Section 329IAC9-8-14. Local government bond rating test

   (a) A:

(1) general purpose local government owner or operator and general purpose local government serving as a guarantor;

(2) general purpose local government owner or operator; or

(3) general purpose local government serving as a guarantor;

may satisfy the requirements of section 4 of this rule by having a currently outstanding issue or issues of general obligation bonds of one million dollars ($1,000,000) or more, excluding refunded obligations, with a Moody's rating of Aaa, Aa, A, or Baa, or a Standard & Poor's rating of AAA, AA, A, or BBB. Where a local government has multiple outstanding issues, or where a local government's bonds are rated by both Moody's and Standard & Poor's, the lowest rating must be used to determine eligibility. Bonds that are backed by credit enhancement, other than municipal bond insurance, must not be considered in determining the amount of applicable bonds outstanding.

  (b) A local government owner or operator or local government serving as a guarantor that:

(1) is not a general purpose local government; and

(2) does not have the legal authority to issue general obligation bonds;

may satisfy the requirements of section 4 of this rule by having a currently outstanding issue or issues of revenue bonds of one million dollars ($1,000,000) or more, excluding refunded issues, and having a Moody's rating of Aaa, Aa, A, or Baa, or a Standard & Poor's rating of AAA, AA, A, or BBB as the lowest rating for any rated revenue bond issued by the local government. Where bonds are rated by both Moody's and Standard & Poor's, the lower rating for each bond must be used to determine eligibility. Bonds that are backed by credit enhancement must not be considered in determining the amount of applicable bonds outstanding.

  (c) The:

(1) local government owner or operator and local government guarantor;

(2) local government owner or operator; or

(3) local government guarantor;

shall maintain a copy of its bond rating published within the last twelve (12) months by Moody's or Standard & Poor's.

  (d) To demonstrate that it meets the local government bond rating test, the chief financial officer of a:

(1) general purpose local government owner or operator and general purpose local government serving as a guarantor;

(2) general purpose local government owner or operator; or

(3) general purpose local government serving as a guarantor;

shall sign a letter worded exactly as follows, except that the instructions in brackets are to be replaced by the relevant information and the brackets deleted:

Letter from Chief Financial Officer

I am the chief financial officer of [insert name and address of local government owner or operator or guarantor]. This letter is in support of the use of the bond rating test to demonstrate financial responsibility for [insert "taking corrective action" or "compensating third parties for bodily injury and property damage" or both of those phrases] caused by [insert "sudden accidental releases" or "nonsudden accidental releases" or both of those phrases] in the amount of at least [insert dollar amount] per occurrence and [insert dollar amount] annual aggregate arising from operating (an) underground storage tank(s).

Underground storage tanks at the following facilities are assured by this bond rating test: [List for each facility the name and address of the facility where tanks are assured by the bond rating test.]

The details of the issue date, maturity, outstanding amount, bond rating, and bond rating agency of all outstanding bond issues that are being used by [insert name of local government owner or operator or guarantor] to demonstrate financial responsibility are as follows: [complete table]

Issue Date

Maturity Date

Outstanding Amount

Bond Rating

Rating Agency [Moody's or Standard & Poor's]

The total outstanding obligation of [insert amount], excluding refunded bond issues, exceeds the minimum amount of one million dollars ($1,000,000). All outstanding general obligation bonds issued by this government that have been rated by Moody's or Standard & Poor's are rated as at least investment grade (Moody's Baa or Standard & Poor's BBB) based on the most recent ratings published within the last twelve (12) months. Neither rating service has provided notification within the last twelve (12) months of downgrading of bond ratings below investment grade or of withdrawal of bond rating other than for repayment of outstanding bond issues.

I hereby certify that the wording of this letter is identical to the wording specified in 329 IAC 9-8-14(d) as such regulations were constituted on the date shown immediately below.

[Date]

[Signature]

[Name]

[Title]

  (e) To demonstrate that it meets the local government bond rating test, the chief financial officer of a:

(1) local government owner or operator other than a general purpose government and guarantor other than a general purpose government;

(2) local government owner or operator other than a general purpose government; or

(3) guarantor other than a general purpose government;

shall sign a letter worded exactly as follows, except that the instructions in brackets are to be replaced by the relevant information and the brackets deleted:

Letter from Chief Financial Officer

I am the chief financial officer of [insert name and address of local government owner or operator or guarantor]. This letter is in support of the use of the bond rating test to demonstrate financial responsibility for [insert "taking corrective action" or "compensating third parties for bodily injury and property damage" or both of those phrases] caused by [insert "sudden accidental releases" or "nonsudden accidental releases" or both of those phrases] in the amount of at least [insert dollar amount] per occurrence and [insert dollar amount] annual aggregate arising from operating (an) underground storage tank(s). This local government is not organized to provide general governmental services and does not have the legal authority under state law or constitutional provisions to issue general obligation debt.

Underground storage tanks at the following facilities are assured by this bond rating test: [List for each facility the name and address of the facility where tanks are assured by the bond rating test.]

The details of the issue date, maturity, outstanding amount, bond rating, and bond rating agency of all outstanding revenue bond issues that are being used by [insert name of local government owner or operator or guarantor] to demonstrate financial responsibility are as follows: [complete table]

Issue Date

Maturity Date

Outstanding Amount

Bond Rating

Rating Agency [Moody's or Standard & Poor's]

The total outstanding obligation of [insert amount], excluding refunded bond issues, exceeds the minimum amount of one million dollars ($1,000,000). All outstanding revenue bonds issued by this government that have been rated by Moody's or Standard & Poor's are rated as at least investment grade (Moody's Baa or Standard & Poor's BBB) based on the most recent ratings published within the last twelve (12) months. The revenue bonds listed are not backed by third party credit enhancement or are insured by a municipal bond insurance company. Neither rating service has provided notification within the last twelve (12) months of downgrading of bond ratings below investment grade or of withdrawal of bond rating other than for repayment of outstanding bond issues.

I hereby certify that the wording of this letter is identical to the wording specified in 329 IAC 9-8-14(e) as such regulations were constituted on the date shown immediately below.

[Date]

[Signature]

[Name]

[Title]

  (f) The commissioner may require reports of financial condition at any time from the:

(1) local government owner or operator and local government guarantor;

(2) local government owner or operator; or

(3) local government guarantor.

If the commissioner finds, on the basis of such reports or other information, that the local government owner or operator and local government guarantor, the local government owner or operator, or the local government guarantor no longer meets the local government bond rating test requirements of this section, the local government owner or operator shall obtain alternative coverage within thirty (30) days after notification of such a finding.

  (g) If a local government owner or operator that uses the bond rating test to provide financial assurance finds that it no longer meets the bond rating test requirements, the local government owner or operator shall obtain alternative coverage within one hundred fifty (150) days of the change in status. (Solid Waste Management Division; 329 IAC 9-8-14; filed Jul 19, 1999, 12:00 p.m.: 22 IR 3747; readopted filed Jan 10, 2001, 3:25 p.m.: 24 IR 1535)