(1) When a commodity handler purchases commodities for which payment has not been made, the commodity handler, within thirty days after the receipt of the commodities, shall provide the producer or owner of the commodities with the credit sale contract. The credit sale contract must contain the following information:
The class, grade, and quantity of the commodities purchased, and the date of thepurchase;
The charges for handling, if any;
The name and address of the producer or owner and the signature of the commodityhandler;
The contract number;
The words "not a storage contract" printed in block capital letters in bold-faced type,conspicuously on the first page of the contract;
One or more statements specified by the commissioner by rule, including one thatwarns a producer that entering into a credit sale contract entails a risk that the bond may not completely protect the producer from loss in the event of a failure of the commodity handler.
(2) (a) A commodity handler or a small-volume commodity handler shall retain records for a period of two years and shall keep the records at the commodity handler's or the smallvolume commodity handler's place of business at all times.
(b) (I) With respect to a credit sale contract, a commodity handler shall retain records for a period of two years after the date of completion of the credit sale contract.
(II) The records must reflect those credit sale contracts that have been cancelled and those that are still open and be kept at the commodity handler's place of business at all times.
The commissioner shall require an annual report of the status of the credit sale contracts along with the financial statement required in section 35-36-204 (1)(b).
A commodity handler or small-volume commodity handler shall consecutively number all credit sale contracts entered into by the commodity handler and make available copies of the credit sale contracts for inspection and examination by the commissioner or the commissioner's authorized agents.
A commodity handler issuing credit sale contracts shall maintain allowable net assetsof not less than twenty-five thousand dollars and shall maintain reserves in an amount equaling or exceeding one hundred percent of the value of all of that commodity handler's open credit sale contracts, which value shall be determined with reference to the daily bid price. The reserves may be in the form of any one or a combination of the following:
Cash;
Commodity assets, including commodities and warehouse receipts or other evidenceof storage of commodities;
Credit sale contracts with other commodity handlers licensed by the department; or
An irrevocable letter of credit in favor of the commissioner, which letter of credit issubject to section 35-36-216.
(6) A small-volume commodity handler shall not enter into or offer to enter into a credit sale contract.
Source: L. 2020: Entire article amended with relocations, (HB 20-1213), ch. 160, p. 728, § 2, effective June 29.
Editor's note: This section is similar to former § 35-36-109 as it existed prior to 2020.