SB 73 (Bonding Requirements) Provisions Effective as of May 7!

Legislation impacting Commodity Dealer and Commodity Warehouse License holders.

Thanks to everyone who worked with MGEA during the legislative session to get SB 73 into a form that works for grain handlers and passed by the legislature.  The bill was effective immediately upon passage and approval and it was signed by Governor Bullock on May 7th.  The provisions of SB 73 apply from that date forward.

 The primary changes are the fact that brokers must be licensed as well as the following sections being added to 80-4-601.  Commodity dealer license requirements -- financial responsibility:

(6)  A company may post a bond required by this part for a subsidiary company if the corporate bonds are rated as Aa3 or better by Moody's investors service, inc., or as AA- or better by Standard and Poor's financial services and are issued with the full credit of the parent corporation.

(7) (a) A company or its subsidiary may request that the department waive the requirement to file a complete financial statement pursuant to subsection (3)(a)(vi) for a licensing year, the deficit bonding requirements in 80-4-405(1), or both, if the company:
     (i) has been licensed for 1 year;
     (ii) has corporate bonds rated as Baa3 or better by Moody's investors service, inc., as BBB- or better by Standard and Poor's financial services, or as investment grade by an equivalent rating system as determined by department rule; and
     (iii) posts the maximum bond amount required by 80-4-405.
     (b) The director shall grant or deny the request within 14 days.

(8) (a) A company or its subsidiary may request that the department waive the requirement of subsection (4)(a) or (4)(b), or both, if the company:
     (i) has been licensed for 1 year;
     (ii) posts the maximum bond amount required by 80-4-405; and
     (iii) includes a profit or loss statement from the company's or subsidiary's previous fiscal year that shows operational income equal to or in excess of the value of commodities intended to be purchased during the term of the commodity dealer license.
     (b) The director shall grant or deny the request within 14 days.

(9) A company whose business structure includes one or more subsidiary locations may file the parent company's financial statement to meet the requirement of subsection (3)(a)(vi). Financial statements are not required for each subsidiary location.


Full text of SB 73 can be found HERE.



If you have any questions or thoughts please email Krista at mabamgea@gmail.com
 
 
 
 
        
 
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