Print Friendly HOUSE BILL NO. 274 – Commodity dealers, licensure
HOUSE BILL NO. 274
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H0274...............................................by AGRICULTURAL AFFAIRS
COMMODITY DEALERS - Amends and adds to existing law to provide for licenses
for commodity dealers that purchase seed crops; to increase the penalty fee
for licensees with expired licenses; to provide bonding requirements; to
provide for irrevocable letters of credit in lieu of bonds; to provide for
suspension or revocation of licenses; to provide an exception for written
agreements altering time for payment; to require annual inspections; to
provide for purchase of seed crops by credit sale contracts; to provide for
title to seed crops; to provide for production records; to provide
violations; to provide for participation of producers covered by this
chapter in the Bonded Warehouse Commodity Indemnity Fund program; and to
provide for notice to licensed warehouses and dealers of the effective date
of the program.
02/15 House intro - 1st rdg - to printing
02/16 Rpt prt - to Agric Aff
03/02 Rpt out - to Gen Ord
03/20 Ret'd to Agric Aff
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-sixth Legislature First Regular Session - 2001
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 274
BY AGRICULTURAL AFFAIRS COMMITTEE
1 AN ACT
2 RELATING TO COMMODITY DEALER LAW; AMENDING SECTION 69-502, IDAHO CODE, TO
3 REVISE DEFINITIONS; AMENDING SECTION 69-503, IDAHO CODE, TO PROVIDE FOR
4 LICENSES FOR COMMODITY DEALERS THAT PURCHASE SEED CROPS, TO STRIKE A REF-
5 ERENCE TO A LICENSED PUBLIC ACCOUNTANT AND TO MAKE TECHNICAL CORRECTIONS;
6 AMENDING SECTION 69-504, IDAHO CODE, TO INCREASE THE PENALTY FEE FOR
7 LICENSEES WITH CERTAIN EXPIRED LICENSES AND TO MAKE TECHNICAL CORRECTIONS;
8 AMENDING SECTION 69-506, IDAHO CODE, TO STRIKE REFERENCE TO ANNUITY, TO
9 PROVIDE BONDING REQUIREMENTS FOR COMMODITY DEALERS IN SEED CROPS, TO PRO-
10 VIDE FOR IRREVOCABLE LETTERS OF CREDIT IN LIEU OF BOND AND TO MAKE A TECH-
11 NICAL CORRECTION; AMENDING CHAPTER 5, TITLE 69, IDAHO CODE, BY THE ADDI-
12 TION OF A NEW SECTION 69-506A, IDAHO CODE, TO PROVIDE THAT THE DEPARTMENT
13 OF AGRICULTURE SHALL REQUIRE LICENSEES, UNABLE TO PAY PRODUCERS DUE TO
14 FINANCIAL DIFFICULTY, TO POST CERTAIN SECURITY, TO AUTHORIZE RULEMAKING
15 AND TO PROVIDE FOR SUSPENSION OR REVOCATION OF LICENSES; AMENDING SECTION
16 69-508, IDAHO CODE, TO INCREASE FEES, TO STRIKE REFERENCE TO A SEPARATE
17 FUND, TO PROVIDE THAT DEPOSITED MONEYS SHALL BE CREDITED TO THE GENERAL
18 ACCOUNT, TO STRIKE REFERENCE TO CERTAIN USES OF THE MONEYS BY THE DIRECTOR
19 OF THE DEPARTMENT OF AGRICULTURE AND TO MAKE A TECHNICAL CORRECTION;
20 AMENDING SECTION 69-510, IDAHO CODE, TO PROVIDE FOR A WAREHOUSE PAYMENT OF
21 PURCHASE PRICE FOR SEED CROPS AND TO PROVIDE AN EXCEPTION FOR WRITTEN
22 AGREEMENTS ALTERING TIME FOR PAYMENT; AMENDING SECTION 69-511, IDAHO CODE,
23 TO REQUIRE YEARLY INSPECTION BY THE DEPARTMENT OF AGRICULTURE OF COMMODITY
24 DEALERS PREMISES AND TO PROVIDE FOR THE INSPECTION OF RECORDS REGARDING
25 CERTAIN SEED CROPS; AMENDING SECTION 69-512, IDAHO CODE, TO STRIKE A REF-
26 ERENCE TO CREDIT SALE, TO PROVIDE A CODE REFERENCE, TO PROVIDE REFERENCES
27 TO SEED CROP; AMENDING SECTION 69-514, IDAHO CODE, TO PROVIDE FOR THE PUR-
28 CHASE OF SEED CROPS BY CONTRACT, TO STRIKE A REFERENCE TO CREDIT SALE, TO
29 PROVIDE FOR TITLE TO SEED CROPS AND TO PROVIDE FOR PAYMENT OF PURCHASE
30 PRICE FOR SEED CROPS; AMENDING SECTION 69-515, IDAHO CODE, TO PROVIDE FOR
31 PRODUCTION RECORDS; AMENDING SECTION 69-516, IDAHO CODE, TO STRIKE REFER-
32 ENCE TO REGULATIONS AND TO STRIKE REFERENCE TO CREDIT SALE; AMENDING SEC-
33 TION 69-517, IDAHO CODE, TO PROVIDE FOR SERVICE ON LICENSE HOLDER BY FAC-
