CHAPTER 7. INDIANA GRAIN BUYERS AND WAREHOUSE LICENSING AND BONDING LAW
IC 26-3-7
Chapter 7. Indiana Grain Buyers and Warehouse Licensing andBonding Law
IC 26-3-7-1
Indiana grain buyers and warehouse licensing agency; employees
Sec. 1. (a) The Indiana grain buyers and warehouse licensingagency is established within the Indiana state department ofagriculture to administer this chapter. The director of the Indianastate department of agriculture may appoint the director of theagency, who shall serve at the pleasure of the director of the Indianastate department of agriculture. The director shall administer thischapter and shall be the ultimate authority in the administration ofthis chapter.
(b) The agency may employ all necessary employees, counsel, andconsultants to carry out the provisions of this chapter and is vestedwith the power necessary to fully and effectively carry out theprovisions 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 itspurposes.
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 warehouselicensing 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 licensedunder this chapter.
(3) "Bin" means a bin, tank, interstice, or other container in awarehouse in which bulk grain may be stored.
(4) "Buyer-warehouse" means a person that operates both as awarehouse licensed under this chapter and as a grain buyer.
(5) "Claimant" means a person that is unable to securesatisfaction within the twelve (12) months following delivery ofthe financial obligations due from a licensee under this chapterfor grain that has been delivered to the licensee for sale or forstorage under a bailment.
(6) "Deferred pricing" or "price later" means a purchase by abuyer in which title to the grain passes to the buyer and theprice 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 whichtitle to the grain passes to the buyer at a determined price andpayment 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 thischapter for storage or sale.
(B) A person that:
(i) owns or is the legal holder of a ticket or receipt issuedby a licensee for grain received by the licensee; and
(ii) is the creditor of the issuing licensee for the value ofthe 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 orcontrolled by the licensee or another licensee.
(9) "Designated representative" means the person or personsdesignated by the director to act instead of the director inassisting in the administration of this chapter.
(10) "Director" means the director of the Indiana grain buyersand warehouse licensing agency appointed under section 1 ofthis chapter.
(11) "Facility" means a location or one (1) of several locationsin 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 allobligations due to claimants.
(B) Public declaration of a licensee's insolvency.
(C) Revocation or suspension of a licensee's license, if thelicensee has outstanding indebtedness owed to claimants.
(D) Nonpayment of a licensee's debts in the ordinary courseof business, if there is not a good faith dispute.
(E) Voluntary surrender of a licensee's license, if thelicensee 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 agriculturalcommodities as approved by the agency, and seed as defined inthis section. The term does not include canning crops forprocessing, sweet corn, or flint corn.
(14) "Grain assets" means any of the following:
(A) All grain owned or stored by a licensee, including grainthat:
(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 alicensee's grain.
(C) Equity, less any secured financing directly associatedwith the equity, in hedging or speculative margin accountsof a licensee held by a commodity or security exchange, ora dealer representing a commodity or security exchange, and
any money due the licensee from transactions on theexchange, less any secured financing directly associated withthe money due the licensee from the transactions on theexchange.
(D) Any other unencumbered funds, property, or equity infunds or property, wherever located, that can be directlytraced to the sale of grain by a licensee. However, funds,property, or equity in funds or property may not beconsidered encumbered unless:
(i) the encumbrance results from valuable considerationpaid to the licensee in good faith by a secured party; and
(ii) the encumbrance did not result from the licenseeposting the funds, property, or equity in funds or propertyas additional collateral for an antecedent debt.
(E) Any other unencumbered funds, property, or equity inassets of the licensee.
(15) "Grain bank grain" means grain owned by a depositor foruse in the formulation of feed and stored by the warehouse to bereturned to the depositor on demand.
(16) "Grain buyer" means a person who is engaged in thebusiness of buying grain from producers.
(17) "Grain standards act" means the United States GrainStandards Act, approved August 11, 1916 (39 Stat. 482; 7U.S.C. 71-87 as amended).
(18) "License" means a license issued under this chapter.
(19) "Official grain standards of the United States" means thestandards of quality or condition for grain, fixed and establishedby 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 awarehouse licensed under this chapter.
(22) "Seed", notwithstanding IC 15-15-1, means grain set apartto be used primarily for the purpose of producing new plants.
