2006 Alabama Code - Section 22-25A-8 — Certificate of economic viability.

(a) Before any entity, except cooperatives transacting business in this state pursuant to Chapter 6 of Title 37 deemed to be general welfare cooperatives and entities of county and local governments including but not limited to water and sewer boards and authorities, shall be granted a permit or certificate by the department, the entity shall first apply for and obtain a certificate of economic viability from the department. The department may make the determination of economic viability utilizing its own resources or may consult with or contract with other agencies of government or appropriate consultants. In determining the grant or denial of such certificate of economic viability, the department shall consider economic viability of an existing entity or the expectation of economic viability of a proposed entity based upon the following criteria or any combination thereof:

(1) Opinion by an independent certified public accountant.

(2) Letter of recommendation from any governmental entity which presently regulates such entity.

(3) Previous economic history of the entity.

(4) Assets as related to liabilities of the entity.

(5) Financial stability and previous financial history of the principals of the entity.

(6) Insurability, bondability, and creditworthiness of the entity as determined by standard business methods.

(b) Before the department shall grant any permit, the department shall require of the entity and the entity shall prove to the department financial assurances of continued compliance with this chapter and rules promulgated hereunder. Such assurances shall be determined by the department in accordance with the following:

(1) The department shall require at least one of the following: Performance bond, pledge of assets of the entity, letter of credit made payable to the department, or other similar instrument or mechanism in an amount sufficient to continue management of the system for a period of 10 years should the entity cease to exist or fail to fulfill its obligations to the clients served by the entity. The bond, pledge, letter of credit, or other instrument may be declared forfeited when the operational permit is expired or revoked. The department may present the declaration of forfeiture to the obligor on the instrument for payment. Failure of the obligor to make full and timely payment thereon shall constitute a cause of action for recovery in a civil action at the instance of the department. Cooperatives transacting business in this state pursuant to Chapter 6 of Title 37 deemed to be general welfare cooperatives are exempt from the provisions of this subsection. Likewise, entities of county and local governments including but not limited to water and sewer boards and authorities are exempt from the provisions of this subsection.

(2) An applicant-entity shall demonstrate to the department legally sufficient safeguards to prevent the entity from sale, assignment, or other divestiture of any kind or form of its assets or responsibilities without the express written consent of the department.

(c) Persons who or which maintain ownership of all real property on which wastewater is generated, treated, transported, and disposed are not subject to the requirements of this section.

(Act 2001-973, 3rd Sp. Sess., p. 900, §8.)