SF 1997

as introduced - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to agriculture; changing meeting provisions 
  1.3             and duties of the board of grain standards; changing 
  1.4             certain fees; defining and clarifying certain terms; 
  1.5             changing certain provisions related to grain buyers, 
  1.6             warehouses, and grain storage; authorizing rulemaking; 
  1.7             amending Minnesota Statutes 1998, sections 17B.07; 
  1.8             17B.12; 17B.15, subdivision 1; 27.01, subdivision 8, 
  1.9             and by adding a subdivision; 27.19, subdivision 1; 
  1.10            223.17, subdivisions 5 and 6; 223.175; 232.21, by 
  1.11            adding a subdivision; and 232.23, subdivisions 3 and 
  1.12            6; proposing coding for new law in Minnesota Statutes, 
  1.13            chapters 231; and 232. 
  1.14  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.15     Section 1.  Minnesota Statutes 1998, section 17B.07, is 
  1.16  amended to read: 
  1.17     17B.07 [OFFICIAL TITLE OF BOARD; MEETINGS.] 
  1.18     The official title of the board shall be "The Minnesota 
  1.19  board of grain standards" and it shall have jurisdiction over 
  1.20  all grain appeal cases brought before it.  
  1.21     The board shall meet annually on or before June 15, as 
  1.22  needed and shall establish the grades of all grain subject to 
  1.23  state inspection which shall be known as the "Minnesota grades," 
  1.24  and all grain received at any public warehouse shall be graded 
  1.25  accordingly.  Such grades shall not be changed before the next 
  1.26  annual meeting without the concurrence of at least two members 
  1.27  of the board.  At the time of establishing Minnesota grades, the 
  1.28  board also shall adopt such rules, in accordance with the 
  1.29  Administrative Procedure Act, as it deems necessary for the 
  2.1   enforcement of this section and section 17B.06.  In establishing 
  2.2   the grades, in addition to the physical qualities of the grain, 
  2.3   there shall be taken into consideration the milling and 
  2.4   bread-producing quality of all grain products used as human 
  2.5   food.  The board shall determine the grade, and dockage, if any, 
  2.6   of all grain in all cases where appeals from the decisions of 
  2.7   the chief inspector have been taken and for such purpose they 
  2.8   may request fresh samples of such grain to be furnished directly 
  2.9   to the board.  Dockage shall be considered as being of two 
  2.10  classes; first, that having value and second, that having no 
  2.11  value.  At the annual meeting the board shall ascertain and 
  2.12  determine what dockage contained in grain is of value and 
  2.13  publish a list thereof in connection with the publication of the 
  2.14  Minnesota grades.  Any foreign content of the grain shall not be 
  2.15  considered in establishing the grade.  Whenever grain containing 
  2.16  dockage of value is sold to any public local warehouse or mill, 
  2.17  terminal warehouse, or to any flour mill located in St. Paul, 
  2.18  Minneapolis, or Duluth, or any other point within the state, 
  2.19  which is now or may hereafter be designated as a terminal point, 
  2.20  such sale shall not be considered to include such dockage of 
  2.21  value, but such dockage shall be paid for at its market value or 
  2.22  shall be returned to the vendor of said grain at the option of 
  2.23  the vendee.  
  2.24     Sec. 2.  Minnesota Statutes 1998, section 17B.12, is 
  2.25  amended to read: 
  2.26     17B.12 [APPEALS; PROCEDURE.] 
  2.27     Any owner, consignee, or shipper of grain, or any warehouse 
  2.28  operator, who is dissatisfied with the inspection of grain may 
  2.29  appeal to the board of grain standards by filing a notice of 
  2.30  such appeal with the commissioner and paying a fee, to be fixed 
  2.31  by the commissioner, which shall be refunded if the appeal is 
  2.32  sustained.  The commissioner shall forthwith promptly transmit 
  2.33  the notice to said the board of grain standards.  The decision 
  2.34  of said the board, fixing the grade of such the grains shall 
  2.35  be is final.  
