Bill Text: IN HB1230 | 2010 | Regular Session | Enrolled
Bill Title: Grain buyers and grain indemnity program; seeds.
Spectrum: Bipartisan Bill
Status: (Passed) 2010-03-25 - Section 35 effective 03/17/2010 [HB1230 Detail]
Download: Indiana-2010-HB1230-Enrolled.html
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AN ACT to amend the Indiana Code concerning agriculture and animals.
(1) Kentucky bluegrass, red fescue, chewings fescue, hard fescue, tall fescue, perennial ryegrass, intermediate ryegrass, annual ryegrass, colonial bentgrass, or creeping bentgrass; and
(2) mixtures of any of the grasses referred to in subdivision (1).
this chapter.
(b) The state seed commissioner may do any of the following to administer this chapter:
(1) Sample, inspect, analyze, and test agricultural and vegetable seed distributed within Indiana for seeding and sowing purposes, when, where, and to the extent the state seed commissioner considers necessary to determine whether the agricultural or vegetable seed is in compliance with this chapter.
(2) Notify a seed distributor of any violations of this chapter.
(3) Adopt rules:
(A) governing:
(i) methods of sampling, inspecting, analyzing, testing, and examining agricultural and vegetable seed; and
(ii) tolerances to be followed in the administration of this chapter; and
(B) necessary for the efficient enforcement of this chapter.
(4) Adopt rules to establish lists of prohibited and restricted noxious weeds.
(5) Adopt rules to establish reasonable standards of germination (as defined by rule adopted under section 28 of this chapter) for vegetable seed.
(6) Adopt rules to establish standards for the effectiveness of legume inoculant applied to pre-inoculated seed.
(7) Adopt rules to govern the treatment of seed and the labeling and distribution of treated seed.
(8) Publish at least one (1) time each year, in the form the seed commissioner considers proper, information concerning:
(A) the sales of agricultural and vegetable seed; and
(B) the results of the analysis of official samples of agricultural and vegetable seed sold within Indiana as
compared with the analysis guaranteed on the label.
Information concerning production and use of agricultural and
vegetable seed may not disclose the operation of any person.
(9) Enter any:
(A) public or private property during regular business hours;
or
(B) vehicle that transports seed, whether by land, water, or air,
at any time the vehicle is accessible;
to inspect seed and the records relating to the seed, subject to this
chapter and the rules adopted under this chapter.
(10) As used in this subdivision, "stop sale order" refers to a
written order issued by the state seed commissioner to the owner
or custodian of a lot of agricultural or vegetable seed that the state
seed commissioner has found violates this chapter or rules
adopted under this chapter. The state seed commissioner may
issue and enforce stop sale orders. A stop sale order prohibits the
future sale, processing, and movement of the seed until the state
seed commissioner issues a release from the stop sale order. The
owner or custodian of the seed is entitled to appeal a stop sale
order to a court with jurisdiction in the locality in which the seed
is found, as provided in IC 4-21.5, seeking a judgment as to the
justification for the order for the discharge of the seed from the
stop sale order in accordance with the findings of the court. This
subdivision does not limit the right of the state seed commissioner
to proceed as otherwise authorized by this chapter.
(11) Establish and maintain or make provisions for seed testing
facilities.
(12) Employ qualified persons.
(13) Incur necessary expenses.
(14) Test or provide for testing seed for purity and germination
(as defined by rule adopted under section 28 of this chapter) for
farmers and dealers on request of a farmer or dealer, prescribe
rules governing such testing, and charge for the tests made.
(15) Cooperate with the United States Department of Agriculture
and other agencies in seed law enforcement.
(16) Enter the property of a producer of hybrid seed to determine
whether the seed produced is as the seed is represented.
(17) Issue a written special use permit to a person to use a
prohibited noxious weed seed or a restricted noxious weed
seed for purposes of research, development, production, or
education, subject to subsection (c).
(18) Adopt rules under IC 4-22-2 to establish fees that are
necessary for the administration of this chapter, including
costs of inspections, analysis, and publications.
(19) Adopt rules under IC 4-22-2 to establish civil fines for the
following:
(A) Failure to submit a report required under this chapter.
(B) Failure to pay a fee required under this chapter.
(c) The seed commissioner, in response to an application for the
issuance of a special use permit under subsection (b)(17), may:
(1) issue a special use permit;
(2) issue a special use permit subject to conditions; or
(3) deny a special use permit request.
In determining whether to issue a special use permit, the seed
commissioner shall consider each species of prohibited noxious
weed or restricted noxious weed separately. The seed commissioner
may revoke a special use permit at any time if it appears that the
permit holder is not complying with the conditions established
under the special use permit.
(b) The labeling required for seed sold in bags and packages, and in bulk as required by this section, must include the following statements on the labeling attached to the container:
(1) The commonly accepted name of each kind and variety of each agricultural seed component that exceeds five percent (5%) of the whole and the percentage by weight of each in the order of its predominance. However, the variety designation may be omitted if the label states the name of the kind and the words "variety not stated". If more than one (1) component is required to be named, the word "mixture" or the word "mixed" must be shown conspicuously on the label. A mixture consisting of two (2) or more varieties of the same kind may be designated as a "blend".
