2010 Indiana Code
TITLE 26. COMMERCIAL LAW
ARTICLE 3. WAREHOUSES
CHAPTER 7. INDIANA GRAIN BUYERS AND WAREHOUSE LICENSING AND BONDING LAW
IC 26-3-7
Chapter 7. Indiana Grain Buyers and Warehouse Licensing and Bonding Law
IC 26-3-7-1
Indiana grain buyers and warehouse licensing agency; employees
Sec. 1. (a) The Indiana grain buyers and warehouse licensing
agency is established within the Indiana state department of
agriculture to administer this chapter. The director of the Indiana
state department of agriculture may appoint the director of the
agency, who shall serve at the pleasure of the director of the Indiana
state department of agriculture. The director shall administer this
chapter and shall be the ultimate authority in the administration of
this chapter.
(b) The agency may employ all necessary employees, counsel, and
consultants to carry out the provisions of this chapter and is vested
with the power necessary to fully and effectively carry out the
provisions and objectives of this chapter.
(Formerly: Acts 1973, P.L.268, SEC.1; Acts 1975, P.L.277, SEC.1.)
As amended by Acts 1982, P.L.155, SEC.2; P.L.125-1997, SEC.18;
P.L.1-2006, SEC.482; P.L.120-2008, SEC.91.
IC 26-3-7-1.5
Liberal construction
Sec. 1.5. This chapter shall be liberally construed to effect its
purposes.
As added by P.L.1-1989, SEC.54.
IC 26-3-7-2
Definitions
Sec. 2. The following definitions apply throughout this chapter:
(1) "Agency" refers to the Indiana grain buyers and warehouse
licensing agency established under section 1 of this chapter.
(2) "Anniversary date" means the date that is ninety (90)
calendar days after the fiscal year end of a business licensed
under this chapter.
(3) "Bin" means a bin, tank, interstice, or other container in a
warehouse in which bulk grain may be stored.
(4) "Buyer-warehouse" means a person that operates both as a
warehouse licensed under this chapter and as a grain buyer.
(5) "Claimant" means a person that is unable to secure
satisfaction within the twelve (12) months following delivery of
the financial obligations due from a licensee under this chapter
for grain that has been delivered to the licensee for sale or for
storage under a bailment.
(6) "Deferred pricing" or "price later" means a purchase by a
buyer in which title to the grain passes to the buyer and the
price to be paid to the seller is not determined:
(A) at the time the grain is received by the buyer; or
(B) less than twenty-one (21) days after delivery.
(7) "Delayed payment" means a purchase by a buyer in which
title to the grain passes to the buyer at a determined price and
payment to the seller is not made in less than twenty-one (21)
days after delivery.
(8) "Depositor" means any of the following:
(A) A person that delivers grain to a licensee under this
chapter for storage or sale.
(B) A person that:
(i) owns or is the legal holder of a ticket or receipt issued
by a licensee for grain received by the licensee; and
(ii) is the creditor of the issuing licensee for the value of
the grain received in return for the ticket or receipt.
(C) A licensee that stores grain that the licensee owns solely,
jointly, or in common with others in a warehouse owned or
controlled by the licensee or another licensee.
(9) "Designated representative" means the person or persons
designated by the director to act instead of the director in
assisting in the administration of this chapter.
(10) "Director" means the director of the Indiana grain buyers
and warehouse licensing agency appointed under section 1 of
this chapter.
(11) "Facility" means a location or one (1) of several locations
in Indiana that are operated as a warehouse or by a grain buyer.
(12) "Failed" or "failure" means any of the following:
(A) The inability of a licensee to financially satisfy fully all
obligations due to claimants.
(B) Public declaration of a licensee's insolvency.
(C) Revocation or suspension of a licensee's license, if the
licensee has outstanding indebtedness owed to claimants.
(D) Nonpayment of a licensee's debts in the ordinary course
of business, if there is not a good faith dispute.
(E) Voluntary surrender of a licensee's license, if the
licensee has outstanding indebtedness to claimants.
(F) Involuntary or voluntary bankruptcy of a licensee.
(13) "Grain" means corn for all uses, popcorn, wheat, oats,
barley, rye, sorghum, soybeans, oil seeds, other agricultural
commodities as approved by the agency, and seed as defined in
this section. The term does not include canning crops for
processing, sweet corn, or flint corn.
(14) "Grain assets" means any of the following:
(A) All grain owned or stored by a licensee, including grain
that:
(i) is in transit following shipment by a licensee; and
(ii) has not been paid for.
(B) All proceeds, due or to become due, from the sale of a
licensee's grain.
(C) Equity, less any secured financing directly associated
with the equity, in hedging or speculative margin accounts
of a licensee held by a commodity or security exchange, or
a dealer representing a commodity or security exchange, and
any money due the licensee from transactions on the
exchange, less any secured financing directly associated with
the money due the licensee from the transactions on the
exchange.
(D) Any other unencumbered funds, property, or equity in
funds or property, wherever located, that can be directly
traced to the sale of grain by a licensee. However, funds,
property, or equity in funds or property may not be
considered encumbered unless:
(i) the encumbrance results from valuable consideration
paid to the licensee in good faith by a secured party; and
(ii) the encumbrance did not result from the licensee
posting the funds, property, or equity in funds or property
as additional collateral for an antecedent debt.
(E) Any other unencumbered funds, property, or equity in
assets of the licensee.
(15) "Grain bank grain" means grain owned by a depositor for
use in the formulation of feed and stored by the warehouse to be
returned to the depositor on demand.
(16) "Grain buyer" means a person who is engaged in the
business of buying grain from producers.
(17) "Grain standards act" means the United States Grain
Standards Act, approved August 11, 1916 (39 Stat. 482; 7
U.S.C. 71-87 as amended).
(18) "License" means a license issued under this chapter.
(19) "Official grain standards of the United States" means the
standards of quality or condition for grain, fixed and established
by the secretary of agriculture under the grain standards act.
(20) "Person" means an individual, partnership, corporation,
association, or other form of business enterprise.
(21) "Receipt" means a warehouse receipt issued by a
warehouse licensed under this chapter.
(22) "Seed", notwithstanding IC 15-15-1, means grain set apart
to be used primarily for the purpose of producing new plants.
(23) "Ticket" means a scale weight ticket, a load slip, or other
evidence, other than a receipt, given to a depositor upon initial
delivery of grain to a facility.
(24) "Warehouse act" means the United States Warehouse Act,
approved August 11, 1916 (39 Stat. 486; 7 U.S.C. 241-273 as
amended).
(25) "Warehouse" means any building or other protected
enclosure in one (1) general location licensed or required to be
licensed under this chapter in which grain is or may be:
(A) stored for hire;
(B) used for grain bank storage; or
(C) used to store company owned grain;
and the building or other protected enclosure is operated under
one (1) ownership and run from a single office.
(26) "Warehouse operator" means a person that operates a
facility or group of facilities in which grain is or may be stored
for hire or which is used for grain bank storage and which is
operated under one (1) ownership and run from a single office.
(Formerly: Acts 1973, P.L.268, SEC.1; Acts 1974, P.L.120, SEC.1;
Acts 1975, P.L.277, SEC.2.) As amended by Acts 1982, P.L.155,
SEC.3; P.L.191-1991, SEC.1; P.L.1-1992, SEC.142; P.L.139-1996,
SEC.6; P.L.125-1997, SEC.19; P.L.173-1999, SEC.1; P.L.1-2006,
SEC.483; P.L.2-2008, SEC.66; P.L.64-2009, SEC.1; P.L.75-2010,
SEC.10.
IC 26-3-7-2.2
Determination of a single warehouse
Sec. 2.2. For purposes of determining whether a building or other
protected enclosure constitutes a single warehouse that requires a
single license under this chapter, the director may consider the
following:
(1) The presence of a full weighing facility at geographically
diverse warehouse facilities.
(2) The traditional method of record keeping with respect to the
separate facilities.
(3) The hours, number of personnel, and activities of the
separate facilities.
(4) Any other factor considered relevant.
In the absence of contradictory information, any warehouses owned
and operated by the same person that are located within close
proximity of each other are presumed to constitute a single
warehouse.
As added by P.L.64-2009, SEC.2.
IC 26-3-7-3
Powers and duties of director
Sec. 3. (a) The director may do the following:
(1) Require any reports that are necessary to administer this
chapter.
(2) Administer oaths, issue subpoenas, compel the attendance
and testimony of witnesses, and compel the production of
records in connection with any investigation or hearing under
this chapter.
(3) Prescribe all forms within the provisions of this chapter.
(4) Establish grain standards in accordance with the grain
standards act and federal regulations promulgated under that act
that must be used by warehouses.
(5) Investigate the activities required by this chapter including
the storage, shipping, marketing, and handling of grain and
complaints with respect to the storage, shipping, marketing, and
handling of grain.
(6) Inspect a facility, the grain stored in a facility, and all
property and records pertaining to a facility. All inspections of
an applicant or licensee under this chapter must take into
consideration the proprietary nature of an applicant's or
licensee's commercial information. The director may adopt rules
under IC 4-22-2 regarding inspections permitted under this
chapter, and the rules must take into consideration the
proprietary nature of an applicant's or a licensee's commercial
information. This chapter does not authorize the inspection of
an applicant's or licensee's trade secret or intellectual property
information.
