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