(2) Lot number or other lot identification.
(3) Origin (state or foreign country where grown) for all seed
except hybrid corn. If the origin is unknown, that fact must be
stated.
(4) The percentage of all weed seed.
(5) The name and rate of occurrence per pound of each kind of
restricted noxious weed seed present.
(6) The percentage of all other agricultural or vegetable seed,
which may be designated as "other crop seeds" or "crop seeds".
(7) The percentage of inert matter.
(8) For each named agricultural seed:
(A) the percentage of germination (as defined by rule adopted
under section 28 of this chapter), exclusive of hard seed;
(B) the percentage of hard seed, if present; and
(C) the calendar month and year the test was completed to
determine the percentages.
(9) The name and address of the person who labeled the seed or
who distributed it within Indiana.
(10) For all seed named and treated (for which a separate label
may be used):
(A) a word or statement indicating that the seed has been
treated;
(B) the commonly accepted coined chemical or abbreviated
chemical (generic) name of any applied pesticide;
(C) a description of the process or the commonly accepted
name of the substance applied if other than a pesticide; and
(D) if the substance in the amount present with the seed is
harmful to human or other vertebrate animals, a caution
statement such as "Do Not Use For Food Or Feed Or Oil
Purposes". A poison statement or symbol must be used as the
caution for mercurials and similarly toxic substances.
(11) For pre-inoculated seed, in addition to other labeling
requirements of this section (for which a separate label may be
used):
(A) a word or statement indicating that the seed has been
pre-inoculated; and
(B) the date beyond which the inoculant is not to be
considered effective.
(12) For cool season lawn and turf grasses, the following
statements on the labeling:
(A) For single kinds of grasses, the name of the kind or the
kind and variety.
(B) For grass mixtures:
(i) the word "mix", "mixed", "mixture", or "blend"
must be stated with the name of the mixture;
(ii) the headings "Pure Seed" and "Germination" or
"Germ" must be used in the proper places; and
(iii) the commonly accepted name of the kind or the kind
and variety of each agricultural seed component that
exceeds five percent (5%) of the whole, and the
percentage by weight of pure seed in order of its
predominance and in columnar form.
(C) The percentage by weight of agricultural seed other
than those required to be named on the label (which must
be designated as "crop seed").
(D) The percentage by weight of inert matter.
(E) The percentage by weight of all weed seeds. The
maximum weed seed content may not exceed two and
five-tenths percent (2.5%) by weight.
(F) The name and rate of occurrence per pound of each
kind of restricted noxious weed seed present and listed
under the heading "Noxious Weed Seeds". Restricted
noxious weed seed may not exceed twenty-five hundredths
of one percent (0.25%) by weight.
(G) For each agricultural seed named under clause (A) or
(B), the following:
(i) The percentage of germination, exclusive of hard seed.
(ii) The percentage of hard seed, if present.
(iii) The calendar month and year the test was completed
to determine the required percentages. The oldest test
date must be used.
(iv) The statement "Sell by (month/year)". The date may
not exceed fifteen (15) months from the date that must be
stated on the labeling under item (iii), exclusive of the
month of the test.
The total of the percentages by weight under clauses (B)(iii),
(C), (D), and (E) must equal one hundred percent (100%).
(c) The statements required by this section may not be modified or
denied.
(d) The total of the percentages that are stated on the labeling
under subsection (b)(1), (b)(4), (b)(6), and (b)(7) must equal one
hundred percent (100%).
attached in a conspicuous place on the outside of the container a plainly
written or printed label in English giving (a) For vegetable seeds in
packets as prepared for use in home gardens or household
plantings or vegetable seeds in preplanted containers, mats, tapes,
or other planting devices in containers that do not exceed one (1)
pound, the labeling must include the following information:
(1) The name of the kind and variety of seed.
(2) The name and address of the person who labeled or who
distributed the seed.
(3) For seed that germinates less than the standard most recently
established under this chapter:
(A) the percentage of germination (as defined by rule adopted
under section 28 of this chapter), exclusive of hard seed;
(B) the percentage of hard seed, if present;
(C) the calendar month and year the test was completed to
determine the percentages; and
(D) the words "Below Standard" in not less than 8 point type.
(4) For seed that has been treated, the same labeling information
required for agricultural seeds.
(5) The number of noxious weed seeds per pound of vegetable
seed, if any weed seed is present.
(6) Lot number or other lot identification.
(7) Germination test information in any of the following
forms:
(A) The calendar month and year the germination test was
completed and the statement "Sell by (month/year)". The
date may not exceed twelve (12) months from the date of
the test, exclusive of the month of the test.
(B) The year for which the seed was packaged for sale, as
"Packed for (year)". The date must be for a calendar year
and include the statement "Sell by (month/year)". The date
may not exceed twelve (12) months from the date of the
test, exclusive of the month of the test.
(C) The percentage of germination and the calendar month
and year the test was completed to determine the
percentages. However, the germination test must have
been completed within the previous twelve (12) months,
exclusive of the month of the test.
