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Key: (1) language to be deleted (2) new language

  

                         Laws of Minnesota 1983 

                        CHAPTER 374--S.F.No. 1097
           An act relating to agriculture; making certain changes 
          in the grain buyers act; providing additional 
          protection to grain producers selling on cash sales 
          and voluntary extensions of credit; setting license 
          fees and bonding requirements; requiring filing of 
          financial statements; retaining certain bonding 
          requirements for public grain warehouses; changing the 
          place of filing of farm product liens; imposing a 
          penalty; appropriating money; amending Minnesota 
          Statutes 1982, sections 223.16, subdivisions 1, 4, 7, 
          11, and by adding subdivisions; 223.17; 223.18; 
          223.19; 232.22, subdivisions 4 and 7; and 336.9-401; 
          Laws 1982, chapter 635, section 9; proposing new law 
          coded in Minnesota Statutes, chapter 223; repealing 
          Minnesota Statutes 1982, section 223.16, subdivision 8.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1982, section 223.16, 
subdivision 1, is amended to read: 
    Subdivision 1.  [APPLICABILITY.] For the purpose of 
sections 223.15 to 223.19 and sections 13 to 15, the terms 
defined in this section have the meanings given them.  
    Sec. 2.  Minnesota Statutes 1982, section 223.16, is 
amended by adding a subdivision to read:  
    Subd. 2a.  [CASH SALE.] "Cash sale" means:  
    (a) a sale for which payment is tendered to the seller not 
later than the close of business on the next business day after 
the sale, either in cash or by check, or by mailing or wiring 
funds to the seller's account in the amount of at least 80 
percent of the value of the grain at delivery; or 
    (b) a sale of a shipment of grain which is part of a 
multiple shipment sale, for which a scale ticket clearly marked 
"CASH" has been received by the seller before completion of the 
entire sale, and for which payment is tendered in cash or by 
check not later than ten days after the sale of that shipment, 
except that when the entire sale is completed, payment is 
tendered in cash or by check not later than the close of 
business on the next business day, or within 48 hours, whichever 
is later.  
    Sec. 3.  Minnesota Statutes 1982, section 223.16, 
subdivision 4, is amended to read: 
    Subd. 4.  [GRAIN.] "Grain" means any cereal grain, coarse 
grain or oilseed in unprocessed form for which a standard has 
been established by the United States secretary of agriculture 
or the Minnesota board of grain standards, or any other 
agricultural crop which the commissioner may designate by rule.  
    Sec. 4.  Minnesota Statutes 1982, section 223.16, 
subdivision 7, is amended to read: 
    Subd. 7.  [ITINERANT INDEPENDENT GRAIN BUYER.] "Itinerant 
Independent grain buyer" means a person who travels from place 
to place to purchase grain for resale using a truck, semitrailer 
or trailer owned or operated by that person without a private or 
public grain warehouse license who is licensed to engage in the 
business of purchasing grain for resale.  
    Sec. 5.  Minnesota Statutes 1982, section 223.16, 
subdivision 11, is amended to read: 
    Subd. 11.  [PRODUCER.] "Producer" means a person who owns 
or manages a grain producing or growing operation and holds or 
shares the responsibility for marketing the grain produced grows 
grain on land that he owns or leases. 
    Sec. 6.  Minnesota Statutes 1982, section 223.16, is 
amended by adding a subdivision to read: 
    Subd. 12a.  [SCALE TICKET.] "Scale ticket" means a 
memorandum issued by a grain elevator or warehouse operator to a 
depositor at the time grain is delivered, showing the weight and 
kind of grain.  
    Sec. 7.  Minnesota Statutes 1982, section 223.16, is 
amended by adding a subdivision to read: 
    Subd. 16.  [VOLUNTARY EXTENSION OF CREDIT CONTRACT.] 
