To repeal sections 276.401, 276.411, 276.421, 276.423, 276.426, 276.436, 276.441, 276.456, 276.461, 276.471, 276.486, 276.491, 276.501, 276.506, 276.511, 276.516, 411.115, 411.131, 411.180, 411.260, 411.261, 411.271, 411.278, 411.280, 411.283, 411.287, 411.321, 411.323, 411.325, 411.391, 411.405, 411.471, 411.517, 411.518 and 411.519, RSMo 1994, and sections 411.026 and 411.070, RSMo Supp. 1995, relating to agricultural products, and to enact in lieu thereof thirty-six new sections relating to the same subject, with penalty provisions and with an emergency clause.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF MISSOURI,

AS FOLLOWS:

Section A. Sections 276.401, 276.411, 276.421, 276.423, 276.426, 276.436, 276.441, 276.456, 276.461, 276.471, 276.486, 276.491, 276.501, 276.506, 276.511, 276.516, 411.115, 411.131, 411.180, 411.260, 411.261, 411.271, 411.278, 411.280, 411.283, 411.287, 411.321, 411.323, 411.325, 411.391, 411.405, 411.471, 411.517, 411.518 and 411.519, RSMo 1994, and sections 411.026 and 411.070, RSMo Supp. 1995, are repealed and thirty-six new sections enacted in lieu thereof, to be known as sections 276.401, 276.404, 276.411, 276.421, 276.423, 276.426, 276.436, 276.441, 276.456, 276.461, 276.471, 276.486, 276.491, 276.501, 276.506, 276.511, 276.516, 276.583, 411.026, 411.070, 411.180, 411.260, 411.271, 411.278, 411.280, 411.283, 411.287, 411.321, 411.323, 411.325, 411.391, 411.405, 411.517, 411.518, 411.519 and 411.800, to read as follows:

276.401. 1. Sections 276.401 to 276.583 shall be known as the "Missouri Grain Dealer Law".

2. The provisions of the Missouri grain dealer law shall apply to grain purchases where title to the grain transfers from the seller to the buyer within the state of Missouri.

3. Unless otherwise specified by contractual agreement, title shall be deemed to pass to the buyer as follows:

(1) On freight on board (FOB) origin or freight on board (FOB) basing point contracts title transfers at time and place of shipment;

(2) On delivered contracts, when and where constructively placed, or otherwise made available at buyer's original destination;

(3) On contracts involving in-store commodities, at the storing warehouse and at the time of contracting or transfer, and/or mailing of documents, if required, by certified mail, unless and to the extent warehouse tariff, warehouse receipt and/or storage contract assumes the risk of loss and/or damage.

[276.401.] 276.404. As used in sections 276.401 to [276.581] 276.583, unless the context otherwise requires, the following terms mean:

(1) "Auditor", a person appointed under sections 276.401 to [276.581] 276.583 by the director to assist in the administration of sections 276.401 to [276.581] 276.583, and whose duties include making inspections, audits and investigations authorized under sections 276.401 to [276.581] 276.583;

(2) "Authorized agent", any person who has the legal authority to act on behalf of, or for the benefit of, another person;

(3) "Buyer", any person who buys or contracts to buy grain;

(4) "Casual purchase", a purchase which is not made customarily or in the regular course of business; an occasional purchase;

(5) "Certified public accountant", any person licensed as such under chapter 326, RSMo;

[(4)] (6) "Claimant", any person who requests payment for grain sold by him to a dealer, but who does not receive payment because the purchasing dealer fails or refuses to make payment;

(7) "Credit sales contracts", a conditional grain sales contract wherein payment and/or pricing of the grain is deferred to a later date. Credit sales contracts include, but are not limited to, all contracts meeting the definition of deferred payment contracts, and/or delayed price contracts;

[(5)] (8) "Current assets", resources that are reasonably expected to be realized in cash, sold, or consumed (prepaid items) within one year of the balance sheet date;

[(6)] (9) "Current liabilities", obligations reasonably expected to be liquidated within one year and the liquidation of which is expected to require the use of existing resources, properly classified as current assets, or the creation of additional liabilities. Current liabilities include obligations that, by their terms, are payable on demand unless the creditor has waived, in writing, the right to demand payment within one year of the balance sheet date;

[(7)] (10) "Deferred payment agreement", a conditional grain sales transaction establishing an agreed upon price for the grain and delaying payment to an agreed upon later date or time period. Ownership of the grain, and the right to sell it, transfers from seller to buyer so long as the conditions specified in section 276.461 and section 411.315, RSMo, are met;

[(8)] (11) "Deferred pricing agreement", a conditional grain sales transaction wherein no price has been established on the grain, the seller retains the right to price the grain later at a mutually agreed upon method of price determination. Deferred pricing agreements include, but are not limited to, contracts commonly known as no price established contracts, price later contracts, and basis contracts. Ownership of the grain, and the right to sell it, transfers from seller to buyer so long as the conditions specified in section 276.461 and section 411.325, RSMo, are met;

[(9)] (12) "Delivery date" shall mean the date upon which the seller transfers physical possession, or the right of physical possession, of the last unit of grain in any given transaction;

[(10)] (13) "Department", the Missouri department of agriculture;

[(11)] (14) "Designated representative", an employee or official of the department designated by the director to assist in the administration of sections 276.401 to [276.581] 276.583;

[(12)] (15) "Director", the director of the Missouri department of agriculture or his designated representative;

[(13)] (16) "Generally accepted accounting principles", the conventions, rules and procedures necessary to define accepted accounting practice, which include broad guidelines of general application as well as detailed practices and procedures generally accepted by the accounting profession, and which have substantial authoritative support from the American Institute of Certified Public Accountants;

[(14)] (17) "Grain", all grains for which the United States Department of Agriculture has established standards under the United States Grain Standards Act, Sections 71 to 87, Title 7, United States Code, and any other agricultural commodity or seed prescribed by the director by regulation;

[(15)] (18) "Grain dealer" or "dealer", any person engaged in the business of, or as a part of his business participates in, buying grain where title to the grain transfers from the seller to the buyer within the state of Missouri. "Grain dealer" or "dealer" shall not be construed to mean or include:

(a) Any person or entity who is a member of a recognized board of trade or futures exchange and whose trading in grain is limited solely to trading with other members of a recognized board of trade or futures exchange; provided, that [transactions with a licensed warehouseman, licensed grain dealer, producer, or any other individual or entity who is not a member of a recognized board of trade or futures exchange] grain purchases from a licensed warehouseman, farmer/producer or any other individual or entity in a manner other than through the purchase of a grain futures contract on a recognized board of trade or futures exchange shall be subject to sections 276.401 to [276.581] 276.583. Exempted herein are all futures transactions;

(b) A producer or feeder of grain for livestock or poultry buying grain for his own farming or feeding purposes who purchases grain exclusively from licensed grain dealers or whose total grain purchases from other producers during his/her fiscal year do not exceed one hundred thousand dollars;

[(c) A producer of grain buying or selling grain for his own farming operation;

(d) A person buying or selling grain only as a farm manager, or as an executor, administrator, trustee, guardian, or a conservator of an estate;

(e) A person buying grain, all of whose purchases are paid for by cash, paid in United States dollars, or by money order or cashier's check paid at time of physical transfer of the grain from the seller or his agent to the buyer or his agent;

(f) A manufacturer or processor of registered or unregistered feed who purchases grain exclusively from grain dealers or who pays for grain purchased from producers at the time of delivery of said grain by the producer, and whose resale of such grain is solely in the form of manufactured or processed feed or feed by-products or whole feed grains to be used by the purchaser thereof as feed;]

(c) Any person or entity whose grain purchases in the state of Missouri are made exclusively from licensed grain dealers;

[(16)] (19) "Grain transport vehicle", a truck, tractor-trailer unit, wagon, pup, or any other vehicle or trailer used by a dealer, whether owned or leased by him, to transport grain which he has purchased; except that, bulk or bagged feed delivery trucks which are used principally for the purpose of hauling feed and any trucks for which the licensed gross weight does not exceed twenty-four thousand pounds shall not be construed to be a grain transport vehicle;

[(17)] (20) "Insolvent" or "insolvency", (a) an excess of liabilities over assets or (b) the inability of a person to meet his financial obligations as they come due, or both (a) and (b);

[(18)] (21) "Interested person", any person having a contractual or other financial interest in grain sold to a dealer, licensed, or required to be licensed;

[(19)] (22) "Location", any site other than the principal office where the grain dealer engages in the business of purchasing grain;

(23) "Minimum price contract", a conditional grain sales transaction establishing an agreed upon minimum price where the seller may participate in subsequent price gain, if any. Ownership of the grain, and the right to sell it, transfers from the seller to the buyer so long as the conditions specified in section 276.461 and section 411.325, RSMo, are met;

[(20)] (24) "Person", any individual, partnership, corporation, cooperative, society, association, trustee, receiver, public body, political subdivision or any other legal or commercial entity of any kind whatsoever, and any member, officer or employee thereof;

[(21)] (25) "Producer", any owner, tenant or operator of land who has an interest in and receives all or any part of the proceeds from the sale of grain or livestock produced thereon;

[(22) "Public accountant", any person permitted to engage in the practice of public accounting under chapter 326, RSMo;

(23)] (26) "Purchase", to buy or contract to buy grain;

[(24)] (27) "Sale", the passing of title from the seller to the buyer in consideration of the payment or promise of payment of a certain price in money, or its equivalent;

[(25)] (28) "Value", any consideration sufficient to support a simple contract.

276.411. 1. No person shall engage in business as a grain dealer in the state of Missouri without having obtained a license therefor issued by the director pursuant to sections 276.401 to [276.581] 276.583. Following an administrative hearing, the director may require the dealer to pay a penalty of not more than five hundred dollars for each day the dealer is found to be operating without a license or bond. In determining whether to assess the penalty, the director shall ascertain whether the dealer has continued to operate without a license or bond after being informed by the department in writing by certified mail of the need for licensing or bonding. Any penalties collected by the director under this section shall be deposited in the general revenue fund to the credit of the grain regulatory services program. In the event that a person penalized under this section fails to pay the penalty, the director may apply to the circuit court of Cole County for, and the court is authorized to enter, an order enforcing the assessed penalty.

2. Each application for a license to engage in business as a grain dealer shall be filed with the director and shall be in a form prescribed by the director.

3. The application for an initial license may be filed at any time prior to beginning business as a grain dealer; however, such license shall terminate on the last day of the fifth month after the close of the grain dealer's fiscal year, except that the initial licensing period shall be for at least six months but not longer than eighteen months. The grain dealer shall set forth on the original application the closing date for his fiscal year.

4. At least sixty days prior to the expiration of each license issued by the director under this chapter, the director shall notify the dealer of the date of expiration and furnish the dealer with the renewal application. The dealer shall submit the renewal application to the director at least thirty days prior to the date of expiration of the license. The dealer shall be penalized ten dollars per day for each day the renewal application is submitted after the date the application for a renewal license is due. The date of submission of the renewal application shall be the date postmarked. Any person licensed under both the provisions of sections 276.401 to [276.581] 276.583 and sections 411.010 to [411.765] 411.778, RSMo, who submits a combination warehouse-grain dealer renewal application shall not be assessed a penalty for late renewal in excess of ten dollars per day.

5. The original application shall be accompanied by a filing fee [of fifteen dollars] pursuant to section 276.506.

276.421. 1. All applications shall be accompanied by a true and accurate financial statement of the applicant, prepared within six months of the date of application, setting forth all the assets, liabilities and net worth of the applicant. All applications shall also be accompanied by a true and accurate statement of income and expenses for the applicant's most recently completed fiscal year. The financial statements required by this chapter shall be prepared in conformity with generally accepted accounting principles; except that, the director may promulgate rules allowing for the valuation of assets by competent appraisal.

2. The financial statement required by subsection 1 of this section shall be audited[,] or reviewed [or compiled] by a [public accountant or a] certified public accountant[, or compiled and prepared by a person competent in the application of generally accepted accounting principles or a financial statement as submitted to a bank and signed and notarized by a bank officer to affirm that such financial statement is on file with the bank and in the opinion of the bank officer represents the true and accurate financial statement of the applicant]. The financial statement may not be audited[,] or reviewed[, compiled or prepared] by the applicant, or an employee of the applicant, if an individual, or, if the applicant is a corporation or partnership, by an officer, shareholder, partner, or a direct employee of the applicant.

3. The director may require any additional information or verification with respect to the financial resources of the applicant as he deems necessary for the effective administration of this chapter. The director may promulgate rules setting forth minimum standards of acceptance for the various types of financial statements filed in accordance with the provisions of this chapter. The director may promulgate rules requiring a statement of retained earnings, a statement of changes in financial position, and notes and disclosures to the financial statements for all licensed grain dealers or all grain dealers required to be licensed. The additional information or verification referred to herein may include, but is not limited to, requiring that the financial statement information be reviewed or audited in accordance with standards established by the American Institute of Certified Public Accountants.

