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H0366...............................................by AGRICULTURAL AFFAIRS
COMMODITIES - BONDED WAREHOUSES - Amends existing law relating to the
bonded warehouse law to revise definitions; to provide for issuance of
certain receipts and scale tickets for commodities deposited in a licensed
warehouse; to provide for examination of commodities and records; to
provide for payments; to provide for application of the Commodity Indemnity
Fund Program; to increase the minimum balance required in the Commodity
Indemnity Fund; to provide procedures for claims; to provide for
inspections and audits; and to provide correct terminology.
03/15 House intro - 1st rdg - to printing
03/16 Rpt prt - to 2nd rdg
03/19 2nd rdg - to 3rd rdg
Rls susp - PASSED - 63-0-7
AYES -- Barraclough, Barrett, Bedke, Bell, Bieter, Black, Boe, Bolz,
Bradford, Bruneel, Callister, Campbell, Clark, Collins, Crow, Cuddy,
Deal, Denney, Ellis, Ellsworth, Eskridge, Field(13), Field(20),
Gagner, Gould, Hadley, Hammond, Harwood, Henbest, Higgins, Hornbeck,
Jones, Kellogg, Kendell, Lake, Langford, Loertscher, Mader, Marley,
McKague, Meyer, Montgomery, Mortensen, Moyle, Pearce, Pischner,
Pomeroy, Raybould, Ridinger, Roberts, Robison, Schaefer, Sellman,
Smith, Smylie, Stevenson, Stone, Swan, Tilman, Trail, Wheeler, Young,
Mr. Speaker
NAYS -- None
Absent and excused -- Chase, Jaquet, Kunz, Moss, Sali, Shepherd, Wood
Floor Sponsor -- Jones
Title apvd - to Senate
03/20 Senate intro - 1st rdg - to Agric Aff
03/22 Rpt out - rec d/p - to 2nd rdg
03/23 2nd rdg - to 3rd rdg
03/26 3rd rdg - PASSED - 35-0-0
AYES -- Andreason, Boatright, Branch, Brandt, Bunderson, Burtenshaw,
Cameron, Danielson, Darrington, Davis, Deide, Dunklin, Frasure,
Geddes, Goedde, Hawkins, Ingram, Ipsen, Keough, King-Barrutia, Lee,
Lodge, Noh, Richardson, Risch, Sandy, Schroeder, Sims, Sorensen,
Stegner, Stennett, Thorne, Wheeler, Whitworth, Williams,
NAYS -- None
Absent and excused -- None
Floor Sponsor -- Davis
Title apvd - to House
03/28 To enrol - rpt enrol - Sp signed
Pres signed
03/29 To Governor
04/02 Governor signed
Session Law Chapter 304
Effective: 04/02/01
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-sixth Legislature First Regular Session - 2001
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 366
BY AGRICULTURAL AFFAIRS COMMITTEE
1 AN ACT
2 RELATING TO WAREHOUSES AND THE BONDED WAREHOUSE LAW; AMENDING SECTION 69-202,
3 IDAHO CODE, TO REVISE DEFINITIONS AND TO STRIKE A DEFINITION OF WAREHOUSE-
4 MAN AND TO MAKE TECHNICAL CORRECTIONS; AMENDING SECTION 69-219, IDAHO
5 CODE, TO STRIKE A REFERENCE TO STORED COMMODITIES AND TO STRIKE A REFER-
6 ENCE TO REGULATIONS; AMENDING SECTION 69-222, IDAHO CODE, TO PROVIDE FOR