(b) For vegetable seeds sold in containers that are more than one
(1) pound, the labeling must include the following:
(1) The name of each kind and variety present that exceeds
five percent (5%) and the percentage by weight of each in
order of its predominance.
(2) Lot number or other lot identification.
(3) For each named vegetable seed:
(A) the percentage of germination, exclusive of hard seed;
(B) the percentage of hard seed, if present; and
(C) the calendar month and year the test was completed to
determine the percentages. The date may not be later than
twelve (12) months after the date of the test, exclusive of
the month of the test.
(c) For seeds placed in a germination medium, mat, tape, or
another device and in a way to make it difficult to determine the
quantity of seed without removing the seed from the medium, mat,
tape, or other device, the labeling must include a statement to
indicate the minimum number of seeds in the container.
with a minimum payment of two and one-fourth cents ($0.0225)
for each package or container of more than one (1) pound.
(3) One dollar and fifty cents ($1.50) for each assortment or unit
of vegetable seed distributed in an assortment or other display
unit, in packets of not more than one (1) pound.
(i) (c) In making application for a permit under subsection (h),
subsection (b), the distributor must agree to the following:
(1) Label the seed with the information required by law.
(2) Keep the records the state seed commissioner considers
necessary to indicate accurately the number and size of containers
of each kind of agricultural and vegetable seed distributed and the
quantity of such seed distributed in bulk.
(3) Grant the state seed commissioner or the state seed
commissioner's authorized representative permission to examine
the records described in subdivision (2) and verify the statement
of quantity of seed distributed.
(4) Report under oath to the state seed commissioner on forms
furnished by the state seed commissioner the quantity of
agricultural and vegetable seed sold during the period covered.
(j) (d) The state seed commissioner may grant a permit under
subsection (h) subsection (b) if the state seed commissioner
determines that the applicant's proposed report of the quality of
agricultural and vegetable seed sold will lead to efficient enforcement
of this chapter. The state seed commissioner may revoke the permit at
any time if it appears to the state seed commissioner that the distributor
is not complying with the agreement described in subsection (i) (c) or
this chapter. The report of sales is due and the inspection fees payable
quarterly, on the last day of the month following the end of the quarter.
If:
(1) the report is not filed and the inspection fee not paid before
ten (10) days following the due date;
(2) the report of volume is false; or
(3) the labeling requirements of this chapter have not been
complied with;
the state seed commissioner may revoke the permit. If the inspection
fee is unpaid after the ten (10) day grace period, a penalty shall be
assessed in the amount of ten percent (10%) in addition to the amount
due.
(e) The report of quantity sold required under subsection (c)(4)
is due, and the inspection fees required under this chapter are
payable, semiannually on the last day of the month following the
end of the semiannual period. The first half reporting period ends
June 30 and the second half reporting period ends December 31.
(1) Detach, alter, deface, or destroy any label provided for in this chapter or the rules adopted under this chapter.
(2) Alter or substitute seed in a manner that may defeat the purpose of this chapter.
(3) Disseminate false or misleading advertisements concerning agricultural or vegetable seed.
(4) Hinder or obstruct in any way an authorized person in the performance of the person's duties under this chapter.
(5) Fail to comply with a stop sale order issued under section 27 of this chapter.
(6) Use the word:
(A) "trace" as a substitute for any statement required by this chapter; or
(B) "type" in any labeling in connection with the name of any seed variety.
(7) Use a state seed commissioner tag or label more than once.
(8) Sell grain or other seed that has been treated to any person for any purpose unless the grain or seed is clearly labeled as required in sections 32 and 33 of this chapter.
(9) Distribute seed colored so that it does not contrast with the natural color of the seed.
(10) Distribute noxious weed seed without a special use permit issued by the seed commissioner under section 27(b)(17) of this chapter.
(11) Assign the same brand designation to more than one (1) variety or blend of the same kind of seed, if not sold by variety name.
(12) Use relabeling stickers unless the relabeling stickers state:
(A) both the calendar month and year the germination test was completed and the sell-by date, as required under sections 32 and 33 of this chapter; and
(B) the lot number that matches the existing original lot number.
(13) Relabel a seed lot using stickers more than once.
this chapter:
(1) "Agency" refers to the Indiana grain buyers and warehouse
licensing agency established under section 1 of this chapter.
(2) "Anniversary date" means the date that is ninety (90) calendar
days after the fiscal year end of a business licensed under this
chapter.
(3) "Bin" means a bin, tank, interstice, or other container in a
warehouse in which bulk grain may be stored.
(4) "Buyer-warehouse" means a person that operates both as a
warehouse licensed under this chapter and as a grain buyer.
(5) "Claimant" means a person that is unable to secure satisfaction
within the twelve (12) months following delivery of the
financial obligations due from a licensee under this chapter for
grain that has been delivered to the licensee for sale or for storage
under a bailment.
(6) "Deferred pricing" or "price later" means a purchase by a
buyer in which title to the grain passes to the buyer and the price
to be paid to the seller is not determined:
(A) at the time the grain is received by the buyer; or
(B) within ten (10) less than twenty-one (21) days of receipt.
after delivery.
