Surety Bond Encyclopedia

Scrap Tire Transporter ($10,000) Bond - Statewide in Alabama

Brief Summary

ADEM gives a scrap tire transporter three ways to show financial assurance, and the $10,000 surety bond is the one that does not require a certified statement of $100,000 net worth or a $1,000,000 insurance policy with no pollution exclusion. One original bond naming ADEM as obligee, filed with the Form 538 permit application, carries the permit for its full three year life.

Alabama requires anyone hauling more than eight scrap tires at a time to hold an ADEM transporter permit, and ADEM Admin. Code 335-4-8-.02 requires financial assurance with the application. A $10,000 surety bond naming the Alabama Department of Environmental Management as obligee is the standard way to meet it. The permit runs three years under Code of Ala. 22-40A-7, and the bond must stay in force for the whole term.

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How to Apply for a Scrap Tire Transporter ($10,000) Bond:

Confirm you need the permit: you haul more than eight scrap tires at a time and are not a registered Class One or Class Two receiver moving your own tires.
Decide on financial assurance. The $10,000 surety bond avoids the certified $100,000 net worth statement and the $1,000,000 no pollution exclusion insurance alternatives.
Apply for the bond with the business legal name as it will appear on ADEM Form 538, plus the owner's name, address and Social Security number for the credit review.
Pay the premium and receive the original executed bond naming the Alabama Department of Environmental Management as obligee, written for the permit term.
Submit Form 538 through AEPACS at least 60 days ahead with the original bond and the permit fee listed in ADEM Fee Schedule I.
Place the ADEM scrap tire transporter decal on every vehicle before it hauls tires.
Keep the bond in force for the full three year permit, and if it is ever drawn on, notify ADEM within 24 hours and replace the $10,000 within five days.

Detailed Information About the Alabama Scrap Tire Transporter ($10,000) Bond:

Who needs the permit and the bond

Code of Ala. 22-40A-7 says no person except a properly registered receiver may transport scrap tires, for profit or not, without a valid transporter permit from the department, unless the load is eight tires or fewer. ADEM Admin. Code 335-4-3-.03 restates the threshold: transporters who move more than eight scrap tires at a time must obtain a transporter permit. Both intrastate and interstate hauling are covered, so an out of state hauler bringing tires into Alabama or passing through with an Alabama pickup needs the permit too.

Three groups are exempt under 335-4-3-.03(c). Class One and Class Two receivers transporting tires received or generated from their own operations. Anyone carrying fewer than eight scrap tires at one time to a registered receiver, permitted processor or solid waste disposal facility. State and local government vehicles removing illegally dumped tires. A tire shop hauling its own customer take offs to a processor should check whether it is registered as a receiver, because that registration, not the load size, is what keeps it out of the permit.

The bond is one of three options

ADEM Admin. Code 335-4-8-.02(1) requires any person proposing to transport scrap tires or processed tire material to submit documentation of financial assurance with the permit application. The rule names three choices: a surety bond in an amount equal to $10,000, a certified financial statement showing net worth of at least ten times the bond value, which ADEM's application states as $100,000, or proof of at least $1,000,000 of insurance with no pollution exclusion clause. ADEM must be named as obligee on the bond or certificate holder on the insurance, and the application is blunt that only original bond or insurance forms are accepted, no copies. The instrument must stay in force for the duration of the permit under 335-4-8-.02(2).

ADEM publishes suggested transporter bond language for sureties. It names the Alabama Department of Environmental Management as obligee, sets the amount at $10,000 as fixed under Code of Ala. 22-40A et seq, and conditions the bond on faithful compliance with that chapter. If the principal violates it between issue and expiration the bond may be forfeited to ADEM. If the bond is ever drawn on, 335-4-8-.02(1)(a)2(ii) requires the transporter to notify ADEM within 24 hours and put up a fresh $10,000 of financial assurance within five days.

Permit term, fee and decals

Transporter permits are valid for three years unless revoked. Applications go through the Alabama Environmental Permitting and Compliance System on ADEM Form 538, and 335-4-3-.04 asks for the application at least 60 days before the permit is needed. ADEM Admin. Code 335-1-6, Fee Schedule I, lists the Scrap Tire Transporter Permit fee at $1,015 for initial issuance, $510 for reissuance and $260 for a modification. Confirm the current figure with ADEM at 334-274-4201 before paying. Permitted transporters receive an ADEM decal for every vehicle in the fleet at no cost, and each truck hauling tires must display one. Loads must be manifested and delivered only to a permitted receiver, processor, another permitted transporter or a landfill approved for scrap tires.

Eligibility and Requirements for a Alabama Scrap Tire Transporter ($10,000) Bond:

Surety company authorized to write surety in Alabama.
Bond amount of $10,000, the figure set by ADEM Admin. Code 335-4-8-.02(1)(a)2(i).
Alabama Department of Environmental Management named as obligee, following ADEM's suggested transporter bond language.
Original signed bond only. ADEM does not accept copies.
Principal name on the bond matching the Form 538 permit application exactly.
Term covering the three year permit, by a multi year bond or annual continuation certificates that never lapse.
Owner credit review. At this bond size credit usually sets the premium rate rather than deciding approval.

Alabama Scrap Tire Transporter ($10,000) Bond FAQs:

I only move a few tires at a time. Do I need the permit and the bond?

If you never carry more than eight scrap tires at once and take them to a registered receiver, permitted processor or solid waste disposal facility, Code of Ala. 22-40A-7 and ADEM Admin. Code 335-4-3-.03 exempt you from the transporter permit, and the bond goes with the permit. Nine tires on one trip puts you inside the rule.

My tire shop hauls its own take offs to the processor. Are we exempt?

Only if the shop is a registered Class One or Class Two receiver transporting tires received or generated from its own operations. The exemption rests on the receiver registration, not on the fact that the tires are yours. An unregistered shop hauling more than eight tires needs the transporter permit.

Can I use insurance or a financial statement instead of the bond?

Yes. ADEM Admin. Code 335-4-8-.02 accepts a surety bond of $10,000, a certified financial statement showing net worth of at least ten times that amount, or proof of $1,000,000 of insurance with no pollution exclusion clause. Most small haulers find the bond the cheapest and simplest of the three.

How long does the bond have to run?

For the duration of the permit, which is three years under Code of Ala. 22-40A-7. ADEM's suggested bond language leaves the number of months blank for the surety to fill in and allows renewal, so either a three year bond or an annual bond with continuation certificates works as long as there is never a gap.

What happens if ADEM collects on the bond?

The bond may be forfeited to ADEM if you violate Code of Ala. 22-40A during the bond term. You must then notify ADEM within 24 hours and provide another $10,000 of financial assurance within five days, and the surety will recover what it paid from you.

What does the bond cost?

The premium is a percentage of the $10,000 amount set by the surety after a credit review. Stronger credit earns a lower rate. The quote is shown before you buy, and it is a small fraction of the permit fee.