House File 999 - Introduced HOUSE FILE 999 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO HF 508) (SUCCESSOR TO HSB 131) A BILL FOR An Act providing for the marketing of grain by licensed 1 warehouse operators and grain dealers, including by 2 providing for indemnity fees and the indemnification 3 of grain depositors and sellers for losses following 4 the cessation of a license or bankruptcy, and including 5 effective date provisions. 6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 7 TLSB 2306HZ (4) 91 da/ns

H.F. 999 Section 1. Section 203.1, subsection 3, Code 2025, is 1 amended to read as follows: 2 3. “Credit-sale contract” means a contract for the sale of 3 grain pursuant to which the sale price is to be paid more than 4 thirty days after the delivery of the grain to the buyer, or a 5 contract which is titled as a credit-sale contract, including 6 but not limited to those contracts commonly referred to as 7 deferred-payment contracts, contract or a deferred-pricing 8 contracts, and price-later contracts contract . 9 Sec. 2. Section 203.1, Code 2025, is amended by adding the 10 following new subsections: 11 NEW SUBSECTION . 4A. “Deferred-payment contract” means a 12 contract pursuant to which the purchase price for grain is 13 agreed to by a seller and licensed grain dealer, if payment 14 will occur more than thirty days from the date of delivery, as 15 defined in section 203.8, subsection 2, paragraph “a” . 16 NEW SUBSECTION . 4B. “Deferred-pricing contract” means a 17 contract by a seller and licensed grain dealer if delivery, 18 as defined in section 203.8, subsection 2, paragraph “a” , has 19 occurred but the purchase price has not been agreed to by the 20 seller and licensed grain dealer. 21 Sec. 3. Section 203.3, subsection 4, paragraph b, Code 2025, 22 is amended to read as follows: 23 b. (1) The Except as provided in subparagraph (2), the 24 grain dealer shall submit, as required by the department, a 25 financial statement that is accompanied by an unqualified 26 opinion based upon an audit performed by a certified public 27 accountant licensed in this state. However, the 28 (2) (a) The department may accept a qualification in an 29 opinion that is unavoidable by any audit procedure that is 30 permitted under generally accepted accounting principles. An 31 The department shall not accept an opinion that is qualified 32 because of a limited audit procedure or because the scope of 33 an audit is limited shall not be accepted by the department . 34 The department shall not require that a the grain dealer 35 -1- LSB 2306HZ (4) 91 da/ns 1/ 31

H.F. 999 submit more than one such unqualified opinion per year. The 1 grain dealer , except as provided in section 203.15 , may elect 2 to submit a financial statement that is accompanied by the 3 report of a certified public accountant licensed in this state 4 that is based upon a review performed by the certified public 5 accountant in lieu of the audited financial statement specified 6 in this paragraph. However, at any time the department may 7 require that the grain dealer submit to the department a 8 financial statement that is accompanied by the report of a 9 certified public accountant licensed in this state that is 10 based upon a review performed by a certified public accountant 11 if the department has good cause. A 12 (b) If the grain dealer purchases grain by credit-sale 13 contract, the grain dealer shall comply with the financial 14 statement requirements in section 203.15. 15 (c) The grain dealer shall submit one or more financial 16 statements to the department in addition to those required 17 in this paragraph if the department determines that it is 18 necessary to verify the grain dealer’s financial status or 19 compliance with this subsection . 20 Sec. 4. Section 203.8, subsection 1, Code 2025, is amended 21 to read as follows: 22 1. a. A grain dealer licensed or required to be licensed 23 pursuant to section 203.3 shall pay the purchase price to the 24 seller for grain upon as follows: 25 (1) Upon delivery or later upon demand by the seller , 26 but . If the seller does not make a demand, the grain dealer 27 shall pay the purchase price not later than thirty days after 28 delivery by the seller unless in last date for scheduled 29 payments made by the licensed grain dealer to sellers for 30 delivered grain according to the grain dealer’s standard 31 business operation. 32 (2) In accordance with the terms of a credit-sale 33 contract that satisfies the requirements of this chapter . 34 The department shall adopt rules for payment by check and 35 -2- LSB 2306HZ (4) 91 da/ns 2/ 31