4. All grain dealers shall provide the director with a copy of all financial statements and updates to financial statements utilized to secure the bonds required by sections 276.401 to [276.581] 276.583.

5. All financial statements submitted to the director for the purposes of this chapter shall be accompanied by a certification by the applicant or the chief executive officer of the applicant, subject to the penalty provision set forth in subsection 4 of section 276.536, that to the best of his knowledge and belief the financial statement accurately reflects the financial condition of the applicant for the fiscal period covered in the statement.

6. Any person who knowingly prepares or assists in the preparation of an inaccurate or false financial statement which is submitted to the director for the purposes of this chapter, or who during the course of providing bookkeeping services or in [compiling,] reviewing[,] or auditing a financial statement which is submitted to the director for the purposes of this chapter, becomes aware of false information in the financial statement and does not disclose in notes accompanying the financial statements that such false information exists, or does not disassociate himself from the financial statements prior to submission, is guilty of a class C felony. Additionally, such persons are liable for any damages incurred by sellers of grain selling to a grain dealer who is licensed or allowed to maintain his license based upon inaccuracies or falsifications contained in the financial statement.

7. Except as set forth in section 276.511 which mandates higher requirements for class I grain dealers, any licensed grain dealer or applicant for a grain dealer's license who purchases less than four hundred thousand dollars worth of grain, during the dealer's last completed fiscal year, in the state of Missouri and those states with whom Missouri has entered into contracts or agreements as authorized by section 276.566 must maintain a minimum net worth equal to the greater of ten thousand dollars or five percent of such grain purchases. If grain purchases during the dealer's last completed fiscal year are four hundred thousand dollars or more, the dealer must maintain a net worth equal to the greater of twenty thousand dollars or one percent of grain purchases. If the dealer or applicant is deficient in meeting this net worth requirement, he must post additional bond as required in section 276.436.

276.423. 1. The department shall make at least one complete examination of each state licensed [class I] grain dealer each year. The examination shall be at the expense of the [class I] grain dealer who shall be charged a fee established by the director based upon the amount paid by the dealer for grain purchased in the state of Missouri and those states with which Missouri has entered into contracts or agreements as authorized by section 276.566 during the dealer's last completed fiscal year. In the case of a dealer who has been engaged in business as a grain dealer for less than one year or who has not previously engaged in such business, the fee shall be based on the estimated aggregate amount to be paid by the dealer for grain purchased in the state of Missouri and those states with which Missouri has entered into contracts or agreements as authorized by section 276.566 during the applicant's initial fiscal year. [Class I] Grain dealers that hold a state warehouse license under chapter 411, RSMo, shall not be charged an additional fee for the annual grain dealer audit required by this section. [The annual grain dealer audit for class I grain dealers holding a federal warehouse license under the United States Warehouse Act may be waived if the director is satisfied as to the quality of the audit performed under the United States Warehouse Act and receives a full copy of such audit. If the director deems it necessary to conduct a grain dealer audit of the class I grain dealer holding a warehouse license under the United States Warehouse Act, the director may collect a fee for such audit in accordance with the fee allowed for grain dealer audits in this section.] The minimum examination fee shall be fifty dollars. [The examination shall include a weigh-up of all grain or a measure-up of all grain, as may be elected by the class I dealer and as applicable. The department may make annual audits of class II, class III or class IV dealers. The fee for any such audit shall be fifty dollars.]

2. Any additional examinations deemed necessary by the department during any year shall be at the expense of the department. If upon any examination a discrepancy is found to exist, the director may collect a fee for that examination and for any subsequent examination deemed necessary to insure that the discrepancy is corrected. The fee for each such examination shall be computed in accordance with rates established by the director by rule. This subsection applies equally to [class II, III, IV] all classes of grain dealers which may be examined by the department.

3. Any dealer may request additional examinations at the expense of the dealer. The director may collect a fee for each special or requested examination or for extra work beyond regular examination procedures in connection with regularly scheduled examinations, computed in accordance with the rates established in section 276.506.

4. Upon completion of any examination which reveals a failure to comply with the provisions of sections 276.401 to [276.581] 276.583, and the regulations promulgated hereunder, the director or any department auditor, within a reasonable time, shall present a written discrepancy report to the dealer, his employee or agent. The report shall specify the areas of noncompliance and shall give a specific period of time, reasonable and practical under the circumstances, within which corrective action is to be taken. A report of that corrective action shall be sent to the director. If, after further examination, the discrepancy still exists, the director may modify, suspend or revoke the dealer's license, or the director may take whatever other action he deems necessary consistent with the provisions of sections 276.401 to [276.581] 276.583 until the dealer has corrected the discrepancy.

5. The director is hereby authorized to issue subpoena duces tecum to any financial institutions, or to any other type of business entity, causing them to deliver any and all records of a licensee, or any and all records kept pertaining to a licensee or any person who in the opinion of the director may need to be licensed. Such financial institutions, or other business entities, are hereby authorized and required to deliver any and all such records to the director notwithstanding any law to the contrary. This section applies to persons or individual accounts or transactions as well as to corporate records where the licensee, or person, who in the opinion of the director, needs to be licensed, is conducting business in corporate form.

276.426. 1. Every person licensed as a grain dealer shall have filed with the director a surety bond executed and signed by the grain dealer as principal and issued by a responsible corporate surety licensed to execute surety bonds in the state of Missouri. It is a violation of sections 276.401 to [276.581] 276.583 for any person to engage in the business of being a grain dealer without a sufficient surety bond on file with the department, on a form prescribed and furnished by the director.

2. Such bond shall be in favor of the state of Missouri, except as authorized by section 276.581, with the director as trustee for the benefit of all persons selling grain to the grain dealer, and their legal representatives, attorneys or assigns, and shall be conditioned upon the following:

(1) The dealer as a buyer paying to the seller the agreed-upon purchase price of the grain purchased from the seller where title to said grain transferred from the seller to the buyer within the state of Missouri;

(2) The grain dealer's faithful performance of his duties as a licensed grain dealer and his compliance with sections 276.401 to [276.581] 276.583 and regulations promulgated hereunder. This section applies to purchases made from the effective date of the bond until the bond is canceled, except as otherwise provided in sections 276.401 to [276.581.] 276.583;

(3) The bond required by this section shall cover the agreed-upon minimum price of any valid minimum price contract;

(4) The bond required by this section shall not cover payment for any promissory note accepted by the seller of grain. To be considered a promissory note, the note must contain the signature of both seller and buyer, date the note was executed, dollar amount of the note, payment terms and interest rate.

3. A surety bond required or allowed by sections 276.401 to [276.581] 276.583 shall be effective on the date of issue, shall not be affected by the expiration of the license period, and shall continue in full force and effect until canceled. The continuous nature of a bond, however, shall in no event be construed to allow the liability of the surety under a bond to accumulate for each successive license period during which the bond is in force, but shall be limited in the aggregate to the amount stated on the bond or as changed, from time to time, by appropriate endorsement or rider.

4. The required bond shall be kept in force at all times while the dealer is conducting business as a licensed grain dealer. Failure to keep such bond in force is cause for revocation of the license, and the dealer is subject to the penalties provided in this chapter. No dealer may cancel an approved bond without the prior written approval of the director and the director's approval of a substitute bond.

5. A grain dealer filing bonds required under sections 276.401 to [276.581] 276.583, or regulations promulgated thereunder who is also licensed under chapter 411, RSMo, shall utilize the same corporate surety for all bonds required to be licensed under chapter 411, RSMo, and as a grain dealer.

6. Upon written demand of the director for payment, the surety shall either pay over to the director the sum demanded up to the full face amount of the bond, or shall deposit the sum demanded in an interest-bearing escrow account at the highest rate of interest available. When a surety pays the director upon demand, the director shall either interplead the sum in court or hold an administrative hearing for the determination of the liability of the surety, and the validity of claims against the bond, and upon the conclusion thereof, the director shall distribute the bond proceeds accordingly. The determination of the director shall be final, subject to the surety's or a claimant's right to appeal to the circuit court pursuant to the provisions of chapter 536, RSMo. Refusal or failure of the surety to pay the sum demanded to the director within ten days of receipt of the director's demand letter or the refusal or failure to deposit the sum demanded in an interest-bearing escrow account at the highest rate of interest available, shall be grounds for withdrawal of the surety's license and authorization to conduct business in this state, and grounds for the court to penalize the surety, for refusal to pay or to deposit within the ten days of demand, in the amount of twenty-five percent of the full face amount of the bond, plus interest at the rate of nine percent, or at the rate that the director can establish he would have received had the money been paid or deposited by the surety, whichever rate of interest is higher. In the event that the surety pays as demanded and the director or court determines the surety is not liable, the director shall return to the surety the sum paid to the director plus all accumulated interest, or any pro rata part of the sum, plus interest, as applicable in the event of liability less than the sum demanded. In the event that the surety elects to deposit the demanded sum in an interest-bearing escrow account and the director holds an administrative hearing determining the liability of the surety and the validity of claims, and upon the exhaustion of appeals, if any, the surety immediately shall pay to the director for distribution to claimants the amount for which the surety has been determined to be liable plus accumulated interest on that amount.

7. Every bond filed shall contain a provision that it may not be canceled by the principal or surety company except upon ninety days' prior notice in writing, by certified mail, to the director at his Jefferson City office. In the case of a surety giving notice of cancellation, a copy of such notice shall be mailed, by certified mail, on the same day to the principal. The cancellation does not affect the liability accrued or which may accrue under such bond before the expiration of the ninety days. The notice shall contain the termination date. In the event such notice procedures are not followed, the bond shall remain in full force and effect until properly canceled.

8. Whenever the director receives notice from a surety that it intends to cancel the bond of a dealer, the director shall automatically suspend the dealer's license if a new bond is not received by the director within thirty days of receipt of the notice of intent to cancel. If a new bond is not received within sixty days of receipt of the notice of intent to cancel, the director shall revoke the dealer's license. The director may cause an inspection of the grain dealer at the end of this sixty-day period. Such inspection may include an attempt to identify all possible grain sellers and related claimants of the dealer by advertising for same in local news media.

9. Verbal or written surety bond binders issued by a surety on behalf of a grain dealer for original or replacement bonds are hereby recognized as legally effective in the state of Missouri as if the bond were fully executed when such binders meet the following conditions:

(1) The dealer or principal has paid, or has promised to pay, the surety an agreed upon or tentatively agreed upon premium or other consideration;

(2) The surety provides the department, either in writing or verbally:

(a) A bond number;

(b) The amount of the bond;

(c) The effective date of the bond;

(d) Either verbal or written assurance that the person providing the preceding information has authority to commit the surety. Such binders may be canceled only in the manner provided in subsection 8 of this section. The director may or may not accept such a binder depending on the particular circumstances involved and consistent with the orderly administration of this chapter.

276.436. 1. The total amount of the surety bond required of a dealer licensed pursuant to sections 276.401 to [276.581] 276.583 shall be established by the director by rule, but in no event shall such bond be less than twenty thousand dollars nor more than three hundred thousand dollars, except as authorized by other provisions of sections 276.401 to [276.581] 276.583.

2. The formula for determining the amount of bond shall be established by the director by rule and shall be computed at a rate of no less than the principal amount to the nearest one thousand dollars, equal to not less than one percent and not more than five percent of the aggregate dollar amount paid by the dealer for grain purchased in the state of Missouri and those states with whom Missouri has entered into contracts or agreements as authorized by section 276.566 during the dealer's last completed fiscal year, or, in the case of a dealer who has been engaged in business as a grain dealer for less than one year or who has not previously engaged in such business, not less than one percent and not more than five percent of the estimated aggregate dollar amount to be paid by the dealer for grain purchased in the state of Missouri and those states with whom Missouri has entered into contracts or agreements as authorized by section 276.566 during the applicant's initial fiscal year.

3. Any licensed grain dealer or applicant who has, at any time, a net worth less than the amount required by subsection 7 of section 276.421, shall be required to obtain a surety bond in the amount of one thousand dollars for each one thousand dollars or fraction thereof of the net worth deficiency. Failure to post such additional bond is grounds for refusal to license or the suspension or revocation of a license issued under sections 276.401 to [276.581] 276.583. This additional bond can be in addition to or greater than or both in addition to and greater than the maximum bond as set by this section.

