Sec. 08.19.05.01. Short-Term Protective Agreements

A. Maintenance Agreements.

(1) Application. A person required to conduct afforestation or reforestation under a local or State program shall include in the forest conservation plan a binding maintenance agreement for the minimum length of 2 years.

(2) Approval procedures and timing shall be consistent with the procedures provided in the local program or as provided in COMAR 08.19.04.04.

(3) The maintenance agreement shall detail how the areas designated for afforestation or reforestation will be maintained to ensure protection and satisfactory establishment of forest.

(4) The person required to conduct the afforestation or reforestation, after this referred to as the "obligee", shall present evidence of a legal right to implement the proposed maintenance agreement on a selected site by providing:

(a) An executed deed conveying title to a selected site to the obligee;

(b) An executed conservation easement agreement;

(c) Written evidence of the landowner's consent to the use of a selected site;

(d) A fully executed option agreement, long-term lease agreement, or contract of sale for a selected site; or

(e) Other written evidence of a possessory or ownership interest in a selected site.

(5) The Department or the local authority shall be a signatory to the maintenance agreement, or shall be designated a third-party beneficiary of the agreement.

(6) The Department or local authority may not release a bond or end monitoring without receipt of a legally binding deed, long-term lease, or conservation easement agreement on those lands where afforestation or reforestation will occur.

(7) The maintenance agreement shall provide for access by the Department or local authority to the afforestation or reforestation site.

B. Bonding.

(1) Application.

(a) A person required to conduct afforestation or reforestation, or to deposit money into a state or local fund under the State or local program shall include a bond or other financial security as an element of a forest conservation plan.

(b) This section does not apply to agencies of any federal, state, county or municipal government.

(2) Requirements. A financial security shall be furnished in the form of:

(a) A bond which shall be made payable to the Department or local authority;

(b) An irrevocable letter of credit which shall:

(i) Be equivalent to the required bond,

(ii) Be issued by a financial institution authorized to do business in Maryland,

(iii) Expressly state that the total sum is guaranteed to be available and payable directly to the Department on demand in the event of forfeiture, and

(iv) Be in force until all mitigation for reforestation and afforestation and monitoring requirements have been fulfilled to the satisfaction of the Department or local authority or until all contributions have been made to the State or local fund; or

(c) Other security approved by the Department or local authority.

(3) The financial security shall:

(a) Ensure that:

(i) The afforestation, reforestation, and associated maintenance agreements are conducted and maintained in accordance with the approved forest conservation plan, or

(ii) Contributions have been made to the State or local fund;

(b) Be in the amount equal to the estimated cost of afforestation and reforestation, or the amount of the contribution due, as determined by the Department or local authority;

(c) Be in a form and content approved by the Department or local authority.

(4) The value of the financial security:

(a) Shall be based on:

(i) The cost to perform all work required by the afforestation or reforestation plan if the work had to be performed by or contracted out by the Department or local authority, or

(ii) When appropriate, the amount due for a fund contribution;

(b) May be adjusted according to the actual cost of mitigation for afforestation and reforestation or, if the cost of future mitigation work changes, the Department or local authority shall notify the obligee of a proposed adjustment and provide an opportunity for an informal conference on the adjustment; and

(c) May be reduced if the obligee proves to the Department or local authority that the costs to complete the mitigation project have been reduced.

(5) A surety bond or other alternative form of security may not be canceled by the surety, bank, or other issuing entity unless both of the following conditions are satisfied:

(a) The surety notifies the Department and the obligee of its intent to cancel the bond, in writing, by registered mail, not less than 90 days before cancellation; and

(b) At least 45 days before the cancellation date indicated in the notice, the obligee files a commitment from a surety, bank, or other issuing entity to provide a substitute security which will be effective on the cancellation date indicated in the notice.

(6) After one growing season, the person required to file a bond or other financial security under this regulation may request reduction of the amount of the bond or other financial security by submitting a written request to the Department with a justification for reducing the bond or other financial security amount, including estimated or actual costs to ensure that the afforestation or reforestation requirements are met.

(7) The Department shall determine whether a lesser amount is sufficient to cover the cost of afforestation or reforestation, taking into account the following:

(a) The number of acres;

(b) The proposed method of afforestation or reforestation;

(c) The cost of planting materials or replacement materials;

(d) The cost of maintenance of the afforestation or reforestation project; and

(e) Other relevant factors.

(8) If, after two growing seasons or 1 year, whichever is greater, the plantings associated with the afforestation or reforestation meet or exceed the standards of the local or State program, the remaining amount of the cash bond, letter of credit, surety bond, or other security shall be returned or released.

(9) Bond Release.

(a) The bond shall be released on receipt of written notice from the Department or local authority, if applicable, stating that all afforestation or reforestation requirements have been met.

(b) The written notice shall be sent at the end of the required 2-year monitoring and management period, as provided in the maintenance agreement.

(c) If the Department fails to send written notice within 60 days after the end of the monitoring and management period, the bond shall be automatically released.

(10) Financial Security Forfeiture.

(a) The bond or other financial security may be subject to forfeiture if the obligee fails to comply with:

(i) Revocation of the forest conservation plan;

(ii) An administrative order; or

(iii) An element of the afforestation or reforestation plan.

(b) The Department or local authority shall notify the obligee, by certified mail, of the intention of the Department or local authority to initiate forfeiture proceedings.

(c) The obligee has 30 days from receipt of the notice of forfeiture to show cause why the bond or other financial security may not be forfeited.

(d) If the obligee fails to show cause, the bond or other financial security shall be forfeited.

C. A local program may substitute for the bonding provisions of §B of this regulation a process that is consistent with the State bonding procedure.