523G.6 - EVIDENCE OF FINANCIAL RESPONSIBILITY.
523G.6 EVIDENCE OF FINANCIAL RESPONSIBILITY. 1. An invention developer shall maintain as security evidence of financial responsibility as approved by the commissioner. The security shall be either a bond or cash deposit in an amount which is equal to the greater of either ten percent of the invention developer's gross income from the invention development business in this state during the invention developer's preceding fiscal year, or twenty-five thousand dollars. The commissioner shall approve the security before the invention developer renders or offers to render invention development services in this state. The invention developer shall have ninety days beginning on the first day of the invention developer's new fiscal year to change the security as necessary to conform to the requirements of this subsection. 2. A surety who issues a bond must be approved by the commissioner. A copy of the bond shall be filed in a manner and according to procedures approved by the commissioner. A cash deposit shall be filed with the treasurer of state in a manner and according to procedures approved by the treasurer of state in consultation with the commissioner. The treasurer of state shall not refund a deposit until sixty days following either the date that the invention developer has ceased doing business in the state or a bond has been filed with the commissioner in compliance with this section. 3. The security shall be in favor of the state for the benefit of any person entering into a contract with and damaged by an invention developer, if the damages are caused by one of the following: a. A failure by the invention developer to perform the terms of the contract. b. The insolvency of the invention developer or the cessation of the invention developer's business. c. The intentional violation of a provision of this chapter by the invention developer. A person claiming against the security may maintain an action at law against the invention developer. An action against a bond may also include the surety. The aggregate liability of the surety to all persons for all breaches of conditions of the bond shall not exceed the amount of the bond.
Section History: Recent Form 92 Acts, ch 1114, § 7, 13
Footnotes Implementation contingent upon appropriation; 92 Acts, ch 1114, § 13; 94 Acts, ch 1031, §21