1. Before a license is effective for a public warehouseman, the applicant for the license
shall file a bond with the commissioner which must:
a. Be in a sum not less than one hundred thousand dollars for any one warehouse.
b. Be continuous, unless the corporate surety by certified mail notifies the licensee
and the commissioner the surety bond will be canceled ninety days after receipt
of the notice of cancellation.
c. Run to this state for the benefit of all persons storing or selling grain in that
warehouse.
d. Be conditioned:
(1)For the faithful performance of the licensee's duties as a public
warehouseman.
(2)For compliance with the provisions of law and the rules of the commissioner
relating to the storage and purchase of grain by the warehouseman.
e. Specify the location of each pu
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1. Before a license is effective for a public warehouseman, the applicant for the license
shall file a bond with the commissioner which must:
a. Be in a sum not less than one hundred thousand dollars for any one warehouse.
b. Be continuous, unless the corporate surety by certified mail notifies the licensee
and the commissioner the surety bond will be canceled ninety days after receipt
of the notice of cancellation.
c. Run to this state for the benefit of all persons storing or selling grain in that
warehouse.
d. Be conditioned:
(1) For the faithful performance of the licensee's duties as a public
warehouseman.
(2) For compliance with the provisions of law and the rules of the commissioner
relating to the storage and purchase of grain by the warehouseman.
e. Specify the location of each public warehouse intended to be covered by the
bond.
f. Be for the specific purpose of:
(1) Protecting the holders of outstanding receipts.
(2) Covering the costs incurred by the commissioner in the administration of this
chapter in the event of the licensee's insolvency.
g. Not accrue to the benefit of any person entering a credit-sale contract with a
public warehouseman.
2. The aggregate liability of the surety under a bond does not accumulate for each
successive annual license renewal period during which the bond is in force but, for
losses during an annual license renewal period, is limited in the aggregate to the bond
amount stated or changed by appropriate endorsement or rider.
3. The commissioner shall set the amount of the bond and may require an increase in the
amount of a bond as the commissioner deems necessary to accomplish the purposes
of this section. The amount of the bond must be:
a. Based on the dollar value of the grain purchased; and
b. Calculated using the value of the amount of grain intended to be purchased by a
new licensee during the first year of operation, or the three-year rolling annual
average of the value of grain purchased at the time of license renewal.
4. The surety on the bond must be a corporate surety company, approved by the
commissioner, and authorized to do business within the state. The commissioner may
accept cash, a negotiable instrument, or a bond executed by personal sureties in lieu
of a surety bond if, in the commissioner's judgment, the cash, negotiable instrument, or
personal surety bond properly will protect the holders of outstanding receipts.
5. One bond only may be given for a line of elevators, mills, or warehouses, owned,
controlled, or operated by one individual, firm, corporation, or limited liability company,
and the bond must be construed to cover the elevators, mills, or warehouses, as a
whole and not a specific amount for each.