(a) Bonding obligations. (1) Prior to the commencement of surface-disturbing or active management activities, the authorized officer may require the restoration or mitigation lease holder to submit a reclamation, decommission, or performance bond conditioned upon compliance with all the terms and conditions of the lease covered by the bond, as described in this subpart. For mitigation leases, the lease holder will usually be required to provide letters of credit or establish an escrow account for the full amount needed to ensure the development plan meets all performance criteria. The bond amounts shall be sufficient to ensure reclamation of the restoration and mitigation lease area(s) and the restoration of any lands or surface waters adversely affected by restoration or mitigation lease operations. Such restoration may be required after the abandonment or cessation of operations by the restoration or mitigation lease holder in accordance with, but not limited to, the standards and requirements set forth by authorized officers.

(2) Considerations for requiring a bond include, but are not limited to:

(i) The type and level of active restoration;

(ii) Amount and type of surface disturbing activity;

(iii) Proposed use of non-natural restoration methods, such as the use of pesticides;

(iv) Proposed use of experimental methods of restoration;

(v) Risk of compounding effects resulting from restoration activities, such as a proliferation of invasive species; and

(vi) Fire risk.

(3) Surety bonds shall be issued by qualified surety companies certified by the Department of the Treasury.

(4) Personal bonds shall be accompanied by:

(i) Cashier's check;

(ii) Certified check; or

(iii) Negotiable Treasury securities of the United States of a value equal to the amount specified in the bond. Negotiable Treasury securities shall be accompanied by a proper conveyance to the Secretary of full authority to sell such securities in case of default in the performance of the terms and conditions of a conservation use authorization.

(b) In lieu of bonds for each individual restoration or mitigation lease, holders may furnish a bond covering all restoration or mitigation leases and operations in any one State. Such a bond must be at least $25,000 and must be sufficient to ensure reclamation of all of the holder's restoration or mitigation lease area(s) and the restoration of any lands or surface waters adversely affected by restoration or mitigation lease operations in the State.

(c) All bonds shall be filed in the proper BLM office on a current form approved by the Office of the Director. A single copy executed by the principal or, in the case of surety bonds, by both the principal and an acceptable surety is sufficient. Bonds shall be filed in the Bureau State Office having jurisdiction of the restoration or mitigation lease covered by the bond.

(d) Default.

(1) Where, upon a default, the surety makes a payment to the United States of an obligation incurred under a restoration or mitigation lease, the face amount of the surety bond or personal bonds and the surety's liability thereunder shall be reduced by the amount of such payment.

(2) After default, where the obligation in default equals or is less than the face amount of the bond(s), the principal shall either post a new bond or restore the existing bond(s) to the amount previously held or a larger amount as determined by authorized officers. In lieu thereof, the principal may file separate or substitute bonds for each conservation use covered by the deficient bond(s). Where the obligation incurred exceeds the face amount of the bond(s), the principal shall make full payment to the United States for all obligations incurred that are in excess of the face amount of the bond(s) and shall post a new bond in the amount previously held or such larger amount as determined by authorized officers. The restoration of a bond or posting of a new bond shall be made within 6 months or less after receipt of notice from authorized officers.

(3) Failure to comply with these requirements may:

(i) Subject all leases covered by such bond(s) to termination under the provisions of this title;

(ii) Prevent the bond obligor or principal from acquiring any additional restoration or mitigation leases or interest therein under this subpart; and

(iii) Result in the bond obligor or principal being referred to the suspension and debarment program under 2 CFR part 1400 to determine if the entity will be suspended or debarred from doing business with the Federal Government.