4. The director may, when the question arises as to a grain dealer's ability to pay for grain purchased, require a grain dealer to post an additional bond in a dollar amount deemed appropriate by the director. Such additional bond can be in addition to or greater than or both in addition to and greater than the maximum bond as set by this section. The director must furnish to the dealer, by certified mail, a written statement of the reasons for requesting additional bond and the reasons for questioning the dealer's ability to pay. Failure to post such additional bond is a ground for modification, suspension or revocation by the director of a license issued under sections 276.401 to [276.581] 276.583. The determination of insufficiency of a bond and of the amount of the additional bond shall be based upon evidence presented to the director that a dealer:

(1) Is or may be unable to meet his dollar or grain obligations as they become due;

(2) Has acted or is acting in a way which might lead to the impairment of his capital;

(3) As a result of his activity, inactivity, or purchasing and pricing practices and procedures, including, but not limited to, the dealer's deferred pricing or deferred payment practices and procedures, is or may be unable to honor his grain purchase obligations arising out of his dealer business. The amount of the additional bond required under this subsection shall not exceed the amount of the dealer's current loss position. Current loss position shall be the sum of the dealer's current liabilities less current assets or the amount by which he is currently unable to meet the grain purchase obligations arising out of his dealer business.

5. One bond, cumulative as to minimum requirements, may be given where a dealer has multiple licenses; except however, that in computing the amount of the single bond the grain dealer may add together the total purchases of grain of all locations to be covered thereby and use the aggregate total purchases for the fiscal year for the purpose of computing bond. However, this single cumulative bond must be at least equal to twenty thousand dollars per dealer license issued up to the three hundred thousand maximum bond amount specified in subsection 1 of this section. When a grain dealer elects to provide a single bond for a number of licensed locations, the total assets of all the licensed locations shall be subject to liabilities of each individual licensed location.

6. Failure of a grain dealer to provide and file a bond and financial statement and to keep such bond in force shall be grounds for the suspension or revocation, by the director, of a license issued under sections 276.401 to [276.581] 276.583.

7. A dealer shall be required to post additional surety bond when he surpasses the estimated aggregate dollar amount to be paid for grain purchased as set forth in subsection 2 of this section. Such additional bond shall be determined by the director so as to effectively protect sellers of grain dealing with such dealer.

276.441. 1. Any grain dealer who is of the opinion that his net worth is sufficient to guarantee payment for grain purchased by him may make a formal, written request to the director that he be relieved of the obligation of filing a bond in excess of the minimum bond of twenty thousand dollars. Such request shall be accompanied by a financial statement of the applicant, prepared within four months of the date of such request and accompanied by such additional information concerning the applicant and his finances as the director may require which may include the request for submission of a financial statement audited by a public accountant.

2. If such financial statement discloses a net worth equal to at least [three] five times the amount of the bond otherwise required by sections 276.401 to [276.581] 276.583, and the director is otherwise satisfied as to the financial ability and resources of the applicant, the director may waive that portion of the required bond in excess of twenty thousand dollars for each license issued.

276.456. 1. Each dealer shall have and conspicuously display in each of his business locations, within full and unobstructed sight of the public:

(1) Either the original or a certified copy of the dealer license as issued by the director;

(2) Such other materials or information as may be required by the director.

2. Upon written request of a licensee and the payment of the proper fees the director shall issue to the licensee a certificate that a license has been issued or renewed as required by sections 276.401 to [276.581] 276.583. The number of such certificates shall be based upon the dealer's request and need as shown by his application.

3. A certificate of license issued or renewed shall be posted in each location listed on a licensee's application where he engages in the business of a grain dealer but does not keep records pertaining to his business or transactions as a grain dealer. In the case of a licensee operating various grain transporting vehicles, the licensee is required to have a certificate that the license is in effect carried in each grain transporting vehicle used in connection with the purchase and transporting of grain.

4. The certificate of license shall be displayed upon demand and shall contain information as deemed necessary by the director.

5. [Each grain transporting vehicle used by a licensee shall be equipped with a registration plate which shall be in the form and be displayed as prescribed by the director.

6.] All licenses, including, without limitation, [registration plates and] certificates of license, shall be and remain the property of the director and shall be subject to revocation, cancellation or repossession, as provided by sections 276.401 to [276.581] 276.583.

276.461. 1. In general, a person licensed as a grain dealer shall make payment of the agreed-upon purchase price to the seller of grain upon delivery or demand of said seller or his authorized agent, unless a written grain purchase contract or valid deferred payment contract shall provide otherwise. However, every person licensed as a grain dealer shall establish and properly document the agreed-upon purchase price of all grain he buys as prescribed by the director or as otherwise provided by law. When a dealer has failed to make payment upon demand of the seller and such failure has come to the attention of the director, the director may request the dealer to make payment. Such request may be made verbally or in writing. The director may require the dealer to make payment with a certified or cashier's check, or in cash. The license may be modified, suspended or revoked if the dealer fails to make timely payment as requested by the director.

2. A person licensed as a class I dealer shall properly document the agreed upon, between buyer and seller, purchase price of grain, as prescribed by the director, and shall make payment upon demand. However, if no demand for payment is made, a class I dealer has the option of entering the account, as prescribed by the director, onto a formal settlement sheet or paying the seller the agreed upon price. Such entry onto a formal settlement sheet must occur within thirty days of delivery. When an account is so entered onto a formal settlement sheet, payment shall be made the earlier of demand or one hundred eighty days from delivery. If payment is not made at the conclusion of the one hundred eighty day period, a formal written contract as provided for in subsections [7 and] 8 and 11 of this section shall be executed.

3. A person licensed as a class II dealer shall properly document the agreed upon, between buyer and seller, purchase price of grain, as prescribed by the director, and shall make payment upon demand. However, if no demand for payment is made, a class II dealer has the option of entering the account, as prescribed by the director, onto a formal settlement sheet or paying the seller the agreed upon price. Such entry onto a formal settlement sheet must occur within thirty days of delivery. When an account is so entered onto a formal settlement sheet, payment shall be made on demand or within one hundred eighty days from delivery, whichever occurs first. A class II dealer shall not enter into any type of credit sales contract.

[3.] 4. A person licensed as a class [II] III, IV, V or VI grain dealer shall make payment to the seller within [ten] thirty days of delivery or upon demand of the seller or his authorized agent, whichever occurs first. A class III, IV, V, or VI dealer shall not enter into any type of credit sales contract.

[4. A person licensed as a class III or class IV grain dealer shall make payment to the seller upon delivery.]

5. Nothing contained in sections 276.401 to [276.581] 276.583 shall be construed to limit or prohibit the right of a seller of grain to make an oral demand for payment from a dealer, provided that the right to recover under the surety bond shall be based only upon written demand to the surety by the seller or by the department on behalf of the claimant.

6. Recovery by a claimant on the bond shall not be his sole or exclusive remedy and shall not bar a civil action based upon rights or obligations arising under the grain purchase contract.

7. Notwithstanding any provisions of this section, in the case of valid deferred price contracts the seller of grain shall have no right of recovery under the grain dealer's surety bond. Deferred price contracts shall be in writing, dated, and shall contain a statement informing the seller that the seller is relinquishing title and all rights of ownership in the grain, that the grain dealer is not required to carry bond on the grain for the benefit of the seller, and that the payment for the grain becomes a common claim against the grain dealer. Only a class I grain dealer may enter into deferred price contracts.

8. In the case of deferred payment contracts, a class I grain dealer and a seller of grain may agree that payment be deferred to a future date. The agreement shall be in writing, dated, and shall contain a statement informing the seller that the seller is transferring title to the buyer and that the seller is relinquishing all rights in the grain and that the class I dealer is required to carry bond on the grain for the benefit of the seller for twelve months from the date the contract was entered into, and that after twelve months, payment for the grain becomes a common claim against the dealer. No other class of dealer may enter into deferred payment contracts.

9. In the event the license of a grain dealer is revoked by the director for any reason, all deferred payment agreements executed within the twelve months prior to revocation shall be deemed priced unpaid obligations as of the effective date of the revocation and as such agreements are covered by the grain dealer's bond.

10. In the case of minimum price contracts, a class I grain dealer and a seller of grain may agree upon a minimum price for the grain sold but allow the seller to retain the ability to participate in subsequent price gains or futures market increases, if any. The agreement shall be in writing, dated, and shall contain a statement informing the seller that the seller is transferring title and all rights of ownership in the grain to the buyer, and shall contain entries stating the agreed upon minimum price and explaining how subsequent price gains will be calculated. This agreement shall also contain statements informing the seller that only the payment of the specified minimum price is covered under the dealer's bond for the benefit of the seller, for, and only for, twelve months from the date the contract was entered; and that payment for any subsequent price gains, if any, is not covered by bond. No other class of dealer may enter minimum price contracts.

[10.] 11. For the purposes of this section, deferred price [and], deferred payment, and minimum price contracts are not deemed valid unless they contain all the required statements and are signed by both the buyer and seller or their authorized representatives. The director may require any additional information from a grain dealer that he deems necessary to protect the interests of the seller of grain in such transactions. Class II, III [and], IV, V and VI grain dealers may not use or enter into such contracts with sellers of grain.

276.471. 1. The grain dealer shall maintain at his principal place of business current and complete records with respect to all grain received and withdrawn from, purchased, sold, and held by him for that business.

[2. All books, records and accounts of a dealer shall be kept and held available for inspection for a period of not less than three years after the close of the period for which such books or records were required.]

2. Each licensed grain dealer shall keep in a place of safety, complete and correct records and accounts of:

(1) The quantity of each kind and class of grain received in his facility and withdrawn therefrom;

(2) Duplicate copy of receipts, tickets and bills of lading issued by him;

(3) Original receipts and tickets returned to and cancelled by him;

(4) A register which records all grain transactions not evidenced by the dealer's own scale ticket, i.e., direct farm to market shipments. This register shall be updated daily showing, at a minimum, the name of the seller, quantity of grain, date of shipment, name of terminal or other business accepting the physical commodity, destination scale ticket number and whether the grain was delivered for sale, or other specified purpose.

3. In addition to the records required by subsections 1 and 2 of this section, the grain dealer shall maintain such adequate financial records as will clearly reflect his current financial position and will clearly support any financial information required to be submitted to the director for licensing, auditing, inspection and/or investigation purposes.

4. A grain dealer licensed or required to be licensed under this chapter shall keep available for examination all books, records and accounts required by this chapter and any other books, records and accounts relevant to his operating a grain dealer business for a period of not less than three years after the close of the period for which such books or records were required. An examination may be performed by the director or his representative, and may take place at any time during the normal business hours of the dealer or, if prior notice of the examination is given to the grain dealer, at such time as is prescribed in that notice.

276.486. 1. The director may apply for a restraining order or a temporary or permanent injunction against the operation of a dealer which is in violation of sections 276.401 to [276.581] 276.583 or regulations promulgated hereunder or in order to enforce sections 276.401 to [276.581] 276.583 or such regulations, notwithstanding the existence of other remedies at law. The restraining order or injunction may be prosecuted by the attorney general or the prosecuting attorney of the proper county upon request of the director.

2. The director may apply for a restraining order or a temporary or permanent injunction enjoining a grain dealer from disposing of any grain owned, in whole or in part, or held or in his possession whether owned in whole or in part, or enjoining anyone from removing any grain in which the grain dealer or claimants from which he has purchased grain have an interest. The restraining order or injunction may be prosecuted by the attorney general or the prosecuting attorney of the proper county upon request of the director.

3. The director shall have power in the conduct of any investigation or hearing authorized or held by him to:

(1) Examine, or cause to be examined, under oath, any person;

(2) Examine, or cause to be examined, books and records of any dealer or warehouseman;

(3) Hear such testimony and take such evidence as will assist him in the discharge of his duties under this chapter;

(4) Administer or cause to be administered oaths; [and]

(5) Issue subpoenas to require the attendance of witnesses and the production of books[.]; and

(6) Serve, or cause to be served, any subpoena, petition, or order required for the administration of this chapter.

4. Any circuit court may, by order duly entered, require the attendance of witnesses and the production of relevant books and records subpoenaed by the director, and the court may compel obedience to its order by proceedings for contempt.

276.491. 1. The director may, after a hearing or upon verified complaint filed by any person, modify, suspend or revoke the license of any person licensed under sections 276.401 to [276.581] 276.583 for the violation of or failure to comply with the provisions of sections 276.401 to [276.581] 276.583 or regulations promulgated pursuant to sections 276.401 to [276.581] 276.583.

2. Any information of a verified complaint stating the grounds for modification, suspension or revocation shall be filed with the director. The director shall notify the licensee of the complaint and furnish him with a copy of the information or the complaint and a copy of the order of the director fixing the time for a hearing, which time shall be at least five days but not more than thirty days from the date of notification. Such written notification may be served by personal service on the licensee or by mailing the same by registered or certified mail to the place of business specified by the licensee in the last application or notification to the director.

3. If at any time the director determines that the public good requires immediate action, and that there is reasonable cause to believe that there exists a violation of sections 276.401 to [276.581] 276.583 or regulations promulgated pursuant hereunder, and that the nature of the violation is such that there exists an immediate danger of loss to any claimant, the director may, upon the filing of the information or the complaint with the licensee, without hearing, temporarily suspend a license pending the determination of the complaint. Such temporary suspension shall be for not longer than ninety days. When a license is suspended without hearing, however, the director shall grant a hearing to be held in accordance with the provisions of sections 276.401 to [276.581] 276.583 as soon thereafter as is possible, but not later than five days after such temporary suspension.

