Okla. Stat. tit. 2, § 2-9-22

requirement - Bonds, certificates of deposit and irrevocable letters

of credit - Bond cancellation.

A. 1. It shall be unlawful and a misdemeanor for any person to

operate a public warehouse unless such person shall have obtained

and holds a charter therefor issued by the State Board of

Agriculture or be licensed and bonded as required by the United

States Warehouse Act.

2. Each application for a charter issued by the Board shall be

on a form prescribed by the Board. The Board shall charge and

collect a one-time fee of One Hundred Dollars ($100.00) for each

charter. The Board shall deposit the fees in the State Department

of Agriculture Revolving Fund.

3. No charter shall be issued by the Board until the applicant

therefor has filed with the Board a financial statement prepared by

an independent certified public accountant and such other financial

information as shall be required by the Board.

B. 1. The Board shall also charge and collect a fee of Ten

Dollars ($10.00) per One Thousand Dollars ($1,000.00) of surety.

The fee shall be deposited in the Commodity Storage Indemnity Fund

and shall be specially designated and accounted for as a reinsurance

fee. The Board shall use the reinsurance fee to provide protection

to the Indemnity. If upon determination by the Board that the fee

of Ten Dollars ($10.00) is not sufficient to adequately provide

protection of the Indemnity, the Board is authorized to assess an

additional fee in such an amount so as to provide the necessary

protection for the Indemnity provided such additional fee shall not

exceed Twenty Dollars ($20.00) per One Thousand Dollars ($1,000.00)

of surety. The additional assessment shall only be collected from

those persons securing surety through this section.

2. Surety required by this section shall be in the same amounts

as shall be required for bonds or certificates of deposit as

specified in subsection D of this section. Claims against the

surety shall be paid by the Board from the Indemnity in the same

manner as shall be required for bonds or certificates of deposit. A

corporate surety bond or certificate of deposit, as specified in

subsection D of this section, may be used to secure a charter in

lieu of the reinsurance fee.

C. The applicant, in order to qualify for a charter issued by

the Board, as evidence of the applicant's financial status shall

Oklahoma Statutes - Title 2. Agriculture Page 430

have a net worth equal to twenty-five cents ($0.25) per bushel for

the first four million (4,000,000) bushels of chartered capacity but

not less than Fifty Thousand Dollars ($50,000.00). All chartered

capacity in excess of four million (4,000,000) bushels shall be

computed at the rate of ten cents ($0.10) per bushel for net worth

purposes. In case of a net worth deficiency, the warehouseman shall

furnish a surety bond or certificate of deposit in an amount equal

to such deficiency. The bond or certificate of deposit shall be

filed and made payable to the Board for the benefit of all persons

storing commodities with the applicant as a state-chartered

warehouseman. Insurable property owned by the warehouseman may only

be included in the net worth of the warehouse, provided it is

insured to at least eighty percent (80%) of its appraised value.

The Board may require a certified property appraisal provided by an

appraiser approved by the Board. If the net worth of the applicant

or charter holder is less than One Million Dollars ($1,000,000.00),

a financial statement shall be submitted annually. Financial

statements shall be prepared and submitted by an independent

certified public accountant, describing the current financial

position of the applicant, and include such other information

required by the Board. Corporate surety bonds shall be on a form

prescribed by the Board, on condition that the applicant will

fulfill all obligations as a warehouseman. The Board may require
nually. Financial

statements shall be prepared and submitted by an independent

certified public accountant, describing the current financial

position of the applicant, and include such other information

required by the Board. Corporate surety bonds shall be on a form

prescribed by the Board, on condition that the applicant will

fulfill all obligations as a warehouseman. The Board may require

the applicant or charter holder to provide a profit and loss

statement and an audited financial statement prepared by an

independent certified public accountant.

D. The bond, certificates of deposit, or irrevocable letter of

credit issued by a financial institution that is insured by the

Federal Deposit Insurance Corporation (FDIC) or chartered by the

farm credit system organized under the “Farm Credit Act of 1971”

shall be payable to the Board for the benefit of all persons storing

commodities with the applicant as a state-chartered warehouseman.

The amount of bond or certificates of deposit to be furnished for

each state-chartered warehouse shall be fixed at a rate of twenty-

five cents ($0.25) per bushel of chartered capacity, provided that

the amount of the bond or certificates of deposit shall be not less

than Fifty Thousand Dollars ($50,000.00) nor more than Five Hundred

Thousand Dollars ($500,000.00). The chartered capacity shall be the

maximum number of bushels of commodities that the warehouse may

accommodate. Depositors, including producers, suffering a loss due

to a violation of any of the terms of the Public Warehouse and

Commodity Indemnity Act may recover such loss up to the amount of

the bond or certificates of deposit, and claims therefor may be

instituted with the Board by such person. Each state charter issued

pursuant to the provisions of this section shall be for the life of

the person. Such state charter may be suspended, revoked or denied

by the Board, after notice by registered mail and an opportunity to

Oklahoma Statutes - Title 2. Agriculture Page 431

be heard has been given, for a failure to maintain the financial

status required or adequate insurance on all commodities received in

store, or received for storage or for handling for restorage, or for

a violation of any of the provisions of the Public Warehouse and

Commodity Indemnity Act or of any rule of the Board adopted pursuant

thereto. Upon evidence of just and good cause, such state charter

may be temporarily suspended without a hearing, for a period of not

to exceed thirty (30) days. Whenever a state charter is suspended

or revoked, the Board shall immediately give notice thereof, by

registered United States mail, to the holder of such charter, who

may, within twenty (20) days after receipt of such notice, appeal to

the district court of Oklahoma County. The district court, after a

full hearing, shall make an order either sustaining the action of

the Board or reinstating the charter.

E. Upon cancellation of the bond, all indemnifications held by

the bonding company shall be released to the warehouseman following

the second consecutive satisfactory inspection or examination by the

Board.