Cash Bond Requirements 

A cash bond must be submitted in the form of a guaranteed remittance, this is, cashier’s check, bank draft, certified check, USPS money order, or cash that is deposited in BLM's suspense account when received.  The check must be payable in U.S. dollars and issued by a U.S. bank.  A check posted with the BLM must be issued to the U.S. Department of the Interior-BLM; and the BLM Surface Management Personal Bond form (Form 3809-2) must accompany the check. 

Letter of Credit (LOC) Requirements   

The LOC must be an irrevocable letter of credit issued by a bank organized to do business in the United States and is Federally insured. LOCs a not allowed on some non-energy permits. Requirements include:

  • When posting a joint bond, it must be payable to both the U.S. Department of Interior-BLM and the state agency involved. The BLM Surface Management Bond form (Form 3809-2) must accompany the LOC. 
  • Initial expiration of the LOC must be not less than 1 year after the date filing with the BLM. It must contain an automatic renewal in one-year increments.
  • The LOC must contain provisions allowing collection by BLM in cases of default of obligor or if the bank revokes the LOC.

Certificates of Deposit (CD) Requirements

The CD must be Federally insured and payable to the BLM and the state, if applicable.  Required information:

  • The CD must indicate that "The Secretary of the Interior-BLM and State (if applicable) are granted full authority to demand immediate payment in case of default. Approval by the Secretary of Interior-BLM is required prior to redemption of the CD by any party.”
  • The CD should be issued to or for the benefit of the U.S. Department of the Interior-BLM and the state (if applicable).  The BLM Surface Management Personal Bond form (Form 3809-2) must accompany the CD.
  • If CD is issued to another person/company then BLM/state, proof must be provided that the right to payment of the principal under the CD has been assigned to BLM/state, together with the proof that the bank has changed its records to show that only BLM/state may collect the amount of the CD. The financial agency must place a hard hold on the CD.
  • The principal must ensure that the CD can be redeemed prior to maturity. If there are any penalties for early redemption, such penalties will be paid out of the principal’s interest earned.  
  • There should be no expiration date for the CD that would restrict the right of the BLM/state to collect the principal at any time of default. 
  • It must be clear that the deposit is for the sole and exclusive use of the Department of the Interior-BLM and the state. The financial institution must agree to not use the deposit to off-set any monetary default of the principal.