CHAPTER 502
An Act to amend and reenact § 32.1-174.1 of the Code of
Virginia, relating to the regulation of waterworks systems.
[H 2326]
Approved March 24, 2011
Be it enacted by the General Assembly of Virginia:
1. That § 32.1-174.1 of the Code of Virginia is amended
and reenacted as follows:
§ 32.1-174.1. Bonds of permit holders.
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 when:
1. The owner fails to pay the electric utility bills for
the waterworks;
2. The owner ceases to operate the waterworks; or
3. The owner fails to provide water to his customers for a period
of time greater than forty-eight hours except when a natural disaster prevents
the owner from supplying water upon revocation of the Waterworks
Operation Permit by the Board or Commissioner pursuant to § 32.1-174.
The If the foregoing condition is met, the court
shall order forfeiture of such bond or escrow account, in whole or in part, if
any of the three foregoing conditions is met 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 subdivision 1 of
subsection B of this section shall be paid in the amount of such
forfeiture to the electric utility supplying electrical power to the waterworks.
Any sums forfeited pursuant to subdivision 2 or 3 of 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.
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