(7) Determine whether a facility for which a license has been
applied for or has been issued is suitable for the proper storage,
shipping, and handling of the grain that is stored, shipped, or
handled, or is expected to be stored, shipped, or handled.
(8) Require a licensee to terminate storage, shipping, marketing,
and handling agreements upon revocation of the person's
license.
(9) Attend and preside over any investigation or hearing
allowed or required under this chapter.
(10) Impose sanctions for violations of this article.
(11) Require a grain buyer and all persons purchasing grain to
show evidence of training or licensing on the risks associated
with grain marketing practices only if a grain buyer engages in
a risk factor higher than a standard defined by the director. This
training or licensing may include requiring the grain buyer or
person purchasing grain to do any of the following:
(A) Provide the agency with proof of registry with the
commodity futures trading commission (CFTC) as a
commodity trading adviser, a futures commission merchant,
an introducing broker, or an associated person.
(B) Demonstrate passage of the series 3 examination
administered by the National Association of Security
Dealers.
(C) Annually attend six (6) hours of continuing education,
approved by the director, focusing on the risks to a grain
buyer and seller that are associated with grain marketing
practices and the communication of risks to the producer.
Additionally, as part of continuing education, require a grain
buyer, and all persons purchasing grain for a grain buyer, to
pass a test, approved and administered by the director, that
reasonably measures the grain buyer's understanding of the
risks to grain buyers and sellers associated with producer
marketing strategies.
(12) Require all contracts executed after June 30, 1997, for the
purchase of grain from producers, except a flat price contract or
a contract for the production of seed, to include the following
notice immediately above the place on the contract where the
seller of the grain must sign:
"NOTICE - SELLER IS CAUTIONED THAT
CONTRACTING FOR THE SALE AND DELIVERY OF
GRAIN INVOLVES RISKS. THESE RISKS MAY
INCLUDE FUTURE PAYMENTS BY YOU TO
MAINTAIN THIS CONTRACT, A LOWER SALES
PRICE, AND OTHER RISKS NOT SPECIFIED.
COVERAGE UNDER THE INDIANA GRAIN
INDEMNITY PROGRAM IS LIMITED TO 100% OF A
LOSS FOR STORED GRAIN AND 80% OF A LOSS FOR
OTHER COVERED CONTRACTS.
BE SURE YOU UNDERSTAND THE NATURE OF THIS
CONTRACT AND THE ASSOCIATED RISKS."
(13) Require all contracts executed after January 1, 2000, for
the production of seed to include the following notice, in
conspicuous letters, immediately above the place on the
contract or an addendum where the seller of the seed must sign:
"NOTICE - IF THE TERMS OF THIS CONTRACT STATE
THAT THE CONTRACTOR RETAINS OWNERSHIP OF
THE SEED AND ITS PRODUCTS, YOU MAY NOT BE
ELIGIBLE FOR PARTICIPATION IN THE INDIANA
GRAIN INDEMNITY PROGRAM. TO BE ELIGIBLE TO
PARTICIPATE IN THE INDIANA GRAIN INDEMNITY
PROGRAM, FARMERS MUST OWN AND SELL GRAIN
OR SEED. BE SURE YOU UNDERSTAND THE
NATURE OF THIS CONTRACT AND THE
ASSOCIATED RISKS."
(14) At any time, order an unannounced audit for compliance
with this article.
(15) Adopt rules under IC 4-22-2 to carry out the purposes and
intent of this chapter.
(16) Require all grain buyers offering deferred pricing, delayed
payments, or contracts linked to the commodity futures or
commodity options market in connection with a grain purchase
to document the agreement in writing not more than twenty-one
(21) days after delivery.
(b) The director shall do the following:
(1) Establish standards to ensure that a grain buyer has a
suitable financial position to conduct a business as a grain
buyer.
(2) Require a person who conducts business as a grain buyer to
first be licensed by the agency.
(3) Require any person engaged in the business of advising
producers on grain marketing for hire to:
(A) register with the agency; and
(B) provide the agency with proof of registry with the
commodity futures trading commission (CFTC) as a
commodity trading advisor, a futures commission merchant,
an introducing broker, or an associated person.
(c) The director may designate an employee to act for the director
in the administration of this chapter. A designee may not:
(1) act in matters that require a public hearing or the temporary
suspension of a license;
(2) adopt rules; or
(3) act as the ultimate authority in the administration of this
chapter.
(d) The director may determine whether geographically separate
facilities constitute a single warehouse or grain buyer and in making
the determination may consider the following:
(1) The number of facilities involved.
(2) Whether full weighing equipment is present at the
geographically separate facilities.
(3) The method of bookkeeping employed by the separate
facilities.
(4) The hours of operation of the separate facilities.
(5) The personnel employed at the separate facilities.
(6) Other factors the director deems relevant.
(e) The director and the director's designees shall become
members of the national grain regulatory organization and shall:
(1) work in partnership with other state grain regulatory
officials;
(2) participate in national grain regulatory meetings; and
(3) provide expertise and education at national meetings.
(Formerly: Acts 1973, P.L.268, SEC.1; Acts 1974, P.L.120, SEC.2.)
As amended by P.L.191-1991, SEC.2; P.L.1-1992, SEC.143;
P.L.249-1995, SEC.1; P.L.139-1996, SEC.7; P.L.125-1997, SEC.20;
P.L.173-1999, SEC.2; P.L.75-2010, SEC.11.
IC 26-3-7-4
License; application; exemptions; suspension or revocation;
prohibited operation
Sec. 4. (a) A person may not operate a warehouse or conduct
business as a grain buyer or buyer-warehouse without first having
obtained the appropriate license from the agency, nor may a person
continue to operate a warehouse or conduct business as a grain buyer
or buyer-warehouse after the person's license has been revoked or
suspended, except as provided in section 18 of this chapter.
(b) All facilities in Indiana that an applicant for a license uses to
store or handle grain must qualify for and obtain a license and be
licensed under this chapter before the applicant may operate a
warehouse or conduct business as a grain buyer in Indiana. An
applicant may not be licensed unless all of the applicant's facilities
qualify for a license under this chapter. An applicant for a license
must apply to the agency for a license that covers all facilities
operated by the applicant for the storage or handling of grain in
Indiana.
(c) If a licensee acquires an additional grain storage or handling
facility in Indiana, the licensee shall promptly submit to the agency
an amended application for licensure. A licensee shall promptly
notify the agency of a material change to the licensee's operations,
such as expansion of the amount of storage being used in the
licensee's existing facilities or change of ownership of a facility, and
shall provide the director with additional information the director
may require. A licensee shall obtain the approval of the director
before making use of increased storage or handling capacity.
(d) A licensee that acquires an additional grain storage or
handling facility that is required to be licensed shall not use the
facility for the storage or handling of grain until it qualifies for and
is issued a license and is licensed as provided in this chapter. If a
licensed grain storage or handling facility that a licensee operates in
Indiana becomes ineligible for a license at any time for any reason,
it shall not be used for the storage or handling of grain until the
condition making it ineligible is removed.
(e) A licensee shall maintain at least eighty percent (80%) of the
unpaid balance of grain payables in unencumbered assets represented
by the aggregate of the following:
(1) Company owned grain.
(2) Cash on hand.
(3) Cash held on account in federally or state licensed financial
institutions or lending institutions of the Federal Farm Credit
Administration.
(4) Investments held in time accounts with federally or state
licensed financial institutions.
(5) Direct obligations of the United States government.
(6) Balances in grain margin accounts determined by marking
to market.
(7) Balances due or to become due to the licensee on deferred
pricing contracts.
(8) Marketable securities, including mutual funds.
(9) Irrevocable letters of credit that are:
(A) in favor of the agency;
(B) acceptable to the agency; and
(C) in addition to any letter of credit deposited with the
director to satisfy the bonding requirement of this chapter.
(10) Deferred pricing contract service charges due or to become
due to the licensee.
(11) Other evidence of proceeds from or of grain that is
acceptable to the agency.
(12) Other assets approved by the director.
(f) A licensee must have the minimum positive net worth
specified in section 16 of this chapter to hold any license or do
business.
(Formerly: Acts 1973, P.L.268, SEC.1; Acts 1974, P.L.120, SEC.3.)
As amended by Acts 1982, P.L.155, SEC.4; P.L.191-1991, SEC.3;
P.L.139-1996, SEC.8; P.L.125-1997, SEC.21; P.L.173-1999, SEC.3.
IC 26-3-7-4.1
Renewal application
Sec. 4.1. (a) The agency shall mail by first class mail a renewal
application, which must include a listing of all the licensee's
facilities, to each licensee before the end of the licensee's fiscal year.
The renewal application form must be completed and returned to the
agency not later than ninety (90) days after the end of the licensee's
fiscal year. The licensee must forward, with the renewal application,
the following:
(1) Current reviewed level financial statement.
(2) Updated financial profile form supplied by the agency.
