Iowa Administrative Code › Agency 21 - Agriculture and Land Stewardship Department › Chapter 91 - Licensed Grain Dealers › Rule 21-91.9 - Bonds and Irrevocable Letters of Credit

Current through Register Vol. 47, No. 3, July 24, 2024
Bonds filed with the bureau shall be on forms prescribed by the
				bureau. Irrevocable letters of credit issued to the bureau shall be on the form
				prescribed by the bureau. Bonds and irrevocable letters of credit shall be
				written so as to provide funds to protect producers who have sold grain to the
				licensed grain dealer
(1)
Deficiency bond or irrevocable letter of credit.
When the net
			 worth or current ratio of a licensee is less than that required by Iowa Code
			 section
			 203.3,
			 the grain dealer may file a bond or an irrevocable letter of credit with the
			 bureau to cover the deficiency as provided by and within the time prescribed in
			 Iowa Code section
			 203.3.
			 Bonds filed with the bureau shall be on the form prescribed and furnished by
			 the bureau. Irrevocable letters of credit shall be on the form prescribed by
			 the bureau. Bonds or irrevocable letters of credit shall be written so as to
			 provide a source of funds to protect producers who have sold grain to the
			 licensed grain dealer. Unless the licensee files the bond or irrevocable letter
			 of credit within the prescribed time period, the grain dealer license shall be
			 suspended. The licensee's failure to provide the bond or irrevocable letter of
			 credit within ten days of suspension shall cause the license to be
			 revoked.
(2)
lime period to
			 correct deficiency.
If a grain dealer has current assets equal to less
			 than 50 percent of current liabilities and files a deficiency bond or
			 irrevocable letter of credit as provided in Iowa Code section
			 203.3(5)
			  within the 30-day period after the notice by
			 the bureau, the grain dealer shall correct the deficiency other than by the use
			 of a deficiency bond or irrevocable letter of credit within 30 days after the
			 filing of the deficiency bond or irrevocable letter of credit. Failure to cure
			 the deficiency other than by the use of a deficiency bond or irrevocable letter
			 of credit within the 30 days shall cause the license to be suspended.
(3)
Replacement bond or irrevocable
			 letter of credit.
The bureau shall send written notice to the licensee
			 notifying the licensee that the bond or irrevocable letter of credit shall be
			 canceled on the date specified by the surety or issuer in its notice to the
			 bureau. The bureau shall send a written notice and information and forms for
			 filing the required replacement bond or irrevocable letter of credit.
			 Replacement bond or irrevocable letter of credit shall be on file with the
			 bureau prior to the time of cancellation of the bond or irrevocable letter of
			 credit. The department shall suspend any grain dealer license from the time the
			 grain dealer's bond or irrevocable letter of credit is canceled until the
			 replacement bond or irrevocable letter of credit is on file with the
			 department. Unless the bond or irrevocable letter of credit is no longer
			 necessary, the department shall revoke the grain dealer's license if a
			 replacement bond or irrevocable letter of credit is not received from the
			 licensee within 30 days of suspension of the license.
(4)
Cancellation of the bond or
			 irrevocable letter of credit.
The issuer shall send a cancellation
			 notice to the bureau by certified mail. The notice shall be in accordance with
			 the provisions stated in the bond or irrevocable letter of credit. The time
			 period for notice of cancellation stated in the bond or irrevocable letter of
			 credit Cornmences on the date when the bureau receives the notice. The bureau
			 shall send written acknowledgment of notice of the cancellation of the bond or
			 irrevocable letter of credit to the issuer and the principal.
This rule is intended to implement Iowa Code sections 203.3 and
				203.4.