(23) "Ticket" means a scale weight ticket, a load slip, or otherevidence, other than a receipt, given to a depositor upon initialdelivery 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 asamended).
(25) "Warehouse" means any building or other protectedenclosure in one (1) general location licensed or required to belicensed 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 underone (1) ownership and run from a single office.
(26) "Warehouse operator" means a person that operates afacility or group of facilities in which grain is or may be stored
for hire or which is used for grain bank storage and which isoperated 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 otherprotected enclosure constitutes a single warehouse that requires asingle license under this chapter, the director may consider thefollowing:
(1) The presence of a full weighing facility at geographicallydiverse warehouse facilities.
(2) The traditional method of record keeping with respect to theseparate facilities.
(3) The hours, number of personnel, and activities of theseparate facilities.
(4) Any other factor considered relevant.
In the absence of contradictory information, any warehouses ownedand operated by the same person that are located within closeproximity of each other are presumed to constitute a singlewarehouse.
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 thischapter.
(2) Administer oaths, issue subpoenas, compel the attendanceand testimony of witnesses, and compel the production ofrecords in connection with any investigation or hearing underthis chapter.
(3) Prescribe all forms within the provisions of this chapter.
(4) Establish grain standards in accordance with the grainstandards act and federal regulations promulgated under that actthat must be used by warehouses.
(5) Investigate the activities required by this chapter includingthe storage, shipping, marketing, and handling of grain andcomplaints with respect to the storage, shipping, marketing, andhandling of grain.
(6) Inspect a facility, the grain stored in a facility, and allproperty and records pertaining to a facility. All inspections ofan applicant or licensee under this chapter must take intoconsideration the proprietary nature of an applicant's orlicensee's commercial information. The director may adopt rules
under IC 4-22-2 regarding inspections permitted under thischapter, and the rules must take into consideration theproprietary nature of an applicant's or a licensee's commercialinformation. This chapter does not authorize the inspection ofan applicant's or licensee's trade secret or intellectual propertyinformation.
(7) Determine whether a facility for which a license has beenapplied for or has been issued is suitable for the proper storage,shipping, and handling of the grain that is stored, shipped, orhandled, 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'slicense.
(9) Attend and preside over any investigation or hearingallowed or required under this chapter.
(10) Impose sanctions for violations of this article.
(11) Require a grain buyer and all persons purchasing grain toshow evidence of training or licensing on the risks associatedwith grain marketing practices only if a grain buyer engages ina risk factor higher than a standard defined by the director. Thistraining or licensing may include requiring the grain buyer orperson purchasing grain to do any of the following:
(A) Provide the agency with proof of registry with thecommodity futures trading commission (CFTC) as acommodity trading adviser, a futures commission merchant,an introducing broker, or an associated person.
(B) Demonstrate passage of the series 3 examinationadministered by the National Association of SecurityDealers.
(C) Annually attend six (6) hours of continuing education,approved by the director, focusing on the risks to a grainbuyer and seller that are associated with grain marketingpractices and the communication of risks to the producer.Additionally, as part of continuing education, require a grainbuyer, and all persons purchasing grain for a grain buyer, topass a test, approved and administered by the director, thatreasonably measures the grain buyer's understanding of therisks to grain buyers and sellers associated with producermarketing strategies.
(12) Require all contracts executed after June 30, 1997, for thepurchase of grain from producers, except a flat price contract ora contract for the production of seed, to include the followingnotice immediately above the place on the contract where theseller of the grain must sign:
"NOTICE - SELLER IS CAUTIONED THATCONTRACTING FOR THE SALE AND DELIVERY OFGRAIN INVOLVES RISKS. THESE RISKS MAYINCLUDE FUTURE PAYMENTS BY YOU TOMAINTAIN THIS CONTRACT, A LOWER SALESPRICE, AND OTHER RISKS NOT SPECIFIED. COVERAGE UNDER THE INDIANA GRAININDEMNITY PROGRAM IS LIMITED TO 100% OF ALOSS FOR STORED GRAIN AND 80% OF A LOSS FOROTHER COVERED CONTRACTS.
BE SURE YOU UNDERSTAND THE NATURE OF THISCONTRACT AND THE ASSOCIATED RISKS."
