By: Estes, et al. S.B. No. 1099
(Phillips)
A BILL TO BE ENTITLED
AN ACT
relating to the operation and functions of the Texas Grain Producer
Indemnity Board.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 41.102, Agriculture Code, is amended to
read as follows:
Sec. 41.102. SUSPENSION OR REVOCATION OF LICENSE. In
addition to other remedies provided by law, a violation of any
provision of Subchapter B, C, D, E, or I [Subchapters B-E] of this
chapter is grounds for suspension or revocation of any license or
permit issued by the commissioner. The suspension or revocation
shall be conducted in accordance with the procedures provided by
law for suspension or revocation on the basis of other grounds.
SECTION 2. Section 41.201, Agriculture Code, is amended by
adding Subdivisions (3-a) and (8) to read as follows:
(3-a) "Fund" means the grain producer indemnity fund.
(8) "Reinsurance" means an insurance product
purchased by the board to reduce the financial risk and capital
balance associated with the function of the board.
SECTION 3. Subchapter I, Chapter 41, Agriculture Code, is
amended by adding Section 41.2035 to read as follows:
Sec. 41.2035. FUND. (a) The grain producer indemnity fund
is a trust fund outside the state treasury to be held and
administered by the board, without appropriation, for the payment
of claims against a grain buyer who has experienced a financial
failure.
(b) The board shall deposit assessments remitted under
Section 41.206 in the fund.
(c) Interest or other income from investment of the fund
shall be deposited to the credit of the fund.
(d) As a part of the annual budget proposal procedure
described by Section 41.059, the board shall set a minimum balance
for the fund to be held in reserve to pay for administrative costs
in the event that claims against the fund exceed the total balance
of the fund. The board shall post the minimum balance set under
this subsection on the board's Internet website.
SECTION 4. The heading to Section 41.205, Agriculture Code,
is amended to read as follows:
Sec. 41.205. POWERS AND DUTIES OF BOARD.
SECTION 5. Section 41.205, Agriculture Code, is amended by
adding Subsection (f) to read as follows:
(f) The board may borrow money, with the approval of the
commissioner, as necessary to implement this subchapter.
SECTION 6. Section 41.206(a), Agriculture Code, is amended
to read as follows:
(a) Except as provided by this subsection, a grain buyer
shall collect assessments in the manner prescribed for processors
under Section 41.081. The assessment shall be collected at the
first point of sale. Section 41.081(b) does not apply to the
collection of assessments under this section.
SECTION 7. Sections 41.209(b) and (f), Agriculture Code,
are amended to read as follows:
(b) In determining the amount due to a grain producer under
Subsection (a) for a loss of grain, the board may award the grain
producer 85 [not more than 90] percent of:
(1) the value of the grain on the claim initiation
date, as determined by board rule, if the grain has not been sold;
or
(2) the contract price of the grain, if the grain has
been sold.
(f) The board may deny a grain producer's claim in whole or
in part:
(1) if the grain producer has failed to pay
assessments [for the current growing season] under Section 41.206;
(2) if the applicable grain buyer has a history of
failure to collect assessments as required by Section 41.206;
(3) if the documentation submitted by the grain
producer in support of the grain producer's claim is incomplete,
false, or fraudulent;
(4) to prevent the grain producer from recovering from
multiple payments an amount greater than the amount the grain
producer lost due to the financial failure of a grain buyer or to
the grain buyer's refusal, failure, or inability to deliver to the
grain producer grain held by the grain buyer as a bailment,
including:
(A) payments made by the board;
(B) payments made from a grain warehouse
operator's bond;
(C) payments ordered by a bankruptcy court; or
(D) a recovery under a state or federal crop
insurance policy or program; or
(5) if documentation submitted by the grain producer
demonstrates that deferred payment on sold grain was beyond normal
and customary practices.
SECTION 8. Section 41.210, Agriculture Code, is amended to
read as follows:
Sec. 41.210. REIMBURSEMENT OF BOARD BY GRAIN BUYER;
SUBROGATION OF RIGHTS; REINSURANCE. (a) If the board pays a claim
against a grain buyer, the board is subrogated to the extent of the
amount paid to a grain producer by the board to all rights of the
grain producer against[:
[(1)] the grain buyer[, to the extent of the amount
paid to a grain producer by the board;] and
[(2)] any other entity from which the grain producer
is entitled to a payment for the loss giving rise to the grain
producer's claim under this subchapter.
(b) Funds recovered under this section shall be deposited
with the depository bank selected by the board under Section
41.060.
(c) The board may purchase reinsurance policies to mitigate
the board's financial risks.
SECTION 9. Section 41.211, Agriculture Code, is amended to
read as follows:
Sec. 41.211. RULES. Except as provided by Section 41.212,
the board may adopt rules as necessary to implement this
subchapter, including rules relating to:
(1) notice and collection of assessments;
(2) the orderly distribution of refunds;
(3) the management of the board's budget;
(4) the use of insurance and reinsurance products;
(5) [(3)] administration of the board's duties;
(6) [(4)] the statewide referendum conducted under
Section 41.212;
(7) [(5)] the selection of agents, designees, or
devices to carry out the intent of the board; and
(8) [(6)] guidelines for industry practices that do or
do not qualify for indemnification by the board.
SECTION 10. Section 41.212(e), Agriculture Code, is amended
to read as follows:
(e) A referendum is approved if a majority of votes cast are
in favor of the referendum [meets the requirements of Section
41.031].
SECTION 11. Subchapter I, Chapter 41, Agriculture Code, is
amended by adding Section 41.2145 to read as follows:
Sec. 41.2145. REFUND OF ASSESSMENTS. (a) A grain producer
who has paid an assessment under Section 41.206 may be eligible for
a refund from excess money in the indemnity fund as provided by this
section.
(b) As a part of the annual budget proposal procedure
described by Section 41.059, the board shall review the budget for
the next year and the board's current financial status. Based on
that review, the board shall determine whether funds are available
in excess of the minimum fund balance to issue refunds to grain
producers who paid an assessment under Section 41.206.
(c) The board shall adopt rules regarding the procedure for
determining the amount of a grain producer's refund and the timing,
method, and order of refund issuance.
SECTION 12. Subchapter I, Chapter 41, Agriculture Code, is
amended by adding Section 41.216 to read as follows:
Sec. 41.216. ADMINISTRATIVE REVIEW. (a) The board by rule
shall establish an administrative review process to informally
review and resolve claims arising from an action of the board under
this subchapter. The board shall adopt rules:
(1) designating which board actions are subject to
review under this section; and
(2) outlining available remedial actions.
(b) A person may appeal an administrative review decision
made by the board under Subsection (a) to the commissioner.
(c) A person may appeal a decision of the commissioner in
the manner provided for a contested case under Chapter 2001,
Government Code.
(d) This section does not waive this state's sovereign
immunity.
SECTION 13. Section 41.214, Agriculture Code, is repealed.
SECTION 14. (a) The change in law made by this Act to
Section 41.102, Agriculture Code, applies only to conduct that
occurs on or after the effective date of this Act. Conduct that
occurs before the effective date of this Act is governed by the law
in effect on the date the conduct occurs, and the former law is
continued in effect for that purpose.
(b) The repeal of Section 41.214, Agriculture Code, by this
Act applies only to an application for a refund submitted on or
after the effective date of this Act. An application for a refund
submitted before the effective date of this Act is governed by the
law in effect on the date the application was submitted, and the
former law is continued in effect for that purpose.
SECTION 15. This Act takes effect immediately if it
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for immediate
effect, this Act takes effect September 1, 2015.