Section 26-3-7-10 - Amount of bond, cash deposit, letter of credit, or other surety; deficiencies; penalties(a) The minimum amount of bond, letter of credit, or cash deposit required from a licensee is as follows:(1) For a grain bank license or a warehouse license:(A) fifty thousand dollars ($50,000); and(B) ten cents ($0.10) multiplied by the licensed bushel storage capacity of the grain bank or warehouse.(2) For a grain buyer, including a grain buyer that is also a licensee under the warehouse act:(A) fifty thousand dollars ($50,000); or(B) five-tenths percent (0.5%) of the total amount the grain buyer paid for grain purchased from producers during the grain buyer's most recent fiscal year; whichever is greater.
(3) For a buyer-warehouse: (A) an amount equal to the sum of: (i) fifty thousand dollars ($50,000); and(ii) ten cents ($0.10) multiplied by the licensed bushel storage capacity of the buyer-warehouse's facility; or(B) five-tenths percent (0.5%) of the total amount the buyer-warehouse paid for grain purchased from producers during the buyer-warehouse's most recent fiscal year; whichever is greater.
(b) Except as provided in subsections (g) and (h), the amount of bond, letter of credit, or cash deposit required by this chapter may not exceed three hundred twenty-five thousand dollars ($325,000) per license and may not exceed a total of one million two hundred fifty thousand dollars ($1,250,000) per person.(c) The licensed bushel storage capacity is the maximum number of bushels of grain that the licensee's facility could accommodate as determined by the director or the director's designated representative and shall be increased or reduced in accordance with the amount of space being used for storage from time to time.(d) Instead of a bond or cash deposit, an irrevocable letter of credit in the prescribed amount may be provided with the director as the beneficiary. The director shall adopt rules under IC 4-22-2 to establish acceptable form, substance, terms, and conditions for letters of credit. The director may not release a party from the obligations of the letter of credit within eighteen (18) months of the termination of the licensee's license.(e) The director shall adopt rules under IC 4-22-2 to provide for the receipt and retention of cash deposits. However, the director shall not return a cash deposit to a licensee until the director has taken reasonable precautions to assure that the licensee's obligations and liabilities have been or will be met.(f) If a person is licensed or is applying for licenses to operate two (2) or more facilities in Indiana, the person may give a single bond, letter of credit, or cash deposit to satisfy the requirements of this chapter and the rules adopted under this chapter to cover all the person's facilities in Indiana.(g) If a licensee has a deficiency in the minimum positive net worth required under section 16(a)(2)(B), 16(a)(3)(B), 16(a)(4)(B), or 16(a)(5)(B) of this chapter, the licensee shall add to the amount of bond, letter of credit, or cash deposit determined under subsection (a) an amount equal to the deficiency or provide another form of surety as permitted under the rules of the agency.(h) Except as provided in subsections (i) and (j), a licensee may not correct a deficiency in the minimum positive net worth required by section 16(a)(1), 16(a)(2)(A), 16(a)(3)(A), 16(a)(4)(A), or 16(a)(5)(A) of this chapter by adding to the amount of bond, letter of credit, or cash deposit required by subsection (a).(i) A buyer-warehouse that has a bushel storage capacity of less than one million (1,000,000) bushels or purchases less than one million (1,000,000) bushels of grain per year may correct a deficiency in minimum positive net worth by adding to the amount of bond, letter of credit, or cash deposit determined under subsection (a) if the buyer-warehouse has a minimum positive net worth of at least fifty thousand dollars ($50,000), not including the amount added to the bond, letter of credit, or cash deposit.(j) A buyer-warehouse that has a bushel storage capacity of at least one million (1,000,000) bushels, or purchases at least one million (1,000,000) bushels of grain per year, may correct a deficiency in minimum positive net worth by adding to the amount of bond, letter of credit, or cash deposit determined under subsection (a) if the buyer-warehouse has a minimum positive net worth of at least one hundred thousand dollars ($100,000), not including the amount added to the bond, letter of credit, or cash deposit.(k) If the director or the director's designated representative finds that conditions exist that warrant requiring additional bond or cash deposit, there shall be added to the amount of bond or cash deposit as determined under the other provisions of this section, a further amount to meet the conditions.(l) If the director or the director's designated representative finds a deficiency in minimum net worth before the licensee's next audit by the agency, the director shall issue a notice of deficiency to the licensee stating that the licensee has thirty (30) days to correct the deficiency. If a licensee fails to correct a deficiency in minimum net worth within the thirty (30) day period, the director may issue a fine of not more than one thousand dollars ($1,000).(m) If a licensee fails to correct a deficiency in minimum net worth within sixty (60) days of receiving a fine under subsection (l), the director may issue a temporary suspension of not more than thirty (30) days. The director or the director's designated representative shall grant an opportunity for a hearing as soon as possible following a temporary suspension under this subsection.(n) The director may accept, instead of a single cash deposit, letter of credit, or bond, a deposit consisting of any combination of cash deposits, letters of credit, or bonds in an amount equal to the licensee's obligation under this chapter. The director shall adopt rules under IC 4-22-2 to establish standards for determining the order in which the forms of security on deposit must be used to pay proven claims if the licensee defaults.(o) The director may require additional bonding that the director considers necessary.Amended by P.L. 208-2021,SEC. 5, eff. 4/29/2021.Amended by P.L. 60-2015, SEC. 10, eff. 7/1/2015.(Formerly: Acts1973 , P.L. 268, SEC.1; Acts1974 , P.L. 120, SEC.7; Acts1975 , P.L. 277, SEC.7.) As amended by Acts1979 , P.L. 249, SEC.6; Acts1982 , P.L. 155, SEC.9; P.L. 191-1991, SEC.7; P.L. 125-1997, SEC.29; P.L. 173-1999, SEC.6; P.L. 64-2009, SEC.7.