7 THE ISSUANCE OF CERTAIN RECEIPTS AND SCALE TICKETS FOR COMMODITIES DEPOS-
8 ITED IN LICENSED WAREHOUSES; AMENDING SECTION 69-227, IDAHO CODE, TO PRO-
9 VIDE CORRECT TERMINOLOGY, TO PROVIDE FOR EXAMINATION OF COMMODITIES AND
10 RECORDS REGARDING COMMODITIES DEPOSITED IN A LICENSED WAREHOUSE AND TO
11 STRIKE A REFERENCE TO REGULATIONS; AMENDING SECTION 69-238, IDAHO CODE, TO
12 PROVIDE FOR A WAREHOUSEMAN'S DUTY TO DELIVER DEPOSITED COMMODITIES; AMEND-
13 ING SECTION 69-239, IDAHO CODE, TO PROVIDE FOR RECORDS REGARDING DEPOSITED
14 COMMODITIES; AMENDING SECTION 69-248, IDAHO CODE, TO STRIKE A REFERENCE TO
15 BONDED WAREHOUSEMEN AND TO STRIKE A REFERENCE TO AGENTS OF BONDED WARE-
16 HOUSEMEN; AMENDING SECTION 69-251, IDAHO CODE, TO PROVIDE FOR PAYMENT OF
17 PURCHASE PRICE BY A WAREHOUSEMAN TO A DEPOSITOR UPON DEPOSIT OF AGRICUL-
18 TURAL COMMODITIES OR UPON DEMAND BY A DEPOSITOR, TO REQUIRE PAYMENT WITHIN
19 A SPECIFIED TIME OF DEPOSIT OF THE COMMODITIES UNLESS OTHERWISE AGREED TO
20 IN WRITING, TO STRIKE REFERENCES TO OWNER OR AGENT, TO STRIKE THE DEFINI-
21 TION OF DELIVERY AS USED IN THE SECTION AND TO REVISE THE DEFINITION OF
22 PAYMENT AS USED IN THE SECTION; AMENDING SECTION 69-255, IDAHO CODE, TO
23 PROVIDE CORRECT TERMINOLOGY, TO STRIKE REFERENCE TO START-UP PROCEDURE, TO
24 PROVIDE A CORRECT CODE REFERENCE, TO PROVIDE THAT PROVISIONS AND DEFINI-
25 TIONS IN THE CHAPTER, TOGETHER WITH OTHER CITED CODE PROVISIONS, CONSTI-
26 TUTE THE COMMODITY INDEMNITY FUND PROGRAM, TO STRIKE REFERENCE TO THE
27 EFFECTIVE DATE AND THE DIRECTOR'S NOTIFICATION OF THE EFFECTIVE DATE OF
28 THE PROGRAM TO EACH LICENSED WAREHOUSE AND DEALER AND TO PROVIDE FOR THE
29 APPLICATION OF THE COMMODITY INDEMNITY FUND PROGRAM; AMENDING SECTION
30 69-256, IDAHO CODE, TO PROVIDE CORRECT TERMINOLOGY, TO PROVIDE FOR PAYMENT
31 OF ASSESSMENTS BY CERTAIN PERSONS AND TO PROVIDE EXCEPTIONS; AMENDING SEC-
32 TION 69-258, IDAHO CODE, TO STRIKE REFERENCE TO A TIME PERIOD IN WHICH TO
33 ESTABLISH A RULE REGARDING CERTAIN ASSESSMENTS, TO PROVIDE FOR REMITTANCE
34 OF ASSESSMENTS, TO PROVIDE CORRECT TERMINOLOGY, TO PROVIDE THAT COMMODITY
35 INDEMNITY FUND ASSESSMENTS ARE TRUST FUNDS AND PROPERTY OF THE FUND AND TO
36 MAKE TECHNICAL CORRECTIONS; AMENDING SECTION 69-259, IDAHO CODE, TO PRO-
37 VIDE FOR THE FUNDING AND LIMITS OF THE FUND, TO PROVIDE CORRECT TERMINOL-
38 OGY, TO INCREASE THE REQUISITE BALANCE IN THE FUND DURING WHICH TIME
39 ASSESSMENTS WILL BE IMPOSED AND TO STRIKE OUTDATED LANGUAGE; AMENDING SEC-
40 TION 69-262, IDAHO CODE, TO PROVIDE THAT THE DEPARTMENT SHALL PROCESS CER-
41 TAIN CLAIMS, TO STRIKE REFERENCE TO CERTAIN WRITTEN EVIDENCE OF OWNERSHIP,
42 TO PROVIDE FOR CLAIMS AGAINST FAILED WAREHOUSES AND DEALERS, TO PROVIDE