34 SIMILE; AMENDING SECTION 69-520, IDAHO CODE, TO PROVIDE A VIOLATION FOR
35 CERTAIN PAYMENTS BY WAREHOUSES TO PRODUCERS OF SEED CROPS MADE UPON AN
36 ACCOUNT WITH INSUFFICIENT FUNDS; AMENDING SECTION 69-521, IDAHO CODE, TO
37 STRIKE A REFERENCE TO REVIEWED FINANCIAL STATEMENTS AND TO STRIKE A REFER-
38 ENCE TO LICENSED PUBLIC ACCOUNTANT; AMENDING SECTION 69-523, IDAHO CODE,
39 TO PROVIDE CORRECT TERMINOLOGY; AMENDING SECTION 69-524, IDAHO CODE, TO
40 STRIKE A REFERENCE TO REGULATIONS; AMENDING SECTION 69-526, IDAHO CODE, TO
41 MAKE A TECHNICAL CORRECTION; AMENDING CHAPTER 5, TITLE 69, IDAHO CODE, BY
42 THE ADDITION OF A NEW SECTION 69-527, IDAHO CODE, TO PROVIDE FOR THE PAR-
43 TICIPATION OF PRODUCERS COVERED BY THE PROVISIONS OF THIS CHAPTER IN THE
44 BONDED WAREHOUSE COMMODITY INDEMNITY FUND PROGRAM, TO PROVIDE FOR APPLICA-
45 TION OF CERTAIN PROVISIONS AND TO PROVIDE FOR NOTICE TO LICENSED WARE-
46 HOUSES AND DEALERS OF THE EFFECTIVE DATE OF THE PROGRAM.
1 Be It Enacted by the Legislature of the State of Idaho:
2 SECTION 1. That Section 69-502, Idaho Code, be, and the same is hereby
3 amended to read as follows:
4 69-502. DEFINITIONS. As used in this chapter, except as otherwise speci-
6 (1) "Agricultural commodity" means any grain, dry peas, wheat, barley,
7 oats, corn, rye, oilseeds, dry edible beans, peas, lentils and other
8 leguminous or other small seeds, except true seed crops, or any other commod-
9 ity as determined by the director.
10 (2) "Bailee" means a person who receives personal property from another
11 as a bailment.
12 (3) "Bailment" means a delivery of personal property by one (1) person
13 (the bailor) to another (the bailee) who holds the property for a certain pur-
14 pose under an express or implied-in-fact contract. Unlike a sale or gift of
15 personal property, a bailment involves a change in possession but not in
17 (4) "Bailment contract" means a contract between two (2) or more parties
18 that creates a "bailor" and "bailee" relationship wherein the bailor transfers
19 property (seed) to the bailee, but does not transfer title along with the
20 property. For the purposes of this chapter, the term "bailment contract" is
21 interchangeable with the term "production contract."
22 (5) "Bailor" means a person who delivers personal property to another as
23 a bailment.
24 (6) "Commodity dealer or dealer" means any person who solicits, contracts
25 for, or negotiates the consignment or purchase, or obtains from an Idaho pro-
26 ducer or producers, title, possession, or control of any agricultural commod-
27 ity or seed crop through his place of business located in the state of Idaho
28 or through his place of business located outside the state of Idaho for the
29 purpose of sale or resale or who buys, during any calendar year, at least ten
30 thousand dollars ($10,000) worth of agricultural commodities or seed crops
31 from an Idaho producer or producers of the commodities or seed crops. Commod-
32 ity dealer or dealer shall not mean any person who purchases agricultural com-
33 modities or seed crops for his own use as seed or feed within his own opera-
35 (3) "Credit-sale contract" means a contract for the sale of an agricul-
36 tural commodity pursuant to which the sale price is to be paid at a date sub-
37 sequent to the delivery of the agricultural commodity to the buyer and
38 includes, but is not limited to, those contracts commonly referred to as
39 deferred payment contracts, deferred pricing contracts and price-later con-
41 (7) "Contract" means an agricultural contract as defined in chapter 50,
42 title 22, Idaho Code, which may include, but is not limited to, those con-
43 tracts commonly referred to as credit sales, bailment, deferred payment,
44 delayed or price-later contracts.
