Senate File 267 - Introduced
SENATE FILE
BY PUTNEY
Passed Senate, Date Passed House, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act providing financial requirements for persons executing
2 contracts for the production of agricultural seed, making a
3 penalty applicable, and providing an effective date.
4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
5 TLSB 2666SS 81
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PAG LIN
1 1 Section 1. Section 199.16, Code 2005, is amended to read
1 2 as follows:
1 3 199.16 PERMIT HOLDER'S BOND HOLDER == REQUIREMENTS.
1 4 1. It is unlawful for the A permit holder to enter into
1 5 shall not execute a contract with a grower who purchases
1 6 agricultural seed in which the permit holder agrees to
1 7 repurchase the seed crop produced from the purchased seed at a
1 8 price in excess of the current market price, unless the permit
1 9 holder has on file with the department a bond, in a penal sum
1 10 of twenty=five fifty thousand dollars running to the state of
1 11 Iowa, with sureties approved by the secretary, for the use and
1 12 benefit of a person holding a repurchase contract who might
1 13 may have a cause of action of any nature arising from the
1 14 purchase or contract. However, the aggregate liability of the
1 15 surety to all purchasers of seed holding repurchase contracts
1 16 shall not exceed the sum of the bond.
1 17 2. Prior to executing a contract, a grower may demand that
1 18 the permit holder provide the grower with a financial
1 19 statement that is accompanied by an unqualified opinion based
1 20 upon an audit performed by a certified public accountant
1 21 licensed in this state and prepared according to generally
1 22 accepted accounting principles. The financial statement shall
1 23 set forth the assets, liabilities, and net worth of the permit
1 24 holder. The permit holder shall provide the grower with the
1 25 financial statement and unqualified opinion at least five days
1 26 prior to executing the contract. However, this subsection
1 27 does not apply to a permit holder that has shares listed on a
1 28 national securities exchange or regularly traded in a market
1 29 maintained by one or more members of a national or affiliated
1 30 securities association.
1 31 Sec. 2. EFFECTIVE DATE. This Act, being deemed of
1 32 immediate importance, takes effect upon enactment.
1 33 EXPLANATION
1 34 This bill amends provisions in Code chapter 199, which in
1 35 part requires a person who sells or distributes agricultural
2 1 seed to obtain a permit from the department of agriculture and
2 2 land stewardship.
2 3 Current law provides that a permit holder who executes a
2 4 contract with a grower for the repurchase of seed must file a
2 5 bond with the department for $25,000 for purposes of providing
2 6 security in a case arising from a cause of action in which the
2 7 grower is a party. The bill increases the bond amount to
2 8 $50,000.
2 9 Secondly, the bill provides that prior to executing a
2 10 contract, the grower may demand that the permit holder provide
2 11 a financial statement that is accompanied by an unqualified
2 12 opinion based upon an audit performed by a certified public
2 13 accountant which sets forth the assets, liabilities, and net
2 14 worth of the permit holder. The permit holder must provide
2 15 the information at least five days prior to executing the
2 16 contract. Code section 199.13 provides that a person who
2 17 violates a provision of Code chapter 199 is guilty of a simple
2 18 misdemeanor. A simple misdemeanor is punishable by
2 19 confinement for no more than 30 days or a fine of at least $50
2 20 but not more than $500 or by both. The financial reporting
2 21 requirement does not apply to a grower that is a business with
2 22 publicly traded securities.
2 23 The bill takes effect upon enactment.
2 24 LSB 2666SS 81
2 25 da:rj/gg/14