Bill Summary – FastDemocracy

0494.01000
     Sixty-eighth
     Legislative Assembly                      HOUSE BILL NO. 1393
     of North Dakota
     Introduced by
       Representatives D. Johnson, Brandenburg, Thomas
       Senators Luick, Weber
  A BILL for an Act to create and enact chapters 4.1-58, 4.1-59, 4.1-61, and 4.1-62 of the North
  Dakota Century Code, relating to grain and seed warehouses, grain buyers, insolvent grain
  warehousemen, uniform accounting for public elevators and warehouses, and credit-sale
  contracts indemnity from title 60; to amend and reenact subsection 4 of section 41-07-10 and
  section 51-23-04 of the North Dakota Century Code, relating to cross-references to repealed
  laws; to repeal chapters 60-02, 60-02.1, 60-04, 60-05, and 60-10 of the North Dakota Century
  Code, relating to grain and seed warehouses, grain buyers, insolvent grain warehousemen,
  uniform accounting for public elevators and warehouses, and credit-sale contracts indemnity; to
  provide a penalty; and to provide a continuing appropriation.
 BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF NORTH DAKOTA:
     SECTION 1. Chapter 4.1-58 of the North Dakota Century Code is created and enacted as
 follows:
     4.1-58-01. Definitions.
     In this chapter, unless the context or subject matter otherwise requires:
     1.     "Credit-sale contract" means a written contract for the sale of grain under which the
            sale price is to be paid or may be paid more than thirty days after the delivery or
            release of the grain for sale and which contains the notice provided in section
            4.1-58-21. If a part of the sale price of a contract for the sale of grain is to be paid or
            may be paid more than thirty days after the delivery or release of the grain for sale,
            only that part of the contract is a credit-sale contract.
     2.     "Deferred-payment contract" means a credit-sale contract for which the amount owed
            for the sale of grain has been established, but the payment is postponed until a later
            date.
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      3.   "Grain" means wheat, durum, oats, rye, barley, buckwheat, flaxseed, speltz, safflower,
           sunflower seeds, tame mustard, peas, beans, soybeans, corn, clover, millet, alfalfa,
           and any other commercially grown grain or grass seed. "Grain" as defined in this
           chapter does not include grain or grass seeds owned by or in the possession of the
           warehouseman which have been cleaned, processed, and specifically identified for an
           intended use of planting for reproduction and for which a warehouse receipt has not
           been issued.
      4.   "Noncredit-sale contract" means a contract for the sale of grain other than a credit-sale
           contract.
     5.   "Public warehouse" means an elevator, mill, warehouse, subterminal, grain
          warehouse, terminal warehouse, or other structure in which grain is received for
          storing, buying, selling, shipping, or processing for compensation.
     6.   "Public warehouseman" means the person operating a public warehouse located or
          doing business within this state, regardless of whether the owner or operator resides
          within this state. The term does not include a person permitted to sell seed under
          chapter 4.1-53, if that person does not store grain for the public and buys grain only for
          processing and subsequent resale as seed, or an authorized dealer or agent of a seed
          company holding a permit in accordance with section 4.1-53-43.
     7.   "Receipts" means grain warehouse receipts, scale tickets, checks, or other
          memoranda given by a public warehouseman for, or as evidence of, the receipt,
          storage, or sale of grain except when the memoranda was received as a result of a
          credit-sale contract.
     8.   "Receiving station" means any facility other than an individually licensed warehouse
          which is used by a licensed public warehouseman to receive and temporarily store
          grain before transferring the grain to the warehouseman's primary licensed warehouse
          location or delivering it directly to market.
    4.1-58-02. Duties of the commissioner.
    The commissioner shall:
     1.   Exercise general supervision of the public warehouses of this state, including the
          handling, weighing, and storing of grain, and the management of public warehouses.
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      2.   Investigate all complaints of fraud and injustice, unfair practices, and unfair
           discrimination.
      3.   Examine and inspect, during ordinary business hours, any licensed warehouse,
           including all books, documents, and records.
      4.   Require the filing of reports pertaining to the operation of the warehouse.
      5.   Make all proper rules for carrying out and enforcing any law in this state regarding
           public warehouses.
      4.1-58-03. Federal licensed inspector and employees.
