Bill Text: IA SF2393 | 2023-2024 | 90th General Assembly | Introduced
Bill Title: A bill for an act regulating the marketing of grain, by providing for fees paid by grain dealers and warehouse operators into the grain depositors and sellers indemnity fund, and the payment of claims to reimburse sellers and depositors for losses covered by the fund, and including effective date provisions.(Formerly SSB 3174; See SF 2401.)
Spectrum: Committee Bill
Status: (Introduced - Dead) 2024-02-29 - Committee report approving bill, renumbered as SF 2401. S.J. 424. [SF2393 Detail]
Download: Iowa-2023-SF2393-Introduced.html
Senate
File
2393
-
Introduced
SENATE
FILE
2393
BY
COMMITTEE
ON
AGRICULTURE
(SUCCESSOR
TO
SSB
3174)
A
BILL
FOR
An
Act
regulating
the
marketing
of
grain,
by
providing
for
1
fees
paid
by
grain
dealers
and
warehouse
operators
into
2
the
grain
depositors
and
sellers
indemnity
fund,
and
the
3
payment
of
claims
to
reimburse
sellers
and
depositors
for
4
losses
covered
by
the
fund,
and
including
effective
date
5
provisions.
6
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
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Section
1.
Section
203.15,
subsection
6,
Code
2024,
is
1
amended
by
striking
the
subsection.
2
Sec.
2.
Section
203D.1,
subsection
2,
Code
2024,
is
amended
3
by
striking
the
subsection.
4
Sec.
3.
Section
203D.1,
subsection
14,
paragraph
b,
Code
5
2024,
is
amended
to
read
as
follows:
6
b.
“Purchased
grain”
does
not
include
grain
that
is
subject
7
to
an
exempt
transaction
based
on
documentation
satisfactory
8
to
the
department
showing
that
the
grain
dealer
did
any
of
the
9
following:
10
(1)
Purchased
the
grain
from
the
United
States
government
or
11
any
of
its
subdivisions
or
agencies.
12
(2)
Purchased
the
grain
from
a
person
licensed
as
a
grain
13
dealer
in
any
jurisdiction.
14
(3)
Purchased
the
grain
under
a
credit-sale
contract.
15
(4)
(3)
Entered
the
grain
in
the
company-owned
paid
16
position
as
a
cancellation
of
a
collateral
warehouse
receipt.
17
(5)
(4)
Entered
the
grain
in
the
company-owned
paid
18
position
as
an
intra-company
location
transfer.
19
Sec.
4.
Section
203D.1,
subsection
16,
Code
2024,
is
amended
20
to
read
as
follows:
21
16.
a.
“Seller”
means
a
person
who
sells
grain
which
the
22
person
has
produced
or
caused
to
be
produced
to
a
licensed
23
grain
dealer
,
but
excludes
a
person
who
executes
a
credit-sale
24
contract
as
a
seller
as
provided
in
section
203.15
.
However,
25
“seller”
26
b.
“Seller”
does
not
include
any
of
the
following:
27
a.
(1)
A
person
licensed
as
a
grain
dealer
in
any
28
jurisdiction
who
sells
grain
to
a
licensed
grain
dealer.
29
b.
(2)
A
person
who
sells
grain
that
is
not
produced
in
30
this
state
unless
such
grain
is
delivered
to
a
licensed
grain
31
dealer
at
a
location
in
this
state
as
the
first
point
of
sale.
32
Sec.
5.
Section
203D.5,
subsections
4
and
5,
Code
2024,
are
33
amended
to
read
as
follows:
34
4.
If
on
the
last
date
of
the
fund’s
assessment
year
as
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provided
in
section
203D.3
the
assets
of
the
fund
exceed
eight
1
sixteen
million
dollars,
less
any
encumbered
balances
or
2
pending
or
unsettled
claims,
all
of
the
following
apply:
3
a.
The
participation
fee
shall
be
waived
and
shall
not
be
4
assessable
or
owing
for
the
following
assessment
year
of
the
5
fund.
However,
the
licensee
shall
continue
to
pay
any
owing
6
participation
fee
that
was
in
effect
on
the
prior
September
1.
7
b.
The
per-bushel
fee
shall
be
waived
and
shall
not
be
8
assessable
or
owing.
9
5.
The
board
shall
reinstate
the
fees
as
provided
in
this
10
section
if
the
assets
of
the
fund,
less
any
unencumbered
11
balances
or
pending
or
unsettled
claims,
are
three
eight
12
million
dollars
or
less.
13
Sec.
6.
Section
203D.6,
subsection
4,
paragraph
d,
Code
14
2024,
is
amended
to
read
as
follows:
15
d.
That
the
claim
derives
from
a
covered
transaction.
For
16
purposes
of
this
paragraph,
a
claim
derives
from
a
covered
17
transaction
if
the
claimant
is
a
seller
who
transferred
18
title
to
the
grain
to
a
licensed
grain
dealer
other
than
by
19
credit-sale
contract
within
six
months
of
the
incurrence
date
20
for
a
claim
period
as
provided
in
subsection
2
,
or
if
the
21
claimant
is
a
depositor
who
delivered
the
grain
to
a
licensed
22
warehouse
operator.
