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Senate Study Bill 2067

Bill Text

PAG LIN
  1  1    Section 1.  Section 203.15, Code 1997, is amended by adding
  1  2 the following new subsection:
  1  3    NEW SUBSECTION.  7A.  A grain dealer who purchases grain by
  1  4 credit-sale contract shall meet at least one of the following
  1  5 conditions:
  1  6    a.  The grain dealer's last financial statement required to
  1  7 be submitted to the department pursuant to section 203.3 is
  1  8 accompanied by an unqualified opinion based upon an audit
  1  9 performed by a certified public accountant licensed in this
  1 10 state.
  1 11    b.  The licensed grain dealer does all of the following:
  1 12    (1)  At all times maintains grain, rights in grain,
  1 13 proceeds from the sale of grain, or a combination thereof
  1 14 totaling at least ninety percent of the dealer's obligation
  1 15 for grain purchased by credit-sale contract, as required
  1 16 pursuant to rules adopted by the department.
  1 17    (2)  Files a bond with the department in the amount of one
  1 18 hundred thousand dollars payable to the department.  The bond
  1 19 shall be for deposit in the grain depositors and sellers
  1 20 indemnity fund created pursuant to section 203D.3.  The bond
  1 21 shall not be canceled by the issuer on less than ninety days'
  1 22 notice by certified mail to the department and the principal.
  1 23 When the department receives notice from an issuer that it has
  1 24 canceled the bond, the department shall automatically suspend
  1 25 the grain dealer's license if a replacement bond is not
  1 26 received by the department within sixty days of the issuance
  1 27 of the notice of cancellation.  The department shall cause an
  1 28 inspection of the licensed grain dealer immediately at the end
  1 29 of the sixty-day period.  If a replacement bond is not filed
  1 30 within another thirty days following the suspension, the grain
  1 31 dealer's license shall be automatically revoked.  When a
  1 32 license is revoked, the department shall provide notice of the
  1 33 revocation by ordinary mail to the last known address of each
  1 34 holder of an outstanding credit-sale contract and all known
  1 35 sellers.
  2  1    Sec. 2.  Section 203.15, subsection 9, Code 1997, is
  2  2 amended by striking the subsection.
  2  3    Sec. 3.  Section 203D.3, subsection 2, paragraph c, Code
  2  4 1997, is amended by striking the paragraph.
  2  5    Sec. 4.  Section 203D.5, Code 1997, is amended to read as
  2  6 follows:
  2  7    203D.5  ADJUSTMENTS TO FEE.
  2  8    1.  The board shall review annually the debits of and
  2  9 credits to the grain depositors and sellers indemnity fund
  2 10 created in section 203D.3 and shall make any adjustments in
  2 11 the per-bushel fee required under section 203D.3, subsection
  2 12 2, and the dealer-warehouse fee required under section 203D.3,
  2 13 subsection 3, that are necessary to maintain the fund within
  2 14 the limits established under this section.  Not later than the
  2 15 first day of May of each year, the board shall determine the
  2 16 proposed amount of the per-bushel fee based on the expected
  2 17 volume of grain on which the fee is to be collected and that
  2 18 is likely to be handled under this chapter, and shall also
  2 19 determine any adjustment to the dealer-warehouse fee.  The
  2 20 board may establish a different per-bushel fee for grain
  2 21 purchased by credit-sale contract.  The board shall make any
  2 22 changes in the previous year's fees in accordance with chapter
  2 23 17A.  Changes in the fees shall become effective on the
  2 24 following first day of July.  The per-bushel fee shall not
  2 25 exceed one-quarter cent per bushel on all purchased grain as
  2 26 defined in section 203D.3, other than grain purchased by
  2 27 credit-sale contract.  The per-bushel fee for grain purchased
  2 28 by credit-sale contract shall not exceed one-half cent per
  2 29 bushel on all purchased grain.  Until the per-bushel fee is
  2 30 adjusted or waived as provided in this section, the per-bushel
  2 31 fee is one-quarter cent on all purchased grain.
  2 32    2.  If, at the end of any three-month period, the assets of
  2 33 the fund exceed six million dollars, less any encumbered
  2 34 balances or pending or unsettled claims, the per-bushel fee
  2 35 required under section 203D.3, subsection 2, and the dealer-
  3  1 warehouse fee required under section 203D.3, subsection 3,
  3  2 shall be waived and the fees are not assessable or owing.  The
  3  3 board shall reinstate the fees if the assets of the fund, less
  3  4 any unencumbered balances or pending or unsettled claims, are
  3  5 three million dollars or less.  However, the board is not
  3  6 required to waive the per-bushel fee required to be paid for
  3  7 purchases of grain by credit-sale contract.
  3  8    Sec. 5.  Section 203D.6, subsection 3, paragraph d, Code
  3  9 1997, is amended to read as follows:
  3 10    d.  That the claim derives from a covered transaction.  For
  3 11 purposes of this paragraph, a claim derives from a covered
  3 12 transaction if the claimant is a seller who transferred title
  3 13 to the grain to the grain dealer other than by credit sale
  3 14 contract within six months of the incurrence date, or if the
  3 15 claimant is a depositor who delivered the grain to the
  3 16 warehouse operator.  
  3 17                           EXPLANATION
  3 18    This bill amends provisions relating to credit-sale
  3 19 contracts executed by licensed grain dealers and farmers.
  3 20 Specifically, it allows farmers to be reimbursed for losses
  3 21 arising from the default of the grain dealer.  A credit-sale
  3 22 contract is an agreement for the sale of grain in which the
  3 23 sale price is to be paid more than 30 days after the delivery
  3 24 of the grain to the buyer.  Code chapter 203D establishes the
  3 25 grain depositors and sellers indemnity fund.  The purpose of
  3 26 the fund is to reimburse persons who have suffered financial
  3 27 loss because they have not been paid for grain sold to a
  3 28 state-licensed grain dealer or deposited in a state-licensed
  3 29 warehouse.  The chapter provides that persons selling grain
  3 30 according to credit-sale contract are not assessed a per-
  3 31 bushel indemnity fee of one-quarter cent for deposit into the
  3 32 fund and are not covered for losses sustained by the failure
  3 33 of a grain dealer to make payment under the contract.  This
  3 34 bill provides that farmers executing such contracts are
  3 35 covered under the fund and must pay a fee which may be double
  4  1 the per-bushel fee otherwise required.  This fee may be
  4  2 assessable even if the ordinary fee is not assessable because
  4  3 the assets in the fund have reached a certain level.
  4  4    The bill also places more requirements on grain dealers who
  4  5 execute credit-sale contracts.  Currently, if a grain dealer's
  4  6 last financial statement required to be submitted to the
  4  7 department is not accompanied by an unqualified opinion based
  4  8 upon an audit performed by a certified public accountant
  4  9 licensed in this state, the grain dealer must post a bond with
  4 10 the department for $100,000.  This bill provides that in
  4 11 addition to that bond, the grain dealer must maintain grain,
  4 12 rights in grain, or proceeds from the sale of grain totaling
  4 13 at least 90 percent of the dealer's obligation for grain
  4 14 purchased by credit-sale contract, as required pursuant to
  4 15 rules adopted by the department.  
  4 16 LSB 3637SC 77
  4 17 da/jw/5.1
     

Text: SSB02066                          Text: SSB02068
Text: SSB02000 - SSB02099               Text: SSB Index
Bills and Amendments: General Index     Bill History: General Index

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