Section 312 IAC 25-5-12 - Collateral bondsAuthority: IC 14-34-2-1
Affected: IC 14-34; 30 CFR 800.21
Sec. 12.
(a) Collateral bonds, except for letters of credit, shall be subject to the following conditions: (1) The director shall obtain possession of and keep in custody all collateral deposited by the applicant until authorized for release or replacement as provided in this rule.(2) The director shall value collateral at its current market value, not face value.(3) The director shall require that certificates of deposit be assigned to the state, in writing, and upon the books of the bank issuing such certificates.(b) Letters of credit shall be subject to the following conditions: (1) The letter may only be issued by a bank organized or authorized to do business in Indiana.(2) The letter must be irrevocable prior to a release by the director.(3) The letter must be payable to "State of Indiana, Department of Natural Resources" in part or in full upon demand by and receipt from the director of a notice of forfeiture issued in accordance with section 17 of this rule.(4) The letter must contain terms that authorize the director to draw upon the letter, in full, to obtain cash collateral in the event that the permittee has failed to furnish, to the director, a replacement bond consistent with this rule at least thirty (30) days prior to the expiration of the letter, and that such drafts need not be accompanied by a notice of forfeiture in accordance with section 17(d) of this rule.(5) The total amount of letters of credit that will be accepted from any bank for any permittee, on all permits held by that permittee, shall not exceed the bank's maximum legal lending limit as required by the appropriate Indiana or federal banking regulatory agency.(6) The letter of credit shall provide that:(A) the bank shall give prompt notice to the permittee and the director of any notice received or action filed alleging: (i) the insolvency or bankruptcy of the bank; or(ii) any violations of regulatory requirements that could result in suspension or revocation of the bank's charter or license to do business;(B) in the event the bank becomes unable to fulfill its obligations under the letter of credit for any reason, notice shall be given immediately to the permittee and the director; and(C) upon the incapacity of a bank by reason of:(ii) insolvency or suspension; or (iii) revocation of its charter or license; the permittee shall be deemed to be without performance bond coverage in violation of section 5(b) of this rule.(c) Persons with an interest in collateral posted as bond, and who desire notification of actions pursuant to the bond, shall request the notification, in writing, to the director at the time the collateral is offered.Natural Resources Commission; 312 IAC 25-5-12; filed Jun 21, 2001, 2:53 p.m.: 24 IR 3505, eff Dec 1, 2001; readopted filed May 29, 2007, 9:51 a.m.: 20070613-IR-312070146RFA; readopted filed Sep 19, 2013, 10:12 a.m.: 20131016-IR-312130125RFAReadopted filed 3/26/2019, 3:40 p.m.: 20190424-IR-312190011RFA