"Voluntary extension of credit contract" means a contract for 
the purchase of a specific amount of grain from a producer in 
which the title to the grain passes to the grain buyer upon 
delivery, but the price is to be determined or payment for the 
grain is to be made at a date later than the date of delivery of 
the grain to the grain buyer.  Voluntary extension of credit 
contracts include deferred or delayed payment contracts, 
unpriced sales, no price established contracts, average pricing 
contracts, and all other contractual arrangements with the 
exception of cash sales and grain storage agreements evidenced 
by a grain warehouse receipt.  
    Sec. 8.  Minnesota Statutes 1982, section 223.17, is 
amended to read: 
    223.17 [LICENSES; BONDING; CLAIMS; DISBURSEMENTS.] 
    Subdivision 1.  [LICENSES.] An application for a grain 
buyer's license must be filed with the commissioner and the 
license issued before any grain may be purchased.  The types of 
grain buyers' licenses are:  
    (a) private grain warehouse operator's license;  
    (b) public grain warehouse operator's license; and 
    (c) nonwarehouse grain buyer's license; and 
    (d) itinerant independent grain buyer's license.  
    Public grain warehouse operators' licenses cover both grain 
buying and grain storage.  The applicant for a grain buyer's 
license shall identify all grain buying locations owned or 
controlled by the grain buyer and all vehicles owned or 
controlled by the grain buyer used to transport purchased grain. 
Every applicant for a grain buyer's license shall have a 
permanent established place of business at each licensed 
location.  An "established place of business" means a permanent 
enclosed building, including a house or a farm, either owned by 
the applicant or leased by the applicant for a period of at 
least one year, and where the books, records, and files 
necessary to conduct the business are kept and maintained.  The 
commissioner may maintain information on grain buyers by 
categories including, but not limited to, the categories 
provided in clauses (a) to (c) and grain buyers that are 
licensed to purchase grain using trucks but that do not have a 
public or private warehouse license.  
    Subd. 2.  [LICENSE RENEWAL.] A license must be renewed 
annually.  Beginning July 1, 1984, the commissioner may stagger 
the renewal dates of licenses issued under this chapter, subject 
to the policy expressed in section 116J.69, subdivision 2, 
paragraph (d).  If a person receives more than one license from 
the commissioner, the licenses shall be issued at the same time, 
but only after all conditions for each license are met.  
Multiple licenses should be combined into one license if 
possible.  
    Subd. 3.  [GRAIN BUYERS AND STORAGE FUND; FEES.] The 
commissioner shall set the fees for inspections and licenses 
under sections 223.15 to 223.19 and sections 13 to 15 at levels 
necessary to pay the expenses of administering and enforcing 
sections 223.15 to 223.19 and sections 13 to 15.  These fees may 
be adjusted pursuant to the provisions of section 16A.128.  
    The fee for any license issued or renewed prior to June 30, 
1984, is $100.  The fee for any license issued or renewed after 
June 30, 1984, shall be set according to the following schedule: 
    (a) $100 plus $50 for each additional location for grain 
buyers whose gross annual purchases are less than $1,500,000;  
    (b) $200 plus $50 for each additional location for grain 
buyers whose gross annual purchases are at least $1,500,000, but 
not more than $3,000,000; and 
    (c) $300 plus $50 for each additional location for grain 
buyers whose gross annual purchases are more than $3,000,000.  
    There is created in the state treasury the grain buyers and 
storage fund.  Money collected pursuant to sections 223.15 to 
223.19 shall be paid into the state treasury and credited to the 
grain buyers and storage fund and is appropriated to the 
commissioner for the administration and enforcement of sections 
223.15 to 223.19 and sections 13 to 15.  