H.F. 999 electronic funds transfer. 1 b. A grain dealer licensed or required to be licensed 2 pursuant to section 203.3 shall not hold a check for the 3 purchase of grain more than five days after the grain dealer 4 issues a check to the seller. After that date, the grain 5 dealer shall deliver the check in person or by mail to the 6 seller’s last known address. The department shall adopt rules 7 pursuant to chapter 17A for a grain dealer’s payment by check 8 and electronic funds transfer. 9 Sec. 5. Section 203.15, subsections 1, 3, 4, and 6, Code 10 2025, are amended to read as follows: 11 1. The grain dealer shall be licensed pursuant to section 12 203.3 . All of the following shall apply to a grain dealer 13 required to be licensed under that section who purchases grain 14 by credit-sale contract: 15 a. The meaning of “credit-sale contract” , including 16 “deferred-payment contract” or “deferred-pricing contract” , as 17 those terms are defined in section 203.1, shall supersede the 18 meaning of those terms in a contract entered into by a seller 19 and a licensed grain dealer. 20 a. b. The grain dealer shall give provide written notice to 21 the department prior to engaging in the purchase of grain by 22 credit-sale contract. The written notice shall must contain 23 all of the following: 24 (1) A statement that the grain dealer is engaging in 25 the purchase of grain by deferred-pricing contract or 26 deferred-payment contract or both. 27 (2) Any other information required by the department. 28 b. c. All The grain dealer shall maintain credit-sale 29 contract forms in the possession of the grain dealer shall . 30 The department may require the credit-sale contract forms to 31 distinguish between the purchase of grain by deferred-pricing 32 contract or deferred-payment contract. The credit-sale 33 contract forms must have been permanently and consecutively 34 numbered at the time of printing of the forms. The grain 35 -3- LSB 2306HZ (4) 91 da/ns 3/ 31

H.F. 999 dealer shall maintain an accurate record of all credit-sale 1 contract forms and numbers obtained by that grain dealer. The 2 record shall must include the disposition of each numbered 3 form, whether by execution, destruction, or otherwise. 4 c. d. The grain dealer who purchases grain by credit-sale 5 contract shall maintain records as required by the department 6 in compliance with this section . The department may require 7 the grain dealer to account separately for deferred-pricing 8 contracts and deferred-payment contracts. 9 3. a. Title to all grain sold If a grain dealer purchases 10 grain by a credit-sale contract , is in the purchasing grain 11 dealer as of the time the contract is executed, unless the 12 contract provides otherwise transferred title to the grain 13 upon the grain’s delivery to the grain dealer. As used in 14 this paragraph, “delivery” means the same as defined in section 15 203.8 . 16 b. The contract must be signed and dated by both parties 17 and executed in duplicate. One copy shall be retained by the 18 grain dealer and one copy shall be delivered to the seller. 19 Upon the cessation of the grain dealer’s license by revocation, 20 cancellation, or expiration as provided in section 203.10 , the 21 payment date for all credit-sale contracts shall be advanced to 22 a date not later than thirty days after the effective date of 23 the cessation, and the purchase price for all unpriced grain 24 shall be determined as of the effective date of the cessation 25 in accordance with all other provisions of the contract. 26 However, if the business of the grain dealer is sold to another 27 licensed grain dealer, credit-sale contracts may be assigned to 28 the purchaser of the business. 29 4. a. A grain dealer shall not purchase grain on by 30 credit-sale contract during any time period in which any of the 31 grain dealer fails to maintain following apply: 32 (1) The grain dealer fails to maintain fifty cents of net 33 worth for each outstanding bushel of grain purchased under 34 credit credit-sale contract . The grain dealer may maintain 35 -4- LSB 2306HZ (4) 91 da/ns 4/ 31