(13) Require all contracts executed after January 1, 2000, forthe production of seed to include the following notice, inconspicuous letters, immediately above the place on thecontract or an addendum where the seller of the seed must sign:
"NOTICE - IF THE TERMS OF THIS CONTRACT STATETHAT THE CONTRACTOR RETAINS OWNERSHIP OFTHE SEED AND ITS PRODUCTS, YOU MAY NOT BEELIGIBLE FOR PARTICIPATION IN THE INDIANAGRAIN INDEMNITY PROGRAM. TO BE ELIGIBLE TOPARTICIPATE IN THE INDIANA GRAIN INDEMNITYPROGRAM, FARMERS MUST OWN AND SELL GRAINOR SEED. BE SURE YOU UNDERSTAND THENATURE OF THIS CONTRACT AND THEASSOCIATED RISKS."
(14) At any time, order an unannounced audit for compliancewith this article.
(15) Adopt rules under IC 4-22-2 to carry out the purposes andintent of this chapter.
(16) Require all grain buyers offering deferred pricing, delayedpayments, or contracts linked to the commodity futures orcommodity options market in connection with a grain purchaseto 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 asuitable financial position to conduct a business as a grainbuyer.
(2) Require a person who conducts business as a grain buyer tofirst be licensed by the agency.
(3) Require any person engaged in the business of advisingproducers on grain marketing for hire to:
(A) register with the agency; and
(B) provide the agency with proof of registry with thecommodity futures trading commission (CFTC) as acommodity trading advisor, a futures commission merchant,an introducing broker, or an associated person.
(c) The director may designate an employee to act for the directorin the administration of this chapter. A designee may not:
(1) act in matters that require a public hearing or the temporarysuspension of a license;
(2) adopt rules; or
(3) act as the ultimate authority in the administration of thischapter.
(d) The director may determine whether geographically separate
facilities constitute a single warehouse or grain buyer and in makingthe determination may consider the following:
(1) The number of facilities involved.
(2) Whether full weighing equipment is present at thegeographically separate facilities.
(3) The method of bookkeeping employed by the separatefacilities.
(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 becomemembers of the national grain regulatory organization and shall:
(1) work in partnership with other state grain regulatoryofficials;
(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 conductbusiness as a grain buyer or buyer-warehouse without first havingobtained the appropriate license from the agency, nor may a personcontinue to operate a warehouse or conduct business as a grain buyeror buyer-warehouse after the person's license has been revoked orsuspended, except as provided in section 18 of this chapter.
(b) All facilities in Indiana that an applicant for a license uses tostore or handle grain must qualify for and obtain a license and belicensed under this chapter before the applicant may operate awarehouse or conduct business as a grain buyer in Indiana. Anapplicant may not be licensed unless all of the applicant's facilitiesqualify for a license under this chapter. An applicant for a licensemust apply to the agency for a license that covers all facilitiesoperated by the applicant for the storage or handling of grain inIndiana.
(c) If a licensee acquires an additional grain storage or handlingfacility in Indiana, the licensee shall promptly submit to the agencyan amended application for licensure. A licensee shall promptlynotify the agency of a material change to the licensee's operations,such as expansion of the amount of storage being used in thelicensee's existing facilities or change of ownership of a facility, andshall provide the director with additional information the directormay require. A licensee shall obtain the approval of the directorbefore making use of increased storage or handling capacity.
(d) A licensee that acquires an additional grain storage orhandling facility that is required to be licensed shall not use the
facility for the storage or handling of grain until it qualifies for andis issued a license and is licensed as provided in this chapter. If alicensed grain storage or handling facility that a licensee operates inIndiana becomes ineligible for a license at any time for any reason,it shall not be used for the storage or handling of grain until thecondition making it ineligible is removed.
(e) A licensee shall maintain at least eighty percent (80%) of theunpaid balance of grain payables in unencumbered assets representedby the aggregate of the following:
(1) Company owned grain.
(2) Cash on hand.
(3) Cash held on account in federally or state licensed financialinstitutions or lending institutions of the Federal Farm CreditAdministration.
(4) Investments held in time accounts with federally or statelicensed financial institutions.
(5) Direct obligations of the United States government.
(6) Balances in grain margin accounts determined by markingto market.
(7) Balances due or to become due to the licensee on deferredpricing 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 thedirector to satisfy the bonding requirement of this chapter.
