.101 (relating to general requirements for permit); 25 Pa. Code § 287.102 (relating to permit by rule); 25 Pa. Code § 287.115 (relating to filing by permitted facilities); 25 Pa. Code § 287.212 (relating to conditions of permits—general and right of entry); 25 Pa. Code § 287.221 (relating to permit reissuance); 25 Pa. Code § 287.411 (relating to when a penalty will be assessed); 25 Pa. Code § 287.502 (relating to relationship to other requirements); 25 Pa. Code § 287.601 (relating to scope); 25 Pa. Code § 287.621 (relating to application for general permit); 25 Pa. Code § 287.632 (relating to waiver of requirements); 25 Pa. Code § 288.131 (relating to basic requirements); 25 Pa. Code § 288.133 (relating to maps and grid requirements); 25 Pa. Code § 289.131 (relating to basic requirements); 25 Pa. Code § 289.133 (relating to map and grid requirements); 25 Pa. Code § 293.103 (relating to maps and related information); 25 Pa. Code § 295.112 (relating to maps and related information); and 25 Pa. Code § 297.103 (relating to maps and related information).
SCOPE
§ 287.301. Scope.
(a) This subchapter sets forth minimum requirements for demonstrating sufficient financial responsibility for the operation of residual waste processing or disposal facilities by providing for bond guarantees for the operation of the facilities, and by providing for minimum standards for insurance protection for personal injury and property damage to third parties arising from the operation of those facilities.
(b) Except as otherwise expressly provided, this subchapter applies to the permit applicant, permittee or 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. This subchapter will not be construed or understood to relieve or excuse the applicant or permittee from complying with the requirements of this subchapter.
BONDING REQUIREMENTS
§ 287.311. New facilities.
(a) The Department will not approve a new, reissued, renewed or modified permit for the processing or disposal of residual waste, unless the applicant first submits to the Department a bond in accordance with 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 § 287.331 (relating to bond amount determination).
Cross References This section cited in 25 Pa. Code § 287.333 (relating to failure to maintain adequate bond).
§ 287.312. Existing facilities.
(a) Each person or municipality operating a residual waste processing or disposal facility and which has not filed a bond under the act shall, by January 4, 1993, file a bond with the Department in accordance with this subchapter. For facilities subject to § 287.111 (relating to notice by impoundments and unpermitted processing or disposal facilities), the bond shall be filed as part of the notice required under that section. The minimum amount of the bond shall be $10,000. This section will not be construed to prevent the Department from requiring bonds to be posted in addition to the bond originally posted in compliance with this section. This section will not be construed to prevent the Department from requiring bonds to be posted as required by the act for another facility operating on or after July 4, 1992.
(b) Prior to the approval by the Department of a closure plan submitted under § 287.117 (relating to closure plan) or to the issuance by the Department of an approval of a completed application for permit modification submitted under § 287.115 (relating to filing by permitted facilities), each person or municipality operating a residual waste processing or disposal facility under permit subject to § 287.115 shall submit an updated bond in an amount approved by the Department.
(c) The bond required by this section shall be submitted under this subchapter, containing terms and conditions required by the Department, and shall be on a form prepared and approved by the Department. The bond 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 § 287.331 (relating to bond amount determination).
Source The provisions of this § 287.312 corrected October 23, 1992, effective July 4, 1992, 22 Pa.B. 5249. Immediately preceding text appears at serial pages (170728) to (170729).
Cross References This section cited in 25 Pa. Code § 287.111 (relating to notice by impoundments and unpermitted processing or disposal facilities).
§ 287.313. Form, terms and conditions of the bond.
(a) The Department will accept the following types of bonds:
(1) A surety bond as provided in § 287.321 (relating to special terms and conditions for surety bonds).
(2) A collateral bond as provided in § § 287.322—287.325.
(3) A combination of surety and collateral bonds as provided in § 287.326 (relating to phased deposit of collateral).
(4) For a facility with a permit term of at least 10 years, a phased deposit of collateral bond as provided in § 287.326.
(5) A department or agency of the United States or the Commonwealth which owns or operates a residual waste processing or disposal facility may satisfy the requirements of this section by other means of financial assurance approved by the Department which satisfies the terms and conditions for bonds under this subchapter.