45 (8) "Deliver or delivery" means the physical transfer of agricultural
46 commodity or seed crop from one (1) party to another.
47 ( 49) "Department" means the department of agriculture of the state of
49 ( 510) "Director" means the director of the Idaho state department of agri-
51 ( 611) "Person" means any individual, firm, association, partnership, or
52 corporation or limited liability company.
53 ( 712) "Producer" means the owner, tenant or operator of land in this state
1 who has an interest in and receives all or part of the proceeds from the his
2 sale of agricultural commodities or seed crops produced on that land.
3 (13) "Production facility" means any elevator, mill, warehouse,
4 subterminal commodity warehouse, public warehouse or other structure or facil-
5 ity in which agricultural commodities or seed crops are received, partially or
6 wholly, through the use of production contracts or bailment contracts.
7 ( 814) "Public warehouse or warehouse" means any elevator, mill, warehouse,
8 subterminal commodity warehouse, public warehouse or other structure or facil-
9 ity in which agricultural commodities or seed crops are received for storage,
10 shipment, processing, reconditioning or handling.
11 (15) "Revocation" means the permanent removal of a commodity dealer
12 license following a hearing on violations of the provisions of this chapter by
13 the hearing officer or director.
14 (16) "Seed crops" means any true seed crop that may include, but not be
15 limited to, dry edible bean seed, dry garden bean seed, alfalfa seed, clover
16 seed, forage grass seed, ornamental grass seed, vegetable seed, flower seed,
17 peas, lentils and other leguminous seeds or any other seed crop as determined
18 by the director.
19 ( 917) "Suspension" means the temporary removal of a commodity dealer
20 license by the department pending a hearing for violations of the provisions
21 of this chapter. Correction of the violations prior to a hearing may result in
22 the reinstatement of a license without a hearing.
23 (10) "Revocation" means the permanent removal of a commodity dealer
24 license following a hearing on violations of the provisions of this chapter by
25 the hearing officer or director.
26 (1 18) "Termination" means the expiration of a commodity dealer license
27 due to failure to meet minimum licensing requirements, failure to renew a com-
28 modity dealer license or as requested by the licensee according to the terms
29 of section 69-504 (4), Idaho Code.
30 SECTION 2. That Section 69-503, Idaho Code, be, and the same is hereby
31 amended to read as follows:
32 69-503. LICENSE REQUIREMENTS -- FINANCIAL RESPONSIBILITY. (1) A person
33 shall not engage in the business of a commodity dealer in this state without
34 having obtained a license issued by the department.
35 (2) The type of license required shall be determined as follows:
36 (a) A class 1 license is required if the commodity dealer purchases agri-
37 cultural commodities or seed crops by credit-sale contract or if the value
38 of the agricultural commodities or seed crops purchased by the commodity
39 dealer from producers during the previous twelve (12) month period exceeds
40 two hundred and fifty thousand dollars ($250,000), or if the value of the
41 agricultural commodities or seed crops expected to be purchased by the
42 commodity dealer from the producers during the succeeding twelve (12)
43 month period will exceed two hundred and fifty thousand dollars
44 ($250,000). Any other commodity dealer may elect to be licensed as a class
45 1 commodity dealer.
46 (b) A class 2 license is required for any commodity dealer if the value
47 of the agricultural commodities or seed crops purchased by the commodity
48 dealer from producers during the previous twelve (12) month period exceeds
49 ten thousand dollars ($10,000) and is less than two hundred and fifty
50 thousand dollars ($250,000), and if the value of the agricultural commodi-
51 ties or seed crops expected to be purchased by the commodity dealer from
52 producers during the succeeding twelve (12) month period will be more than
53 ten thousand dollars ($10,000) but less than two hundred and fifty thou-
1 sand dollars ($250,000). A class 2 licensee whose purchases from producers
2 exceed two hundred and fifty thousand dollars ($250,000) in value during
3 any twelve (12) month period shall immediately apply for a class 1
4 license. If a class 1 license is denied, the person shall immediately
5 cease doing business as a commodity dealer.
6 (3) An application for a license to engage in business as a commodity
7 dealer shall be filed with the department and shall be on a form prescribed by
8 the department. A separate license is required for each location at which
9 records are maintained for transactions of the commodity dealer.