4. At the time and place fixed in the notice, the director shall proceed to hear the matter and any charges made, and both the licensee and complainant shall be accorded ample opportunity to present in person or by counsel such statement, testimony, evidence, and arguments as may be pertinent to the matter or charges or to any defense thereto. The director may continue such hearing from time to time.

5. Any person aggrieved by the decision of the director may appeal the decision as provided in chapter 536, RSMo.

6. Upon revocation of a license, any claim shall be filed against the former licensee and the surety company within one hundred twenty days after the date of revocation. Failure to timely file such claim shall defeat the claim for the purposes of recovery under the grain dealer's bond.

276.501. 1. If at any time the director has evidence that a dealer is insolvent or is unable to satisfy the claims of all sellers, the director may petition the circuit court in the county where the dealer's principal place of business is located [as shown on the license application], for an ex parte order authorizing the director or his authorized agent to seize, and take title and possession, as trustee, of any grain in the dealer's possession or under the dealer's control, and of all pertinent records and property as provided for in subsection 2 of this section.

2. Upon receipt of the director's verified petition setting forth the circumstances of the dealer's failure to comply with sections [276.501 to 276.581] 276.401 to 276.583, and further stating reasons why immediate possession by the director or his authorized agent is necessary for the protection of grain sellers or sureties, the court is authorized to issue an ex parte order authorizing the director or his authorized agent to take immediate possession for the purposes stated in this section. A copy of the petition and order shall be sent to the dealer. If appropriate, the court may order the director's taking possession of only grain-related assets and not the entire business of the dealer. Such order may include, but is not limited to, the following:

(1) The director locking down and securing, by padlocks or other appropriate means, the grain storage bins, scales, offices, equipment and rolling stock of the dealer;

(2) Removing and excluding the dealer, or any and all of the dealer's employees, from the facility;

(3) Prohibiting the dealer from engaging in any grain-related business transactions whatever during the director's possession of the grain-related assets of the dealer's business;

(4) Authorizing all financial institutions to place all business accounts of the dealer under the director's authority and to freeze all transactions involving such accounts except to honor outstanding checks written previous to the issuance of the court's order. If it appears that the dealer has conducted, in part, his grain dealer business through the use of personal accounts as opposed to business accounts, or intermingled two or more such accounts, the court may authorize the applicable financial institutions to place such personal accounts, as well as the business accounts, under the authority of the director in order to allow the director to accurately determine the extent of all grain-related obligations incurred by the dealer, the correct status of same and the dealer's resources to pay his grain-related obligations;

(5) Authorizing the director to redeliver or sell depositor or dealer-owned grain, as appropriate in the circumstances and setting forth the conditions for doing such;

(6) Authorizing the director to deposit all grain-related assets and proceeds therefrom in an interest-bearing escrow account to be disbursed only upon orders of the court;

(7) Directing the dealer to provide the director with all grain-related business documents which come into his possession subsequent to the director's possession of the grain-related assets, as well as any other grain-related documents which the dealer may have knowledge of and which are not at the dealer's facility.

3. At any time within ten days after the director or his authorized agent takes possession, the dealer may file with the court a response to the petition of the director stating reasons why the director or his authorized agent should not be allowed to retain possession. The court shall set the matter for hearing on a date not more than fifteen days from the date of the filing of the dealer's response. The order placing the director or his authorized agent in possession shall not be stayed nor set aside until such time as the court, after hearing, determines that possession should be restored to the dealer.

4. Upon taking possession, the director shall give written notice of his action to the surety on the bond of the dealer and may notify all known sellers as shown by the dealer's records.

5. The director or his authorized agent shall retain possession obtained under this section until such time as the dealer or the surety on the bond shall have satisfied the claims of all sellers, or until such time as the director or his authorized agent is ordered by the court to surrender possession. At no time while the director or his authorized agent is in possession of a dealer's business, as authorized by this section, shall the director, or his authorized agent be required to operate the dealer's business; nor shall the director or his authorized agent be liable for any claims which have arisen or could arise from the nonoperation of the dealer's business.

6. If at any time, the director, whether or not he or his authorized agent has possession as authorized by this section, has evidence that a dealer is insolvent or is unable to satisfy the claims of all sellers, the director may petition the circuit court for the appointment of a receiver to operate or liquidate the business of the dealer in accordance with law.

7. All necessary expenses incurred by the director, his authorized agents or any receiver appointed under this section, in carrying out the provisions of this section may be recovered from the dealer in a separate civil action brought by the director in the circuit court or as part of the seizure or receivership action filed under this section. If the director or any of his authorized agents seize and take possession of the grain, records or property at the dealer's facility, the dealer may be assessed and shall pay as part of the necessary expenses incurred a fee of one hundred dollars per person for each day or part thereof that each such person performs such activities. The cost of liability insurance necessary to protect the director, the receiver, and others engaged in carrying out the provisions of this section, may be recovered as part of the necessary expenses.

276.506. 1. The director shall collect fees as follows:

(1) A filing fee of [fifteen] fifty dollars for each original application for license filed;

(2) A license fee of [twenty-five] fifty dollars for the issuance of an original or renewal license;

(3) [A fee of five dollars for each duplicate vehicle registration plate;

(4)] A fee for each special or requested inspection of a grain dealer for extra work beyond regular inspection procedures in connection with regular scheduled inspections computed as follows:

(a) Necessary personal expenses in conformance with the rules and regulations promulgated by the commissioner of administration pursuant to section 33.090, RSMo;

(b) A mileage allowance equal to the allowance established by the commissioner of administration pursuant to section 33.095, RSMo;

(c) [Ten] Twenty dollars for each man-hour required to complete the inspection.

2. [The director shall establish an annual registration fee of not less than five dollars nor more than ten dollars for each vehicle used by the license holder in the transportation of grain.

3.] All fees collected by the director under sections 276.401 to [276.581] 276.583 shall be deposited in the general revenue fund of the state. No fees shall be prorated.

[4.] 3. Nonpayment of fees shall be grounds for refusal to issue or renew a license or for suspension or revocation of a grain dealer's license.

[5.] 4. Notwithstanding other provisions of sections 276.401 to [276.581] 276.583, a grain dealer licensed under sections 276.401 to [276.581] 276.583 who is also licensed by the state of Missouri under chapter 411, RSMo, shall not be charged application filing fees or licensing fees authorized by sections 276.401 to [276.581] 276.583; however, all fees required or authorized by sections 276.401 to [276.581] 276.583 for the issuance of vehicle registration plates or registration of grain transporting vehicles shall be charged to such grain dealer.

276.511. 1. For the purpose of regulation, all dealers shall be classified according to their type of business operation.

2. Dealers that meet the requirements set forth below may be classified as class I dealers:

(1) Each class I grain dealer must have and maintain a net worth equal to the greater of fifty thousand dollars or two percent of grain purchases;

(2) Each class I grain dealer shall be open for business every business day for a period of not less than six hours between the hours of 8:00 a.m. and 6:00 p.m., except as provided in subdivision (3) of this subsection. The dealer shall keep conspicuously posted on the door of the public entrance to his office a notice showing the hours during which the business will be kept open, except when such business is kept open continuously from 9:00 a.m. to 4:00 p.m.;

(3) In case the dealer's office is not to be kept open as required by subdivision (2) of this subsection, the notice posted as prescribed in that subdivision shall state the period during which the business is to be closed and the name of an accessible person, with the address where he is to be found, and the telephone number, if any, of whom shall be authorized to pay for grain sold to such dealer business.

[2.] 3. Dealers also licensed as warehousemen under chapter 411, RSMo, or under the United States Warehouse Act that do not meet the requirements of class I dealers are class [I] II dealers.

(1) Each class II grain dealer shall be open for business every business day for a period of not less than six hours between the hours of 8:00 a.m. and 6:00 p.m., except as provided in subdivision (2) of this subsection. The dealer shall keep conspicuously posted on the door of the public entrance to his office a notice showing the hours during which the business will be kept open, except when such business is kept open continuously from 9:00 a.m. to 4:00 p.m.;

(2) In case the dealer's office is not to be kept open as required by subdivision (1) of this subsection, the notice posted as prescribed in that subdivision shall state the period during which the business is to be closed and the name of an accessible person, with the address where he is to be found, and the telephone number, if any, of whom shall be authorized to pay for grain sold to such dealer business.

[3.] 4. Dealers using physical facilities, in which bulk grain may be stored or held, in the operation of their dealer business, maintain an office, and not licensed as a warehouseman under chapter 411, RSMo, or the United States Warehouse Act, may be classified by the director as class [II] III grain dealers.

(1) Each class III grain dealer shall be open for business every business day for a period of not less than six hours between the hours of 8:00 a.m. and 6:00 p.m., except as provided in subdivision (2) of this subsection. The dealer shall keep conspicuously posted on the door of the public entrance to his office a notice showing the hours during which the business will be kept open, except when such business is kept open continuously from 9:00 a.m. to 4:00 p.m.;

(2) In case the dealer's office is not to be kept open as required by subdivision (1) of this subsection, the notice posted as prescribed in that subdivision shall state the period during which the business is to be closed and the name of an accessible person, with the address where he is to be found, and the telephone number, if any, of whom shall be authorized to pay for grain sold to such dealer business.

[4.] 5. Dealers primarily engaged in the trucking or transportation business, who incidental to or as a part of such business buy or sell grain, may be classified by the director as class [III] IV dealers.

6. Notwithstanding subdivision (18) of section 276.404 to the contrary, dealers whose grain transactions are only comprised of sales of grain from their own farming operations may apply for a class V grain dealers license.

[5.] 7. All dealers who are not class I, II, [or] III, IV or V dealers are class [IV] VI dealers.

[6.] 8. The director may establish, by rule or regulation, additional requirements for the regulation of all classes of grain dealers. Such rules and regulations shall not be inconsistent with the provisions of sections 276.401 to [276.581] 276.583.

276.516. [Each load of grain delivered to and received by a class I dealer shall be evidenced by a completed scale ticket which shall be in a form as prescribed by the director.] 1. A scale ticket, or other document approved by the director, shall be made out and filed for each movement of grain in or out of any grain facility owned or operated by a dealer licensed or required to be licensed under the provisions of this chapter. All scale tickets shall be printed with the business name and location and consecutively numbered. They must be issued in consecutive order. A copy of all scale tickets shall be kept on file in numerical order in the grain dealer's office. All other source documents for movement of grain in or out of the facility shall be in a form approved by the director and kept and maintained in a manner approved by the director. Any scale ticket or other source document used in pricing grain for the purpose of sale to the grain dealer shall have the price shown on all copies of the ticket.

2. A scale ticket issued in accordance with the provisions of this chapter or regulations promulgated hereunder shall be considered a form of nonnegotiable receipt. This form of nonnegotiable receipt shall be deemed a document of title. The grain dealer's failure to complete all entries on a scale ticket as required by this chapter and the rules promulgated pursuant to this chapter shall constitute a violation on the part of the grain dealer, but shall not preclude or restrict a seller's right to receive payment for grain sold. The scale ticket or document issued in lieu of a scale ticket shall constitute prima facie evidence of the holder's claim for payment for the grain regardless of the degree of compliance with this chapter with respect to completion of the entries required by this chapter.

3. All scale tickets, or other approved documents, issued shall contain the following information:

(1) Customer name;

(2) Date issued;

(3) Type of grain;

(4) Quantity of grain;

(5) Notation to show whether the grain movement was IN or OUT;

(6) If movement was IN, whether the grain received was for purchase by the grain dealer, or for other specified purpose; and

(7) If received for purchase by the grain dealer, the price shall be stated on all copies or supporting documents.

276.583. 1. The director of the Missouri department of agriculture is authorized and empowered to enter into contracts and agreements necessary to cooperate with grain commodity promotion organizations to conduct audits to verify compliance with grain commodity check-off requirements.

2. All grain dealers shall maintain current and complete records with respect to grain commodity check-off assessments, deductions and payments. Such records shall be adequate as to clearly show quantities and dollar values of all grain purchased.

3. Nonpayment of grain commodity check-off assessments may be grounds for refusal to issue or renew a license or for modification, suspension or revocation of a grain dealer's license.

4. The grain commodity check-off programs shall reimburse the grain regulatory services program for conducting said audits or that portion of regularly scheduled dealer exams or audits relating to grain commodity check-offs at the rates established in subsection 4 of section 276.506, RSMo, for extra work beyond regular inspection or auditing procedures. Any money received pursuant to the terms of the contract shall be paid to the director of revenue and thereupon deposited into the state treasury to the credit of the grain regulatory services program.

