(1)(a)
Before any license is issued to a commodity handler, the applicant shall file with the
commissioner a bond executed by the applicant as principal and by a surety
company qualified and authorized to do business in this state as a surety or an
irrevocable letter of credit meeting the requirements of section 11-35-101.5, in the
sum of not less than ten thousand dollars nor more than one million dollars, at the
discretion of the commissioner.
(b)The bond or irrevocable letter of credit must be conditioned upon
compliance with this part 2 and section 35-36-104 and upon the faithful and honest
handling of commodities in accordance with this part 2 and section 35-36-104 and
must cover any inspection fees due the department by the commodity handler and
all costs and reasonable
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(1) (a)
Before any license is issued to a commodity handler, the applicant shall file with the
commissioner a bond executed by the applicant as principal and by a surety
company qualified and authorized to do business in this state as a surety or an
irrevocable letter of credit meeting the requirements of section 11-35-101.5, in the
sum of not less than ten thousand dollars nor more than one million dollars, at the
discretion of the commissioner.
(b) The bond or irrevocable letter of credit must be conditioned upon
compliance with this part 2 and section 35-36-104 and upon the faithful and honest
handling of commodities in accordance with this part 2 and section 35-36-104 and
must cover any inspection fees due the department by the commodity handler and
all costs and reasonable attorney fees incident to any suit upon the bond or
irrevocable letter of credit. The bond or irrevocable letter of credit must be to the
department in favor of every producer or owner and, in the instance of a bond, must
remain in full force and effect until canceled by the surety upon thirty days' prior
written notice to the commissioner.
(c) (I) A producer or owner within the state of Colorado claiming to be injured
by the fraud, deceit, or willful negligence of, or failure to comply with this part 2
and section 35-36-104 by, a commodity handler may request the department, as
beneficiary, to demand payment on the irrevocable letter of credit or surety bond to
recover the damages caused by the fraud, deceit, willful negligence, or failure to
comply with this part 2 and section 35-36-104.
(II) The surety on the bond or the issuer of the letter of credit is not liable to
pay any claim pursuant to an action brought under this part 2 if the action is not
commenced within five hundred forty-eight days, which is approximately eighteen
months, after the date of the transaction, as that term is described in section 35-36-213 (13), on which the claim is based, or the date of the loss, whichever is later.
(III) A producer or owner is not eligible for reimbursement from the bond or
the irrevocable letter of credit for a claim submitted pursuant to this section if, at
the time the claim is submitted, the producer or owner is:
(A) The owner of at least five percent of the voting shares, excluding
patronage interests, membership interests, partnership interests, or publicly traded
shares of the licensee whose failure is the basis of the claim; or
(B) The owner of at least five percent of the voting shares, excluding
patronage interests, membership interests, partnership interests, or publicly traded
shares of the parent corporation of the licensee whose failure is the basis of the
claim.
(d) When an action is commenced on the bond or irrevocable letter of credit,
the commissioner may require the filing of a new bond or irrevocable letter of
credit, and the commodity handler's failure to file the new bond or irrevocable letter
of credit within ten days after the commencement of the action constitutes grounds
for the suspension or revocation of the commodity handler's license.
(e) A person licensed pursuant to part 3 of this article 36 may apply for a
license as a commodity handler and is not subject to the license fee required by
section 35-36-203. The bond or irrevocable letter of credit required by section 35-36-304 applies to the person's activities as a commodity handler and is subject to
this section and section 35-36-213.
(2) Whenever the commissioner determines that a previously approved bond
or irrevocable letter of credit is or for any cause has become insufficient, the
commissioner may require that a commodity handler provide an additional bond or
irrevocable letter of credit or other evidence of financial responsibility to conform
to the requirements of this part 2 and section 35-36-104 or any rule promulgated
pursuant to this article 36 regarding commodity handlers. The commodity handler's
failure to comply with the commissioner's requirement within thirty days after
written demand for compliance constitutes grounds for the suspension or
revocation of the commodity handler's license.
(3) This section does not apply to small-volume commodity handlers.