2016 North Dakota Century Code Title 60 Warehousing and Deposits Chapter 60-10 Credit-Sale Contract Indemnity
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CHAPTER 60-10
CREDIT-SALE CONTRACT INDEMNITY
60-10-01. Credit-sale contracts - Assessment on grain - Submission of assessment.
An assessment at the rate of two-tenths of one percent is placed on the value of all grain
sold in this state under a credit-sale contract, as provided for in sections 60-02-19.1 and
60-02.1-14. The licensee purchasing the grain shall note the assessment on the contract
required under sections 60-02-19.1 and 60-02.1-14 and shall deduct the assessment from the
purchase price payable to the seller. The licensee shall submit any assessment collected under
this section to the public service commission no later than thirty days after each calendar
quarter. The commission shall deposit the assessments received under this section in the
credit-sale contract indemnity fund.
60-10-02. Credit-sale contract indemnity fund - Creation - Continuing appropriation.
There is created in the state treasury the credit-sale contract indemnity fund. The state
treasurer shall invest available moneys in the fund in accordance with section 21-10-07 and in
cooperation with the public service commission and shall deposit any income earned through
the investments into the fund. The fund and earnings of the fund are appropriated to the public
service commission on a continuing basis to be used exclusively to carry out the intent and
purpose of this chapter.
60-10-03. Credit-sale contract indemnity fund - Suspension of assessment.
At the end of the calendar quarter in which the credit-sale contract indemnity fund reaches a
level of six million dollars, the public service commission shall suspend collection of the
assessment required by this chapter. If after suspension of collection the balance in the fund is
less than three million dollars, the public service commission shall require collection of the
assessment.
60-10-04. Credit-sale contract indemnity fund - Eligibility for reimbursement.
A person is eligible to receive indemnity payments from the credit-sale contract indemnity
fund if:
1. After August 1, 2003, the person sold grain to a licensed warehouse or a grain buyer in
this state under the provisions of a credit-sale contract;
2. The licensed warehouse to which the person sold grain or the grain buyer to whom the
person sold grain becomes insolvent; and
3. The licensed warehouse or the grain buyer, as a result of the insolvency, does not fully
compensate the person in accordance with the credit-sale contract.
60-10-05. Credit-sale contract indemnity fund - Availability of money.
Upon the insolvency of a licensed warehouse or a grain buyer and a declaration that the
public service commission serve as the trustee, the public service commission shall make the
proceeds of the credit-sale contract indemnity fund available for use in meeting the licensee's
obligations with respect to the reimbursement of any person who sold grain to the licensee
under a credit-sale contract and who was not fully compensated in accordance with the
contract.
60-10-06. Credit-sale contract indemnity fund - Reimbursement limit.
The amount payable to any eligible person from the credit-sale contract indemnity fund for
each insolvency may not exceed the lesser of eighty percent of the amount owed to that eligible
person in accordance with all of that person's unsatisfied credit-sale contracts or two hundred
eighty thousand dollars.
60-10-07. Credit-sale contract indemnity fund - Prorated claims.
If claims for indemnity payments from the credit-sale contract indemnity fund exceed the
amount in the fund, the public service commission shall prorate the claims and pay the prorated
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amounts. As future assessments are collected, the public service commission shall continue to
forward indemnity payments to each eligible person until the person receives the maximum
amount payable in accordance with this chapter.
60-10-08. Reimbursement for later insolvencies.
The public service commission shall ensure that all persons eligible for payment from the
indemnity fund as a result of an insolvency are fully compensated to the extent permitted by this
chapter before any payments from the indemnity fund are initiated as a result of a later
insolvency. The chronological order of insolvencies is determined by the date the public service
commission is appointed trustee under section 60-02.1-29 or 60-04-03.
60-10-09. Credit-sale contract indemnity fund - Reimbursement for administrative
expenses.
Any expense incurred by the public service commission in administrating the credit-sale
contract indemnity fund is reimbursable from the fund before any other claim for indemnity is
paid.
60-10-10. Credit-sale contract indemnity fund assessment - Failure to collect
assessment - Penalty.
Any person who knowingly or intentionally refuses or fails to collect the assessment
required under this chapter from producers or to submit any assessment collected from
producers to the public service commission for deposit in the credit-sale contract indemnity fund
is guilty of a class A misdemeanor.
60-10-11. Revocation and suspension.
The commission may suspend or revoke the license of any licensee for cause upon notice
and hearing for violation of this chapter.
60-10-12. Cease and desist.
If a person engages in an activity or practice that is contrary to this chapter or rules adopted
by the commission, the commission, upon its own motion without complaint and with or without
a hearing, may order the person to cease and desist from the activity until further order of the
commission. The order may include any corrective action up to and including license
suspension. A cease and desist order must be accompanied by a notice of opportunity to be
heard on the order within fifteen days of the issuance of the order.
60-10-13. Claims.
A claim concerning a grain buyer must be administered in a manner consistent with chapter
60-02.1. A claim concerning a state licensed grain warehouse must be administered in a
manner consistent with chapter 60-04. A payment may not be made from the credit-sale
contract indemnity fund for a claim based on losses resulting from the sale of grain to a person
not licensed under chapter 60-02, chapter 60-02.1, or the United States Warehouse Act [Pub. L.
106-472; 114 Stat. 2061; 7 U.S.C. 241 et seq.].
60-10-14. Subrogation.
Money paid from the credit-sale contract indemnity fund in satisfaction of a valid claim
constitutes a debt obligation of the person against whom the claim was made. The commission
may take action on behalf of the fund against a person to recover the amount of payment made,
plus costs and attorney's fees. Any recovery for reimbursement to the fund must include interest
computed at the weight average prime rate charged by the Bank of North Dakota. Upon
payment of a claim from the credit-sale contract indemnity fund, the claimant shall subrogate its
interest, if any, to the commission in a cause of action against all parties, to the amount of the
loss that the claimant was reimbursed by the fund.
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60-10-15. Unlicensed facility-based grain buyer.
This chapter also applies to a facility-based grain buyer, as defined in section 60-02.1-01,
which is licensed under the United States Warehouse Act but which does not possess a state
grain buyer license. The commission has the duty and power to examine and inspect, during
regular business hours, all books, documents, and records related to collections and
remittances pertaining to the credit-sale contract indemnity fund. In the case of insolvency,
credit-sale contract payments to valid claimants must be reduced by an amount equal to the
credit-sale contract indemnity payments received from payments administered by the United
States department of agriculture.
60-10-16. Roving grain buyers - Exception - Applicability of provisions.
Notwithstanding any other law, this chapter does not apply to any person that purchases,
solicits, or merchandises grain, which has been cleaned, processed, and made ready for
consumption, from a public warehouseman licensed and bonded under chapter 60-02 or from a
facility-based grain buyer licensed and bonded under chapter 60-02.1. If the person engages in
any activity other than those described in this section, the person is subject to the law governing
those other activities.
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