CODE OF VIRGINIA

BONDS OF PERMIT HOLDERS (§ 32.1-174.1)

A. The Board may by regulation require owners holding or issued permits for
waterworks pursuant to this article, to post bonds or deposit funds to be placed
in escrow.

B. The Board or the governing body of a county, city or town in which a
waterworks is located may request the circuit court having jurisdiction where
the waterworks is located to order forfeiture of the owner’s bond or
escrow account upon revocation of the Waterworks Operation Permit by the Board
or Commissioner pursuant to § 32.1-174.If the foregoing condition is met, the
court shall order forfeiture of such bond or escrow account, in whole or in
part, unless the court finds the forfeiture would result in manifest injustice.

C. In addition to ordering such forfeiture, the court may, with the concurrence
of the governing body of the county, city or town in which the waterworks is
located, place the waterworks in receivership naming the county, city, or town,
or any public service authority created by the county, city or town, as
receiver.

D. Any sums forfeited pursuant to subsection B shall be paid in the amount of
such forfeiture to the county, city or town in which the waterworks is located
(i) if the county, city, or town, or a public service authority created by the
county, city or town, initiates eminent domain proceedings for the condemnation
of the waterworks within one year of the date of the order of forfeiture or (ii)
if the county, city, town or public service authority operates the waterworks
pursuant to a decree of an appropriate circuit court vesting receivership of the
waterworks in the county, city, town or public service authority. If the
governing body of the county, city, or town, or a public service authority
created by the county, city or town, fails to initiate such condemnation
proceedings within one year of the date of forfeiture of any bond or to accept
receivership of the waterworks from the circuit court, the funds forfeited shall
be paid to the general fund of the Commonwealth.

E. The Board may adopt regulations for determining the amount of the bond or
funds to be placed in escrow based upon the number of persons served, the number
of connections served, the age and condition of the waterworks system
infrastructure, the cost of maintaining, repairing, or replacing the waterworks
system infrastructure, and the water supply capacity of the permit holder.

F. No state, local or other governmental agency shall be required to post a bond
or deposit funds. The Board may, by regulation, exempt classes of permit holders
from such requirements if the Board determines such classes present no
significant risks to public health and safety.

G. An acceptable bond for the purposes of this section shall be a bond issued by
a fidelity or surety company authorized to do business in Virginia, a personal
bond secured by such collateral as the Board may require or a cash bond.

HISTORY: 1980, c. 402; 2011, c. 502.