N.Y. AGM Law § 250 — New York Code / Act AGM / Article 20 / Section 250
Form and amount of security; agricultural producers security fund; scope of coverage
Status: in_force

§ 250. Form and amount of security; agricultural producers security\nfund; scope of coverage. 1.  (a) The bond or letter of credit required\nby section two hundred forty-eight of this article shall be upon a form\nprescribed by the commissioner and shall be in the sum fixed by the\ncommissioner, provided that the sum shall not be less than three\nthousand dollars nor more than four hundred thousand dollars, and shall\nbe conditioned on the faithful compliance by the licensee with the\nprovisions of this article. Upon notice, the commissioner may increase\nthe security based upon review of the applicant's or licensee's\nfinancial statements and other materials in support of its application.\nIn the case of an applicant or licensee owned in whole or in part by a\nproducer, said producer may execute a waiver of his or her right to\nrecover from the applicant or licensee's security and the agricultural\nproducers security fund and the amount of the security said applicant or\nlicensee is required to provide shall be adjusted accordingly.\n  (b) In addition to the bond or letter of credit required by section\ntwo hundred forty-eight of this article, a fee for deposit in the\nagricultural producers security fund shall be paid annually to the\ncommissioner at the time application is made for a license. Such fee\nshall be determined on the basis of the annual dollar volume of\npurchases of farm products as shown in the application for license under\nthis article in accordance with the following schedule:\n           Annual Volume                    Fee\n      $5,000,000 and over               $2,500\n       3,000,000 - 4,999,999             1,750\n       1,000,000 - 2,999,999             1,000\n         500,000 - 999,999                 750\n         300,000 - 499,999                 500\n          50,000 - 299,999                 300\n          20,000 - 49,999                  200\n  (c) In lieu of filing the bond or letter of credit required by section\ntwo hundred forty-eight of this article and paying the fee as provided\nfor in paragraph (b) of this subdivision, the applicant may elect to\nfile a bond or letter of credit in the amount determined by the\ncommissioner, but which shall not be less than an amount covering ninety\npercent of the previous year's dollar volume of purchases of New York\nstate farm products.\n  (d) Upon initial application for a license under this article, the\napplicant who elects to participate in the agricultural producers\nsecurity fund shall pay into the fund an amount equal to one-half the\nfee determined in paragraph (b) of this subdivision, based on an\napplicant's good faith estimate of his or her annual dollar volume of\npurchases.\n  (e) There is hereby established in the joint custody of the\ncomptroller and commissioner of taxation and finance a fund to be\ndesignated as the agricultural producers security fund. The commissioner\nshall deposit all moneys received from dealers pursuant to paragraph (b)\nof this subdivision into the fund. The moneys so received and deposited\nin the agricultural producers security fund shall not be deemed state\nfunds.  The comptroller shall be empowered to invest such funds pursuant\nto section ninety-eight-a of the state finance law consistent with the\npurposes of this article. The commissioner is hereby authorized to draw\nupon such funds, in his or her discretion, to purchase credit insurance\nfor the benefit of the agricultural producers security fund. The expense\nof administering the licensing and bonding provisions of this article\nshall be paid from the fund upon vouchers certified by the commissioner.\nPayments from the fund for administrative expenses shall not exceed five\npercent of the maximum amount authorized for the fund. The commissioner\nshall make an annual report of the receipts to and disbursements from\nthe fund, including the costs of administration of the fund, which\nreport shall be made available to each dealer and to any other person\nhaving an interest in the fund, and any person who may request a copy of\nthat report.\n  (f) (i) At any time the fund exceeds six million dollars on the one\nhundred twentieth day prior to the commencement of the next license\nyear, the commissioner shall suspend collection of the security fund\nfee, unless such commissioner has reason to believe that pending claims\nmay reduce the fund below that amount.\n  (ii) In the event that the fund exceeds six million dollars on the one\nhundred twentieth day prior to the commencement of the next year, but\nwhen adjusted for the rate of inflation, the security fund does not\nprovide the same level of protection to the producers as provided for by\nsubparagraph (i) of this paragraph, the commissioner shall continue the\ncollection of security fund fees for such year.\n  2. When and as required by the commissioner, a licensee shall file\nwith the commissioner a verified statement of his or her disbursements\nduring a period to be prescribed by the commissioner which shall contain\nthe names of the producers from whom farm products were received or\npurchased and the amount due to the producers. Prior to acceptance of\nsuch statement for filing, the commissioner may require, at the expense\nof the licensee, the submission of an audit by a certified public\naccountant. If, in the judgment of the commissioner, it appears from\nsuch statement or from facts otherwise ascertained by him or her that\nthe security afforded to producers delivering or selling farm products\nto such licensee does not protect such producers to the extent intended\nby this section, the commissioner may require such licensee to give an\nadditional bond or letter of credit in a sum to be determined by the\ncommissioner, but in no event shall the combined bonds for the licensee\nexceed four hundred thousand dollars.\n  3. If satisfied from an investigation of the financial condition,\ncharacter and record of the person applying for a license that (a) such\nperson is solvent and possessed of sufficient assets reasonably to\nassure compensation to producers of farm products; and (b) the gross\nvolume of farm products purchased from producers by said applicant will\nnot exceed one hundred thousand dollars during the license year, the\ncommissioner, in his or her discretion, may relieve such applicant from\nthe provision of this section requiring the filing of a bond or letter\nof credit.\n  4. The commissioner, at least annually, shall publish the names of all\nlicensees and the amount of their security and shall, upon request,\nfurnish such list to any person.\n