(3) Appropriate license fee.
(b) A renewal application must contain the information as
required under rules adopted by the agency. The licensee shall
receive an annual renewal license application form appropriate to the
license issued to the licensee. The annual renewal license application
forms are for a:
(1) grain bank;
(2) warehouse;
(3) grain buyer; or
(4) buyer-warehouse.
As added by P.L.64-2009, SEC.3.
IC 26-3-7-4.5
Repealed
(Repealed by P.L.125-1997, SEC.57.)
IC 26-3-7-5
Inspection and certification of scales
Sec. 5. All scales used to weigh grain for purchase or storage must
be inspected and certified as to accuracy at least once each year.
(Formerly: Acts 1973, P.L.268, SEC.1.) As amended by P.L.2-1992,
SEC.781; P.L.125-1997, SEC.22.
IC 26-3-7-6
Types of licenses issued; application for license; fees; payment of
fees; current liability ratio; review level financial statement
inspection
Sec. 6. (a) The agency shall issue the following licenses:
(1) A grain bank license may be issued to a person that:
(A) stores only grain bank grain;
(B) has a storage capacity of not more than fifty thousand
(50,000) bushels of grain; and
(C) purchases less than fifty thousand (50,000) bushels of
grain per year.
(2) A warehouse license may be issued to a person that:
(A) stores grain for hire; and
(B) purchases less than fifty thousand (50,000) bushels of
grain per year.
(3) A grain buyer license may be issued to a person that:
(A) purchases annually at least fifty thousand (50,000)
bushels of grain that are not for the sole purpose of feeding
the person's own livestock or poultry;
(B) chooses to obtain a grain buyer's license; or
(C) offers deferred pricing, delayed payments, or contracts
linked to the commodity futures or commodity options
market in connection with grain purchases.
(4) A buyer-warehouse license may be issued to a person that
operates both as a warehouse and as a grain buyer.
(b) An applicant shall file with the director a separate application
for each license or amendment of a license at the times, on the forms,
and containing the information that the director prescribes.
(c) An initial application for a license must be accompanied by a
license fee as follows:
(1) For a grain bank or for a warehouse or buyer-warehouse
with a storage capacity of less than two hundred fifty thousand
(250,000) bushels, two hundred fifty dollars ($250) for the first
facility and fifty dollars ($50) for each additional facility.
(2) For a warehouse or a buyer-warehouse with a storage
capacity of at least two hundred fifty thousand (250,000)
bushels but less than one million (1,000,000) bushels, five
hundred dollars ($500) for the first facility and fifty dollars
($50) for each additional facility.
(3) For a warehouse or a buyer-warehouse with a storage
capacity of at least one million (1,000,000) bushels but less than
ten million (10,000,000) bushels, seven hundred fifty dollars
($750) for the first facility and fifty dollars ($50) for each
additional facility.
(4) For a warehouse or buyer-warehouse with a storage capacity
greater than ten million (10,000,000) bushels, one thousand
dollars ($1,000) for the first facility and fifty dollars ($50) for
each additional facility.
(5) For a grain buyer, including a grain buyer that is also
licensed as a warehouse under the warehouse act, five hundred
dollars ($500) for the first facility and fifty dollars ($50) for
each additional facility.
The director may prorate the initial application fee for a license that
is issued at least thirty (30) days after the anniversary date of the
licensee's business.
(d) Before the anniversary date of the license, the licensee shall
pay an annual fee in an amount equal to the amount required under
subsection (c). The director may prorate the annual application fee
for a license that is modified at least thirty (30) days after the
anniversary date of the licensee's license.
(e) A licensee or an applicant for an initial license must have a
minimum current asset to current liability ratio of one to one (1:1) or
better.
(f) An applicant for an initial license shall submit with the
person's application a review level financial statement or better
financial statement that reflects the applicant's financial situation on
a date not more than fifteen (15) months before the date on which the
application is submitted. A financial statement submitted under this
section must:
(1) be prepared by an independent accountant certified under
IC 25-2.1;
(2) comply with generally accepted accounting principles; and
(3) contain:
(A) an income statement;
(B) a balance sheet;
(C) a statement of cash flow;
(D) a statement of retained earnings;
(E) the preparer's notes; and
(F) other information the agency may require.
The director may adopt rules under IC 4-22-2 to allow the agency to
accept other substantial supporting documents instead of those listed
to determine the financial solvency of the applicant if the director
determines that providing the listed documents creates a financial or
other hardship on the applicant or licensee.
(g) An application for a license implies a consent to be inspected.
(h) Fees collected under this section shall be deposited in the
grain buyers and warehouse licensing agency license fee fund
established by section 6.3 of this chapter.
(Formerly: Acts 1973, P.L.268, SEC.1; Acts 1974, P.L.120, SEC.4;
Acts 1975, P.L.277, SEC.3.) As amended by Acts 1979, P.L.249,
SEC.2; Acts 1981, P.L.232, SEC.1; Acts 1982, P.L.155, SEC.6;
P.L.191-1991, SEC.4; P.L.125-1997, SEC.23; P.L.173-1999, SEC.4;
P.L.207-2007, SEC.28; P.L.64-2009, SEC.4; P.L.75-2010, SEC.12.
IC 26-3-7-6.1
Financial statement; fines
Sec. 6.1. (a) Not more than ninety (90) days after the end of a
licensee's fiscal year, the licensee shall file with the agency a current
review level financial statement or better financial statement that
reflects the licensee's financial situation for the previous fiscal year.
A financial statement submitted under this section must:
(1) be prepared by an independent accountant certified under
IC 25-2.1;
(2) comply with generally accepted accounting principles; and
(3) contain:
(A) an income statement;
(B) a balance sheet;
(C) a statement of cash flow;
(D) a statement of retained earnings;
(E) the preparer's notes; and
(F) other information the agency requires.
The director may adopt rules under IC 4-22-2 to allow the agency to
accept other substantial supporting documents instead of those listed
to determine the financial solvency of the applicant if the director
determines that providing the listed documents creates a financial or
other hardship on the applicant or licensee.
(b) If the licensee has failed to timely file the financial statement
as required in subsection (a), the agency may assess a fine as follows:
(1) Twenty percent (20%) of the licensee's renewal fee for a
financial statement that is at least one (1) and less than sixteen
(16) days late.
(2) Forty percent (40%) of the licensee's renewal fee for a
financial statement that is more than fifteen (15) and less than
thirty-one (31) days late.
(3) Sixty percent (60%) of the licensee's renewal fee for a
financial statement that is more than thirty (30) and less than
forty-six (46) days late.
(4) Eighty percent (80%) of the licensee's renewal fee for a
financial statement that is more than forty-five (45) and less
than sixty-one (61) days late.
(5) One hundred percent (100%) of the licensee's renewal fee
for a financial statement that is more than sixty (60) days late.
As added by P.L.64-2009, SEC.5.
IC 26-3-7-6.3
Grain buyers and warehouse licensing agency license fee fund
Sec. 6.3. (a) The grain buyers and warehouse licensing agency
license fee fund is established to provide funds for the administration
of this chapter. The fund shall be administered by the agency. The
fund consists of:
(1) the moisture testing device inspection fees collected under
IC 15-11-8-3;
(2) the licensing fees collected under section 6 of this chapter;
(3) gifts and bequests; and
(4) appropriations made by the general assembly.
(b) Expenses of administering the fund shall be paid from money
in the fund.
(c) The treasurer of state shall invest the money in the fund not
currently needed to meet the obligations of the fund in the same
manner as other public money may be invested. Interest that accrues
from these investments shall be deposited in the fund.
(d) Money in the fund at the end of a state fiscal year does not
revert to the state general fund.
As added by P.L.207-2007, SEC.29. Amended by P.L.2-2008,
SEC.67.
IC 26-3-7-6.5
Disclosure of information
Sec. 6.5. The names and respective counties of licensees may be
disclosed. Unless in accordance with a judicial order, the director,
the agency, its counsel, auditors, or its other employees or agents
shall not divulge any other information disclosed by the applications
or reports filed or inspections performed under the provisions of this
chapter, except to agents and employees of the agency or to any other
legal representative of the state or federal government otherwise
empowered to see or review the information. The director may
disclose the information only in the form of an information summary
or profile, or statistical study based upon data provided with respect
to more than one (1) warehouse, grain buyer, or buyer-warehouse
that does not identify the warehouse, grain buyer, or
buyer-warehouse to which the information applies.
(Formerly: Acts 1975, P.L.277, SEC.4.) As amended by Acts 1979,
P.L.249, SEC.3; P.L.12-1984, SEC.5; P.L.139-1996, SEC.9;
P.L.125-1997, SEC.24; P.L.64-2009, SEC.6.
IC 26-3-7-7
qualifications
Issuance of license or permit; false statements; applicant's
(1) received and approved the required information and
documentation; and
(2) determined that:
(A) the facility or facilities covered by the application are
suitable for the proper storage or handling of the grain
intended to be stored or handled in the facility or facilities;
and
(B) the applicant has complied with this chapter and the
rules adopted under this chapter.
