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CHAPTER 236. GRAIN BANKS

Table of Sections
SectionHeadnote
236.01DEFINITIONS.
236.02GRAIN BANK LICENSING; BONDING OF APPLICANTS.
236.03GRAIN BANK RECEIPT; CONTENTS.
236.04CHARGES.
236.05DUTIES OF GRAIN BANK OPERATOR.
236.06GRAIN BANK'S POSSESSORY LIEN.
236.07REPORTS.
236.08RULES.
236.09PENALTIES FOR VIOLATIONS.
236.01 DEFINITIONS.
    Subdivision 1. Scope. The definitions in this section apply to sections 236.01 to 236.09.
    Subd. 2. Person. "Person" means an individual, partnership, association, corporation, or joint
venture or a combination of these.
    Subd. 3. Grain bank. "Grain bank" means a feed-processing plant that receives and stores
grain, the equivalent of which, except as is otherwise permitted by section 236.04, it processes
and returns to the grain's owner in amounts, at intervals, and with added ingredients that are
mutually agreeable to the grain's owner and the person operating the plant. "Grain bank" does
not include a seed cleaning plant.
    Subd. 4. Grain bank receipt. "Grain bank receipt" means a nonnegotiable receipt issued to
the owner of grain or the owner's agent.
    Subd. 5. Department. "Department" means the Department of Agriculture.
History: 1961 c 232 s 1; 1971 c 25 s 67; 1979 c 332 art 1 s 78; 1986 c 444; 1989 c 197 art 6
s 1; 1997 c 131 s 5
236.02 GRAIN BANK LICENSING; BONDING OF APPLICANTS.
    Subdivision 1. Licensing requirement. A person who (1) operates an establishment that
processes grain into feed and (2) is licensed to buy grain as a private local grain warehouse
operator under section 223.17 may obtain a license to operate a grain bank. A person licensed
under section 232.22 to operate a public grain warehouse is not required to obtain a separate grain
bank license. No person may conduct a grain bank without a grain bank license or a public
grain warehouse operator's license.
    Subd. 2. Issuance. A grain bank license must be obtained from the department. The
department may issue a grain bank license when the applicant has complied with the bond
requirements of sections 236.01 to 236.09. A grain bank license is required in addition to a license
to buy grain as a private local grain warehouse operator and permits the licensee to conduct a
grain bank in accordance with sections 236.01 to 236.09.
    Subd. 3. Expiration; posting; revocation. Grain bank licenses expire at midnight on June
30 each year. A license is required for each location where a grain bank is operated. Licenses are
revocable by the department for cause upon notice and hearing. Licenses and rules regulating
the operation of the grain bank must be posted in a prominent and easily accessible place in
the grain bank.
    Subd. 4. Fees. The license fee is $140 for each home rule charter or statutory city or town in
which a private grain warehouse is operated and which will be used to operate a grain bank. A
penalty amount not to exceed ten percent of the fees due may be imposed by the commissioner for
each month for which the fees are delinquent. The license fee must be set by the commissioner
in an amount sufficient to cover the costs of administering and enforcing this chapter. Fees
collected under this chapter must be paid into the grain buyers and storage account established in
section 232.22.
    Subd. 5. Bond. A license may not be issued for the operation of a grain bank until the
applicant has filed with the department a bond in a sum set by the department. The bond may not
be less than $1,500 for each license and must at all times be large enough to protect the holders of
outstanding grain bank receipts. Bonds must be filed annually and cover the period of the grain
bank license. Bonds must run to the state of Minnesota and be for the benefit of all persons storing
grain in a grain bank. They must be conditioned upon the faithful performance by the grain bank
operator of the law relating to the operation of grain banks by the grain bank operator and related
rules of the department. The department may require increases in the amounts of bonds as it
considers necessary for the protection of grain bank receipt holders. The surety of grain bank
bonds must be a corporate surety company authorized to transact business in Minnesota.
    Subd. 6. Action on bond. A person for whose benefit the bond is given may commence
an action in district court.
    Subd. 7. Single bond. A person who is granted a grain bank license at more than one location
may, with the department's approval, file one bond covering all locations in a total amount the
department requires under sections 236.01 to 236.09 and rules made under sections 236.01 to
236.09. A person, firm, or corporation licensed as a public grain warehouse operator and bonded
under section 232.22 may include liability for outstanding nonnegotiable grain bank receipts
under the coverage of that bond in lieu of securing a separate grain bank bond under this section.
History: 1961 c 232 s 2; 1967 c 318 s 14; 1969 c 399 s 1; 1969 c 856 s 3; 1971 c 25 s 67;
1982 c 508 s 9; 1985 c 248 s 70; 1986 c 444; 1987 c 384 art 2 s 1; 1989 c 197 art 6 s 1; 1990 c
426 art 2 s 5; 1997 c 131 s 6,7; 1999 c 231 s 173; 1Sp2005 c 1 art 1 s 88
236.03 GRAIN BANK RECEIPT; CONTENTS.
A grain bank receipt, authorized by the department, must be issued for each delivery of
grain to the grain bank. Each receipt must contain the name and address of the grain bank
establishment, the names of the persons for whom the grain is delivered to the grain bank, the
kind, quantity, and grade of grain to be redelivered to the owner of the grain, and other relevant
factors required by the rules of the department.
