Nebraska Administrative Code › Topic - AGRICULTURE, DEPARTMENT OF › Title 33 - DEPARTMENT OF AGRICULTURE, DIVISION OF MANAGEMENT AND FINANCE › Chapter 1 - PACKER BONDING REGULATIONS › Section 33-1-003 - Requirements

Current through June 17, 2024
Except as provided by 33 NAC 1-003.06, registrants under the
				  Nebraska Livestock Sellers Protective Act shall provide the director assurances
				  of their financial ability to faithfully and promptly account for and pay to
				  the sellers with whom they deal or their designated representatives, the total
				  proceeds from sale of slaughter livestock in accordance with the following
				  requirements:
003.01 Each registrant
				shall file a surety bond or bond equivalent with the director. Such surety
				bonds and bond equivalents shall meet the following requirements:
003.01A Bond equivalents shall be in the form
				of a trust agreement, and the fund of the trust shall be in the form of fully
				negotiable obligations of the United States or certificates of deposit insured
				by the Federal Deposit Insurance Corporation or the Federal Savings and Loan
				Insurance Corporation.
003.01B The
				amount of the bond or bond equivalent shall be not less than the next multiple
				of five thousand dollars ($5,000) above the average of all slaughter livestock
				purchased in Nebraska during a period equivalent to two (2) business days based
				on the total number of business days and the total amount of such transactions
				in the preceding twelve (12) months, or in such substantial part thereof, if
				any, in which the registrant did business. In the case of new registrants, the
				amount of the bond or bond equivalent shall be based upon the level of
				purchases reasonable to be expected, as determined by the director. For the
				purpose of computing average daily value, two hundred and sixty (260) is deemed
				the number of business days in a year.
003.01C Whenever a registrant's weekly
				purchases exceed one hundred fifty percent (150%) of his average weekly
				purchases, such fact shall be reported to the director, and the director may
				require an increase in the amount of the bond or bond equivalent. The amount of
				the increase shall be determined by the director, but shall not be excessive in
				relation to the increased volume of purchases.
003.01D All registrants shall review their
				level of purchases each six (6) months to determine the adequacy of their bonds
				or bond equivalent.
Whenever such a review reveals that the level of purchases
				  has increased to such an extent that the amount of the bond or bond equivalent
				  should be increased by five thousand dollars ($5,000) or more based upon the
				  formula set out above, a new or amended bond or bond equivalent of such amount
				  shall be filed.
003.01E
				Bonds or bond equivalents shall provide that prior to terminating or reducing
				the amount of the bond or bond equivalent, at least thirty (30) days notice, in
				writing, shall be given to the director by the party terminating or reducing
				the amount;
Provided,
that no such notice shall be
				required in cases wherein a replacement bond or bond equivalent of sufficient
				amount is provided for. Whenever a bond or bond equivalent is to be terminated
				by a cancellation by the surety or trustee, the director may cause notice of
				such fact to be published. Bonds and bond equivalents shall provide that
				termination will not release the parties from liability arising out of facts or
				transactions occurring prior to the termination date.
003.01F In the case of bonds filed with the
				director, the registrant and surety of the bond shall be held and firmly bound
				to the State of Nebraska as trustee for all persons from whom the registrant
				has purchased slaughter livestock in Nebraska and failed to pay in full
				therefor before the close of the next business day following the purchase or
				within twenty-four (24) hours following the determination of the price,
				whichever may occur last, or, in the case of an express agreement between the
				seller and purchaser, according to the terms of such agreement. In the case of
				bond equivalents filed with the director, the trust agreement shall provide as
				beneficiary, the State of Nebraska for the benefit of all persons from whom the
				registrant has purchased slaughter livestock in Nebraska and failed to pay in
				full therefor before the close of the next business day following the purchase
				or within twenty-four (24) hours following the determination of the price,
				whichever may occur last, or, in the case of an express agreement between the
				seller and purchaser, according to the terms of such agreement. In the case of
				bond equivalents filed with the director, the trust agreement shall provide as
				beneficiary, the State of Nebraska for the benefit of all persons from whom the
				registrant has purchased slaughter livestock in Nebraska and failed to pay in
				full therefor before the close of the next business day following the purchase
				or within twenty-four (24) hours following the determination of the price,
				whichever may occur last, or, in the case of an express agreement between the
				seller and purchaser, according to the terms of such agreement. The bond or
				trust agreement of a registrant shall be conditioned for the payment only of
				those claims which arise from purchases of livestock from Nebraska residents,
				and further conditioned to provide that the proceeds of the bond or the fund of
				the trust shall not be used to pay fees, salaries, or expenses for legal
				representation, or be subject to attachment for any other claim, or to levy of
				execution upon a judgment based on any other claim.
003.01G Registrants operating more than one
				plant used to slaughter livestock purchased from Nebraska residents shall
				describe with particularity the exact locations of the plants slaughtering such
				livestock and thus covered by the bond or bond equivalent;
Provided,
that nothing contained herein shall prevent
				a registrant operating multiple plants from bonding each such plant
				individually, or establishing separate trust agreements for each
				plant.
003.01H Bonds filed with the
				director shall be with a surety company duly authorized to do business within
				the State of Nebraska, and trustees of bond equivalents filed with the director
				shall be institutions located within the State of Nebraska in which funds are
				invested or deposited.
003.01I
				Bonds and bond equivalents shall provide that persons damaged by nonpayment of
				obligations on the part of the registrant may maintain an action against the
				registrant, and the surety on the bond or the trustee of the trust fund, even
				though not named as a party to the bond or bond equivalent.
003.01J Bonds and bond equivalents shall
				provide that any claim for recovery on the bond or trust agreement must be
				filed in writing with the surety, the trustee, or the director, and the party
				who receives such claim shall, within twenty-four (24) hours notify the other
				such party or parties and the registrant of the fact of such filing. Neither
				the surety on a bond nor the trustee of a trust agreement shall be liable to
				pay any claim if it is not filed in writing within one hundred and twenty (120)
				days from the date of the transaction on which the claim is based, or if suit
				thereon is commenced less than one hundred and eighty (180) or more than five
				hundred and forty-seven (547) days from the date of the transaction on which
				the claim is based.
003.01K Trust
				funds shall not be removed from trust by a registrant until the expiration of
				one hundred and twenty (120) days after the date of termination of a trust, and
				then only if no claims secured by the agreement have been filed under 33 NAC
				1-003.01J, above. If any such claims have been filed, the withdrawal of funds
				by the registrant shall not be permitted until the claims have been satisfied
				or released and evidence of satisfaction or release has been filed with the
				director.