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When an application is submitted, the applicant shall file with the commissioner, on a form prescribed and furnished by the commissioner, a bond payable to the state of Tennessee, in penal sum, and conditioned on the faithful performance of the provisions of the applicant's permit.
The bond shall cover that area of land within the permit area upon which the operator will initiate and conduct coal surface mining and reclamation operations.
The bond shall be executed by the operator and a corporate surety who is approved by the commissioner and properly authorized to act as such surety and licensed to do business in this state; provided, however, that the operator may elect to deposit cash or negotiable certificates of deposit assigned irrevocably to the state, or negotiable United States treasury bonds or negotiable general obligation municipal or corporate bonds, which municipal or corporate bonds have the highest rating by Moody's and/or Standard and Poor's rating services, with the treasurer of this state in lieu of a corporate surety.
The treasurer shall receive and hold such deposits in the name of the state of Tennessee, in trust, for the purposes for which such deposit is made, and shall at all times be responsible for the custody and safekeeping of such deposits.
The operator making the deposit shall be entitled from time to time to demand and receive from the treasurer, on the written order of the commissioner, the whole or any portion of any securities so deposited, upon depositing with the treasurer, in lieu thereof, other negotiable securities of the classes herein specified having a market value at least equal to the sum of the bond, and also to demand and recover the interest income from the securities as the same becomes due and payable; provided, however, that the treasurer, at the request of the operator, shall convert such securities into such other negotiable securities of the classes herein specified as may be designated by the operator.
The amount of bond or cash deposit or marketable value of the securities shall be ten thousand dollars ($10,000). Liability under each bond shall be continuous until the reclamation provisions of this part and regulations have been fulfilled.
Local governmental entities and state agencies may execute their own bonds as surety.