(1)When a dealer or small-volume
dealer purchases farm products for which payment has not been made, the dealer
or small-volume dealer, within thirty days after the receipt of the farm products,
shall provide the producer or owner of the farm products with a credit sale contract.
The credit sale contract must contain the following information:
(a)The type and quantity of farm products purchased and the date of
purchase;
(b)The charges for handling, if any;
(c)The name and address of the producer or owner and the signature of the
dealer or small-volume dealer or the authorized agent of the dealer or small-volume dealer;
(d)The contract number required pursuant to subsection (4) of this section;
and
(e)One or more statements specified by the commissioner by rule, including
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(1) When a dealer or small-volume
dealer purchases farm products for which payment has not been made, the dealer
or small-volume dealer, within thirty days after the receipt of the farm products,
shall provide the producer or owner of the farm products with a credit sale contract.
The credit sale contract must contain the following information:
(a) The type and quantity of farm products purchased and the date of
purchase;
(b) The charges for handling, if any;
(c) The name and address of the producer or owner and the signature of the
dealer or small-volume dealer or the authorized agent of the dealer or small-volume dealer;
(d) The contract number required pursuant to subsection (4) of this section;
and
(e) One or more statements specified by the commissioner by rule, including
one that warns a producer that entering into a credit sale contract entails a risk that
the bond may not completely protect the producer from loss in the event of a
failure of the dealer or small-volume dealer.
(2) A dealer or small-volume dealer shall retain records of a dealer or small-volume dealer for a period of two years after the date of completion of the credit
sale contracts, and the records must reflect those credit sale contracts that have
been paid, canceled, or amended and those that are still open. The dealer or small-volume dealer shall keep the records at the dealer's or small-volume dealer's place
of business at all times.
(3) The commissioner shall require an annual report of the status of all of a
dealer's or small-volume dealer's credit sale contracts along with the financial
statement required under section 35-36-204 (1)(b).
(4) A dealer or small-volume dealer shall consecutively number all credit
sale contracts entered into by the dealer or small-volume dealer and make copies
of the credit sale contracts available for inspection by the commissioner or the
commissioner's authorized agents.
(5) A dealer or small-volume dealer issuing credit sale contracts shall
maintain positive working capital and a current ratio equal to or greater than one-to-one and reserves in an amount equaling or exceeding one hundred percent of the
value of all of that dealer's or small-volume dealer's open credit sale contracts,
which value shall be determined with reference to the daily bid price. The reserves
may be in the form of any one or a combination of the following:
(a) Cash;
(b) Farm product assets, including farm products or other evidence of
storage of farm products;
(c) Credit sale contracts with other dealers or small-volume dealers licensed
by the department; or
(d) An irrevocable letter of credit in favor of the commissioner, which letter
of credit is subject to section 35-36-216.