10 (4) A license application shall include the following:
11 (a) The name of the applicant;
12 (b) The names of the officers and directors if the applicant is a corpo-
14 (c) The names of the partners if the applicant is a partnership;
15 (d) The location of the principal place of business; and
16 (e) Any other reasonable information the department finds necessary to
17 carry out the provisions and purposes of this chapter.
18 (5) A license applicant shall further provide a sufficient and valid bond
19 as specified in section 69-506, Idaho Code.
20 (6) A license applicant shall further provide a complete financial state-
21 ment setting forth the applicant's assets, liabilities and net worth. This
22 financial statement shall be prepared by an independent certified public
23 accountant or a licensed public accountant according to generally accepted
24 accounting principles. The commodity dealer shall have and maintain current
25 assets equal to or greater than current liabilities. Assets shall be shown at
26 original cost less depreciation. Upon written request filed with the depart-
27 ment, the director may allow asset valuations in accordance with a competent
29 (7) In order to receive and retain a commodity dealer's license the fol-
30 lowing additional conditions must be satisfied:
31 (a) For a class 1 license a commodity dealer shall have and maintain a
32 net worth of at least fifty thousand dollars ($50,000) or maintain a bond
33 in the amount of two thousand dollars ($2,000) for each one thousand dol-
34 lars ($1,000) or fraction thereof of net worth deficiency; however, a per-
35 son shall not be licensed as a class 1 commodity dealer if the person has
36 a net worth of less than twenty-five thousand dollars ($25,000). A bond
37 submitted for purposes of this subsection shall be in addition to any bond
38 otherwise required under the provisions of this chapter.
39 (b) For a class 2 license a commodity dealer shall have and maintain a
40 net worth of at least twenty-five thousand dollars ($25,000) or maintain a
41 bond in the amount of two thousand dollars ($2,000) for each one thousand
42 dollars ($1,000) or fraction thereof of net worth deficiency; however, a
43 person shall not be licensed as a class 2 commodity dealer if the person
44 has a net worth of less than ten thousand dollars ($10,000). A bond sub-
45 mitted for purposes of this subsection shall be in addition to any bond
46 otherwise required under the provisions of this chapter.
47 (8) The department may require additional information or verification
48 regarding the financial resources of the applicant and the applicant's ability
49 to pay producers for agricultural commodities or seed crops purchased from
51 SECTION 3. That Section 69-504, Idaho Code, be, and the same is hereby
52 amended to read as follows:
53 69-504. LICENSE ISSUANCE -- RENEWAL -- EXPIRATION. (1) The department
1 shall issue a license when the applicant has filed the application and com-
2 plied with the terms and conditions of the provisions of this chapter and the
3 rules and regulations of the department. The license shall expire on December
4 31 of each year.
5 (2) A commodity dealer's license may be renewed annually by submitting
6 all necessary licensing materials required by the provisions of this chapter.
7 This material shall be received by the department before December 31 of each
9 (3) A commodity dealer's license which has expired may be reinstated by
10 the department upon receipt of all necessary licensing materials required by
11 the provisions of this chapter and a penalty fee in the amount of fifty five
12 hundred dollars ($50 .00); providing, that this material is filed within thirty
13 (30) days from the date of expiration of the commodity dealer's license. At
14 the end of the thirty (30) day penalty period, a commodity dealer's license
15 shall terminate. All license applications received after the thirty (30) day
16 penalty period shall be considered original applications and license fees
17 shall be assessed according to section 69-508(1), Idaho Code.
18 (4) A license may terminate upon request of the licensee unless a com-
19 plaint has been filed against the licensee alleging a violation of any provi-
20 sion of this chapter. A commodity dealer's license is not transferable between
21 legal entities.
22 (5) If an applicant has had a license revoked under the provisions of
23 chapters 2 or 5, title 69, Idaho Code, or the United States warehouse act
24 within the past three (3) years or been convicted of a violation of the provi-
25 sions of chapters 2 or 5, title 69, Idaho Code, or the United States warehouse
26 act within the past three (3) years, the department may deny a commodity
27 dealer's license to the applicant.
28 (6) Any partnership with a partner or any corporation which has an offi-
29 cer, director or majority stockholder owning at least ten per cent percent
30 (10%) of issued stock who has had a license revoked under the provisions of
31 chapters 2 or 5, title 69, Idaho Code, or the United States warehouse act
32 within the previous three (3) years or has been convicted of a felony involv-
33 ing violations of the provisions of chapters 2 or 5, title 69, Idaho Code, or
34 the United States warehouse act, may be denied a commodity dealer's license by
35 the department.