      The commissioner may employ a federal licensed inspector and other employees as
 necessary to carry out this chapter.
     4.1-58-04. Grain marketing - Procedure for resolving disputes.
     1.   If any dispute or disagreement arises between the person receiving and the person
          delivering grain at any public warehouse as to the proper grade, dockage, vomitoxin
          level, moisture content, or protein content of any grain, an average sample of at least
          three pints [1.65 liters] of the grain in dispute may be taken together by both parties
          interested.
          a.    The sample must be certified by each party as a true and representative sample
                of the grain in dispute on the day the grain was delivered.
          b.    The sample must be forwarded in a suitable container by parcel post or express,
                prepaid with the name and address of both parties for inspection by a federal
                licensed inspector, or a mutually agreed-upon third party, who will examine the
                grain and adjudge what grade, dockage, vomitoxin level, moisture content, or
                protein content the sample of grain is entitled to under the inspection rules and
                grades adopted by the secretary of agriculture of the United States.
          c.    The person requesting the inspection service shall pay for the inspection.
          d.    If the grain in question is damp, otherwise out of condition, or if moisture content
                is in dispute, the sample must be placed in an airtight container.
          e.    Payment for the grain involved in the dispute must be made and accepted on the
                basis of the determination made by the federal licensed inspector or third party.
           f.   All other quality factors may also be considered in determining the price of the
                grain.
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           g.    An appeal of the determination made by a third party other than a federal
                 licensed inspector may be made to a federal licensed inspector.
           h.    An appeal of the determination made by a federal licensed inspector may be
                 made as provided under the United States Grain Standards Act [Pub. L. 103-354;
                 108 Stat. 3237; 7 U.S.C. 79(c) and (d)] and under 7 CFR 800.125-800.140.
            i.   A person not abiding by a final determination is liable for damage resulting from
                 not abiding by the determination.
      2.   If a dispute or disagreement arises between the person delivering grain and the
           person receiving grain as to the determination of quality factors of grain purchased or
          delivered for which inspection rules and grades have not been adopted by the
          secretary of agriculture of the United States, an average sample of at least three pints
          [1.65 liters] of the grain in dispute may be taken together by the parties interested.
          a.    The sample must be certified by each party as a true and representative sample
                of the grain in dispute on the day the grain was delivered.
          b.    If the grain is damp or otherwise out of condition, the sample must be placed in
                an airtight container.
          c.    The sample must be forwarded in a suitable container by parcel post or express,
                prepaid with the name and address of both parties, for inspection by a federal
                licensed inspector, or a mutually agreed-upon third party, who may examine the
                grain and determine the quality factors in dispute.
          d.    The person requesting the inspection service shall pay for the inspection.
          e.    The determination made by the inspector, or the third party, must be used in the
                settlement of the dispute.
     4.1-58-05. Notice of procedures for resolving disputes over grain.
     A public warehouse shall post a notice containing the procedures specified in section
 4.1-58-04 for resolving disputes. The commissioner shall prescribe the form of the notice and
 shall provide a copy of the notice to each public warehouse. The public warehouseman shall
 post the notice in the grain inspection room of the warehouse. The notice must specifically
 mention the procedure for resolving disputes applies to the grade, dockage, moisture content,
 and protein content of grain and to the quality factors of grain for which inspection rules and
 grades have not been adopted by the secretary of agriculture of the United States.
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     4.1-58-06. Release of records - Confidentiality.
      1.   As a condition of licensure under section 4.1-58-08, an applicant shall agree to provide
           to the commissioner, upon request, any financial record the commissioner deems
           relevant for purposes related to:
           a.   The issuance or renewal of a public warehouse license; or
           b.   An investigation after issuance or renewal of a public warehouse license.
      2.   As a condition of licensure, an applicant shall file a records release with the
           commissioner, authorizing the commissioner to obtain from any source any financial
           record the commissioner deems relevant for purposes related to:
          a.   The issuance or renewal of a public warehouse license; or
          b.   An investigation after issuance or renewal of a public warehouse license.
     3.   Information obtained by the commissioner under this section is confidential and may
          be provided only:
          a.   To federal authorities in accordance with federal law;
          b.   To the attorney general, state agencies, and law enforcement agencies, for use in
               the pursuit of official duties; and
          c.   As directed by an order of a court pursuant to a showing of good cause.
