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Virginia Administrative Code
Title 9. Environment
Agency 25. State Water Control Board
Chapter 770. Virginia Financial Responsibility Requirements for Mitigation Associated with Tidal Dredging Projects
1/26/2020

9VAC25-770-190. Wording of the Instruments.

A. Wording of surety bond.

SURETY BOND

Date bond executed:

______________________________

Period of coverage:

______________________________

Effective date:

_______________

Principal: (legal name and address of owner or operator)

_______________________

Type of organization: (insert "individual" "joint venture," "partnership," "corporation," or appropriate identification of type of organization)

______________________________

State of incorporation (if applicable):

______________________________

Surety: (name(s) and business address)

______________________________

Scope of Coverage:

(List the name of the project and the physical address where the project is located and VWP permit number. List the coverage guaranteed by the bond: "for completion of compensatory mitigation activities")

Penal sum of bond: $________________________

Surety's bond number: ______________________________

Know All Persons by These Presents, that we, the Principal and Surety(ies), hereto are firmly bound to the Department of Environmental Quality, Commonwealth of Virginia, ("DEQ") in the above penal sum for the payment of which we bind ourselves, our heirs, executors, administrators, successors, and assigns jointly and severally; provided that, where the Surety(ies) are corporations acting as co-sureties, we, the Sureties, bind ourselves in such sums jointly and severally only for the purpose of allowing a joint action or actions against any or all of us, and for all other purposes each Surety binds itself, jointly and severally with the Principal, for the payment of such sums only as is set forth opposite the name of such Surety, but if no limit of liability is indicated, the limit of liability shall be the full amount of the penal sum.

Whereas said Principal is required under § 62.1-44.15 (5c) of the State Water Control Law of the Code of Virginia to demonstrate financial responsibility to implement a plan to complete the required compensatory mitigation activities described in a permit, order or regulations;

Now, therefore, the conditions of the obligation are such that if the Principal shall faithfully implement the compensatory mitigation plan in accordance with the applicable regulations and the Director of the DEQ's instructions to implement the plan for the project described above, or if the Principal shall provide alternate documentation of financial responsibility, acceptable to DEQ and obtain the Director's written approval of such assurance, within 60 days after the date the notice of cancellation is received by the Director of the DEQ from the Surety(ies), then this obligation shall be null and void; otherwise it is to remain in full force and effect.

The Surety(ies) shall become liable on this bond when the Principal has failed to fulfill the conditions described above. Upon notification by the Director of the DEQ that the owner or operator has failed to fulfill the conditions above or that the DEQ has determined that the Principal has failed to complete the project described above, the Surety(ies) shall either implement the compensatory mitigation plan or forfeit the full amount of the penal sum as directed by the Director of the DEQ under 9VAC25-770-120.

The liability of the Surety(ies) shall not be discharged by any payment or succession of payments hereunder, unless and until such payment or payments shall amount in the penal sum shown on the face of the bond, but in no event shall the obligation of the Surety(ies) hereunder exceed the amount of said penal sum.

The Surety(ies) may cancel the bond by sending notice of cancellation by certified mail to the Principal and to the Director of the DEQ, Commonwealth of Virginia, P.O. Box 1105, Richmond, Virginia 23218 provided, however, that cancellation shall not occur during the 120 days beginning on the date of receipt of the notice of cancellation by the Principal and Director of the DEQ as shown on the signed return receipt.

In Witness Thereof, the Principal and Surety(ies) have executed this Bond and have affixed their seals on the date set forth above.

The persons whose signatures appear below hereby certify that they are authorized to execute this surety bond on behalf of the Principal and Surety(ies) and that the wording of this surety bond is identical to the wording specified in 9VAC25-770-190 A as such regulations were constituted on the date this bond was executed.

PRINCIPAL

(Signature(s))

(Name(s))

(Title(s))

(Corporate seal)

CORPORATE SURETY(IES)

(Name and address)

State of Incorporation:

Liability limit: $ ______________

(Signature(s))

(Name(s) and title(s))

(Corporate seal)

(For every co-surety, provide signature(s), corporate seal, and other information in the same manner as for Surety above.)

Bond premium: $ ______________

B. Wording of letter of credit.

IRREVOCABLE STANDBY LETTER OF CREDIT

(Name and address of issuing institution)

Beneficiary:

Director

Department of Environmental Quality (DEQ)

P. O. Box 1105

1111 East Main Street, Suite 1400

Richmond, Virginia 23218

Dear Sir or Madam: We hereby establish our Irrevocable Standby Letter of Credit No.________ in your favor, at the request and for the account of (permittee) of (address) up to the aggregate amount of (in words) U.S. dollars, ($(insert dollar amount)), available upon presentation of

(1) your sight draft, bearing reference to this letter of credit, No._______ and

(2) your signed statement reading as follows:

"I certify that the amount of the draft is payable pursuant to regulations issued under authority of § 62.1- 44.15 (5c) of the Code of Virginia."