(7) "Delayed payment" means a purchase by a buyer in which
title to the grain passes to the buyer at a determined price and
payment to the seller is not made in less than twenty-one (21)
days after delivery.
(7) (8) "Depositor" means any of the following:
(A) A person that delivers grain to a licensee under this
chapter for storage or sale.
(B) A person that:
(i) owns or is the legal holder of a ticket or receipt issued by
a licensee for grain received by the licensee; and
(ii) is the creditor of the issuing licensee for the value of the
grain received in return for the ticket or receipt.
(C) A licensee that stores grain that the licensee owns solely,
jointly, or in common with others in a warehouse owned or
controlled by the licensee or another licensee.
(8) (9) "Designated representative" means the person or persons
designated by the director to act instead of the director in assisting
in the administration of this chapter.
(9) (10) "Director" means the director of the Indiana grain buyers
and warehouse licensing agency appointed under section 1 of this
chapter.
(A) The inability of a licensee to financially satisfy fully all obligations due to claimants.
(B) Public declaration of a licensee's insolvency.
(C) Revocation or suspension of a licensee's license, if the licensee has outstanding indebtedness owed to claimants.
(D) Nonpayment of a licensee's debts in the ordinary course of business, if there is not a good faith dispute.
(E) Voluntary surrender of a licensee's license, if the licensee has outstanding indebtedness to claimants.
(F) Involuntary or voluntary bankruptcy of a licensee.
(A) All grain owned or stored by a licensee, including grain that:
(i) is in transit following shipment by a licensee; and
(ii) has not been paid for.
(B) All proceeds, due or to become due, from the sale of a licensee's grain.
(C) Equity, less any secured financing directly associated with the equity, in hedging or speculative margin accounts of a licensee held by a commodity or security exchange, or a dealer representing a commodity or security exchange, and any money due the licensee from transactions on the exchange, less any secured financing directly associated with the money due the licensee from the transactions on the exchange.
(D) Any other unencumbered funds, property, or equity in funds or property, wherever located, that can be directly traced to the sale of grain by a licensee. However, funds, property, or equity in funds or property may not be considered encumbered unless:
(i) the encumbrance results from valuable consideration paid to the licensee in good faith by a secured party; and
(ii) the encumbrance did not result from the licensee posting
the funds, property, or equity in funds or property as
additional collateral for an antecedent debt.
(E) Any other unencumbered funds, property, or equity in
assets of the licensee.
(14) (15) "Grain bank grain" means grain owned by a depositor
for use in the formulation of feed and stored by the warehouse to
be returned to the depositor on demand.
(15) (16) "Grain buyer" means a person who is engaged in the
business of buying grain from producers. The term does not
include a buyer of grain who:
(A) buys less than fifty thousand (50,000) bushels of grain
annually;
(B) buys grain for the sole purpose of feeding the person's own
livestock or poultry and derives a major portion of the person's
income from selling that livestock or poultry; or
(C) does not offer storage, deferred pricing, delayed payment,
or contracts or other instruments that are linked to the
commodity futures or commodity options market.
(16) (17) "Grain standards act" means the United States Grain
Standards Act, approved August 11, 1916 (39 Stat. 482; 7 U.S.C.
71-87 as amended).
(17) (18) "License" means a license issued under this chapter.
(18) (19) "Official grain standards of the United States" means the
standards of quality or condition for grain, fixed and established
by the secretary of agriculture under the grain standards act.
(19) (20) "Person" means an individual, partnership, corporation,
association, or other form of business enterprise.
(20) (21) "Receipt" means a warehouse receipt issued by a
warehouse licensed under this chapter.
(21) (22) "Seed", notwithstanding IC 15-15-1, means grain set
apart to be used primarily for the purpose of producing new
plants.
(22) (23) "Ticket" means a scale weight ticket, a load slip, or
other evidence, other than a receipt, given to a depositor upon
initial delivery of grain to a facility.
(23) (24) "Warehouse act" means the United States Warehouse
Act, approved August 11, 1916 (39 Stat. 486; 7 U.S.C. 241-273
as amended).
(24) (25) "Warehouse" means any building or other protected
enclosure in one (1) general location licensed or required to be
licensed under this chapter in which grain is or may be:
(A) stored for hire;
(B) used for grain bank storage; or
(C) used to store company owned grain;
and the building or other protected enclosure is operated under one (1) ownership and run from a single office.
(1) Require any reports that are necessary to administer this chapter.
(2) Administer oaths, issue subpoenas, compel the attendance and testimony of witnesses, and compel the production of records in connection with any investigation or hearing under this chapter.
(3) Prescribe all forms within the provisions of this chapter.
(4) Establish grain standards in accordance with the grain standards act and federal regulations promulgated under that act that must be used by warehouses.
(5) Investigate the activities required by this chapter including the storage, shipping, marketing, and handling of grain and complaints with respect to the storage, shipping, marketing, and handling of grain.