H.F. 999 a deficiency bond or an irrevocable letter of credit in the 1 amount of two thousand dollars for each one thousand dollars or 2 fraction thereof of deficiency in net worth. 3 b. (2) A If the grain dealer who is also a warehouse 4 operator licensed by the department under chapter 203C or the 5 United States department of agriculture under the United States 6 Warehouse Act, and who does not the warehouse operator fails 7 to have a sufficient quantity or quality of grain to satisfy 8 the warehouse operator’s obligations based on an examination by 9 the department or the United States department of agriculture 10 shall not purchase grain on credit-sale contract to correct the 11 shortage of grain . 12 b. If the grain dealer purchases grain by deferred-pricing 13 contract, the grain dealer’s last financial statement required 14 to be submitted to the department pursuant to section 203.3 15 must have been accompanied by an unqualified opinion based upon 16 an audit performed by a certified public accountant licensed in 17 this state. The department shall not accept a qualification 18 in an opinion or a review performed by the certified public 19 accountant in lieu of the audited financial statement. 20 c. (1) A If the grain dealer purchases grain by 21 deferred-payment contract, the grain dealer must meet at least 22 either of the following conditions: 23 (a) (1) The grain dealer’s last financial statement 24 required to be submitted to the department pursuant to section 25 203.3 is must be accompanied by an unqualified opinion based 26 upon an audit performed by a certified public accountant 27 licensed in this state. 28 (b) (2) The grain dealer files must file a bond with 29 the department in the amount of one hundred thousand dollars 30 payable to the department. The bond is subject to all of the 31 following: 32 (2) (a) The bond filed with the department under this 33 paragraph shall must be used to indemnify sellers for losses 34 resulting from a breach of a credit-sale deferred-payment 35 -5- LSB 2306HZ (4) 91 da/ns 5/ 31

H.F. 999 contract as provided by rules adopted by the department. The 1 rules shall must include but are not limited to procedures and 2 criteria for providing notice, filing claims, valuing losses, 3 and paying claims. The bond provided in this paragraph shall 4 be in addition to any other bond required in this chapter . 5 (b) The bond shall not be canceled by the issuer on less 6 than ninety days’ notice by certified mail to the department 7 and the principal. However, if an adequate replacement bond 8 is filed with the department, the department may authorize 9 the cancellation of the original bond before the end of the 10 ninety-day period. 11 (c) If an adequate replacement bond is not received by the 12 department within sixty days of the issuance of the notice of 13 cancellation, the department shall suspend the grain dealer’s 14 license. The department shall cause an inspection of the 15 licensed grain dealer immediately at the end of the sixty-day 16 period. If a replacement bond is not filed within another 17 thirty days following the suspension, the department shall 18 revoke the grain dealer’s license. 19 (3) When a Upon the revocation of the grain dealer’s 20 license is revoked , the department shall provide notice of the 21 revocation by ordinary mail to the last known address of each 22 holder of an outstanding credit-sale contract and all known 23 sellers. 24 6. a. A grain dealer who purchases grain by credit-sale 25 contract shall obtain from the seller a signed acknowledgment 26 stating that the seller has received a written notice that 27 grain purchased by credit-sale contract is not protected by the 28 grain depositors and sellers indemnity fund explaining all of 29 the following: 30 (1) Ordinarily, a person who sells grain to a licensed grain 31 dealer may file a claim with the Iowa grain indemnity fund 32 board for a loss or losses caused by the licensed grain dealer . 33 (2) For a grain transaction, other than by credit-sale 34 contract, the seller may file a claim for indemnification of 35 -6- LSB 2306HZ (4) 91 da/ns 6/ 31

