On March 26, 2015, Governor Asa Hutchinson enacted Senate Bill 555 requiring all grain dealers in the state of Arkansas to post a surety bond as a form of financial security.
Prior to the enactment of this bill, grain dealers did not have to prove their creditworthiness to the State by guaranteeing financial morality. By requiring principals (grain dealers) to post a surety bond, they are promising to conduct all business relating to the sales of wheat, oat, rye, rice and oil seeds in an honest and professional manner.
Principals who perform any of the following damages are considered in violation of the bonding agreements:
- Operating as a grain dealer without a license issued by the State Plant Board
- Refusing to allow inspection of the dealer’s premises, books, accounts, or other relevant records
- Violating conditions stated in the Code
- And more
Requiring individuals to post a surety bond is due to S.B. 555’s creation of the Arkansas Grain Dealers Act. This act was formed to regulate grain dealers. It is considered unlawful for individuals to act as grain dealers without first obtaining the proper license. Those seeking a grain dealer’s license should do the following:
- Submit an application to the State Plant Board
- Submit proof of having posted a surety bond in the appropriate amount
- Accompany all documents with the necessary filing/application fee
Licenses will remain valid from July 1 of the year of application to June 30 of the following year. Those who have obtained their first initial license, however, will only be considered valid until June 30 of the year of application.