23
Sec.
7.
EMERGENCY
RULES.
The
department
of
agriculture
24
and
land
stewardship
shall
adopt
emergency
rules
under
section
25
17A.4,
subsection
3,
and
section
17A.5,
subsection
2,
paragraph
26
“b”,
to
implement
the
provisions
of
this
Act
and
the
adopted
27
rules
shall
be
effective
July
1,
2024.
The
rules
adopted
28
in
accordance
with
this
section
shall
also
be
published
as
a
29
notice
of
intended
action
as
provided
in
section
17A.4.
30
Sec.
8.
ASSESSMENT
OF
FEES.
A
grain
dealer
licensed
under
31
chapter
203
who
is
a
party
to
a
credit-sale
contract
shall
32
owe
any
participation
fee
or
per-bushel
fee
assessed
on
grain
33
purchased
under
the
credit-sale
contract
beginning
on
July
1
of
34
the
fourth
assessment
quarter
pursuant
to
section
203D.3A.
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Sec.
9.
EFFECTIVE
DATE.
1
1.
Except
as
provided
in
subsection
2,
this
Act
takes
effect
2
July
1,
2024.
3
2.
The
section
of
this
Act
requiring
the
department
of
4
agriculture
and
land
stewardship
to
adopt
emergency
rules
takes
5
effect
upon
enactment.
6
EXPLANATION
7
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
8
the
explanation’s
substance
by
the
members
of
the
general
assembly.
9
BACKGROUND
——
GRAIN
DEPOSITORS
AND
SELLERS
INDEMNITY
FUND.
10
This
bill
amends
provisions
regulating
marketers
of
grain,
11
referred
to
as
grain
dealers
purchasing
grain
(Code
chapter
12
203),
and
grain
warehouse
operators
storing
grain
under
13
bailment
(Code
chapter
203C).
The
department
of
agriculture
14
and
land
stewardship
(DALS)
issues
a
license
to
each
type
of
15
marketer
(licensee)
doing
business
in
this
state,
including
16
inspections
and
audits.
A
person
selling
grain
to
a
licensed
17
grain
dealer
(seller)
or
a
person
depositing
grain
with
a
18
licensed
warehouse
operator
(depositor)
may
be
reimbursed
for
19
a
loss
incurred
by
the
failure
of
the
licensee
to
honor
a
20
contractual
obligation
regarding
the
transaction
(Code
section
21
203D.6).
Payments
are
made
from
the
grain
depositors
and
22
sellers
indemnity
fund
(indemnity
fund)
upon
a
determination
23
that
the
claim
is
eligible
for
payment
by
the
Iowa
grain
24
indemnity
fund
board
(indemnity
board)
acting
in
cooperation
25
with
DALS.
26
BACKGROUND
——
FEES.
In
addition
to
license
fees
deposited
27
into
the
general
fund
of
the
state
(Code
sections
203.6
and
28
203C.33),
each
licensee
pays
either
one
or
two
special
fees
29
(indemnity
fees)
to
support
the
indemnity
fund,
referred
30
to
as
a
participation
fee
and
per-bushel
fee.
A
licensed
31
grain
dealer
pays
both
fees
based
on
the
number
of
bushels
of
32
grain
purchased
during
the
grain
dealer’s
last
fiscal
year
33
(coinciding
with
the
grain
dealer’s
license
period).
The
term
34
“purchased
grain”
is
used
to
designate
those
bushels
purchased
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for
which
a
loss
may
be
claimed
under
the
indemnity
fund
and
1
therefore
excluded
from
coverage
(e.g.,
grain
purchased
from
2
the
United
States
government
or
by
credit-sale
contract)
(21
3
IAC
92.2).
The
rate
for
the
participation
fee
is
0.014
cents
4
per
bushel
on
all
purchased
grain
with
a
minimum
of
$50,
and
5
the
rate
for
the
per-bushel
fee
is
0.25
cents
per
bushel
on
6
all
purchased
grain.
A
licensed
warehouse
operator
pays
only
7
a
participation
fee,
based
on
bulk
warehouse
capacity.
The
8
rate
of
the
participation
fee
is
0.014
cents
per
bushel
of
9
bulk
grain
storage
capacity,
or
$500,
whichever
is
less,
with
10
a
minimum
of
$50.
Indemnity
fees
are
collected
quarterly
11
during
the
assessment
year:
September
1,
December
1,
March
1,
12
and
June
1
(Code
section
203D.3).
The
indemnity
board
must
13
annually
review
the
debits
of
and
credits
to
the
indemnity
fund
14
and
by
May
1
determine
whether
the
balance
triggers
a
waiver
or
15
reinstatement
(Code
section
203D.5).
The
triggered
waiver
or
16
reinstatement
is
effective
on
the
first
day
of
the
following
17
assessment
year
(September
1).
If
a
waiver
is
triggered
before
18
then,
a
licensee
is
subject
to
pay
the
outstanding
amount
of
19
the
participation
fee
that
is
otherwise
owing
for
the
current
20
assessment
year.