(6) Inspect a facility, the grain stored in a facility, and all property and records pertaining to a facility. All inspections of an applicant or licensee under this chapter must take into consideration the proprietary nature of an applicant's or licensee's commercial information. The director may adopt rules under IC 4-22-2 regarding inspections permitted under this chapter, and the rules must take into consideration the proprietary nature of an applicant's or a licensee's commercial information. This chapter does not authorize the inspection of an applicant's or licensee's trade secret or intellectual property information.
(7) Determine whether a facility for which a license has been applied for or has been issued is suitable for the proper storage, shipping, and handling of the grain that is stored, shipped, or handled, or is expected to be stored, shipped, or handled.
(8) Require a licensee to terminate storage, shipping, marketing, and handling agreements upon revocation of the person's license.
(9) Attend and preside over any investigation or hearing allowed or required under this chapter.
(10) Impose sanctions for violations of this article.
(11) Require a grain buyer and all persons purchasing grain to show evidence of training or licensing on the risks associated with grain marketing practices only if a grain buyer engages in a risk factor higher than a standard defined by the director. This training or licensing may include requiring the grain buyer or person purchasing grain to do any of the following:
(A) Provide the agency with proof of registry with the commodity futures trading commission (CFTC) as a commodity trading adviser, a futures commission merchant, an introducing broker, or an associated person.
(B) Demonstrate passage of the series 3 examination administered by the National Association of Security Dealers.
(C) Annually attend six (6) hours of continuing education, approved by the director, focusing on the risks to a grain buyer and seller that are associated with grain marketing practices and the communication of risks to the producer. Additionally, as part of continuing education, require a grain buyer, and all persons purchasing grain for a grain buyer, to pass a test, approved and administered by the director, that reasonably measures the grain buyer's understanding of the risks to grain buyers and sellers associated with producer marketing strategies.
(12) Require all contracts executed after June 30, 1997, for the purchase of grain from producers, except a flat price contract or a contract for the production of seed, to include the following notice immediately above the place on the contract where the seller of the grain must sign:
"NOTICE - SELLER IS CAUTIONED THAT CONTRACTING FOR THE SALE AND DELIVERY OF GRAIN INVOLVES RISKS. THESE RISKS MAY INCLUDE FUTURE PAYMENTS BY YOU TO MAINTAIN THIS CONTRACT, A LOWER SALES PRICE, AND OTHER RISKS NOT SPECIFIED.
COVERAGE UNDER THE INDIANA GRAIN INDEMNITY PROGRAM IS LIMITED TO 100% OF A LOSS FOR STORED GRAIN AND 80% OF A LOSS FOR OTHER COVERED CONTRACTS.
BE SURE YOU UNDERSTAND THE NATURE OF THIS CONTRACT AND THE ASSOCIATED RISKS."
(13) Require all contracts executed after January 1, 2000, for the production of seed to include the following notice, in conspicuous
letters, immediately above the place on the contract or an
addendum where the seller of the seed must sign:
"NOTICE - IF THE TERMS OF THIS CONTRACT STATE
THAT THE CONTRACTOR RETAINS OWNERSHIP OF
THE SEED AND ITS PRODUCTS, YOU MAY NOT BE
ELIGIBLE FOR PARTICIPATION IN THE INDIANA
GRAIN INDEMNITY PROGRAM. TO BE ELIGIBLE TO
PARTICIPATE IN THE INDIANA GRAIN INDEMNITY
PROGRAM, FARMERS MUST OWN AND SELL GRAIN
OR SEED. BE SURE YOU UNDERSTAND THE NATURE
OF THIS CONTRACT AND THE ASSOCIATED RISKS."
(14) At any time, order an unannounced audit for compliance with
this article.
(15) Adopt rules under IC 4-22-2 to carry out the purposes and
intent of this chapter.
(16) Require all grain buyers offering deferred pricing,
delayed payments, or contracts linked to the commodity
futures or commodity options market in connection with a
grain purchase to document the agreement in writing not
more than twenty-one (21) days after delivery.
(b) The director shall do the following:
(1) Establish standards to ensure that a grain buyer has a suitable
financial position to conduct a business as a grain buyer.
(2) Require a person who conducts business as a grain buyer to
first be licensed by the agency.
(3) Require any person engaged in the business of advising
producers on grain marketing for hire to:
(A) register with the agency; and
(B) provide the agency with proof of registry with the
commodity futures trading commission (CFTC) as a
commodity trading advisor, a futures commission merchant, an
introducing broker, or an associated person.
(c) The director may designate an employee to act for the director
in the administration of this chapter. A designee may not:
(1) act in matters that require a public hearing or the temporary
suspension of a license;
(2) adopt rules; or
(3) act as the ultimate authority in the administration of this
chapter.
(d) The director may determine whether geographically separate
facilities constitute a single warehouse or grain buyer and in making
the determination may consider the following:
(1) The number of facilities involved.
(2) Whether full weighing equipment is present at the geographically separate facilities.
(3) The method of bookkeeping employed by the separate facilities.
(4) The hours of operation of the separate facilities.
(5) The personnel employed at the separate facilities.
(6) Other factors the director deems relevant.
