Administrative Rules of Montana › Department 4 - AGRICULTURE › Chapter 4.12 - AGRICULTURAL SCIENCES DIVISION › Subchapter 4.12.10 - Grain Rules › Rule 4.12.1022 - CERTIFICATES OF DEPOSIT OR OTHER BOND EQUIVALENTS

Current through Register Vol. 13, July 5, 2024
(1) Rules promulgated hereunder that apply to
				surety bonds shall also apply to certificates of deposit (CD) and other bond
				equivalents.
(2) A CD may be
				liquidated for disbursement for the same reasons and in the same manner that
				surety bond proceeds may be requested for disbursement.
(3) A CD or other bond equivalent shall be on
				a form approved by the department.
(4) A CD issued by a bank or savings and loan
				association that is a member in good standing with the federal deposit
				insurance corporation or the federal savings and loan insurance corporation,
				respectively may be submitted to the department in lieu of a surety bond for a
				public warehouseman or a commodity dealer as required by
				80-4-504
				and
				80-4-601,
				MCA. The CD must be in an amount equal to the otherwise required surety
				bond.
(5) A CD may be automatically
				renewable, or for a single maturity. If it is for a single maturity, the CD
				must be for a term of one year or less.
(6) A CD submitted in lieu of a surety bond
				shall be held by the department.
(7) All CDs shall be made payable or properly
				assigned to the department as follows: "Pay to the order of the Director of the
				Montana Department of Agriculture". If a CD is assigned to the department,
				written consent of the assignment must be received from the financial
				institution issuing the certificate.
(8) All interest earned on the CD is to be
				credited or paid directly to the purchaser of the CD. If interest is paid to
				the department, it shall be endorsed to the purchaser of the CD. These
				conditions are valid only if no claim has been made against the CD. In event of
				a claim the interest earned may become a part of the dispersible proceeds of
				the CD.
(9) If a licensee desires
				to terminate a license and requests the return of a CD, the licensee filing the
				CD must return the license and make written request by registered or certified
				mail with return receipt for the return of the CD. Upon receipt of the written
				request and the submission of the license, the director shall hold the CD for a
				period of 90 days before it is returned. If at the end of the 90 days no claim
				against the CD has been made, the CD shall be returned, unless the director is
				of the opinion that claims against the CD may exist. Under these conditions,
				the director may hold the CD until it is determined that no claims against the
				CD exist.
(10) If a license issued
				is revoked, the CD shall be held by the director for a period of 120 days or
				until the director is satisfied that no claims against the CD exist.
(11) If a licensee desires to remain licensed
				and requests the return of a CD on file with the director, the licensee shall
				file with the director a replacement CD, bond, or bond equivalent in an amount
				required by the director in accordance with
				80-4-504
				and
				80-4-601,
				MCA. The replacement CD, bond, or bond equivalent must be received, become
				effective and be in full force and effect on or before the date that the
				licensee's existing CD is to be returned. The director shall not return the CD
				until a replacement CD, bond or bond equivalent has been received.
(12) If a reduction in the amount of a CD is
				permitted by the department, such reduction shall be made by submitting a new
				CD in the smaller amount approved by the department. The date the CD is to be
				effective, shall be set by the department and any new liability accrued under
				the prior CD will transfer to the new CD or its equivalent. The department will
				release the original CD upon receipt of the reduced CD or its equivalent
				providing all actions are approved by the department.
(13) In addition to CDs the director may
				accept irrevocable letters of credit which he deems to be acceptable. All of
				the provisions that apply to CDs shall apply to these bond
				equivalents.
80-4-403, MCA;
					 IMP,
					 80-4-425,
					 80-4-504,
					 80-4-505,
					 80-4-538,
					 80-4-601,
					 80-4-604,
					 MCA;