411.026. The following words, terms and phrases, when used in this chapter, except where the context clearly indicates a different meaning, shall mean:

(1) "Authorized agent", any person who has the legal authority to act on behalf of, or for the benefit of, another person;

(2) "Certified public accountant", any person licensed as such under chapter 326, RSMo;

(3) "Claimant", any person or depositor who requests, but does not receive, payment for, or redelivery of, grain stored at a warehouse because the warehouseman fails or refuses to make such payment or redelivery;

[(2)] (4) "Compensation", anything of value or benefit, whether in cash, kind or otherwise;

(5) "Credit sales contracts", a conditional grain sales contract wherein payment and/or pricing of the grain is deferred to a later date. Credit sales contracts include, but are not limited to, all contracts meeting the definition of deferred payment contracts, and/or delayed price contracts;

[(3)] (6) "Current assets", resources that are reasonably expected to be realized in cash, sold, or consumed (prepaid items) within one year of the balance sheet date;

[(4)] (7) "Current liabilities", obligations reasonably expected to be liquidated within one year and the liquidation of which is expected to require the use of existing resources, properly classified as current assets, or the creation of additional liabilities. Current liabilities include obligations that, by their terms, are payable on demand unless the creditor has waived, in writing, the right to demand payment within one year of the balance sheet date;

[(5)] (8) "Deferred payment agreement", a conditional grain sales transaction establishing an agreed upon price for the grain and delaying payment to an agreed upon later date or time period. Ownership of the grain, and the right to sell it, transfers from seller to buyer so long as the conditions specified in section 276.461, RSMo, and section 411.325 are met;

[(6)] (9) "Deferred pricing agreement", a conditional grain sales transaction wherein no price has been established on the grain, the seller retains the right to price the grain later at a mutually agreed upon method of price determination. Deferred pricing agreements include, but are not limited to, contracts commonly known as no price established contracts, price later contracts, and basis contracts. Ownership of the grain, and the right to sell it, transfers from seller to buyer so long as the conditions specified in section 276.461, RSMo, and section 411.325 are met;

[(7)] (10) "Delivery", the voluntary physical transfer of grain from one person to another;

[(8)] (11) "Department", the Missouri department of agriculture;

[(9)] (12) "Depositor", any person who deposits grain in a warehouse for storage, handling, shipment, processing, or who is the owner or holder of a warehouse receipt, or who is otherwise lawfully entitled to possession of the grain;

[(10)] (13) "Designated representative", an employee or official of the department designated by the director to assist in the administration and enforcement of the Missouri grain warehouse law;

[(11)] (14) "Director", the director of the Missouri department of agriculture or his designated representative;

[(12)] (15) "Documents of title" include negotiable and nonnegotiable warehouse receipts [and], scale tickets, and other documents which are issued in the regular course of a warehouseman's business, and which adequately evidence that the possessor is entitled to receive, hold, and dispose of the goods it covers;

[(13)] (16) "Generally accepted accounting principles", the conventions, rules and procedures necessary to define accepted accounting practice, which include broad guidelines of general application as well as detailed practices and procedures generally accepted by the accounting profession, and which have substantial authoritative support from the American Institute of Certified Public Accountants;

[(14)] (17) "Grain", all grains for which standards have been established under the United States Grain Standards Act (Sections 71 to 87 of Title 7, United States Code), and any other agricultural commodities, seeds and vegetable oils prescribed by the director by regulation, except the term "grain" shall not include those commodities deemed not to be grain pursuant to section 411.028;

[(15)] (18) "Grain inspector", a warehouseman or a person employed by the warehouseman [and licensed under section 411.115 of this chapter] to inspect, grade or sign warehouse receipts for grain stored or to be stored in a warehouse licensed under this chapter;

[(16)] (19) "Grain weigher", a warehouseman or a person employed by the warehouseman [and licensed under section 411.115 of this chapter] to weigh grain stored or to be stored in a warehouse licensed under this chapter;

[(17)] (20) "Holder of receipt", a person who has possession of a warehouse receipt, or a right of property therein;

[(18)] (21) "Insolvent" or "insolvency", either, or both of the following:

(a) An excess of liabilities over assets; or

(b) The inability of a warehouseman to meet his financial obligations as they come due;

[(19)] (22) "Interested person", any person having a contractual or other financial interest in grain stored in a warehouse licensed or required to be licensed under this chapter;

[(20)] (23) "Licensed warehouse", a warehouse for which the department has issued a license to operate as a public warehouse in accordance with the provisions of this chapter;

[(21)] (24) "Licensed warehouseman", a warehouseman who owns or operates a warehouse licensed under the provisions of this chapter;

(25) "Minimum price contract", a conditional grain sales transaction establishing an agreed upon minimum purchase price for the grain and where the seller may participate in subsequent price gain, if any. Ownership of the grain, and the right to sell it, transfers from the seller to the buyer so long as the conditions specified in section 276.461, RSMo, and section 411.325 are met;

[(22)] (26) "Official grain standards", the standards of quality or condition for grain, fixed and established by the Secretary of Agriculture of the United States of America under the regulations of the United States Grain Standards Act;

[(23)] (27) "Operator" or "warehouseman", any person who owns, controls, operates or manages any warehouse whether such owner resides within the state or not;

[(24)] (28) "Person" means and includes any individual, firm, partnership, exchange, association, trustee, receiver, corporation, cooperative, society, public body, political subdivision, or any other business or commercial entity or organization of any kind whatsoever, and any member, officer or employee thereof;

[(25)] (29) "Private warehouse", any warehouse within this state used for the purpose of storing grain exclusively for the owners or operators of that warehouse and/or individual producers affiliated with the owner or operator in a landlord/tenant relationship on farmland and, except as otherwise herein specifically provided, which is not subject to the provisions of this chapter;

(30) "Producer", any owner, tenant or operator of land who has an interest in and receives all or any part of the proceeds from the sale of grain or livestock produced thereon;

[(26) "Public accountant", any person permitted to engage in the practice of public accounting under chapter 326, RSMo;

(27)] (31) "Public warehouse", a warehouse used for the purpose of storing grain of owners other than the warehousman, whether grain of the owners be commingled or whether identity of different lots be preserved, or a warehouse used for any purpose for which a license is required under section 411.255;

[(28)] (32) "Public warehouseman", any person owning or operating a public warehouse whether that owner or operator resides within the state or not;

[(29)] (33) "Receipt", a grain warehouse receipt, whether negotiable or nonnegotiable, issued under this chapter;

[(30)] (34) "Regulations" or "rules", rules, regulations and standards promulgated pursuant to this chapter by the director;

[(31)] (35) "Storage grain" or "stored grain", any grain received in a warehouse, including grain bank grain, unless sold in accordance with the provisions of section 411.325 or sold in accordance with the provisions of sections 276.401 to [276.581] 276.583, RSMo;

[(32)] (36) "Successor's agreement", a written agreement between any public warehouseman ceasing operations as a public warehouseman and the person succeeding him which states how the obligations to depositors will be handled;

[(33)] (37) "Terminal warehouse", any warehouse where the department makes available official grain inspectors and official weighmasters on a full-time basis;

[(34)] (38) "Terminal warehouseman", the person owning or operating a terminal warehouse whether such owner or operator resides within the state or not;

[(35)] (39) "Violation", any act contrary to the provisions of this chapter or any failure by a person to act as required by the provisions of this chapter or regulations promulgated hereunder;

[(36)] (40) "Warehouse", any building, structure or other enclosure in which grain is or may be stored and through which grain is or may be handled or shipped. All facilities used in connection with the operation of the warehouse shall be deemed to be part of the warehouse;

[(37)] (41) "Warehouse auditor", or "warehouse examiner", or "inspector", any individual appointed under this chapter by the director to assist in the administration of the chapter.

These terms shall include persons employed as warehouse examiners under the United States Warehouse Act.

411.070. 1. The director shall:

(1) Supervise the handling, sampling, inspection, weighing and storage of grain in warehouses as required by this chapter;

(2) Supervise protein or other chemical analysis of grain where laboratories are now or may hereafter be established;

(3) Keep proper records of all sampling, inspection, weighing, protein or other chemical analysis performed under the provisions of this chapter;

(4) Employ, fix the salaries and pay all necessary

personnel required to administer, execute and perform the duties required by the provisions of this chapter, including warehouse auditors whose duties may include making examinations, audits, inspections and investigations authorized under this chapter;

(5) Cause the operations of warehousemen licensed under this chapter to be examined. The examinations may include an audit of all grain and all books, documents and records

pertaining to the warehousemen's business operations, to

determine whether the interests of producers, shippers and receivers of grain and the holders of warehouse receipts are adequately protected and safeguarded;

(6) Take such action or issue such orders as necessary to prevent any fraud upon or discrimination against depositors of grain in warehouses. If upon examination, a deficiency is found to exist between physical inventory and the warehouseman's obligations, the director may require an examiner to remain at the warehouse and monitor all operations conducted thereat, involving grain stored under the provisions of this chapter, until such deficiency is corrected.

2. The director may:

(1) Promulgate and adopt such regulations in accordance with the provisions of chapter 536, RSMo, as may be necessary for the efficient and effective enforcement of this chapter;

(2) Designate an employee of the department to act as his designated representative;

(3) Publish such data in connection with the administration of this chapter as may be of public interest;

(4) Require any forms, records or reports to be filed with the department, by any warehouseman, that he deems necessary to ensure compliance with the provisions of this chapter;

(5) Examine, or cause to be examined, at reasonable times, any warehouse, including an examination of grain stored therein and all books, documents and records pertaining thereto, in order to determine whether or not such facility should be licensed pursuant to this chapter;

(6) Prescribe minimum contents for any forms, records, contracts or reports that grain warehousemen use or by the provisions of this chapter and its pursuant regulations, are required to issue, file, maintain or keep;

(7) Issue subpoenas duces tecum for any records relating to a grain warehouseman's business;

(8) Prescribe procedures for hearings to be held in

accordance with the provisions of this chapter and regulations promulgated hereunder; provided, however, an appeal from such hearings may be taken in accordance with the provisions of chapter 536, RSMo;

(9) Conduct, or appoint a designated representative to conduct, administrative hearings pursuant to the provisions of this chapter and chapter 536, RSMo. Hearings may be conducted for the purpose of determining the liability of sureties which have filed bonds with the department on behalf of warehousemen licensed, or required to be licensed, under this chapter.

Hearings may be conducted for the purpose of determining the validity of grain-related claims filed with the department against such warehousemen and sureties, as well as the subsequent disbursement of all available funds, pro rata or otherwise, to satisfy claims determined to be valid. An order issued by the director, or his designated representative, as a result of such hearings shall be final and legally binding on all parties unless appealed in accordance with the provisions of chapter 536, RSMo[.];

(10) Serve, or cause to be served, any subpoena, petition, or order required for the administration of this chapter.

3. No rule or portion of a rule promulgated under the authority of this chapter shall become effective unless it has been promulgated pursuant to the provisions of section 536.024, RSMo.

[411.115. 1. No grain shall be stored or accepted for storage in any licensed warehouse unless first inspected, graded and weighed by an individual licensed under this section.

2. A warehouseman or any individual employed by a warehouseman may apply to the director, on a form provided by the director, to be licensed as an inspector or a weigher of grain. It shall be indicated on that form whether the applicant is to be authorized to sign warehouse receipts.

3. Upon receipt of a complete and sufficient application, including a statement of the applicant's competency properly executed by the warehouseman, the director shall issue to the applicant a license to inspect or a license to weigh grain, if he is satisfied that the applicant is competent to inspect or weigh grain.

4. A license issued under this section shall be posted at the warehouse where the licensee is employed. If a licensee is transferred to another licensed warehouse owned or operated by the same warehouseman the license issued under this section may be transferred. No license issued under this section shall be transferable in any other situation.

5. Nothing within this chapter shall be construed to mean that any person licensed under this section may give official weights or official inspections or in any way perform the duties of an official weigher or official inspector.

6. The fee for a license issued under this section shall be set by the director by regulation, but in no event shall the fee be less than five dollars nor more than ten dollars for each license issued.]

[411.131. 1. The director shall appoint a qualified employee of the department to serve as registrar of receipts at all places, if needed, where official inspections and weights are maintained. The registrar shall execute a corporate surety bond to the state of Missouri in the penal sum of twenty thousand dollars, the sureties to be approved by the director, conditioned that he well and faithfully discharge all his duties as registrar of receipts according to law, and truly account for and turn over to his successor, all moneys, books, files, and papers that may come in his hands or possession as registrar.

2. The director shall approve some qualified person other than an employee of the department to serve as registrar of registered receipts at all places, if needed, where official inspection or weights are not maintained. The registrar shall execute a corporate surety bond to the state of Missouri in the penal sum of twenty thousand dollars, the sureties to be approved by the director, conditioned that he well and faithfully discharge all his duties as registrar of receipts according to law and truly account for, and turn over to his successors, all moneys, books, files and papers that may come in his hands or possession as registrar.