    Subd. 4.  [BOND.] Before a grain buyer's license is issued, 
the applicant for a grain buyers the license shall must file 
with the commissioner a bond in a penal sum prescribed by the 
commissioner but not more less than the following amounts:  
    (a) $10,000 for each private or public grain warehouse up 
to a maximum of five grain warehouses;  
    (b) $10,000 for each semitrailer used by an itinerant grain 
buyer up to a maximum of five semitrailers;  
    (c) $5,000 for each truck used by an itinerant grain buyer 
up to a maximum of five trucks;  
    (d) $5,000 for each trailer used by an itinerant grain 
buyer up to a maximum of five trailers; and 
    (e) $50,000 for each nonwarehouse grain buyer $10,000 for 
grain buyers whose gross annual purchases are $100,000 or less;  
    (b) $20,000 for grain buyers whose gross annual purchases 
are more than $100,000 but not more than $750,000;  
    (c) $30,000 for grain buyers whose gross annual purchases 
are more than $750,000 but not more than $1,500,000;  
    (d) $40,000 for grain buyers whose gross annual purchases 
are more than $1,500,000 but not more than $3,000,000; and 
    (e) $50,000 for grain buyers whose gross annual purchases 
exceed $3,000,000.  A grain buyer who has filed a bond with the 
commissioner prior to July 1, 1983 is not required to increase 
the amount of the bond to comply with this section until July 1, 
1984.  The commissioner may postpone an increase in the amount 
of the bond until July 1, 1985, if a licensee demonstrates that 
the increase will impose undue financial hardship on the 
licensee, and that producers will not be harmed as a result of 
the postponement.  The commissioner may impose other 
restrictions on a licensee whose bond increase has been 
postponed.  The amount of the bond shall be based on the most 
recent financial statement of the grain buyer filed under 
subdivision 6.  
    A first-time applicant for a grain buyer's license after 
July 1, 1983 shall file a $20,000 bond with the commissioner. 
This bond shall remain in effect for the first year of his 
license.  Thereafter, the licensee shall comply with the 
applicable bonding requirements contained in clauses (a) to (e) 
of this section.  
    In lieu of the bond required by this subdivision the 
applicant may deposit with the state treasurer cash, a certified 
check, a cashier's check, a postal, bank, or express money 
order, assignable bonds or notes of the United States, or an 
assignment of a bank savings account or investment certificate 
or an irrevocable bank letter of credit as defined in section 
336.5-103, in the same amount as would be required for a bond.  
    Subd. 5.  [VOLUNTARY EXTENSION OF CREDIT CASH SALES; MANNER 
OF PAYMENT.] Upon demand by a seller of grain, a grain buyer 
shall pay 90 percent of the estimated or actual value of grain 
purchased at the time the physical possession of the grain is 
conveyed from the seller to the grain buyer.  For a cash sale of 
a shipment of grain which is part of a multiple shipment sale, 
the grain buyer shall tender payment to the seller in cash or by 
check not later than ten days after the sale of that shipment, 
except that when the entire sale is completed, payment shall be 
tendered not later than the close of business on the next day, 
or within 48 hours, whichever is later.  For other cash sales 
the grain buyer, before the close of business on the next 
business day after the sale, shall tender payment to the seller 
in cash or by check, or shall wire or mail funds to the seller's 
account in the amount of at least 80 percent of the value of the 
grain at the time of delivery.  The grain buyer shall complete 
final settlement as rapidly as possible through ordinary 
diligence.  Any transaction wherein this demand is not exercised 
which is not a cash sale in compliance with the provisions of 
this subdivision constitutes a voluntary extension of credit and 
which is not afforded protection under the grain buyer's bond, 
and which must comply with sections 9 and 10.  
    Subd. 5a.  [GRAIN PURCHASES FROM UNLICENSED PRODUCERS.] No 
grain buyer may refuse to purchase grain from a producer solely 
because the producer is not bonded or is not licensed by the 
commissioner; provided, that any producer who buys grain from 
other producers shall be licensed and bonded as required by this 
chapter.  