H.F. 999 ninety percent of a loss. 1 (3) (a) For a credit-sale contract classified as a 2 deferred-pricing contract, the seller may file a claim for 3 indemnification of seventy percent of a loss. 4 (b) The indemnification limit is not more than three 5 hundred thousand dollars but may be decreased to two hundred 6 ten thousand dollars depending upon the extent to which the 7 seller’s loss arose form a deferred-pricing contract. 8 (c) For a credit-sale contract classified as a 9 deferred-payment contract, a seller is not eligible to claim a 10 loss for indemnification. 11 b. The form for the acknowledgment shall be prescribed by 12 the department , and the . 13 c. The licensed grain dealer and the seller shall each be 14 provided a copy of the acknowledged form . 15 Sec. 6. Section 203D.1, Code 2025, is amended by adding the 16 following new subsections: 17 NEW SUBSECTION . 2A. “Deferred-payment contract” means the 18 same as defined in section 203.1. 19 NEW SUBSECTION . 2B. “Deferred-pricing contract” means the 20 same as defined in section 203.1. 21 NEW SUBSECTION . 8A. “Indemnity fees” or “fees” means a 22 participation fee and per-bushel fee as provided in sections 23 203D.3 and 203D.3A. 24 NEW SUBSECTION . 14A. “Repayment loss” means the part of a 25 repayment claim filed with the department under section 203D.6A 26 by a seller that includes a dollar value of a loss incurred 27 by the seller for purchased grain that the seller had paid 28 back or is required to pay back to a grain dealer’s bankruptcy 29 estate, pursuant to an order issued, judgment entered, or 30 settlement agreement approved by a bankruptcy court, and which 31 amount has not been subsequently recovered through other legal 32 or equitable remedies including the liquidation of the grain 33 dealer’s assets. 34 Sec. 7. Section 203D.1, subsections 14 and 16, Code 2025, 35 -7- LSB 2306HZ (4) 91 da/ns 7/ 31

H.F. 999 are amended to read as follows: 1 14. a. “Purchased grain” means grain any of the following: 2 (1) Grain entered in the company-owned paid position as 3 evidenced on the grain dealer’s daily position record. 4 (2) Grain purchased under a deferred-pricing contract. 5 b. “Purchased grain” does not include grain that is subject 6 to an exempt transaction based on documentation satisfactory 7 to the department showing that the grain dealer did any of the 8 following: 9 (1) Purchased the grain from the United States government or 10 any of its subdivisions or agencies. 11 (2) Purchased the grain from a person licensed as a grain 12 dealer in any jurisdiction. 13 (3) Purchased the grain under a credit-sale 14 deferred-payment contract. 15 (4) Entered the grain in the company-owned paid position as 16 a cancellation of a collateral warehouse receipt. 17 (5) Entered the grain in the company-owned paid position as 18 an intra-company location transfer. 19 16. a. “Seller” means a person who sells grain which , that 20 the person has produced or caused to be produced , to a licensed 21 grain dealer , but excludes a person who executes a credit-sale 22 contract as a seller as provided in section 203.15 . However, 23 “seller” 24 b. “Seller” does not include any of the following: 25 a. (1) A person licensed as a grain dealer in any 26 jurisdiction who sells grain to a licensed grain dealer. 27 b. (2) A person who sells grain that is not produced in 28 this state unless such grain is delivered to a licensed grain 29 dealer at a location in this state as the first point of sale. 30 (3) A person who sells grain pursuant to a deferred-payment 31 contract. 32 Sec. 8. Section 203D.3, subsections 1 and 4, Code 2025, are 33 amended to read as follows: 34 1. The grain depositors and sellers indemnity fund is 35 -8- LSB 2306HZ (4) 91 da/ns 8/ 31

