Rules & Regulations of the State of Tennessee
Title 0400 - Environment and Conservation
Subtitle 0400-40 - Water Resources (WPC)
Chapter 0400-40-06 - State Operating Permits
Section 0400-40-06-.11 - BONDS

(1) Except as provided in paragraph (2) of this rule, no person shall construct, operate, or hold out to the public as proposing to construct or operate a sewerage system unless such person first provides a bond or other financial security established by the Commissioner in accordance with the provisions of this rule.

(2) The requirements of this rule do not apply to the following:

(3) Performance security amounts pursuant to T.C.A. § 69-3-122 shall be established by the Commissioner primarily based on the ability of a sewerage system to control the flow of sewage in the event of sewerage system failure. If the Commissioner determines that the sewerage system is capable of ceasing production or altering its business activity to prevent inadequate treatment of sewage, then the amount of the bond or financial security may be zero dollars. If a sewerage system provides sewerage treatment service to residential units or to other persons (including businesses) via lease or other contract agreement, then the security shall be set at $75,000.00 unless the sewerage system owner provides sufficient documentation of a basis for reducing the amount to the Commissioner. Acceptable bases for reducing the amount include the cost of installing alternatives that provide treatment or lawful ability to convey sewage to another sewerage treatment system.

(4) For new permits, evidence that an acceptable security can be provided by the person who will own the assets during the permit term shall be provided to the Commissioner prior to permit issuance. The permittee shall provide acceptable security to the Commissioner prior to commencing operation pursuant to the permit.

(5) For reissued permits or for permits modified to reflect new ownership of the assets, the permittee shall provide an acceptable security to the Commissioner prior to issuance or transfer of the permit.