    Subd. 6.  [CONFIDENTIAL STATEMENTS REQUIRED FINANCIAL 
STATEMENTS.] For the purpose of fixing or changing the amount of 
a required bond or for any other proper reason, the commissioner 
shall require an annual financial statements statement from a 
licensee which has been prepared in accordance with generally 
accepted accounting principles and which meets the following 
requirements:  
    (a) The financial statement shall include, but not be 
limited to the following:  (1) a balance sheet; (2) a statement 
of income (profit and loss); (3) a statement of retained 
earnings; (4) a statement of changes in financial position; and 
(5) a statement of the dollar amount of grain purchased in the 
previous fiscal year of the grain buyer.  
    (b) The financial statement shall be accompanied by a 
compilation report of the financial statement which is prepared 
by a grain commission firm or a management firm approved by the 
commissioner or by an independent public accountant, in 
accordance with standards established by the American Institute 
of Certified Public Accountants.  
    (c) The financial statement shall be accompanied by a 
certification by the chief executive officer or his designee of 
the licensee, under penalty of perjury, that the financial 
statement accurately reflects the financial condition of the 
licensee for the period specified in the statement. 
     Only one financial statement must be filed for a chain of 
warehouses owned or operated as a single business entity, unless 
otherwise required by the commissioner.  Any grain buyer having 
a net worth in excess of $500,000,000 need not file the 
financial statement required by this subdivision but must 
provide the commissioner with a certified net worth statement. 
All financial statements filed with the commissioner are private 
or nonpublic data as provided in section 13.02.  
    Subd. 6a.  [SUSPENSION, REVOCATION, OR REFUSAL TO ISSUE 
LICENSE.] (a) If the a license applicant or a licensee fails to 
furnish financial statements or to furnish any new bond 
required, the commissioner may immediately refuse to issue or 
renew the license or may suspend the license and the licensee 
shall surrender the license to the commissioner.  Within 15 days 
the.  
    (b) The commissioner may refuse to issue or renew a license 
or may suspend a license if he determines, based upon the 
financial statement filed under this section or other financial 
information obtained by him, that the applicant or licensee is 
not financially able to properly perform the services and 
operate the business for which the license is issued.  
    (c) When a license is suspended the licensee shall 
surrender the license to the commissioner.  An applicant or 
licensee may request an administrative hearing subject to 
chapter 14 within 15 days after the commissioner suspends a 
license or refuses to issue or renew a license under clause (b) 
to determine whether the license should be issued, renewed, or 
revoked.  If no request is made within 15 days after suspension, 
the commissioner shall revoke the license.  All financial 
statements submitted to the commissioner are confidential.  
    Subd. 7.  [PRODUCER BOND AND CONTRACT CLAIMS.] A producer 
claiming to be damaged by a breach of the conditions of a bond 
of a contract for the purchase of grain by a licensed grain 
buyer may file a written claim with the commissioner.  The claim 
must state the facts constituting the claim.  The claim must be 
filed with the commissioner within 180 days of the breach of the 
conditions of the bond contract.  If the commissioner believes 
that a claim is valid, the commissioner may immediately suspend 
the license, in which case the licensee shall surrender the 
license to the commissioner.  Within 15 days the licensee may 
request an administrative hearing subject to chapter 14 to 
determine whether the license should be revoked.  If no request 
is made within 15 days, the commissioner shall revoke the 
license.  
    Subd. 8.  [BOND DISBURSEMENT.] (a) The bond required under 
subdivision 4 shall provide for payment of loss caused by the 
grain buyer's failure to pay, upon the owner's demand, the 
purchase price of grain sold to the grain buyer in the manner 
provided by subdivision 5, including loss caused by failure to 
pay within the time required.  The bond shall be conditioned 
upon the grain buyer being duly licensed as provided herein.  
The bond shall not cover any transaction which constitutes a 
voluntary extension of credit.  
