1.    As part of a surface coal mining and reclamation permit application, the permit applicant shall file with the commission, on a form prescribed and furnished by the commission, a bond for performance payable to the state of North Dakota and conditional upon faithful performance of all the requirements of this chapter and the requirements of all regulations promulgated pursuant to this chapter and all permit terms and conditions.

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2.    The commission shall set the bond amount sufficient to complete the reclamation plan in event of forfeiture. The bond for the permit area must be at least ten thousand dollars.

3.    The bond must cover that area of land within the permit area upon which the permittee will initiate and conduct surface coal mining and reclamation operations for the ensuing year. Prior to initiating and conducting succeeding increments of surface coal mining and reclamation operations within the permit area, the permittee shall file with the commission an additional bond or bonds to cover such increments in accordance with this section.

4.    Liability under the bond, subject to allowable releases under subsection 7 of section 38-14.1-17, is for the duration of the surface coal mining and reclamation operation and for a period coincident with the permittee’s responsibility for revegetation requirements in subsection 18 of section 38-14.1-24 and until such time as the lands included in the surface coal mining operation have been approved and released by the commission. The bond must be executed by the permit applicant and a corporate surety licensed to do business in North Dakota, except that the permit applicant may elect to deposit cash, negotiable bonds of the United States or of North Dakota, or negotiable certificates of deposit of any bank organized or transacting business in the state. The cash deposit or market value of such securities must be equal to or greater than the amount of the bond required for the bonded area.

5.    Cash or securities so deposited must be deposited upon the same terms as the terms upon which surety bonds may be deposited. Such securities are security for the repayment of such negotiable certificate of deposit.

6.    A bond filed as prescribed in subsection 2 for areas not yet affected by surface coal mining and reclamation operations may not be canceled by the surety unless it shall give not less than ninety days’ notice to the commission. For lands on which surface coal mining and reclamation operations are being conducted, the bond may not be canceled by the surety unless a substitute surety assuming liability from the initiation of such operations is obtained and is approved by the commission.

7.    If the corporate surety’s license is suspended or revoked, the permittee, after notice from the commission, shall provide a substitute performance bond. If the permittee fails to make substitution within thirty days, the commission may suspend the permit. If substitution is not made within ninety days, the commission shall suspend the permit.

8.    The commission may accept the bond of the permit applicant itself without separate surety when the permit applicant demonstrates to the satisfaction of the commission the existence of a suitable agent to receive service of process and a history of financial solvency and continuous operation sufficient for authorization to self-insure or bond such amount.

9.    The amount of the bond or deposit required and the terms of each acceptance of the permit applicant’s bond must be adjusted by the commission from time to time as    acreages [hectarages] affected by surface coal mining operations are increased or decreased or where the cost of future reclamation changes.

10.    The amount of any forfeiture of the bond or security must be the amount prescribed in the permit for each acre [.40 hectare] or portion thereof on which surface coal mining and reclamation operations are being conducted.