36 SECTION 4. That Section 69-506, Idaho Code, be, and the same is hereby
37 amended to read as follows:
38 69-506. BONDING REQUIREMENTS -- CANCELLATION -- CERTIFICATE OF DEPOSIT OR
39 ANNUITY IRREVOCABLE LETTER OF CREDIT IN LIEU OF BOND. Except as provided in
40 chapter 2, title 69, Idaho Code, an applicant for a license to operate as a
41 commodity dealer shall, before a license will be issued, file with the depart-
42 ment a bond payable to the state of Idaho with a corporate surety approved by
43 the department with the condition that the applicant will pay the purchase
44 price of any agricultural commodity or seed crop to the seller. The aggregate
45 annual liability of the surety shall in no event exceed the sum of the bond.
46 The bond for each class 1 license shall be in the sum of twenty-five thou-
47 sand dollars ($25,000). The bond for each class 2 license shall be in the sum
48 of fifteen thousand dollars ($15,000). A surety shall notify the commodity
49 dealer and the department by certified mail at least sixty (60) days prior to
50 the cancellation of a bond issued under the provisions of this chapter. The
51 liability of the surety shall cover purchases made by the commodity dealer
52 during the time the bond is in force. A commodity dealer's bond filed with
1 this department shall be continuous until cancelled canceled by the surety
2 upon sixty (60) days' notice. The director reserves the right to waive the
3 sixty (60) day cancellation period.
4 Any person required to submit a bond to the department in accordance with
5 this chapter, may at his option give to the department a certificate of
6 deposit or annuity an irrevocable letter of credit payable to the director as
7 trustee in lieu of the bond required herein. The principal amount of the cer-
8 tificate or annuity letter of credit shall be the same as that required for a
9 surety bond pursuant to this chapter. Accrued interest upon the certificate
10 of deposit or annuity shall be payable to the purchaser of the certificate. or
11 annuity. The certificate or annuity letter of credit shall remain on file with
12 the department until it is released, cancelled canceled or discharged by the
13 director. The certificate or letter of credit shall remain in force so long as
14 the director of the Idaho state department of agriculture is notified thirty
15 (30) days in advance of such time the aforementioned document is renewed,
16 altered or amended. Failure to comply with such requirement to notify may
17 result in the suspension of a warehouseman or dealer license. The provisions
18 of this chapter that apply to a bond required pursuant to this chapter apply
19 to each certificate of deposit or annuity letter of credit given in lieu of
20 such bond.
21 Under the provisions of this chapter, an annuity irrevocable letter of
22 credit shall not be accepted by the department acceptable unless it is issued
23 by a n insurance company, national bank in Idaho or other financial institution
24 found acceptable by the director and shall have a cash value equal to the bond
25 requirement less any penalty for early withdrawal by an Idaho state chartered
26 bank insured by the federal deposit insurance corporation.
27 SECTION 5. That Chapter 5, Title 69, Idaho Code, be, and the same is
28 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
29 ignated as Section 69-506A, Idaho Code, and to read as follows:
30 69-506A. FINANCIAL DIFFICULTIES -- ADDITIONAL BOND OR SECURITY REQUIRED.
31 The department shall, when it has reason to believe that a licensee does not
32 have the ability to pay producers for commodities purchased, or when it deter-
33 mines that the licensee does not have a sufficient net worth to outstanding
34 financial obligations ratio, require the licensee to post a bond or other
35 additional security in an amount to be prescribed by rule. The additional
36 security may exceed the maximum amount set forth in this chapter. Failure of
37 the licensee to timely post the additional bond or other security constitutes
38 grounds for suspension or revocation of a license issued under this chapter.
39 The licensee may request a hearing regarding the decision to increase the
40 amount of security required or the revocation or suspension of a license pur-
41 suant to this section and may appeal such decisions pursuant to the procedure
42 set out in section 69-518, Idaho Code.
43 SECTION 6. That Section 69-508, Idaho Code, be, and the same is hereby
44 amended to read as follows:
45 69-508. LICENSE FEES. (1) The department shall assess and collect an
46 annual fee for each commodity dealer license on an original application
47 according to the following schedule:
48 (a) For a class 1 license the fee shall be two three hundred sixty dol-
49 lars ($ 20360).
50 (b) For a class 2 license the fee shall be one hundred eighty dollars
51 ($1 080).
1 (2) The department shall assess and collect an annual fee for the renewal
2 of each commodity dealer license according to the following schedule:
3 (a) For a class 1 license the renewal fee shall be forty sixty dollars
4 ($ 460.00).