    (b) Upon notification of default, The commissioner shall 
promptly determine the validity of all claims filed with him and 
notify all parties having filed claims the claimants of the 
determination.  An aggrieved party may appeal the commissioner's 
determination by requesting, within 15 days, that the 
commissioner initiate a contested case proceeding.  In the 
absence of such a request, or following the issuance of a final 
order in a contested case, the surety company shall issue 
payment promptly to those claimants entitled to payment.  When 
the commissioner determines it necessary, The commissioner may 
apply to the district court for an order appointing a trustee or 
receiver to manage and supervise the operations of the grain 
buyer in default.  The commissioner may participate in any 
resulting court proceeding as an interested party.  
    (c) If a grain buyer has become liable to more than one 
producer by reason of breaches of the conditions of the bond and 
the amount of the bond is insufficient to pay the entire 
liability to all producers entitled to the protection of the 
bond, the proceeds of the bond shall be apportioned among the 
bona fide claimants.  
    (d) The bond shall not be cumulative from one licensing 
period to the next.  The maximum liability of the bond shall be 
its face value for the licensing period.  
    Subd. 9.  [DEFAULTS; VIOLATIONS.] If the commissioner 
finds, after an investigation is conducted, that a complaint is 
valid or that a licensee is in violation of the provisions of 
this chapter, the commissioner may immediately suspend the 
license, in which case the licensee shall surrender the license 
to the commissioner.  Within 15 days, the licensee may request 
an administrative hearing subject to chapter 14 to determine 
whether the license should be revoked.  If no request is made 
within 15 days, the commissioner shall revoke the license.  
    Sec. 9.  [223.175] [WRITTEN VOLUNTARY EXTENSION OF CREDIT 
CONTRACTS; FORM.] 
    A written confirmation required under section 10, 
subdivision 2, and a written voluntary extension of credit 
contract must include those items prescribed by the commissioner 
by rule.  A contract shall include a statement of the legal and 
financial responsibilities of grain buyers and sellers 
established in this chapter.  A contract shall also include the 
following statement in not less than ten point, all capital 
type, framed in a box with space provided for the seller's 
signature:  "THIS CONTRACT CONSTITUTES A VOLUNTARY EXTENSION OF 
CREDIT.  THIS CONTRACT IS NOT COVERED BY ANY GRAIN BUYER'S 
BOND."  If a written contract is provided at the time the grain 
is delivered to the grain buyer, the seller shall sign the 
contract in the space provided beneath the statement.  
    Sec. 10.  [223.177] [PURCHASE BY VOLUNTARY EXTENSION OF 
CREDIT CONTRACTS.] 
    Subdivision 1.  [INDICATION OF INTENTION.] Every grain 
buyer who intends to purchase grain by voluntary extension of 
credit contracts shall indicate his intention to do so annually 
to the commissioner on a form provided by the commissioner.  
    Subd. 2.  [ORAL CONTRACTS.] Any grain buyer entering into a 
voluntary extension of credit contract orally or by phone shall 
give or mail to the seller a written confirmation conforming to 
the requirements of section 9 before the close of the next 
business day.  
    Subd. 3.  [CONTRACTS REDUCED TO WRITING.] A voluntary 
extension of credit contract must be reduced to writing by the 
grain buyer and mailed or given to the seller before the close 
of the next business day after the contract is entered into or, 
in the case of an oral or phone contract, after the written 
confirmation is received by the seller.  Provided, however, that 
if a scale ticket has been received by the seller prior to the 
completion of the grain shipment, the contract must be reduced 
to writing within ten days after the sale, but not later than 
the close of the next business day after the completion of the 
entire sale.  The form of the contract shall comply with the 
requirements of section 9.  