43 THAT FOR THE PURPOSES OF THIS SECTION STORAGE OBLIGATIONS OR SALES OF COM-
44 MODITIES SHALL NOT INCLUDE CERTAIN SPECIFIED COMMODITIES, TO PROVIDE FOR
45 WRITTEN EVIDENCE OF PRODUCER CLAIMS, TO REQUIRE THE DEPARTMENT TO INVESTI-
46 GATE CERTAIN CLAIMS, TO STRIKE REFERENCE TO THE DEPARTMENT'S DETERMINATION
2
1 OF WHETHER A CLAIMANT'S COMMODITIES ARE UNDER A STORAGE OBLIGATION OR
2 WHETHER A SALE HAS OCCURRED, TO STRIKE REFERENCE TO COMMODITY, TO PROVIDE
3 FOR NOTICE TO THE ADVISORY COMMITTEE, TO PROVIDE CORRECT TERMINOLOGY, TO
4 PROVIDE THAT THE DEPARTMENT MAY REQUIRE A CLAIMANT TO SUBROGATE AND ASSIGN
5 CERTAIN RIGHTS TO RECOVER FROM OTHER SOURCES, TO STRIKE REFERENCE TO A
6 SPECIFIED BASIS FOR THE DEPARTMENT'S INSPECTION AND AUDIT OF CERTAIN WARE-
7 HOUSES, TO PROVIDE FOR THE INSPECTION AND AUDIT OF CERTAIN DEALERS AND TO
8 MAKE A TECHNICAL CORRECTION; AMENDING SECTION 69-263, IDAHO CODE, TO PRO-
9 VIDE CORRECT TERMINOLOGY AND TO PROVIDE THAT VERIFIED CLAIMS MUST BE FILED
10 WITHIN A SPECIFIED TIME OF NOTICE BY THE DIRECTOR; AMENDING SECTION
11 69-264, IDAHO CODE, TO INCREASE THE MINIMUM BALANCE IN THE COMMODITY
12 INDEMNITY FUND AND TO PROVIDE CORRECT TERMINOLOGY; AND DECLARING AN EMER-
13 GENCY.
14 Be It Enacted by the Legislature of the State of Idaho:
15 SECTION 1. That Section 69-202, Idaho Code, be, and the same is hereby
16 amended to read as follows:
17 69-202. DEFINITIONS. As used in this chapter:
18 (1) "Agricultural commodity" or "commodity" means any grain, dry peas,
19 dry beans, leguminous or other small seeds and feeds (not including minerals).
20 (2) "Commodity dealer" or "dealer" means any person who solicits, con-
21 tracts for, negotiates the consignment or purchase, or obtains from an Idaho
22 producer or producers, title, possession or control of any agricultural com-
23 modity through his place of business located in the state of Idaho or through
24 his place of business located outside the state of Idaho for the purposes of
25 sale or resale or who buys, during a calendar year, at least ten thousand dol-
26 lars ($10,000) worth of agricultural commodities from an Idaho producer or
27 producers of the commodities. Commodity dealer or dealer shall not mean any
28 person who purchases agricultural commodities for his own use as seed or feed.
29 (3) "Contract" means a written agreement between two (2) or more parties
30 for the sale of an agricultural commodity stipulating the terms and conditions
31 of performance of the parties and includes, but is not limited to, those con-
32 tracts commonly referred to as credit sales, deferred payment, deferred or
33 price later contracts.
34 (4) "Department" means the Idaho department of agriculture.
