Michigan Administrative Code
Department - Environmental Quality
Water Resources Division
Dam Safety
Section R. 281.1307 - Performance bonds

Universal Citation: MI Admin Code R. 281.1307

Current through Vol. 24-04, March 15, 2024

Rule 7.

(1) As authorized by the provisions of section 31(5) of the act, a permit to construct a new dam or reconstruct a failed dam may require a performance bond. A performance bond may be in the form of any of the following:

(a) A surety bond.

(b) A secured trust fund.

(c) A letter of credit.

(d) Insurance.

(e) A financial test.

(f) A corporate guarantee.

(g) Another suitable instrument or mechanism.

(h) A combination of the items listed in subdivisions (a) to (g) of this subrule as approved by the department. The department shall consider an applicant's past performance in determining if a performance bond shall be required.

(2) The performance bond shall be secured and documentation shall be submitted to the department before the commencement of construction. The bond, instrument, mechanism, or fund or combination of these methods of assurance shall be in the amount equal to a reasonable estimate of the cost, adjusted for inflation, that is required to adequately complete a project or remove a completed or partially completed dam and to provide for complete or partial restoration of a project site. Performance bonds may be required in the following instances if there is a reasonable possibility that the permittee may not complete the project:

(a) Where total project completion is essential for the protection of public health, welfare, or safety or to protect natural resources and the public trust in those natural resources.

(b) For temporary dams or dams that are constructed or reconstructed for a specific purpose and period of time after which removal is planned.

(c) For phased construction projects where dam construction or reconstruction is an integral and necessary part of the total project and is to be phased in over a number of years.

(d) Projects to be constructed in the future to mitigate the loss of natural resources or environmental degradation.

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