(10) Deferred pricing contract service charges due or to becomedue to the licensee.
(11) Other evidence of proceeds from or of grain that isacceptable to the agency.
(12) Other assets approved by the director.
(f) A licensee must have the minimum positive net worthspecified in section 16 of this chapter to hold any license or dobusiness.
(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 renewalapplication, which must include a listing of all the licensee'sfacilities, to each licensee before the end of the licensee's fiscal year.The renewal application form must be completed and returned to theagency not later than ninety (90) days after the end of the licensee'sfiscal 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 asrequired under rules adopted by the agency. The licensee shallreceive an annual renewal license application form appropriate to thelicense issued to the licensee. The annual renewal license applicationforms 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 mustbe 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 offees; current liability ratio; review level financial statementinspection
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 ofgrain 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 ofgrain 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 feedingthe person's own livestock or poultry;
(B) chooses to obtain a grain buyer's license; or
(C) offers deferred pricing, delayed payments, or contractslinked to the commodity futures or commodity optionsmarket in connection with grain purchases.
(4) A buyer-warehouse license may be issued to a person thatoperates both as a warehouse and as a grain buyer.
(b) An applicant shall file with the director a separate applicationfor 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 alicense fee as follows:
(1) For a grain bank or for a warehouse or buyer-warehousewith a storage capacity of less than two hundred fifty thousand(250,000) bushels, two hundred fifty dollars ($250) for the firstfacility and fifty dollars ($50) for each additional facility.
(2) For a warehouse or a buyer-warehouse with a storagecapacity of at least two hundred fifty thousand (250,000)bushels but less than one million (1,000,000) bushels, fivehundred dollars ($500) for the first facility and fifty dollars($50) for each additional facility.
(3) For a warehouse or a buyer-warehouse with a storagecapacity of at least one million (1,000,000) bushels but less thanten million (10,000,000) bushels, seven hundred fifty dollars($750) for the first facility and fifty dollars ($50) for eachadditional facility.
(4) For a warehouse or buyer-warehouse with a storage capacitygreater than ten million (10,000,000) bushels, one thousanddollars ($1,000) for the first facility and fifty dollars ($50) foreach additional facility.
(5) For a grain buyer, including a grain buyer that is alsolicensed as a warehouse under the warehouse act, five hundreddollars ($500) for the first facility and fifty dollars ($50) foreach additional facility.
The director may prorate the initial application fee for a license thatis issued at least thirty (30) days after the anniversary date of thelicensee's business.
(d) Before the anniversary date of the license, the licensee shallpay an annual fee in an amount equal to the amount required undersubsection (c). The director may prorate the annual application feefor a license that is modified at least thirty (30) days after theanniversary date of the licensee's license.
(e) A licensee or an applicant for an initial license must have aminimum current asset to current liability ratio of one to one (1:1) orbetter.
(f) An applicant for an initial license shall submit with theperson's application a review level financial statement or betterfinancial statement that reflects the applicant's financial situation ona date not more than fifteen (15) months before the date on which theapplication is submitted. A financial statement submitted under thissection must:
(1) be prepared by an independent accountant certified underIC 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 toaccept other substantial supporting documents instead of those listedto determine the financial solvency of the applicant if the directordetermines that providing the listed documents creates a financial orother 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 thegrain buyers and warehouse licensing agency license fee fundestablished 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 alicensee's fiscal year, the licensee shall file with the agency a currentreview level financial statement or better financial statement thatreflects 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 underIC 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 toaccept other substantial supporting documents instead of those listedto determine the financial solvency of the applicant if the directordetermines that providing the listed documents creates a financial orother hardship on the applicant or licensee.
(b) If the licensee has failed to timely file the financial statementas required in subsection (a), the agency may assess a fine as follows:
(1) Twenty percent (20%) of the licensee's renewal fee for afinancial 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 afinancial statement that is more than fifteen (15) and less thanthirty-one (31) days late.
(3) Sixty percent (60%) of the licensee's renewal fee for afinancial statement that is more than thirty (30) and less thanforty-six (46) days late. (4) Eighty percent (80%) of the licensee's renewal fee for afinancial statement that is more than forty-five (45) and lessthan sixty-one (61) days late.