35 (5) "Depositor" means any person who deposits an agricultural commodity
36 in an Idaho state licensed warehouse for storage, handling, processing, recon-
37 ditioning or shipment, or who is the owner or legal holder of a negotiable
38 warehouse receipt, outstanding scale weight ticket, nonnegotiable warehouse
39 receipt or other evidence of such deposit, or any person whose agricultural
40 commodity has been sold to or is under control of a warehouseman for selling,
41 processing, reconditioning or handling whether or not such agricultural com-
42 modity is within the warehouse.
43 (6) "Director" means the director of the department of agriculture.
44 (7) "Failure" means the date that one (1) or more of the following events
45 occurred, as determined by the director:
46 (a) An inability to financially satisfy claimants in accordance with this
47 chapter and the time limits provided for in it;
48 (b) A public declaration of insolvency;
49 (c) A revocation of license and the leaving of an outstanding indebted-
50 ness to a depositor;
51 (d) A failure to redeliver any commodity to a depositor or to pay
52 depositors for commodities purchased by a licensee in the ordinary course
3
1 of business;
2 (e) A failure to make application for license renewal within sixty (60)
3 days after the annual license renewal date; or
4 (f) A denial of the application for a license renewal.
5 (8) "Historical depositor" means any person who, in the normal course of
6 business operation has consistently made deposits in the same warehouse of
7 commodities produced on the same land. In addition, anyone purchasing or leas-
8 ing that particular land directly from the original depositor or receiving
9 that particular land by devise, descent, bequest or gift directly from the
10 historical depositor shall also be considered an historical depositor with
11 regard to the commodities produced on that land.
12 (9) "Person" means any individual, firm, association, corporation or
13 partnership.
14 (10) "Producer" means the owner, tenant or operator of land in this state
15 who has an interest in and receives all or part of the contract proceeds from
16 the sale of agricultural commodities produced on that land.
17 (11) "Public warehouse" or "warehouse" or "warehouseman" means any eleva-
18 tor, mill, warehouse, subterminal commodity warehouse, public warehouse or
19 other structure or facility in which agricultural commodities are received for
20 storage, shipment, processing, reconditioning or handling.
21 (12) "Receipt" means a warehouse receipt.
22 (13) "Revocation" means the permanent removal of a warehouse license fol-
23 lowing a hearing on violations of this chapter by the hearing officer or
24 director.
25 (14) "Scale weight ticket" means a load slip or other evidence, other than
26 a receipt, given to a depositor by a warehouseman licensed under the provi-
27 sions of this chapter, upon initial delivery of the commodity to the ware-
28 house.
29 (15) "Subterminal warehouse" means any warehouse at which an intermediate
30 function is performed in which agricultural commodities are customarily
31 received from dealers rather than producers and where the commodities are
32 accumulated prior to shipment.
33 (16) "Suspension" means the temporary removal of a warehouse license by
34 the department pending a hearing for violations of this chapter. Correction of
35 the violations prior to a hearing may result in the reinstatement of a license
36 without a hearing.
37 (17) "Termination" means the expiration of a warehouse license due to
38 failure to meet minimum licensing requirements, failure to renew a warehouse
39 license or as requested by the licensee, unless a complaint has been filed
40 against the licensee alleging a violation of any provision of this chapter.
41 (18) "Warehouse receipt" means every receipt, whether negotiable or non-
42 negotiable, issued by a warehouseman, except scale weight tickets.
43 (19) "Warehouseman" means a person operating or controlling a public ware-
44 house.
45 SECTION 2. That Section 69-219, Idaho Code, be, and the same is hereby
46 amended to read as follows:
47 69-219. COMMODITIES FOR STORAGE DEEMED DEPOSITED SUBJECT TO LAW. Any per-
48 son who deposits agricultural commodities for storage in a warehouse licensed
49 under this chapter shall be deemed to have deposited the same subject to the
50 terms of this chapter and the rules and regulations prescribed hereunder.
