HLS 20RS-496 ORIGINAL
2020 Regular Session
HOUSE BILL NO. 496
BY REPRESENTATIVE RISER AND SENATOR WOMACK
AGRICULTURE/GRAIN: Provides relative to grain buyers within the agricultural
commodity dealer and warehouse law and to the Grain and Cotton Indemnity Fund
1 AN ACT
2To amend and reenact R.S. 3:3402(10) and (12) through (19), 3406(A)(1) and (2),
3 3410.1(A), and 3412.1(C)(1) and (2), (E), (F)(1), and (I), to enact R.S. 3:3402(20)
4 and 3410.1(G), and to repeal R.S. 3:3412.1(C)(4), relative to the agricultural dealer
5 and warehouse law; to provide for definitions; to provide for powers and duties of
6 the commissioner of agriculture; to provide for exceptions to licensure and notice
7 applicable to noncommercial grain buyers or other unlicensed grain dealers; to
8 provide for changes in balance allocation, suspension of collections, and claims
9 under the Grain and Cotton Indemnity Fund; and to provide for related matters.
10Be it enacted by the Legislature of Louisiana:
11 Section 1. R.S. 3:3402(10) and (12) through (19), 3406(A)(1) and (2), 3410.1(A),
12and 3412.1(C)(1) and (2), (E), F(1), and (I) are hereby amended and reenacted and R.S.
133:3402(20) and 3410.1(G) are hereby enacted to read as follows:
14 §3402. Definitions
15 As used in this Chapter, the following terms shall have the meanings ascribed
16 below:
17 * * *
18 (10) "Grain dealer" means any person who purchases any agricultural
19 commodities from producers or represents producers in the sale of agricultural
20 commodities. The term does not include producers who purchase grain commodities
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1 for their own use as feed or seed any person who qualifies as a noncommercial grain
2 buyer.
3 * * *
4 (12) "Noncommercial grain buyer" means any person who purchases, or
5 contracts to purchase, less than ten thousand bushels of grain or five thousand
6 hundredweights of rice in a calendar year.
7 (12) (13) "Open" or "open position" means the grain dealer's contracts for
8 purchase or sale of agricultural commodities which are unhedged.
9 (13) (14) "Open storage" means any storage for which a warehouse receipt
10 has not been issued.
11 (14) (15) "Person" means any individual, partnership, company, firm,
12 association, cooperative association, corporation, or any other legal entity engaged
13 in any of the activities regulated under this Chapter.
14 (15) (16) "Producer" means the owner, tenant, lessee, or operator of land
15 within this state who has an interest in or receives all or any part of the proceeds
16 from the sale of agricultural commodities produced thereon.
17 (16) (17) "Risk position" means the loss potential to the grain dealer
18 resulting from bringing its open position to market.
19 (17) (18) "Security" means any financial instrument or document issued for
20 the benefit of or given to the commission by a licensee, or participation in any self-
21 insurance fund program authorized by this Chapter as assurance for the fulfillment
22 of the obligations imposed on the licensee by applicable law or regulations.
23 (18) (19) "Warehouse" means any building, structure, or any other protected
24 enclosure required to be licensed by the commission in which agricultural
25 commodities or other farm products are stored for the public for a fee. The term
26 includes facilities which commingle commodities belonging to different owners and
27 facilities which preserve the separate identities of different lots of agricultural
28 commodities.
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1 (19) (20) "Warehouseman" means any person or other entity operating a
2 warehouse.
3 * * *
4 §3406. Powers and duties of the commissioner
5 A. The commissioner shall administer and enforce this Chapter in
6 accordance with the rules and regulations promulgated by the commission. In the
7 administration and enforcement of this Chapter, the commissioner and his duly
8 constituted representatives are specifically authorized to do the following:
9 (1) Enter the premises of any warehouse, cotton merchant, or cotton agent,
10 or grain dealer required to be licensed under this Chapter, or those of any person
11 purchasing grain from Louisiana producers, at any reasonable time during normal
12 working hours, for the purpose of making any examination or any inspection of the
13 premises and the contents thereof as may be necessary.
