974 CMR, § 1.13 - Performance Guarantees

(1) Applicability. The DEC shall require a performance guarantee for any or all of the following Unified Permits components:

(a) Plans For a New Subdivision Road. The creation of roadways to provide frontage and access for lots, involving construction or substantial grading of any of the following improvements: streets and rights-of-way and all improvements therein (signs, monuments, street trees and planting strips, sidewalks); construction of utility system segment(s); earth removal and site alteration; drainage systems; and other features associated with opening the area for development.

(b) Site Plans. Site preparation, including grading and earth removal; driveways and internal access roads; landscaping; lighting; site drainage improvements; and other features associated with the site plan.

(c) Wetlands. Construction of any alterations and/or required mitigation measures pursuant to a Wetlands Permit (Orders of Conditions).

(d) Historic. Major Architectural Alteration of Buildings (and/or designated settings) within Devens Historic Districts, and subject to Massachusetts Historical Commission approval.

(e) Innovative or Residential Development.

(2) General Requirements.

(a) Form of Performance Guarantees. The DEC may require a performance guarantee as a single, inclusive instrument involving all components of a Unified Permit or, at the Director's discretion, may accept more than one type of instrument.

The following irrevocable Performance Guarantee instruments may be used by Applicants:

1. A performance insurance bond

2. A properly pledged passbook or other surety document or instrument that has been secured by the applicant in a recognized, State chartered, savings or lending institution

3. Other negotiable surety acceptable to the DEC, inclusive of a properly pledged and executed lenders agreement or letter of credit

(b) Agreement. The DEC shall enter into a written agreement with the Applicant whenever a Performance Guarantee is required. This document shall describe all pertinent terms and conditions, including the physical improvements being secured, the amount of money involved, and the obligations and rights of the parties under the agreement.

(3) Guarantee Amount and Value.

(a) The Director shall determine the amount of the guarantee, considering the scale of the proposed project and the potential risk.

(b) The Applicant shall submit to the Director an estimate of the cost of construction related to implementing the Permits(s). The estimate shall be prepared by an engineer or other suitably qualified professional, and shall include general quantities of materials and costs associated with construction (all calculated by linear foot, cubic yard, square foot, and other appropriate itemizations of quantities).

(c) For a Unified Permit, the estimated construction costs should include the full range of improvements starting with the earliest earth removal (associated with improvements) from the subdivision of land, and proceeding to improvements associated with the construction of a building. For Partial Permits, the estimated construction costs should only include the improvements associated with the Permits being sought.

(d) For phased construction, the DEC may allow Performance Guarantees for individual phases with the amounts calculated for a specific phase, particularly in situations when the phases in and of themselves result in the complete construction of a portion of the entire project. The Director may also allow the Performance Guarantee instrument to be used for each phase successively on the completion of the preceding phase.

(4) Release.

(a) Based on a written request by an applicant that includes an estimation of the remaining site completion costs, and based on an inspection conducted by DEC staff, the Director shall determine whether a release of a performance guarantee is warranted.

(b) The Director shall, within 14 days of receipt of such request render a decision to either reduce, release, or maintain the value of the performance guarantee posted by an applicant. In the event the Director determines the original guarantee amount should continue to be held or elects to retain a greater amount than that requested to be released by the applicant, the Director shall list the reasons for its decision and the improvements that still need to be completed.

(c) Resolution of disputes related to a partial or full surety release shall be by means of the Reconsideration process described in 974 CMR 1.11. Partial release points are permissible at distinct construction milestones, at the discretion of the Director.

(5) Certificates of Occupancy and Performance Guarantees. A Certificate of Occupancy shall not be issued if any work items, whether in the building or site improvements associated with the Permit, remain incomplete. A temporary Certificate of Occupancy may be issued by the Building Official provided sufficient surety has been posted with the Director for any outstanding site improvements.

(6) Conversion to Another Form of Performance Guarantee.

(a) The Director may allow the form of a performance guarantee to be revised or substituted with an alternative form of security. If the alternate performance guarantees are deemed by the Director to be equally as protective of the public interest as the preceding form of security, they will be granted. Where an Applicant proposes to change a performance guarantee instrument, a written request shall be given to the Director, that sets forth and includes:

1. The extent and scope of remaining work to implement a Unified Permit to satisfy DEC requirements and/or conditions;

2. An estimate, as provided above, that reflects all remaining construction; and

3. The form and alternative type of guarantee being proposed to secure all remaining improvements.

(b) The Director shall make a determination on the sufficiency of the submitted estimate and the suitability of the alternate form of security. If the estimate and alternative form of security is deemed adequate, the new performance guarantee shall be appropriately pledged and secured. An amended or new agreement may be required. On acceptance by the Director of the new performance guarantee, the prior guarantee or security provided shall be released.

Notes

974 CMR, § 1.13

Amended by Mass Register Issue 1446, eff. 6/25/2021.