51 SECTION 3. That Section 69-222, Idaho Code, be, and the same is hereby
52 amended to read as follows:
4
1 69-222. RECEIPTS -- SCALE WEIGHT TICKETS. For all agricultural commodi-
2 ties stored deposited in a warehouse licensed under this chapter original
3 negotiable or nonnegotiable warehouse receipts, or scale weight tickets, shall
4 be issued by the warehouseman conducting the same, but no receipts, or scale
5 weight tickets, shall be issued except for agricultural commodities actually
6 stored deposited in the warehouse at the time of the issuance thereof; pro-
7 vided, however, that no negotiable receipt need be issued except when
8 requested by the depositor.
9 SECTION 4. That Section 69-227, Idaho Code, be, and the same is hereby
10 amended to read as follows:
11 69-227. EXAMINATION OF COMMODITIES -- RECORDS -- PUBLICATION OF FINDINGS.
12 The department of agriculture is authorized to cause examination to be made of
13 any agricultural commodity stored deposited, or any record pertaining to com-
14 modities stored deposited therein, in any warehouse licensed under the provi-
15 sions of this chapter. Whenever, after opportunity for hearing is given to the
16 warehouseman conducting such warehouse, it is determined that he is not per-
17 forming fully the duties imposed on him by this chapter and the rules and reg-
18 ulations made hereunder, the department may publish its findings in a local
19 daily or weekly newspaper in the area where the warehouse is located.
20 SECTION 5. That Section 69-238, Idaho Code, be, and the same is hereby
21 amended to read as follows:
22 69-238. WAREHOUSEMAN'S OBLIGATIONS -- DUTY TO DELIVER STORED DEPOSITED
23 COMMODITIES -- DAMAGES. (1) The duty of the warehouseman to deliver agricul-
24 tural commodities stored deposited shall be governed by the provisions of this
25 chapter and the requirements of the uniform commercial code. Upon the return
26 of a properly endorsed negotiable warehouse receipt to the warehouseman, and
27 upon payment or tender of all advances and legal charges, agricultural commod-
28 ities of the grade and quantity named therein shall be delivered to the holder
29 of the negotiable warehouse receipt, except as provided by the uniform commer-
30 cial code.
31 (2) A warehouseman's duty to deliver any agricultural commodity is ful-
32 filled if delivery is made pursuant to the contract with the depositor, or if
33 no contract exists, then to the several owners in the order of demand as rap-
34 idly as it can be done by ordinary diligence. When delivery is made within
35 thirty (30) days from date of demand, or as agreed upon in writing by all par-
36 ties concerned, such delivery is deemed to comply with the provisions of this
37 section. An extension of the delivery period may be granted by the department
38 upon written request.
39 (3) A warehouseman shall not fail to deliver an agricultural commodity as
40 provided in this section, and delivery shall be made at the warehouse or sta-
41 tion where the agricultural commodity was received, unless otherwise agreed.
42 (4) In addition to being subject to penalties provided in this chapter
43 for a violation of the provisions of this section, any warehouseman failing to
44 deliver agricultural commodities within the time provided in this section is
45 subject to suit by the person entitled to delivery of the agricultural commod-
46 ities and may be ordered by a court of competent jurisdiction to pay actual
47 damage or liquidated damages of one-half (1/2) of one percent (1%) of the
48 value for each day's delay.
49 SECTION 6. That Section 69-239, Idaho Code, be, and the same is hereby
50 amended to read as follows:
5
1 69-239. DUTIES OF WAREHOUSEMAN -- CONTENTS OF RECORDS. (1) The warehouse-
2 man shall maintain current and complete records at all times with respect to
3 all agricultural commodities handled, stored deposited, shipped or
4 merchandised by him, including agricultural commodities owned by him. Such
5 records shall include, but are not limited to, a daily position record showing
6 the total quantity of each kind and class of agricultural commodity received
7 and loaded out and the amount remaining in storage on deposit at the close of
8 each business day, and the warehouseman's total storage deposit obligation for
9 each kind and class of agricultural commodity at the close of each business
10 day.
