Sec. 14.034. CANCELLATION OF LETTER OF CREDIT. (a) A warehouse operator may not cancel a letter of credit approved by the department in lieu of a bond unless the department gives written approval of a substitute bond or letter of credit.
(b) The issuer of the letter of credit may cancel a letter of credit by sending notice of intent to cancel by registered or certified mail to the department. Cancellation of a letter of credit may not take effect before the 91st day after the date the issuer mails notice of intent to cancel. On receipt of notice of cancellation of a letter of credit, the department shall promptly notify the warehouse operator involved. Liability under the letter of credit ceases to accrue on the effective date of cancellation. Notwithstanding cancellation under this subsection or other law to the contrary, the department or a depositor may collect under the letter of credit for any claim that arose during the period during which the letter of credit was in effect, provided that the claim is filed within the applicable limitations period established under Section 14.065.
(c) The issuer of a letter of credit shall send a copy of the notice required by this section to any government agency requesting the copy. Notwithstanding any other provision of this chapter, a public grain warehouse license is automatically suspended if the warehouse operator fails to file a new bond or letter of credit before the cancellation of a letter of credit is effective.
(d) The suspension of a license under this section continues as long as the warehouse operator fails to maintain the bond or letter of credit required by this chapter.
Amended by Acts 2001, 77th Leg., ch. 1124, Sec. 1, eff. Sept. 1, 2001.
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