19.1148.01000
Sixty-sixth
Legislative Assembly SENATE BILL NO. 2346
of North Dakota
Introduced by
Senators Wanzek, Dotzenrod, Klein, Luick
Representatives D. Johnson, Kempenich
1 A BILL for an Act to create and enact a new section to chapter 60-02 and a new section to
2 chapter 60-10 of the North Dakota Century Code, relating to records confidentiality for
3 warehousemen and grain buyers and assessment refunds for grain producers; to amend and
4 reenact subsection 5 of section 60-02-07 and sections 60-02-11, 60-02.1-07, 60-02.1-37,
5 60-02.1-38, 60-04-09, 60-04-10, 60-10-01, 60-10-02, 60-10-03, 60-10-04, 60-10-05, 60-10-06,
6 60-10-07, 60-10-09, 60-10-10, 60-10-13, 60-10-14, and 60-10-15 of the North Dakota Century
7 Code, relating to warehouse and grain buyer licensing, scale ticket conversions, claims
8 distributions, assessments and refunds, subrogation, and unlicensed grain buyers; to provide a
9 penalty; to provide a continuing appropriation; and to provide for reports.
10 BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF NORTH DAKOTA:
11 SECTION 1. AMENDMENT. Subsection 5 of section 60-02-07 of the North Dakota Century
12 Code is amended and reenacted as follows:
13 5. If required to obtain United States department of agriculture approval of the
14 commission's warehouse inspection program, theThe commission mayshall require
15 that the applicant to submit a current financial statement prepared in accordance with
16 generally accepted accounting principles. A financial statement furnished under this
17 subsection is a confidential trade secret and is not a public record.
18 SECTION 2. AMENDMENT. Section 60-02-11 of the North Dakota Century Code is
19 amended and reenacted as follows:
20 60-02-11. Scale ticket - Contents - Conversion.
21 1. a. Every public warehouseman, upon receiving grain into the warehouse, shall
22 issue a uniform scale ticket for each load of grain received. The scale tickets
23 must be numbered consecutively, and one copy of each ticket must be retained
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1 and remain as a permanent record. The original ticket must be delivered to the
2 person from whom the grain is received, upon receipt of each load of grain.
3 b. All scale tickets must be converted into cash, noncredit-sale contracts, credit-sale
4 contracts, or warehouse receipts, within forty-fivethirty days after the grain is
5 delivered to the warehouse, unless:
6 (1) The person to whom the scale ticket is issued signs a form waiving all rights
7 to trust benefits under section 60-04-03.1;
8 (2) The form identifies by number each scale ticket to which the waiver applies;
9 and
10 (3) The form is signed by the warehouseman.
11 c. The commission shall prepare the waiver form required by subdivision b and
12 make the form available to each warehouse.
13 d. The warehouseman shall keep one copy of the signed waiver form with the
14 records of the warehouse, provide one copy to the person who was issued the
15 scale ticket and signed the form, and file one copy with the commission.
16 e. If a warehouseman becomes insolvent under chapter 60-04, a producer who
17 failed to convert the producer's grain under subdivision b and files a claim
18 pursuant to chapter 60-04 must be treated as a credit-sale contract claimant.
19 2. Nothing in this chapter requires a warehouseman to receive grain for storage. A
20 warehouseman shall publish and post, in a conspicuous place in the warehouse, a
21 publication identifying whether storage will be available to patrons or whether grain will
22 be accepted via cash or a credit-sale contract arrangement.
23 SECTION 3. A new section to chapter 60-02 of the North Dakota Century Code is created
24 and enacted as follows:
25 Release of records - Confidentiality.
26 1. As a condition of licensure under sections 60-02-07 or 60-02.1-07, an applicant must
27 agree to provide to the commission, upon request, any financial record the
28 commission deems relevant for purposes related to:
29 a. The issuance of a public warehouse or grain buyer license; or
30 b. An investigation after issuance of a public warehouse or grain buyer license.
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1 2. As a condition of licensure, an applicant shall file a records release with the
2 commission, authorizing the commission to obtain from any source any financial
3 record the commission deems relevant for purposes related to:
4 a. The issuance of a public warehouse or grain buyer license; or
5 b. An investigation after issuance of a public warehouse or grain buyer license.
6 3. Any information obtained by the commission under this section is confidential and may
7 be provided only:
8 a. To federal authorities in accordance with federal law;
9 b. To the attorney general, state agencies, and law enforcement agencies, for use in
10 the pursuit of official duties; and
11 c. As directed by an order of a court pursuant to a showing of good cause.
12 SECTION 4. AMENDMENT. Section 60-02.1-07 of the North Dakota Century Code is
13 amended and reenacted as follows:
14 60-02.1-07. Grain buyer license - How obtained - Fee - Financial statement.