  2.36     Sec. 3.  Minnesota Statutes 1998, section 17B.15, 
  3.1   subdivision 1, is amended to read: 
  3.2      Subdivision 1.  [ADMINISTRATION; APPROPRIATION.] The fees 
  3.3   for inspection and weighing shall be fixed by the commissioner 
  3.4   and be a lien upon the grain.  The commissioner shall set fees 
  3.5   for all inspection and weighing in an amount adequate to pay the 
  3.6   expenses of carrying out and enforcing the purposes of sections 
  3.7   17B.01 to 17B.23, including the portion of general support costs 
  3.8   and statewide indirect costs of the agency attributable to that 
  3.9   function, with a reserve sufficient for up to six months.  The 
  3.10  commissioner shall review the fee schedule twice each year.  Fee 
  3.11  adjustments are not subject to chapter 14.  Payment shall be 
  3.12  required for services rendered.  If the grain is in transit, the 
  3.13  fees shall be paid by the carrier and treated as advance 
  3.14  charges, and, if received for storage, the fees shall be paid by 
  3.15  the warehouse operator, and added to the storage charges. 
  3.16     All fees collected and all fines and penalties for 
  3.17  violation of any provision of this chapter shall be deposited in 
  3.18  the grain inspection and weighing account, which is created in 
  3.19  the state treasury for carrying out the purpose of sections 
  3.20  17B.01 to 17B.23.  The money in the account, including interest 
  3.21  earned on the account, is annually appropriated to the 
  3.22  commissioner of agriculture to administer the provisions of 
  3.23  sections 17B.01 to 17B.23.  When money from any other account is 
  3.24  used to administer sections 17B.01 to 17B.23, the commissioner 
  3.25  shall notify the chairs of the agriculture, environment and 
  3.26  natural resources finance, and ways and means committees of the 
  3.27  house of representatives; the agriculture and rural development 
  3.28  and finance committees of the senate; and the finance division 
  3.29  of the environment and natural resources committee of the senate.
  3.30     Sec. 4.  Minnesota Statutes 1998, section 27.01, 
  3.31  subdivision 8, is amended to read: 
  3.32     Subd. 8.  [WHOLESALE PRODUCE DEALER.] (a) "Wholesale 
  3.33  produce dealer" or "dealer at wholesale" means:  
  3.34     (1) a person who buys or contracts to buy produce in 
  3.35  wholesale lots for resale; 
  3.36     (2) a person engaging in the business of a broker or agent, 
  4.1   who handles or deals in produce for a commission or fee; 
  4.2      (3) a truck owner or operator who buys produce in wholesale 
  4.3   lots for resale; and 
  4.4      (4) a person engaged in the business of a cannery, food 
  4.5   manufacturer, or food processor, who purchases produce in 
  4.6   wholesale lots as a part of that business; or 
  4.7      (5) a person who contracts with a producer to grow, raise, 
  4.8   or provide produce in Minnesota.  
  4.9      (b) For purposes of paragraph (a), "wholesale lots" means 
  4.10  purchases from Minnesota sellers must total more than $12,000 
  4.11  annually. 
  4.12     (c) "Wholesale produce dealer" or "dealer at wholesale" 
  4.13  does not include:  
  4.14     (1) a truck owner and operator who regularly engages in the 
  4.15  business of transporting freight, including produce, for a 
  4.16  transportation fee only, and who does not purchase, contract to 
  4.17  purchase, or sell produce; 
  4.18     (2) a marketing cooperative association in which 
  4.19  substantially all of the voting stock is held by patrons who 
  4.20  patronize the association and in which at least 75 percent of 
  4.21  the business of the association is transacted with member or 
  4.22  stockholder patrons; 
  4.23     (3) a person who purchases Minnesota seasonally grown 
  4.24  perishable fresh fruits and vegetables, and pays cash, including 
  4.25  lawful money of the United States, a cashier's check, a 
  4.26  certified check, or a bank draft; 
  4.27     (4) a person who handles and deals in only canned, 
  4.28  packaged, or processed produce or packaged dairy products that 
  4.29  are no longer perishable as determined by the commissioner by 
  4.30  rule; or 
  4.31     (5) retail merchants who purchase produce, defined in 
  4.32  subdivision 2, directly from farmers, which in the aggregate 
  4.33  does not exceed $500 per month.  