H.F. 999 created in the state treasury as a separate account. The 1 general fund of the state is not liable for claims presented 2 against the fund under section sections 203D.6 and 203D.6A . 3 4. The moneys collected under this section and deposited 4 in the fund shall be used expended by the board exclusively to 5 indemnify do all of the following: 6 a. Indemnify depositors and sellers who have submitted 7 eligible claims to the department as provided in section 8 sections 203D.6 and to pay the administrative costs of this 9 chapter 203D.6A . 10 b. Pay the department, the board, or the office of attorney 11 general for actual and necessary costs incurred by any of the 12 following: 13 (1) The department for acting as receiver if appointed by a 14 court pursuant to section 203.12B or 203C.3. 15 (2) (a) The office of attorney general for representing 16 the department, the board, or the office in a legal or 17 administrative proceeding involving moneys required to be 18 deposited or expended from the fund. 19 (b) Outside counsel for representing the department, 20 the board, or the office of attorney general in a legal or 21 administrative proceeding involving moneys required to be 22 deposited or expended from the fund. 23 Sec. 9. Section 203D.3A, unnumbered paragraph 1, Code 2025, 24 is amended to read as follows: 25 The department shall collect indemnity fees , including 26 participation fees and per-bushel fees as provided in this 27 section , if established imposed by the board pursuant to 28 section 203D.5 , at rates determined by the board as provided 29 in that section. A person required to pay a fee shall use 30 licensee shall remit indemnity fees and forms and deliver the 31 payment to the department as required by the department. 32 Sec. 10. Section 203D.3A, subsection 1, paragraph a, 33 subparagraph (1), Code 2025, is amended to read as follows: 34 (1) In calculating the amount of the initial participation 35 -9- LSB 2306HZ (4) 91 da/ns 9/ 31

H.F. 999 fee, an applicant for a new license shall be deemed a licensee 1 paying the full annual amount of the participation fee owing on 2 the licensee’s first anniversary date as provided in paragraph 3 “b” . The department must be satisfied that the applicant is 4 calculating the amount due in good faith and using the best 5 information available. 6 (a) For a licensed grain dealer, the anniversary date is 7 the last date to apply for the renewal of the grain dealer’s 8 license before the license expires as provided in section 9 203.5. 10 (b) For a licensed warehouse operator, the anniversary date 11 is the last date to apply for the renewal of the warehouse 12 operator’s license before the license expires as provided in 13 section 203C.37. 14 Sec. 11. Section 203D.3A, subsection 1, paragraph b, Code 15 2025, is amended to read as follows: 16 b. A licensee shall pay remit a participation fee in one 17 installment as part of a license renewal application in the 18 same manner provided in paragraph “a” . However, the licensee 19 may elect to remit the participation fee on four successive 20 installment dates, with each installment date occurring on in 21 the month succeeding the last date of the fund’s assessment 22 quarter as provided in section 203D.3 , on a date determined by 23 rules adopted by the department . The licensee shall pay remit 24 twenty-five percent of the total participation fee assessed on 25 each installment date. However, nothing in this subsection 26 prevents a licensee from paying the participation fee on an 27 accelerated basis. A licensee shall pay the first installment 28 on the last date of the fund’s assessment quarter immediately 29 following the licensee’s anniversary date. 30 (1) For a licensed grain dealer, the anniversary date is 31 the last date to apply for the renewal of the grain dealer’s 32 license before the license expires as provided in section 33 203.5 . 34 (2) For a licensed warehouse operator, the anniversary date 35 -10- LSB 2306HZ (4) 91 da/ns 10/ 31

H.F. 999 is the last date to apply for the renewal of the warehouse 1 operator’s license before the license expires as provided in 2 section 203C.37 . 3 Sec. 12. Section 203D.3A, subsection 2, Code 2025, is 4 amended to read as follows: 5 2. a. A licensed grain dealer shall remit a per-bushel fee 6 shall be assessed on all purchased grain. 7 b. The licensed grain dealer shall forward remit the 8 per-bushel fee to the department on a quarterly basis in the 9 manner and using the forms a form prescribed by the department. 10 The licensed grain dealer shall remit the per-bushel fee 11 and form on four successive installment dates, with each 12 installment date occurring in the month succeeding the last 13 assessment quarter as provided in section 203D.3, on December 14 15, March 15, June 15, and September 15. 15 c. A licensee licensed grain dealer is delinquent if the 16 licensee grain dealer fails to submit remit the full quarterly 17 per-bushel fee or quarterly forms and form when due or if, 18 upon examination, an underpayment of the fee is found by the 19 department. The licensed grain dealer is subject to a penalty 20 of ten dollars for each day the licensed grain dealer is 21 delinquent or an amount equal to the amount of the deficiency, 22 whichever is less. However, a licensee licensed grain dealer 23 who fails to submit remit the full quarterly per-bushel fee or 24 quarterly forms form when due , is subject to a minimum payment 25 of ten dollars. The department may establish and apply a 26 margin of error in determining whether a licensed grain dealer 27 is delinquent. The per-bushel fee shall be collected only once 28 on each bushel of grain. 29 c. d. The per-bushel fee shall not be collected more 30 than once on each bushel of grain. A licensed grain dealer 31 may choose to pass on the cost of a per-bushel fee to the 32 sellers by an itemized discount noted on the settlement sheet. 33 However, if the per-bushel fee is not in effect, no a licensed 34 grain dealer shall not make such a discount on the purchase of 35 -11- LSB 2306HZ (4) 91 da/ns 11/ 31