3. Every licensed warehouseman desiring to issue registered warehouse receipts shall furnish, upon a form that the director may require, to the state registrar of receipts, information regarding:

(1) Receipts issued;

(2) Receipts canceled;

(3) Shipments of grain received;

(4) Shipments of grain delivered; and

(5) Any other information as is necessary to enable the state registrar of receipts to keep a full and complete record of all transactions by the warehouse.]

411.180. 1. The director or his authorized [agent] representative may examine, audit and inspect every licensed grain warehouse, or persons whom the director has reasonable cause to believe should be licensed under this chapter, the business thereof, and the mode of conducting the same at such times as he may deem necessary; and the property, books, records, accounts, papers, and the proceedings pertaining to the operations of these warehouses, so far as they may relate to the operation or management of public storage, and to the ability of the warehouseman to meet his grain and dollar obligations shall be subject to examination and inspection by the director, or his authorized agent. Such books, accounts, records and papers of every grain warehouseman shall at all times during normal business hours be subject to inspection as prescribed by the director.

2. The director may perform such inspections as are deemed necessary for the orderly administration of this chapter based upon reports and other information available to him.

[2.] 3. Every grain warehouseman and his employees, agents, officers, partners, directors and shareholders shall cooperate and hold themselves available to assist in the examination, including allowing full and reasonable use of sampling and grading equipment. Failure or refusal to cooperate or assist is a violation of this chapter and a basis for the suspension of a public grain warehouseman's license.

[3.] 4. No inspector or employee of the department shall disclose any information obtained by him in the course of his employment relative to the affairs or transactions of any warehouseman, other than as permitted by this chapter, without first having obtained the express permission in writing of such warehouseman, or of the director; provided, that the director may, upon written application of any person, disclose or direct any inspector or employee of the department to disclose any information which, in the opinion of the director, the person applying for the same is entitled to receive. If any such inspector or employee shall disclose any such information except as permitted by this chapter, he is guilty of a misdemeanor. This section shall not prevent the taking of sworn testimony at a public hearing with respect to violations of this chapter or regulations promulgated hereunder.

[4.] 5. The director is hereby authorized to issue subpoena duces tecum to any financial institution, or to any other type of business entity, to deliver any and all records of the licensee, or any and all records kept pertaining to the licensee, or of any person who in the opinion of the director may need to be licensed. Such financial institutions, or other business entities, are hereby authorized and required to deliver any and all such records to the director notwithstanding any law to the contrary. This section applies to persons or individual accounts or transactions as well as to corporate records where the licensee, or person who in the opinion of the director needs to be licensed, is conducting business in corporate form.

6. The director shall, upon the verified complaint in writing of any person setting forth facts which, if proved, would be in violation of the provisions of chapter 411, RSMo, or regulations promulgated hereunder or would constitute grounds for refusal, suspension or revocation of a license under this chapter, investigate the actions of any person applying for, holding or claiming to hold a license; provided that the director is not required to investigate any complaint which does not appear to have a reasonable basis.

411.260. 1. Each person owning, operating, or desiring to own or operate a grain warehouse who is required to be licensed, shall apply for a license for each such warehouse he owns or operates. The application for a license shall be [typewritten and] subscribed and sworn to under oath by the applicant or a duly authorized representative of the applicant. The application shall be in a form prescribed by the director. All items on the application must be completed or marked "not applicable" as appropriate.

2. All applications shall be accompanied by a true and accurate financial statement of the applicant, prepared within six months of the date of the application, setting forth the assets, liabilities and the net worth of the applicant. All applications shall also be accompanied by a true and accurate statement of income and expenses for the applicant's most recently completed fiscal year. The financial statements required by this chapter shall be prepared in conformity with generally accepted accounting principles; except that, the director may promulgate rules allowing for the valuation of assets by competent appraisal.

3. The financial statements required by subsection 2 of this section shall be audited[,] or reviewed [or compiled by a public accountant or] by a certified public accountant[, or compiled and prepared by a person competent in the application of generally accepted accounting principles]. The financial statement may not be audited, reviewed[, compiled] or prepared by the applicant, if an individual, or, if the applicant is a corporation or partnership, by any officer, shareholder, partner, or employee of the applicant.

4. The director may require any additional information or verification with respect to the financial resources of the applicant as he deems necessary for the effective administration of this chapter. The director may promulgate rules setting forth minimum standards of acceptance for the various types of financial statements filed in accordance with the provisions of this chapter. The director may promulgate rules requiring a statement of retained earnings, a statement of changes in financial position, and notes and disclosures to the financial statements for all licensed warehousemen or all warehousemen required to be licensed. The additional information or verification referred to herein may include, but is not limited to, requiring that the financial statement information be reviewed or audited in accordance with standards established by the American Institute of Certified Public Accountants.

5. All warehousemen shall provide the director with a copy of all financial statements and updates to financial statements utilized to secure the bonds required by this chapter. Also, all warehousemen maintaining a uniform grain storage agreement with the Commodity Credit Corporation or a United States Warehouse Act license shall provide the director with a copy of all financial statements and updates to financial statements utilized to secure and maintain such agreement or license.

6. All financial statements submitted to the director for the purposes of this chapter shall be accompanied by a certification by the applicant or the chief executive officer of the applicant, subject to the penalty provision set forth in section 411.517 that to the best of his knowledge and belief the financial statement accurately reflects the financial condition of the applicant for the fiscal period covered in the statement.

7. Any person who knowingly prepares or assists in the preparation of an inaccurate or false financial statement which is submitted to the director for the purposes of this chapter, or who during the course of providing bookkeeping services or in [compiling,] reviewing[,] or auditing a financial statement which is submitted to the director for the purposes of this chapter, becomes aware of false information in the financial statement and does not disclose in notes accompanying the financial statements that such false information exists, or does not disassociate himself from the financial statements prior to submission, is guilty of a class C felony. Additionally, such persons are liable for any damages incurred by depositors of grain with a warehouseman who is licensed or allowed to maintain his license based upon inaccuracies or falsifications contained in the financial statement.

[411.261. Notwithstanding any provision of section 276.421, RSMo, or section 411.260, to the contrary, effective July 1, 1996, in any application made pursuant to section 276.421, RSMo, or section 411.260, the financial statement required by said sections shall meet the following criteria:

(1) If the applicant is posting a bond as security as prescribed by law, the financial statement shall be a review level financial statement by a certified public accountant; and

(2) If the applicant is posting a letter of credit or a certificate of deposit as security as prescribed by law, the financial statement shall be an audit level financial statement prepared by a certified public accountant.]

411.271. 1. The department shall make at least one complete examination of each state licensed public warehouse each year. The examination shall be at the expense of the warehouseman who shall be charged thereby a fee based on rates established by the director. The minimum examination fee shall be [fifty] one hundred dollars. The examination shall include a weigh-up of all grain or a measure-up of all grain, as may be elected by the warehouseman.

2. Any additional examinations deemed necessary by the department to be made during any year shall be at the expense of the department; except that, if upon any examination a discrepancy is found to exist, the director may collect a fee for that examination and for any subsequent examinations deemed necessary to insure that the discrepancy is corrected. The fee for each such examination shall be computed in accordance with the provisions of subsection 3 of this section.

3. Any warehouseman may request additional examinations at the expense of the warehouseman. The director may collect a fee for each special or requested inspection of a public grain warehouse or for extra work beyond regular inspection procedures in connection with regularly scheduled inspections, computed as follows:

(1) Necessary personal expenses in conformance with the rules and regulations promulgated by the commissioner of administration pursuant to section 33.090, RSMo;

(2) A mileage allowance equal to the allowance established by the commissioner of administration pursuant to section 33.095, RSMo;

(3) [Ten] Twenty dollars for each man-hour required to complete the inspection.

4. Upon completion of any examination which reveals a failure to comply with this chapter or regulations promulgated hereunder, the director or any warehouse auditor, within a reasonable time, shall present a written discrepancy report to the warehouseman, his employee or agent. The report shall specify the areas of noncompliance and shall give a specific period of time within which corrective action is to be taken. Such period of time shall be both reasonable and practicable under the circumstance. A report of that corrective action shall be sent to the director by the warehouseman. If, after further examination, the discrepancy still exists, the director may modify, suspend, or revoke the warehouseman's license, or the director may take whatever other action he deems necessary, consistent with the provisions of this chapter, until the warehouseman has corrected the discrepancy.

411.278. 1. The amount of the bond required by section 411.275 shall be based upon the licensed capacity of the warehouse, but in no event shall such bond be less than twenty thousand dollars, and shall be based upon the following table of rates:

If the licensed capacity of the The required bond is

warehouse is: the greater of $20,000 or:

Not over 200,000 bushels .......... $10,000 plus $0.25 per

bushel of licensed

capacity

Over 200,000 but not over 1,000,000 $60,000 plus $0.20 per

bushel of excess over

200,000 bushels

of licensed capacity

Over 1,000,000 but not over 2,000,000 $220,000 plus $0.15

per bushel of excess

over 1,000,000 bushels

of licensed capacity

Over 2,000,000 but not over 3,000,000 $370,000 plus $0.10

per bushel of excess

over 2,000,000 bushels

of licensed capacity

Over 3,000,000 $470,000 plus $0.05

per bushel of excess

over 3,000,000 bushels

of licensed capacity

2. Notwithstanding subsection 1 of this section, no bond required under section 411.275 shall exceed one million dollars; except, in the case of a deficiency in the net worth as set forth in section 411.280, the director may require additional bond as he shall deem necessary to provide security.

411.280. Every warehouseman licensed under the provisions of this chapter shall have and maintain a net worth equal to [at least] the greater of ten thousand dollars or the amount which results from multiplying the storage capacity of the warehouse by fifteen cents per bushel [of the warehouse's storage capacity]. Capital stock, for the purpose of determining the net worth, shall not be considered a liability. Any deficiency in required net worth above the ten thousand dollar minimum requirement may be met by supplying additional bond in an amount equal to one thousand dollars for each one thousand dollars or fraction thereof of deficiency.

411.283. 1. Upon receiving an original application, the director may make an examination of the warehouse covered by the application. The director shall issue a license to operate a public grain warehouse if he determines that:

(1) The application is sufficient;

(2) The warehouse facility is suitable for the proper storage of grain. The director shall determine the suitability of the warehouse for the storage of grain based upon the type, location, construction, layout and facilities of each warehouse. The warehouse facility shall have at least ten thousand bushel storage capacity. An adequate scale for weighing grain must be available for the warehouseman's use on-site or within a reasonable distance of the warehouse facility, not to exceed five miles. The director's findings shall include, but not be limited to, the following:

(a) The storage facilities are weathertight so as to protect the grain from the elements at all times;

(b) The facilities and the practices with respect to those facilities are such as to maintain and preserve the quantity and quality of the grain;

(c) Safe and adequate means of ingress and egress to the various storage units of the warehouse are provided and maintained by the warehouseman;

(3) The applicant is capable of performing the service proposed;

(4) The applicant is willing and able to comply with the provisions of this chapter and regulations promulgated hereunder;

(5) The applicant, or, if the applicant is a corporation or partnership, any officer, majority shareholder, board member or partner has not been involved in illegal or improper manipulation of grain inventories which involved or resulted in losses to grain depositors within the seven-year period of time immediately preceding the date the director received the application;

(6) The applicant has sufficient financial resources to adequately protect depositors; except that, if the director finds that the applicant, management personnel, a principal officer or partner has a bad business reputation, the director may deny the application. If the director is not satisfied with the applicant's qualifications as stated in this section, the application may be denied. If the application is denied, notice shall be mailed to the applicant setting forth the reasons for the denial of the license. Within fifteen days of receipt of a notice of denial for license, the applicant may file a written application with the director for a hearing on the denial. The hearing shall be carried out in accordance with the provisions of this chapter and regulations promulgated hereunder.

2. Every license shall be dated and shall expire on the last day of the fifth month after the close of the warehouse's fiscal year, except that the initial licensing period after April 22, 1986, shall be for at least six months but not longer than eighteen, and shall designate the name of the licensee and the location of the warehouse. No fees shall be prorated.

3. Every license shall be, at all times during the operation of the licensed warehouse, posted in a conspicuous place in the office room of the warehouse. Upon proof, satisfactory to the director, that a public grain warehouse license issued under this chapter has been destroyed or lost, the director may issue to the warehouse a duplicate license, with "DUPLICATE" clearly printed on its face. The fee for such duplicate license is ten dollars.

4. If the holder of any public warehouseman's license is convicted of any violation of this chapter, or if the director determines that any holder has violated any of the provisions of this chapter, or any of the rules and regulations adopted by the director under the provisions of this chapter, the director may at his discretion modify, suspend, cancel, revoke or refuse to renew the license of the holder.

