RS 3:565 Surety instrument required of market agencies and dealers - Louisiana Statutes

§565.  Surety instrument required of market agencies and dealers

A.  The Louisiana Board of Animal Health by rule shall define the term "surety instrument" for the purposes of this Part.  The definition shall include, but shall not be limited to, cash deposits, surety bonds, and trust agreements with one or more irrevocable letters of credit.

B.  Every market agency and dealer, on or before the date of commencement of operations, shall execute and thereafter maintain, or cause to be executed and maintained, a surety instrument payable to the executive secretary of the Louisiana Board of Animal Health for the use and protection of livestock producers, shippers, or purchasers, to secure the performance of their obligations incurred as a market agency or dealer, and shall immediately file with the executive secretary of the Louisiana Board of Animal Health a fully executed duplicate of the surety instrument.  The surety company shall be approved and authorized to do business in Louisiana.  In the event that an applicant for a permit is unable to secure a surety instrument, the Louisiana Board of Animal Health may accept a deposit with it of a cash amount equal to the amount of the surety required.

C.  Except as otherwise provided herein, the amount of each surety instrument shall be not less than the next multiple of two thousand dollars above the average amount of sales of livestock by a market agency, or purchases of livestock by a person buying livestock as a market agency or dealer, or both, during a period equivalent to three business days based on the total number of business days, and the total amount of such transactions in the preceding twelve months, or in such substantial part thereof in which such market agency or dealer did business, if any.  However, surety instruments above twenty-six thousand dollars shall be not less than the next multiple of five thousand dollars above the average amount of sales of livestock by a market agency or purchases of livestock by a person buying livestock as a market agency or dealer, or both, computed as set out in this Subsection.  For the purpose of this computation, two hundred sixty shall be deemed the number of business days in any year.  When the principal part of the livestock handled by a market agency selling livestock on a commission basis is sold at public auction, the amount of the surety instrument shall be not less than the next multiple of two thousand dollars for those surety instruments of twenty-six thousand dollars or less and the next multiple of five thousand dollars for those surety instruments in excess of twenty-six thousand dollars above an amount determined by dividing the total value of the livestock sold by the market agency during the preceding twelve months, or such a substantial part thereof as the market agency was engaged in business, by the actual number of auction sales at which livestock was sold by the market agency, but in no instance shall the divisor be greater than eighty-six and two-thirds.  When the amount of a surety instrument for any market agency or dealer, calculated as specified above, exceeds fifty thousand dollars, the amount of the surety instrument need not exceed fifty thousand dollars plus ten percent of the excess, unless the Louisiana Board of Animal Health has reason to believe a surety instrument in such amount to be inadequate pursuant to Subsection D of this Section.

D.  No surety instrument shall be less than five thousand dollars.  Any applicant for a permit who has not previously engaged in the business of market agency or dealer on or before the date of commencement of operations shall execute and maintain, or cause to be executed and maintained, a surety instrument in the amount of five thousand dollars to cover the first twelve months operations.  However, whenever the Louisiana Board of Animal Health has reason to believe that any surety instrument filed or maintained under the provisions of this Part is inadequate to secure the performance of the obligations of the market agency or dealer covered by the surety instrument and such investigations shall be conducted and adjustments demanded on not less than an annual basis, it shall notify the market agency or dealer to adjust the surety instrument to meet the requirements of this Section or, if the surety instrument is inadequate because of the volume of business conducted on a seasonal or otherwise irregular basis, to meet such requirements as may be determined by the Louisiana Board of Animal Health to be reasonable based upon such seasonal or irregular operation.

E.  The surety instrument shall be required for each individual establishment operated within the state.  All surety instruments shall contain a provision requiring that at least thirty days notice in writing shall be given to the executive secretary of the Louisiana Board of Animal Health, Baton Rouge, Louisiana, by the party terminating the surety instrument in order to effect its termination.

Amended by Acts 1952, No. 432, §1; Acts 1954, No. 635, §1; Acts 1974, No. 715, §1; Acts 1985, No. 802, §2; Acts 2008, No. 920, §1, eff. July 14, 2008.