H.F. 999 grain. A discount made nominally for the per-bushel fee while 1 the per-bushel fee is not in effect is grounds for a license 2 suspension or revocation under chapter 203 . 3 Sec. 13. Section 203D.5, subsection 1, unnumbered paragraph 4 1, Code 2025, is amended to read as follows: 5 The board shall annually review the debits of and credits 6 to the grain depositors and sellers indemnity fund created 7 in section 203D.3 and shall determine whether to impose the 8 participation fee and per-bushel fee indemnity fees as provided 9 in section 203D.3A , make adjustments to the indemnity fees 10 effective on the previous September 1, or waive the indemnity 11 fees as necessary to comply with this section . The board shall 12 make the determination not later than May 1 of each year. The 13 board shall impose the indemnity fees or adjust the indemnity 14 fees effective on the previous September 1 in accordance with 15 chapter 17A . The imposition or adjustment of the indemnity 16 fees shall become effective as follows: 17 Sec. 14. Section 203D.5, subsections 4 and 5, Code 2025, are 18 amended to read as follows: 19 4. If on the last date of the fund’s assessment year as 20 provided in section 203D.3 the assets of the fund exceed eight 21 sixteen million dollars, less any encumbered balances or 22 pending or unsettled claims, all of the following apply: 23 a. The participation fee as provided in section 203D.3A 24 shall be waived and shall not be assessable or owing for the 25 following assessment year of the fund. However, the licensee 26 shall continue to pay remit any owing participation fee that 27 was in effect on the prior September 1. 28 b. The per-bushel fee as provided in section 203D.3A 29 shall be waived and shall not be assessable or owing for the 30 following assessment year . The waiver shall also apply to 31 purchased grain that is unpriced on the last date of the fund’s 32 assessment year. However, the licensed grain dealer shall 33 remit any per-bushel fee that is owing on that date. 34 5. The board shall reinstate the indemnity fees as 35 -12- LSB 2306HZ (4) 91 da/ns 12/ 31

H.F. 999 provided in this section if the assets of the fund, less any 1 unencumbered balances or pending or unsettled claims, are three 2 eight million dollars or less. 3 Sec. 15. Section 203D.6, subsection 1, Code 2025, is amended 4 to read as follows: 5 1. a. Persons who may file claims. A depositor or seller 6 may file a claim with the department for the indemnification 7 of a loss dollar value losses from the grain depositors and 8 sellers indemnity fund. A claim shall be filed by a depositer 9 or seller in the manner prescribed by rules adopted by the 10 board department . 11 b. The department may identify each claim and associated 12 claimant by a unique number which may be a federal tax 13 identification number. 14 Sec. 16. Section 203D.6, subsection 4, paragraph d, Code 15 2025, is amended to read as follows: 16 d. (1) That the claim derives from a covered transaction. 17 For purposes of this paragraph, a claim derives from a covered 18 transaction if the claimant is a incurred a dollar value loss 19 as any of the following: 20 (a) A depositor who delivered the grain to a licensed 21 warehouse operator. 22 (b) (i) A seller who transferred title to the grain to 23 a licensed grain dealer other than by credit-sale contract 24 within six months of the incurrence date for a claim period as 25 provided in subsection 2 , or if the claimant is a depositor who 26 delivered the grain to a licensed warehouse operator . 27 (ii) A seller described in subparagraph subdivision (i) 28 who incurred a repayment claim loss against a grain dealer as 29 provided in section 203D.6A. 30 (2) The dollar value losses incurred by a depositor 31 or seller described in subparagraph (1) for all eligible 32 claims are subject to the indemnification limit described in 33 subsection 8. 34 (a) The department shall segregate that part of a claim 35 -13- LSB 2306HZ (4) 91 da/ns 13/ 31