5 (b) For a class 2 license the renewal fee shall be twenty forty dollars
6 ($ 240.00).
7 (3) All license fees, assessments and moneys collected by the director
8 under the provisions of this chapter shall be placed in a separate fund in
9 deposited into the state treasury to be used by the director for the purpose
10 of inspection, administration and enforcement of the provisions of this chap-
11 ter and credited to the general account.
12 SECTION 7. That Section 69-510, Idaho Code, be, and the same is hereby
13 amended to read as follows:
14 69-510. PAYMENT OF PURCHASE PRICE. A person required to be licensed as a
15 commodity dealer under the provisions of this chapter shall pay the purchase
16 price to the owner or his agent for agricultural commodities or seed crops
17 upon delivery or demand by the owner or agent, but not later than thirty (30)
18 days after delivery by the owner or agent, unless otherwise agreed to by the
19 parties, in writing. As used in this section, "delivery" means the transfer of
20 title to and possession of agricultural commodities or seed crops by the owner
21 or agent to the commodity dealer or to another person in accordance with the
22 agreement of the owner or agent and the commodity dealer. As used in this sec-
23 tion, "payment" means the actual payment or tender of payment by the commodity
24 dealer to the owner or agent of the agreed purchase price.
25 SECTION 8. That Section 69-511, Idaho Code, be, and the same is hereby
26 amended to read as follows:
27 69-511. INSPECTION OF PREMISES, BOOKS AND RECORDS. The department may
28 shall inspect the premises used by any commodity dealer in the conduct of his
29 business at least once every calendar year and at any other reasonable time.
30 The books, accounts, records and papers of every such commodity dealer which
31 pertain to agricultural commodity or seed crop purchase sd or received shall
32 have bills of lading or other documents covering the agricultural commodities
33 or seed crops in his possession, and shall present them to any law enforcement
34 officer or to a person designated as a law enforcement officer. A commodity
35 dealer licensed in this state who does not have a place of business within the
36 state shall, upon the request of the director, make available and furnish to
37 the department at any reasonable time and place the department may set, all
38 books, accounts, records and papers relating to agricultural commodity or seed
39 crop transactions within the state of Idaho. Where there is good cause to
40 believe that a person is doing business as a commodity dealer in the state of
41 Idaho without a license, the department may inspect the books, papers and
42 records of the person which pertain to agricultural commodity purchases or
43 seed crop transactions.
44 SECTION 9. That Section 69-512, Idaho Code, be, and the same is hereby
45 amended to read as follows:
46 69-512. PENALTIES. (1) Any person who engages in business as a commodity
47 dealer without obtaining a license or who refuses to permit inspection of
48 licensed premises, books, accounts, records or other documents required by the
49 provisions of this chapter or who uses a scale ticket or credit-sale contract
1 that fails to satisfy the requirements of the provisions of this chapter and
2 chapter 50, title 22, Idaho Code, shall be guilty of a felony and be punished
3 by imprisonment for not more than ten (10) years, or by a fine of not more
4 than ten thousand dollars ($10,000), or both.
5 (2) Any person who knowingly submits false information to or who know-
6 ingly withholds information from the department when such information is
7 required to be submitted or maintained pursuant to the provisions of this
8 chapter shall be guilty of a felony and be punished by imprisonment for not
9 more than ten (10) years, or by a fine of not more than ten thousand dollars
10 ($10,000), or both.
11 (3) Any person who shall misrepresent, forge, alter or counterfeit a
12 license required by the provisions of this chapter, or who shall issue, utter
13 or aid in the issuance or utterance or attempt to issue or utter a false or
14 fraudulent receipt for any commodity or seed crop shall be guilty of a felony
15 and be punished by imprisonment for not more than ten (10) years, or by a fine
16 of not more than ten thousand dollars ($10,000), or both.
17 (4) Any violation of the provisions of this chapter except as provided in
18 subsections (1), (2) or (3) of this section or section 69-520, Idaho Code,
19 shall be a misdemeanor and punishable by imprisonment in a county jail for not
20 more than six (6) months, or by a fine of not more than one thousand dollars
21 ($1,000), or by both.
22 SECTION 10. That Section 69-514, Idaho Code, be, and the same is hereby
23 amended to read as follows:
24 69-514. CREDIT-SALE CONTRACTS. (1) A commodity dealer who purchases agri-
25 cultural commodities or seed crops by credit-sale contracts shall maintain
26 books, records and other documents as required by the department to establish
27 compliance with the provisions of this section.
