[Code of Federal Regulations]
[Title 25, Volume 1]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 25CFR225.30]

[Page 618-619]
 
                            TITLE 25--INDIANS
 
     CHAPTER I--BUREAU OF INDIAN AFFAIRS, DEPARTMENT OF THE INTERIOR
 
PART 225_OIL AND GAS, GEOTHERMAL, AND SOLID MINERALS AGREEMENTS
--Table of Contents
 
                      Subpart B_Minerals Agreements
 
Sec. 225.30  Bonds.

    (a) Bonds required by provisions of a minerals agreement should be 
in an amount sufficient to ensure compliance with all of the 
requirements of the minerals agreement and the statutes and regulations 
applicable to the minerals agreement. Surety bonds shall be issued by a 
qualified company approved by the Department of the Treasury (see 
Department of the Treasury Circular No. 570).
    (b) An operator may file a $75,000 bond for all geothermal, mining, 
or oil and gas minerals agreements in any one State, which may also 
include areas on that part of an Indian reservation extending into any 
contiguous State. Statewide bonds shall be filed for approval with the 
Secretary.
    (c) An operator may file a $150,000 bond for full nationwide 
coverage to cover all geothermal or oil and gas minerals agreements 
without geographic or acreage limitation to which the operator is or may 
become a party. Nationwide bonds shall be filed for approval with the 
Secretary.
    (d) Personal bonds shall be accompanied by:
    (1) Certificate of deposit issued by a financial institution, the 
deposits of which are Federally insured, explicitly granting the 
Secretary full authority to demand immediate payment in case of default 
in the performance of the provisions and conditions of the minerals 
agreement. The certificate shall explicitly indicate on its face that 
Secretarial approval is required prior to redemption of the certificate 
of deposit by any party;
    (2) Cashier's check;
    (3) Certified check;
    (4) 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 provisions and conditions of a minerals agreement; or
    (5) Letter of credit issued by a financial institution authorized to 
do business in the United States and whose deposits are Federally 
insured, and identifying the Secretary as sole payee with full authority 
to demand immediate payment in the case of default in the performance of 
the provisions and conditions of a minerals agreement.
    (i) The letter of credit shall be irrevocable during its term.
    (ii) The letter of credit shall be payable to the Bureau of Indian 
Affairs on demand, in part or in full, upon receipt from the Secretary 
of a notice of attachment stating the basis thereof (e.g., default in 
compliance with the minerals agreement provisions and

[[Page 619]]

conditions or failure to file a replacement in accordance with 
subparagraph (d)(5)(v) of this section).
    (iii) The initial expiration date of the letter of credit shall be 
at least one (1) year following the date it is filed in the proper 
Bureau of Indian Affairs office.
    (iv) The letter of credit shall contain a provision for automatic 
renewal for periods of not less than one (1) year in the absence of 
notice to the proper Bureau of Indian Affairs office at least ninety 
(90) days prior to the originally stated or any extended expiration 
date.
    (v) A letter of credit used as security for any minerals agreement 
upon which operations have taken place and final approval for 
abandonment has not been given, or as security for a statewide or 
nationwide bond, shall be forfeited and shall be collected by the 
Secretary if not replaced by other suitable bond or letter of credit at 
least thirty (30) days before its expiration date.
    (e) The required amount of a bond may be increased in any particular 
case at the discretion of the Secretary.

[59 FR 14971, Mar. 30, 1994; 60 FR 10474, Feb. 24, 1995]