RS 3:3410 Bond required as a condition of warehouse license, time of filing; amount of bond, minimum and maximum; approval; notice of cancellation; changes in licensed capacity; insurance; alternate s - Louisiana Statutes

§3410.  Bond required as a condition of warehouse license, time of filing; amount of bond, minimum and maximum; approval; notice of cancellation; changes in licensed capacity; insurance; alternate security; failure to maintain bond and insurance in full force and effect

A.  Each applicant for a warehouse license shall, prior to issuance of the license, execute and file with the commission a surety bond, issued by a bonding or surety company authorized to do business in this state and conditioned upon (1) the faithful performance of all duties and obligations to the patrons of the warehouse, and (2) compliance with this Chapter and the rules and regulations adopted pursuant hereto.

B.  The bond shall cover the same facilities covered by the warehouse license.

C.  The amount of the bond shall be determined by the total licensed capacity of the facilities to be covered by the bond, as follows:

(1)  Twenty cents per bushel for the first million bushels of licensed capacity.

(2)  Fifteen cents per bushel for the second million bushels of licensed capacity.

(3)  Ten cents per bushel for all bushels over two million bushels of licensed capacity.

D.  In any case, the net amount of the bond shall be not less than twenty-five thousand dollars and not more than five hundred thousand dollars.

E.  Each bond shall be approved by the commission prior to the issuance of the warehouse license.

F.  Each bond shall provide for ninety days written notice to the commission prior to cancellation.

G.  Whenever the licensed warehouse capacity changes, the amount of the bond shall be amended to conform with the current licensed capacity of the facility or facilities covered by the bond.

H.  The commission may accept alternate security in lieu of the bond required under Subsection C of this Section.  The alternate security shall be in the same amount as the amount of the bond required in Subsection C of this Section and shall be in one of the following forms:

(1)  A certificate of deposit from a lending institution whose deposits are insured by an agency of the federal government.

(2)  An irrevocable letter of credit from a lending institution whose deposits are insured by an agency of the federal government.

(3)  A first mortgage on immovable property which is located in Louisiana and which has an appraised value of at least one hundred fifty percent of the amount of the bond.  The appraisal shall be made by an independent appraiser jointly designated by the commission and the applicant.  The applicant shall provide a title insurance policy issued by a company authorized to do business in Louisiana in the amount of required bond with the commission being an insured under the policy.  The applicant shall pay all fees involved in providing such security.

I.  The commission shall require the licensed warehouse to maintain provisional stock insurance issued by an insurance company authorized to do business in this state for protection against fire and other disasters in an amount proportionate to the licensed capacity of the facility, for the full market value of all commodities located in the licensed facility, which insurance shall provide for thirty days written notice to the commission prior to cancellation.

J.  The commission may suspend or revoke the license of any warehouse which fails to maintain the required bond and insurance in full force and effect.

Added by Acts 1982, No. 563, §1, eff. Jan. 1, 1983; Acts 1986, No. 1068, §1, eff. July 17, 1986; Acts 2009, No. 24, §1, eff. June 12, 2009.