9 Va. Admin. Code § 25-900-300

Current through Register Vol. 41, No. 4, October 8, 2024

Section 9VAC25-900-300 - Surety bond

A. An owner may satisfy the requirements of this part by obtaining a surety bond that conforms to the requirements of this section and by submitting an originally signed duplicate of the bond to the department. The surety company issuing the bond shall be licensed to operate as a surety in the Commonwealth of Virginia and be among those listed as acceptable sureties on federal bonds in the latest Circular 570 of the U.S. Department of the Treasury.

B. Under the terms of the bond, the surety shall become liable on the bond obligation when the owner fails to perform as guaranteed by the bond.

C. The bond shall guarantee that the owner or any other authorized person shall perform all or any of the following activities for which the bond is used to satisfy the requirements of this part:

1. Operate and maintain, monitor, repair, or replace any practices for achieving nutrient reductions at the nutrient credit-generating project in question and in accordance with the nutrient credit certification; or,

2. Operate and maintain, monitor, repair, or replace any practices following an order to do so that has been issued by the department or by a court.

D. The owner shall compare the cost estimate with the penal sum of the bond:

1. Annually, at least 60 days prior to the anniversary date of the initial approval by the department of the release of credits for exchange. If the penal sum of the bond is less than the amount of the cost estimate, the owner shall, by the anniversary date of the initial approval by the department of the release of credits for exchange, increase the penal sum of the bond so that its value at least equals the amount of the cost estimate, or obtain other financial assurance as specified in this part to cover the difference. If the penal sum of the bond is greater than the total amount of the cost estimate, the owner may submit a written request to the director for permission to reduce the penal sum of the bond to the amount of the cost estimate; and

2. Whenever the cost estimate changes. If the penal sum of the bond is less than the amount of the new cost estimate, the owner shall, within 60 days of the change in the cost estimate, increase the penal sum of the bond so that its value at least equals the amount of the new estimate, or obtain other financial assurance as specified in this part to cover the difference. If the penal sum of the bond is greater than the total amount of the cost estimate, the owner may submit a written request to the director for permission to reduce the penal sum of the bond to the amount of the cost estimate.

E. The surety bond shall guarantee that the owner shall provide alternate evidence of financial assurance as specified in this part within 60 days after receipt by the department of a notice of cancellation of the bond from the surety.

F. The bond shall remain in force for its term unless the surety sends written notice of cancellation by certified mail to the owner and to the department. Cancellation cannot occur, however, during the 120 days beginning on the date of receipt of the notice of cancellation by the department as shown on the signed return receipt. The surety shall provide written notification to the department by certified mail no less than 120 days prior to the expiration date of the bond that the bond will expire and the date the bond will expire.

G. The department shall cash the surety bond :

1. When it is not replaced 60 days prior to expiration with alternate evidence of financial assurance acceptable to the department; or

2. If the owner has failed to monitor, operate and maintain, or repair or replace, as applicable, the practices utilized by the nutrient credit-generating project in accordance with this chapter and the nutrient credit certification. The department shall use the funds from the surety bond to pay for the performance of monitoring, operation, and maintenance or repair and replacement, as applicable, of the practices utilized by the nutrient credit-generating project.

H. The department shall return the original surety bond to the surety for termination when:

1. The owner substitutes acceptable alternate evidence of financial assurance; or

2. The director notifies the owner that the owner is no longer required by this part to maintain evidence of financial assurance for nutrient credit-generating project.

I. The surety bond shall be worded as described in 9VAC25-900-350, except that instructions in parentheses are to be replaced with the relevant information and the parentheses deleted.

9 Va. Admin. Code § 25-900-300

Derived From Virginia Register Volume 36, Issue 23, eff. 9/1/2020.

Statutory Authority: § 62.1-44.19:20 of the Code of Virginia.