H.F. 999 that includes a dollar value of a loss incurred by a seller 1 who sold grain to a licensed grain dealer pursuant to a 2 credit-sale contract, including by deferred-pricing contract 3 and deferred-payment contract. 4 (b) The part of the segregated claim that includes a 5 dollar value of a loss incurred by a seller who sold grain to a 6 licensed grain dealer pursuant to a deferred-payment contract 7 is ineligible for indemnification. 8 Sec. 17. Section 203D.6, subsections 5, 6, 8, and 9, Code 9 2025, are amended to read as follows: 10 5. Value Dollar value of loss —— warehouse claims depositor 11 claim . 12 a. (1) The board shall determine the an eligible claim’s 13 dollar value of a claim loss incurred by a depositor holding 14 a warehouse receipt or a scale weight ticket for grain that 15 the depositor delivered for storage to the licensed warehouse 16 operator. 17 (a) If the department has been appointed by the court as 18 receiver of the grain assets of the warehouse operator, the 19 dollar value of the loss shall be presumed to be as stated in 20 the plan of disposition approved by the court. 21 (b) If the warehouse operator has filed a petition in 22 bankruptcy, the dollar value of the loss shall be presumed to 23 be based upon the fair market price, free-on-board from the 24 site of the warehouse operator, being paid to producers for 25 grain by the grain terminal operator nearest the warehouse 26 operator on the date the petition was filed. 27 (c) If there is neither a department receivership nor 28 a bankruptcy filing, the dollar value of the loss shall be 29 presumed to be based upon the fair market price, free-on-board 30 from the site of the warehouse operator, being paid to 31 producers for grain by the grain terminal operator nearest the 32 warehouse operator on the incurrence date of license revocation 33 or cancellation . If more than one incurrence date applies to a 34 claim, the board may choose between the two. However, the 35 -14- LSB 2306HZ (4) 91 da/ns 14/ 31

H.F. 999 (d) The board may accept an alternative valuation dollar 1 value of a claim the loss upon a showing of just cause by the 2 depositor or department. All depositors 3 (2) The dollar value of the loss of priced or unpriced grain 4 shall not exceed the price of that grain if the grain were 5 U.S. No. 2 grain according to standards adopted by the federal 6 grain inspection service of the United States department of 7 agriculture. The price of the grain shall be determined in 8 accordance with the relevant date used to determine the price 9 described in subparagraph (1). The department may adjust the 10 price of the grain if necessary to better account for the 11 condition of the grain when stored. 12 b. A depositor filing claims a claim for a dollar value 13 loss under this section subsection shall be bound by the dollar 14 value of the loss determined by the board. The dollar value of 15 the loss is the outstanding balance on the validated claim at 16 time of payment the claimant is indemnified from the fund. 17 6. Value Dollar value of loss —— grain dealer claims seller 18 claim . 19 a. (1) The dollar value of a claim The board shall 20 determine an eligible claim’s dollar value of a loss incurred 21 by a seller who has sold grain or delivered grain for sale or 22 exchange and who is a creditor of the licensed grain dealer for 23 all or part of the value of the grain shall be based on the 24 amount stated on the obligation on the date of the sale. 25 (a) If the sold grain was unpriced, the dollar value 26 of a claim the loss shall be presumed to be based upon the 27 fair market price, free-on-board from the site of the grain 28 dealer, being paid to producers for grain by the grain terminal 29 operator nearest the grain dealer on the incurrence date of the 30 license revocation or cancellation or the filing of a petition 31 in bankruptcy . If more than one incurrence date applies to a 32 claim, the board may choose between the two. However, the 33 (b) The board may accept an alternative valuation dollar 34 value of a claim the loss upon a showing of just cause by the 35 -15- LSB 2306HZ (4) 91 da/ns 15/ 31