14 (2) Examine, copy, and audit the accounts, books, and records, including
15 stock records, position records, balance sheets, scale tickets, and warehouse receipts
16 of any warehouse, cotton merchant, or cotton agent, or grain dealer required to be
17 licensed under this Chapter, or those of any person purchasing grain from Louisiana
18 producers, including all warehouses or grain dealers, or both, licensed under the
19 United States Warehouse Act, as amended, and any applicant for licensure under this
20 Chapter, or as otherwise permitted under this Chapter.
21 * * *
22 §3410.1. License to buy or sell agricultural commodities; posting requirements for
23 grain dealers; duration of license
24 A. No person shall engage in the business of buying or selling agricultural
25 commodities from producers unless licensed by the commission, except a person that
26 qualifies as a noncommercial grain buyer.
27 * * *
28 G. Any noncommercial grain buyer, or other person not licensed as a grain
29 dealer, shall post notification in a conspicuous area on their premises, and on any
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1 document used in the purchase of grain, including contracts and receipts, that they
2 are not a licensed grain dealer, and any producer selling grain to an unlicensed
3 person is not eligible to make a claim with the Grain and Cotton Indemnity Fund.
4 * * *
5 §3412.1. Grain and Cotton Indemnity Fund; creation; assessment; rules and
6 regulations; suspension of assessment; eligibility for reimbursement;
7 availability of money; prorated claims; reimbursement for administrative
8 expenses; failure to pay; subrogation
9 * * *
10 C. The assessments charged under this Section shall be subject to the
11 following provisions:
12 (1) All assessments collected received pursuant to this Section shall be
13 deposited immediately upon receipt in the state treasury.
14 (2) After compliance with the requirements of Article VII, Section 9 of the
15 Constitution of Louisiana relative to the Bond Security and Redemption Fund, and
16 prior to monies being placed in the state general fund, an amount equal to that
17 deposited as required by Paragraph (1) of this Subsection shall be credited to a
18 special fund hereby created in the state treasury to be known as the Grain and Cotton
19 Indemnity Fund. The monies in this fund shall be used solely as provided in
20 Paragraph (3) of this Subsection and only in the amounts appropriated by the
21 legislature. All unexpended and unencumbered monies in this fund at the end of
22 each fiscal year shall remain in this fund be transferred to the Louisiana Agricultural
23 Finance Authority to provide solely for the administration and operation of the fund
24 provided for in this Section. The monies in this fund shall be invested by the state
25 treasurer in the same manner as monies in the state general fund, and interest earned
26 on the investment of these monies shall be credited to this fund, again, following
27 compliance with the requirement of Article VII, Section 9 of the Constitution of
28 Louisiana relative to the Bond Security and Redemption Fund.
29 * * *
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1 E. At the end of the calendar quarter Beginning on July 1st following the
2 fiscal year in which the Grain and Cotton Indemnity Fund balance within the
3 Louisiana Agricultural Finance Authority reaches a level of six twelve million
4 dollars, the commission shall suspend collection of the assessment required by this
5 Section. If after suspension of collection the balance in the fund is less than three ten
6 million dollars, the commission shall require collection of the assessment. Any
7 assessments collected after the balance reaches twelve million dollars, but prior to
8 the suspension of collection, shall remain within the Louisiana Agricultural Finance
9 Authority.
10 F. A producer shall be eligible to receive indemnity payments from the Grain
11 and Cotton Indemnity Fund if:
12 (1) The licensed grain dealer becomes insolvent after January 1, 2008.
