House File 2596 S-5159 Amend House File 2596, as amended, passed, and reprinted by 1 the House, as follows: 2 1. By striking page 1, line 3, through page 2, line 32, and 3 inserting: 4 < Section 1. Section 203.3, subsection 4, paragraph b, Code 5 2026, is amended by striking the paragraph and inserting in 6 lieu thereof the following: 7 b. The grain dealer shall submit, as required by the 8 department, a financial statement that is accompanied by 9 an unqualified opinion based upon an audit performed by a 10 certified public accountant licensed in this state. However, 11 the department may accept a qualification in an opinion that 12 is unavoidable by any audit procedure that is permitted under 13 generally accepted accounting principles. An opinion that 14 is qualified because of a limited audit procedure or because 15 the scope of an audit is limited shall not be accepted by 16 the department. The department shall not require that a 17 grain dealer submit more than one such unqualified opinion 18 per year. The grain dealer, except as provided in section 19 203.15 , may elect to submit a financial statement that is 20 accompanied by the report of a certified public accountant 21 licensed in this state that is based upon a review performed 22 by the certified public accountant in lieu of the audited 23 financial statement specified in this paragraph. However, at 24 any time the department may require a financial statement that 25 is accompanied by the report of a certified public accountant 26 licensed in this state that is based upon a review performed 27 by a certified public accountant if the department has good 28 cause. A grain dealer shall submit financial statements to 29 the department in addition to those required in this paragraph 30 if the department determines that it is necessary to verify 31 the grain dealer’s financial status or compliance with this 32 subsection . 33 Sec. ___. Section 203.3, subsection 5, paragraph b, Code 34 2026, is amended by striking the paragraph and inserting in 35 -1- HF 2596.3769 (1) 91 da/js 1/ 6 #1.

lieu thereof the following: 1 b. The grain dealer shall submit, as required by the 2 department, a financial statement that is accompanied by 3 an unqualified opinion based upon an audit performed by a 4 certified public accountant licensed in this state. However, 5 the department may accept a qualification in an opinion that 6 is unavoidable by any audit procedure that is permitted under 7 generally accepted accounting principles. An opinion that 8 is qualified because of a limited audit procedure or because 9 the scope of an audit is limited shall not be accepted by the 10 department. The department shall not require that a grain 11 dealer submit more than one such unqualified opinion per year. 12 The grain dealer may elect, however, to submit a financial 13 statement that is accompanied by the report of a certified 14 public accountant licensed in this state that is based upon 15 a review performed by the certified public accountant in 16 lieu of the audited financial statement specified in this 17 paragraph. However, at any time the department may require 18 a financial statement that is accompanied by the report of a 19 certified public accountant licensed in this state that is 20 based upon a review performed by a certified public accountant 21 if the department has good cause. A grain dealer shall submit 22 financial statements to the department in addition to those 23 required in this paragraph if the department determines that it 24 is necessary to verify the grain dealer’s financial status or 25 compliance with this section . > 26 2. Page 4, after line 3 by inserting: 27 < Sec. ___. Section 203.15, subsection 4, Code 2026, is 28 amended by striking the subsection and inserting in lieu 29 thereof the following: 30 4. a. A grain dealer shall not purchase grain on 31 credit-sale contract during any time period in which the grain 32 dealer fails to maintain fifty cents of net worth for each 33 outstanding bushel of grain purchased under credit. The grain 34 dealer may maintain a deficiency bond or an irrevocable letter 35 -2- HF 2596.3769 (1) 91 da/js 2/ 6 #2.

