HF 2021

as introduced - 91st Legislature (2019 - 2020) Posted on 03/04/2019 02:04pm

A bill for an act
relating to agriculture; establishing a grain credit contract indemnity program;
authorizing a transfer; appropriating money; amending Minnesota Statutes 2018,
sections 223.15; 223.16, subdivision 1; 223.177, by adding a subdivision; 223.19;
proposing coding for new law in Minnesota Statutes, chapter 223.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2018, section 223.15, is amended to read:

223.15 CITATION.

Sections 223.15 to deleted text begin 223.19 deleted text end new text begin 223.30 new text end may be cited as the "Grain Buyers Act."

Sec. 2.

Minnesota Statutes 2018, section 223.16, subdivision 1, is amended to read:

Subdivision 1.

Applicability.

For the purpose of sections 223.15 to deleted text begin 223.22 deleted text end new text begin 223.30 new text end , the
terms defined in this section have the meanings given them.

Sec. 3.

Minnesota Statutes 2018, section 223.177, is amended by adding a subdivision to
read:

new text begin Subd. 1a. new text end

new text begin Indemnity assessment. new text end

new text begin (a) A grain buyer entering into a voluntary extension
of credit contract must collect from the seller an assessment equal to two-tenths of one
percent of the gross value of the grain purchased if payment is deferred for 60 days or less,
or three-tenths of one percent of the gross value if payment is deferred for more than 60
days. The grain buyer must deduct the assessment from the purchase price payable to the
seller and itemize the assessment in a written confirmation or contract required under this
section.
new text end

new text begin (b) The grain buyer must remit all assessment revenue to the commissioner no later than
30 days after the end of each calendar quarter in the form and accompanied by any
documentation required by the commissioner. The commissioner must deposit all revenue
received under this paragraph in the grain credit contract indemnity account established in
section 223.30, subdivision 7.
new text end

new text begin (c) At the end of any calendar quarter in which the grain credit contract indemnity account
balance equals or exceeds $6,000,000, the commissioner must direct grain buyers to suspend
collection of the assessment. If the account balance falls below $3,000,000 after suspension,
the commissioner must direct grain buyers to resume collection of the assessment.
new text end

Sec. 4.

Minnesota Statutes 2018, section 223.19, is amended to read:

223.19 RULES.

The commissioner may make rules pursuant to chapter 14 to carry out the provisions of
sections 223.15 to deleted text begin 223.22 deleted text end new text begin 223.30 new text end .

Sec. 5.

new text begin [223.30] INDEMNITY PAYMENTS.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin A grain credit contract indemnity program is established.
The commissioner must administer the program and award indemnity payments to eligible
producers.
new text end

new text begin Subd. 2. new text end

new text begin Eligibility. new text end

new text begin A producer is eligible to receive an indemnity payment from the
commissioner if the producer sold grain under a voluntary extension of credit contract to a
grain buyer and the producer is damaged by the grain buyer's breach of the voluntary
extension of credit contract.
new text end

new text begin Subd. 3. new text end

new text begin Application. new text end

new text begin (a) A producer asserting eligibility under subdivision 2 must file
a completed claim with the commissioner within 180 days of the alleged breach of contract.
The producer must state the facts constituting the claim and all other information required
by the commissioner.
new text end

new text begin (b) The commissioner shall promptly determine the validity of each filed claim and
notify the claimant accordingly. An aggrieved party may appeal the commissioner's
determination by requesting, within 15 days, that the commissioner initiate a contested case
proceeding under chapter 14.
new text end

new text begin Subd. 4. new text end

new text begin Court order. new text end

new text begin The commissioner may apply to the district court for an order
appointing a trustee or receiver to manage and supervise the operations of a grain buyer in
default. The commissioner may participate in any resulting court proceeding as an interested
party.
new text end

new text begin Subd. 5. new text end

new text begin Payment limitation. new text end

new text begin (a) For each breach of contract, the commissioner must
pay the eligible producer an amount equal to the lesser of $280,000 or 80 percent of the
amount owned to the producer pursuant to the voluntary extension of credit contract in
default.
new text end

new text begin (b) If valid claims exceed funds available in the grain credit contract indemnity account,
the commissioner must prorate the claims and pay prorated amounts to each eligible producer.
When additional funds become available, the commissioner must resume issuing indemnity
payments to each eligible producer until each producer receives the maximum amount
payable under paragraph (a).
new text end

new text begin Subd. 6. new text end

new text begin Debt obligation; subrogated claim. new text end

new text begin (a) Money paid by the commissioner to
satisfy a valid claim constitutes a debt obligation of the grain buyer in default. The
commissioner may take action against the grain buyer to recover the amount of any claim
payment plus reasonable costs, attorney fees, and interest computed at the rate provided in
section 270C.40. The commissioner must deposit any amount recovered under this
subdivision in the grain credit contract indemnity account.
new text end

new text begin (b) As a condition of payment from the commissioner, a producer must subrogate the
producer's interest in the voluntary extension of credit contract to the commissioner in an
amount equal to any claim payment or payments the producer received under this section.
new text end

new text begin Subd. 7. new text end

new text begin Account; appropriation. new text end

new text begin A grain credit contract indemnity account is
established in the agricultural fund. Money in the account, including interest, is appropriated
to the commissioner to pay valid claims and to administer this section.
new text end

Sec. 6. new text begin TRANSFER.
new text end

new text begin $2,000,000 is transferred in fiscal year 2020 from the general fund to the commissioner
of agriculture for deposit in the grain credit contract indemnity account in the agricultural
fund.
new text end

Sec. 7. new text begin EFFECTIVE DATE.
new text end

new text begin This act is effective July 1, 2019.
new text end