    Subd. 4.  [GRAIN, RIGHTS, OR PROCEEDS HELD.] A licensed 
grain buyer purchasing grain by voluntary extension of credit 
contracts shall at all times maintain grain, rights in grain, or 
proceeds from the sale of grain totaling 90 percent of the grain 
buyer's obligation for grain purchased by voluntary extension of 
credit contracts.  That amount must be evidenced or represented 
by one or more of the following:  
    (a) grain owned and actually held by the grain buyer in a 
grain warehouse owned or controlled by the grain buyer;  
    (b) rights in grain evidenced or represented by warehouse 
receipts issued by a state or federally licensed grain warehouse;
    (c) cash on hand or cash held on account in federally or 
state licensed institutions;  
    (d) short-term investments held in time accounts with 
federally or state licensed institutions;  
    (e) balances on grain margin accounts;  
    (f) voluntary extension of credit contracts for grain 
shipped to a processor or terminal as purchaser, less any 
payment or advance that has been received;  
    (g) an irrevocable letter of credit, as defined in section 
336.5-103; or 
     (h) other evidence of proceeds from the sale of grain 
acceptable to the commissioner.  
    Subd. 5.  [VALUE OF GRAIN.] For the purpose of computing 
the dollar value of inventories of voluntary extension of credit 
obligations, the value of grain must be figured at the current 
market price on the day of delivery.  
    Subd. 6.  [TRANSFER OF TITLE.] The title to grain delivered 
on a voluntary extension of credit contract transfers to the 
grain buyer upon delivery.  
    Subd. 7.  [STORAGE CHARGES PROHIBITED.] No storage charges 
may be charged with respect to grain purchased on voluntary 
extension of credit contracts.  
    Subd. 8.  [RECORDS.] A grain buyer shall keep sufficiently 
detailed books and records of voluntary extension of credit 
contracts and evidences of grain, rights in grain, and the 
proceeds from the sale of grain so as to clearly show compliance 
with this section.  The commissioner or his authorized agent may 
inspect these books and records to determine whether grain 
buyers are complying with the provisions of this chapter, and 
for this purpose the commissioner may enter upon any public or 
private premises during regular business hours.  
    Sec. 11.  Minnesota Statutes 1982, section 223.18, is 
amended to read: 
    223.18 [PENALTY.] 
    A person buying grain without first obtaining a grain 
buyer's license is guilty of a misdemeanor.  Each day of 
operation without a grain buyer's license constitutes a separate 
offense.  In case of license revocation, no new license shall be 
granted to the person whose license was revoked nor to anyone 
either directly or indirectly engaged with him in the licensed 
business for two years.  A grain dealer who withholds records 
from the commissioner, keeps or files records which he knows to 
be false, alters records fraudulently, or presents to the 
commissioner any records which he knows to be false, is guilty 
of a gross misdemeanor.  
    Sec. 12.  Minnesota Statutes 1982, section 223.19, is 
amended to read: 
    223.19 [RULES.] 
    The commissioner may promulgate make temporary or permanent 
rules pursuant to chapter 14 to carry out the provisions of 
sections 223.15 to 223.19, and sections 13 to 15.  
    Sec. 13.  [223.20] [REGULATION OF GRAIN BUYERS AND GRAIN 
STORAGE.] 
    The commissioner may create a separate division within the 
department of agriculture for the purpose of administering this 
chapter and chapter 232.  
    Sec. 14.  [223.21] [ATTORNEY GENERAL; ENFORCEMENT.] 
    The attorney general, upon request of the commissioner, 
shall assist the commissioner in enforcing this chapter.  
    Sec. 15.  [223.22] [INVESTIGATION; EDUCATION.] 
    Subdivision 1.  [LEGISLATIVE INVESTIGATION.] The 
legislature recommends that the standing committees of the house 
and senate with jurisdiction over agriculture investigate 
methods of protecting producers when marketing grain using 
voluntary extension of credit contracts, including establishment 
of a state administered trust fund, private insurance, or 
reinsurance, and methods which grain buyers can use to protect 
themselves and grain producers from grain price fluctuations. 
