Current through Register Vol. 50, No. 9, September 20, 2024
A. Each
applicant shall execute and file security, on forms provided by the commission,
which security shall be issued by a company authorized to do business in
Louisiana prior to issuance of the license.
B. The security shall be conditioned upon:
1. the faithful performance of all duties and
obligations to patrons of the warehouse; and
2. compliance with all requirements of
R.S.
3:3401-3425 and the regulations contained in
this Part.
C. The amount
of the security shall be established on the basis of the capacity of the
warehouse to be licensed.
1. The commission
shall establish capacity records for all licensed facilities. Whenever there is
a discrepancy between the capacity claimed by the applicant and the
commission's capacity figures for the applicant, the security to be required
shall be determined by the commission's capacity figures. A licensee may,
however, appeal the decision of the commission whenever it disagrees with the
capacity figures established by the commission for its facility.
2. All facilities which commingle
agricultural commodities shall secure 100 percent of their available capacity,
subject to the exemptions contained in
§115. C.5 of this
Part.
3. Facilities which store
identity-preserved commodities may, with the prior approval of the commission,
secure 75 percent of their available capacity. In such event, the amount of the
security shall be increased if commodities in storage exceed the licensed
capacity.
4. All capacity under one
roof shall be secured.
5. Outside
tanks which are used solely for storage of company-owned commodities are not
required to be secured.
6.
Buildings which are used solely for storage of company-owned commodities are
not required to be secured.
D. The amount of the security shall be as
follows:
1. $0.20 per bushel for the first
1,000,000 bushels of licensed capacity-up to $200,000 for a licensed capacity
of 2,000,000 bushels;
2. plus $0.15
per bushel for the second 1,000,000 bushels of licensed capacity, a total of
$350,000 for a facility with a licensed capacity of 2,000,000
bushels;
3. plus $0.10 per bushel
for all bushels over 2,000,000 bushels up to 3,500,000 million bushels of
licensed capacity, a maximum of an additional $150,000.
E. The amount of security shall not be less
than $25,000 for all facilities of 125,000 bushels or less licensed
capacity.
F. Maximum security of
$500,000 is required for all facilities of 3,500,000 or more bushels of
licensed capacity.
G. All security
shall be written for a period of one year, beginning on July 1, or for such
other period of time as the commission may require.
H. All security shall provide for at least 90
days written notice to the commission prior to cancellation.
I. All security is subject to final approval
by the commission and shall be so approved prior to issuance of the
license.
J. Provisions for Security
1. The commission may accept security in an
amount equal to 100 percent of the required security.
2. Security may be offered only by:
a. pledging of certificates of
deposit;
b. filing of an
irrevocable letter of credit, which shall be non-cancelable for a period of one
year;
c. securing a first mortgage
on immovable property which is located in Louisiana and which has an appraised
value of at least 150 percent of the amount of the security. 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 the
required security with the commission being an insured under the policy. The
applicant shall pay all fees involved in providing such security;
d. a bond.
3. Security is subject to the approval of the
commission. Approval is required prior to issuance of a license.
4. All security instruments shall be assigned
to the commission and maintained in the commissions office in Baton Rouge.
Holders of certificates of deposit will continue to draw the interest
thereon.
5. Whenever any warehouse
ceases to operate as a licensed warehouse, the security shall be retained by
the commission:
a. until public notice, as
herein required, is made; and
b.
until completion of a final audit, which final audit shall be completed in not
more than 120 days. Public notice of the commission's intent to release the
security shall be made by publication in a newspaper of general circulation in
the area where the licensee is located, as follows:
i. if there is a daily newspaper in the area,
such notice shall be published at least three times, beginning at least 15 days
prior to the date on which the commission will release the security;
ii. if there is no daily newspaper in the
area, such notice shall be published in a weekly newspaper and shall be
published once each week for the three weeks preceding the date on which the
commission will release the security.
AUTHORITY NOTE:
Promulgated in accordance with
R.S.
3:3405 and
3:3410.