  4.34     Sec. 5.  Minnesota Statutes 1998, section 27.01, is amended 
  4.35  by adding a subdivision to read: 
  4.36     Subd. 11.  [PRODUCER.] "Producer" means a person who 
  5.1   produces or causes to be produced produce in a quantity beyond 
  5.2   the person's own family use and is able to transfer title to 
  5.3   another or provides management, labor, machinery, facilities, or 
  5.4   any other production input for the production of produce. 
  5.5      Sec. 6.  Minnesota Statutes 1998, section 27.19, 
  5.6   subdivision 1, is amended to read: 
  5.7      Subdivision 1.  [PROHIBITED ACTS.] (a) A person subject to 
  5.8   the provisions of this section and sections 27.01 to 27.14 may 
  5.9   not:  
  5.10     (1) operate or advertise to operate as a dealer at 
  5.11  wholesale without a license; 
  5.12     (2) make any false statement or report as to the grade, 
  5.13  condition, markings, quality, or quantity of produce, as defined 
  5.14  in section 27.069, received or delivered, or act in any manner 
  5.15  to deceive a consignor or purchaser; 
  5.16     (3) refuse to accept a shipment contracted for by the 
  5.17  person, unless the refusal is based upon the showing of a state 
  5.18  inspection certificate secured with reasonable promptness after 
  5.19  the receipt of the shipment showing that the kind and quality of 
  5.20  produce, as defined in section 27.069, is other than that 
  5.21  purchased or ordered by the person; 
  5.22     (4) fail to account or make a settlement for produce within 
  5.23  the required time; 
  5.24     (5) violate or fail to comply with the terms or conditions 
  5.25  of a contract entered into by the person for the purchase 
  5.26  production or sale of produce; 
  5.27     (6) purchase for a person's own account any produce 
  5.28  received on consignment, either directly or indirectly, without 
  5.29  the consent of the consignor; 
  5.30     (7) issue a false or misleading market quotation, or cancel 
  5.31  a quotation during the period advertised by the person; 
  5.32     (8) increase the sales charges on produce shipped to the 
  5.33  person by means of "dummy" or fictitious sales; 
  5.34     (9) receive decorative forest products and the products of 
  5.35  farms and waters from foreign states or countries for sale or 
  5.36  resale, either within or outside of the state, and give the 
  6.1   purchaser the impression, through any method of advertising or 
  6.2   description, that the produce is of Minnesota origin; 
  6.3      (10) fail to notify in writing all suppliers of produce of 
  6.4   the protection afforded to suppliers by the person's licensee 
  6.5   bond, including:  availability of a bond, notice requirements, 
  6.6   and any other conditions of the bond; 
  6.7      (11) make a false statement to the commissioner on an 
  6.8   application for license or bond or in response to written 
  6.9   questions from the commissioner regarding the license or bond; 
  6.10     (12) commit to pay and not pay in full for all produce 
  6.11  committed for.  A processor may not pay an amount less than the 
  6.12  full contract price if the crop produced is satisfactory for 
  6.13  processing and is not harvested for reasons within the 
  6.14  processor's control.  If the processor sets the date for 
  6.15  planting, bunching, unusual yields, and a processor's inability 
  6.16  or unwillingness to harvest must be considered to be within the 
  6.17  processor's control.  Under this clause growers must be 
  6.18  compensated for passed acreage at the same rate for grade and 
  6.19  yield as they would have received had the crop been harvested in 
  6.20  a timely manner minus any contractual provision for green manure 
  6.21  or feed value.  Both parties are excused from payment or 
  6.22  performance for crop conditions that are beyond the control of 
  6.23  the parties; or 
  6.24     (13) discriminate between different sections, localities, 
  6.25  communities, or cities, or between persons in the same 
  6.26  community, by purchasing produce from farmers of the same grade, 
  6.27  quality, and kind, at different prices, except that price 
  6.28  differentials are allowed if directly related to the costs of 
  6.29  transportation, shipping, and handling of the produce and a 
  6.30  person is allowed to meet the prices of a competitor in good 
  6.31  faith, in the same locality for the same grade, quality, and 
  6.32  kind of produce.  A showing of different prices by the 
  6.33  commissioner is prima facie evidence of discrimination.  
