(1) Before the license is issued to any commission merchant or dealer, or both, the applicant shall execute and deliver to the director a surety bond executed by the applicant as principal and by a surety company qualified and authorized to do business in this state as surety. The bond shall be to the state for the benefit of qualified consignors of agricultural products in this state. All such sureties on a bond, as provided in this section, shall be released and discharged from all liability to the state accruing on such bond by giving notice to the principal and the director by certified mail. Upon receipt of such notice the director shall notify the surety and the principal of the effective date of termination which shall be thirty days from the receipt of such notice by the director, but this shall not relieve, release, or discharge the surety from any liability already accrued or which shall accrue before the expiration period provided for in this subsection.

Terms Used In Washington Code 20.01.210

  • Agent: means any person who, on behalf of any commission merchant, dealer, broker, or cash buyer, acts as liaison between a consignor and a principal, or receives, contracts for, or solicits any agricultural product from the consignor thereof or who negotiates the consignment or purchase of any agricultural product on behalf of any commission merchant, dealer, broker, or cash buyer and who transacts all or a portion of that business at any location other than at the principal place of business of his or her employer. See Washington Code 20.01.010
  • Commission merchant: means any person who receives on consignment for sale or processing and sale from the consignor thereof any agricultural product for sale on commission on behalf of the consignor, or who accepts any farm product in trust from the consignor thereof for the purpose of resale, or who sells or offers for sale on commission any agricultural product, or who in any way handles for the account of or as an agent of the consignor thereof, any agricultural product. See Washington Code 20.01.010
  • Dealer: means any person other than a cash buyer, as defined in subsection (4) of this section, who solicits, contracts for, or obtains from the consignor thereof for reselling or processing, title, possession, or control of any agricultural product, or who buys or agrees to buy any agricultural product from the consignor thereof for sale or processing and includes any person, other than one who acts solely as a producer, who retains title in an agricultural product and delivers it to a producer for further production or increase. See Washington Code 20.01.010
  • Director: means the director of agriculture or a duly authorized representative. See Washington Code 20.01.010
  • Licensee: means any person or business licensed under this chapter as a commission merchant, dealer, limited dealer, broker, cash buyer, or agent. See Washington Code 20.01.010
  • Seed: means agricultural seed, flower seed, vegetable seed, other crop seed, and seeds, as defined in chapter 15. See Washington Code 20.01.010
(2) The bond for a commission merchant or dealer in hay, straw, or seed shall be not less than fifteen thousand dollars. The actual amount of such bond shall be determined by dividing the annual dollar volume of the licensee‘s net proceeds or net payments due consignors by twelve and increasing that amount to the next multiple of five thousand dollars. The bond for a new commission merchant or dealer in hay, straw, or seed shall be subject to increase at any time during the licensee’s first year of operation based on the average of business volume for any three months. Except as provided in subsection (3) of this section, the bond shall be not less than ten thousand dollars for any other dealer.
(3) The bond for a commission merchant or dealer in livestock shall be not less than ten thousand dollars. The actual amount of such bond shall be determined in accordance with the formula set forth in the packers and stockyard act of 1921 (7 U.S.C. § 181), except that a commission merchant or dealer in livestock shall increase the commission merchant’s or dealer’s bond by five thousand dollars for each agent the commission merchant or dealer has endorsed under RCW 20.01.090. A dealer who also acts as an order buyer for other persons who are also licensed and bonded under this chapter or under the packers and stockyards act (7 U.S.C. § 181) may subtract that amount of business from the annual gross volume of purchases reported to the director in determining the amount of bond coverage that must be provided and maintained for the purposes of this chapter.
(4) The bond for a commission merchant handling agricultural products other than livestock, hay, straw, or seed shall not be less than ten thousand dollars. The bond for a dealer handling agricultural products other than livestock, hay, straw, or seed shall not be less than ten thousand dollars. The actual amount of such bond shall be determined by dividing the annual dollar volume of the licensee’s net proceeds or net payments due consignors by fifty-two and increasing that amount to the next multiple of two thousand dollars. However, bonds above twenty-six thousand dollars shall be increased to the next multiple of five thousand dollars.
(5) When the annual dollar volume of any commission merchant or dealer reaches two million six hundred thousand dollars, the amount of the bond required above this level shall be on a basis of ten percent of the amount arrived at by applying the appropriate formula.

NOTES:

Severability—1983 c 305: See note following RCW 20.01.010.
Cash or other security in lieu of surety bond: RCW 20.01.570.
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