1999 Minnesota Statutes

     232.22 Licenses, bonding claims, disbursements. 

    Subdivision 1.    Licenses.  An application for a public 
 grain warehouse operator's license must be filed with the 
 commissioner and the license issued before the purchase or 
 storage of grain may be commenced.  All grain warehouses located 
 within the same home rule charter or statutory city or town and 
 owned and operated by the same person may be covered by a single 
 license.  

    Subd. 2.    Renewal.  A license must be renewed annually.
 If a business 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.  The 
 licenses may be combined into one joint license.  

    Subd. 3.    Fees; grain buyers and storage account.  
 There is created in the agricultural fund an account known as 
 the grain buyers and storage account.  The commissioner shall 
 set the fees for inspections, certifications and licenses under 
 sections 232.20 to 232.25 at levels necessary to pay the costs 
 of administering and enforcing sections 232.20 to 232.25.  All 
 money collected pursuant to sections 232.20 to 232.25 and 
 chapters 233 and 236 shall be paid by the commissioner into the 
 state treasury and credited to the grain buyers and storage 
 account and is appropriated to the commissioner for the 
 administration and enforcement of sections 232.20 to 232.25 and 
 chapters 233 and 236.  All money collected pursuant to chapter 
 231 shall be paid by the commissioner into the grain buyers and 
 storage account and is appropriated to the commissioner for the 
 administration and enforcement of chapter 231.  

    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.  

    Subd. 5.    Statement of grain in storage; reports.  (a) 
 All public grain warehouse operators must by the tenth day of 
 each month file with the commissioner on forms approved by the 
 commissioner a report showing the net liability of all grain 
 outstanding on grain warehouse receipts as of the close of 
 business on the last day of the preceding month.  This report 
 shall be used for the purpose of establishing the penal sum of 
 the bond.  

    (b) If any public grain warehouse operator willfully 
 neglects or refuses to file the report required in clause (a) 
 for two consecutive months, the commissioner may immediately 
 suspend the person's license and the licensee must surrender the 
 license to the commissioner.  Within 15 days the licensee may 
 request an administrative hearing subject to chapter 14 to 
 determine if the license should be revoked.  If no request is 
 made within 15 days the commissioner shall revoke the license.  

    (c) Every public grain warehouse operator shall keep in a 
 place of safety complete and accurate records and accounts 
 relating to any grain warehouse operated.  The records shall 
 reflect each commodity received and shipped daily, the balance 
 remaining in the grain warehouse at the close of each business 
 day, a listing of all unissued grain warehouse receipts in the 
 operator's possession, a record of all grain warehouse receipts 
 issued which remain outstanding and a record of all grain 
 warehouse receipts which have been returned for cancellation.  
 Copies of grain warehouse receipts or other documents evidencing 
 ownership of grain by a depositor, or other liability of the 
 grain warehouse operator, shall be retained as long as the 
 liability exists but must be kept for a minimum of three years.  

    (d) Every public grain warehouse operator must maintain in 
 the grain warehouse at all times grain of proper grade and 
 sufficient quantity to meet delivery obligations on all 
 outstanding grain warehouse receipts.  

    Subd. 6.    Bond claims.  A person claiming to be 
 damaged by a breach of the conditions of a bond of a licensed 
 public grain warehouse operator may file a written claim with 
 the commissioner stating 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.  If the commissioner has 
 reason to believe that a claim is valid, the commissioner may 
 immediately suspend the license of the public grain warehouse 
 operator and the licensee must 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. 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.  

    (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.  

    HIST: 1982 c 424 s 130; 1982 c 508 s 3; 1983 c 300 s 27; 1983 
 c 374 s 16,17,20; 1999 c 231 s 171