28 (2) In addition to other information as may be required, a credit-sale
29 contract shall contain or make provision for all of the following:
30 (a) The seller's name and address;
31 (b) The conditions of delivery;
32 (c) The amount and kind of agricultural commodities or seed crops deliv-
34 (d) The price per unit or basis of value; and
35 (e) The date payment is to be made.
36 (3) Title to all agricultural commodities or seed crops sold by a con-
37 tract is in the purchasing dealer as of the time the contract is signed,
38 unless the contract provides otherwise. The contract must be signed by all
39 parties and executed in duplicate. One (1) copy shall be retained by the com-
40 modity dealer and one (1) copy shall be delivered to the seller. Upon revoca-
41 tion or termination of a commodity dealer's license, the payment date for all
42 credit-sale contracts shall be advanced to a date not later than thirty (30)
43 days following the effective date of the revocation or termination and the
44 purchase price for all agricultural commodities or seed crops without a price
45 shall be determined as of the effective date of revocation or termination in
46 accordance with all other provisions of the contract. However, if the business
47 of the commodity dealer is sold to another licensed commodity dealer, credit-
48 sale contracts may be assigned to the purchaser of the business.
49 SECTION 11. That Section 69-515, Idaho Code, be, and the same is hereby
50 amended to read as follows:
51 69-515. RECORDS. All financial statements and production records of com-
1 modity dealers required under the provisions of this chapter shall be subject
2 to disclosure according to chapter 3, title 9, Idaho Code, except as follows:
3 (a) Upon written permission by the licensee;
4 (b) In actions or administrative proceedings commenced under the provi-
5 sions of this chapter or chapter 2, title 69, Idaho Code;
6 (c) When required by subpoena or court order; or
7 (d) Disclosure to law enforcement agencies in connection with the inves-
8 tigation or prosecution of criminal offenses.
9 SECTION 12. That Section 69-516, Idaho Code, be, and the same is hereby
10 amended to read as follows:
11 69-516. STANDARDIZATION OF RECORDS AND DOCUMENTS. The department may
12 adopt rules and regulations specifying the form and content of scale tickets
13 and credit-sale contracts.
14 SECTION 13. That Section 69-517, Idaho Code, be, and the same is hereby
15 amended to read as follows:
16 69-517. DIRECTOR'S AUTHORITY. The director may, upon his own motion,
17 whenever he has reason to believe the provisions of this chapter have been
18 violated, or upon verified complaint of any person in writing, investigate the
19 actions of any commodity dealer licensed under the provisions of this chapter,
20 and if he finds probable cause to do so, shall file a complaint against said
21 commodity dealer which shall be set down for hearing before the director upon
22 thirty (30) days' notice served upon such license holder either by personal
23 service, registered mail or telegram facsimile prior to such hearing.
24 The director shall have the power to administer oaths, certify to all
25 official acts and shall have the power to subpoena any person in this state as
26 a witness, to compel through subpoena the production of books, papers and
27 records, and to take the testimony of any person on deposition in the same
28 manner as is prescribed by law in the procedure before the courts of this
29 state. A subpoena issued by the director shall extend to all parts of the
30 state and may be served by any person authorized to do so.
31 All powers of the director herein enumerated in respect to administering
32 oaths, power of subpoena, and other enumerated powers in hearings on com-
33 plaints shall likewise be applicable to hearings held on applications for the
34 issuance or renewal of a commodity dealer license.
35 Nothing in this chapter shall be construed to require the director or his
36 authorized representative to report for prosecution or to institute civil,
37 criminal or administrative action against a commodity dealer for a violation
38 of the provisions of this chapter when he believes that public interest will
39 best be served by a suitable warning.
40 SECTION 14. That Section 69-520, Idaho Code, be, and the same is hereby
41 amended to read as follows:
42 69-520. DRAWING CHECKS INSUFFICIENTLY COVERED A VIOLATION. Any person
43 engaged in business as a commodity dealer, as defined in this chapter, who
44 shall make, draw, utter or deliver any check, draft or order for the payment
45 of money upon any bank, or other depository in payment to the seller producer
46 of the purchase or contract price of any agricultural commodity or seed crop
47 or any part thereof upon obtaining possession or control thereof, or in com-
48 pliance with a contract, when at the time of such making, drawing, uttering or
49 delivery the maker or drawer has not sufficient funds in or credit with such
1 bank or other depository for the payment of such check, draft or order in full
2 upon its presentation, shall be in violation of the provisions of this chap-
3 ter. The word "credit" as used herein shall mean an arrangement or understand-
4 ing with the bank or depository for the payment of such check, draft or order.
