Section 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.

Notation

Cross References

This section cited in 25 Pa. Code § 287.313 (relating to form, terms and conditions of the bond).