Kentucky State enacted a new bill relating to grain purchasers. Labeled HB 173, the new bill increases the required surety bond for grain purchasers. The previous law required that the surety bond be equivalent to 10% of the aggregate dollar amount paid by the dealer to producers for grain purchased from them throughout the dealer’s most recent completed fiscal year. Under the previous law, the surety bond quantity had to be a bare minimum of $25,000 and was capped at $100,000. HB 173 amplifies the surety requirements for grain buyers making purchases or taking the title to grain that is prized at more than $1 million within a calendar month. Supplementary surety will be required on a dollar-for-dollar basis if the sum value of grain purchases surpassed the collective value of the licensee’s net worth and existing surety.
HB 462 modifies the same surety bond requirement by terminating the existing cap of $100,000 on the bond and by canceling the procedures that authorized a dealer to acquire a surety bond for the bare minimum of $25,000; but only if the dealer met a net worth benchmark. HB 462 also boosts the minimum surety bond quantity from $1,000 to $5,000 for incidental grain dealers (those whose total purchases from grain procedures are no more than $250,000 during the fiscal year). The law also requires the surety bond to be $1,000 for each $10,000 in grain transactions or fraction thereof throughout the fiscal year.