[Code of Federal Regulations]
[Title 7, Volume 7, Parts 700 to 899]
[Revised as of January 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR736.13]

[Page 248]
 
                          TITLE 7--AGRICULTURE
 
                            CHAPTER VII--FARM
                SERVICE AGENCY, DEPARTMENT OF AGRICULTURE
 
PART 736--GRAIN WAREHOUSES--Table of Contents
 
Sec. 736.13  Bond required; time of filing.

    Each warehouseman applying for a warehouse license under the Act 
shall, before such license is granted, file with the Secretary or his 
designated representative a bond either:
    (a) In the form of a bond containing the following conditions and 
such other terms as the Secretary or his designated representative may 
prescribe in the approved bond forms, with such changes as may be 
necessary to adapt the forms to the type of legal entity involved:
    Now, therefore, if the said license(s) or any amendments thereto be 
granted and said principal, and its successors and assigns operating 
said warehouse(s), shall faithfully perform during the period of this 
bond all obligations of a licensed warehouseman under the terms of the 
Act and regulations thereunder relating to the above-named products;
    Then this obligation shall be null and void and of no effect, 
otherwise to remain in full force. For purposes of this bond, the 
aforesaid obligations under the Act and regulations and contracts 
include obligations under any and all modifications of the Act, the 
regulations, and the contracts that may hereafter be made, notice of 
which modifications to the surety being hereby waived.
    This obligation shall be and remain in full force and effect for a 
minimum of one year beginning with the effective date and shall be 
considered a continuous bond thereafter until terminated as herein 
provided. The total liability of the surety is limited to the penal 
amount hereof, for liabilities that accrue during the term hereof.
    This obligation shall be and remain in full force and effect from 
date of issue until one hundred twenty (120) days after notice in 
writing of cancellation shall have been received by the Secretary from 
the principal or surety. If said notice shall be given by the surety, a 
copy thereof shall be mailed on the same day to the principal. 
Cancellation of this bond and cancellation of any of its provisions 
shall not affect any liability accrued thereon at the time of said 
notice or which may accrue thereon during the one hundred twenty (120) 
days after such notice.

A bond in this form shall be subject to 7 CFR 736.6, and 736.14 through 
736.17, and 31 CFR part 225, or
    (b) In the form of a certificate of participation in and coverage by 
an indemnity or insurance fund as approved by the Secretary, established 
and maintained by a State, backed by the full faith and credit of the 
applicable State, and which guarantees depositors of the licensed 
warehouse full indemnification for the breach of any obligation of the 
licensed warehouseman under the terms of the Act and regulations. A 
certificate of participation and coverage in such fund shall be 
furnished to the Secretary annually. If administration or application of 
the fund shall change after being approved by the Secretary, the 
Secretary may revoke his approval. Such revocation shall not affect a 
depositor's rights which have arisen prior to such revocation. Upon such 
revocation the licensed warehouseman then must comply with paragraph 
(a). Such certificate of participation shall not be subject to 
Secs. 736.14 and 736.15, or
    (c) In the form of a deposit with the Secretary as security, United 
States, bonds, Treasury notes, or other public debt obligations of the 
United States or obligations which are unconditionally guaranteed as to 
both interest and principal by the United States, in a sum equal at 
their par value to the amount of the penal bond required to be 
furnished, together with an irrevocable power of attorney and agreement 
in the form prescribed, authorizing the Secretary to collect or sell, 
assign and transfer such bonds or notes so deposited in case of any 
default in the performance of any of the conditions or stipulations of 
such penal bond. Obligations posted in accordance with this paragraph 
may not be withdrawn by the warehouseman until one year after license 
termination or until satisfaction of any claims against the obligations 
whichever is later. A bond in this form shall be subject to 7 CFR 736.6 
and 736.14 through 736.17 and 31 CFR part 225.

[52 FR 37127, Oct. 5, 1987]