Except as provided by 33 NAC 1-003.06, registrants under the
Nebraska Livestock Sellers Protective Act shall provide the director assurances
of their financial ability to faithfully and promptly account for and pay to
the sellers with whom they deal or their designated representatives, the total
proceeds from sale of slaughter livestock in accordance with the following
requirements:
003.01 Each registrant
shall file a surety bond or bond equivalent with the director. Such surety
bonds and bond equivalents shall meet the following requirements:
003.01A Bond equivalents shall be in the form
of a trust agreement, and the fund of the trust shall be in the form of fully
negotiable obligations of the United States or certificates of deposit insured
by the Federal Deposit Insurance Corporation or the Federal Savings and Loan
Insurance Corporation.
003.01B The
amount of the bond or bond equivalent shall be not less than the next multiple
of five thousand dollars ($5,000) above the average of all slaughter livestock
purchased in Nebraska during a period equivalent to two (2) business days based
on the total number of business days and the total amount of such transactions
in the preceding twelve (12) months, or in such substantial part thereof, if
any, in which the registrant did business. In the case of new registrants, the
amount of the bond or bond equivalent shall be based upon the level of
purchases reasonable to be expected, as determined by the director. For the
purpose of computing average daily value, two hundred and sixty (260) is deemed
the number of business days in a year.
003.01C Whenever a registrant's weekly
purchases exceed one hundred fifty percent (150%) of his average weekly
purchases, such fact shall be reported to the director, and the director may
require an increase in the amount of the bond or bond equivalent. The amount of
the increase shall be determined by the director, but shall not be excessive in
relation to the increased volume of purchases.
003.01D All registrants shall review their
level of purchases each six (6) months to determine the adequacy of their bonds
or bond equivalent.
Whenever such a review reveals that the level of purchases
has increased to such an extent that the amount of the bond or bond equivalent
should be increased by five thousand dollars ($5,000) or more based upon the
formula set out above, a new or amended bond or bond equivalent of such amount
shall be filed.
003.01E
Bonds or bond equivalents shall provide that prior to terminating or reducing
the amount of the bond or bond equivalent, at least thirty (30) days notice, in
writing, shall be given to the director by the party terminating or reducing
the amount; Provided, that no such notice shall be
required in cases wherein a replacement bond or bond equivalent of sufficient
amount is provided for. Whenever a bond or bond equivalent is to be terminated
by a cancellation by the surety or trustee, the director may cause notice of
such fact to be published. Bonds and bond equivalents shall provide that
termination will not release the parties from liability arising out of facts or
transactions occurring prior to the termination date.
003.01F In the case of bonds filed with the
director, the registrant and surety of the bond shall be held and firmly bound
to the State of Nebraska as trustee for all persons from whom the registrant
has purchased slaughter livestock in Nebraska and failed to pay in full
therefor before the close of the next business day following the purchase or
within twenty-four (24) hours following the determination of the price,
whichever may occur last, or, in the case of an express agreement between the
seller and purchaser, according to the terms of such agreement. In the case of
bond equivalents filed with the director, the trust agreement shall provide as
beneficiary, the State of Nebraska for the benefit of all persons from whom the
registrant has purchased slaughter livestock in Nebraska and failed to pay in
full therefor before the close of the next business day following the purchase
or within twenty-four (24) hours following the determination of the price,
whichever may occur last, or, in the case of an express agreement between the
seller and purchaser, according to the terms of such agreement. In the case of
bond equivalents filed with the director, the trust agreement shall provide as
beneficiary, the State of Nebraska for the benefit of all persons from whom the
registrant has purchased slaughter livestock in Nebraska and failed to pay in
full therefor before the close of the next business day following the purchase
or within twenty-four (24) hours following the determination of the price,
whichever may occur last, or, in the case of an express agreement between the
seller and purchaser, according to the terms of such agreement. The bond or
trust agreement of a registrant shall be conditioned for the payment only of
those claims which arise from purchases of livestock from Nebraska residents,
and further conditioned to provide that the proceeds of the bond or the fund of
the trust shall not be used to pay fees, salaries, or expenses for legal
representation, or be subject to attachment for any other claim, or to levy of
execution upon a judgment based on any other claim.
003.01G Registrants operating more than one
plant used to slaughter livestock purchased from Nebraska residents shall
describe with particularity the exact locations of the plants slaughtering such
livestock and thus covered by the bond or bond equivalent;
Provided, that nothing contained herein shall prevent
a registrant operating multiple plants from bonding each such plant
individually, or establishing separate trust agreements for each
plant.
003.01H Bonds filed with the
director shall be with a surety company duly authorized to do business within
the State of Nebraska, and trustees of bond equivalents filed with the director
shall be institutions located within the State of Nebraska in which funds are
invested or deposited.
