Surety Bond News

Kentucky grain dealers/warehouseman are affected by a revised bill that was recently enacted. The bill is titled HB 221 and modifies the bond requirements for grain warehousemen and grain dealers. The previous legislation required a surety bond of at least twenty-five cents per bushel of the total maximum bushel capacity of the warehouse or $10,000, whichever is more. HB 221 boosts the alternate minimum bond quantity from $10,000 to $25,000 and caps the maximum amount of the bond at $1 million.

Missouri State has put forth new legislation this summer concerning grain dealers. The new law is named SB 356/HB 458 and it changes the surety bond required of grain dealers. The previous legislation required at least a $20,000 bond and could not surpass $300,000. Due to a the biggest grain dealer fraud scheme in Missouri history, the new law boosts the minimum bond amount to $50,000 and the maximum bond amount to $600,000. SB 356/HB 458 also requires dealers to sustain assets equivalent to 100% of its liabilities. Should a dealer have a negative working capital, the new legislation allows dealers to obtain a bigger bond to compensate for the deficiency.

When choosing a company to do business with, it’s difficult to tell whether or not it’s a credible one; even after doing research and looking in to an organizations history, it’ still possible to get scathed by dishonest individuals. This is what happened to numerous Missouri farmers in the most detrimental grain fraud scheme in the state’s history.
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The state of South Dakota has enacted a new law titled SB 44. The new grain dealer law alters the amount of the surety bond required from grain dealers, now referred to as grain buyers under SB44. Under the former law, the required surety bond amount was $50,000. The new law establishes two license classifications for the grain buyers, Class A and B. The Class A and B bond requirement is based on a rolling average of the amount spent on grain by the license applicant in South Dakota in the last three calendar years. For novice grain buyers, the bond amount is based on their predicted purchases. Grain buyers with less than three years experience will have to figure out the average actual purchases for all of their past experience as a buyer to base the amount of their bond on. The bond is valid for all grain purchases and all of the grain buyer’s company locations.

For a Class A license:

For a Class B license: