House
Study
Bill
572
-
Introduced
HOUSE
FILE
_____
BY
(PROPOSED
COMMITTEE
ON
AGRICULTURE
BILL
BY
CHAIRPERSON
SEXTON)
A
BILL
FOR
An
Act
providing
for
certain
fees
deposited
in
the
grain
1
depositors
and
sellers
indemnity
fund,
making
penalties
2
applicable,
and
including
effective
date
provisions.
3
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
4
TLSB
5865YC
(3)
90
da/ns
H.F.
_____
Section
1.
Section
203D.5,
subsections
4
and
5,
Code
2024,
1
are
amended
to
read
as
follows:
2
4.
If
on
the
last
date
of
the
fund’s
assessment
year
as
3
provided
in
section
203D.3
the
assets
of
the
fund
exceed
eight
4
sixteen
million
dollars,
less
any
encumbered
balances
or
5
pending
or
unsettled
claims,
all
of
the
following
apply:
6
a.
The
participation
fee
shall
be
waived
and
shall
not
be
7
assessable
or
owing
for
the
following
assessment
year
of
the
8
fund.
However,
the
licensee
shall
continue
to
pay
any
owing
9
participation
fee
that
was
in
effect
on
the
prior
September
1.
10
b.
The
per-bushel
fee
shall
be
waived
and
shall
not
be
11
assessable
or
owing.
12
5.
The
board
shall
reinstate
the
fees
as
provided
in
this
13
section
if
the
assets
of
the
fund,
less
any
unencumbered
14
balances
or
pending
or
unsettled
claims,
are
three
eight
15
million
dollars
or
less.
16
Sec.
2.
EFFECTIVE
DATE.
This
Act,
being
deemed
of
immediate
17
importance,
takes
effect
upon
enactment.
18
EXPLANATION
19
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
20
the
explanation’s
substance
by
the
members
of
the
general
assembly.
21
BILL’S
PROVISIONS.
This
bill
amends
provisions
in
Code
22
chapter
203D
that
provide
for
two
associated
fees
(indemnity
23
fees)
deposited
into
the
grain
depositors
and
sellers
indemnity
24
fund
(indemnity
fund)
administered
by
the
department
of
25
agriculture
and
land
stewardship
(DALS)
and
the
Iowa
grain
26
indemnity
fund
board
(indemnity
board).
The
Code
chapter
27
provides
for
the
regulation
of
two
types
of
persons
doing
28
business
in
the
grain
marketing
industry
and
licensed
by
DALS
29
(licensees)
who
are
required
to
pay
one
or
both
indemnity
fees:
30
(1)
a
warehouse
operator
licensed
under
Code
chapter
203C
who
31
stores
grain
in
a
state-licensed
warehouse
under
a
bailment
32
contract
in
which
the
bailor
(depositor)
holds
title
to
the
33
grain
under
warehouse
receipt
or
similar
document,
and
(2)
a
34
grain
dealer
licensed
under
Code
chapter
203
who
purchases
35
-1-
LSB
5865YC
(3)
90
da/ns
1/
3
H.F.
_____
grain
from
a
seller
transferring
title
under
one
of
a
number
1
of
different
types
of
sales
contracts
(see
Code
chapter
554,
2
Articles
2
and
7).
The
indemnity
fees
are
subject
to
two
3
triggers:
the
first
trigger
waives
existing
indemnity
fees
4
and
the
second
trigger
reinstates
those
fees
that
were
waived.
5
The
waiver
or
reinstatement
is
triggered
by
the
balance
in
6
the
indemnity
fund.
The
bill
adjusts
both
triggers
by
(1)
7
increasing
from
$8
million
to
$16
million
the
balance
required
8
to
trigger
the
waiver
and
(2)
increasing
from
$3
million
to
$8
9
million
the
balance
required
to
trigger
the
reinstatement.
10
BACKGROUND.
A
depositor
or
seller
may
claim
up
to
90
percent
11
of
a
loss
payable
from
the
indemnity
fund
based
on
the
failure
12
of
a
licensee
to
honor
an
obligation
under
a
bailment
or
sales
13
contract
(e.g.,
a
failure
to
comply
with
instructions
regarding
14
the
deposited
grain
or
a
failure
to
pay
the
sales
price)
(Code
15
section
203D.6).
The
two
indemnity
fees
used
to
support
the
16
indemnity
fund
include
(1)
a
participation
fee
imposed
on
17
both
licensees
and
(2)
a
per-bushel
fee
imposed
only
on
grain
18
dealers.
For
a
warehouse
operator,
the
participation
fee
19
is
based
on
bulk
warehouse
capacity
and
for
a
grain
dealer,
20
the
participation
fee
and
the
per-bushel
fee
are
based
on
21
the
number
of
bushels
of
grain
purchased
(“purchased
grain
22
entered
into
the
company-owned
paid
position”)
during
the
grain
23
dealer’s
last
fiscal
year
(coinciding
with
the
grain
dealer’s
24
license
period),
and
subject
to
a
number
of
exceptions,
such
25
as
grain
purchased
from
the
United
State
government
(Code
26
sections
203D.1,
203D.3A,
and
203D.5).
A
warehouse
operator’s
27
participation
fee
rate
is
0.014
cents
per
bushel
of
bulk
grain
28
storage
capacity,
or
$500,
whichever
is
less,
with
a
minimum
29
of
$50.
A
grain
dealer’s
participation
fee
rate
is
0.014
30
cents
per
bushel
with
a
minimum
of
$50,
and
the
per-bushel
31
fee
rate
is
0.25
cents
per
bushel
on
all
such
purchased
32
grain.
Indemnity
fees
are
collected
quarterly
during
the
33
assessment
year:
September
1,
December
1,
March
1,
and
June
34
1
(Code
section
203D.3).
The
indemnity
board
must
annually
35
-2-
LSB
5865YC
(3)
90
da/ns
2/
3
H.F.
_____
review
the
debits
of
and
credits
to
the
indemnity
fund
and
1
by
May
1
determine
whether
the
balance
triggers
a
waiver
or
2
reinstatement
(Code
section
203D.5).
If
there
is
a
trigger,
3
the
waiver
or
reinstatement
is
effective
on
the
first
day
of
4
the
following
assessment
year
(September
1).
If
a
waiver
5
is
triggered,
a
licensee
is
subject
to
pay
the
outstanding
6
amount
of
the
participation
fee
that
is
otherwise
owing
for
7
the
current
assessment
year.
However,
the
grain
dealer
is
8
no
longer
obligated
to
pay
the
outstanding
amount
of
the
9
per-bushel
fee
otherwise
owing
for
that
period,
unless
the
10
amount
is
delinquent
(Code
section
203D.5).
11
APPLICABLE
CIVIL
PENALTIES.
A
licensee
who
fails
to
pay
12
an
indemnity
fee
as
required
is
subject
to
a
civil
penalty
of
13
not
more
than
$1,500,
with
each
day
that
a
violation
continues
14
constituting
a
separate
offense
(Code
section
203C.36A).
15
EFFECTIVE
DATE.
The
bill
takes
effect
upon
enactment.
16
-3-
LSB
5865YC
(3)
90
da/ns
3/
3