  6.34     (b) A separate violation occurs with respect to each 
  6.35  different person involved, each purchase or transaction 
  6.36  involved, and each false statement. 
  7.1      Sec. 7.  Minnesota Statutes 1998, section 223.17, 
  7.2   subdivision 5, is amended to read: 
  7.3      Subd. 5.  [CASH SALES; MANNER OF PAYMENT.] For a cash sale 
  7.4   of a shipment of grain which is part of a multiple shipment 
  7.5   sale, the grain buyer shall tender payment to the seller in cash 
  7.6   or by check not later than ten days after the sale of that 
  7.7   shipment, except that when the entire sale is completed, payment 
  7.8   shall be tendered not later than the close of business on the 
  7.9   next day, or within 48 hours, whichever is later.  For other 
  7.10  cash sales the grain buyer, before the close of business on the 
  7.11  next business day after the sale, shall tender payment to the 
  7.12  seller in cash or by check, or shall wire or mail funds to the 
  7.13  seller's account in the amount of at least 80 percent of the 
  7.14  value of the grain at the time of delivery.  The grain buyer 
  7.15  shall complete final settlement as rapidly as possible through 
  7.16  ordinary diligence.  Any transaction which is not a cash sale in 
  7.17  compliance with the provisions of this subdivision constitutes a 
  7.18  voluntary extension of credit which is not afforded protection 
  7.19  under the grain buyer's bond, and which must comply with 
  7.20  sections 223.175 and 223.177. 
  7.21     Sec. 8.  Minnesota Statutes 1998, section 223.17, 
  7.22  subdivision 6, is amended to read: 
  7.23     Subd. 6.  [FINANCIAL STATEMENTS.] For the purpose of fixing 
  7.24  or changing the amount of a required bond or for any other 
  7.25  proper reason, the commissioner shall require an annual 
  7.26  financial statement from a licensee which has been prepared in 
  7.27  accordance with generally accepted accounting principles and 
  7.28  which meets the following requirements:  
  7.29     (a) The financial statement shall include, but not be 
  7.30  limited to the following:  (1) a balance sheet; (2) a statement 
  7.31  of income (profit and loss); (3) a statement of retained 
  7.32  earnings; (4) a statement of changes in financial position cash 
  7.33  flows; and (5) a statement of the dollar amount of grain 
  7.34  purchased in the previous fiscal year of the grain buyer.  
  7.35     (b) The financial statement shall be accompanied by a 
  7.36  compilation, a review, or an audit report of the financial 
  8.1   statement which is prepared by a grain commission firm or a 
  8.2   management firm approved by the commissioner or by an 
  8.3   independent public accountant, in accordance with standards 
  8.4   established by the American Institute of Certified Public 
  8.5   Accountants.  
  8.6      (c) The financial statement shall be accompanied by a 
  8.7   certification by the chief executive officer or the chief 
  8.8   executive officer's designee of the licensee, under penalty of 
  8.9   perjury, that the financial statement accurately reflects the 
  8.10  financial condition of the licensee for the period specified in 
  8.11  the statement. 
  8.12     Only one financial statement must be filed for a chain of 
  8.13  warehouses owned or operated as a single business entity, unless 
  8.14  otherwise required by the commissioner.  Any grain buyer having 
  8.15  a net worth in excess of $500,000,000 need not file the 
  8.16  financial statement required by this subdivision but must 
  8.17  provide the commissioner with a certified net worth statement. 
  8.18  All financial statements filed with the commissioner are private 
  8.19  or nonpublic data as provided in section 13.02.  