003.01I
Bonds and bond equivalents shall provide that persons damaged by nonpayment of
obligations on the part of the registrant may maintain an action against the
registrant, and the surety on the bond or the trustee of the trust fund, even
though not named as a party to the bond or bond equivalent.
003.01J Bonds and bond equivalents shall
provide that any claim for recovery on the bond or trust agreement must be
filed in writing with the surety, the trustee, or the director, and the party
who receives such claim shall, within twenty-four (24) hours notify the other
such party or parties and the registrant of the fact of such filing. Neither
the surety on a bond nor the trustee of a trust agreement shall be liable to
pay any claim if it is not filed in writing within one hundred and twenty (120)
days from the date of the transaction on which the claim is based, or if suit
thereon is commenced less than one hundred and eighty (180) or more than five
hundred and forty-seven (547) days from the date of the transaction on which
the claim is based.
003.01K Trust
funds shall not be removed from trust by a registrant until the expiration of
one hundred and twenty (120) days after the date of termination of a trust, and
then only if no claims secured by the agreement have been filed under 33 NAC
1-003.01J, above. If any such claims have been filed, the withdrawal of funds
by the registrant shall not be permitted until the claims have been satisfied
or released and evidence of satisfaction or release has been filed with the
director.
003.02 Each
registrant shall file an annual financial statement with the director. Such
statement shall:
003.02A Be filed within
thirty (30) days prior to the anniversary date of the initial registration;
Provided, that, at the option of the registrant, a
date in lieu of the actual anniversary date may be designated by the director
and the registrant, in which case, the annual statement shall be filed within
thirty (30) days prior to the designated date,
003.02B Have been prepared by a Certified
Public Accountant within one hundred and twenty (120) days prior to the date
established in 33 NAC 1-003.02A, above,
003.02C Accurately reflect the financial
condition of the business at the time of preparation, and
003.02D Contain a statement of the total
amount of purchases of slaughter livestock in Nebraska during the period of
time covered by the financial statement.
003.03 In cases wherein:
003.03A The registrant has reasonable cause
to believe that the financial condition of the business may change to such an
extent within the upcoming year as to cause a reasonable expectation that the
registrant may be unable to fulfill his financial obligations incurred in the
purchase of slaughter livestock, and
003.03B The conditions creating such
reasonable belief are not readily ascertainable from the contents of the
financial statement currently on file or in the process of being prepared for
filing, each registrant shall file at the time such conditions become known or
in conjunction with the financial statement being prepared for filing, a
detailed account of such conditions sufficient to enable the director to
ascertain whether assurances of financial ability in addition to those provided
for in these rules and regulations shall be required of the
registrant.
003.04 Each
registrant shall be required by the director, if determined by the director to
be necessary, to file regular or special written reports or answers to specific
questions for the purpose of furnishing information concerning the registrant's
financial condition as it relates to his ability to fulfill his financial
obligations incurred in the purchase of slaughter livestock if:
003.04A A statement is filed under 33 NAC
1-003.03, above,
003.04B The
director determines that the financial statement filed under 33 NAC 1-003.02
above is inadequate to accurately reflect the financial conditions of the
registrant, and no statement is filed under 33 NAC 1-003.03 above, or
003.04C The registrant fails to fully comply
with the provisions of the Nebraska Livestock Sellers Protective Act or these
rules and regulations.
003.05 After having been offered an
opportunity for a hearing, each registrant shall be required by the director to
furnish assurances of financial ability in addition to those specified herein
in cases wherein:
003.05A The director
determines such to be necessary based upon the existence of conditions which
have or should have resulted in the filing of a statement under 33 NAC 1-003.03
above, or
003.05B The amount of the
bond or bond equivalent filed hereunder, while in an amount equal to that
required by 33 NAC 1-003.01B, above, is inadequate because of the volume of
business conducted on a seasonable or other irregular basis.
The additional assurances the director may require may
include but not be limited to bonding in an amount greater than required under
33 NAC
1-003.01B, above.
Nothing contained herein shall prevent the director from foregoing an
application for equitable relief under Section
54-1805
of the Nebraska Livestock Sellers Protective Act when the additional assurances
of financial ability provided by the registrant are found by the director to
adequately protect the Nebraska residents from whom the registrant purchases
slaughter livestock.
003.06 The requirements of 33 NAC
1-003.01 shall not be enforced upon
any registrant whose average annual purchases exceed $500, 000.00, as
determined by the Packers and Stockyards Administration of the United States
Department of Agriculture, and who is operating in compliance with the bonding
provisions of the Federal Packers and Stockyards Act of 1921, as amended, and
the regulations adopted thereunder. Such person shall continuously maintain on
file with the director a conformed copy of its current bond or bond equivalent
executed under the provisions of such act and regulations.