(b) Each person or municipality submitting a bond shall comply with Department guidelines establishing minimum criteria for execution and completion of the bond forms and related documents and on calculation of total bond liability.
(c) Bonds submitted under this subchapter shall be conditioned on compliance with the act and regulations promulgated thereunder, the environmental protection acts, the terms and conditions of the permit and Departmental orders relating thereto which include orders relating to the operation of the facility. The liability of the operator under the bond is absolute and unconditional to ensure compliance by the operator with all requirements for the operation of a residual waste processing or disposal facility.
(d) Liability on the bond shall cover the operation of residual 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 requirements of this subchapter. A bond executed by an operator who is not the permittee or permit applicant does not meet the requirement of this subchapter if liability on the bond is limited to the residual waste management activities conducted by that operator.
(e) Bonds will be reviewed for legality and form according to established Department procedures.
§ 287.314. Duration of bond liability.
The liability under a bond filed with the Department under this subchapter shall continue for the period of operation of the facility, and for 10 years after final closure certification of the facility under § 287.342 (relating to final closure certification), unless released in whole or in part by the Department in writing, prior thereto as provided by § 287.341 (relating to release of bonds).
TYPES OF BONDS
§ 287.321. Special terms and conditions for surety bonds.
(a) The Department will not accept the bond of a surety company that has failed or unduly 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 January 13, 2001, and modifications issued after January 13, 2001, 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 by the surety 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 shall take effect 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 § 287.361 (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 all 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 § 287.351 (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 a part of the facility is located. The Department may provide copies of notices of violation, cessation orders and other relevant correspondence regarding the surety cancellation, to governmental units.
(f) The Department will not accept surety bonds from a surety company when the total bond liability to the Department on the 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 shall be 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 will not be affected by the bankruptcy, insolvency or other financial incapacity of the operator or principal on the bond.
(j) Monies collected on bonds posted under this section shall be deposited with the Treasurer of the Commonwealth, who shall hold it in the name of the Commonwealth in trust as cash collateral until the Department determines one of the following:
(1) Bonds would otherwise be released under § 287.341 (relating to release of bonds).
(2) There are other grounds for forfeiture under § 287.351 or collection under the terms and conditions of the bond.
(3) Other bonds or collateral acceptable to the Department have been posted.
(k) If the bonds are releasable under § 287.341, 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 § 287.351, the Department will deposit the collected moneys into the Solid Waste Abatement Fund for the purposes specified in § 287.352 (relating to forfeiture procedures).
Source The provisions of this § 287.321 amended January 12, 2001, effective January 13, 2001, 31 Pa.B. 235. Immediately preceding text appears at serial pages (226532) and (250867) to (250868).
Cross References This section cited in 25 Pa. Code § 287.313 (relating to form, terms and conditions of the bond).
§ 287.322. 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 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.
(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 stand-by 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 the 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 in this Commonwealth.
(c) The Department will place collateral submitted under this subchapter with the Treasurer, who shall be responsible for its custody and safekeeping until released or collected and deposited in the Solid Waste Abatement Fund by the Department under this chapter.
(d) Collateral shall be in the name of the operator, and shall be pledged and assigned to the Department clear of claims or rights. The pledge or assignment will vest in the Department a property interest in the collateral which will remain until release under the terms of this subchapter, and will not be affected by the bankruptcy, insolvency or other financial incapacity of the operator.
(e) The Department will ensure its ownership interest in collateral posted on a bond under this section such 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 necessary to ensure its ownership interest is fully protected and may take actions under the law as it deems necessary to protect the ownership interest.
Cross References This section cited in 25 Pa. Code § 287.313 (relating to form, terms and conditions of the bond).
§ 287.323. Collateral bonds; letters of credit.
(a) Letters of credit submitted as collateral for collateral bonds 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 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 monies 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 both of 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 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 its 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 may 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 shall be subject to 13 Pa.C.S. § § 5105—5117 (relating to letters of credit) or the equivalent Article or Division of 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 may 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 rights of set-off 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.