11 (2) Every warehouseman purchasing any agricultural commodity from a
12 depositor thereof shall promptly make and keep for five (5) years a correct
13 record showing in detail the following information:
14 (a) The name and address of the depositor;
15 (b) The date purchased;
16 (c) The terms of the sale; and
17 (d) The quality and quantity purchased by the warehouseman and, where
18 applicable, the dockage, tare, grade, size and net weight.
19 SECTION 7. That Section 69-248, Idaho Code, be, and the same is hereby
20 amended to read as follows:
21 69-248. DRAWING CHECKS INSUFFICIENTLY COVERED A VIOLATION. Any person
22 engaged in business as a bonded warehouseman, or agent, as defined in this
23 chapter, who shall make, draw, utter or deliver any check, draft or order for
24 the payment of money upon any bank or other depository, in payment to the
25 seller of the purchase price of any agricultural commodity or any part thereof
26 upon obtaining possession or control thereof, when at the time of such making,
27 drawing, uttering or delivery the maker or drawer does not have sufficient
28 funds in or credit with such bank or other depository for the payment of such
29 check, draft or order in full upon its presentation, shall violate the provi-
30 sions of this chapter. The word "credit" as used herein shall mean an arrange-
31 ment or understanding with the bank or depository for the payment of such
32 check, draft or order.
33 SECTION 8. That Section 69-251, Idaho Code, be, and the same is hereby
34 amended to read as follows:
35 69-251. PAYMENT OF PURCHASE PRICE. A person required to be licensed to do
36 business as a warehouseman under the provisions of this chapter shall pay to
37 the depositor the purchase price to the owner or his agent for agricultural
38 commodities upon delivery deposit or demand by the owner or agent depositor,
39 but not later than thirty (30) days after delivery by the owner or agent
40 deposit unless otherwise agreed to by the parties in writing. As used in this
41 section, "delivery" means the transfer of title to and possession of agricul-
42 tural commodities by the owner or agent to the warehouseman or to another per-
43 son in accordance with the agreement of the owner or agent and the warehouse-
44 man. As used in this section, "payment" means the actual payment or tender of
45 payment by the warehouseman to the owner or agent depositor of the agreed pur-
46 chase price.
47 SECTION 9. That Section 69-255, Idaho Code, be, and the same is hereby
48 amended to read as follows:
49 69-255. SHORT TITLE -- INDEMNITY ACCOUNT FUND PROGRAM. -- START-UP PROCE-
6
1 DURE. (1) The provisions of this section and sections 69-256 through 69-267,
2 Idaho Code, together with any definitions in this chapter, constitute the
3 "Commodity Indemnity Account Fund Program." (program). The director shall
4 notify each licensed warehouse and dealer of the effective date of the program
5 provisions. The program shall commence on May 1, 1989.
6 (2) The commodity indemnity fund program shall apply to entities governed
7 by this chapter or governed by the provisions of the commodity dealer law as
8 provided for in chapter 5, title 69, Idaho Code, referred to as "warehouses
9 and/or dealers."
10 SECTION 10. That Section 69-256, Idaho Code, be, and the same is hereby
11 amended to read as follows:
12 69-256. CREATION OF INDEMNITY ACCOUNT FUND -- USES. (1) There is hereby
13 established within the dedicated fund an account fund to be known as the com-
14 modity indemnity account fund. The commodity indemnity account fund shall con-
15 sist of assessments remitted by producers pursuant to the provisions of this
16 chapter and any interest or earnings on the account fund balance.