15 Grain buyers must obtain an annual license from the commission. Except as provided in
16 this section, each license expires on July thirty-first of each year. When a licensee's initial
17 license is issued effective after May thirty-first, thatthe license expires on July thirty-first of the
18 following year. A facility-based grain buyer must obtain a license for each receiving location
19 operated in the state. If a grain buyer operates two or more facilities in the same city or siding,
20 in conjunction with each other and with the same working force, and where but one set of books
21 and records is kept for all such facilities, and scale tickets and checks of but one series are
22 issued for the grain, purchased, only one license is required for the operation of all such
23 facilities. The annual license fee for a facility-based grain buyer is three hundred dollars and a
24 license renewal application that is received after July fifteenth must be assessed an additional
25 one hundred dollar fee per receiving location.
26 If required to obtain United States department of agriculture approval of the commission's
27 grain buyer inspection program, theThe commission mayshall require that grain buyers to
28 submit a current financial statement prepared in accordance with generally accepted accounting
29 principles. A financial statement furnished under this section is a confidential trade secret and is
30 not a public record.
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1 SECTION 5. AMENDMENT. Section 60-02.1-37 of the North Dakota Century Code is
2 amended and reenacted as follows:
3 60-02.1-37. Report of trustee to court - Approval - Distribution.
4 1. Upon the receipt and evaluation of claims, the commission shall file with the court a
5 report showing the amount and validity of each claim after recognizing:
6 a. Relevant liens or pledges.
7 b. Relevant assignments.
8 c. Relevant deductions due to advances or offsets accrued in favor of the licensee.
9 d. In case of relevant cash claims or checks, the amount of the claim.
10 e. In case of a relevant credit-sale contract or noncredit-sale contract, the amount
11 remaining to be paid based on the terms of the contract.
12 2. The report must also contain the proposed reimbursement to the commission for the
13 expenses of administering the insolvency, the proposed distribution of the trust fund
14 assets to receiptholders, less expenses incurred by the commission in the
15 administration of the insolvency, and the proposed credit-sale contractgrain producers
16 indemnity fund payments to credit-sale contract claimants. If the trust fund is
17 insufficient to redeem all receiptholder claims in full, the report should list the funds as
18 prorated.
19 3. The court shall set a hearing and the appropriate notice for interested persons to show
20 cause why the commission's report should not be approved and distribution of the
21 trust fund be made as proposed. Copies of the report and notice of hearing must be
22 served by the commission by certified mail upon the licensee and the surety and by
23 ordinary mail upon all persons having claims filed with the commission.
24 4. Any aggrieved person having an objection to the commission's report shall file the
25 objection with the court and serve copies on the commission, the licensee, and the
26 surety at least twenty days before the hearing. Failure to file and serve objections in
27 the time set is a waiver of the objection.
28 5. Following the hearing, the court shall approve or modify the report and issue an order
29 directing payment of the necessary bond proceeds, distribution of the trust fund,
30 payments from the credit-sale contractgrain producers indemnity fund, and discharge
31 of the commission from its trust.
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1 6. If the trust fund is insufficient to redeem all receiptholder claims in full, a receiptholder
2 is eligible to receive reimbursement of the remaining amount from the grain producers
3 indemnity fund, subject to the limitations under section 60-10-06.
4 SECTION 6. AMENDMENT. Section 60-02.1-38 of the North Dakota Century Code is
5 amended and reenacted as follows:
6 60-02.1-38. Filing fees and court costs - Expenses.
7 The commission may not be required to pay any filing fee or other court costs or
8 disbursements. The attorney general may appoint outside legal counsel to assist the
9 commission in the prosecution of the action and the cost of employing outside counsel must be
10 paid from the trust fund and the credit-sale contractgrain producers indemnity fund as
11 appropriate. All other necessary expenses incurred by the commission in carrying out the
12 provisions of this chapter, including adequate insurance to protect the commission, its
13 employees, and others engaged in carrying out the provisions of sections 60-02.1-28 through
14 60-02.1-38, must be reimbursed to the commission from the trust fund and credit-sale
15 contractgrain producers indemnity funds as appropriate.
16 SECTION 7. AMENDMENT. Section 60-04-09 of the North Dakota Century Code is
17 amended and reenacted as follows:
18 60-04-09. Report of trustee to court - Approval - Distribution.
19 Upon the receipt and evaluation of claims filed with it, the commission shall file with the
20 court a report showing the amount and validity of each claim after recognizing:
21 1. Any proper liens or pledges thereon.
22 2. Assignments thereof.
23 3. Deductions therefrom by reason of advances or offsets accrued in favor of the
24 warehouseman.
25 4. In case of cash claims or checks, the amount thereof.