     Subd. 2.  [EDUCATION.] The commissioner shall make every 
effort to inform grain producers and grain buyers of the 
protections and exposures which result from application of this 
chapter.  
    Sec. 16.  Minnesota Statutes 1982, section 232.22, 
subdivision 4, is amended to read: 
    Subd. 4.  [BONDING.] Before a license is issued, the 
applicant for a public grain warehouse operator's license shall 
file with the commissioner a bond in a penal sum prescribed by 
the commissioner.  The penal sum on a condition one bond shall 
be established by rule by the commissioner pursuant to the 
requirements of chapter 14 for all grain outstanding on grain 
warehouse receipts.  The penal sum on a condition two bond shall 
not be less than $10,000 for each location up to a maximum of 
five locations.  No condition two bond shall be required under 
this subdivision after June 30, 1983.  
    Sec. 17.  Minnesota Statutes 1982, section 232.22, 
subdivision 7, is amended to read: 
    Subd. 7.  [BOND DISBURSEMENT.] (a) The condition one bond 
of a public grain warehouse operator must be conditioned that 
the public grain warehouse operator issuing a grain warehouse 
receipt is liable to the depositor for the delivery of the kind, 
grade and net quantity of grain called for by the receipt.  
    (b) The condition two bond shall provide for payment of 
loss caused by the grain buyer's failure to pay, upon the 
owner's demand, the purchase price of grain sold to the grain 
buyer.  The bond shall be conditioned upon the grain buyer being 
duly licensed as provided herein.  The bond shall not cover any 
transaction which constitutes a voluntary extension of credit.  
This clause expires July 1, 1983.  
    (c) Upon notification of default, the commissioner shall 
determine the validity of all claims and notify all parties 
having filed claims.  Any aggrieved party may appeal the 
commissioner's determination by requesting, within 15 days, that 
the commissioner initiate a contested case proceeding.  In the 
absence of such a request, or following the issuance of a final 
order in a contested case, the surety company shall issue 
payment to those claimants entitled to payment.  If the 
commissioner determines it is necessary, the commissioner may 
apply to the district court for an order appointing a trustee or 
receiver to manage and supervise the operations of the grain 
warehouse operator in default.  The commissioner may participate 
in any resulting court proceeding as an interested party.  
    (d) For the purpose of determining the amount of bond 
disbursement against all valid claims under a condition one 
bond, all grain owned or stored in the public grain warehouse 
shall be sold and the combined proceeds deposited in a special 
fund.  Payment shall be made from the special fund satisfying 
the valid claims of grain warehouse receipt holders.  
    (e) If a public grain warehouse operator has become liable 
to more than one depositor or producer by reason of breaches of 
the conditions of the bond and the amount of the bond is 
insufficient to pay, beyond the proceeds of the special fund, 
the entire liability to all valid claimants, the proceeds of the 
bond and special fund shall be apportioned among the valid 
claimants on a pro rata basis.  
    (f) A bond is not cumulative from one licensing period to 
the next.  The maximum liability of the bond shall be its face 
value for the licensing period.  
    Sec. 18.  Minnesota Statutes 1982, section 336.9-401, is 
amended to read: 
    336.9-401 [PLACE OF FILING; ERRONEOUS FILING; REMOVAL OF 
COLLATERAL.] 