17 (2) All assessments shall be paid to the department and shall be depos-
18 ited in the commodity indemnity account fund. Assessments shall be paid solely
19 by producers who deposit a commodity with a warehouse or dealer and in no
20 event shall be paid by a person who deposits commodities or other agricultural
21 products with a warehouse or dealer under a bailment, entrustment, consign-
22 ment, sale and return, or similar contract. The state treasurer shall be the
23 custodian of the commodity indemnity account fund. Disbursements shall be on
24 authorization of the director. No appropriation is required for disbursements
25 from this account fund.
26 (3) The commodity indemnity account fund shall be used exclusively for
27 purposes of paying claimants pursuant to this chapter, and paying necessary
28 expenses of administering the commodity indemnity account fund, provided how-
29 ever, that up to one-half (1/2) of the interest accumulated by the account
30 fund may be paid to the department and to the state treasurer to defray costs
31 of administering the warehouse and dealer indemnity program and the commodity
32 indemnity account fund. The state of Idaho shall not be liable for any claims
33 presented against the account fund.
34 SECTION 11. That Section 69-258, Idaho Code, be, and the same is hereby
35 amended to read as follows:
36 69-258. PAYMENT OF ASSESSMENT. The department shall promulgate a rule
37 establishing the assessment within sixty (60) days of the activation of the
38 program pursuant to section 69-255, Idaho Code. The department shall promul-
39 gate rules to provide a procedure for the collection and remittance of the
40 producer's' assessments, provided, providing that warehousemen warehouses
41 and/or commodity dealers shall be responsible for the collection and remit-
42 tance of the producer's assessment payments and the transmission of same to
43 the department.
44 Commodity indemnity fund assessments are trust funds and are property of
45 the commodity indemnity fund immediately upon payment and collection by ware-
46 houses and dealers.
47 SECTION 12. That Section 69-259, Idaho Code, be, and the same is hereby
48 amended to read as follows:
49 69-259. MAXIMUM ACCOUNT BALANCE -- CESSATION OF ASSESSMENTS FUNDING AND
7
1 LIMITS OF FUND. The assessments imposed pursuant to section 69-257, Idaho
2 Code, shall be imposed under rules promulgated by the department, until such
3 time as the commodity indemnity account balance, less any outstanding claims,
4 fund reaches five ten million dollars ($510,000,000). If the commodity indem-
5 nity account fund balance, less any outstanding claims, exceeds five ten mil-
6 lion dollars ($510,000,000) on an assessment date, no assessment shall be
7 imposed by the department, except as provided in section 69-258, Idaho Code.
8 For the two (2) fiscal years immediately following the effective date of the
9 program, an amount not exceeding one hundred thousand dollars ($100,000) per
10 year may be paid to the department to defray costs of administering the ware-
11 house audit program.
12 SECTION 13. That Section 69-262, Idaho Code, be, and the same is hereby
13 amended to read as follows:
14 69-262. PROOF OF CLAIMS -- PROCEDURE -- HEARING -- INSPECTION OF WARE-
15 HOUSE. In the event a warehouse or dealer fails, as defined in section
16 69-202(7), Idaho Code, the department shall process the claims of producers
17 producing written evidence of ownership disclosing a storage obligation or
18 written evidence of a sale of commodities for damages caused by the failure,
19 in the following manner: who have paid assessments as required by this chap-
20 ter. Claims against a failed warehouse or dealer shall include written evi-
21 dence disclosing a storage obligation or a sale of commodities. For the pur-
22 pose of this statute, a storage obligation or a sale of commodities shall not
23 include any commodities deposited with a warehouse or dealer under a bailment,
24 entrustment, consignment, sale or return, or similar contract.
25 (1) The department shall give notice and provide a reasonable time of not
26 less than thirty (30) days and not more than sixty (60) days to producers pos-
27 sessing written evidence of ownership disclosing a storage obligation or writ-
28 ten evidence of sale of commodities to file their written verified claims,
29 including any written evidence, with the department.