(b) A person may not represent that the person is licensed under
this chapter, and may not use a name or description that conveys the
impression that the person is licensed, in a receipt or otherwise,
unless the person holds an unsuspended and unrevoked license to
conduct the business indicated by the license.
(c) An applicant for a license under this chapter must show that
the applicant:
(1) has a good business reputation;
(2) has not been involved in improper manipulation of books
and records or other improper business practice;
(3) has the qualifications and background essential for the
conduct of the business to be licensed;
(4) employs management and principal officers that have
suitable business reputations, background, and qualifications to
perform their duties;
(5) has not been found guilty of a crime that would affect the
licensee's ability to conduct business with integrity; and
(6) does not employ an officer, director, partner, or manager
that has been found guilty of a crime that would affect the
licensee's ability to conduct business with integrity.
(Formerly: Acts 1973, P.L.268, SEC.1; Acts 1974, P.L.120, SEC.5.)
As amended by Acts 1979, P.L.249, SEC.4; Acts 1982, P.L.155,
SEC.7; P.L.17-1985, SEC.21; P.L.191-1991, SEC.5; P.L.249-1995,
SEC.2; P.L.125-1997, SEC.25.
IC 26-3-7-8
Temporary license
Sec. 8. Upon receipt of an application for a permanent license, the
director may issue a temporary license to the applicant for a
reasonable time, not to exceed ninety (90) days, as the director deems
necessary or advisable to enable the applicant to comply with the
further requirements for obtaining a license under this chapter. A
temporary license entitles the temporary licensee to the same rights
and subjects the temporary licensee to the same duties as if the
temporary licensee had a permanent license.
(Formerly: Acts 1973, P.L.268, SEC.1; Acts 1975, P.L.277, SEC.5.)
As amended by P.L.125-1997, SEC.26.
IC 26-3-7-8.5
Licensing requirements of successor owner
Sec. 8.5. If the ownership of a facility or business licensed under
this chapter passes to a successor owner, the obligations under this
chapter of the original licensee do not cease until the successor
owner is properly licensed and has executed a successor's agreement
with the agency.
As added by P.L.125-1997, SEC.27.
IC 26-3-7-9
Bond, cash deposit, or letter of credit
Sec. 9. (a) Each applicant for a license under this chapter shall, as
a condition of licensure, file or have on file with the director:
(1) a cash deposit;
(2) an irrevocable letter of credit;
(3) a bond; or
(4) any combination of the above;
as provided in section 10 of this chapter.
(b) A bond filed under this chapter shall:
(1) be conditioned upon the faithful performance of all
obligations of the licensee under this chapter and the rules
adopted under this chapter from the effective date of the bond
until the earlier of the date the license is revoked or the bond is
canceled as provided in this chapter; and
(2) be further conditioned upon the faithful performance of all
obligations from the effective date of the bond and thereafter,
regardless of whether the licensee's facility or facilities exist on
the effective date of the bond or are thereafter assumed prior to
the date the licensee's license is revoked or the bond is canceled
as provided in this chapter.
(c) The bond must remain in effect during a violation, a temporary
suspension of the licensee's license, or a period during which the
licensee is subject to a cease and desist order.
(Formerly: Acts 1973, P.L.268, SEC.1; Acts 1974, P.L.120, SEC.6;
Acts 1975, P.L.277, SEC.6.) As amended by Acts 1979, P.L.249,
SEC.5; Acts 1982, P.L.155, SEC.8; P.L.191-1991, SEC.6;
P.L.125-1997, SEC.28; P.L.173-1999, SEC.5.
IC 26-3-7-10
Amount of bond, cash deposit, letter of credit, or other surety;
deficiencies
Sec. 10. (a) The minimum amount of bond, letter of credit, or cash
deposit required from a licensee is as follows:
(1) For a grain bank license or a warehouse license:
(A) ten thousand dollars ($10,000); and
(B) ten cents ($0.10) multiplied by the licensed bushel
storage capacity of the grain bank or warehouse.
(2) For a grain buyer, including a grain buyer that is also a
licensee under the warehouse act:
(A) ten thousand dollars ($10,000); or
(B) five-tenths percent (0.5%) of the total amount the grain
buyer paid for grain purchased from producers during the
grain buyer's most recent fiscal year;
whichever is greater.
(3) For a buyer-warehouse:
(A) an amount equal to the sum of:
(i) ten thousand dollars ($10,000); and
(ii) ten cents ($0.10) multiplied by the licensed bushel
storage capacity of the buyer-warehouse's facility; or
(B) five-tenths percent (0.5%) of the total amount the
buyer-warehouse paid for grain purchased from producers
during the buyer-warehouse's most recent fiscal year;
whichever is greater.
(b) Except as provided in subsections (g) and (h), the amount of
bond, letter of credit, or cash deposit required by this chapter may
not exceed one hundred thousand dollars ($100,000) per license and
may not exceed a total of five hundred thousand dollars ($500,000)
per person.
(c) The licensed bushel storage capacity is the maximum number
of bushels of grain that the licensee's facility could accommodate as
determined by the director or the director's designated representative
and shall be increased or reduced in accordance with the amount of
space being used for storage from time to time.
(d) Instead of a bond or cash deposit, an irrevocable letter of
credit in the prescribed amount may be provided with the director as
the beneficiary. The director shall adopt rules under IC 4-22-2 to
establish acceptable form, substance, terms, and conditions for letters
of credit. The director may not release a party from the obligations
of the letter of credit within eighteen (18) months of the termination
of the licensee's license.
(e) The director shall adopt rules under IC 4-22-2 to provide for
the receipt and retention of cash deposits. However, the director shall
not return a cash deposit to a licensee until the director has taken
reasonable precautions to assure that the licensee's obligations and
liabilities have been or will be met.
(f) If a person is licensed or is applying for licenses to operate two
(2) or more facilities in Indiana, the person may give a single bond,
letter of credit, or cash deposit to satisfy the requirements of this
chapter and the rules adopted under this chapter to cover all the
person's facilities in Indiana.
(g) If a licensee has a deficiency in the minimum positive net
worth required under section 16(a)(2)(B), 16(a)(3)(B), 16(a)(4)(B),
or 16(a)(5)(B) of this chapter, the licensee shall add to the amount of
bond, letter of credit, or cash deposit determined under subsection (a)
an amount equal to the deficiency or provide another form of surety
as permitted under the rules of the agency.
(h) Except as provided in subsections (i) and (j), a licensee may
not correct a deficiency in the minimum positive net worth required
by section 16(a)(1), 16(a)(2)(A), 16(a)(3)(A), 16(a)(4)(A), or
16(a)(5)(A) of this chapter by adding to the amount of bond, letter of
credit, or cash deposit required by subsection (a).
(i) A buyer-warehouse that has a bushel storage capacity of less
than one million (1,000,000) bushels or purchases less than one
million (1,000,000) bushels of grain per year may correct a
deficiency in minimum positive net worth by adding to the amount
of bond, letter of credit, or cash deposit determined under subsection
(a) if the buyer-warehouse has a minimum positive net worth of at
least fifteen thousand dollars ($15,000), not including the amount
added to the bond, letter of credit, or cash deposit.
(j) A buyer-warehouse that has a bushel storage capacity of at
least one million (1,000,000) bushels, or purchases at least one
million (1,000,000) bushels of grain per year, may correct a
deficiency in minimum positive net worth by adding to the amount
of bond, letter of credit, or cash deposit determined under subsection
(a) if the buyer-warehouse has a minimum positive net worth of at
least fifty thousand dollars ($50,000), not including the amount
added to the bond, letter of credit, or cash deposit.
(k) If the director or the director's designated representative finds
that conditions exist that warrant requiring additional bond or cash
deposit, there shall be added to the amount of bond or cash deposit
as determined under the other provisions of this section, a further
amount to meet the conditions.
(l) The director may accept, instead of a single cash deposit, letter
of credit, or bond, a deposit consisting of any combination of cash
deposits, letters of credit, or bonds in an amount equal to the
licensee's obligation under this chapter. The director shall adopt rules
under IC 4-22-2 to establish standards for determining the order in
which the forms of security on deposit must be used to pay proven
claims if the licensee defaults.
(m) The director may require additional bonding that the director
considers necessary.
(Formerly: Acts 1973, P.L.268, SEC.1; Acts 1974, P.L.120, SEC.7;
Acts 1975, P.L.277, SEC.7.) As amended by Acts 1979, P.L.249,
SEC.6; Acts 1982, P.L.155, SEC.9; P.L.191-1991, SEC.7;
P.L.125-1997, SEC.29; P.L.173-1999, SEC.6; P.L.64-2009, SEC.7.
IC 26-3-7-11
Repealed
(Repealed by Acts 1979, P.L.249, SEC.18.)
IC 26-3-7-12
Insurance; filing of certificate; settlement with depositor in case of
destruction
Sec. 12. (a) Each applicant for a license under this chapter shall,
as a condition to the granting of the license, file or have on file a
certificate of insurance evidencing an effective policy of insurance
issued by an insurance company authorized to do business in Indiana
insuring in the name of the applicant all grain that is or may be in the
licensee's facilities for its full market value against loss by fire,
internal explosion, lightning, and windstorm.