26 5. In the case of scale tickets or warehouse receipts, the amount thereof based upon the
27 market price prevailing on the date the commission first received a copy of the written
28 demand required by section 60-04-02.
29 6. In the case of a credit-sale or noncredit-sale contract, the amount remaining to be paid
30 based on the terms of the contract.
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1 The report must also contain the proposed reimbursement to the commission for the
2 expenses of administering the insolvency, a proposed distribution of the trust fund assets, less
3 expenses incurred by the commission in the administration of this chapter, and the proposed
4 credit-sale contractgrain producers indemnity fund payments to credit-sale contract claimants
5 as their interests are determined. If the trust fund is insufficient to redeem all receiptholder
6 claims in full, the fund must be shown prorated in the report in the manner the commission
7 deems fair and equitable. If the trust fund is insufficient to redeem all receiptholder claims in full,
8 a receiptholder is eligible to receive reimbursement of the remaining amount from the grain
9 producers indemnity fund, subject to the limitations under section 60-10-06.
10 The court shall set a hearing and the appropriate notice for interested persons to show
11 cause why the commission's report should not be approved and credit-sale contractgrain
12 producers indemnity fund payments and distribution of the trust fund be made as proposed, and
13 payments from the credit-sale contracts be made as proposed. Copies of the report and notice
14 of hearing must be served by the commission by certified mail upon the warehouseman and the
15 surety and by ordinary mail upon all persons having claims filed with the commission.
16 Any aggrieved person having an objection to the commission's report shall file the objection
17 with the court and serve copies on the commission, the warehouseman, and the surety at least
18 twenty days before the hearing. Failure to file and serve objections in the time set is a waiver of
19 the objection.
20 Following hearing, the court shall approve or modify the report and issue an order directing
21 payment of the necessary bond proceeds, distribution of the trust fund, payments from the
22 credit-sale contractgrain producers indemnity fund, and discharge of the commission from its
23 trust.
24 SECTION 8. AMENDMENT. Section 60-04-10 of the North Dakota Century Code is
25 amended and reenacted as follows:
26 60-04-10. Filing fees and court costs - Expenses.
27 In any action in a state court in this state, the commission shallmay not be required to pay
28 any filing fee or other court costs or disbursements if the fees accrue to the county or to the
29 state. The attorney general may employ outside legal services to assist the commission in the
30 prosecution of suchthe action as in the attorney general's judgment may be necessary and the
31 commission shall deduct the expenses of the same from the trust fund and the credit-sale
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1 contractgrain producers indemnity fund as appropriate. All other necessary expenses incurred
2 by the commission in carrying out the provisions of this chapter, including adequate insurance
3 to protect the commission, its employees, and others engaged in carrying out the provisions of
4 this chapter, must be reimbursed to the commission from the trust fund and credit-salegrain
5 producers indemnity funds as appropriate.
6 SECTION 9. AMENDMENT. Section 60-10-01 of the North Dakota Century Code is
7 amended and reenacted as follows:
8 60-10-01. Credit-sale contracts - Assessment on grain - Submission of assessment.
9 An assessment at the rate of two-tenthsone-tenth of one percent is placed on the value of
10 all grain sold in this state under a credit-sale contract, as provided for in sections 60-02-19.1
11 and 60-02.1-14. The licensee purchasing the grain shall note the assessment on the contract
12 required under sections 60-02-19.1 and 60-02.1-14 and shall deduct the assessment from the
13 purchase price payable to the seller. The licensee shall submit any assessment collected under
14 this section to the public service commission no later than thirty days after each calendar
15 quarter. The commission shall deposit the assessments received under this section in the
16 credit-sale contractgrain producers indemnity fund.
17 SECTION 10. AMENDMENT. Section 60-10-02 of the North Dakota Century Code is
18 amended and reenacted as follows:
19 60-10-02. Credit-sale contractGrain producers indemnity fund - Creation - Continuing
20 appropriation.
21 There is created in the state treasury the credit-sale contractgrain producers indemnity
22 fund. The state treasurer shall invest available moneys in the fund in accordance with section
23 21-10-07 and in cooperation with the public service commission and shall deposit any income
24 earned through the investments into the fund. The fund and earnings of the fund are
25 appropriated to the public service commission on a continuing basis to be used exclusively to
26 carry out the intent and purpose of this chapter.
27 SECTION 11. AMENDMENT. Section 60-10-03 of the North Dakota Century Code is
28 amended and reenacted as follows:
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1 60-10-03. Credit-sale contractGrain producers indemnity fund - Suspension of
2 assessment.
3 At the end of the calendar quarterOn the thirtieth day of June in years in which the
4 credit-sale contractgrain producers indemnity fund reac