  8.20     Sec. 9.  Minnesota Statutes 1998, section 223.175, is 
  8.21  amended to read: 
  8.22     223.175 [WRITTEN VOLUNTARY EXTENSION OF CREDIT CONTRACTS; 
  8.23  FORM.] 
  8.24     A written confirmation required under section 223.177, 
  8.25  subdivision 2, and a written voluntary extension of credit 
  8.26  contract must include those items prescribed by the commissioner 
  8.27  by rule.  A contract shall include a statement of the legal and 
  8.28  financial responsibilities of grain buyers and sellers 
  8.29  established in this chapter.  A contract shall also include the 
  8.30  following statement in not less than ten point, all capital 
  8.31  type, framed in a box with space provided for the seller's 
  8.32  signature:  "THIS CONTRACT CONSTITUTES A VOLUNTARY EXTENSION OF 
  8.33  CREDIT.  THIS CONTRACT IS NOT COVERED BY ANY GRAIN BUYER'S 
  8.34  BOND."  If a written contract is provided at the time the grain 
  8.35  is delivered to the grain buyer, the seller shall sign the 
  8.36  contract in the space provided beneath the statement.  Any 
  9.1   transaction that does not meet all the provisions of a voluntary 
  9.2   extension of credit, including the issuance and signing of a 
  9.3   voluntary extension of credit contract, is a cash sale. 
  9.4      Sec. 10.  [231.40] [RULES.] 
  9.5      The commissioner may adopt rules for administering this 
  9.6   chapter related to: 
  9.7      (1) warehouse receipts; 
  9.8      (2) liability limitations for goods; 
  9.9      (3) tenders for storage and labeling; 
  9.10     (4) rates and charges; 
  9.11     (5) fire protection; 
  9.12     (6) floor load; 
  9.13     (7) opening and abandonment; 
  9.14     (8) storage conditions; and 
  9.15     (9) surety bonds. 
  9.16     Sec. 11.  Minnesota Statutes 1998, section 232.21, is 
  9.17  amended by adding a subdivision to read: 
  9.18     Subd. 14.  [OPEN STORAGE.] "Open storage" means grain or 
  9.19  agricultural products received by a warehouse operator from a 
  9.20  depositor for which warehouse receipts have not been issued or a 
  9.21  purchase made and the records documented accordingly. 
  9.22     Sec. 12.  Minnesota Statutes 1998, section 232.23, 
  9.23  subdivision 3, is amended to read: 
  9.24     Subd. 3.  [GRAIN DELIVERED CONSIDERED SOLD STORED.] All 
  9.25  grain delivered to a public grain warehouse operator shall be 
  9.26  considered sold stored at the time of delivery, unless 
  9.27  arrangements have been made with the public grain warehouse 
  9.28  operator prior to or at the time of delivery to apply the grain 
  9.29  on contract, for shipment or consignment or for storage cash 
  9.30  sale.  Grain may be held in open storage or placed on a 
  9.31  warehouse receipt.  Warehouse receipts must be issued for all 
  9.32  grain held in open storage within six months of delivery to the 
  9.33  warehouse unless the depositor has signed a statement that the 
  9.34  depositor does not desire a warehouse receipt.  The warehouse 
  9.35  operator's tariff applies for any grain that is retained in open 
  9.36  storage or under warehouse receipt.  
 10.1      Sec. 13.  Minnesota Statutes 1998, section 232.23, 
 10.2   subdivision 6, is amended to read: 
 10.3      Subd. 6.  [LIABILITY.] A public grain warehouse 
 10.4   operator issuing a grain warehouse receipt is liable to the 
 10.5   depositor for the delivery of the kind, grade, and net quantity 
 10.6   of grain called for by the grain warehouse receipt or scale 
 10.7   ticket marked "store".  
 10.8      Sec. 14.  [232.26] [RULES] 
 10.9      The commissioner may adopt rules for administering this 
 10.10  chapter related to: 
 10.11     (1) licensing requirements, including termination of 
 10.12  licenses; 
 10.13     (2) bonds, claims against bonds, and bond coverages; 
 10.14     (3) fees; 
 10.15     (4) statements of grain in storage; 
 10.16     (5) voluntary extension of credit contracts; 
 10.17     (6) warehouse examinations; 
 10.18     (7) receipts and scale tickets, including lost, stolen, or 
 10.19  destroyed receipts; 
 10.20     (8) determination of grade; 
 10.21     (9) charges and rates; 
 10.22     (10) shortages; and 
 10.23     (11) movement of encumbered grain.