(b) In case fire, internal explosion, lightning, or wind-storm
destroys or damages any grain in a licensed facility, the licensee
shall, upon demand by the depositor and upon being presented with
the receipt or other evidence of ownership, make settlement, after
deducting the licensee's charges and advances, at the market value of
the grain based on the value at the average price paid for grain of the
same grade and quality on the date of the loss at the location of the
facility. If a settlement is not made within sixty (60) days from the
date of demand, the depositor is entitled to seek recovery from the
insurance company.
(Formerly: Acts 1973, P.L.268, SEC.1; Acts 1975, P.L.277, SEC.8.)
As amended by P.L.125-1997, SEC.30.
IC 26-3-7-13
Additional bond, cash deposit, letter of credit, or insurance
Sec. 13. Whenever the director determines that a previously
approved bond, letter of credit, cash deposit, or previously approved
insurance is insufficient, the director shall require an additional
bond, letter of credit, cash deposit, or insurance to be given by the
licensee in the form and upon the terms and conditions required by
this chapter and rules adopted under this chapter.
(Formerly: Acts 1973, P.L.268, SEC.1; Acts 1974, P.L.120, SEC.8;
Acts 1975, P.L.277, SEC.9.) As amended by Acts 1979, P.L.249,
SEC.7; P.L.125-1997, SEC.31.
IC 26-3-7-14
Cancellation of bond or insurance; approval; notice; suspension of
license
Sec. 14. (a) A licensee may not cancel an approved bond or
approved insurance unless the director has given prior written
approval for the cancellation and has received a substitute cash
deposit or has approved a substitute bond or insurance. The surety on
a bond may cancel a bond required by this chapter only after the
expiration of ninety (90) days from the date the surety mailed a
notice of intent to cancel, by registered or certified mail, to the
director. An insurance company may cancel insurance required by
this chapter only after the expiration of a thirty (30) day period from
the mailing, by certified mail, of notice of intent to cancel, to the
director. The surety and the insurance company shall, at the time of
giving notice to the director, send a copy of the notice to the licensee.
(b) Notwithstanding any other provision of this chapter, the
license of a licensee shall automatically be suspended for failure to:
(1) file a new bond, letter of credit, or cash deposit within the
ninety (90) day period as provided in this section;
(2) file new evidence of insurance within the thirty (30) day
period as provided in this section; or
(3) maintain at all times a bond or cash deposit and insurance as
provided in this chapter.
The suspension shall continue until the licensee complies with the
bonding and insurance requirements of this chapter.
(Formerly: Acts 1973, P.L.268, SEC.1.) As amended by Acts 1979,
P.L.249, SEC.8; P.L.125-1997, SEC.32.
IC 26-3-7-15
Grain inventories; sufficiency for outstanding warehouse receipts
or other storage obligations
Sec. 15. (a) A licensee shall maintain inventories of sufficient
quantity and grade of grain to meet the licensee's storage obligations.
(b) Inventories representing grain evidenced by outstanding
warehouse receipts shall be maintained in the warehouse shown on
the warehouse receipt issued by the warehouse in which the grain
was originally deposited.
(c) Inventories representing storage obligations other than those
evidenced by warehouse receipts may be represented by:
(1) receipts for grain stored in a facility licensed under this
chapter;
(2) receipts in a warehouse licensed and bonded under the
warehouse act; or
(3) other warehouse receipts or tickets as approved by the
director.
(Formerly: Acts 1973, P.L.268, SEC.1; Acts 1974, P.L.120, SEC.9.)
As amended by Acts 1979, P.L.249, SEC.9; P.L.125-1997, SEC.33.
IC 26-3-7-16
Maintenance of minimum net worth
Sec. 16. (a) A licensee shall have and maintain a current asset to
current liability ratio of one to one (1:1) and shall maintain, as
evidenced by the financial statement required by section 6 of this
chapter, the following minimum positive net worth:
(1) For a grain bank, minimum positive net worth is at least ten
thousand dollars ($10,000).
(2) For a warehouse, minimum positive net worth is at least
equal to the sum of:
(A) fifteen thousand dollars ($15,000); and
(B) ten cents ($0.10) multiplied by the bushel storage
capacity of the warehouse.
(3) For a grain buyer, minimum positive net worth is:
(A) ten thousand dollars ($10,000); or
(B) five cents ($0.05) multiplied by the total number of
bushels of grain purchased by the grain buyer during the
grain buyer's most recent fiscal year;
whichever is greater.
(4) For a buyer-warehouse that has a bushel storage capacity of
less than one million (1,000,000) bushels or purchases less than
one million (1,000,000) bushels of grain per year, minimum
positive net worth is:
(A) the sum of:
(i) fifteen thousand dollars ($15,000); and
(ii) ten cents ($0.10) multiplied by the bushel storage
capacity of the buyer-warehouse; or
(B) five cents ($0.05) multiplied by the total number of
bushels of grain purchased by the buyer-warehouse during
the buyer-warehouse's most recent fiscal year;
whichever is greater.
(5) For a buyer-warehouse that has a bushel storage capacity of
at least one million (1,000,000) bushels or purchases at least
one million (1,000,000) bushels of grain per year, minimum
positive net worth is:
(A) the sum of:
(i) fifty thousand dollars ($50,000); and
(ii) ten cents ($0.10) multiplied by the bushel storage
capacity of the buyer-warehouse; or
(B) five cents ($0.05) multiplied by the total number of
bushels of grain purchased by the buyer-warehouse during
the buyer-warehouse's most recent fiscal year;
whichever is greater.
(b) Except as provided in section 10 of this chapter, if a licensee
is required to show additional net worth to comply with this section,
the licensee may satisfy the requirement by adding to the amount of
the bond, letter of credit, or cash deposit required under section 10
of this chapter an amount equal to the additional net worth required
or provide another form of surety as permitted under the rules of the
agency.
(c) The director may adopt rules under IC 4-22-2 to provide that
a narrative market appraisal that demonstrates assets sufficient to
comply with this section may satisfy the minimum positive net worth
requirement.
(Formerly: Acts 1973, P.L.268, SEC.1.) As amended by Acts 1979,
P.L.249, SEC.10; P.L.125-1997, SEC.34; P.L.253-1997(ss), SEC.26;
P.L.173-1999, SEC.7; P.L.64-2009, SEC.8.
IC 26-3-7-16.1
Repealed
(Repealed by P.L.125-1997, SEC.57.)
IC 26-3-7-16.5
Determination of shortages; payment of claims; hearings and
procedures
Sec. 16.5. (a) Upon learning of the possibility that a shortage
exists, either as a result of an inspection or a report or complaint
from a depositor, the agency, based on an on-premise inspection,
shall make a preliminary determination as to whether a shortage
exists. If a shortage is not discovered, the agency shall treat the audit
as it would any other audit.
(b) If it is determined that a shortage may exist, the director or the
director's designated representative shall hold a hearing as soon as
possible to confirm the existence of a shortage as indicated by the
licensee's books and records and the grain on hand. Only the
licensee, the surety company named on the licensee's bond, the issuer
of the irrevocable letter of credit, and any grain depositor who has
made a claim or complaint to the agency in conjunction with the
shortage shall be considered as interested parties for the purposes of
that hearing, and each shall be given notice of the hearing. At the
hearing, the director or the director's designated representative shall
determine whether there appears to be a reasonable probability that
a shortage exists. If it is determined that a reasonable probability
exists and that the bond or letter of credit proceeds or the cash
deposit should be distributed, a preliminary determination shall be
entered to the effect that the licensee has failed to meet its
obligations under this chapter or the rules adopted under this chapter.
At the hearing, the director or the director's designated representative
may order that all proceeds from grain sales are to be held in the
form in which they are received and to be kept separate from all
other funds held by the licensee. The order may also provide for
informal conferences between agency representatives and persons
who have or who appear to have grain deposited with the licensee.
The surety company shall be permitted to participate in those
conferences.
(c) In the event that the director determines that the bond or letter
of credit proceeds or cash deposit is to be distributed, the agency
shall hold a hearing on claims. Notice shall be given to the surety
company named on the licensee's bond, the issuer of the irrevocable
letter of credit, and to all persons shown by the licensee's books and
records to have interests in grain deposited with the licensee. If the
agency has actual knowledge of any other depositor or person
claiming rights in the grain deposited with the licensee, the bond, the
irrevocable letter of credit, or the cash deposit, notice shall also be
provided to that person. In addition, public notice shall be provided
in newspapers of general circulation that serve the counties in which
licensed facilities are located, and notices shall be posted on the
licensed premises. At the hearing on claims, the director may accept
as evidence of claims the report of agency representatives who in
informal conferences with depositors have concluded that a claim is
directly and precisely supported by the licensee's books and records.
When there is disagreement between the claims of a depositor and
the licensee's books and records, the director or the director's
designated representative shall hear oral claims and receive written
evidence of claims in order to determine the validity of the claim.
(d) Any depositor who does not present a claim at the hearing may
bring the claim to the agency within fifteen (15) days after the
conclusion of the hearing.
