(a) Any bond provided in this article to be filed with the department by the operator shall be in the form as the director prescribes, payable to the State of Alabama and conditioned that the operator shall faithfully perform all applicable requirements of this article and comply with all applicable rules of the department made in accordance with the provisions of this article. The bond shall be signed by the operator, as principal, and by a good and sufficient corporate surety licensed to do business in the State of Alabama, as surety. The penalty of the bond shall be two thousand five hundred dollars ($2,500) for each acre covered by the permit.

In lieu of a bond, the operator may elect to deposit cash or negotiable bonds of the United States government or the State of Alabama or any municipality within the state with the department in lieu of a corporate surety. The cash deposit or market value of the securities shall be equal at least to the sum of the bond.

The department shall, upon receipt of any deposit of cash or securities, immediately place the same with the State Treasurer, whose duty it shall be to receive and hold the same in the name of the state, in trust, for the purposes for which the deposit is made. The State Treasurer shall at all times be responsible for the custody and safekeeping of the deposits. The operator making the deposit shall be entitled from time to time to demand and receive from the State Treasurer, on the written order of the director, the whole or any portion of any securities so deposited, upon depositing with the State Treasurer in lieu thereof other negotiable securities of the classes specified in this section having a market value at least equal to the sum of the cash deposits or securities deposited. When the securities mature or are called, the State Treasurer, at the request of the operator, shall convert the securities into other negotiable securities of the classes specified in this section as may be designated by the operator. The total penalty of the bond or amount of cash and securities shall be increased or reduced from time to time as land is added to or withdrawn from the permit as provided in this article.

(b) Whenever an operator shall have completed all applicable requirements under the provisions of this article as to any affected land, the operator shall notify the department. The department shall within 30 days after notification by the operator inspect the affected land completed by the operator and, if the land has been reclaimed as required by this article, shall release the operator from further obligations regarding the affected land and reduce or release the bond or substituted cash or securities of the operator. Inspections by the department under this subsection shall include inspection by a registered forester.

(c) A bond filed as above prescribed shall be conditioned so that it cannot be cancelled by the surety except after not less than 90 days written notice to the department. If a bond is cancelled after the notice, the operator shall, on or before the effective date of the cancellation, substitute for the bond another bond, or cash, or securities as provided in this section.

(d) If the license to do business in the state of a surety upon a bond filed with the department pursuant to this article shall be suspended or revoked, the operator, within 30 days after receiving written notice thereof from the department, shall substitute for the surety a good and sufficient corporate surety licensed to do business in the State of Alabama or another bond, or cash, or securities in lieu thereof as provided in this section.

(e) The failure of the operator to make substitution of surety as provided in subsections (c) and (d) of this section shall result in the automatic suspension of the permit of the operator to conduct mining operations on the land described in the permit, and the operator shall not conduct further or additional mining operations on the land described in the permit until substitution as provided in this section has been made on the surety.