2005 Idaho Code - 69-208 — BOND OF APPLICANT FOR LICENSE -- ADDITIONAL BOND -- ADDITIONAL OBLIGATIONS -- CERTIFICATE OF DEPOSIT OR IRREVOCABLE LETTER OF CREDIT IN LIEU OF BOND -- SINGLE BOND

                                  TITLE  69
                                  WAREHOUSES
                                  CHAPTER 2
                             BONDED WAREHOUSE LAW
    69-208.  BOND OF APPLICANT FOR LICENSE -- ADDITIONAL BOND -- ADDITIONAL
OBLIGATIONS -- CERTIFICATE OF DEPOSIT OR IRREVOCABLE LETTER OF CREDIT IN LIEU
OF BOND -- SINGLE BOND. Each warehouseman applying for a license to conduct a
warehouse in accordance with this chapter shall, as a condition to the
granting thereof, execute and file with the department a good and sufficient
bond other than personal security. The bond shall be in favor of the commodity
indemnity fund to secure the faithful performance of his obligations as a
warehouseman under all the laws of the state, including obligations arising by
operation of the commodity indemnity fund program, and the rules prescribed
hereunder, and of such additional obligations as a warehouseman as may be
assumed by him under contracts with the respective depositors of agricultural
commodities in such warehouse. Said bond shall be in such form and amount,
shall have such surety or sureties, and shall contain such terms and
conditions as the department may prescribe to carry out the purposes of this
chapter. Whenever the department shall determine that a bond approved by it
is, or for any cause has become, insufficient, it shall require an additional
bond or bonds to be given by the warehouseman concerned, conforming with the
requirements of this section, and unless the same be given within the time
fixed by a written demand therefor the license of such warehouseman shall be
suspended or revoked.
    The bond shall be approved by the department and shall be conditioned upon
the faithful performance by the warehouseman of the duty to keep in the
warehouse for the depositor the agricultural commodity delivered and to
deliver the agricultural commodity to or for such depositors. The bond shall
also be conditioned upon the faithful performance by the warehouseman of any
additional obligations involving marketing transactions with a depositor.
    The warehouseman may give a single bond meeting the requirements as
provided in this chapter and all warehouses operated by the warehouseman shall
be as one (1) warehouse for the purpose of compliance with the provisions of
this section. At the discretion of the director, any person required to submit
a bond to the department in accordance with this chapter, may give to the
department a certificate of deposit or an irrevocable letter of credit payable
to the commodity indemnity fund in lieu of the bond required herein. The
principal amount of the certificate of deposit or irrevocable letter of credit
shall be the same as that required  for a surety bond pursuant to this
chapter. Accrued interest upon the certificate of deposit shall be payable to
the purchaser of the certificate. The irrevocable letter of credit or
certificate of deposit shall remain on file with the department until it is
released, canceled or discharged by the director or until the director is
notified ninety (90) days in advance, by registered or certified mail, return
receipt requested, that the irrevocable letter of credit or certificate of
deposit is renewed, canceled or amended. Failure to notify the director may
result in the suspension or revocation of the bonded warehouse license. The
provisions of this chapter that apply to a bond required pursuant to this
chapter apply to each certificate of deposit or irrevocable letter of credit
given in lieu of such bond.
    Under provisions of this chapter, an irrevocable letter of credit or
certificate of deposit shall not be acceptable unless it is issued by a
national bank or federal thrift institution in Idaho or by a state-chartered
bank or thrift institution authorized to conduct business in Idaho and insured
by the federal deposit insurance corporation.
    Any changes in the capacity of a warehouse or installation of any new
warehouses involving a change in the bond liability under the provisions of
this chapter shall be reported to the department prior to the operation
thereof.
    If a warehouseman is licensed pursuant to chapter 51, title 22, Idaho
Code, that same warehouseman may obtain a single bond, certificate of deposit
or irrevocable letter of credit as surety for both chapter 2, title 69, Idaho
Code, and chapter 51, title 22, Idaho Code. If a single bond, certificate of
deposit or irrevocable letter of credit is written covering chapter 2, title
69, Idaho Code, and chapter 51, title 22, Idaho Code, the bond, certificate of
deposit or irrevocable letter of credit shall be made out in favor of the
commodity indemnity fund and the seed indemnity fund. In the event a
warehouseman fails as defined in section 69-202(8), Idaho Code, and a single
bond, certificate of deposit or irrevocable letter of credit is written in
favor of the commodity indemnity fund and seed indemnity fund, the proceeds of
the bond, certificate of deposit or irrevocable letter of credit will be
allocated based on the dollar amount of the verified claims approved pursuant
to chapter 2, title 69, Idaho Code, and chapter 51, title 22, Idaho Code.