5. Whenever the director shall modify, suspend, cancel, revoke or refuse to issue any license he shall prepare an order so providing which shall be signed by the director or some person designated by him, and the order shall state the reason or reasons for the modification, suspension, cancellation, revocation or refusal to issue the license. The order shall be sent by certified mail to the licensee or applicant at the address of the warehouse licensed or applying for a license. Within thirty days after the mailing of the order, the licensee, if aggrieved by the order of the director, may appeal as provided in chapter 536, RSMo. At the time of the filing of the appeal, the party appealing shall give a bond for costs conditioned on his prosecuting the appeal without delay and paying all costs assessed against him. In addition, the licensee shall post a bond which shall remain in effect pending final disposition of all appeals, including review by the Missouri court of appeals or Missouri supreme court, or federal review, in an amount sufficient to cover all grain storage and grain-related obligations of the licensee as identified by the director. The posting of such bond is jurisdictional to the circuit court's authority to entertain the appeal.

6. Notwithstanding any other provision of this chapter, if, upon examination, it is determined that a licensed warehouseman has violated or is violating any of the provisions of this chapter, and the director has reasonable cause to believe that the nature of the violation is such that there exists an immediate danger of substantial loss, the director may authorize and cause any employee charged with the enforcement of this chapter to remove the warehouseman's license to operate a public grain warehouse from the premises of the warehouse. Any license so removed shall be returned to the director. The removal of the license from the premises shall constitute a temporary suspension of the license. The director shall grant a hearing, to be held in accordance with the provisions of this chapter and regulations promulgated hereunder, as soon thereafter as is possible, but not later than ten days after the temporary suspension imposed by removal of the warehouseman's license.

411.287. 1. If a license is suspended, revoked or a shortage is known to exist and the director determines that there is danger of loss to depositors, the director or his authorized agents may enter the premises of the warehouseman, monitor the activities of the warehouseman and take any actions authorized by this chapter which are necessary to protect the interests of depositors of grain. Additionally, when a shortage exists, the director or his designated representative may order, verbally or in writing, the warehouseman to cease shipping any grain until such shortage is corrected. Should the warehouseman continue to ship grain after being advised of such order to cease shipping, such action of the warehouseman shall constitute a class C felony. The director and his designated representative shall notify local law enforcement officials and request the immediate arrest of the warehouseman.

2. Whenever the director or his authorized agents monitor the operation of any warehouse, the warehouseman, upon a finding by a court of competent jurisdiction that the director had reasonable grounds to believe that this action was necessary to protect the depositors, shall pay a fee of [fifty] one hundred dollars per person for each day or part thereof that the director or his authorized agents monitored the operations.

411.321. 1. It shall be the duty of every terminal warehouseman to receive for storage any grain, dry and suitable for warehousing, that may be tendered to him in the usual manner in which terminal warehouses are accustomed to receive the same, in the ordinary and usual course of business, to the capacity of his warehouse available for public storage. The grain shall be officially inspected, officially weighed, and officially graded, upon receiving grain into the warehouse, except that the owner or warehouseman may direct that the grain not be officially inspected, officially weighed, or officially graded as provided in section 411.030, but shall be inspected, weighed, and graded by [a state licensed employee of] an individual designated by the warehouseman competent and qualified in performing these services.

2. All grain delivered from the warehouse shall be officially inspected, officially weighed, and officially graded on its delivery by a duly authorized inspector and weighmaster of the department, except that the owner or warehouseman may direct that the grain not be officially inspected, officially weighed, or officially graded as provided in section 411.030, but shall be inspected and weighed by [a state licensed employee of] an individual designated by the warehouseman competent and qualified in performing these services.

411.323. 1. Every public warehouseman, other than a terminal warehouseman, shall receive for storage or shipment, so far as the available capacity for public storage of the warehouse shall permit, all grain in a dry and suitable condition for storage tendered him in the usual course of business, the grain to be inspected, weighed, and graded by [a state licensed employee of] an individual designated by the warehouseman competent and qualified in performing these services except that:

(1) The owner and the warehouseman may agree upon a sample taken from the lot of grain to be offered for storage as being a true and representative sample. This sample shall be sent to an official licensed inspector of the Missouri state grain warehouse division and the official licensed inspector who receives the sample shall grade it according to the official U.S.D.A. grain standards and issue a certificate of grade which shall state the name of the owner, the warehouse at which it is stored and the official grade of the grain and the official grade shall be stated on the warehouse receipt. The sample submitted to the licensed inspector shall be held by him for a period of at least ten days from its receipt and in case that either party of the transaction is dissatisfied with the grade assigned, he may have the right to reinspection and appeal upon request. The fees for the inspection of the sample shall be paid by the warehouseman and added to the storage charges of the grain;

(2) The owner and the warehouseman may agree to the grade of the grain to be offered for storage and a warehouse receipt issued on the agreed grade;

(3) The owner or warehouseman may have an official weight, official inspection, and an official grade on the grain to be offered for storage if requested of the department, the expense thereof paid by the person requesting the service.

2. Any warehouseman desiring to issue warehouse receipts for his own grain in store may do so by complying with the regulations governing the methods as prescribed by the director.

411.325. 1. At the time of delivery of grain to any public warehouse the scale ticket shall be marked to indicate whether the grain is delivered for storage, for sale or for some other purpose.

2. All grain received at a licensed public warehouse shall be deemed to be storage grain within the meaning of this chapter, unless:

(1) Payment for the grain is made upon delivery to the warehouseman; or

(2) At the time of delivery of the grain to the warehouseman, the purchase price is established, documented as prescribed by the director, and payment made within thirty days or the account is entered, as prescribed by the director, onto a formal settlement sheet within the same thirty-day period. Further, when an account is so entered onto a formal settlement sheet payment shall be made within one hundred eighty days of delivery. If payment is not so made within one hundred eighty days of delivery, a formal written contract as provided for in subsection 4 of this section shall be executed.

3. All grain received at any warehouse not licensed under this chapter shall be deemed to be grain held for storage within the meaning of this chapter, unless:

(1) The sale price for the grain has been established; and

(2) Payment made by the warehouseman and received by the owner of the grain within [ten] thirty days from the delivery of the grain to the warehouse; or

(3) A formal written contract as provided for in subsection 4 of this section is executed.

4. A warehouseman and a seller of grain may agree that payment or pricing of the seller's grain be deferred to a future date. The agreement shall be in writing, dated and shall contain a statement informing the seller that the seller is relinquishing title and all rights of ownership in the grain[, that the warehouseman is not required to carry a warehouse bond on the grain for the benefit of the seller and that the payment for the grain becomes a common claim against the warehouseman]. The director may require any additional information from a warehouseman that he deems necessary to protect the interests of the seller of grain in these transactions. Failure to provide such additional information, upon request, shall be deemed a violation of this chapter. Grain received under a deferred payment or deferred pricing agreement under the provisions of this section shall not be deemed to be stored grain. For the purposes of this section, minimum price, deferred price and deferred payment contracts are not deemed valid unless they contain all the [required] statements required by section 276.461, RSMo, and are signed by both the buyer and seller or their authorized representatives. Grain represented by an invalid [deferred payment or] deferred pricing contract shall be deemed storage grain for the purposes of this chapter. Grain represented by an invalid deferred payment contract shall be deemed storage grain for the purposes of this chapter if payment has not been made within one hundred eighty days of delivery as required in subsection 2 of this section. Only class I grain dealers may enter into deferred price, minimum price or deferred payment agreements.

5. The following transactions shall not be covered by the warehouseman's bond:

(1) Any sale of grain evidenced by a check written by the warehouseman, received and accepted by the seller. Any check returned for any reason shall be evidence of a sales transaction; or

(2) Any sale of grain evidenced by a promissory note accepted by the seller. To be considered a promissory note, the note must contain the signature of both seller and buyer, date the note was executed, dollar amount of the note, payment terms, and interest rate; or

(3) Any sale of grain delivered to the warehouse pursuant to and evidenced by a [delivery] grain purchase contract and treated as sold grain pursuant to the provisions of subsection 2 or 4 of this section.

6. The warehouseman's bond shall cover all grain deemed storage pursuant to the provisions of this section.

[6.] 7. Grain originally received at a warehouse as storage grain and subsequently sold by the depositor to the warehouseman shall be considered received at the warehouse at the time of sale and shall be treated as grain sold or stored, as applicable, pursuant to the provisions of subsection 2 of this section as if at the time of physical delivery, the grain had been priced. The thirty-day, one hundred eighty-day and written contract provisions of subsection 2 of this section apply to these transactions commencing at the time of sale.

411.391. Any public warehouseman operating a warehouse in the state may make a valid sale or a pledge of any warehouse receipts issued for grain of which the warehouseman is the owner, either solely or jointly or in common with others, and the recital of ownership in the receipt shall constitute notice of the right to sell or pledge the same and of the title or specific lien of the transferee or pledgee upon the warehouseman's grain represented by the receipts[, provided that the receipts are registered according to the provisions of this chapter].

411.405. 1. At his option a public warehouseman may ship carlots of grain, when requested by the owner to do so, to a specified terminal warehouse within the state without official inspection or the issuing of trust receipts, providing that the identical lot of grain is tendered for shipment. The transportation of the grain shall be at the owner's risk. When a warehouse receipt has been issued by the terminal warehouseman receiving the grain, and returned to the public warehouseman, he shall deliver the warehouse receipt to the owner upon payment of freight and all legal charges and upon surrender by the owner of the trust receipt or receipts, if any, issued by the public warehouseman for the grain.

2. A licensed warehouseman may ship grain to another state or federally licensed warehouse for storage to cover non-receipted storage obligations at his licensed facility. The original warehouseman must have the written approval of the owner of the grain or notify the owner in writing prior to transferring the commodity or the obligation. Prior written notification may include printed statements on scale tickets or statements made on the schedule of charges required under section 411.268. The receiving warehouse must be a state licensed facility within the state of Missouri, a warehouse licensed under the United States Warehouse Act, or a facility located outside the state of Missouri licensed by the state where the facility is located if, based upon a determination by the director, that state's requirements are sufficient to protect the integrity of the stored grain. The transportation of the grain shall be at the original warehouseman's risk.

[411.471. 1. It shall be the duty of every public warehouseman issuing registered negotiable receipts upon receipt of any grain, to issue a receipt therefor, in compliance with this chapter, and to, by the close of the thirtieth business day, or the time that the director shall designate, file with the registrar of warehouse receipts designated by the director a report as hereinafter provided, showing the amount of grain received and the number of the receipts therefor issued, accompanied by the warehouse receipts for registration.

2. A public warehouseman may register every negotiable receipt issued by him for grain of which the warehouseman is the owner, either solely, jointly or in common with others; and it is unlawful for any public warehouseman to limit or modify his responsibility imposed by law by any words inserted in any receipt or by any contract relative thereto. Upon receipt of the report, as hereinafter provided, and warehouse receipts, it shall be the duty of the registrar of warehouse receipts to register the receipt in a book to be kept for that purpose and to stamp on each of these receipts, with the official grain inspection division registration stamp, the word "registered", with the date of registration and affix his signature thereto.

3. At the option of the warehouseman, a public warehouseman may issue unregistered negotiable receipts or unregistered nonnegotiable receipts, for grain of which the warehouseman is the owner or not the owner, either solely, jointly or in common with others.]

411.517. 1. The warehouseman shall maintain in a place of safety at each licensed warehouse facility current and complete records with respect to all grain delivered to, withdrawn from and received, stored or processed at that warehouse. The director may allow the warehouseman to maintain said records at the warehouseman's headquarters office on a case-by-case basis taking into consideration the location from which grain payments are made. Such records shall include but not be limited to the following:

(1) A perpetual inventory showing the total quantity of each kind and class of grain received and loaded out, the quantity of each kind and class of grain remaining in the warehouse and the total storage obligations for each kind and class of grain. This record shall be kept current as of the close of each business day; except that, if no transaction takes place during a business day, a record showing the actual status as to quantity and storage obligations at the close of the next preceding business day during which recordable transactions occurred shall be deemed to be current;

(2) A register which records all grain transactions not evidenced by the warehouseman's own scale ticket, i.e., direct farm to market shipments. This register shall be updated daily showing, at a minimum, customer name, type of grain, quantity of grain, date of shipment, name of terminal or other business accepting the physical commodity, destination scale ticket number and whether the grain was delivered for storage, sale or other specified purpose.

[(2)] (3) A current copy of the periodic insurance report submitted to the insurer.

2. In addition to the records required by section 411.383 and subsection 1 of this section, the warehouseman shall maintain such adequate financial records as will clearly reflect his current financial position and will clearly support any financial information required to be submitted to the director from time to time.

3. Each grain warehouseman may also be required to keep such records or make such reports as deemed necessary by the director to protect the depositor or seller of grain as set forth in this chapter and the regulations promulgated hereunder.

