2016 Colorado Revised Statutes
Title 12 - Professions and Occupations
General
Article 16 - Farm Products and Farm Commodity Warehouses
Part 2 - Commodity Warehouses
§ 12-16-208. Credit sale contracts - rules

(1) When a commodity handler purchases commodities for which payment has not been made, the commodity handler, within thirty days after the receipt of the commodities, shall provide the producer or owner of the commodities with the credit sale contract. The credit sale contract must contain the following information:

(a) The class, grade, and quantity of the commodities purchased, and the date of the purchase;

(b) The charges for handling, if any;

(c) The name and address of the producer or owner and the signature of the commodity handler;

(d) The contract number;

(e) The words "not a storage contract" printed in block capital letters in bold-faced type, conspicuously on the first page of the contract;

(f) One or more statements specified by the commissioner by rule, including one that warns a producer that entering into a credit sale contract entails a risk that the bond may not completely protect the producer from loss in the event of a failure of the commodity handler.

(2) A commodity handler's records shall be retained for a period of two years and shall reflect those credit sale contracts that have been cancelled and those that are still open. Such records shall be kept at the commodity handler's place of business at all times.

(3) An annual report of the status of the credit sale contracts may be required by the commissioner along with the financial statement required in section 12-16-206.

(4) All credit sale contracts entered into by a commodity handler shall be consecutively numbered by such commodity handler, and copies thereof shall be made available by the commodity handler for inspection and examination by the commissioner or his authorized agents.

(5) A commodity handler issuing credit sale contracts shall maintain allowable net assets of not less than twenty-five thousand dollars and shall maintain reserves in an amount equaling or exceeding fifty percent of the value of all of that commodity handler's open credit sale contracts, which value shall be determined with reference to the daily bid price. Such reserves may be in the form of any one or a combination of the following:

(a) Cash;

(b) Commodity assets, including commodities and warehouse receipts or other evidences of storage of commodities;

(c) Credit sale contracts with other commodity handlers licensed by the department of agriculture;

(d) An irrevocable letter of credit in favor of the commissioner, which letter of credit shall be subject to the provisions of section 12-16-218; or

(e) Net worth of the commodity handler of at least four times the value of the open credit sale contracts.