(a) Before granting an encroachment permit, the Department may require any applicant, other than a county, city, city and county, or public agency that is authorized by law to establish and maintain any works or facilities within the Department's right-of-way, to file with the Department a performance and/or payment bond payable in an amount the Department estimates will cover the cost of removal, relocation, reconstruction or maintenance of the encroachment, which will protect the Department in the event the permittee does not comply with the terms and condition of the permit.

(b) The Department may require a performance and/or payment bond from a county, city, city and county, or public agency that, prior to submitting an application, failed to comply with these regulations or with the conditions of a previous permit.