(1) The Department of State Lands may enter into contract of lease for purposes of ORS 274.525 to 274.590 with such stipulations protecting the interest of the state as the department may require, and may require a bond with a surety company authorized to transact a surety business in this state, as surety, or other form of security, to be given by the lessee for performance of such stipulations, and providing for forfeiture for nonpayment or failure to operate under the contract. No contract shall be entered into giving any person an option of leasing or purchasing the property of the State of Oregon. The lessee in all such contracts shall report monthly to the department the amount of material taken under the contract and pay to the department the amount of royalty thereon provided in the contract. (2) The department shall adopt rules to establish criteria to determine when security is required. [Amended by 1965 c.375 1; 1967 c.421 147; 1969 c.594 45; 1991 c.264 1]
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