    4.1-58-07. Public warehouse license - Financial criteria to be met.
     1.   To be eligible to receive an annual public warehouse license, an applicant shall submit
          financial documentation to the commissioner verifying the applicant has satisfactory
          net worth and working capital, as determined by the commissioner.
     2.   A licensed public warehouseman or an applicant for initial licensure shall report
          balance sheets and income statements to the commissioner annually on written
          application for initial licensure or license renewal if the applicant purchased up to
          ten million dollars worth of grain during the previous licensing period, or intends to
          purchase up to ten million dollars worth of grain during the first year of operation.
     3.   As a condition of licensure, an applicant shall provide the commissioner, upon request,
          any financial record or bank verification release the commissioner deems relevant for
          the purpose of verifying the financial information of an applicant pursuant to the
          requirements of this section.
     4.   As a condition of licensure, a new applicant must:
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           a.      Pass a background check;
           b.      Have a satisfactory credit score, as determined by the commissioner; and
           c.      Be a responsible person with a good business reputation, as determined by the
                   commissioner, that:
                (1)     Is in the public warehouse business;
                (2)     Has knowledge of, and experience with, generally accepted grain
                        warehousing and handling practices;
                (3)     Is competent and willing to operate a public warehouse in accordance with
                        state and federal regulations; and
               (4)     Has not committed fraud or a criminal offense indicating a lack of business
                       integrity or honesty that undermines the person's responsibility as a
                       warehouse operator.
    4.1-58-08. Public warehouse license - Fee - Posting of license.
     1.   A license must be obtained from the commissioner for each public warehouse in
          operation in this state. A license issued is for one year and terminates on the thirty-first
          day of July in the year of expiration. An initial annual license application that becomes
          effective after June first does not expire until July thirty-first of the following calendar
          year.
     2.   A license may not describe more than one public warehouse nor grant permission to
          operate a public warehouse other than the one described.
     3.   a.      The annual license fee for a public warehouse is:
               (1)     Four hundred dollars for a warehouse that purchased up to one million
                       dollars worth of grain during the previous licensing period, or intends to
                       purchase up to one million dollars worth of grain during the first year of
                       operation;
               (2)     Eight hundred dollars for a warehouse that purchased more than one million
                       dollars worth of grain but not more than ten million dollars worth of grain
                       during the previous licensing period, or intends to purchase more than
                       one million dollars worth of grain but not more than ten million dollars worth
                       of grain during the first year of operation; and
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                (3)   One thousand two hundred dollars for a warehouse that purchased more
                      than ten million dollars worth of grain during the previous licensing period, or
                      intends to purchase more than ten million dollars worth of grain during the
                      first year of operation.
           b.   An application for an annual license renewal received after July fifteenth must
                include an additional one hundred dollar fee per warehouse.
      4.   If a public warehouseman operates two or more warehouses in the same city or
           railroad siding, in conjunction with each other and with the same working force, and
           keeps one set of books and records for the warehouses, and issues one series of
          scale tickets, warehouse receipts, checks, and credit-sale contracts for the grain
          stored and purchased, only one license is required for the operation of all the
          warehouses. When two or more warehouses are operated under one license, the
          license fee is based upon the combined value of the grain purchased by the
          warehouses during the previous licensing period.
     5.   The license must be posted in a conspicuous place in the public warehouse.
     4.1-58-09. Warehouseman to operate warehouse owned by another.
     A warehouseman may operate under its license a warehouse owned by another person.
 Storage performed for the person in the entire licensed warehouse is excepted from the storage
 rate and discrimination provisions contained in sections 4.1-58-19 and 4.1-58-22 to the extent of
 the person's owned capacity in the warehouse.
     4.1-58-10. Receiving stations.
     1.   A licensed public warehouseman may establish a receiving station without a separate
          warehouse license for that facility if:
          a.   The station is colocated with another licensed public warehouse, the operator of
               which takes delivery of the grain on behalf of the warehouseman that established
               the receiving station.
          b.   The storage space used by the receiving station is used solely by the receiving
               station and is not licensed as part of the warehouse located at that site.
          c.   The grain taken in by the receiving station is not commingled with other grain at
               that site.
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