26.10.01.24

.24 Bonding Requirements for Tank Vessels.

A. The operator of a tank vessel, other than a public vessel, upon entering waters of the State to transfer greater than 25 barrels of oil in bulk as cargo shall post a bond, or other security as set forth in §F of this regulation, of $500 per gross ton of vessel. The bond or other security shall be in a form approved by the Department and shall be obtained by the tank vessel operator.

B. A bond may not be required for a vessel in waters of the State if that vessel is:

(1) Carrying oil that has been removed from waters of the State:

(a) As a result of a discharge, or oil that has been removed from another vessel because of the threat of a discharge into waters of the State, or

(b) At the request of the Department, the federal government, or a person responsible for that discharge; and

(2) Not owned or operated by a person responsible for the discharge resulting in the need for removal of the oil from waters of the State.

C. If the Department determines that oil has been discharged or spilled into waters of the State from the tank vessel, the bond or other security shall be forfeited to the Department to the extent of:

(1) The costs incurred to eliminate the residue of oil discharge or spillage;

(2) Damage caused to the natural and recreational resources of the State; and

(3) Any uncollectible penalty levied against the tank vessel operator.

D. If a bond or other security is forfeited to the Department as described in §C of this regulation, the tank vessel operator shall post a new bond or other security for that tank vessel.

E. The terms "assets", "current assets", "current liabilities", "liabilities", "net working capital", "net worth", "parent corporation", and "tangible net worth" as used in §F of this regulation have the meanings defined in 40 CFR §264.141.

F. A tank vessel operator may present other security acceptable to the Department instead of the requirements of §A of this regulation. Other security acceptable to the Department shall meet either §F(1) or (2) of this regulation as follows:

(1) A certification signed by a certified public accountant that the tank vessel operator has all of the following:

(a) Two of the following three ratios:

(i) A ratio of total liabilities to net worth less than 2.0,

(ii) A ratio of the sum of net income plus depreciation, depletion, and amortization to total liabilities greater than 0.1, or

(iii) A ratio of current assets to current liabilities greater than 1.5;

(b) Net working capital and tangible net worth each at least six times the amount required for bond posting in §A of this regulation;

(c) Tangible net worth of at least $10,000,000; and

(d) Assets located in the United States amounting to at least 90 percent of total assets or at least six times the amount required for bond posting in §A of this regulation;

(2) A certification signed by a certified public accountant that the tank vessel operator has:

(a) A current rating for this most recent bond issuance of AAA, AA, A, or BBB as issued by Standard and Poor's or Aaa, Aa, A, or Baa as issued by Moody's;

(b) A parent corporation that meets the requirements of §F(1)(b)—(d) of this regulation; and

(c) An absolute guaranty by the parent corporation of the tank vessel operator.

G. The requirement of this regulation may be satisfied by offering proof to the Department of a current Certificate of Financial Responsibility issued by the USCG under 33 CFR 130 for each tank vessel entering waters of the State.

H. The Department may waive the requirements of this regulation if the Department determines that the bonds or other securities required are not generally available.