History: 1961 c 232 s 3; 1971 c 25 s 67; 1981 c 261 s 18; 1985 c 248 s 70; 1989 c 197 art
6 s 1
236.04 CHARGES.
Grain for which a grain bank receipt is issued must be received and stored for processing.
Storage charges must be paid by the owner at rates prescribed by section 232.23 from ten days
after the date on which the grain is delivered to the grain bank until the date the grain or processed
grain represented by a grain bank receipt is redelivered to the owner of the grain. Storage charges
must be computed and recorded at the time of the redelivery of grain or processed grain to the
owner or at the time of sale by the owner. If grain evidenced by a grain bank receipt is not
processed or is not sold to the operator of the grain bank, the grain's owner or the owner's
authorized agent may obtain redelivery of grain of the kind, quantity, and grade shown on the
grain bank receipt covering that grain, if the owner or the authorized agent pays the grain bank
operator a delivery charge. Sections 236.01 to 236.09 do not authorize the storage of grain or the
issuance of a grain bank receipt for grain that is not intended, when received at the grain bank, to
be redelivered to the owner of the grain or an authorized agent as a part of mixed or as otherwise
processed feeds within a reasonable time after receipt.
History: 1961 c 232 s 4; 1986 c 444; 1987 c 384 art 2 s 1; 1989 c 197 art 6 s 1
236.05 DUTIES OF GRAIN BANK OPERATOR.
    Subdivision 1. Insurance. The operator of the grain bank shall keep all stored grain insured
against loss by fire, windstorm, and extended coverage risks for the account of the owner and
furnish the department with the evidence it requires that the insurance is in force.
    Subd. 2. Receipt and storage of grain. The grain bank operator shall determine the
quantities, kinds, and grades of grain to be received from a depositor, and grain equal to the grade
shown on the receipt to be due the owner of the grain on redelivery must be used in the delivery
back to the owner. Commingling of like kinds of grain and the addition to the grain of materials
used in the lawful formulation of mixed feeds are permitted as required by the depositor of the
grain. If, through no fault of the grain bank operator, redelivery of grain equal to the grade shown
on the receipt cannot be made, then redelivery to the owner of a lesser grade may be made if the
operator pays to the owner in money the difference in market value between the two grades.
    Subd. 3. Deliveries of processed feeds. Deliveries of mixed or otherwise processed feeds
formulated from grain bank stocks must be at intervals of time and in quantities that are mutually
agreeable to the grain owner and the grain bank operator.
    Subd. 4. Separate records. The operator of a grain bank shall keep separate records for each
customer of the balances that remain between the grain bank operator and the owner of grain who
has deposited grain in the grain bank, including but not limited to the charges made under section
236.04 and the figures that support all balances shown.
    Subd. 5. Grain on hand. The operator of the grain bank shall keep on hand at all times grain
sufficient to cover all outstanding storage receipts and outstanding grain bank receipts balances.
History: 1961 c 232 s 5; 1971 c 25 s 67; 1989 c 197 art 6 s 1
236.06 GRAIN BANK'S POSSESSORY LIEN.
The operator of a grain bank has a possessory lien against grain represented by a grain bank
receipt for all charges and money owed the operator by the owner of the grain as a result of
the receiving, storing, processing, and other activities performed by the operator for the owner
as part of the grain bank operation. In the event of inconsistency between this section and the
Uniform Commercial Code, this section applies.
History: 1961 c 232 s 6; 1965 c 812 s 9; 1989 c 197 art 6 s 1
236.07 REPORTS.
A person licensed to operate a grain bank under sections 236.01 to 236.09 shall give the
department on forms prescribed by it the reports the department reasonably requires and other
information required by the rules of the department.
No license may be issued to a licensed grain bank operator who has failed to make the
reports required in this section.
The department may have each grain bank, its business, and the mode of conducting its
business inspected by one or more of its members or by its authorized agent when inspection is
considered proper. The property, records, and proceedings of each grain bank are subject to
inspection at all times during business hours.
History: 1961 c 232 s 7; 1967 c 318 s 15; 1971 c 25 s 67; 1985 c 248 s 70; 1989 c 197 art
6 s 1
236.08 RULES.
The department may make rules that are reasonably necessary relative to grain bank
operations.
History: 1961 c 232 s 8; 1971 c 25 s 67; 1985 c 248 s 70; 1989 c 197 art 6 s 1
236.09 PENALTIES FOR VIOLATIONS.
A person who violates sections 236.01 to 236.09 or rules made by the department under
sections 236.01 to 236.09 is guilty of a misdemeanor. If the department finds after a hearing that a
person licensed to operate a grain bank in this state has violated sections 236.01 to 236.09 or rules
made under sections 236.01 to 236.09, the department may suspend or revoke the license. In case
of a revocation, no new license may be granted to the person whose license is revoked nor to
anyone directly or indirectly engaged in that business for one year.
History: 1961 c 232 s 9; 1969 c 792 s 2; 1971 c 25 s 67; 1985 c 248 s 70; 1989 c 197 art 6 s 1