5 SECTION 15. That Section 69-521, Idaho Code, be, and the same is hereby
6 amended to read as follows:
7 69-521. FINANCIAL STATEMENTS. In order to obtain a commodity dealer's
8 license, the applicant shall submit an audited or reviewed financial statement
9 prepared by an independent certified public accountant or licensed public
10 accountant, a statement of current assets and current liabilities and a state-
11 ment of net worth, all of which shall be prepared in accordance with generally
12 accepted accounting principles. This statement must have been prepared not
13 more than ninety (90) days prior to the date of application and shall conform
14 to the applicable requirements of this chapter as to annual financial state-
16 Once licensed, every licensee shall annually prepare a financial statement
17 either at the close of business, December 31, or at the end of their fiscal
18 year and file the statement with the department not later than ninety (90)
19 days thereafter. These statements shall be prepared in conformity with gener-
20 ally accepted accounting principles and shall include, but not be limited to,
21 a reviewed financial statement prepared by an independent certified public
22 accountant, a statement of current assets and current liabilities, and a
23 statement of net worth.
24 SECTION 16. That Section 69-523, Idaho Code, be, and the same is hereby
25 amended to read as follows:
26 69-523. PUBLICATION OF REPORTS. The Idaho state department of agriculture
27 may publish the results of any investigations made under the provisions of
28 this chapter and may publish the names and addresses of persons licensed under
29 this chapter and a list of all licenses terminated under this chapter and the
30 causes therefor.
31 SECTION 17. That Section 69-524, Idaho Code, be, and the same is hereby
32 amended to read as follows:
33 69-524. RULES. AND REGULATIONS. The department of agriculture shall make
34 such rules and regulations as it may deem necessary for the efficient execu-
35 tion of the provisions of this chapter.
36 SECTION 18. That Section 69-526, Idaho Code, be, and the same is hereby
37 amended to read as follows:
38 69-526. COOPERATION WITH GOVERNMENTAL AGENCIES AND PRIVATE ASSOCIATIONS.
39 The director may cooperate with and enter into agreements with governmental
40 agencies of this state, other states, agencies of the federal government, and
41 private associations in order to carry out the purpose and provisions of this
42 chapter and the United States warehouse act (7 U.S.C.A. section 241, et seq.).
43 Notwithstanding any other provisions of this chapter, such agreements may also
44 relate to a joint program for licensing, bonding and inspecting stations. Such
45 a program should be designed to avoid duplication of effort on the part of the
46 licensing authority and requirements for operation, and promote more efficient
47 enforcement of the provisions of this chapter and comparable provisions of the
1 laws of the states of Oregon, Washington, Montana, Wyoming, Utah, and Nevada
2 and the province of British Columbia, Canada.
3 SECTION 19. That Chapter 5, Title 69, Idaho Code, be, and the same is
4 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
5 ignated as Section 69-527, Idaho Code, and to read as follows:
6 69-527. PARTICIPATION IN COMMODITY INDEMNITY FUND PROGRAM -- APPLICATION
7 OF PROVISIONS. Commencing on July 1, 2001, each producer covered pursuant to
8 the provisions of this chapter shall participate in the commodity indemnity
9 fund program, established pursuant to the provisions of chapter 2, title 69,
10 Idaho Code. All provisions regarding the indemnity fund program as set forth
11 in chapter 2, title 69, Idaho Code, including but not limited to, assessments,
12 payment of assessments, cessation of assessments, procedures for proofs of
13 claim, hearing and payments from the account shall apply to each producer cov-
14 ered pursuant to the provisions of this chapter. The director shall notify
15 each licensed warehouse and dealer of the effective date of the program provi-
STATEMENT OF PURPOSE
This bill is one of several that have been recommended by the
Governors task force on Family Farm Security. This bill updates
and clarifies the commodity dealer section of the code. The bill
strengthens the licensing procedures and raises the license fee
schedule. This will give the Department of Agriculture more money
and more ability to regulate commodity dealers. Additionally, the
bill clarifies that commodity dealers must collect for the
commodity indemnity account and that growers will be covered by
the indemnity account in the case of a dealer failure.
The fiscal impact to the Commodity Dealer program will be $1,520,
increase due to a renewal fee increase. At this time the Department
does not project any additional workload from this increase, but this
will more nearly cover the cost of operating this program. The
program's funds have been moved from dedicated to General Fund.
Name: Rep. Jones
Dennis Doshier, Department of Agriculture
STATEMENT OF PURPOSE/FISCAL NOTE H 27