(a) (1) (A) The Arkansas Department of Environmental Quality may require a permitted common sewage system that is in chronic noncompliance to demonstrate to the department its financial ability to cover the estimated costs of operating and maintaining the common sewage system for a minimum period of five (5) years.

(B) The department may require the permitted common sewage system that is in chronic noncompliance to submit a cost estimate for a third party to operate and maintain the common sewage system each year for a period of five (5) years.

(2) The department shall not modify or renew a National Pollutant Discharge Elimination System permit or state permit for a common sewage system if the common sewage system facility is in chronic noncompliance and the common sewage system facility proposes to use new technology that in the discretion of the department cannot be verified to meet permit requirements.

(b) The applicant's financial ability to operate and maintain the system for a period of five (5) years shall be demonstrated to the department by:

(1) Obtaining insurance that specifically covers operation and maintenance costs;

(2) Obtaining a letter of credit;

(3) Obtaining a surety bond;

(4) Obtaining a trust fund or an escrow account; or

(5) Using a combination of insurance, letter of credit, surety bond, trust fund, or escrow account.

(c) The department may require an amount of financial assurance that exceeds the cost estimate submitted by the applicant.

(d) A financial instrument required by this section shall be posted to the benefit of the department and shall remain in effect for the life of the permit.

(e) It is explicitly understood that the department shall not directly operate and shall not be responsible for the operation of any sewage system.

(f) This section does not restrict local and county government entities from enacting more stringent ordinances regulating nonmunicipal domestic treatment sewage systems in Arkansas.