House File 350
HOUSE FILE
BY GREINER
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act requiring that dealers of certain swine file a surety bond
2 with the department of agriculture and land stewardship.
3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
4 TLSB 1942HH 80
5 da/sh/8
PAG LIN
1 1 Section 1. Section 163.30, subsection 3, unnumbered
1 2 paragraph 1, Code 2003, is amended to read as follows:
1 3 No A person shall not act as a dealer without first
1 4 securing unless the department issues the person a dealer's
1 5 license from the department. The person must be licensed as a
1 6 dealer regardless of whether the swine originate in this state
1 7 or another jurisdiction or the person resides in this state or
1 8 another jurisdiction. The jurisdiction may be in another
1 9 state or a foreign nation.
1 10 a. The fee for a dealer's license shall be is five dollars
1 11 per annum and all licenses shall expire each year. A license
1 12 expires on the first day of July following the date of issue.
1 13 Licenses A license shall be numbered and the dealer shall
1 14 retain the number from year to year.
1 15 3A. To secure be issued a license, the an applicant must
1 16 file a surety bond with the department a bond in the sum of.
1 17 The applicant shall file a standard surety bond of ten
1 18 thousand dollars with the secretary named as trustee, for the
1 19 use and benefit of anyone damaged by a violation of this
1 20 section, except that the bond shall not be required for
1 21 dealers who are bonded in the same or a greater amount than
1 22 required pursuant to the federal Packers and Stockyards Act.
1 23 In addition, the department may require that a licensee file
1 24 an additional surety bond with the department prior to a
1 25 license being renewed as provided in section 202C.2.
1 26 Sec. 2. NEW SECTION. 202C.1 DEFINITIONS.
1 27 As used in this chapter, unless the context otherwise
1 28 requires:
1 29 1. "Dealer" means a person required to be licensed as a
1 30 dealer pursuant to section 163.30.
1 31 2. "Department" means the department of agriculture and
1 32 land stewardship.
1 33 3. "Feeder pig" means an immature swine fed for purposes
1 34 of direct slaughter which weighs one hundred pounds or less.
1 35 4. "Purchaser" means the owner or operator of a farm as
2 1 provided in section 163.30 who is delivered feeder pigs
2 2 pursuant to a sales agreement in which the owner or operator
2 3 is a party.
2 4 Sec. 3. NEW SECTION. 202C.2 SURETY BOND == REQUIREMENTS.
2 5 1. The department shall require that a dealer file a
2 6 surety bond if the department determines that the dealer is
2 7 delivering feeder pigs to purchasers pursuant to a sales
2 8 agreement and the delivered feeder pigs have a substantially
2 9 higher than average rate of morbidity or mortality.
2 10 2. The amount of the surety bond shall be established by
2 11 the department, but shall not exceed three hundred thousand
2 12 dollars.
2 13 3. The surety bond must be conditioned upon the dealer's
2 14 faithful performance of a sales agreement by delivering feeder
2 15 pigs that have a rate of morbidity or mortality in compliance
2 16 with the terms and conditions of the sales agreement. The
2 17 surety's liability extends to each such sales agreement
2 18 executed while the surety bond is in force and until
2 19 performance or the recision of the sales agreement.
2 20 4. The surety bond shall be continuous in nature until
2 21 canceled by the surety. The surety shall provide at least
2 22 ninety days' notice in writing to the dealer and the
2 23 department indicating the surety's intent to cancel the surety
2 24 bond and the effective date of the cancellation. The dealer
2 25 shall have sixty days from the date of receipt of the surety's
2 26 notice of cancellation to file a replacement surety bond.
2 27 5. The aggregate liability of the surety for a breach of
2 28 the conditions of the surety bond shall not exceed the amount
2 29 of the surety bond.
2 30 Sec. 4. NEW SECTION. 202C.3 SURETY == LIABILITY.
2 31 In a legal action based on breach of contract by a
2 32 purchaser for the delivery of feeder pigs which have a rate of
2 33 morbidity or mortality which is not in compliance with the
2 34 terms and conditions of the sales agreement, the surety is
2 35 liable to the purchaser. The purchaser may sue the surety to
3 1 recover actual damages caused by the breach, together with
3 2 interest as determined pursuant to section 668.13 from the
3 3 date of sale, reasonable attorney fees, and court costs.
3 4 Sec. 5. NEW SECTION. 202C.4 DEPARTMENTAL RULES.
3 5 The department shall adopt rules as required to administer
3 6 this chapter, including but not limited to rules providing for
3 7 threshold rates of mortality or morbidity, qualifications for
3 8 sureties, procedures for filing a surety bond or replacement
3 9 surety bond, requirements for the cancellation of the surety
3 10 bond by a surety, and the liability of a surety after
3 11 cancellation.
3 12 EXPLANATION
3 13 This bill provides that a dealer of feeder pigs may be
3 14 required to obtain a surety bond filed with the department of
3 15 agriculture and land stewardship.
3 16 Under Code chapter 163 regulating infectious and contagious
3 17 diseases among animal populations, a dealer who is engaged in
3 18 the business of selling swine must be licensed by the
3 19 department and secure a bond of $10,000. The bill amends Code
3 20 section 163.30 to provide that a dealer must be licensed
3 21 regardless of where the swine originate or where the dealer
3 22 resides. It also provides that in addition to the standard
3 23 bond, a dealer of feeder pigs may be required to file an
3 24 additional bond with the department as provided in new Code
3 25 chapter 202C.
3 26 Under the new Code chapter, the department must require
3 27 that a dealer required to be licensed under Code section
3 28 163.30 must file a surety bond if the department determines
3 29 that the dealer is delivering feeder pigs that have a
3 30 substantially higher than average rate of morbidity or
3 31 mortality. According to the bill, the amount of the bond
3 32 cannot exceed $300,000. The bond is conditioned upon the
3 33 dealer's faithful performance of a sales agreement by
3 34 delivering feeder pigs that have a rate of morbidity or
3 35 mortality that complies with the sales agreement. The bill
4 1 provides procedures for filing and canceling such a bond and
4 2 substituting a bond in case of cancellation. The bill
4 3 provides that a purchaser may bring a legal action against the
4 4 surety to recover damages and interest based on breach of
4 5 contract for the delivery of the feeder pigs.
4 6 LSB 1942HH 80
4 7 da/sh/8