(5) One hundred percent (100%) of the licensee's renewal feefor 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 agencylicense fee fund is established to provide funds for the administrationof this chapter. The fund shall be administered by the agency. Thefund consists of:
(1) the moisture testing device inspection fees collected underIC 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 moneyin the fund.
(c) The treasurer of state shall invest the money in the fund notcurrently needed to meet the obligations of the fund in the samemanner as other public money may be invested. Interest that accruesfrom these investments shall be deposited in the fund.
(d) Money in the fund at the end of a state fiscal year does notrevert 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 bedisclosed. Unless in accordance with a judicial order, the director,the agency, its counsel, auditors, or its other employees or agentsshall not divulge any other information disclosed by the applicationsor reports filed or inspections performed under the provisions of thischapter, except to agents and employees of the agency or to any otherlegal representative of the state or federal government otherwiseempowered to see or review the information. The director maydisclose the information only in the form of an information summaryor profile, or statistical study based upon data provided with respectto more than one (1) warehouse, grain buyer, or buyer-warehousethat does not identify the warehouse, grain buyer, orbuyer-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
Issuance of license or permit; false statements; applicant's
qualifications
Sec. 7. (a) The director may issue or amend a license after thedirector has:
(1) received and approved the required information anddocumentation; and
(2) determined that:
(A) the facility or facilities covered by the application aresuitable for the proper storage or handling of the grainintended to be stored or handled in the facility or facilities;and
(B) the applicant has complied with this chapter and therules adopted under this chapter.
(b) A person may not represent that the person is licensed underthis chapter, and may not use a name or description that conveys theimpression that the person is licensed, in a receipt or otherwise,unless the person holds an unsuspended and unrevoked license toconduct the business indicated by the license.
(c) An applicant for a license under this chapter must show thatthe applicant:
(1) has a good business reputation;
(2) has not been involved in improper manipulation of booksand records or other improper business practice;
(3) has the qualifications and background essential for theconduct of the business to be licensed;
(4) employs management and principal officers that havesuitable business reputations, background, and qualifications toperform their duties;
(5) has not been found guilty of a crime that would affect thelicensee's ability to conduct business with integrity; and
(6) does not employ an officer, director, partner, or managerthat has been found guilty of a crime that would affect thelicensee'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, thedirector may issue a temporary license to the applicant for areasonable time, not to exceed ninety (90) days, as the director deemsnecessary or advisable to enable the applicant to comply with thefurther requirements for obtaining a license under this chapter. Atemporary license entitles the temporary licensee to the same rightsand subjects the temporary licensee to the same duties as if thetemporary 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 underthis chapter passes to a successor owner, the obligations under thischapter of the original licensee do not cease until the successorowner is properly licensed and has executed a successor's agreementwith 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, asa 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 allobligations of the licensee under this chapter and the rulesadopted under this chapter from the effective date of the bonduntil the earlier of the date the license is revoked or the bond iscanceled as provided in this chapter; and
(2) be further conditioned upon the faithful performance of allobligations from the effective date of the bond and thereafter,regardless of whether the licensee's facility or facilities exist onthe effective date of the bond or are thereafter assumed prior tothe date the licensee's license is revoked or the bond is canceledas provided in this chapter.
(c) The bond must remain in effect during a violation, a temporarysuspension of the licensee's license, or a period during which thelicensee 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 cashdeposit 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 bushelstorage capacity of the grain bank or warehouse.
(2) For a grain buyer, including a grain buyer that is also alicensee under the warehouse act:
(A) ten thousand dollars ($10,000); or (B) five-tenths percent (0.5%) of the total amount the grainbuyer paid for grain purchased from producers during thegrain 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 bushelstorage capacity of the buyer-warehouse's facility; or
(B) five-tenths percent (0.5%) of the total amount thebuyer-warehouse paid for grain purchased from producersduring the buyer-warehouse's most recent fiscal year;
whichever is greater.
(b) Except as provided in subsections (g) and (h), the amount ofbond, letter of credit, or cash deposit required by this chapter maynot exceed one hundred thousand dollars ($100,000) per license andmay not exceed a total of five hundred thousand dollars ($500,000)per person.
(c) The licensed bushel storage capacity is the maximum numberof bushels of grain that the licensee's facility could accommodate asdetermined by the director or the director's designated representativeand shall be increased or reduced in accordance with the amount ofspace being used for storage from time to time.