(e) Following the hearing on claims, the director shall make a
determination as to the total proven storage obligation of the
claimants and the loss sustained by each depositor who has proven
a claim. Depositors found to have proven their claims shall be proven
claimants. In arriving at that loss, in accordance with section 19 of
this chapter, the director shall apply all grain on hand or its
identifiable proceeds to meet the licensee's obligations to grain
depositors of grain of that type. Initial determinations of loss shall be
made on the amount of grain on hand, or identifiable proceeds, and
shall reduce the amount to which a depositor may have a proven
claim. With respect to the remaining unfulfilled obligations, the
director shall, for the sole purpose of establishing each depositor's
claim under this chapter, establish a date upon which the loss is
discovered, shall price the grain as of that date, shall treat all
outstanding grain storage obligations not covered by grain on hand
or identifiable proceeds as being sold as of that date, and shall
determine the extent of each depositor's loss as being the actual loss
sustained as of that date. Grain of a specific type on the premises of
a licensee must first be applied to meet the licensee's storage
obligations with respect to that type of grain. If there is insufficient
grain of a specific type on hand to meet all storage obligations with
respect to that type of grain, the grain that is present shall be prorated
in accordance with the procedures described in this section and
section 16.8 of this chapter.
(f) Upon the failure of the agency to begin an audit, which would
serve as the basis for a preliminary administrative determination,
within forty-five (45) days of the agency's receipt of a written claim
by a depositor, a depositor shall have a right of action upon the bond,
letter of credit, or cash deposit. A depositor bringing a civil action
need not join other depositors. If the agency has undertaken an audit
within the forty-five (45) day period, the exclusive remedy for
recovery against the bond, letter of credit, or cash deposit shall be
through the recovery procedure prescribed by this section.
(g) When the proven claims exceed the amount of the bond, letter
of credit, or cash deposit, recoveries of proven claimants shall be
prorated in the same manner as priorities are prorated under section
16.8 of this chapter.
(h) The proceedings and hearings under this section may be
undertaken without regard to, in combination with, or in addition to
those undertaken in accordance with section 17.1 of this chapter.
(i) The findings of the director shall be final, conclusive, and
binding on all parties.
(j) The director may adopt rules under IC 4-22-2 to determine how
the agency may distribute the interest that may accrue from funds
held by the agency for the payment of claims.
(k) A claim of a licensee for stored grain may not be honored until
the proven claims of all other claimants arising from the purchase,
storage, and handling of the grain have been paid in full.
As added by Acts 1979, P.L.249, SEC.11. Amended by P.L.191-1991,
SEC.8; P.L.125-1997, SEC.35; P.L.173-1999, SEC.8; P.L.75-2010,
SEC.13.
IC 26-3-7-16.6
SEC.9; P.L.139-1996, SEC.10; P.L.125-1997, SEC.36;
P.L.173-1999, SEC.9.
Procedures
Sec. 16.6. The procedures established by this chapter also apply
when the director learns or has reason to believe that a person is
doing business as a grain buyer, operating a warehouse, or acting as
a buyer-warehouse without the license required by this chapter.
As added by Acts 1982, P.L.155, SEC.11. Amended by P.L.191-1991,
IC 26-3-7-16.8
Liens on grain assets
Sec. 16.8. (a) A lien against all grain assets of a licensee or a
person who is required to be licensed under this chapter attaches in
favor of the following:
(1) A lender or other claimant that has a receipt for grain owned
or stored by the licensee.
(2) A claimant that has a ticket or written evidence, other than
a receipt, of a storage obligation of the licensee.
(3) A claimant that surrendered a receipt as part of a grain sales
transaction if:
(A) the claimant was not fully paid for the grain sold; and
(B) the licensee failed less than twenty-one (21) days after
the surrender of the receipt.
(4) A claimant that has other written evidence of a sale to the
licensee of grain for which the claimant has not been fully paid.
(b) A lien under this section attaches and is effective at the
earliest of the following:
(1) the delivery of the grain for sale, storage, or under a
bailment;
(2) the commencement of the storage obligation; or
(3) the advancement of funds by a lender.
(c) A lien under this section terminates when the licensee
discharges the claim.
(d) If a licensee has failed, the lien that attaches under this section
is assigned to the agency by operation of this section. If a failed
licensee is liquidated, a lien under this section continues to attach as
a claim against the assets or proceeds of the assets of the licensee
that are received or liquidated by the agency.
(e) Except as provided in subsection (g), if a licensee has failed,
the power to enforce the lien on the licensee's grain assets transfers
by operation of this section to the director and rests exclusively with
the director who shall allocate and prorate the proceeds of the grain
assets as provided in subsections (f) and (h).
(f) The priority of a lien that attaches under this section is not
determined by the date on which the claim arose. If a licensee has
failed, the director shall enforce lien claims and allocate grain assets
and the proceeds of grain assets of the licensee in the following order
of priority:
(1) First priority is assigned to the following:
(A) A lender or other claimant that has a receipt for grain
owned or stored by the licensee.
(B) A claimant that has a ticket or written evidence, other
than a receipt, of a storage obligation of the licensee.
(C) A claimant that surrendered a receipt as part of a grain
sales transaction if:
(i) the claimant was not fully paid for the grain sold; and
(ii) the licensee failed less than twenty-one (21) days after
the surrender of the receipt.
If there are insufficient grain assets to satisfy all first priority
claims, first priority claimants shall share pro rata in the assets.
(2) Second priority is assigned to all claimants who have
written evidence of the sale of grain, such as a ticket, a deferred
pricing agreement, or similar grain delivery contract, and who
completed delivery less than thirty (30) days before the
licensee's failure. Claimants under this subdivision share pro
rata in the remaining assets if all claimants under subdivision
(1) have been paid but insufficient assets remain to fully satisfy
all claimants under this subdivision.
(3) Third priority is assigned to all other claimants that have
written evidence of the sale of grain to the failed licensee.
Claimants under this subdivision share pro rata in the
distribution of the remaining grain assets.
(g) If a claimant under this section brings an action to recover
grain assets that are subject to a lien under this section and the
agency does not join the action, the director shall, upon request of
the claimant, assign the lien to the claimant in order to allow the
claimant to pursue the claim to the extent that the action does not
delay the resolution of the matter by the agency, the prompt
liquidation of the assets, or the ultimate distribution of assets to all
claimants.
(h) If:
(1) a claimant engaged in farming operations granted to one (1)
or more secured parties one (1) or more security interests in the
grain related to the claimant's claim under this section; and
(2) one (1) or more secured parties described in subdivision (1)
have given to:
(A) the licensee prior written notice of the security interest
under IC 26-1-9.1-320(a)(1) or IC 26-1-9-307(1)(a) before
its repeal; and
(B) the director prior written notice of the security interest
with respect to the grain described in subdivision (1)
sufficient to give the director a reasonable opportunity to
cause the issuance of a joint check under this subsection;
the director shall pay the claimant described in subdivision (1) the
portion of the proceeds of grain assets under subsection (e) to which
the claimant is entitled under this section by issuance of a check
payable jointly to the order of the claimant and any secured party
described in subdivision (1) who has given the notices described in
subdivision (2). If only one (1) secured party described in
subdivision (1) is a payee, the rights of the secured party in the check
shall be to the extent of the indebtedness of the claimant to the
secured party. If two (2) or more secured parties described in
subdivision (1) are payees, the nature, extent, and priority of their
respective rights in the check are determined in the same manner as
the nature, extent, and priority of their respective security interest
under IC 26-1-9.1.
As added by P.L.125-1997, SEC.37. Amended by P.L.115-1999,
SEC.1; P.L.173-1999, SEC.10; P.L.1-2002, SEC.101; P.L.75-2010,
SEC.14.
IC 26-3-7-17
Repealed
(Repealed by Acts 1979, P.L.249, SEC.18.)
IC 26-3-7-17.1
Possible violations; powers of director; procedures
Sec. 17.1. (a) Whenever the director, as a result of an inspection
or otherwise, has reasonable cause to believe that a person to which
this chapter is or may be applicable:
(1) is conducting business contrary to this chapter or in an
unauthorized manner; or
(2) has failed, neglected, or refused to observe or comply with
any order, rule, or published policy statement of the agency;
then the director may undertake any one (1) of the actions prescribed
by this section.
(b) Upon learning of the possibility that a licensee is acting as
described in subsection (a), the director or the director's designated
representative may seek an informal meeting with the licensee. At
that meeting, which shall be held at a time and place agreed to by the
licensee and the director, the director or the director's designated
representative shall discuss the possible violations and may enter into
a consent agreement with the licensee under which the licensee
agrees to undertake, or to cease, the activities that were the subject
of the meeting. The consent agreement may provide for a time frame
within which the licensee must be in compliance.
(c) Upon learning of the possibility that a person is acting as
described in subsection (a), the director, except as otherwise
provided in this subsection, shall hold a hearing to determine
whether a cease and desist order should issue against a licensee or an
unlicensed person undertaking activities covered by this chapter. If
the director determines that the violation or the prohibited practice
is likely to cause immediate insolvency or irreparable harm to
depositors, the director, without notice, may issue a temporary cease
and desist order requiring the person to cease and desist from that
violation or practice. The order shall become effective upon service
on the person and shall remain effective and enforceable pending the
completion of all administrative proceedings.
