2023 New York Laws › AGM - Agriculture and Markets › Article 20 - Licensing of Farm Products Dealers › 250 - Form and Amount of Security; Agricultural Producers Security Fund; Scope of Coverage.

§  250.  Form  and amount of security; agricultural producers security
fund; scope of coverage. 1.  (a) The bond or letter of  credit  required
by  section two hundred forty-eight of this article shall be upon a form
prescribed by the commissioner and shall be in  the  sum  fixed  by  the
commissioner,  provided  that  the  sum  shall  not  be  less than three
thousand dollars nor more than four hundred thousand dollars, and  shall
be  conditioned  on  the  faithful  compliance  by the licensee with the
provisions of this article. Upon notice, the commissioner  may  increase
the  security  based  upon  review  of  the  applicant's  or  licensee's
financial statements and other materials in support of its  application.
In  the  case of an applicant or licensee owned in whole or in part by a
producer, said producer may execute a waiver of  his  or  her  right  to
recover  from  the applicant or licensee's security and the agricultural
producers security fund and the amount of the security said applicant or
licensee is required to provide shall be adjusted accordingly.
(b) In addition to the bond or letter of credit  required  by  section
two  hundred  forty-eight  of  this  article,  a  fee for deposit in the
agricultural producers security fund  shall  be  paid  annually  to  the
commissioner  at  the  time  application is made for a license. Such fee
shall be determined  on  the  basis  of  the  annual  dollar  volume  of
purchases of farm products as shown in the application for license under
this article in accordance with the following schedule:
Annual Volume                    Fee
$5,000,000 and over               $2,500
3,000,000 - 4,999,999             1,750
1,000,000 - 2,999,999             1,000
500,000 - 999,999                 750
300,000 - 499,999                 500
50,000 - 299,999                 300
20,000 - 49,999                  200
(c) In lieu of filing the bond or letter of credit required by section
two  hundred  forty-eight of this article and paying the fee as provided
for in paragraph (b) of this subdivision, the  applicant  may  elect  to
file  a  bond  or  letter  of  credit  in  the  amount determined by the
commissioner, but which shall not be less than an amount covering ninety
percent of the previous year's dollar volume of purchases  of  New  York
state farm products.
(d)  Upon  initial  application  for a license under this article, the
applicant who  elects  to  participate  in  the  agricultural  producers
security  fund  shall  pay into the fund an amount equal to one-half the
fee determined in  paragraph  (b)  of  this  subdivision,  based  on  an
applicant's  good  faith  estimate of his or her annual dollar volume of
purchases.
(e)  There  is  hereby  established  in  the  joint  custody  of   the
comptroller  and  commissioner  of  taxation  and  finance  a fund to be
designated as the agricultural producers security fund. The commissioner
shall deposit all moneys received from dealers pursuant to paragraph (b)
of this subdivision into the fund. The moneys so received and  deposited
in  the  agricultural  producers security fund shall not be deemed state
funds.  The comptroller shall be empowered to invest such funds pursuant
to section ninety-eight-a of the state finance law consistent  with  the
purposes  of this article. The commissioner is hereby authorized to draw
upon such funds, in his or her discretion, to purchase credit  insurance
for the benefit of the agricultural producers security fund. The expense
of  administering  the  licensing and bonding provisions of this article
shall be paid from the fund upon vouchers certified by the commissioner.
Payments from the fund for administrative expenses shall not exceed five
percent of the maximum amount authorized for the fund. The  commissioner

shall  make  an  annual report of the receipts to and disbursements from
the fund, including the costs  of  administration  of  the  fund,  which
report  shall  be  made available to each dealer and to any other person
having an interest in the fund, and any person who may request a copy of
that report.
(f)  At  any  time  the  fund  exceeds four million dollars on the one
hundred twentieth day prior to the  commencement  of  the  next  license
year,  the  commissioner  shall  suspend collection of the security fund
fee, unless he or she has reason to  believe  that  pending  claims  may
reduce the fund below that amount.
2.  When  and  as  required by the commissioner, a licensee shall file
with the commissioner a verified statement of his or  her  disbursements
during a period to be prescribed by the commissioner which shall contain
the  names  of  the  producers  from whom farm products were received or
purchased and the amount due to the producers. Prior  to  acceptance  of
such  statement for filing, the commissioner may require, at the expense
of the licensee, the submission  of  an  audit  by  a  certified  public
accountant.  If,  in  the  judgment of the commissioner, it appears from
such statement or from facts otherwise ascertained by him  or  her  that
the  security  afforded to producers delivering or selling farm products
to such licensee does not protect such producers to the extent  intended
by  this  section, the commissioner may require such licensee to give an
additional bond or letter of credit in a sum to  be  determined  by  the
commissioner,  but in no event shall the combined bonds for the licensee
exceed four hundred thousand dollars.
3. If satisfied from an  investigation  of  the  financial  condition,
character  and record of the person applying for a license that (a) such
person is solvent and  possessed  of  sufficient  assets  reasonably  to
assure  compensation  to  producers  of farm products; and (b) the gross
volume of farm products purchased from producers by said applicant  will
not  exceed  one  hundred  thousand dollars during the license year, the
commissioner, in his or her discretion, may relieve such applicant  from
the  provision  of this section requiring the filing of a bond or letter
of credit.
4. The commissioner, at least annually, shall publish the names of all
licensees and the amount of their  security  and  shall,  upon  request,
furnish such list to any person.