of credit in the amount of two thousand dollars for each one 1 thousand dollars or fraction thereof of deficiency in net 2 worth. 3 b. A grain dealer who is also a warehouse operator licensed 4 by the department under chapter 203C or the United States 5 department of agriculture under the United States Warehouse 6 Act, and who does not have a sufficient quantity or quality 7 of grain to satisfy the warehouse operator’s obligations 8 based on an examination by the department or the United 9 States department of agriculture shall not purchase grain on 10 credit-sale contract to correct the shortage of grain. 11 c. (1) A grain dealer must meet at least either of the 12 following conditions: 13 (a) The grain dealer’s last financial statement required 14 to be submitted to the department pursuant to section 203.3 15 is accompanied by an unqualified opinion based upon an audit 16 performed by a certified public accountant licensed in this 17 state. 18 (b) The grain dealer files a bond with the department in 19 the amount of one hundred thousand dollars payable to the 20 department. 21 (2) (a) The bond filed with the department under this 22 paragraph shall be used to indemnify sellers for losses 23 resulting from a breach of a credit-sale contract as provided 24 by rules adopted by the department. The rules shall include 25 but are not limited to procedures and criteria for providing 26 notice, filing claims, valuing losses, and paying claims. The 27 bond provided in this paragraph shall be in addition to any 28 other bond required in this chapter . 29 (b) The bond shall not be canceled by the issuer on less 30 than ninety days’ notice by certified mail to the department 31 and the principal. However, if an adequate replacement bond 32 is filed with the department, the department may authorize 33 the cancellation of the original bond before the end of the 34 ninety-day period. 35 -3- HF 2596.3769 (1) 91 da/js 3/ 6

(c) If an adequate replacement bond is not received by the 1 department within sixty days of the issuance of the notice of 2 cancellation, the department shall suspend the grain dealer’s 3 license. The department shall cause an inspection of the 4 licensed grain dealer immediately at the end of the sixty-day 5 period. If a replacement bond is not filed within another 6 thirty days following the suspension, the department shall 7 revoke the grain dealer’s license. 8 (3) When a license is revoked, the department shall provide 9 notice of the revocation by ordinary mail to the last known 10 address of each holder of an outstanding credit-sale contract 11 and all known sellers. > 12 3. By striking page 4, line 6, through page 5, line 34, and 13 inserting: 14 < Sec. ___. Section 203C.6, subsection 4, paragraph b, Code 15 2026, is amended by striking the paragraph and inserting in 16 lieu thereof the following: 17 b. The warehouse operator shall submit, as required by 18 the department, a financial statement that is accompanied by 19 an unqualified opinion based upon an audit performed by a 20 certified public accountant licensed in this state. However, 21 the department may accept a qualification in an opinion that 22 is unavoidable by any audit procedure that is permitted under 23 generally accepted accounting principles. An opinion that 24 is qualified because of a limited audit procedure or because 25 the scope of an audit is limited shall not be accepted by the 26 department. The department shall not require that a warehouse 27 operator submit more than one such unqualified opinion per 28 year. The warehouse operator may elect, however, to submit 29 a financial statement that is accompanied by the report of 30 a certified public accountant licensed in this state that 31 is based upon a review performed by the certified public 32 accountant in lieu of the audited financial statement specified 33 in this paragraph. However, at any time the department may 34 require a financial statement that is accompanied by the report 35 -4- HF 2596.3769 (1) 91 da/js 4/ 6 #3.

of a certified public accountant licensed in this state that is 1 based upon a review performed by a certified public accountant 2 if the department has good cause. A warehouse operator shall 3 submit financial statements to the department in addition to 4 those required in this paragraph if the department determines 5 that it is necessary to verify the warehouse operator’s 6 financial status or compliance with this subsection . 7 Sec. ___. Section 203C.6, subsection 5, paragraph b, Code 8 2026, is amended by striking the paragraph and inserting in 9 lieu thereof the following: 10 b. The warehouse operator shall submit, as required by 11 the department, a financial statement that is accompanied by 12 an unqualified opinion based upon an audit performed by a 13 certified public accountant licensed in this state. However, 14 the department may accept a qualification in an opinion that 15 is unavoidable by any audit procedure that is permitted under 16 generally accepted accounting principles. An opinion that 17 is qualified because of a limited audit procedure or because 18 the scope of an audit is limited shall not be accepted by the 19 department. The department shall not require that a warehouse 20 operator submit more than one such unqualified opinion per 21 year. The warehouse operator may elect, however, to submit 22 a financial statement that is accompanied by the report of 23 a certified public accountant licensed in this state that 24 is based upon a review performed by the certified public 25 accountant in lieu of the audited financial statement specified 26 in this paragraph. However, at any time the department may 27 require a financial statement that is accompanied by the report 28 of a certified public accountant licensed in this state that is 29 based upon a review performed by a certified public accountant 30 if the department has good cause. A warehouse operator shall 31 submit financial statements to the department in addition to 32 those required in this paragraph if the department determines 33 that it is necessary to verify the warehouse operator’s 34 financial status or compliance with this subsection . > 35 -5- HF 2596.3769 (1) 91 da/js 5/ 6