In Florida, citrus fruit dealers are required to post a surety bond as part of their licensing agreement. Florida Administrative Code Rule 20-108.0041 was revised in regulations adopted in August 2015, exempting citrus fruit from coverage under the bond in certain situations. The exempting situations are as follows:
- when the fruit is produced by the dealer
- when the fruit is handled by a cooperative marketing association for its members
- when the fruit is purchased from a registered packinghouse (other than the dealer) and has been inspected and certified for shipment
- when the fruit is from groves for which the dealer provides complete management services
- The dealer must be a contracted manager, authorized in writing to supervise work, market the grove’s fruit, receive payment for the fruit, pay all bills incurred in the performance of these services, and submit the balance of all payment received to the producer.
- The dealer’s contract must also state that the producer understands that the dealer is not posting a surety bond and the producer will not have recourse under any dealer’s bond posted during the contract period.
- when the fruit is handled by a partnership or corporation dealer and is a product of groves owned by the affiliated partnership, corporation, any officers or stockholders of the corporation, any subsidiaries or their officers or stockholders, or any partner of a partnership
- when the fruit has been processed by a registered processing plant other than the dealer, is prepared for commercial marketing and has been issued a certificate of inspection
The bond ensures that dealers will abide by the regulations of the Florida Citrus Code and will honor contracts with citrus fruit producers and other dealers. The amount of the bond each dealer must hold is determined by the number of boxes of fruit they expect to handle; if they are renewing their bond, the amount is determined by the volume handled the previous year. A chart showing the amount of coverage required per number of boxes is available on the last page of the bond form.
If you have any questions about the change in bond coverage, contact the Florida Department of Citrus or SuretyBonds.com. The citrus fruit dealer application and other necessary forms are available here.