Cross References This section cited in 25 Pa. Code § 287.313 (relating to form, terms and conditions of the bond).
§ 287.324. Collateral bonds; certificates of deposit.
Certificates of deposit submitted as collateral for collateral bonds shall be 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 such 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 chartered or 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 that 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 of the Commonwealth or an authority of the 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 provisions of 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 (72 P. S. § 3836-3). A certificate of deposit is not 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 all 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 their face that they are automatically renewable. If the operator is a political subdivision of the Commonwealth or an authority of a political subdivision, the certificate of deposit may be established for a term and need not be automatically renewable at the expiration of the term. The political subdivision or authority shall provide to the Department, at least 60 days prior to the expiration of the term, written notice of the expiration of the term of the certificate of deposit. If the political subdivision or authority fails to replace the certificate of deposit with another certificate of deposit or other bond guarantee acceptable to the Department within 20 days of the expiration of the term, the Department may collect an amount under the certificate of deposit and hold the proceeds as cash collateral as provided by this subchapter.
(6) The operator shall submit certificates of deposit in amounts and containing terms and conditions 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 may not accept certificates of deposit from banks which have failed or 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.
Cross References This section cited in 25 Pa. Code § 287.313 (relating to form, terms and conditions of the bond).
§ 287.325. Collateral bonds; negotiable bonds.
Negotiable bonds submitted and pledged as collateral for collateral bonds shall be 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 securities for bond deposit.
(2) The current market value as determined by the Department shall be at least equal to the amount of the required bond.
(3) The Department may periodically revalue the securities and shall 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 Corporation (25 Broadway, New York, New York 10004-1064) or ‘‘A’’ by Moody’s Investor Service (99 Church Street, New York, New York 10007-2787).
(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.
Cross References This section cited in 25 Pa. Code § 287.313 (relating to form, terms and conditions of the bond).
§ 287.326. Phased deposit of collateral.
(a) If the Department determines, based upon the approved facility operation plan, that the facility will be accepting residual waste for at least 10 years from the date of permit issuance or the commencement of acceptance of residual 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 as 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 shall be grounds for forfeiture of the bond.
(5) The Department may require additional bonding in an amount determined under § 287.331 (relating to bond amount determination) 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 an 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 residual 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 bonds 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 the accumulated interest if the return of the accumulated interest does not reduce the amount of collateral below the required bond amount.
Cross References This section cited in 25 Pa. Code § 287.313 (relating to form, terms and conditions of the bond); and 25 Pa. Code § 287.333 (relating to failure to maintain adequate bond).
§ 287.327. Surety/collateral combination bond.
The Department may accept a bond which is comprised of surety and collateral bond instruments otherwise allowed by this subchapter. These instruments will 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 otherwise does not meet the purposes of the act, this article or orders of the Department.
Cross References This section cited in 25 Pa. Code § 287.332 (relating to bond amount adjustments).
BOND AMOUNT
§ 287.331. Bond amount determination.
(a) A person or municipality shall calculate the proposed amount of total bond liability 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 the bond is released as provided by this subchapter.
(b) A person or municipality that is required to file a bond under this subchapter, shall prepare a written estimate of the cost of closing the facility under this subchapter, and all other related costs necessary to comply with the requirements of this subchapter, for the purpose of determining the bond 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 effects 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 at any time 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 effects 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 of 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 of 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 amount shall be calculated using guidelines prepared by the Department and shall be based on factors which include the following:
(1) The costs to the Commonwealth to conduct closure and postclosure care activities as determined by the cost estimate for closure and postclosure care under this section, as well as costs of monitoring, sampling and analysis, and 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 § § 287.124 and 287.125 (relating to identification of interests; and compliance information).
(d) The bond amount shall cover areas where residual waste disposal or processing activities are to be conducted.
(e) The minimum bond amount is $10,000.
(f) The Department will review the bond amount calculated by the operator and will not issue a permit, approve a closure plan, or otherwise authorize operation of residual waste processing and disposal facilities under this article prior to approval of the bond amount.
