(1) Within 48 hours of taking possession of a public warehouse, the Department of Agriculture shall give written notice of its action to the surety company on the bond or to the financial institution of the warehouseman on a CD or its equivalent.
(2) Upon taking possession of a public warehouse, the Department of Agriculture shall allow 120 days for the holder of public warehouse receipts or scale weigh tickets to provide to the department such tickets as evidence of deposit. Failure to file a claim within the 120 days provided shall defeat the claim with respect to the surety bond or its equivalent.
(3) The director may make demand upon the bond or its equivalent at any time he finds valid claims may exist against it. The department shall make full or pro rata payment on such claims within 180 days from the date of verification of all claims and receipt of liquidated bond or bond equivalent proceeds.