(1) Before a permit is issued by the Permit Board, the applicant shall file with the department in the manner and form required by the commission a bond for performance payable to the commission and conditioned on full and satisfactory performance of the requirements of this chapter and the permit. The bond shall not be less than Five Hundred Dollars ($500.00) nor more than Two Thousand Five Hundred Dollars ($2,500.00) for each estimated acre of the permit area of the respective operation.

(2) The bond shall be executed by the applicant and a corporate surety licensed to do business in the state. The applicant may elect to deposit the following in lieu of the surety bond: cash, negotiable bonds of the United States government or the state, assignment of real or personal property or a savings account acceptable to the department, negotiable certificates of deposit or a letter of credit of any bank organized or transacting business in the state and insured by the Federal Deposit Insurance Corporation (FDIC) or the Federal Savings and Loan Insurance Corporation (FSLIC) or a similar federal banking or savings and loan insurance organization. The cash deposit or market value of the securities shall be equal to or greater than the amount of the bond required for the permit area. Cash, negotiable bonds, negotiable certificates of deposit, letter of credit, assignment of real or personal property or a savings account or other securities shall be deposited on the same terms as the terms on which surety bonds may be deposited.

(3) The amount of the bond or deposit required and the terms of acceptance of the applicant’s bond or deposit may be increased or decreased by the Permit Board from time to time to reflect changes in the cost of future reclamation of land mined or to be mined subject to the limitations on the amount of the bond set forth in this section.

(4) All state agencies, political subdivisions of the state and local governing bodies shall be exempt from the bonding requirements of this section.