A certificate of deposit as financial assurance is subject to the following requirements:

1. (1) An assignment of a certificate of deposit may not exceed a denomination of one hundred thousand dollars, or the maximum insurable amount as determined by the Federal Deposit Insurance Corporation and the Federal Savings and Loan Insurance Corporation, whichever is less. Any combination of certificates of deposit for one operator from one institution may not be in excess of that limit;
2. (2) An automatically renewable certificate of deposit is from a United States bank insured by the Federal Deposit Insurance Corporation, or a United States credit union insured by the National Credit Union Administration;
3. (3) The certificate of deposit is not an asset of the operator and may not be canceled, assigned, revoked, disbursed, replaced, or allowed to terminate without board approval. The certificate of deposit may not be assigned for the benefit of creditors, attached, garnished, levied, or executed on, or subject to process issued from any court except for the purpose of enabling this state to effectuate reclamation and environmental cleanup;
4. (4) The certificate of deposit is made payable to or assigned to the department, both in writing and in the records of the bank issuing the certificate. The bank waives all rights of setoff or liens against the certificate;
5. (5) The original certificate of deposit must be submitted to the department and held by the department until released by the board;
6. (6) Upon submittal of the certificate of deposit and at the subsequent request of board staff the operator shall demonstrate that the bank issuing the certificate of deposit is in good financial standing and condition, as evidenced by the bank's rating by an appropriate rating system;
7. (7) The operator shall deposit sufficient amounts of certificates of deposit, to ensure the department is able to liquidate those certificates prior to maturity, upon forfeiture, for the amount of financial assurance required;
8. (8) In addition to the financial assurance amount, the certificate of deposit must include the amount of the maximum early withdrawal penalty rounded up to the next higher hundred dollars;
9. (9) The operator may roll any accrued interest back into the certificate of deposit principal to cover any increases in the face value due to any financial assurance increases. Otherwise, any accrued interest may be deposited into the operator's individual account and is free of encumbrance by financial assurance liability; and
10. (10) In the event of forfeiture of a certificate of deposit, the face value of the certificate plus any accrued interest that has been rolled back into the certificate's principal is subject to bond liability and expenditure in the performance of reclamation.

Source: 52 SDR 24, effective September 10, 2025 .

General Authority: SDCL 45-6B-81 .

Law Implemented: SDCL 45-6B-20 , 45-6B-20.1 , 45-6B-21 , 45-6B-22 , 45-6B-23 , 45-6B-24 , 45-6B-55 , 45-6B-91 .