Cross References This section cited in 25 Pa. Code § 287.311 (relating to new facilities); 25 Pa. Code § 287.312 (relating to existing facilities); 25 Pa. Code § 287.326 (relating to phased deposit of collateral); 25 Pa. Code § 287.332 (relating to bond amount adjustments); 25 Pa. Code § 287.341 (relating to release of bonds); 25 Pa. Code § 288.283 (relating to annual operation report); 25 Pa. Code § 289.303 (relating to annual operation report); 25 Pa. Code § 293.252 (relating to annual operation report); 25 Pa. Code § 295.272 (relating to annual operation report); and 25 Pa. Code § 297.262 (relating to annual operation report).
§ 287.332. Bond 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 according to § 287.333 (relating to failure to maintain adequate bond), or whenever additional bond amounts are required under this chapter, including § § 287.327 and 287.331 (relating to surety/collateral combination bond; and bond amount determination).
(b) The Department will require an operator to deposit additional bond amounts determined under § 287.331 when the existing bond does not meet the requirements of this subchapter for any reason, including 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, reissued, 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 a bond was required to be submitted under this subchapter, the Department may determine the adequacy of bond amount requirements for residual waste processing or disposal facilities and, if necessary, require additional bond amounts.
(d) A request for reduction of the required bond shall be considered a request for bond release under § 287.341 (relating to release of bonds).
Source The provisions of this § 287.332 amended January 12, 2001, effective January 13, 2001, 31 Pa.B. 235. Immediately preceding text appears at serial pages (226542) and (250869).
Cross References This section cited in 25 Pa. Code § 287.341 (relating to release of bonds).
§ 287.333. 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 in accordance with the schedule submitted under § 287.326 (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 residual waste processing and disposal activities conducted by the operator. The Department may take additional actions that may be 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 State Treasurer who shall hold it in trust in the name of the Commonwealth until the Department determines that the bonds would otherwise be released under § 287.341 (relating to release of bonds), or that there are other grounds for forfeiture under § 287.351 (relating to forfeiture determination).
(1) If the bonds are releasable, the monies may be returned to the surety or operator, as appropriate, in a manner and under conditions as 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 § 287.352 (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 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 according to this subchapter. If the operator fails to correct the violation within 45 days of this notice, the Department will issue a cessation order for the operator’s and related parties’ permits. The Department may take other action as may be 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 operating a residual waste disposal or processing facility under § 287.311 (relating to new facilities).
Cross References This section cited in 25 Pa. Code § 287.332 (relating to bond amount adjustments).
BOND RELEASE
§ 287.341. Release of bonds.
(a) An operator seeking a release of a bond previously submitted to the Department shall file a written request with the Department for release of all or part of the bond amount posted for the facility as part of a request for bond adjustment under § 287.332 (relating to bond amount adjustments), or after certification of final closure of the facility.
(b) The written request for bond release shall contain the following:
(1) The name of the operator and identification of the facility for which 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 why bond release is requested. The explanation shall include, but is not limited to, details relating 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, final closure certification 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 § 287.331 (relating to bond amount determination).
(5) Other information that may be required by the Department.
(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 bond release by the operator, as required by § 287.342 (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 § 287.331. If the new bond amount determination would require less bond 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 bond release under this section upon final closure, or any time 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 this chapter, 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 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 shall be 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 may be 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 now or hereafter existing in equity or under criminal and civil common law or statutory law. The release of a bond 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.
(3) The Department may grant bond releases immediately upon final closure, for facilities other than landfills, and disposal impoundments 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 § 287.341 amended January 12, 2001, effective January 13, 2001, 31 Pa.B. 235. Immediately preceding text appears at serial pages (250870) and (226545) to (226546).
Cross References This section cited in 25 Pa. Code § 287.314 (relating to duration of bond liability); 25 Pa. Code § 287.321 (relating to special terms and conditions for surety bonds); 25 Pa. Code § 287.332 (relating to bond amount adjustments); and 25 Pa. Code § 287.333 (relating to failure to maintain adequate bond).
§ 287.342. Final closure certification.
(a) If the operator of a residual waste processing or disposal facility believes that all 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 final closure certification request shall be accompanied by a nonrefundable administration fee in the form of a check payable to the ‘‘Commonwealth of Pennsylvania’’ for the following amount:
(1) Eight thousand eight hundred dollars for residual waste landfills and residual waste disposal impoundments.
