Financial assurance shall be accepted in a lump sum to be used for any purpose under these regulations. Financial assurance shall be executed in the amount calculated following the methods specified in these regulations. By offering the forms of financial assurance required to meet closure and corrective action requirements, the permittee of a confined swine feeding operation and its surety represent that the form of financial assurance offered is binding, irrevocable, unconditional, is financially guaranteed by assets sufficient to meet the obligation, is a valid instrument made payable to the Department, and fully complies with these regulations. The following forms of financial assurance may be accepted:
(a) A letter of credit. A letter of credit shall be subject to the following conditions: - (i) A letter of credit shall be accepted only from a bank or lending institution licensed to do business in the State of Wyoming and subject to banking laws and regulations of the State of Wyoming with more than 50 percent of the bank's assets residing in the U.S.
- (ii) The letter shall be irrevocable during its term. The Department may approve the use of a letter of credit as security according to a schedule approved within the permit. Any bank or lending institution issuing a letter of credit shall notify the Director in writing by certified mail at least ninety (90) days before the maturity date or expiration of the letter of credit agreement of its intent not to extend the letter of credit. A letter of credit shall be forfeited if not replaced by another form of financial assurance thirty (30) days before expiration of the letter of credit. All forms of financial assurance shall be approved by the Department before being accepted. A forfeited letter of credit shall be converted to cash by the bank or lending institution and the cash transferred to the Department.
- (iii) Letters of credit shall be made payable to the Department both in writing and upon the records of the bank issuing the letter of credit. Letters of credit must be payable upon demand by the Department and the lending institutions or banks issuing letters of credit are required to waive all rights of set off or liens against the letters of credit.
- (iv) The letter of credit shall not be more than ten (10) percent of the bank's capital surplus account as shown on a balance sheet and a financial statement certified by a certified public accountant in good standing.
- (v) No bank or lending institution shall issue a letter of credit to any person or entity, on any permit or financial assurance requirement required of that person or entity, in excess amounts allowed under W.S. 13-3-402. Violation of this provision shall be deemed a violation of the permit and the Department shall declare forfeiture of the letter of credit.
- (vi) In addition to those requirements set forth above, letters of credit shall provide that:
- (A) The bank or lending institution shall give prompt notice to the permittee and the Director by certified mail of any notice received or action filed alleging the insolvency or bankruptcy of the bank or lending institution, or alleging any violations of regulatory requirements that could result in suspension or revocation of the bank or lending institution's charter or license to do business.
- (B) In the event the bank or lending institution becomes unable to fulfill its obligations under the letter of credit for any reason, notice shall immediately be given to the permittee and the Director by certified mail. In the event the permittee becomes aware that the institution providing a letter of credit has become unable to fulfill its obligations, the permittee shall immediately notify the Director by certified mail.
- (C) The permittee is in violation of the permit if the financial assurance becomes invalid due to failure of the issuing bank or lending institution. The bank or lending institution shall be considered incapacitated due to bankruptcy, insolvency, lapse, suspension, or revocation of its charter or license to do business in Wyoming, or violation of the requirements set forth in these regulations. The Director shall issue a notice of violation to any permittee without financial assurance requiring replacement coverage within sixty (60) days. During this period the Director or a designated representative shall conduct weekly inspections to ensure continuing compliance with the permit. If any other permit conditions are violated, the Director may suspend the permit.
- (vii) Nothing herein shall limit the right to serve any process, notice , or demand required or permitted by law to be served upon the bank.
(b) Surety bonds. A surety shall not be considered good and sufficient for purposes of these regulations unless: - (i) It is licensed to do business in the State of Wyoming.
- (ii) The surety holds the highest rating under the following rating services:
- (C) Others accepted by the Division.
- (iii) The estimated bond amount does not exceed the limit of risk as provided for in W.S. 26-5-110, nor raise the total of all bonds held by the applicant under that surety above three (3) times the limit of risk.
- (iv) The surety agrees:
- (A) Not to cancel the bond, except where the Department gives prior written approval of a good and sufficient replacement form of financial assurance complying with these regulations.
- (B) To be jointly and severally liable with the permittee for closure and corrective actions as required by Part E of this regulation.
- (C) To provide immediate written notice to the Department and permittee once it becomes unable or may become unable to fulfill its obligations under the bond.
- (D) To warrant in the bond instrument that the bond is authorized, is fully enforceable, and is backed by sufficient assets to guarantee execution on the bond.
- (E) To further warrant that the bond shall be payable to the Department upon demand and shall not be subject to any liens or setoffs.
- (v) If, for any reason, the surety becomes unable to fulfill its obligations under the bond, the permittee and surety shall immediately provide the required notice to the Department. The permittee shall have sixty (60) days to secure alternative bonding complying with the provisions of these regulations. Failure to provide notice to the Department or failure to secure alternative bonding shall result in suspension of the permit.
(c) Federally insured certificate of deposit. The Department shall not accept an individual federally insured certificate of deposit in an amount in excess of the maximum insur-able amount as determined by the FDIC. Such certificates of deposit shall be made payable to the Department both in writing and upon the records of the bank issuing the certificate of deposit. All certificates of deposit shall be retained by the Wyoming State Treasurer and shall be payable on demand. The Department shall require the bank or lending institution issuing the certificate to waive all rights of set off or liens against the certificate. The amount of the certificate of deposit shall be calculated after any penalty for payment before maturity is deducted.
(d) Government-backed securities. In lieu of a bond, the permittee or its principal may deposit government securities registered solely in the Department 's name and backed by the full faith and credit of the United States. The market value of the securities shall be utilized to value the security.
(e) Cash. In lieu of a bond, the permittee or its principal may provide cash to be retained on deposit by the Wyoming State Treasurer in the name of the Department. Interest shall not be earned on amount of cash deposited in lieu of a bond or other form of financial assurance.
020-20 Wyo. Code R. § 20-50