House File 2503 - Introduced



                                       HOUSE FILE       
                                       BY  PETTENGILL


    Passed House,  Date               Passed Senate, Date             
    Vote:  Ayes        Nays           Vote:  Ayes        Nays         
                 Approved                            

                                      A BILL FOR

  1 An Act requiring that a person entering into a repurchase
  2    contract for the growing of corn seed stock post a special
  3    bond.
  4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  5 TLSB 5735HH 82
  6 da/nh/5

PAG LIN



  1  1    Section 1.  Section 199.16, Code 2007, is amended to read
  1  2 as follows:
  1  3    199.16  PERMIT HOLDER'S BOND.
  1  4    It is unlawful for the permit holder to enter into a
  1  5 contract with a grower who purchases agricultural seed in
  1  6 which the permit holder agrees to repurchase the seed crop
  1  7 produced from the purchased seed at a price in excess of the
  1  8 current market price, unless the permit holder has on file
  1  9 with the department a general bond, in a penal sum of
  1 10 twenty=five thousand dollars running to the state of Iowa,
  1 11 with sureties approved by the secretary, for the use and
  1 12 benefit of a person holding a repurchase contract who might
  1 13 have a cause of action of any nature arising from the purchase
  1 14 or contract.  However, the aggregate liability of the surety
  1 15 to all purchasers of seed holding repurchase contracts shall
  1 16 not exceed the sum of the bond.  In addition to the general
  1 17 bond, if the permit holder sells corn seed to the grower under
  1 18 a repurchase contract as provided in this section, the permit
  1 19 holder shall furnish the department with a special bond in the
  1 20 amount of the purchase price for the benefit of the grower in
  1 21 the same manner as the general bond.  The grower shall not be
  1 22 reimbursed for the same damages under the general bond and the
  1 23 special bond.
  1 24                           EXPLANATION
  1 25    This bill amends Code section 199.16, which applies when a
  1 26 person licensed by the department of agriculture and land
  1 27 stewardship to distribute agricultural seed (permit holder)
  1 28 contracts with a person promising to grow the seed (grower).
  1 29 The Code section provides that the permit holder must execute
  1 30 a bond with the department in the amount of $25,000.  The bill
  1 31 refers to these bonds as general bonds and provides that in
  1 32 cases in which the grower pays for the seed for planting, the
  1 33 permit holder must post a special bond for the benefit of the
  1 34 grower for the amount of the purchase price.  The bill also
  1 35 provides that the grower cannot be reimbursed for the same
  2  1 damages under the general bond and the special bond.
  2  2 LSB 5735HH 82
  2  3 da/nh/5