Missouri Code of State Regulations › Title 2 - DEPARTMENT OF AGRICULTURE › Division 60 - Grain Inspection and Warehousing › Chapter 4 - Missouri Grain Warehouse Law › Section 2 CSR 60-4.140 - Certificates of Deposit

Current through Register Vol. 49, No. 14, July 15, 2024
PURPOSE: This rule sets forth guidelines for the
				  submission, acceptance, safeguarding, possible liquidation and return of a
				  certificate of deposit that has been submitted in lieu of a Missouri grain
				  warehouse bond.
(1) A
				certificate of deposit (CD) issued by a bank or savings and loan association
				that is a member in good standing with the Federal Deposit Insurance
				Corporation or Federal Savings and Loan Insurance Corporation respectively may
				be submitted to the Missouri Department of Agriculture in lieu of a Missouri
				grain warehouse bond as required by sections 411.010-411.800, RSMo. The CD must
				be in an amount equal to the otherwise required bond.
(2) A CD shall have a term of no longer than
				one (1) year and shall be automatically renewable. However, the term of the CD
				may be for a period longer than one (1) year if the issuing bank states in
				writing that in the event the Missouri Department of Agriculture liquidates the
				CD, the bank will honor the request for liquidation and will not assess a
				penalty for early withdrawal.
(3) A
				CD submitted in lieu of a Missouri grain warehouse bond shall be held in a
				safe-deposit box of a local bank or savings and loan association by the
				director of the Missouri Department of Agriculture who shall act as trustee for
				the benefit of all persons storing grain with the warehousemen as set forth in
				the Missouri Grain Warehouse Law, sections 411.010-411.800, RSMo.
(4) All CDs shall be made payable or properly
				assigned to the Missouri Department of Agriculture as follows: Pay to the order
				of the Director of the Missouri Department of Agriculture. If a CD is assigned
				to the Department of Agriculture, written consent of the assignment must be
				received from the financial institution issuing the certificate. The director
				may make the necessary inquiries to determine that the certificate is
				negotiable and, if applicable, to confirm that the assignment of the CD to the
				Missouri Department of Agriculture has been approved by the financial
				institution issuing the CD.
(5) A
				CD assigned or purchased by a principal shareholder, officer, employee or any
				other individual for or on behalf of a licensee shall disclose on its face the
				name of the licensee in whose favor the CD is deposited. The balance of any
				proceeds remaining after liquidation and disbursement shall be paid to the
				assignor or purchaser.
(6) In the
				event that a plurality of CDs from any number of sources are deposited in
				satisfaction of a licensee's bonding obligation, the director may satisfy
				claims arising under the Missouri Grain Warehouse Law by liquidating any one
				(1) or more of these CDs without regard to proration.
(7) In the event that a licensee desires to
				substitute a bond for a CD then on deposit with the director of agriculture,
				the CD shall be retained by the Department of Agriculture for a period of
				ninety (90) days following the later of the effective date of the bond or the
				date the bond is received by the director. A substitute bond shall be
				considered as received by the director when the bond is actually received or
				when a binding verbal commitment for a substitute bond has been accepted by the
				director. The director may retain the CD beyond ninety (90) days for such time
				as may be required to fully ascertain the existence of any claims. After that,
				the CD shall be returned to the purchaser. Should the maturity date be
				interposed during this transition period, the director, at the option of the
				licensee and upon its timely request, shall cause the CD to be liquidated and
				the proceeds deposited in a passbook savings account for the duration of the
				transition period, when the funds shall be forwarded to the purchaser or
				assignor of the CD.
(8) A licensee
				shall be required to augment CD deposits in any situation where it would be
				required to increase its coverage under a bond; this augmentation shall be
				commensurate to the increased bond value required.
(9) All CDs liquidated by the Department of
				Agriculture pursuant to these rules may be redeemed by collection proceedings
				through a local bank or savings and loan association selected by the
				director.
(10) A CD may only be
				liquidated for disbursement upon the same reasons that bond proceeds may be
				demanded for disbursement and shall apply to all claims whenever
				arising.
(11) All interest earned
				on the CD is to be credited or paid directly to the purchaser of the CD, except
				in the event of liquidation for the purpose of paying claims, in which event
				interest attributed to the claim amounts shall be payable to
				claimants.
(12) If a licensee
				desires to surrender its license and requests the return of a CD to the CD
				purchaser, the licensee must return its grain warehouse license and make
				written request by registered or certified mail with return receipt for return
				of the CD. Upon receipt of the written request and submission of the grain
				warehouse license, the director shall hold the CD until the director is
				satisfied that no claims exist, which may include a minimum ninety (90)-day
				holding period, before the CD is returned to the purchaser.
(13) If a grain warehouse license is revoked,
				the CD shall be held by the director for a period of one hundred twenty (120)
				days or until the director is satisfied that no claims against the licensee
				exist.
(14) In the event that a
				licensee desires to substitute a letter of credit for a CD, the director shall
				return the CD to the purchaser upon receipt and authentication of the letter of
				credit.
(15) In the event that the
				amount of the bond required under sections 411.010-411.800, RSMo decreases, a
				licensee may substitute a CD for the lesser amount; however, that substitution
				shall be made only at maturity of the CD in possession of the Department of
				Agriculture, or at such time as approved by the director.
(16) If the decrease in bond requirement is
				due to a decrease in storage capacity, a minimum ninety (90)-day holding period
				may be required from the date of the amendment audit, before a decreased CD
				will be accepted.
(17) If the
				decrease in bond requirement is due to an increase in net worth, a minimum
				ninety (90)-day holding period may be required from the date the improved net
				worth is accepted by the director.
*Original authority 411.070(2), RSMo 1941, amended 1955,
					 1965, 1977, 1980, 1986, 1993, 1995, 1997; and 411.277.1, RSMo 1986, amended
					 1987.