SECTION 35:10-7-9. Certificate of deposit requirements

(a)   A certificate of deposit issued by a bank or savings and loan association that is a member of good standing with the Federal Deposit Insurance Corporation (FDIC) or Federal Savings and Loan Insurance Corporation (FSLIC) respectively, may be submitted to the Board in lieu of the Oklahoma public warehouse surety or deficiency bond required by the Public Warehouse and Commodity Indemnity Act. The certificate of deposit shall be in an amount equal to the required surety. Certificates of deposit shall not be accepted from any institution in excess of FDIC or FSLIC insurance coverage.

(b)   A certificate of deposit shall have a term of no longer than one (1) year and shall be automatically renewable.

(c)   A certificate of deposit submitted in lieu of a Oklahoma public warehouse surety shall be held in trust by the Board who shall act as trustee for the benefit of all persons storing commodities with the warehouseman as set forth in the Oklahoma Public Warehouse and Commodity Indemnity Act.

(d)   All certificates of deposit shall be made payable to the Board as follows: "Pay to the order of the Oklahoma Board of Agriculture". The Board may make the necessary inquiries to determine that the certificate is negotiable.

(e)   A certificate of deposit purchased by a principle, shareholder, officer, employee, or any other individual for or on behalf of a charter shall disclose on its face the name of the charter in whose favor the certificate of deposit is deposited. The balance of any proceeds remaining after liquidation and disbursement shall be paid to the purchaser.

(f)   In the event that a plurality of certificates of deposit from any number of sources are deposited in satisfaction of a charter's surety obligation, the Board may satisfy claims arising under the Oklahoma Public Warehouse and Commodity Indemnity Act by liquidating any one (1) or more of the certificates of deposit without regard to proration.

(g)   In the event that a charter desires to substitute a surety of bond for a certificate of deposit then on deposit with the Board, the certificate of deposit shall be retained by the Board for a period of not less than ninety (90) days following receipt of the surety or bond, or for any time required to fully ascertain the existence of any claims. If the maturity date is interposed during this transition period, the Board, at the option of the charter and upon its timely request shall cause the certificate of deposit to be liquidated and the proceeds deposited in a passbook savings account for the duration of the transition period, when the funds shall be forwarded to the purchaser or assignor of the certificate of deposit.

(h)   A charter shall be required to augment certificates of deposit in any situation where it would be required to increase its coverage under a surety. This augmentation shall be commensurate to the increased surety value required.

(i)   All certificates of deposit liquidated by the Board shall be redeemed by collection proceedings through a local bank or savings and loan association selected by the Board.

(j)   A certificate of deposit may only be liquidated for disbursement upon the same reasons that surety proceeds may be demanded for disbursement and shall apply to all claims whenever arising.

(k)   All interest earned on the certificate of deposit shall be assigned by the Board to be accredited or paid directly to the purchaser of the certificate of deposit, except in the event of liquidation for the purpose of paying claims, in which event interest shall attributed to the claims.

(l)   If a charter holder desires to surrender its charter and request the return of a certificate of deposit to the purchaser, the charter holder shall return the charter and make written request by registered or certified mail, with return receipt, for return of the certificate of deposit. Upon receipt of the written request and submission of the public warehouse charter, the Board shall hold the certificate of deposit for a period of ninety (90) days or for a longer period if the Board is of the opinion that claims against the charter may exist and then forward the certificate of deposit to the purchaser.

(m)   If a public warehouse charter is revoked, the certificate of deposit shall be held by the Board for a period of not less than one hundred twenty (120) days or until the Board is satisfied that no claims against that charter exist.

(n)   If an unsecured or unbonded public warehouseman desires to remain chartered and requests the return of a certificate of deposit that is on file with the Board, the warehouseman shall file with the Board a replacement certificate of deposit, bond, or state surety in the amount required by the Board in accordance with the Oklahoma Public Warehouse and Commodity Indemnity Act. The replacement surety shall be received, become effective, and be in full force and effect before the date that the warehouseman's existing certificate of deposit is to be returned.

(o)   Substitution shall be made only at the maturity of the certificate of deposit in possession of the Board.

[Source: Amended at 14 Ok Reg 3699, eff 8-7-97 (emergency); Amended at 15 Ok Reg 2490, eff 6-25-98; Amended at 18 Ok Reg 1439, eff 5-25-01]