    (1) The proper place to file in order to perfect a security 
interest is as follows: 
    (a) When the collateral is equipment used in farming 
operations, or farm products, or accounts or general intangibles 
arising from or relating to the sale of farm products by a 
farmer, or consumer goods, or motor vehicles which are not 
inventory, then in the office of the county recorder in the 
county of the debtor's residence if the debtor is an individual 
who is a resident of this state but if the debtor is an 
individual who is not a resident of this state or is a 
corporation, partnership or other organization then in the 
office of the secretary of state, and in addition when the 
collateral is crops growing or to be grown in the office of the 
county recorder in the county where the land is located; 
    (b) When the collateral is equipment to be used in farming 
operations, or farm products, or accounts or general intangibles 
arising from or relating to the sale of farm products by a 
farmer, or crops growing or to be grown, then in the office of 
the county recorder in the county of the debtor's residence if 
the debtor is an individual or organization with residence in 
this state, but if the debtor is not a resident of this state, 
then in the office of the secretary of state;  
    (c) When the collateral is timber to be cut or is minerals 
or the like (including oil and gas) or accounts subject to 
subsection (5) of section 336.9-103, or when the financing 
statement is filed as a fixture filing (section 336.9-313) and 
the collateral is goods which are or are to become fixtures, 
then in the office where a mortgage on the real estate would be 
filed or recorded; 
    (c) (d) In all other cases, in the office of the secretary 
of state. 
    (2) A filing which is made in good faith in an improper 
place or not in all of the places required by this section is 
nevertheless effective with regard to any collateral as to which 
the filing complied with the requirements of this article and is 
also effective with regard to collateral covered by the 
financing statement against any person who has knowledge of the 
contents of such financing statement. 
    (3) A filing which is made in the proper place in this 
state continues effective even though the debtor's residence in 
this state or the use of the collateral, whichever controlled 
the original filing, is thereafter changed. 
    (4) The rules stated in section 336.9-103 determine whether 
filing is necessary in this state. 
    (5) Notwithstanding the preceding subsections, the proper 
place to file in order to perfect a security interest in 
collateral, including fixtures, of a transmitting utility is the 
office of the secretary of state.  Such a filing shall not be 
deemed a separate filing from the filings required by other 
laws, if applicable, set forth in subsection (3) of section 
336.9-302.  This filing constitutes a fixture filing (section 
336.9-313) as to the collateral described therein which is or is 
to become fixtures. 
    (6) For the purposes of this section, the residence of an 
organization is its place of business if it has one or its chief 
executive office if it has more than one place of business. 
    (7) "Motor vehicle" means any device propelled or drawn by 
any power other than muscular power in, upon, or by which any 
person or property is or may be transported or drawn upon a 
highway, excepting building and road construction equipment.  
    Sec. 19.  Laws 1982, chapter 635, section 9, is amended to 
read: 
    Sec. 9.  [REPEALER.] 
    Minnesota Statutes 1980, sections 223.04; 223.07; 223.08;  
223.09; 223.10; 223.11; 232.01; 232.02, subdivisions 4, 5, 6, 7, 
8 and 9; 232.03; 232.04; and 232.06, subdivision 5; Minnesota 
Statutes 1981 Supplement, sections 223.01; 223.02; 223.03;  
223.05; and 232.02, subdivisions 1, 2 and 3, are repealed.  
Sections 1 to 6 are repealed July 1, 1983.  Any claims under 
sections 1 to 6 which are not settled before July 1, 1983, may 
be settled under the provisions of section 4, subdivisions 7 and 
8, as they existed prior to July 1, 1983.  
    Sec. 20.  [STATUTES REMAIN IN EFFECT.] 
    Notwithstanding Minnesota Statutes, section 645.36, 
Minnesota Statutes, sections 223.15 to 223.19, and section 
232.22, subdivision 7, clause (b), remain in effect without 
interruption.  
    Sec. 21.  [APPROPRIATION.] 
    The sum of $95,000 is appropriated from the general fund 
for the biennium ending June 30, 1985, to the commissioner of 
agriculture for the purposes of administering and enforcing this 
chapter.  The personnel complement of the department of 
agriculture is increased by two.  
    Sec. 22.  [REPEALER.] 
    Minnesota Statutes 1982, section 223.16, subdivision 8, is 
repealed.  
    Sec. 23.  [EFFECTIVE DATE.] 
    Sections 1 to 23 are effective July 1, 1983. 
    Approved June 14, 1983

Official Publication of the State of Minnesota Revisor of Statutes