LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
FISCAL IMPACT STATEMENT
LS 7600 NOTE PREPARED: Jan 13, 2025
BILL NUMBER: HB 1419 BILL AMENDED:
SUBJECT: Grain Indemnity.
FIRST AUTHOR: Rep. Baird BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State
XDEDICATED
FEDERAL
Summary of Legislation: Grain Buyer and Warehouse Licenses: The bill defines "revocation of a license".
It creates a process in which the Director of the Indiana Grain Buyers and Warehouse Licensing Agency
(IGBWLA) determines whether a building or other protected enclosure constitutes a single warehouse that
requires one or more licenses. It specifies the documents a person who desires to conduct business as a grain
buyer, warehouse operator, or buyer-warehouse must submit to the IGBWLA to renew a license to operate.
It specifies how a business as a licensee may renew its license. It specifies the types of licenses the IGBWLA
shall issue and how a license may be relinquished. It establishes what information must be included in a
financial statement submitted by a licensee to the IGBWLA. It removes the ability of the IGBWLA to
temporarily suspend a licensee's license. It specifies various matters related to on-premises inspections.
Enforcement Actions: The bill permits the Director of the IGBWLA to call an informal meeting with a
licensee. It provides how the Director may begin an enforcement action and what information the Director
must send to the licensee. It provides when the Director may revoke a licensee's license and what information
the Director must share with the licensee. It establishes various notice requirements. It permits the IGBWLA
to adopt rules. It requires the Director to inspect and test all equipment used to test the moisture content of
grain purchased from producers once per year.
Indiana Grain Indemnity Corporation: The bill requires the Indiana Grain Indemnity Corporation (IGIC)
board to elect a chairperson and vice chairperson and take on various new responsibilities. It addresses
various issues with producer premiums. It provides that a grain buyer shall keep accurate and correct records
of grain purchased from producers documenting the producer premiums paid by producers. It establishes
storage fees to determine storage loss.
Effective Date: Upon passage; July 1, 2025.
Explanation of State Expenditures: Summary: The bill will increase workload for the IGBWLA and the
IGIC board, but will have an indeterminate impact on the their expenditures and expenditures from the
Indiana Grain Indemnity Fund. It makes various changes to requirements for grain buyer and warehouse
HB 1419 1 licenses, renewals, revocations, and enforcement actions. It also makes changes to the timing of eligible
claims made by a producer wishing to reenter the indemnity program and establishes minimum grain storage
fees for determining storage losses. If the actions required by the bill for the IGBWLA help to ensure that
a licensee maintains the financial requirements specified in the bill, future payouts from the fund could be
reduced or avoided. The bill adds authorized and required purposes for which the Administrative Expense
Account, within the Indiana Grain Indemnity Fund may be spent.
Additional Information:
Grain Buyer and Warehouse Licenses: The bill could increase workload for the IGBWLA to review
documents and financial statements for license applications and renewals, to conduct on-premises
inspections, to hold hearings, and to perform a closeout audit of a licensee that requests to relinquish a
license. The bill also provides that the IGBWLA is to provide administrative support to the IGIC board, at
the request of the chairperson of the IGIC board.
The bill transfers duties to inspect and test equipment used to test the moisture content of grain to the
Director of the IGBWLA (rather than the Director of the Indiana State Department of Agriculture (ISDA)).
This provision may have little impact, as the IGBWLA is an agency within the ISDA.
Indiana Grain Indemnity Fund: The bill authorizes the use of the Administrative Expense Account within
the Indiana Grain Indemnity Fund for various legal expenses and requires the IGIC board to hire a manager
or management firm, not associated with or related to any board member, to assist in actions pertaining to
any claim made against the fund.
Expenditures from the Indiana Grain Indemnity Fund could be impacted indeterminately as the bill sets rates
for minimum storage fees that the IGIC board must use when determining the storage losses to be paid from
the fund ($0.05 to $0.15 per bushel per month, depending on the type of grain).
