2011 Louisiana Laws
Revised Statutes
TITLE 3 — Agriculture and forestry
RS 3:3411.1 — License required prior to engaging in business of buying or selling cotton; security requirements; agent agreements

§3411.1. License required prior to engaging in business of buying or selling cotton; security requirements; agent agreements

A. Any cotton merchant who purchases or contracts to purchase, either directly or through a cotton agent, cotton grown or to be grown in this state shall be licensed by the commission before purchasing or contracting to purchase such cotton. The license shall authorize cotton merchants and their cotton agents to purchase or enter into contracts to purchase cotton grown or to be grown in this state.

B.(1) Before such a license shall be issued to a cotton merchant, the applicant shall furnish a bond in the amount of fifty thousand dollars conditioned upon:

(a) The good faith performance of contracts entered into with cotton farmers for cotton sold.

(b) Compliance with this Chapter and the rules and regulations adopted pursuant hereto.

(2) The premiums and all expenses of the bond shall be borne by the cotton merchant. The bond shall be signed by a surety company authorized to do business in this state with security in favor of the commission, and shall be subject to the approval of the commission as to form and sufficiency. Such bond shall be filed with the commission where it shall be subject to public inspection. Each bond shall provide for no less than ninety days written notice to the commission prior to cancellation.

C.(1) The commission may accept alternate security from a cotton merchant in lieu of the bond required under Subsection B of this Section. The alternate security shall be in the same amount as the bond required in Subsection B of this Section and shall be either:

(a) A certificate of deposit from a lending institution whose deposits are insured by an agency of the federal government.

(b) An irrevocable letter of credit from a lending institution whose deposits are insured by an agency of the federal government.

(c) Any other security determined to be adequate by the commission.

(2) The cotton merchant shall pay all fees involved in providing such security.

D. The commission may require the cotton merchant to submit to an examination and audit of its accounts, books, and records.

E. No cotton merchant shall purchase cotton grown or to be grown by producers in this state without having obtained the prescribed license from the commission as described in Subsection A of this Section. The commission may, for cause, revoke the license.

F. Each cotton agent shall have a written notarized agency agreement with all cotton merchants on whose behalf said cotton merchant acts. No cotton agent shall purchase cotton grown or to be grown in this state until he has obtained a written notarized agency agreement in a form approved by the commission. The commission may require the cotton agent entering into an agency agreement to submit to an examination and audit of his accounts, books, and records. The cost of any examination and audit shall be borne by the cotton agent. The commission may, for cause, revoke the authority of the cotton agent under any written notarized agency agreement.

Acts 1997, No. 1034, §1; Acts 2009, No. 24, §1, eff. June 12, 2009.