30 (2) The department may shall investigate each claim and determine whether
31 the claimant's commodities are under a storage obligation or whether a sale of
32 commodities has occurred. The department shall notify each claimant, the com-
33 modity warehouseman or dealer, and the advisory committee of the department's
34 determination as to the validity and amount of each claimant's claim. A
35 claimant or warehouseman or dealer may request a hearing on the department's
36 determination within twenty (20) days of receipt of written notification and a
37 hearing shall be held by the department pursuant to title 67, chapter 52,
38 title 67, Idaho Code. Upon determining the amount and validity of the claim,
39 the director shall pay to the claimant an amount equal to ninety percent (90%)
40 of the approved claim from the commodity indemnity account fund. Prior to any
41 payment from the account fund to a claimant, the claimant shall may be
42 required to subrogate and assign his right to recover from any other source.
43 The department may then pay up to ninety percent (90%) of the approved claim
44 to the claimant. The department shall have a priority claim for that amount.
45 The claimant shall be entitled to seek recovery of the remaining ten percent
46 (10%) which was not originally assigned to the department. For the purpose of
47 determining the amount of the producer's claim, the value of a producer's com-
48 modity shall be the value of the commodity on the date the director declared
49 the warehouse or dealer to have failed or to have failed to comply with the
50 provisions of this chapter or rules promulgated thereunder.
51 (3) The department may inspect and audit a failed warehouseman to deter-
52 mine whether the warehouseman has in his possession sufficient quantities of
53 commodities to cover his storage obligations or dealer. In the event of a
8
1 shortage, the department shall determine each producer's pro rata share of
2 available commodities and the deficiency shall be considered as a claim of the
3 producer. Each type of commodity shall be treated separately for the purpose
4 of determining shortages.
5 (4) The director shall not approve or pay any claim made on the commodity
6 indemnity account fund if the claim is based on losses resulting from the
7 deposit, sale or storage of commodities in an unlicensed warehouse or dealer.
8 SECTION 14. That Section 69-263, Idaho Code, be, and the same is hereby
9 amended to read as follows:
10 69-263. FAILURE TO FILE -- LOSS OF CLAIM ON ACCOUNT FUND. If a producer,
11 creditor, after notification, refuses or neglects to file in the office of the
12 director his verified claim against a warehouseman or dealer as requested by
13 the director within sixty (60) days from the date of the request notice, the
14 director shall thereupon be relieved of responsibility for taking action with
15 respect to such claim later asserted and no such claim shall be paid from the
16 commodity indemnity account fund.
17 SECTION 15. That Section 69-264, Idaho Code, be, and the same is hereby
18 amended to read as follows:
19 69-264. MINIMUM BALANCE -- SUBSEQUENT PAYMENTS. The minimum balance in
20 the commodity indemnity account fund shall be five hundred thousand one mil-
21 lion dollars ($51,000,000). At no time shall the balance be allowed to fall
22 below the minimum balance. The director may pay claims, on a pro rata basis if
23 necessary, until the minimum balance is reached. If the director cannot fully
24 pay a claim before the minimum balance is reached, he shall, when the commod-
25 ity indemnity account fund contains sufficient funds, pay off the claim.
26 SECTION 16. An emergency existing therefor, which emergency is hereby
27 declared to exist, this act shall be in full force and effect on and after its
28 passage and approval.
STATEMENT OF PURPOSE
RS 11260
The purpose of this legislation is to correct legal problems in the
Commodity Indemnity Fund Account (ClAP) experienced in recent
warehouse failures. This legislation clarifies when a failure has
occurred; the producers dealing with a commodity broker must pay into
the fund; stipulates what type of transactions are subject to
assessment; and, it makes clear that the fund is a trust fund for
the use of the depositors. It raises the cap on the fund to
$10,000,000.
There is an emergency clause making the changes effective on approval.
FISCAL IMPACT
None
Contact
Name: Rep. Doug Jones
Phone: 332-1137
STATEMENT OF PURPOSE/FISCAL NOTE H 366