(d) Upon a determination, after a hearing held by the director or
the director's designated representative, that a person is acting as
described in subsection (a), the director may suspend, revoke, or
deny a license. If the director suspends, revokes, or denies a license,
the director shall publish notice of the suspension, revocation, or
denial as provided in section 17.5 of this chapter.
(e) If the director has reasonable cause to believe that a licensee
is acting as described in subsection (a) and determines that
immediate action without an opportunity for a hearing is necessary
in order to safeguard depositors, the director may suspend a license
temporarily without a hearing for a period not to exceed twenty (20)
days. When a license is suspended without a hearing, the director or
the director's designated representative shall grant an opportunity for
a hearing as soon as possible.
As added by Acts 1979, P.L.249, SEC.12. Amended by P.L.191-1991,
SEC.10; P.L.125-1997, SEC.38.
IC 26-3-7-17.5
Notice of suspension or revocation of license; notice of denial of
application
Sec. 17.5. (a) Whenever the license of a licensee is suspended or
revoked, the director may:
(1) for each facility operated by the licensee, publish a public
notice in a newspaper of general circulation that serves the
county in which the facility is located; and
(2) cause notice of the suspension or revocation to be posted at
the facilities covered by the license.
(b) Whenever an application for licensure under this chapter is
denied, the director may:
(1) for each facility operated by the applicant, publish a public
notice in a newspaper of general circulation that serves the
county in which the facility is located; and
(2) cause notice of the denial to be posted at the applicant's
facilities.
(c) A notice posted under this section may not be removed
without the written permission of the director.
(d) The director shall adopt rules under IC 4-22-2 to determine the
content of the notices required by this section.
As added by P.L.125-1997, SEC.39.
IC 26-3-7-18
Revocation, expiration, or suspension of license; effect upon
operation
Sec. 18. (a) When a license is revoked, the licensee shall
terminate in the manner prescribed by the director all arrangements
covering the grain in the facility covered by the license, but shall be
permitted, under the direction and supervision of the director or the
director's designated representative, to deliver grain previously
received.
(b) During any suspension of a license, the licensee may, under
the direction and supervision of the director or the director's
designated representative, operate the facility, but shall not incur any
additional obligations to producers.
(Formerly: Acts 1973, P.L.268, SEC.1; Acts 1974, P.L.120, SEC.11.)
As amended by Acts 1979, P.L.249, SEC.13; Acts 1982, P.L.155,
SEC.12; P.L.191-1991, SEC.11; P.L.125-1997, SEC.40.
IC 26-3-7-19
Receipt of grain; ownership of deposited grain
Sec. 19. (a) A licensee shall issue a receipt or ticket for grain
received. Grain received by a licensee shall be credited to the
depositor on the books of the licensee within seven (7) days from the
date of its delivery. If a ticket is issued on delivery of the grain for
storage, a receipt shall be issued on demand, but no receipt shall be
issued on grain bank grain.
(b) The licensee is a bailee with respect to all stored grain. The
person whose name appears on a receipt or a ticket has title to the
stored grain evidenced by the receipt or ticket.
(Formerly: Acts 1973, P.L.268, SEC.1.) As amended by Acts 1979,
P.L.249, SEC.14; Acts 1982, P.L.155, SEC.13; P.L.125-1997,
SEC.41.
IC 26-3-7-20
Grain owned by licensee; receipts; transfer
Sec. 20. A licensee may issue a receipt for grain owned by the
licensee in whole or in part, located in the licensee's facility. The
negotiation, transfer, sale, or pledge of the receipt shall not be
defeated by reason of the licensee's ownership.
(Formerly: Acts 1973, P.L.268, SEC.1.) As amended by P.L.3-1989,
SEC.150; P.L.125-1997, SEC.42.
IC 26-3-7-21
Uniform Warehouse Receipts Act; application to transactions
Sec. 21. Except as provided by this chapter, and regardless of
whether the grain was received for storage, shipping, or handling,
IC 26-3-2 applies to all transactions involving or incidental to the
issuance, negotiation, transfer, sale, endorsement, or other dealings
with receipts, to transactions involving delivery or other disposition
of grain, and to the rights, duties, liabilities, and privileges of
licensees or others dealing with licensees.
(Formerly: Acts 1973, P.L.268, SEC.1.) As amended by Acts 1982,
P.L.155, SEC.14; P.L.125-1997, SEC.43.
IC 26-3-7-22
Commingling of grain
Sec. 22. Different lots of the same type of grain delivered to a
licensee may be commingled by type of grain unless the receipt or
ticket states that the identity of the lot of grain is to be preserved.
(Formerly: Acts 1973, P.L.268, SEC.1.) As amended by
P.L.125-1997, SEC.44.
IC 26-3-7-23
Return of grain to depositor
Sec. 23. Upon demand, after payment of all applicable charges,
grain shall be returned to the depositor at the licensed facility where
the grain was received unless agreed otherwise in writing.
(Formerly: Acts 1973, P.L.268, SEC.1; Acts 1974, P.L.120, SEC.12.)
As amended by P.L.125-1997, SEC.45.
IC 26-3-7-24
Duplicate receipts; restriction; requisites; bond
Sec. 24. While a receipt or ticket issued under this chapter is
outstanding and uncancelled by the issuing licensee, no other receipt
or ticket shall be issued for the grain or any part of the grain that is
covered by the receipt or ticket. However, if a receipt or ticket is lost,
stolen, or destroyed the owner of the receipt or ticket is entitled to a
new receipt that is a duplicate of the missing receipt or a new ticket
that is a substitute for the missing ticket. The duplicate receipt or
substitute ticket entitles the owner to all rights appertaining to the
document for which it was issued, and shall state that it is in lieu of
the former receipt or ticket and give the number and date of the
former receipt or ticket. If the missing document was a negotiable
receipt, the issuing licensee shall require an indemnity bond of
double the market value of the grain covered by the missing receipt
in a form and with the surety that the director may prescribe to fully
protect all rights under the missing receipt.
(Formerly: Acts 1973, P.L.268, SEC.1.) As amended by
P.L.125-1997, SEC.46.
IC 26-3-7-25
Terms of receipts
Sec. 25. Every warehouse receipt issued, whether paper or
electronic, shall embody within its terms the following:
(1) The type, grade, and quantity of the grain stored as
established by the official grain standards of the United States,
unless:
(A) the identity of the grain is preserved in a special pile or
special bin or otherwise; and
(B) a mark identifying the preserved grain appears on the
face of the receipt.
(2) A statement that the receipt is issued subject to the Indiana
Grain Buyers and Warehouse Licensing and Bonding Law,
IC 26-3-7, and rules adopted under the Indiana Grain Buyers
and Warehouse Licensing and Bonding Law.
(3) A clause that reserves to the licensee the right to terminate
storage and collect outstanding charges against any lot of grain
that remains in storage after June 30 following the date of the
receipt.
(4) A clause that reserves to the licensee the right to terminate
storage, shipping, and handling arrangements and collect
outstanding charges upon the revocation of the licensee's
license.
(5) Other terms and conditions as provided in the Uniform
Warehouse Receipts Acts. However, nothing contained in the
Uniform Warehouse Receipts Act shall require a receipt issued
for grain to specifically state the variety of the grain by name.
(6) A clause that terminates storage on the date the license held
by the licensee when the receipt was issued expires and reserves
to the licensee the right to collect outstanding charges against
any lot of grain.
(7) Other provisions prescribed by the director.
(Formerly: Acts 1973, P.L.268, SEC.1; Acts 1974, P.L.120, SEC.13.)
As amended by P.L.125-1997, SEC.47; P.L.173-1999, SEC.11.
IC 26-3-7-26
Terms of tickets
Sec. 26. Every ticket issued shall embody within its terms:
(1) the name of the licensee to whom the grain was delivered;
(2) the date the grain was delivered;
(3) exact information concerning the type, net weight, and grade
factors of the grain received;
(4) a statement that the grain described in the ticket is to be
taken into storage, is being delivered on contract, or is to be
sold under other arrangements;
(5) the name of the owner of the grain; and
(6) other provisions prescribed by the director.
The director may adopt rules under IC 4-22-2 to exempt certain types
of grain from these requirements.
(Formerly: Acts 1973, P.L.268, SEC.1; Acts 1975, P.L.277, SEC.10.)
As amended by Acts 1982, P.L.155, SEC.15; P.L.125-1997, SEC.48;
P.L.173-1999, SEC.12.
IC 26-3-7-27
Repealed
(Repealed by P.L.125-1997, SEC.57.)
IC 26-3-7-28
Records and accounts; retention
Sec. 28. A licensee shall keep in a place of safety complete and
correct records and accounts pertaining to the licensee's grain
business. The licensee shall retain records and accounts for not less
than six (6) years from the date of the final settlement of the
transaction.
(Formerly: Acts 1973, P.L.268, SEC.1; Acts 1974, P.L.120, SEC.14.)
As amended by P.L.125-1997, SEC.49.
