(a) We will only accept bonds in the following forms:
(1) Cash;
(2) Negotiable Treasury securities that:
(i) Have a market value equal to the bond amount; and
(ii) Are accompanied by a statement granting full authority to the BIA to sell such securities in case of a violation of the terms of the permit.
(3) Certificates of deposit that indicate on their face that Secretarial approval is required prior to redemption by any party;
(4) Irrevocable letters of credit (LOC) issued by federally-insured financial institutions authorized to do business in the United States. LOC's must:
(i) Contain a clause that grants the BIA authority to demand immediate payment if the permittee defaults or fails to replace the LOC within 30 calendar days prior to its expiration date;
(ii) Be payable to the “Department of the Interior, BIA”;
(iii) Be irrevocable during its term and have an initial expiration date of not less than one year following the date we receive it; and
(iv) Be automatically renewable for a period of not less than one year, unless the issuing financial institution provides the BIA with written notice at least 90 calendar days before the letter of credit's expiration date that it will not be renewed;
(5) Surety bond; or
(6) Any other form of highly liquid, non-volatile security subsequently approved by us that is easily convertible to cash by us and for which our approval is required prior to redemption by any party.
(b) Indian landowners may negotiate a permit term that specifies the use of any of the bond forms described in paragraph (a) of this section.
(c) A tribe may accept and hold any form of bond described in paragraph (a) of this section, to secure performance under a permit of tribal land.