(e) The director and the director's designees shall become members of the national grain regulatory organization and shall:
(1) work in partnership with other state grain regulatory officials;
(2) participate in national grain regulatory meetings; and
(3) provide expertise and education at national meetings.
(1) A grain bank license may be issued to a person that:
(A) stores only grain bank grain;
(B) has a storage capacity of not more than fifty thousand (50,000) bushels of grain; and
(C) purchases less than fifty thousand (50,000) bushels of grain per year.
(2) A warehouse license may be issued to a person that:
(A) stores grain for hire; and
(B) purchases less than fifty thousand (50,000) bushels of grain per year.
(3) A grain buyer license may be issued to a person that:
(A) purchases annually at least fifty thousand (50,000) bushels of grain that are not for the sole purpose of feeding the person's own livestock or poultry;
(B)
(C) offers deferred pricing, delayed payments, or contracts linked to the commodity futures or commodity options market in connection with grain purchases.
(4) A buyer-warehouse license may be issued to a person that operates both as a warehouse and as a grain buyer.
(b) An applicant shall file with the director a separate application for each license or amendment of a license at the times, on the forms, and containing the information that the director prescribes.
(c) An initial application for a license must be accompanied by a license fee as follows:
(1) For a grain bank or for a warehouse or buyer-warehouse with a storage capacity of less than two hundred fifty thousand (250,000) bushels, two hundred fifty dollars ($250) for the first facility and fifty dollars ($50) for each additional facility.
(2) For a warehouse or a buyer-warehouse with a storage capacity of at least two hundred fifty thousand (250,000) bushels but less than one million (1,000,000) bushels, five hundred dollars ($500) for the first facility and fifty dollars ($50) for each additional facility.
(3) For a warehouse or a buyer-warehouse with a storage capacity of at least one million (1,000,000) bushels but less than ten million (10,000,000) bushels, seven hundred fifty dollars ($750) for the first facility and fifty dollars ($50) for each additional facility.
(4) For a warehouse or buyer-warehouse with a storage capacity greater than ten million (10,000,000) bushels, one thousand dollars ($1,000) for the first facility and fifty dollars ($50) for each additional facility.
(5) For a grain buyer, including a grain buyer that is also licensed as a warehouse under the warehouse act, five hundred dollars ($500) for the first facility and fifty dollars ($50) for each additional facility.
The director may prorate the initial application fee for a license that is issued at least thirty (30) days after the anniversary date of the licensee's business.
(d) Before the anniversary date of the license, the licensee shall pay an annual fee in an amount equal to the amount required under subsection (c). The director may prorate the annual application fee for a license that is modified at least thirty (30) days after the anniversary date of the licensee's license.
(e) A licensee or an applicant for an initial license must have a minimum current asset to current liability ratio of one to one (1:1) or better.
(f) An applicant for an initial license shall submit with the person's application a review level financial statement or better financial statement that reflects the applicant's financial situation on a date not more than fifteen (15) months before the date on which the application is submitted. A financial statement submitted under this section must:
(1) be prepared by an independent accountant certified under IC 25-2.1;
(2) comply with generally accepted accounting principles; and
(3) contain:
(A) an income statement;
(B) a balance sheet;
(C) a statement of cash flow;
(D) a statement of retained earnings;
(E) the preparer's notes; and
(F) other information the agency may require.
The director may adopt rules under IC 4-22-2 to allow the agency to accept other substantial supporting documents instead of those listed to determine the financial solvency of the applicant if the director determines that providing the listed documents creates a financial or other hardship on the applicant or licensee.
(g) An application for a license implies a consent to be inspected.
(b) If it is determined that a shortage may exist, the director or the director's designated representative shall hold a hearing as soon as possible to confirm the existence of a shortage as indicated by the licensee's books and records and the grain on hand. Only the licensee,
the surety company named on the licensee's bond, the issuer of the
irrevocable letter of credit, and any grain depositor who has made a
claim or complaint to the agency in conjunction with the shortage shall
be considered as interested parties for the purposes of that hearing, and
each shall be given notice of the hearing. At the hearing, the director
or the director's designated representative shall determine whether
there appears to be a reasonable probability that a shortage exists. If it
is determined that a reasonable probability exists and that the bond or
letter of credit proceeds or the cash deposit should be distributed, a
preliminary determination shall be entered to the effect that the
licensee has failed to meet its obligations under this chapter or the rules
adopted under this chapter. At the hearing, the director or the director's
designated representative may order that all proceeds from grain sales
are to be held in the form in which they are received and to be kept
separate from all other funds held by the licensee. The order may also
provide for informal conferences between agency representatives and
persons who have or who appear to have grain deposited with the
licensee. The surety company shall be permitted to participate in those
conferences.
(c) In the event that the director determines that the bond or letter
of credit proceeds or cash deposit is to be distributed, the agency shall
hold a hearing on claims. Notice shall be given to the surety company
named on the licensee's bond, the issuer of the irrevocable letter of
credit, and to all persons shown by the licensee's books and records to
have interests in grain deposited with the licensee. If the agency has
actual knowledge of any other depositor or person claiming rights in
the grain deposited with the licensee, the bond, the irrevocable letter of
credit, or the cash deposit, notice shall also be provided to that person.
