SSB 3151 (LSB 6018XC (3) 88)

SENATE FILE _____ 

BY  (PROPOSED COMMITTEE ON AGRICULTURE BILL BY CHAIRPERSON ZUMBACH)

A BILL FOR

An Act relating to the regulation of grain marketing and storage, by providing for deferred payment contracts.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 203.1, subsection 3, Code 2020, is amended to read as follows:
   3.  “Credit-sale contract” means a contract for the sale of grain pursuant to which the sale price is not fixed at the time of sale and the sales price is to be paid more than thirty days after the delivery of the grain to the buyer, or a contract which is titled as a credit-sale contract, including but not limited to those contracts commonly referred to as deferred-payment contracts, deferred-pricing contracts, and price-later contracts.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill amends the definition of a credit-sale contract which involves an instrument used in commercial transactions involving the marketing of grain. The department of agriculture and land stewardship regulates both grain dealers (Code chapter 203) and warehouse operators (Code chapter 203C) as well as administers the grain depositors and sellers indemnity fund (fund) (Code chapter 203D). 
   Under a credit-sale contract, grain is delivered to a buyer (licensed grain dealer) who receives title but does not pay the sales price to the seller for 30 or more days from the date of delivery (e.g., for storage in a licensed warehouse). A transaction may involve a deferred-payment contract in which the contract price is fixed at the time of sale and a deferred-pricing contract or price-later contract in which the sale price is not fixed at the time of sale (e.g., determined on the basis of a future market price). The bill provides that a deferred-payment contract is no longer considered a credit-sale contract. A licensed grain dealer purchasing grain under a deferred-payment contract would not be subject to special regulation otherwise applicable to credit-sale contracts under Code section 203.15. A seller would also be entitled to coverage under the fund for 90 percent of losses incurred by the grain dealer’s failure to meet a payment obligation for the grain. A grain dealer could also be subject to a per bushel fee assessed on the purchased grain which is deposited into the fund depending upon whether the fee was being assessed.