Current through Register Vol. 47, No. 23, December 10, 2024
7.1.
Each licensee required to obtain a surety bond or irrevocable letter of credit
must determine the minimum amount of coverage by the following methods:
7.1.1. Commodity Handler: bond amounts must
be determined by calculating 2% of the annual Colorado commodity purchases and
transactions in the previous calendar year. Transactions include the value of
brokered commodities.
* Minimum bond of $10,000
* Maximum bond of $1,000,000
7.1.2. Commodity Handler (Public Warehouse)
* $.10/bu. for grain storage capacity and/ or $.50/cwt of
bean storage capacity.
* Minimum bond of $25,000
* Maximum bond of $1,000,000.
7.1.3. Farm Products Dealers: bond amounts
must be determined by calculating 2% of the annual Colorado farm product
purchases and transactions in the previous calendar year. Transactions include
the value of brokered farm products.
* Minimum bond of $3,000
* Maximum bond of $1,000,000
* Farm products dealers: $5,000 minimum
* Farm products brokers: $10,000 minimum
* Farm products dealers dealing only in fruits and
vegetables: $3,000 minimum
7.1.4. Farm products Dealers with storage
facilities: $10,000 minimum
7.1.5.
Farm Products Dealers purchasing only sugar beets: bond amounts must be
determined by calculating 1% of the annual Colorado farm product purchases and
transactions in the previous calendar year.
7.2. If an applicant fails to file a bond or
an irrevocable letter of credit meeting the requirements of section
11-35-101.5, C.R.S., within ninety
(90) calendar days of the date of application, the application is void. The
license fee will not be refunded.
7.2.1. Any
subsequent application for a license shall require a new license application
and license fee.
7.3. A
commodity handler or farm products dealer licensee may petition the
Commissioner for a reduction in the required bond amount or irrevocable letter
of credit. Licensees that are approved for a reduction may base their bond
amounts by calculating 1% of the annual Colorado commodity or farm products
purchases and transactions in the previous calendar year. To qualify, a
licensee must meet the following requirements:
7.3.1. Provide a written petition for a
reduction in the required bond or irrevocable letter of credit amount that
demonstrates their compliance with the requirements of Part 7.3;
7.3.2. Have had a license, and been in good
standing, for the previous three years, and have not had any verified claim and
complaint on file with the CDA in the past three years; and
7.3.3. Provide annual certified financial
statements or an audit, prepared by a certified public accountant, that
demonstrates the licensee meets the following financial criteria for the
current year, plus the previous two years:
* Current ratio (current assets / current liabilities) equal
to at least 1.15:1.
* Debt to equity ratio (total debt / total equity); less than
.6:1
* Positive working capital (current assets- current
liabilities).
7.3.4. A
commodity handler or farm products dealer licensee that is unable to meet two
of three financial criteria in Parts 7.3.3 may provide alternative
documentation for consideration by the commissioner that adequately
demonstrates a similar level of financial assurance and stability. Requirements
in Parts 7.3.1 and 7.3.2 must be met and annual certified financial statements
or an audit prepared by a certified public accountant as required in Part 7.3.3
must be provided.
7.3.5. The
Commissioner shall approve or deny a request for a reduced bond amount in the
Commissioner's sole discretion. The Commissioner may consult with the
Agriculture Commission.
7.3.6.
Licensees who are granted a bond or irrevocable letter of credit reduction must
conspicuously post the approval from the commissioner.
7.3.7. A reduction in the required bond or
irrevocable letter of credit amount is not guaranteed even if all the
requirements of Part 7.3 are met. Any reduced bond amount may be denied,
awarded or revoked at the sole discretion of the Commissioner.
7.3.8. A licensee must monitor their ability
to qualify for a reduced bond or irrevocable letter of credit on a annual
basis, and must notify the Commissioner if they no longer meet the requirements
defined in Part 7.3. and must secure a new bond or irrevocable letter of credit
in the amount required in Part 7.2. within 30 calendar days from the date of
notification.
7.3.9. An owner who
sells a commodity to a small volume commodity handler who is exempt from the
requirement to license as a commodity handler, as defined in section
35-36-102(33),
C.R.S., is not eligible to file a claim under section
35-36-216(1)(c)(I),
C.R.S., for any loss or damage sustained from the sale of commodities to a
small volume commodity handler exempt from licensing.