In addition, public notice shall be provided in newspapers of general
circulation that serve the counties in which licensed facilities are
located, and notices shall be posted on the licensed premises. At the
hearing on claims, the director may accept as evidence of claims the
report of agency representatives who in informal conferences with
depositors have concluded that a claim is directly and precisely
supported by the licensee's books and records. When there is
disagreement between the claims of a depositor and the licensee's
books and records, the director or the director's designated
representative shall hear oral claims and receive written evidence of
claims in order to determine the validity of the claim.
(d) Any depositor who does not present a claim at the hearing
may bring the claim to the agency within fifteen (15) days after the
conclusion of the hearing.
how the agency may distribute the interest that may accrue from funds
held by the agency for the payment of claims.
(j) (k) A claim of a licensee for stored grain may not be honored
until the proven claims of all other claimants arising from the purchase,
storage, and handling of the grain have been paid in full.
(1) A lender or other claimant that has a receipt for grain owned or stored by the licensee.
(2) A claimant that has a ticket or written evidence, other than a receipt, of a storage obligation of the licensee.
(3) A claimant that surrendered a receipt as part of a grain sales transaction if:
(A) the claimant was not fully paid for the grain sold; and
(B) the licensee failed less than twenty-one (21) days after the surrender of the receipt.
(4) A claimant that has other written evidence of a sale to the licensee of grain for which the claimant has not been fully paid.
(b) A lien under this section attaches and is effective at the earliest of the following:
(1) the delivery of the grain for sale, storage, or under a bailment;
(2) the commencement of the storage obligation; or
(3) the advancement of funds by a lender.
(c) A lien under this section terminates when the licensee discharges the claim.
(d) If a licensee
(e) Except as provided in subsection (g), if a licensee
(f) The priority of a lien that attaches under this section is not determined by the date on which the claim arose. If a licensee
(1) First priority is assigned to the following:
(A) A lender or other claimant that has a receipt for grain owned or stored by the licensee.
(B) A claimant that has a ticket or written evidence, other than a receipt, of a storage obligation of the licensee.
(C) A claimant that surrendered a receipt as part of a grain sales transaction if:
(i) the claimant was not fully paid for the grain sold; and
(ii) the licensee failed less than twenty-one (21) days after the surrender of the receipt.
If there are insufficient grain assets to satisfy all first priority claims, first priority claimants shall share pro rata in the assets.
(2) Second priority is assigned to all claimants who have written evidence of the sale of grain, such as a ticket, a deferred pricing agreement, or similar grain delivery contract, and who completed delivery less than thirty (30) days before the licensee's failure. Claimants under this subdivision share pro rata in the remaining assets if all claimants under subdivision (1) have been paid but insufficient assets remain to fully satisfy all claimants under this subdivision.
(3) Third priority is assigned to all other claimants that have written evidence of the sale of grain to the failed licensee. Claimants under this subdivision share pro rata in the distribution of the remaining grain assets.
(g) If a claimant under this section brings an action to recover grain assets that are subject to a lien under this section and the agency does not join the action, the director shall, upon request of the claimant, assign the lien to the claimant in order to allow the claimant to pursue the claim to the extent that the action does not delay the resolution of the matter by the agency, the prompt liquidation of the assets, or the ultimate distribution of assets to all claimants.
(h) If:
(1) a claimant engaged in farming operations granted to one (1) or more secured parties one (1) or more security interests in the grain related to the claimant's claim under this section; and
(2) one (1) or more secured parties described in subdivision (1) have given to:
(A) the licensee prior written notice of the security interest under IC 26-1-9.1-320(a)(1) or IC 26-1-9-307(1)(a) before its repeal; and
(B) the director prior written notice of the security interest with respect to the grain described in subdivision (1) sufficient
to give the director a reasonable opportunity to cause the
issuance of a joint check under this subsection;
the director shall pay the claimant described in subdivision (1) the
portion of the proceeds of grain assets under subsection (e) to which
the claimant is entitled under this section by issuance of a check
payable jointly to the order of the claimant and any secured party
described in subdivision (1) who has given the notices described in
subdivision (2). If only one (1) secured party described in subdivision
(1) is a payee, the rights of the secured party in the check shall be to the
extent of the indebtedness of the claimant to the secured party. If two
(2) or more secured parties described in subdivision (1) are payees, the
nature, extent, and priority of their respective rights in the check are
determined in the same manner as the nature, extent, and priority of
their respective security interest under IC 26-1-9.1.
(1) is a participant in the grain indemnity program;
(2) possesses a claim resulting from a failure of a licensed
grain buyer or warehouse; and
(3) has a claim that has been adjudicated by the agency under
IC 26-3-7-16.5.
(1) An inability
(2) A public declaration of a licensee's insolvency.
(3)
(4) Revocation of suspension of a licensee's license, if the licensee has outstanding indebtedness owed to claimants.
(5) Voluntary surrender of a licensee's license, if the licensee has outstanding indebtedness to claimants.