Currently, if a grain producer has received a refund of a producer premium and then requests reentry into the
indemnity program, the producer cannot make a claim on the fund from a “failure” (changed by the bill to
“revocation of a license”) that occurred prior to the producer meeting all the requirements for reentry. The
bill requires that the claim be from the revocation of a license that occurs at least six months after the
producer meets all requirements for reentry. This provision could reduce potential future payouts.
Various IGIC Provisions: The bill specifies that the six members whose affirmative votes are necessary in
order for the IGIC board to take an action, must be members who are present in person. Expenditures for
travel reimbursement could increase if this is not current practice. It lists requirements for the IGIC board
after the revocation of a license. It authorizes the IGIC board to use the services of the ISDA, when it is
considered necessary.
There are currently 418 licensed grain facilities.
Explanation of State Revenues: IGBWLA License Fee Fund: The bill eliminates the statutory license fee
amounts, thereby eliminating license revenue to the IGBWLA License Fee Fund from July 1, 2025, until
rules can be adopted establishing new license fees. The bill’s future impact on revenues to the fund will
depend on the length of time until the adoption of rules and on the amount of the new fees. These license fees
are currently set based on the type of license and the storage capacity of the facility and range from $1,000
to $2,500 for the first facility and $250 for each additional facility.
HB 1419 2 The bill will have an indeterminate impact on revenue to the IGBWLA License Fee Fund, as it establishes
and eliminates several fines that may be imposed on a licensee. The impact will depend on which violations
are fined and whether the provisions of the bill allow for stronger enforcement or encourage compliance.
Current law states that fees collected for testing and inspection of moisture testing equipment, which are
deposited into the IGBWLA License Fee Fund, are appropriated to the ISDA. The bill removes this
appropriation. This provision may have little impact, as the IGBWLA is an agency within the ISDA.
Indiana Grain Indemnity Fund: Any provision that impacts payouts from the Indiana Grain Indemnity Fund
(either the amount or the timing) can also impact revenues, as current law only provides for producer
premiums on grain to be collected when the fund balance drops below $20 M. Therefore, if the bill’s
provisions influence when a license is revoked, prevent a license from being revoked, or increase the amounts
transferred into the Administrative Expense Account within the fund for the new allowable expenses, the
provisions could also impact revenues to the fund. There have only been two collection periods in the history
of the fund (1996-1998 and 2015-2017).
The balance of the Indiana Grain Indemnity Fund as of June 30, 2024, was $33.7 M. There have been $3 M
in additional payouts since the close of FY 2024, and there is $4.6 M in expected additional payouts.
Penalty Provision: The bill establishes a Class A misdemeanor for a member of the IGIC board that violates
the terms of a confidentiality agreement. When court actions occur and fines are collected, revenue to both
the Common School Fund and the state General Fund increase. The following linked document describes
the fees and distribution of the revenue: Court fees imposed in criminal, juvenile, and civil violation cases.
Explanation of Local Expenditures: Penalty Provision: A Class A misdemeanor is punishable by up to one
year in jail.
Explanation of Local Revenues: Penalty Provision: A member of the IGIC board that violates the terms
of a confidentiality agreement commits a Class A misdemeanor. When court actions occur and guilty verdicts
are entered revenue is collected by certain local units. The following linked document describes the fees and
distribution of the revenue: Court fees imposed in criminal, juvenile, and civil violation cases.
State Agencies Affected: Indiana Grain Buyers and Warehouse Licensing Agency; Indiana Grain Indemnity
Corporation; Indiana State Department of Agriculture.
Local Agencies Affected: Trial courts, local law enforcement agencies.
Information Sources: mycase.in.gov: 35D01-2210-PL-000629;
https://www.in.gov/omb/rule-approval-process/headocumentation/
https://www.in.gov/isda/divisions/indiana-grain-buyers/licensing/;
https://www.in.gov/isda/files/Licensees-by-County-9.18.24.pdf;
https://www.in.gov/isda/files/Licensees-by-Name-9.18.24.pdf;
https://www.in.gov/isda/divisions/indiana-grain-buyers/failures/;
https://www.in.gov/isda/files/BROCHURE_Indiana-Grain-Indemnity-Fund.pdf.
Fiscal Analyst: Heather Puletz, 317-234-9484
HB 1419 3