Grazing Indian Lands Surety Bond

Bond Penalty: Based on Rental Rates and Prospective Expensing

Pursuant to 25 CFR §166.600, a permittee, assignee or subpermittee must provide a grazing indian lands bond for each permit interest that he or she acquires. A person or legal entity, including an independent legal entity owned and operated by a tribe must obtain a permit under the Federal Code before taking possession of Indian land for grazing of livestock. There are grazing "rental rates" and other financial duties imposed on permitees which require financial assurance unless waived under very specific circumstances.

The grazing of indian lands performance bond runs with the contract between a permittee and the land owner, and is regulated by the Bureau of Indian Affairs (BIA). The surety bond guarantees that the permittee will perform and fulfill all the undertakings, covenants, terms, and conditions of the agreement between the he/she and the landholder during the original term of the same. The obligation requires calculation of the bond penalty using the follow formula, pursuant to § 166.601:

  • Value of one year's grazing rental payment;
  • Value of any improvements to be constructed;
  • Cost of performance of any additional obligations; and
  • Cost of performance of restoration and reclamation.

The grazing permit bond must follow the format provided by the BIA (Form 5-5423) or a form acceptable to the tribe or landholder which conforms to the same provisions. The performance bond must be recorded in our Land Titles and Records Office which has jurisdiction over the land. The BIA sends notification of pending renewal of permits 120 days prior to expiration at which time the permittee will evidence compliance with or waiver of the bonding requirement. An applicant should review National Policy Memorandum NPM-TRUS-32, and be fluent in the federal requirements regarding environmental compliance, conservation practices and reclamation which can be viewed here.

Applying for a grazing indian lands performance bond should be accomplished through a surety underwriter with knowledge and experience with the livestock management sector and federal surety obligations. National surety bond leader, Surety One, Inc. offers both surety and fidelity bonds needed by livestock trade and agricultural professionals nationwide. Questions about a grazing indian lands bond? Call us at (800) 373-2804, email us at Underwriting@SuretyOne.com or click here for live chat.

Surety bond application review and quoting are free of charge. There is no obligation to purchase.

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