(2) Six hundred dollars for all other residual waste processing or disposal facilities.
(c) 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) One of the following 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 § 288.256(c)(1) or § 289.266(c)(1) (relating to groundwater assessment plan).
(iii) The site-specific standard at and beyond the property boundary.
(3) 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.
(4) The facility is not causing adverse effects on the environment, and is not causing a nuisance.
(d) For measuring compliance with secondary contaminants, under subsection (c)(2)(i) or (iii), the Department may approve a compliance point beyond the property boundary up to a water source.
(e) Upon a request for final closure certification, the Department will inspect the facility to verify that closure, postclosure and final closure have been completed as provided in this section (c).
(f) 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.
(g) The final closure certification will not be construed as a guarantee of future performance nor will 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 at the time of the certification or at a future time, for which the operator shall remain 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.
(h) If subsequent to the issue 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 the applicable requirements of this article.
(i) 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.
(j) 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 § 287.342 amended January 12, 2001, effective January 13, 2001, 31 Pa.B. 235. Immediately preceding text appears at serial pages (226546) to (226547).
Cross References This section cited in 25 Pa. Code § 287.115 (relating to filing by permitted facilities); 25 Pa. Code § 287.117 (relating to closure plan); 25 Pa. Code § 287.314 (relating to duration of bond liability); 25 Pa. Code § 287.341 (relating to release of bonds); 25 Pa. Code § 288.292 (relating to closure); 25 Pa. Code § 289.172 (relating to closure plan); 25 Pa. Code § 289.312 (relating to closure); 25 Pa. Code § 293.262 (relating to cessation of operations); 25 Pa. Code § 295.282 (relating to cessation of operations); and 25 Pa. Code § 297.272 (relating to cessation of operations).
BOND FORFEITURE
§ 287.351. Forfeiture determination.
The Department will forfeit a collateral or surety bond when it determines that one or more of the following has occurred:
(1) The operator has violated or continues to violate a term or condition 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 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 the 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 without obtaining final closure certification, or has otherwise failed to properly achieve final closure of the facility under the requirements of 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 closure, postclosure or final closure measures according to schedules or plans approved by the Department.
(9) The operator or financial institution has become insolvent, 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 the act, the environmental protection acts, this title, the terms and conditions of the permit or orders of the Department.
Cross References This section cited in 25 Pa. Code § 287.321 (relating to special terms and conditions for surety bonds); 25 Pa. Code § 287.321 (relating to special terms and conditions for surety bonds); 25 Pa. Code § 287.333 (relating to failure to maintain adequate bond); and 25 Pa. Code § 287.375 (relating to maintenance of insurance coverage).
§ 287.352. 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) 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 same to the Office of Attorney General which will proceed to enforce and collect the amount forfeited, which amount will, upon collection, be paid into the Solid Waste Abatement Fund.
(d) Monies 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 residual 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.
Cross References This section cited in 25 Pa. Code § 287.321 (relating to special terms and conditions for surety bonds); and 25 Pa. Code § 287.333 (relating to failure to maintain adequate bond).
MISCELLANEOUS PROVISIONS
§ 287.361. 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 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 residual 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.
Cross References This section cited in 25 Pa. Code § 287.321 (relating to special terms and conditions for surety bonds).
§ 287.362. Reissuance of permit.
Before an existing permit is reissued under § 287.221 (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.
§ 287.363. 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 if the following occur:
(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.
(2) An action asserting 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.
§ 287.364. Preservation of remedies.
Remedies provided or authorized by law for violation of statutes, including the act, the applicable environmental protection acts, this title, and the terms and conditions of permits, and orders of the Department, are expressly preserved. This subchapter will not be construed as an exclusive penalty or remedy for the violations. Action taken under this subchapter does not waive or impair another remedy or penalty provided in law or equity.
PUBLIC LIABILITY INSURANCE REQUIREMENTS
§ 287.371. Insurance requirement.