(6) Involuntary or voluntary bankruptcy of a licensee.
warehouseman warehouse operator not fully satisfying the
warehouseman's warehouse operator's storage obligation to the
depositor, net of any outstanding charges against the grain.
means any building or other protected enclosure in one (1) general location that is licensed or required to be licensed under IC 26-3-7 in which grain is or may be:
(1) stored for hire;
(2) used for grain bank storage; or
(3) used to store company owned grain;
and the building or other protected enclosure is operated under one (1) ownership and run from a single office.
(1) in which grain is or may be stored for hire; or
(2) that is used for grain bank storage;
and that is operated under one (1) ownership and run from a single office that holds a valid license under IC 26-3-7 or the United States Warehouse Act.
The fund shall be administered by the board of the corporation.
(b) The fund shall operate on a fiscal year of July 1 to June 30.
(b) Except as provided in section 8(c) of this chapter, the board may not require the collection of a producer premium during a fiscal year when the board certifies under subsection (a) that the fund has money in excess of ten million dollars ($10,000,000). If the fund is at or below ten million dollars ($10,000,000), the board shall reinstate the collection.
(1) is not available for any purpose other than the payment of
(2) may not be transferred to any other fund.
(b) The limiting and nontransferability provision of subsection (a) is declared to be nonseverable from the whole of this article. If subsection (a) is held to be invalid, repealed, or substantially amended, this article shall immediately become invalid and the money remaining in the fund shall be distributed to participants in the fund in a manner that is proportional to the amount of producer premiums each producer paid to the fund.
(b) The time for payment may be extended if the board and claimant mutually agree and put the terms of the payment in writing.
(c) If:
(1) a claimant engaged in farming operations granted to one (1) or more secured parties one (1) or more security interests in the grain related to the claimant's claim under this section; and
(2) one (1) or more secured parties described in subdivision (1) have given to:
(A) the licensee prior written notice of the security interest under IC 26-1-9.1-320(a)(1) or IC 26-1-9-307(1)(a) before its repeal; and
(B) the board prior written notice of the security interest with respect to the grain described in subdivision (1) sufficient to give the board a reasonable opportunity to cause the issuance of a joint check under this subsection;
the board may compensate the claimant described in subdivision (1) in the amount to which the claimant is entitled under section 4 of this chapter by causing the issuance of a check payable jointly to the order of the claimant and any secured party described in subdivision (1) who has given the notices described in subdivision (2). If only one (1) secured party described in subdivision (1) is a payee, the rights of the secured party in the check shall be to the extent of the indebtedness of the claimant to the secured party. If two (2) or more secured parties described in subdivision (1) are payees, the nature, extent, and priority of their respective rights in the check are determined in the same manner as the nature, extent, and priority of their respective security interest under IC 26-1-9.1.
(b) A claimant who has incurred a financial loss due to the failure
of a grain buyer is entitled to be compensated by the board from the
fund for eighty percent (80%) of the loss incurred less all credits and
offsets and any producer premium that should have been due on
the sale of the grain. The agency shall determine the loss incurred in
the following manner:
(1) For grain that has been priced, the loss shall be the value of
the priced grain less any outstanding charges against the grain.
(2) For grain sold to a grain buyer who is also a warehouseman
warehouse operator and that has not been priced, the loss shall
be established using the price determined for the storage
obligations.
(3) For grain sold to a grain buyer who is not a warehouseman
warehouse operator and that has not been priced, the loss shall
be established using a price determined by the agency using the
same procedures used by the agency to determine the price at the
warehouse.
(1) Determine the valid claims and the amount of such claims to be paid to claimants for financial losses that were incurred due to the failure of a grain buyer or
(2) Authorize payment of money from the fund when necessary for the purpose of compensating claimants in accordance with the provisions of this chapter.
(3) Collect money through subrogated claims against bonds filed under IC 26-3-7 in the place of claimants who collected for a loss incurred due to a warehouse or grain buyer failure.
(4) Borrow money as authorized under IC 26-4-3-9 if the fund has insufficient money to cover
(5) Deposit into the fund any remaining grain assets of a failed
grain buyer or warehouseman warehouse operator for the
purpose of repayment to the fund the money used to pay
claimants, subject to any priority lien right a holder of a mortgage,
security interest, or other encumbrance may possess under any
other applicable law. Any repayment into the fund may not
exceed the principal amount paid to claimants plus interest at the
rate paid on ninety (90) day United States Treasury bills.
(6) If the amount in the fund is insufficient to pay all valid
approved claims in accordance with this chapter and the board is
unable to borrow funds for whatever reason, grant priority of
payment of authorize payment of all the approved claims in the
order the claims were approved as valid by the board. on a pro
rata basis.
(b) A rule adopted under this SECTION must take effect on July 1, 2011.
(c) This SECTION expires July 2, 2011.
; (10)HE1230.1.35. --> SECTION 35. THE FOLLOWING ARE REPEALED [EFFECTIVE UPON PASSAGE]: IC 26-4-1-22; IC 26-4-2-1; IC 26-4-2-2; IC 26-4-2-3; IC 26-4-2-4; IC 26-4-2-5; IC 26-4-5-3; IC 26-4-6-5.
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