IC 26-3-7-29
Display of license or permit; schedule of charges; sign
Sec. 29. A licensee shall:
(1) conspicuously display the licensee's license in the licensee's
main office and at each facility included under the license;
(2) conspicuously display in each operational office the
approved schedule of charges for services; and
(3) conspicuously display at each facility all charts and
diagrams provided to the facility by the agency.
(Formerly: Acts 1973, P.L.268, SEC.1; Acts 1974, P.L.120, SEC.15.)
As amended by Acts 1982, P.L.155, SEC.17; P.L.125-1997, SEC.50.
IC 26-3-7-30
Receipt forms; requests; cost; requisites for accountability
Sec. 30. All receipt forms shall be supplied by the director except
where the director, in writing, approves the form and gives
permission to a warehouse operator to have receipts printed.
Requests for receipts shall be on forms furnished by the director and
shall be accompanied by payment to cover the estimated cost of
printing, packaging, and shipping, as determined by the director.
Where privately printed, the printer shall furnish the director an
affidavit showing the amount of the receipts printed, and the serial
numbers thereof. All receipts remaining unused shall be recovered by
the director or the director's designated representative if the license
required by this chapter is terminated or suspended.
(Formerly: Acts 1973, P.L.268, SEC.1; Acts 1974, P.L.120, SEC.16.)
As amended by P.L.173-1999, SEC.13; P.L.64-2009, SEC.9.
IC 26-3-7-31
orders
Grain shortages; appointment of receiver
Sec. 31. (a) Whenever it appears to the satisfaction of the director
that a licensee cannot meet the licensee's outstanding grain
obligations owed to depositors, or when a licensee refuses to submit
the licensee's records or property to lawful inspection, the director
may give notice to the licensee to do any of the following:
(1) Cover the shortage with grain that is fully paid for.
(2) Give additional bond, letter of credit, or cash deposit as
required by the director.
(3) Submit to inspection as the director may deem necessary.
(b) If the licensee fails to comply with the terms of the notice
within five (5) business days from the date of its issuance, or within
an extension of time that the director may allow, the director may
petition the circuit court of the Indiana county where the licensee's
principal place of business is located seeking the appointment of a
receiver. If the court determines in accordance with IC 32-30-5 that
a receiver should be appointed, upon the request of the licensee the
court may appoint the agency or its representative to act as receiver.
The agency or its representative shall not be appointed as receiver
except upon the request of the licensee. If the agency or its
representative is appointed, any person interested in an action as
described in IC 32-30-5-2 may after twenty (20) days request that the
agency or its representative be removed as receiver. If the agency or
its representative is not serving as receiver, the receiver appointed
shall meet and confer with representatives of the agency regarding
the licensee's grain related obligations and, before taking any actions
regarding those obligations, the receiver and the court shall consider
the agency's views and comments.
(Formerly: Acts 1973, P.L.268, SEC.1; Acts 1974, P.L.120, SEC.17.)
As amended by Acts 1979, P.L.249, SEC.15; P.L.125-1997, SEC.51;
P.L.1-1998, SEC.139; P.L.173-1999, SEC.14; P.L.2-2002, SEC.80.
IC 26-3-7-32
Injunctions; unlawful removal of grain; temporary restraining
(b) Upon a determination by the director that there is reasonable
cause to believe that a licensee is unable to meet the licensee's
storage or other grain obligations, and that the licensee is removing,
or the director has reasonable cause to believe that the licensee may
remove, grain from the licensed premises, the director may, under the
conditions provided in, and in accordance with, the Indiana Rules of
Trial Procedure, seek from the circuit court of the Indiana county in
which the licensee has the licensee's principal place of business a
temporary restraining order preventing the further sale or movement
of any grain and requiring that proceeds from grain sales received
after the issuance of the temporary restraining order should be held
in the form in which they are received by the licensee and kept
separate from all other funds held by the licensee.
(Formerly: Acts 1973, P.L.268, SEC.1; Acts 1974, P.L.120, SEC.18.)
As amended by Acts 1979, P.L.249, SEC.16; Acts 1982, P.L.155,
SEC.18; P.L.191-1991, SEC.12; P.L.125-1997, SEC.52.
IC 26-3-7-33
Examination of warehouse; fee; expenses
Sec. 33. In addition to all other inspections and investigations
authorized by this chapter, the director or the director's designated
representative may, upon request of any person having an interest in
grain in a licensed warehouse, cause the warehouse to be examined.
The director or the director's representative may check the
outstanding receipts and tickets against the grain on hand and advise
each depositor of any shortage with respect to any grain in which the
person has an interest. If the cost of the examination is more than
twenty-five dollars ($25.00), the person requesting the examination
shall pay the additional cost to the director unless a shortage is found
to exist.
(Formerly: Acts 1973, P.L.268, SEC.1; Acts 1974, P.L.120, SEC.19.)
As amended by P.L.125-1997, SEC.53.
IC 26-3-7-34
Violations
Sec. 34. (a) A person who knowingly or intentionally violates or
fails to comply with this chapter commits a Class A misdemeanor.
Each day a person violates this chapter constitutes a separate
violation.
(b) A person who knowingly or intentionally issues a receipt or
ticket, knowing that the grain for which the receipt or ticket is issued
has not been actually received at the licensed warehouse, commits a
Class A misdemeanor. A person who issues a duplicate, or additional
negotiable receipt for grain, knowing that a former negotiable receipt
for the same grain or any part of the grain is outstanding and
uncancelled, except in the case of a lost, stolen, or destroyed receipt,
as provided in section 24 of this chapter, commits a Class A
misdemeanor. A person who fraudulently represents, alters, or
counterfeits any license provided for in this chapter commits a Class
D felony.
(c) Except in case of sale or other disposition of the grain in
lawful enforcement of the lien on grain that attaches under this
chapter or on a licensee's lawful termination of storage, shipping, or
handling agreements, or except as permitted by the rules adopted by
the director under IC 4-22-2 to effectuate the purposes of this
chapter:
(1) a person who knowingly or intentionally delivers grain out
of a licensed facility, knowing that a negotiable receipt, the
negotiation of which would transfer the right of possession of
the grain is outstanding and uncancelled, without obtaining the
possession of the receipt at or before the time of delivery,
commits a Class D felony; and
(2) a person who knowingly or intentionally delivers grain out
of a licensed facility, knowing that a non-negotiable receipt or
ticket is outstanding and uncancelled, without the prior written
approval of the person lawfully entitled to delivery under the
non-negotiable receipt or ticket and without delivery being
shown on the appropriate records of the licensee, commits a
Class D felony.
(d) A person who fraudulently issues a receipt, a ticket, or a
weight or grade certificate, knowing that it contains a false statement,
or who issues a receipt for grain owned solely or jointly by the
person and does not state the fact of the person's ownership in the
receipt, commits a Class A misdemeanor.
(e) A person who recklessly changes a receipt or ticket subsequent
to issuance, except for notation by the licensee of partial delivery,
commits a Class B misdemeanor.
(f) A person who knowingly or intentionally deposits grain to
which the person does not have title or upon which there is a lien or
mortgage and who accepts for the grain a receipt or ticket, without
disclosing the lack of title or the existence of the lien or mortgage,
commits a Class D felony.
(g) A person commits a Class A misdemeanor who knowingly or
intentionally:
(1) engages in the business of being a grain buyer or operates a
warehouse without a valid license issued by the director;
(2) engages in the business of being a grain buyer or operates a
warehouse without a sufficient cash deposit, letter of credit, or
surety bond on file with and in a form approved by the director;
or
(3) engages in the business of being a grain buyer or operates a
warehouse while in violation of the rules adopted by the
director.
(h) A person commits a Class A misdemeanor who willfully
makes or causes to be made a false entry or statement of fact in an
application or report filed with the director.
(i) A person who is not in compliance with section 3(a)(11) of this
chapter may be subject to a fine imposed by the agency of not more
than twenty thousand dollars ($20,000), or the suspension of the
grain buyer's license for not more than five (5) years, or both.
(j) The director may suspend or revoke the license of a licensee
that uses an unlicensed facility to store or handle grain or commits
another violation of this chapter.
(Formerly: Acts 1973, P.L.268, SEC.1.) As amended by Acts 1978,
P.L.2, SEC.2608; Acts 1979, P.L.249, SEC.17; Acts 1981, P.L.232,
SEC.2; Acts 1982, P.L.155, SEC.19; P.L.139-1996, SEC.11;
P.L.125-1997, SEC.54.
IC 26-3-7-35
Grain buyer license required
Sec. 35. A person licensed under the warehouse act must also
have a valid grain buyer license to do business in Indiana as a grain
buyer.
(Formerly: Acts 1973, P.L.268, SEC.1.) As amended by
P.L.191-1991, SEC.13; P.L.125-1997, SEC.55.
IC 26-3-7-36
Deposit of fees
Sec. 36. All fees received by the director under this chapter shall
be deposited within thirty (30) days of receipt.
(Formerly: Acts 1973, P.L.268, SEC.1.) As amended by Acts 1979,
P.L.17, SEC.53; P.L.139-1996, SEC.12.
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