(1) (a) Before any license is issued to a commodity handler, the applicant shall file with the commissioner a bond executed by the applicant as principal and by a surety company qualified and authorized to do business in this state as a surety or an irrevocable letter of credit meeting the requirements of section 11-35-101.5, in the sum of not less than ten thousand dollars nor more than one million dollars, at the discretion of the commissioner.
The bond or irrevocable letter of credit must be conditioned upon compliance withthis part 2 and section 35-36-104 and upon the faithful and honest handling of commodities in accordance with this part 2 and section 35-36-104 and must cover any inspection fees due the department by the commodity handler and all costs and reasonable attorney fees incident to any suit upon the bond or irrevocable letter of credit. The bond or irrevocable letter of credit must be to the department in favor of every producer or owner and, in the instance of a bond, must remain in full force and effect until cancelled by the surety upon thirty days' prior written notice to the commissioner.
(I) A producer or owner within the state of Colorado claiming to be injured by thefraud, deceit, or willful negligence of, or failure to comply with this part 2 and section 35-36-104 by, a commodity handler may request the department, as beneficiary, to demand payment on the irrevocable letter of credit or surety bond to recover the damages caused by the fraud, deceit, willful negligence, or failure to comply with this part 2 and section 35-36-104.
(II) The surety on the bond or the issuer of the letter of credit is not liable to pay any claim pursuant to an action brought under this part 2 if the action is not commenced within five hundred forty-eight days, which is approximately eighteen months, after the date of the transaction, as that term is described in section 35-36-213 (13), on which the claim is based, or the date of the loss, whichever is later.
When an action is commenced on the bond or irrevocable letter of credit, the commissioner may require the filing of a new bond or irrevocable letter of credit, and the commodity handler's failure to file the new bond or irrevocable letter of credit within ten days after the commencement of the action constitutes grounds for the suspension or revocation of the commodity handler's license.
A person licensed pursuant to part 3 of this article 36 may apply for a license as acommodity handler and is not subject to the license fee required by section 35-36-203. The bond or irrevocable letter of credit required by section 35-36-304 applies to the person's activities as a commodity handler and is subject to this section and section 35-36-213.
Whenever the commissioner determines that a previously approved bond or irrevocable letter of credit is or for any cause has become insufficient, the commissioner may require that a commodity handler provide an additional bond or irrevocable letter of credit or other evidence of financial responsibility to conform to the requirements of this part 2 and section 35-36-104 or any rule promulgated pursuant to this article 36 regarding commodity handlers. The commodity handler's failure to comply with the commissioner's requirement within thirty days after written demand for compliance constitutes grounds for the suspension or revocation of the commodity handler's license.
This section does not apply to small-volume commodity handlers.
Source: L. 2020: Entire article amended with relocations, (HB 20-1213), ch. 160, p. 738, § 2, effective June 29.
Editor's note: This section is similar to former § 35-36-119 as it existed prior to 2020.