This letter of credit may be drawn on to implement the compensatory mitigation plan for the project identified below in the amount of (in words) $ (insert dollar amount). (Name and physical address of the project assured by this mechanism and VWP permit number.)

This letter of credit is effective as of (date) and shall expire on (date), but such expiration date shall be automatically extended for a period of (at least the length of the original term) on (expiration date) and on each successive expiration date, unless, at least 120 days before the current expiration date, we notify the Director of the DEQ and the permittee by certified mail that we have decided not to extend this letter of credit beyond the current expiration date. In the event that the permittee is so notified, any unused portion of the credit shall be available upon presentation of your sight draft for 120 days after the date of receipt by the Director of the DEQ and the permittee, as shown on the signed return receipt.

Whenever this letter of credit is drawn on under and in compliance with the terms of this credit, we shall duly honor such draft upon presentation to us, and we shall submit the amount of the draft directly to DEQ in accordance with your instructions.

I hereby certify that I am authorized to execute this letter of credit on behalf of (issuing institution) and I hereby certify that the wording of this letter of credit is identical to the wording required in 9VAC25-770-190 B as such regulations were constituted on the date shown immediately below.

Attest:

Signature

Date

Name

Title

This credit is subject to (insert "the most recent edition of the Uniform Customs and Practice for Documentary Credits, published by the International Chamber of Commerce," or "the Uniform Commercial Code").

C. Wording of assignment of certificate of deposit.

ASSIGNMENT OF CERTIFICATE OF DEPOSIT ACCOUNT

City

, 20

FOR VALUE RECEIVED, the undersigned assigns all right, title and interest to the Virginia Department of Environmental Quality (DEQ), Commonwealth of Virginia and its successors and assigns the Virginia DEQ the principal amount of the instrument, including all moneys deposited now or in the future to that instrument, indicated below:

() If checked here, this assignment includes all interest now and hereafter accrued.

Certificate of Deposit Account No.

This assignment is given as security to the Virginia DEQ in the amount of

Dollars ($

).

Continuing Assignment. This assignment shall continue to remain in effect for all subsequent terms of the automatically renewable certificate of deposit.

Assignment of Document. The undersigned also assigns any certificate or other document evidencing ownership to the Virginia DEQ.

Additional Security. This assignment shall secure the payment of any financial responsibility obligations of the (name of permittee) to the Virginia DEQ for compensatory mitigation activities at the (project name and permit number) located at (physical address).

Application of Funds. The undersigned agrees that all or any part of the funds of the indicated account or instrument may be applied to the payment of any and all financial responsibility obligations of (name of permittee) to the Virginia DEQ for compensatory mitigation activities at the (project name and address). The undersigned authorizes the Virginia DEQ to withdraw any principal amount on deposit in the indicated account or instrument including any interest, if indicated, and to apply it in the Virginia DEQ's discretion to fund compensatory mitigation at the (project name) in the event of (permittee name)'s failure to implement compensatory mitigation activities to the DEQ's satisfaction. The undersigned agrees that the Virginia DEQ may withdraw any principal and/or interest from the indicated account or instrument without demand or notice. The undersigned agrees to assume any and all loss of penalty due to federal regulations concerning the early withdrawal of funds. Any partial withdrawal of principal or interest shall not release this assignment.

The party or parties to this Assignment set their hand or seals, or if corporate, has caused this assignment to be signed in its corporate name by its duly authorized officers and its seal to be affixed by authority of its board of Directors the day and year above written.

SEAL

(Owner)

(Print name)

SEAL

(Owner)

(Print name)

THE FOLLOWING SECTION IS TO BE COMPLETED BY THE BRANCH OR LENDING OFFICE:

The signature(s) as shown above compare correctly with the name(s) as shown on record as owner(s) of the Certificate of Deposit indicated above. The above Assignment has been properly recorded by placing a hold in the amount of $_________________ for the benefit of the Virginia DEQ.

() If checked here, the accrued interest on the Certificate of Deposit indicated above has been maintained to capitalize versus being mailed by check or transferred to a deposit account.

I certify that the wording of this Assignment is identical to the wording required in 9VAC25-770-190 C as such regulations were constituted on the date shown immediately below.

(Signature)

(Date)

(Print name)

(Title)

Statutory Authority

§ 62.1-44.15 of the Code of Virginia.

Historical Notes

Derived from Volume 20, Issue 23, eff. August 25, 2004; Errata 20:24 VA.R. 2981 August 9, 2004; amended, Virginia Register Volume 34, Issue 13, eff. February 19, 2018.

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