Missouri Code of State Regulations › Title 2 - DEPARTMENT OF AGRICULTURE › Division 30 - Animal Health › Chapter 6 - Livestock Markets › Section 2 CSR 30-6.030 - Bonding (Surety) Requirements for Livestock Market Licensees

Current through Register Vol. 49, No. 14, July 15, 2024
PURPOSE: This rule sets forth procedures for
				  establishing proper surety coverage for licensees defined in Chapter 277,
				  RSMo.
(1) Bonding
				Requirements. Every person subject to the provisions of Chapter 277, RSMo shall
				provide proof of a satisfactory bond in the amount specified by the United
				States Department of Agriculture (USDA) Packers and Stockyards Administration
				or the state veterinarian before receiving a license. In lieu of any bond,
				persons may substitute any instrument of financial security approved by the
				USDA Packers and Stockyards Administration.
(2) All surety bonds and certificates of
				deposit shall name the state veterinarian as trustee or beneficiary. Letters of
				credit shall name the state veterinarian and the issuing financial institution
				as co-trustees. For livestock markets or sales whose corporate headquarters are
				located in another state, it is not required that the state veterinarian act as
				beneficiary or trustee, although proof of adequate bonding must be submitted
				with the application for a license. These bonds shall be in favor of Missouri
				with the director as trustee for the benefit of all persons selling livestock
				to the livestock market/sale and their legal representatives, attorneys or
				assigns, and shall be dependent upon the following:
(A) The livestock market/sale as a buyer must
				pay to the seller the agreed upon purchase price of the livestock purchased
				from the seller;
(B) The livestock
				markets/sales must faithfully perform their duties as licensed livestock
				markets/sales and comply with Chapter 277, RSMo and its corresponding rules.
				This rule applies to purchases made from the effective date of the bond until
				official cancellation of the bond;
(C) A surety bond required by section
				277.080,
				RSMo shall be effective on the date of issue, not affected by the expiration of
				the license, and shall continue in effect until cancelled. The continuous
				nature of a bond however, in no event shall allow the liability of a surety
				under a bond to accumulate for each successive license period during which the
				bond is in force, but limited in the aggregate to the amount stated on the
				bond, or as changed, from time-to-time, by appropriate endorsement or
				rider;
(D) The required bond shall
				be kept in force at all times while conducting business as a licensed livestock
				market or sale. Failure to keep that bond in force is cause for revocation of
				the license and the market/sale is subject to the penalties provided in this
				chapter. No market/sale shall cancel an approved bond without the prior written
				approval of the state veterinarian and the state veterinarian's approval of a
				substitute bond;
(E) Upon written
				demand of the state veterinarian for payment, either the surety shall pay over
				to the state veterinarian the sum demanded up to the full face amount of the
				bond or shall deposit the sum demanded in an interest-bearing escrow account at
				the highest rate of interest available. When a surety pays the state
				veterinarian upon demand, the state veterinarian shall set a date for an
				informal conference to allow the parties to discuss the claim. If the surety
				pays as demanded and the parties or a court of law determines the surety is not
				liable, the state veterinarian shall return to the surety the sum paid to the
				state veterinarian plus all accumulated interest, or any
pro
				rata
part of the sum, plus interest, as applicable in the event of
				liability less than the sum demanded. If the surety chooses to deposit the
				demanded sum in an interest-bearing escrow account and upon the exhaustion of
				appeals, if any, the surety immediately shall pay to the state veterinarian for
				distribution to claimants the amount for which the surety is determined to be
				liable plus accumulated interest on that amount;
(F) Every bond filed shall contain a
				provision that the principal or surety company cannot cancel the bond except
				upon ninety (90) days' prior notice in writing, by certified mail, to the state
				veterinarian at the Jefferson City office. When a surety gives notice of
				cancellation, a copy of that notice shall be mailed to the principal by
				certified mail on the same day. The cancellation does not affect the liability
				accumulated or which may accumulate under that bond before the expiration of
				the ninety (90) days. The notice shall contain the termination date. If notice
				procedures are not followed, the bond shall remain in effect until properly
				cancelled;
(G) Whenever the state
				veterinarian receives notice from a surety that it intends to cancel the bond
				of a livestock market or sale, the state veterinarian shall automatically
				suspend the market/sale license if a new bond is not submitted to the state
				veterinarian within forty-five (45) days of receipt of the notice of intent to
				cancel. If a new bond is not received within eighty (80) days of receipt of the
				notice of intent to cancel, the state veterinarian shall revoke the market/sale
				license. The state veterinarian may cause an inspection of the livestock
				market/sale at the end of the eighty (80)-day period. That inspection may
				include an attempt to identify all possible livestock sellers and related
				claimants of the market/sale by advertising for the same in local news media;
				and
(H) Verbal or written surety
				bond binders issued by a surety on behalf of a livestock market/sale for
				original or replacement bonds are recognized as legally effective in Missouri
				when those binders meet the following conditions:
1. The licensee or principal has paid, or has
				promised to pay, the surety a tentatively agreed upon premium or other
				consideration; and
2. A surety
				provides the state veterinarian, either in writing or verbally-
A. A bond number;
B. The amount of the bond;
C. The effective date of the bond;
				and
D. Assurance that the person
				providing the preceding information has authority to commit the surety. The
				state veterinarian may or may not accept this binder, depending on the
				particular circumstances involved and consistent with the orderly
				administration of this rule.