---
kind: "section"
citation: "43 C.F.R. § 3602.14"
title: "43"
number: "3602.14"
heading: "What kind of financial security does BLM require?"
url: "https://uscodex.org/cfr/43/3602.14"
---

# §3602.14. What kind of financial security does BLM require?

- (a) For contracts of $2,000 or more, BLM will require a performance bond of an amount sufficient to meet the reclamation standards provided for in the contract, but at least $500. If you have a sales contract from a community pit or common use area and you pay a reclamation fee, BLM will not require you to post a performance bond.
- (b) BLM may require a performance bond for contracts of less than $2,000. We will not require a bond amount greater than 20 percent of the total contract value.
- (c) A performance bond may be a—
  - (1) Bond of a corporate surety shown on the approved list (Circular 570) issued by the U.S. Treasury Department, including surety bonds arranged or paid for by third parties;
  - (2) **Certificate of deposit that—**
    - (i) Is issued by a financial institution whose deposits are Federally insured;
    - (ii) Does not exceed the maximum insurable amount set by the Federal Deposit Insurance Corporation;
    - (iii) Is made payable or assigned to the United States;
    - (iv) Grants BLM authority to demand immediate payment if you fail to meet the terms and conditions of the contract;
    - (v) States that no party may redeem it before BLM approves its redemption; and
    - (vi) Otherwise conforms to BLM's instructions as found in the contract terms;
  - (3) Cash bond, with a power of attorney to BLM to convert it upon your failure to meet the terms and conditions of the contract;
  - (4) Irrevocable letter of credit from a bank or financial institution organized or authorized to transact business in the United States, with a power of attorney to BLM to redeem it upon your failure to meet the terms and conditions of the contract; or
  - (5) Negotiable Treasury bond of the United States of a par value equal to the amount of the required bond, together with a power of attorney to BLM to sell it upon your failure to meet the terms and conditions of the contract.

## Notes

### Authority

Authority: 30 U.S.C. 601 et seq.; 43 U.S.C. 1201, 1701 et seq.; Sec. 2, Act of September 28, 1962 (Pub. L. 87-713, 76 Stat. 652).

### Source

Source: 66 FR 58901, Nov. 23, 2001, unless otherwise noted.