(1) If a person is required under a law of the state of Idaho to give a surety bond, the person may give a government obligation, as defined in subsection (2)(h) of section 54-1901, Idaho Code. The government obligation shall: Be given to the official having authority to approve the surety bond, or its authorized custodian;
(2) Be in an amount equal at fair market value to the penal sum of the required surety bond; and
(3) Authorize the official receiving the obligation to collect or sell the obligation if the person defaults on a required condition.
(4) An official receiving a government obligation under subsection (a) of this section may deposit it with: (b)(1) An official receiving a government obligation under subsection (a) of this section may deposit it with: The state treasurer;
(5) A national or state chartered bank; or
(6) A depository designated by the state treasurer.
(7) The state treasurer, bank, or depository shall issue a safekeeping receipt that describes the obligation deposited.
(8) Using a government obligation instead of a surety bond for security is the same as using: A corporate surety bond;
(9) A certified check;
(10) A bank draft;
(11) A post office money order; or
(12) Cash.
(13) When security is no longer required, a government obligation given instead of a surety bond shall be returned to the person giving the obligation. If a person supplying labor or material to a contractor defaulting under the public contracts bond act, sections 54-1925 through 54-1930, Idaho Code, files with the contracting body the application and affidavit provided under section 54-1927, Idaho Code, the contracting body: May return to the contractor the government obligation given as security or proceeds of the government obligation given under the public contracts bond act, sections 54-1925 through 54-1930, Idaho Code, only after the ninety (90) day period for bringing a civil action under section 54-1927, Idaho Code;
(14) Shall hold the government obligation or the proceeds subject to the order of the court having jurisdiction of the action if a civil action is brought in the ninety (90) day period.
(15) The provisions of this section do not affect the: Priority of a claim of the contracting body against a government obligation given under this section;
(16) Right or remedy of the contracting body for default on an obligation provided under this section;
(17) Authority of a court over a government obligation given as security in a civil action; and
(18) Authority of an official of the state of Idaho authorized by another law to receive a government obligation as security. (f) To avoid frequent substitution of government obligations, the state treasurer may promulgate rules limiting the effect of the provisions of this section, to a government obligation maturing more than one (1) year after the date the obligation is given as security.