On August 1, 2014, the Delaware Department of Natural Resources and Environmental Control adopted 7 DE DAC 3801, which updates regulations for shellfish aquaculture development areas. The new regulations went into effect on August 11, 2014.

The regulation requires a performance bond in connection with an application for a proposed development area. The regulations provide that the prospective leaseholder must furnish and maintain a performance bond in an amount equal to $2,000 per acre leased. The bond secures the aquaculture equipment removal cost-recovery if the prospective leaseholder fails to perform according to the conditions of the lease or fails to maintain the lease.

With adoption of the final regulation, the Division of Fish and Wildlife will submit a permit application to the U.S. Army Corps of Engineers, with the permit needed by the Division to issue shellfish aquaculture leases in the Inland Bays. A permit application could not be submitted specifying the location of Shellfish Aquaculture Development Areas (SADAs), allowable aquaculture gear types and other program aspects until the regulation was final.

The bond requirement is explained in the excerpt below.

“7.0 Shellfish Aquaculture Bonds and Liability

7.1 Prior to obtaining a SADA Shellfish Aquaculture Subaqueous Land Lease, or a Non-SADA Shellfish Aquaculture Subaqueous Land Lease, the prospective leaseholder shall provide evidence of, and maintain for the duration of the lease, a performance bond of $2,000 per acre leased, to provide for aquaculture equipment removal cost-recovery in the event that the prospective leaseholder fails to perform according to the conditions of the lease, or fails to maintain the lease.

7.2 Prior to obtaining a SADA Shellfish Aquaculture Subaqueous Land Lease or a Non-SADA Shellfish Aquaculture Subaqueous Land Lease, the prospective leaseholder shall provide evidence of, and maintain for the duration of the lease, liability insurance of at least $1 million each occurrence and $2 million annual aggregate against loss or liability for bodily injury, death, property damage or destruction occurring within the leased area, or arising out of the use of the lease by the leaseholder or its agents, employees, officers, and visitors. Said policy shall be written so as to provide that the insurer waives all rights of subrogation against the State in connection with any loss or damage covered by the policy.”

The legislation can be accessed via the State of Delaware’s website.

The DNREC announced the changes here.

SuretyBonds.com is still waiting for more details from the state regarding this new surety bond requirement, but our experts are here to answer any questions you  have and assist you with your surety bond needs in the meantime. Give us a call at 1 (800) 308-4358 between the hours of 7 a.m. and 7 p.m. CST Monday through Friday. Or, fill out an online bond request 24/7.