(a) (1) Before beginning any grading or construction, a permittee under this Article must deliver to the County acceptable security in the form of an irrevocable letter of credit from a financial institution, cash bond, corporate bond, certificate of guarantee, or other instrument approved by the County Attorney. The security must guarantee an amount that the Director estimates to be the total cost to perform all work necessary to complete the subdivision's streets and roads, including any necessary repairs, in a manner suitable for acceptance by the County. As used in this Section, acceptable security includes any such letter of credit, bond, certificate, or other acceptable instrument.
(2) As used in this Article, a certificate of guarantee is an instrument issued by an organization or entity which is approved by the Director and meets capitalization and other reasonable criteria established by regulation. Other criteria may include the demonstrated expertise of the issuing organization or its members in construction of streets and roads; the estimated cost of the work to be performed by the permittee; the estimated cost of all work guaranteed by the issuing organization or entity; and the incidence of violation of, or otherwise failing to comply with, this section by all members of the issuing organization or entity. The certificate of guarantee must only be issued by the approved organization or entity on behalf of members in good standing of that organization or entity. The member for whom the certificate is issued must qualify as a developer or subdivider as defined in Section 50-1. The Director must resolve any question about the eligibility of a permittee to post a certificate of guarantee in the Director's sole discretion.
(3) Any acceptable security must run to the County and specify that the permittee and all agents and employees must:
(A) comply with all applicable terms, conditions, requirements, standards, and specifications of this Article and any other applicable law;
(B) faithfully complete the work for which the permit is issued; and
(C) indemnify the County from any expense incurred because of the failure of the permittee or any agent or employee to complete the work as required by this Article, and from any damages growing out of the negligence of the permittee or any agent or employee.
(b) (1) Instead of satisfying the requirements of subsection (a), a permittee may file an acceptable security approved by the County Attorney in an amount that the Director finds would assure appropriate stabilization of the ground surface of any proposed road project if:
(A) the permittee is a developer or subdivider as defined in Section 50-1, and the Director may resolve any question as to the permittee's status in the Director's sole discretion; and
(B) the permittee files in the County land records, subject to the approval of the County Attorney and the Director, a master deed or covenant delineating the entire subdivision and providing that no lot or parcel has been or may be sold or otherwise alienated until the road running between that lot or parcel and an existing public road is constructed, approved, and accepted by the County for maintenance, or until the County accepts an acceptable security assuring the completion of the subdivision streets and roads. This subparagraph does not prohibit the sale of all or a substantial portion of any subdivision to one or more other developers or subdividers.
(2) In determining the conditions and the amount of the acceptable security, the Director may set reasonable criteria based on practical, engineering, environmental or other considerations, including:
(A) the estimated cost of the work to be performed, in order to assure sufficient protection to the property on or adjacent to the subject subdivision from harm caused by storm water, sediment, or other factors resulting from grading, constructing or otherwise disturbing the right-of- way; and
(B) the estimated cost of removing or repairing any hazardous condition resulting from the operation of the developer's or subdivider's equipment.
(3) If the Director finds that a road or portion of a road is necessary to protect the public safety or welfare or to connect other subdivisions to public highways, subsection (b)(1) does not apply and the Director may require an acceptable security to complete the applicable road or portion of road.
(4) The Director may at any time, after finding a violation of an applicable law, regulation, or the terms and conditions of the permit, revoke the permit and proceed against the security posted to assure the appropriate stabilization of the ground surface of the proposed road project. The Director may post stop-work orders throughout the subject subdivision until an acceptable security is posted which assures the performance of all work necessary to complete the streets and roads, including any necessary repairs.
(c) Before acceptance, each proposed security must be approved by the County Attorney. If a corporate bond is offered, it must be executed by a surety or guaranty company qualified to transact business in the state. If a cash bond is offered, it must be deposited with the Director of Finance, who must give an official receipt reciting that the cash bond has been deposited in compliance with, and subject to, this Section. Any accepted security may be released if the permittee and Director agree. Accepted securities may be released on a prorated basis, depending on the amount of completed and approved work. The Director must decide the amount to be retained by the County, but the amount retained must not be less than 15% of the total cost of the project until the Director finally accepts the project.
(d) (1) If the Director finds a violation of an applicable law or regulation, or a default in the performance of any term or condition of the permit or accepted security, the Director must give written notice of the violation or default to the principal and to the surety of the accepted security. The notice must specify the work to be done, the estimated cost of the work, and the period of time the Director finds reasonably necessary to complete the work.
(2) If a cash bond has been posted, the Director must give notice of default to the principal; and if compliance is not acheived within the time specified, the Director may, without delay and without further notice or proceedings, use the cash deposited, or any portion of the deposit, to cause the required work to be performed by contract or otherwise in the Director’s discretion. After any default in the performance of any term or condition of the permit or accepted security, the County, the surety, and any person employed or engaged on their behalf may enter the site to complete the required work.
(3) If the County undertakes the required work with funds from the forfeited security, the funds must be used to pay the cost of contracting, including engineering and administration, for necessary work within the requirements of the plan, permit, security, or this Chapter.
(4) If the cost of the work exceeds the amount of the security, the permittee is liable to pay all excess costs and expenses incurred by the County. The costs and expenses must be a lien upon all property and all rights to property, real or personal, of any person liable to pay those costs after the costs become due and payable, including interest at the rate applicable for overdue County taxes. The costs must be listed on the tax bill and must be collected in the manner of ordinary taxes.
(5) If the Director finds a violation of an applicable law or regulation by an organization or entity issuing certificates of guarantee, the Director may revoke all permits of members of that organization or entity for which a certificate of guarantee has been posted. The Director may post stop-work orders wherever applicable until an appropriate security acceptable to the County is substituted for the certificates of guarantee.
(e) The Executive may adopt regulations under method (2) to implement this section. The Director must recommend permit fees to include amounts that are necessary to cover any increased costs of administration of any programs in this section. (Mont. Co. Code 1965, § 103-18; 1971 L.M.C., ch. 3, § 47; 1973 L.M.C., ch. 25, § 8; 1976 L.M.C., ch. 16, § 3; 1981 L.M.C., ch. 21, § 1; 1983 L.M.C., ch. 3, § 1; 1984 L.M.C., ch. 24, § 48; 1996 L.M.C., ch. 20, § 1; 1998 L.M.C., ch. 12, § 1; . § 1; , § 2; , § 1.)
Editor’s note—Section 49-37, formerly Section 49-40, was renumbered and amended pursuant to 2007, ch. 8
, § 1. Former Section 49-37 was renumbered Section 49-34 pursuant to 2007, ch. 8
, § 1. Section 49-37 [formerly § 100-17] is applied in Montgomery County v. Phoenix Insurance Company, 232 Md. 58, 192 A.2d 111 (1963). Section 49-37 [formerly § 93-16] is cited in County Council v. Lee, 219 Md. 209, 148 A.2d 568 (1959). 