(d) Instead of a bond or cash deposit, an irrevocable letter ofcredit in the prescribed amount may be provided with the director asthe beneficiary. The director shall adopt rules under IC 4-22-2 toestablish acceptable form, substance, terms, and conditions for lettersof credit. The director may not release a party from the obligationsof the letter of credit within eighteen (18) months of the terminationof the licensee's license.
(e) The director shall adopt rules under IC 4-22-2 to provide forthe receipt and retention of cash deposits. However, the director shallnot return a cash deposit to a licensee until the director has takenreasonable precautions to assure that the licensee's obligations andliabilities 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 thischapter and the rules adopted under this chapter to cover all theperson's facilities in Indiana.
(g) If a licensee has a deficiency in the minimum positive networth 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 ofbond, letter of credit, or cash deposit determined under subsection (a)an amount equal to the deficiency or provide another form of suretyas permitted under the rules of the agency.
(h) Except as provided in subsections (i) and (j), a licensee maynot correct a deficiency in the minimum positive net worth requiredby section 16(a)(1), 16(a)(2)(A), 16(a)(3)(A), 16(a)(4)(A), or16(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 lessthan one million (1,000,000) bushels or purchases less than onemillion (1,000,000) bushels of grain per year may correct adeficiency in minimum positive net worth by adding to the amountof bond, letter of credit, or cash deposit determined under subsection(a) if the buyer-warehouse has a minimum positive net worth of atleast fifteen thousand dollars ($15,000), not including the amountadded to the bond, letter of credit, or cash deposit.
(j) A buyer-warehouse that has a bushel storage capacity of atleast one million (1,000,000) bushels, or purchases at least onemillion (1,000,000) bushels of grain per year, may correct adeficiency in minimum positive net worth by adding to the amountof bond, letter of credit, or cash deposit determined under subsection(a) if the buyer-warehouse has a minimum positive net worth of atleast fifty thousand dollars ($50,000), not including the amountadded to the bond, letter of credit, or cash deposit.
(k) If the director or the director's designated representative findsthat conditions exist that warrant requiring additional bond or cashdeposit, there shall be added to the amount of bond or cash depositas determined under the other provisions of this section, a furtheramount to meet the conditions.
(l) The director may accept, instead of a single cash deposit, letterof credit, or bond, a deposit consisting of any combination of cashdeposits, letters of credit, or bonds in an amount equal to thelicensee's obligation under this chapter. The director shall adopt rulesunder IC 4-22-2 to establish standards for determining the order inwhich the forms of security on deposit must be used to pay provenclaims if the licensee defaults.
(m) The director may require additional bonding that the directorconsiders 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 ofdestruction
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 acertificate of insurance evidencing an effective policy of insuranceissued by an insurance company authorized to do business in Indianainsuring in the name of the applicant all grain that is or may be in thelicensee'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-stormdestroys or damages any grain in a licensed facility, the licenseeshall, upon demand by the depositor and upon being presented withthe receipt or other evidence of ownership, make settlement, afterdeducting the licensee's charges and advances, at the market value ofthe grain based on the value at the average price paid for grain of thesame grade and quality on the date of the loss at the location of thefacility. If a settlement is not made within sixty (60) days from thedate of demand, the depositor is entitled to seek recovery from theinsurance 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 previouslyapproved bond, letter of credit, cash deposit, or previously approvedinsurance is insufficient, the director shall require an additionalbond, letter of credit, cash deposit, or insurance to be given by thelicensee in the form and upon the terms and conditions required bythis 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 oflicense
Sec. 14. (a) A licensee may not cancel an approved bond orapproved insurance unless the director has given prior writtenapproval for the cancellation and has received a substitute cashdeposit or has approved a substitute bond or insurance. The surety ona bond may cancel a bond required by this chapter only after theexpiration of ninety (90) days from the date the surety mailed anotice of intent to cancel, by registered or certified mail, to thedirector. An insurance company may cancel insurance required bythis chapter only after the expiration of a thirty (30) day period fromthe mailing, by certified mail, of notice of intent to cancel, to thedirector. The surety and the insurance company shall, at the time ofgiving notice to the director, send a copy of the notice to the licensee.
