276.436. Amount of bond--director to establish by rule--formula--minimum and maximum--additional bond because of low net worth or other circumstances--failure to maintain, effect.
Amount of bond--director to establish by rule--formula--minimum andmaximum--additional bond because of low net worth or othercircumstances--failure to maintain, effect.
276.436. 1. The total amount of the surety bond required of a dealerlicensed pursuant to sections 276.401 to 276.582 shall be established bythe director by rule, but in no event shall such bond be less than twentythousand dollars nor more than three hundred thousand dollars, except asauthorized by other provisions of sections 276.401 to 276.582.
2. The formula for determining the amount of bond shall beestablished by the director by rule and shall be computed at a rate of noless than the principal amount to the nearest one thousand dollars, equalto not less than one percent and not more than five percent of theaggregate dollar amount paid by the dealer for grain purchased in the stateof Missouri and those states with whom Missouri has entered into contractsor agreements as authorized by section 276.566 during the dealer's lastcompleted fiscal year, or, in the case of a dealer who has been engaged inbusiness as a grain dealer for less than one year or who has not previouslyengaged in such business, not less than one percent and not more than fivepercent of the estimated aggregate dollar amount to be paid by the dealerfor grain purchased in the state of Missouri and those states with whomMissouri has entered into contracts or agreements as authorized by section276.566 during the applicant's initial fiscal year.
3. Any licensed grain dealer or applicant who has, at any time, a networth less than the amount required by subsection 7 of section 276.421,shall be required to obtain a surety bond in the amount of one thousanddollars for each one thousand dollars or fraction thereof of the net worthdeficiency. Failure to post such additional bond is grounds for refusal tolicense or the suspension or revocation of a license issued under sections276.401 to 276.582. This additional bond can be in addition to or greaterthan or both in addition to and greater than the maximum bond as set bythis section.
4. The director may, when the question arises as to a grain dealer'sability to pay for grain purchased, require a grain dealer to post anadditional bond in a dollar amount deemed appropriate by the director.Such additional bond can be in addition to or greater than or both inaddition to and greater than the maximum bond as set by this section. Thedirector must furnish to the dealer, by certified mail, a written statementof the reasons for requesting additional bond and the reasons forquestioning the dealer's ability to pay. Failure to post such additionalbond is a ground for modification, suspension or revocation by the directorof a license issued under sections 276.401 to 276.582. The determinationof insufficiency of a bond and of the amount of the additional bond shallbe based upon evidence presented to the director that a dealer:
(1) Is or may be unable to meet his dollar or grain obligations asthey become due;
(2) Has acted or is acting in a way which might lead to theimpairment of his capital;
(3) As a result of his activity, inactivity, or purchasing andpricing practices and procedures, including, but not limited to, thedealer's deferred pricing or deferred payment practices and procedures, isor may be unable to honor his grain purchase obligations arising out of hisdealer business. The amount of the additional bond required under thissubsection shall not exceed the amount of the dealer's current lossposition. Current loss position shall be the sum of the dealer's currentliabilities less current assets or the amount by which he is currentlyunable to meet the grain purchase obligations arising out of his dealerbusiness.
5. One bond, cumulative as to minimum requirements, may be givenwhere a dealer has multiple licenses; except however, that in computing theamount of the single bond the grain dealer may add together the totalpurchases of grain of all locations to be covered thereby and use theaggregate total purchases for the fiscal year for the purpose of computingbond. However, this single cumulative bond must be at least equal totwenty thousand dollars per dealer license issued up to the three hundredthousand dollar* maximum bond amount specified in subsection 1 of thissection. When a grain dealer elects to provide a single bond for a numberof licensed locations, the total assets of all the licensed locations shallbe subject to liabilities of each individual licensed location.
6. Failure of a grain dealer to provide and file a bond and financialstatement and to keep such bond in force shall be grounds for thesuspension or revocation, by the director, of a license issued undersections 276.401 to 276.582.
7. A dealer shall be required to post additional surety bond when hesurpasses the estimated aggregate dollar amount to be paid for grainpurchased as set forth in subsection 2 of this section. Such additionalbond shall be determined by the director so as to effectively protectsellers of grain dealing with such dealer.
(L. 1980 H.B. 1627 § 8, A.L. 1981 H.B. 892, A.L. 1986 H.B. 1578, A.L. 1997 H.B. 211)Effective 4-2-97
*Word "dollar" does not appear in original rolls.