However,
a
licensed
grain
dealer
is
no
longer
21
obligated
to
pay
the
outstanding
amount
of
the
per-bushel
22
fee
otherwise
owing
for
that
period,
unless
the
amount
is
23
delinquent
(Code
section
203D.5).
24
BACKGROUND
——
CREDIT-SALE
CONTRACTS.
A
credit-sale
25
contract
(also
referred
to
as
deferred-payment
contract,
26
deferred-pricing
contract,
or
price-later
contract)
involves
a
27
transaction
for
the
sale
of
grain
in
which
the
sales
price
is
28
to
be
paid
to
the
seller
by
the
licensed
grain
dealer
(buyer)
29
more
than
30
days
after
the
delivery
of
the
grain
to
the
buyer
30
(Code
section
203.1).
The
delayed
price
arrangement
may
be
31
made
on
the
basis
of
an
expectation
of
higher
price
or
tax
32
liability.
In
such
a
transaction,
the
seller
becomes
the
33
grain
dealer’s
creditor.
For
regulations
regarding
the
use
of
34
credit-sale
contracts
by
licensees,
see
Code
sections
203.3,
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203.8,
203.15,
203.17,
and
203C.17.
1
BACKGROUND
——
PAYMENT
OF
CLAIMS.
A
claim
by
a
seller
or
2
depositor
(claimant)
for
the
reimbursement
of
a
loss
from
the
3
indemnity
fund
begins
on
the
incurrence
date
which
is
the
4
earlier
of
when
the
grain
dealer’s
or
warehouse
operator’s
5
state
license
ceases
or
when
the
grain
dealer
or
warehouse
6
operator
files
a
petition
in
bankruptcy
(Code
section
203D.6).
7
The
claim
must
derive
from
a
covered
transaction,
meaning
that
8
it
is
timely
filed,
there
is
evidence
of
a
loss
incurred
by
a
9
claimant,
and
the
claim
derives
from
a
covered
transaction.
10
For
a
claimant
who
is
a
seller,
a
covered
transaction
requires
11
that
title
be
transferred
with
six
months
of
the
incurrence
12
date.
A
covered
transaction
excludes
sale
by
credit-sale
13
contract.
The
value
of
a
loss
incurred
by
a
seller
is
based
14
on
the
sales
price.
If
the
sold
grain
was
unpriced,
the
value
15
of
a
claim
is
presumed
to
be
based
upon
the
price
paid
on
the
16
incurrence
date
at
the
nearest
terminal.
A
seller
or
depositor
17
is
entitled
to
be
reimbursed
90
percent
of
a
loss
but
not
more
18
than
$300,000.
19
BILL’S
PROVISIONS
——
INDEMNITY
FEES
TRIGGERS.
The
bill
20
adjusts
both
triggers
waiving
or
reinstating
the
two
indemnity
21
fees.
The
bill
increases
from
$8
million
to
$16
million
the
22
balance
in
the
indemnity
fund
required
to
trigger
a
waiver
and
23
increases
from
$3
million
to
$8
million
the
balance
in
the
24
indemnity
fund
required
to
trigger
a
reinstatement.
25
BILL’S
PROVISIONS
——
INDEMNITY
FUND
(FEES
AND
REIMBURSEMENT
26
BASED
ON
CREDIT-SALE
CONTRACT
TRANSACTIONS).
The
bill
provides
27
that
grain
purchased
by
credit-sale
contract
is
no
longer
28
excluded
from
the
definition
of
purchased
grain.
Therefore,
a
29
grain
dealer
must
pay
the
participation
fee
and
per-bushel
fee
30
and
a
warehouse
operator
must
pay
the
participation
fee.
It
31
also
provides
that
the
sale
of
grain
by
credit-sale
contract
is
32
no
longer
excluded
from
the
meaning
of
a
covered
transaction.
33
A
seller
may
therefore
claim
a
loss
resulting
from
this
type
34
of
transaction.
In
the
case
of
a
claim
filed
for
a
loss
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resulting
from
a
credit-sale
contract
for
which
no
price
was
1
established
by
the
incurrence
date,
the
unpriced
valuation
2
would
be
determined
in
the
manner
described
for
unpriced
grain.
3
The
bill
does
not
modify
special
regulations
that
apply
to
a
4
licensee’s
use
of
a
credit-sale
contract.
5
EMERGENCY
RULEMAKING.
The
bill
authorizes
DALS
to
adopt
6
emergency
rules
in
order
to
implement
its
provisions.
7
ASSESSMENT
OF
FEES.
A
grain
dealer
who
is
a
party
to
a
8
credit-sale
contract
owing
an
indemnity
fee
assessed
on
grain
9
purchased
by
credit-sale
contract
is
imposed
on
July
1
of
the
10
fourth
assessment
quarter.
11
EFFECTIVE
DATE.
The
bill
takes
effect
July
1,
2024,
except
12
for
the
provision
authorizing
DALS
to
adopt
emergency
rules
13
which
takes
effect
upon
enactment.
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