(b) Notwithstanding any other provision of this chapter, thelicense of a licensee shall automatically be suspended for failure to:
(1) file a new bond, letter of credit, or cash deposit within theninety (90) day period as provided in this section;
(2) file new evidence of insurance within the thirty (30) dayperiod as provided in this section; or
(3) maintain at all times a bond or cash deposit and insurance asprovided in this chapter.
The suspension shall continue until the licensee complies with thebonding 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 receiptsor other storage obligations
Sec. 15. (a) A licensee shall maintain inventories of sufficientquantity and grade of grain to meet the licensee's storage obligations.
(b) Inventories representing grain evidenced by outstandingwarehouse receipts shall be maintained in the warehouse shown onthe warehouse receipt issued by the warehouse in which the grainwas originally deposited.
(c) Inventories representing storage obligations other than thoseevidenced by warehouse receipts may be represented by:
(1) receipts for grain stored in a facility licensed under thischapter;
(2) receipts in a warehouse licensed and bonded under thewarehouse act; or
(3) other warehouse receipts or tickets as approved by thedirector.
(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 tocurrent liability ratio of one to one (1:1) and shall maintain, asevidenced by the financial statement required by section 6 of thischapter, the following minimum positive net worth:
(1) For a grain bank, minimum positive net worth is at least tenthousand dollars ($10,000).
(2) For a warehouse, minimum positive net worth is at leastequal to the sum of:
(A) fifteen thousand dollars ($15,000); and
(B) ten cents ($0.10) multiplied by the bushel storagecapacity 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 ofbushels of grain purchased by the grain buyer during thegrain buyer's most recent fiscal year;
whichever is greater.
(4) For a buyer-warehouse that has a bushel storage capacity ofless than one million (1,000,000) bushels or purchases less thanone million (1,000,000) bushels of grain per year, minimumpositive net worth is:
(A) the sum of:
(i) fifteen thousand dollars ($15,000); and
(ii) ten cents ($0.10) multiplied by the bushel storagecapacity of the buyer-warehouse; or (B) five cents ($0.05) multiplied by the total number ofbushels of grain purchased by the buyer-warehouse duringthe buyer-warehouse's most recent fiscal year;
whichever is greater.
(5) For a buyer-warehouse that has a bushel storage capacity ofat least one million (1,000,000) bushels or purchases at leastone million (1,000,000) bushels of grain per year, minimumpositive net worth is:
(A) the sum of:
(i) fifty thousand dollars ($50,000); and
(ii) ten cents ($0.10) multiplied by the bushel storagecapacity of the buyer-warehouse; or
(B) five cents ($0.05) multiplied by the total number ofbushels of grain purchased by the buyer-warehouse duringthe buyer-warehouse's most recent fiscal year;
whichever is greater.
(b) Except as provided in section 10 of this chapter, if a licenseeis required to show additional net worth to comply with this section,the licensee may satisfy the requirement by adding to the amount ofthe bond, letter of credit, or cash deposit required under section 10of this chapter an amount equal to the additional net worth requiredor provide another form of surety as permitted under the rules of theagency.
(c) The director may adopt rules under IC 4-22-2 to provide thata narrative market appraisal that demonstrates assets sufficient tocomply with this section may satisfy the minimum positive net worthrequirement.
(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 andprocedures
Sec. 16.5. (a) Upon learning of the possibility that a shortageexists, either as a result of an inspection or a report or complaintfrom a depositor, the agency, based on an on-premise inspection,shall make a preliminary determination as to whether a shortageexists. If a shortage is not discovered, the agency shall treat the auditas it would any other audit.
(b) If it is determined that a shortage may exist, the director or thedirector's designated representative shall hold a hearing as soon aspossible to confirm the existence of a shortage as indicated by thelicensee's books and records and the grain on hand. Only thelicensee, the surety company named on the licensee's bond, the issuerof the irrevocable letter of credit, and any grain depositor who has
made a claim or complaint to the agency in conjunction with theshortage shall be considered as interested parties for the purposes ofthat hearing, and each shall be given notice of the hearing. At thehearing, the director or the director's designated representative shalldetermine whether there appears to be a reasonable probability thata shortage exists. If it is determined that a reasonable probabilityexists and that the bond or letter of credit proceeds or the cashdeposit should be distributed, a preliminary determination shall beentered to the effect that the licensee has failed