13 * * *
14 I. Notwithstanding any other provision of law to the contrary, if the
15 commission pays a claim using Grain and Cotton Indemnity Funds in accordance
16 with this Section, then all payments shall be made jointly payable to the claimant and
17 to all secured parties and lienholders that, ten days before the were included in the
18 most recent master listing of farm products within the central registry as provided in
19 R.S. 3:3654, or addendum to, published by the secretary of state prior to the payment
20 date, and hold a security interest in or a lien on the crops, farm products, or
21 agricultural commodities, perfected by the filing of a financing statement that:
22 * * *
23 Section 2. R.S. 3:3412.1(C)(4) is hereby repealed in its entirety.
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
HB 496 Original 2020 Regular Session Riser
Abstract: Adds the definition and notice requirements for noncommercial grain buyers and
unlicensed grain dealers to the agricultural (ag) commodity and warehouse law.
Allocates year end balances in the Grain and Cotton Indemnity Fund to the La. Ag
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Finance Authority, changes balance triggers for the suspension and resumption of
collections to the fund, and clarifies claims made under it.
Present law provides for a list of definitions under the ag commodity and warehouse law.
Proposed law retains present law and adds the term "noncommercial grain buyer" to the list
of definitions and changes the term "grain dealer" to not include noncommercial grain
buyers.
Present law authorizes the commissioner of agriculture to enter the premises of grain dealers,
among other entities, licensed under this Chapter of law for the purposes of examining and
inspecting the premises and contents to include various financial records and documents.
Proposed law modifies present law by removing the official term "grain dealer" to add any
person purchasing grain from La. producers.
Present law provides that no person or business buying or selling ag commodities from
producers may do so without a license.
Proposed law creates an exception to present law by exempting those that qualify as a
noncommercial grain buyer.
Proposed law requires persons not licensed as a grain dealer to post notification that they are
not licensed on their premises and any purchase documents and prevents producers from
making a claim under the Grain and Cotton Indemnity Fund for any transactions made with
an unlicensed person or business.
Present law requires that all monies in the Grain and Cotton Indemnity Fund not spent or
encumbered at the end of the fiscal year to remain in the fund.
Proposed law requires transfer of these monies to the La. Ag Finance Authority at the end
of the fiscal year instead of remaining in the Grain and Cotton Indemnity Fund.
Present law requires assessments made under the Grain and Cotton Indemnity Fund not
apply to grain or cotton purchased or contracted prior to Aug. 15, 2008.
Proposed law repeals present law.
Present law requires the La. Ag Commodities Commission at the end of the calendar quarter
to suspend collections of the assessments under the Grain and Cotton Indemnity Fund when
the fund reaches a level of $6 million and to resume collection when the balance in the fund
is less than $3 million.
Proposed law provides for a comprehensive revision to present law provisions, including the
following major changes:
(1)Changes time period from end of the calendar quarter to beginning July 1st following
the fiscal year.
(2)Changes reference to fund balance from the Grain and Cotton Indemnity Fund to the
La. Ag Finance Authority.
(3)Changes balance triggers for suspension of collection from $6 million to $12 million
and for resumption of collection from $3 million to $10 million.
(4)Adds a requirement that any assessments collected after the balance reaches $12
million, but prior to suspension, remain within the La. Ag Finance Authority.
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Present law requires that a producer is eligible to receive indemnity payments if a licensed
dealer becomes insolvent after Jan. 1, 2008.
Proposed law modifies present law by removing the reference to Jan. 1, 2008.
Present law requires the La. Ag Commodities Commission to make all claim payments using
Grain and Cotton Indemnity Funds to both the person making the claim and all parties
holding a security interest or lien perfected by a filed financing statement at least 10 days
prior to the payment.
Proposed law modifies present law by changing the reference to the Grain and Cotton
Indemnity Fund to claims in accordance with this Section of law, and changes the time
period in which parties holding a security interest or lien from 10 days prior to payment to
based on the most recent master listing of farm products within the central registry provided
for in present law, or addendum to, published by the secretary of state.
(Amends R.S. 3:3402(10) and (12) through (19), 3406(A)(1) and (2), 3410.1(A), and
3412.1(C)(1) and (2), (E), (F)(1), and (I); Adds R.S. 3:3402(20) and 3410.1(G); Repeals R.S.
3:3412.1(C)(4))
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