H.F. 999 seller or department. All sellers 1 (2) The dollar value of the loss of priced or unpriced grain 2 shall not exceed the price of that grain if the grain were 3 U.S. No. 2 grain according to standards adopted by the federal 4 grain inspection service of the United States department of 5 agriculture. The price of the grain shall be determined in 6 accordance with the relevant date used to determine the price 7 described in subparagraph (1). The department may adjust the 8 price of the grain if necessary to better account for the 9 condition of the grain when purchased. 10 b. A seller filing claims a claim for a dollar value of the 11 loss under this section subsection shall be bound by the dollar 12 value of the loss determined by the board. The dollar value of 13 the loss is the outstanding balance on the validated claim at 14 the time of payment the claimant is indemnified from the fund. 15 8. Payment Indemnification of claims claimant . 16 a. Upon a determination by the board that the claim is 17 an eligible for payment claim satisfies the requirements in 18 subsection 4 , the board shall provide for payment of ninety 19 percent of the loss, as determined under indemnify the claimant 20 as a depositor under subsection 5 , but not more than three 21 hundred thousand dollars per claimant and a seller under 22 subsection 6 . Upon a determination by the board that an 23 eligible repayment claim filed by that seller under section 24 203D.6A derives from the same covered transaction during the 25 claim period, and the repayment loss incurred for that claim, 26 the board shall indemnify the claimant as a seller subject to 27 the requirements of this section and section 203D.6A. 28 b. Subject to the indemnification limit described in 29 paragraph “c” , the board shall indemnify a claimant ninety 30 percent of the combined dollar value losses, including any 31 repayment loss, incurred by the claimant as described in 32 paragraph “a” , except for a segregated dollar value loss 33 incurred from the sale of grain under a credit-sale contract. 34 The board shall indemnify the seller seventy percent of the 35 -16- LSB 2306HZ (4) 91 da/ns 16/ 31

H.F. 999 dollar value loss incurred from the sale of grain under a 1 deferred-pricing contract and zero percent of the dollar 2 value loss for the sale of grain under a deferred-payment 3 contract. The full indemnity amount paid to a claimant shall 4 be calculated as the sum of the following: 5 (1) Ninety cents for each dollar value loss, including any 6 repayment loss, incurred by the claimant other than a dollar 7 value loss for the sale of grain under a credit-sale contract. 8 (2) For the sale of grain under a credit-sale contract, all 9 of the following: 10 (a) Seventy cents for each dollar value loss incurred by the 11 claimant other than a dollar value loss for the sale of grain 12 under a deferred-pricing contract. 13 (b) Zero cents for each dollar value loss incurred by the 14 claimant under a deferred-payment contract. 15 c. The board shall not indemnify any claimant for more than 16 three hundred thousand dollars for an eligible claim for all 17 dollar value losses described in paragraphs “a” and “b” that are 18 part of the same covered transaction during the indemnity claim 19 period. 20 d. (1) If at any time the board determines that there 21 are insufficient funds moneys in the fund to make payment of 22 fully indemnify all eligible claims, the board may shall order 23 that payment be deferred on specified claims. The department, 24 upon the board’s instruction, shall hold those claims for 25 payment until the board determines that the fund again contains 26 sufficient assets the eligible claims be indemnified according 27 to the following order: 28 (a) First, by indemnifying all claims for dollar value 29 losses other than segregated dollar value losses arising from 30 the sale of grain under credit-sale contract as provided in 31 subsection 4 . 32 (b) Second, by indemnifying all claims for segregated 33 dollar value losses arising from the sale of grain under a 34 deferred-pricing contract as provided in subsection 4. 35 -17- LSB 2306HZ (4) 91 da/ns 17/ 31