(a) A person or municipality that has not submitted proof of insurance under the act may not dispose or process residual waste unless the person or municipality has submitted proof of a commercial policy of liability insurance covering third-party claims for property damage and bodily injury as provided by this section.
(b) An applicant for a permit to operate a residual waste processing or disposal facility, and every person or municipality that submits a closure plan under § 287.117 (relating to closure plan), shall submit to the Department proof of a commercial policy of liability insurance covering third party claims for property damage and bodily injury.
(1) The insurance policy shall be effective prior to the initiation of residual waste processing or disposal operations under the permit, or, for a closure plan submitted under § 287.117, prior to the initiation of the closure plan.
(2) The Department may accept as proof of insurance an insurance policy issued to a person 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) Permit applications for new facilities shall certify that the operator has in force, or will, prior to initiation of operations, an insurance policy that complies with the requirements of this subchapter.
(d) A department or agency of the United States or the Commonwealth which owns or operates a residual waste processing or disposal facility may satisfy the requirements of this section by other means of financial assurance approved by the Department which satisfy the terms and conditions for insurance under this subchapter.
Source The provisions of this § 287.371 amended January 12, 2001, effective January 13, 2001, 31 Pa.B. 235. Immediately preceding text appears at serial page (226551).
Cross References This section cited in 25 Pa. Code § 288.283 (relating to annual operation report); 25 Pa. Code § 289.303 (relating to annual operation report); 25 Pa. Code § 291.222 (relating to annual operation report); 25 Pa. Code § 293.252 (relating to annual operation report); 25 Pa. Code § 295.272 (relating to annual operation report); and 25 Pa. Code § 297.262 (relating to annual operation report).
§ 287.372. Conditions of insurance.
(a) Except for operators of residual waste land application sites under Chapter 291 (relating to land application of residual waste), the operator shall maintain a comprehensive general liability insurance policy during operation of the facility and until the Department issues a final closure certification under this chapter which satisfies the following conditions:
(1) The commercial insurance provided to satisfy the public liability insurance 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.
(i) 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 $1,000,000.
(ii) 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 $1,000,000 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.
(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 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 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 shall be liable for payment of the deductible amounts. 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 subsection by the purchase of excess coverage for the deductible amounts.
(b) The operator of a residual waste land application facility for agricultural utilization or land reclamation under Chapter 291, 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 residual waste land application operations, which include vehicular activities. The certificate shall provide for third-party personal injury and property damage protection. Minimum coverage for combined personal injury and property damage shall be $500,000. Coverage provided under this paragraph 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 the 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 this subchapter.
(6) The amount of coverage provided for property damage and bodily injury 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.
§ 287.373. 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 where shorter periods of notice for cancellation or termination have been authorized by the Insurance Department.
(5) State that the insurance coverage provided by the policy is for the purpose of satisfying 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 or insurance policy 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 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.
Cross References This section cited in 25 Pa. Code § 287.375 (relating to maintenance of insurance coverage); 25 Pa. Code § 288.283 (relating to annual operation report); 25 Pa. Code § 289.303 (relating to annual operation report); 25 Pa. Code § 291.222 (relating to annual operation report); 25 Pa. Code § 293.252 (relating to annual operation report); 25 Pa. Code § 295.272 (relating to annual operation report); and 25 Pa. Code § 297.262 (relating to annual operation report).
§ 287.374. 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 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 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.
§ 287.375. Maintenance of insurance coverage.
(a) The operator shall maintain insurance coverage continuously in full force during operation of the residual waste processing or disposal facility until final closure certification.
(b) The operator shall submit proof of insurance under § 287.373 (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 conduct residual waste processing or disposal operations at 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 § 287.373 within 15 days of the notice.
(c) The insurer may cancel or otherwise terminate an insurance policy by sending 60 days or other period prior written notice as may be authorized by the Insurance Department, 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 § 287.373 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 cessation order to the operator.
(4) Forfeit the existing bonds under § 287.351 (relating to forfeiture determination). The proceeds of the forfeited bonds shall 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. This subsection will not be construed to relieve the operator of its duty to maintain in full force and effect a bond as required by this subchapter and acceptable proof of an insurance policy as required by this subchapter.
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