01-001 DEPARTMENT OF AGRICULTURE, CONSERVATION AND FORESTRY
- DIVISION OF GRADING SERVICES
Chapter 123: DISTRIBUTIONS OF PROCEEDS FROM POTATO LICENSE SURETY BONDS
Summary:
This chapter establishes procedures for the presentation, investigation and payment of claims made against potato license surety bonds.
1. Application.
- The provisions of this chapter shall govern the Department's distribution of proceeds recovered from potato licensing surety bonds pursuant to 7 M.R.S.A. §§ 1014 and 1025, except where an action is brought by a producer or licensee pursuant to 7 M.R.S.A. §1025.
2. Claims: Manner of Presentation.
- Distribution of bond proceeds shall be made only to producers and other persons licensed under 7 M.R.S.A. §1011 et seq. holding valid, unsatisfied claims for payment against the Obligor on account of potatoes received or purchased by him/her. Such claims shall be presented in the form of verified complaints as defined in 7 M.R.S.A. §1012.12. Each claimant shall attach to his verified complaint, if available, copies of All contracts, invoices, bills of lading, inspection certificates, records of transactions and other documents which substantiate his claim. Verified complaints shall be mailed or otherwise presented to the Department.
3. Advertisement.
- Before making any distribution of bond proceeds, the Department shall advertise its intention to do so in (an) appropriate newspapers) and may take other appropriate steps to publicize the impending distribution. The advertisement shall notify persons who may have claims against the obligor to file verified complaints with the Department within a specified time. After such time has elapsed, and subject to sections 5 and 6, the Department shall distribute the proceeds among all approved claimants.
4. Investigation; Approval.
- The Department may investigate the validity of any claim to the degree it deems such investigation necessary. The Department shall notify any claimant whose claim it disapproves in whole or in part. Such notice of disapproval shall be deemed "final agency action" for purposes of the Maine Administrative Procedure Act, 5 M.R.S.A. §8001 et seq.
5. Action Pending Judicial Review of Notice of Disapproval.
- Pursuant to 5 M.R.S.A. §11002.3, any petition for judicial review of a notice of disapproval must be filed by the aggrieved claimant within 30 days after his/her receipt of the notice. No bond proceeds shall be distributed by the Department until this 30-day period has run. If a petition for judicial review is timely filed, the Department shall opt to either:
- A. Not distribute any bond proceeds until final determination of said petition by a court of last resort; or
- B. Distribute available bond proceeds less the share to which the claimant would be entitled if his petition is upheld. A second distribution shall be made in accordance with the court's decision upon final determination of the petition.
6. Pro Rata Distribution.
- Where the amount of valid, unsatisfied claims received against a bond exceeds the amount of available proceeds, the proceeds shall be distributed among approved claimants in proportion to the size of their claims.
Example: The bonding company has paid to the Department the $25,000 face value of the bond. Claimants A, B and C have filed verified complaints against the obligor in the amounts of $25,000, $20,000 and $5,000 respectively. The claims are all valid. Under this chapter, distribution would be calculated as follows:
- Total claims: $50,000
- A's share: 25,000
- --------
50,000 = 50% 25,000 x .5 = $12,500
B's share: 20,000
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50,000 = 40% 25,000 x .4 = $10,000
C's share: 5,000
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50,000 = 10% 25,000 x .1 = $ 2,500
Total distribution $ 25,000
STATUTORY AUTHORITY: 7 M.R.S.A. §§ 12, 1015.
EFFECTIVE DATE:
March 24, 1981
EFFECTIVE DATE (ELECTRONIC CONVERSION):
May 4, 1996
CONVERTED TO MS WORD:
May 13, 2008
CORRECTIONS:
February, 2014 – agency names, formatting
CONVERTED DOCUMENT TO AN UPDATED VERSION OF WORD:
April 21, 2026
APAO ACCESSIBILITY CHECK (Word):
April 21, 2026