Tennessee Grain Dealer Surety Bond
The State of Tennessee Department of Agriculture, Division of Consumer and Industry Services, oversees the licensing of public grain warehouses, Grain Dealers, commercial feed, incidental grain dealer, seed dealer, agriculture liming materials and registering of commercial fertilizer distributors. The Tennessee Code Annotated Title 43 Chapter 32 Section 101 Tennessee Commodity Dealer and Warehouse Law, defines the licensure and surety bond requirements for a grain dealer class 1 or class 2.
Surety Bond and License Requirements:
Dollar amount of grain purchased from producers in last 12 months $___ x 10% = a.) ____ (Round up to the nearest $1,000, Minimum is $20,000 maximum is $100,000) Dollar amount of grain purchased & priced later, deferred price, or payment delayed (payment made more than 30 days from delivery= $______x 80% =b.) ______ (Round up to the nearest $1,000 & maximum $500,000)Bond amount is the higher of: a., or b. or $600,000Instead of a bond, a certificate of deposit or irrevocable letter of credit of a value equal to the bond may be deposited with the state.
- Complete the application and pay the applicable fee.
- Obtain fire and extended insurance in the amount to be determined by the commissioner.
- Obtain a minimum $20,000 surety bond to meet the security requirement or otherwise determined by the commissioner. Surety bonds will never exceed $600,000 annually. The surety bond may be waived if the business minimum net worth must be three times or more than the required bond amount set by the commissioner. A compiled financial statement for Class 2 or reviewed financial statements for Class 1 is required for the waiver.
- The formula to determine the surety bond amount is as follows:
How Much Will a Tennessee Grain Dealer Bond Cost?
The premium that you pay for a Tennessee Grain Dealer Surety Bond is dependent on credit and the bond amount required. Applicants may also need to provide business and personal financial statements for bond amounts over $50,000.
Did You Know?
Accounts, books, papers and records can be audited by the Tennessee Department of Agriculture during any normal business hours.
Related Links:Tennessee Grain Dealer License Application Tennessee License Requirements for Dealers and Warehouses Tennessee Commodity Dealer and Warehouse Law
More Surety Bond Questions?
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