A BILL TO BE ENTITLED
AN ACT to allow water well contractors to grout water wells without a PRIOR INSPECTION BY THE LOCAL HEALTH DEPARTMENT and to require water well contractors to obtain a bond or other security payable FOR LOSSES DUE TO DEFECTIVE WELL CONSTRUCTION OR WELL REPAIR.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 87‑97 is amended by adding a new subsection to read:
"(g1)	Grout Certificate Issued by Water Well Contractor. – A water well contractor may grout a private drinking water well without a prior inspection by the local health department, and, upon completing the grouting, the water well contractor may provide, within 10 days of completing the grouting, a written certification to the local health department that the well has been grouted in compliance with the requirements of this Article and rules adopted pursuant to this Article. For purposes of issuing a certificate of completion under subsection (g) of this section, the well contractor's grout certification shall be accepted by the Department as evidence the grout complies with the requirements of this Article and rules adopted pursuant to this Article."
SECTION 2.  G.S. 87‑97(g) reads as rewritten:
"(g)	Certificate of Completion. – Upon completion of construction of a private drinking water well or repair of a private drinking water well for which a permit is required under this section, the local health department shall inspect the well to determine whether it was constructed or repaired in compliance with the construction permit or repair permit. If the local health department determines that the private drinking water well has been constructed or repaired in accordance with the requirements of the construction permit or repair permit, the construction and repair requirements of this Article, and rules adopted pursuant to this Article, the local health department shall issue a certificate of completion. No person shall place a private drinking water well into service without first having obtained a certificate of completion. No person shall return a private drinking water well that has undergone repair to service without first having obtained a certificate of completion. This subsection is subject to subsection (g1) of this section."
SECTION 3.  Article 7 of Chapter 87 of the General Statutes is amended by adding a new section to read:
"§ 87‑97.3.  Bond requirement for water well contractors.
(a)	Each water well contractor that applies for a construction permit or a repair permit under G.S. 87‑97 or for the renewal of such a permit shall not obtain the permit unless the contractor files and maintains in force a bond in favor of the State of North Carolina, executed by a surety approved by the Commissioner of Insurance, in the amount of twenty‑five thousand dollars ($25,000) for each water well contractor. The bond shall be continuous in nature and shall remain in force until cancelled by the surety. Cancellation by the surety shall be effectuated only upon 60 days' written notice thereof to the Department and to the water well contractor.
(b)	The water well contractor that applies for a construction permit or a repair permit under G.S. 87‑97 or for the renewal of such a permit shall have the option of filing a separate bond for each such permit or of filing a blanket bond covering all well construction and repairs requiring a permit within the State for which the applicant holds a permit.
(c)	The bond under subsection (a) of this section shall be conditioned upon the faithful performance of the requirements of this Article and rules adopted pursuant to this Article and shall be payable for losses due to defective well construction or well repair by the water well contractor or the contractor's agents operating in the course and scope of the contractor's agency. Upon filing the bond with the Department, the water well contractor shall lose all right, title, and interest in the bond while the bond is held by the Department. In no event shall the liability of the surety exceed the amount of the surety bond required by this section.
(d)	In lieu of the surety bond required by this section, the water well contractor may file with the Department a cash deposit, an irrevocable letter of credit, a guaranty of payment from an acceptable bank, an assignment of a savings account in an acceptable bank on an assignment form prescribed by the Department, or other security acceptable to the Department.
(e)	If the license to do business in North Carolina of any surety upon a bond filed pursuant to this section should be suspended or revoked, the water well contractor shall, within 60 days after receiving notice thereof, substitute for the surety a good and sufficient corporate surety authorized to do business in this State. Upon failure of the water well contractor to substitute sufficient surety within the time specified, the contractor's construction permit or repair permit shall be automatically revoked.
(f)	After a hearing, the Environmental Management Commission may initiate claims on the bond or other security under this section for the cost of remediation or abatement of the losses under subsection (c) of this section. Claims are limited to actual damages. The person who owns the property on which the well is located where the defective well construction or well repair occurred may initiate a civil action in the county in which that well is located to recover against the bond."
SECTION 4.  This act becomes effective October 1, 2009, and Section 1 and Section 2 of this act apply to the construction or repair of wells that occurs on or after that date.  The bond requirement under G.S. 87‑97.3, as enacted by Section 3 of this act, applies to water well contractors, as defined in G.S. 87‑85, that apply for a construction permit or a repair permit or for the renewal of such a permit on or after that date.