§ 26-3-7-10 — Amount of bond, cash deposit, letter of credit, or other surety; deficiencies; penalties

Indiana § 26-3-7-10

• Jurisdiction: Indiana
• Title 26: COMMERCIAL LAW
• Art. 3: WAREHOUSES
• Ch. 7: Indiana Grain Buyers and Warehouse Licensing and

Text

(a) The minimum amount of bond, letter of
credit, or cash deposit required from a licensee is as follows:
(1) For a grain bank license or a warehouse license:
(A) fifty thousand dollars ($50,000); and
(B) ten cents ($0.10) multiplied by the licensed bushel storage
capacity of the grain bank or warehouse.
(2) For a grain buyer, including a grain buyer that is also a
licensee under the warehouse act:
(A) fifty thousand dollars ($50,000); or
(B) five-tenths percent (0.5%) of the total amount the grain
buyer paid for grain purchased from producers during the grain
buyer's most recent fiscal year;
whichever is greater.
(3) For a buyer-warehouse:
(A) an amount equal to the sum of:
(i) fifty thousand dollars ($50,000); and
(ii) ten cents ($0.10) multiplied by the licensed bushel
storage capacity of the buyer-warehouse's facility; or
(B) five-tenths percent (0.5%) of the total amount the
buyer-warehouse paid for grain purchased from producers
during the buyer-warehouse's most recent fiscal year;
whichever is greater.
(b) Except as provided in subsections (g) and (h), the amount of
bond, letter of credit, or cash deposit required by this chapter may not
exceed three hundred twenty-five thousand dollars ($325,000) per
license and may not exceed a total of one million two hundred fifty
thousand dollars ($1,250,000) per person.
(c) The licensed bushel storage capacity is the maximum number of
bushels of grain that the licensee's facility could accommodate as
determined by the director or the director's designated representative
and shall be increased or reduced in accordance with the amount of
space being used for storage from time to time.
(d) Instead of a bond or cash deposit, an irrevocable letter of credit
in the prescribed amount may be provided with the director as the
beneficiary. The director may not release a party from the obligations
of the letter of credit within fifteen (15) months of the termination of
the licensee's license.
(e) The director may not return a cash deposit to a licensee until the
director has taken reasonable precautions to assure that the licensee's
obligations and liabilities have been or will be met.
(f) If a person is licensed or is applying for licenses to operate two
(2) or more facilities in Indiana, the person may give a single bond,
letter of credit, or cash deposit to satisfy the requirements of this
chapter and the rules adopted under this chapter to cover all the
person's facilities in Indiana.
(g) If a licensee has a deficiency in the minimum positive tangible
net worth required under section 14.4 of this chapter, the licensee shall
add to the amount of bond, letter of credit, or cash deposit determined
under subsection (a) an amount equal to the deficiency or provide
another form of surety as permitted under the rules of the agency.
(h) Except as provided in subsections (i) and (j), a licensee may not
correct a deficiency in the minimum positive tangible net worth
required by section 14.4 of this chapter by adding to the amount of
bond, letter of credit, or cash deposit required by subsection (a).
(i) A buyer-warehouse that has a bushel storage capacity of less than
one million (1,000,000) bushels or purchases less than one million
(1,000,000) bushels of grain per year may correct a deficiency in
minimum positive tangible net worth by adding to the amount of bond,
letter of credit, or cash deposit determined under subsection (a) if the
buyer-warehouse has a minimum positive tangible net worth of at least
fifty thousand dollars ($50,000), not including the amount added to the
bond, letter of credit, or cash deposit.
(j) A buyer-warehouse that has a bushel storage capacity of at least
one million (1,000,000) bushels, or purchases at least one million
(1,000,000) bushels of grain per year, may correct a deficiency in
minimum positive tangible net worth by adding to the amount of bond,
letter of credit, or cash deposit determined under subsection (a) if the
buyer-warehouse has a minimum positive tangible net worth of at least
one hundred thousand dollars ($100,000), not including the amount
added to the bond, letter of credit, or cash deposit.
(k) If the director or the director's designated representative finds
that conditions exist that warrant requiring additional bond or cash
deposit, there shall be added to the amount of bond or cash deposit as
determined under the other provisions of this section, a further amount
to meet the conditions.
(l) If the director or the director's designated representative finds a
deficiency in minimum positive tangible net worth before the licensee's
next audit by the agency, the director shall issue a notice of deficiency
to the licensee stating that the licensee has thirty (30) days to correct
the deficiency. If a licensee fails to correct a deficiency in minimum
positive tangible net worth within the thirty (30) day period, the
director may issue a fine of not more than one thousand dollars
($1,000).
(m) The director may accept, instead of a single cash deposit, letter
of credit, or bond, a deposit consisting of any combination of cash
deposits, letters of credit, or bonds in an amount equal to the licensee's
obligation under this chapter.
(n) The director may require additional bonding that the director
considers necessary.
Formerly: Acts 1973, P.L.268, SEC.1; Acts 1974, P.L.120,
SEC.7; Acts 1975, P.L.277, SEC.7. As amended by Acts 1979,
P.L.249, SEC.6; Acts 1982, P.L.155, SEC.9; P.L.191-1991, SEC.7;
P.L.125-1997, SEC.29; P.L.173-1999, SEC.6; P.L.64-2009, SEC.7;
P.L.60-2015, SEC.10; P.L.208-2021, SEC.5; P.L.114-2025,
SEC.19.