[3.] 4. All books, records and accounts of warehousemen shall be kept and held available for examination for a period of not less than three years after the close of the period for which such book or record was required; except that, canceled or voided warehouse receipts and the warehouse receipt register required by section 411.383 shall be kept and held available for examination for a period of not less than six years from the date of cancellation or voiding of receipts or, in the case of the register, from the last date upon which a receipt referred to therein shall have been canceled or voided.

[4.] 5. A warehouseman licensed or required to be licensed under this chapter shall keep available for examination all books, records and accounts required by this chapter and any other books, records and accounts relevant to his operating a public grain warehouse. An examination may be performed by the director or a warehouse auditor, and may take place at any time during the normal business hours of the warehouseman or, if prior notice of the examination is given to the warehouseman, at such time as is prescribed in that notice.

[5.] 6. Any warehouseman licensed or required to be licensed under this chapter, or any officer, agent, employee, servant or associate of such warehouseman, who files with the director false records, scale tickets, financial statements, accounts, or withholds records, scale tickets, financial statements or accounts from the director, or who alters records, scale tickets, financial statements or accounts in order to conceal outstanding storage obligations or to conceal actual amounts of grain received for storage or for purchase, whether or not paid for, or to conceal warehouse obligations or for the purpose of misleading in any way department warehouse auditors or officials, is guilty of a class C felony.

411.518. 1. A scale ticket, or other document approved by the director, shall be made out and filed for each movement of grain in or out of any grain warehouse licensed or required to be licensed under the provisions of this chapter. All scale tickets shall be printed with the business name and location and consecutively numbered. They must be issued in consecutive order. A copy of all scale tickets shall be kept on file in numerical order in the warehouseman's office. All other source documents for movement of grain in or out of the facility shall be in a form approved by the director and kept and maintained in a manner approved by the director. Any scale ticket used in pricing grain for the purpose of sale to the warehouseman shall have the price shown on all copies of the ticket.

2. A scale ticket issued in accordance with the provisions of this chapter or regulations promulgated hereunder shall be considered a form of nonnegotiable receipt. This form of nonnegotiable receipt shall be deemed a document of title. The warehouseman's failure to complete all entries on a scale ticket as required by this chapter and the rules promulgated pursuant to this chapter shall constitute a violation on the part of the warehouseman, but shall not preclude or restrict a depositor's right to recover stored grain under the provisions of this chapter. The scale ticket shall constitute prima facie evidence of the holder's claim to the grain regardless of the degree of compliance with this chapter with respect to completion of the entries required by this chapter.

3. All scale tickets, or other approved documents, issued shall contain the following information:

(1) Customer name;

(2) Date issued;

(3) Type of grain;

(4) Quantity of grain;

(5) Notation to show whether the grain movement was IN or OUT;

(6) If movement was IN, whether the grain received was for storage, purchased by the warehouseman, or other specified purpose; and

(7) If received for purchase by the warehouseman, the price shall be stated on all copies.

[3. In general, grain scale tickets shall not be used for the purpose of custom weighing;] 4. As used in this section, "custom weighing" shall mean the weighing of products or articles for the sole purpose of ascertaining weight and the weighing of these products and articles is not for the purpose of a sale or purchase by the warehouseman in the usual course of his business transactions. Any scale ticket used for the purpose of custom weighing must be clearly and conspicuously designated as a custom weight ticket. The director may promulgate regulations pertaining to the form and usage of custom weighing tickets.

411.519. 1. Whenever it appears to the satisfaction of the director that a warehouseman does not have in his inventory sufficient grain to cover the outstanding receipts and scale tickets issued or assumed by him, or when the warehouseman refuses to submit his records or property to lawful examination, the director may give notice to the warehouseman to comply with any of the following requirements:

(1) Immediately cease all grain-related operations and transactions such as, but not limited to, shipping, receiving, handling, processing or selling of grain on his own account or the account of others;

(2) Cover the shortage by supplying the grain or evidence of ownership of the grain;

(3) [Give additional bond as required by the director;

(4)] Submit to such examination as the director may deem necessary;

[(5)] (4) Immediately purchase and make actual payment for a sufficient quantity and quality of grain to fully cover the shortage. If the warehouseman fails to comply with the requirements contained in the notice within the time period which the director may allow, the director may petition the circuit court of the county where the warehouse is located[, as shown on the license application,] for an ex parte order authorizing the director or his authorized agent to seize and take possession, as trustee, of any grain located in the warehouse of such warehouseman, and of all pertinent records and property, as provided in subsection [2] 4 of this section.

2. If at any time the director has evidence that a grain warehouseman is insolvent or is unable to satisfy the claims of all depositors as they become due, or the warehouseman does not have in his inventory sufficient grain to cover the outstanding receipts and scale tickets issued or assumed by him, the director may modify, suspend or revoke the warehouseman's license or petition the circuit court in the county where the warehouse is located for an ex parte order authorizing the director or his authorized agent to seize and take title possession, as trustee, of any grain and grain-related assets in the warehouse or under the warehouseman's control, and of all pertinent records and property as provided for in subsection 4 of this section.

3. Whenever the director shall modify, suspend or revoke any license, he shall prepare an order so providing which shall be signed by the director or some person designated by him, and the order shall state the reason or reasons for the modification, suspension or revocation of the license. The order shall be sent by certified mail to the licensee or applicant at the address of the grain warehouseman licensed or applying for a license. Within thirty days after the mailing of the order, the licensee, if aggrieved by the order of the director, may appeal as provided in chapter 536, RSMo. At the time of the filing of the appeal, the party appealing shall give a bond for costs conditioned on his prosecuting the appeal without delay and paying all costs assessed against him. In addition, the licensee shall post a bond which shall remain in effect pending final disposition of all appeals, including review by the Missouri court of appeals or Missouri supreme court, or federal review, in an amount sufficient to cover all grain storage, and other grain-related obligations of the licensee as identified by the director. The posting of such bond is jurisdictional to the circuit court's authority to entertain the appeal.

[2.] 4. Upon receipt of the director's verified petition setting forth the circumstances of the warehouseman's failure to comply with this chapter and further stating reasons why immediate possession by the director or his authorized agent is necessary for the protection of depositors, warehouse receipt holders or sureties, the court is authorized to issue an ex parte order and shall issue such an order authorizing the director or his authorized agent to take immediate possession for the purposes stated in this section. A copy of the petition and order shall be sent to the warehouseman. If appropriate, the court may order the director's taking possession of only grain-related assets and not the entire business of the warehouseman. Such order may include, but is not limited to, the following:

(1) The director locking down and securing, by padlocks or other appropriate means, the grain storage bins, scales, offices, equipment and rolling stock of the warehouseman;

(2) Removing and excluding the warehouseman, or any and all of the warehouseman's employees, from the facility;

(3) Prohibiting the warehouseman from engaging in any grain-related business transactions whatever during the director's possession of the grain-related assets of the warehouseman's business;

(4) Authorizing all financial institutions to place all business accounts of the warehouseman under the director's authority and to freeze all transactions involving such accounts except to honor outstanding checks written previous to the issuance of the court's order. If it appears that the warehouseman has conducted, in part, his grain storage business through the use of personal accounts as opposed to business accounts, or intermingled two or more such accounts, the court may authorize the applicable financial institutions to place such personal accounts, as well as the business accounts, under the authority of the director in order to allow the director to accurately determine the extent of all grain-related obligations incurred by the warehouseman, the correct status of same and the warehouseman's resources to pay his grain-related obligations;

(5) Authorizing the director to redeliver or sell depositor or company-owned grain, as appropriate in the circumstances and setting forth the conditions for doing such;

(6) Authorizing the director to deposit all grain-related assets and proceeds therefrom in an interest-bearing escrow account to be disbursed only upon orders of the court;

(7) Directing the warehouseman to furnish the director with all grain-related business documents which come into his possession subsequent to the director's possession of the grain-related assets, as well as any other grain-related documents which the warehouseman may have knowledge of and which are not at the warehouse facility.

[3.] 5. At any time within ten days after the director or his authorized agent takes possession, the warehouseman may file with the court a response to the petition of the director stating reasons why the director or his authorized agent should not be allowed to retain possession. The court shall set the matter for hearing on a date not more than fifteen days from the date of the filing of the warehouseman's response. The order placing the director or his authorized agent in possession shall not be stayed nor set aside until such time as the court, after hearing, determines that possession should be restored to the warehouseman.

[4.] 6. Upon taking possession, the director shall give written notice of his action to the surety on the bond of the warehouseman and may notify the holders of record, as shown by the warehouseman's records, of all receipts and tickets issued for grain to present their receipts or tickets for examination or to account for the same. The director may thereupon cause an audit and other investigation to be made of the affairs of the warehouse to determine the amount of the shortage and compute the shortage as to each depositor as shown by the warehouseman's records, if practicable. The director shall notify the warehouseman and the surety on his bond of the approximate amount of the shortage and may notify each depositor thereby affected by sending notice to the depositor's last known address as shown by the records of the warehouseman.

[5.] 7. The director or his authorized agent shall retain possession obtained under this section until such time as the warehouseman or the surety on the bond shall have satisfied the claims of all depositors, or until such time as the director or his authorized agent is ordered by the court to surrender possession. At no time while the director or his authorized agent is in possession of a warehouse, as authorized by this section, shall the director or his authorized agent be required to operate the warehouse; nor will the director or his authorized agent be liable for any claims which have arisen or could arise from the nonoperation of the warehouse.

[6.] 8. If at any time, the director, whether or not he or his authorized agent has possession as authorized by this section, has evidence that a warehouseman is insolvent or is unable to satisfy the claims of all depositors, the director may petition the circuit court for the appointment of a receiver to operate or liquidate the business of the warehouseman in accordance with law.

[7.] 9. All necessary expenses incurred by the director, his authorized agents or any receiver appointed under this section, in carrying out the provisions of this section may be recovered from the warehouseman in a separate civil action brought by the director in the circuit court or as part of the seizure or receivership action filed under this section. If the director or any of his authorized agents seize and take possession of the grain, records or property at the warehouse facility, the warehouseman shall be assessed and shall pay as part of the necessary expenses incurred a fee of fifty dollars per person for each day or part thereof that each such person performs such activities. The cost of liability insurance necessary to protect the director, the receiver and others engaged in carrying out the provisions of this section may be recovered as part of the necessary expenses.

411.800. 1. As used in this section "failure" means any of the following involving a licensed or unlicensed grain warehouseman:

(1) An inability to financially satisfy claimants;

(2) A public declaration of insolvency;

(3) A revocation of license with outstanding grain storage obligations;

(4) Refusal to redeliver stored grain where a good faith dispute does not exist;

(5) Neglect to apply for license renewal without first settling all outstanding grain storage obligations;

(6) Denial of license renewal application; or

(7) Voluntarily surrendering a warehouse license without first settling all outstanding grain storage obligations.

2. As used in this section "grain or grain related assets" involving a failed warehouseman means any of the following:

(1) All grain owned or stored, including grain in transit shipped by the failed warehouseman, but not yet paid for;

(2) Grain held on storage in the name of or for the account of the warehouseman at any other warehouse;

(3) Proceeds from the sale of grain due or to become due;

(4) The equity less any secured financing directly associated therewith in assets in hedging or speculative margin accounts held by commodity exchanges or agents representing the exchanges, and any moneys due or to become due less any secured financing directly associated therewith from any transactions on the exchanges;

(5) Any other unencumbered funds, property, or equity in funds or property, wherever located, that can be directly traced to the sale of grain by the failed warehouseman, provided both that the funds, property, or equity in funds or property shall not be considered to be encumbered unless the encumbrance results from good and valuable considerations advanced by any secured party on a good faith basis and that the encumbrance is not the result of the taking of funds, property, or equity in funds or property as additional collateral for an antecedent debt;

3. A lien shall exist on all grain and grain related assets of a failed warehouseman in favor of any of the following:

(1) Depositors, including lenders, who possess negotiable warehouse receipts covering grain owned by the warehouseman; and

(2) Depositors who possess written evidence of ownership disclosing a storage obligation of the warehouseman.

4. The lien which shall secure all claims described in subsection 3 of this section shall arise at the time of commencement of the storage obligation, or when funds are advanced by the lender, and shall terminate when the liability of the warehouseman to the claimant is discharged, provided that the priority of each lien among the respective claimants shall not relate to the date the claim arises. The lien claims of all claimants shall be considered to be assigned by operation of this section to the department of agriculture, and in the event of a failure and subsequent liquidation, the lien shall transfer over to assets or proceeds of assets either received or liquidated by the department of agriculture.

5. In the event of a failure, the director shall enforce the lien claims and allocate the proceeds as follows against all grain and grain related assets for the benefit of the following:

(1) Depositors, including lenders, who possess negotiable warehouse receipts covering grain owned by the warehouseman;

(2) Depositors who possess written evidence of ownership disclosing a storage obligation of the warehouseman.

6. In the event that any adversary proceeding is commenced to recover grain or grain related assets upon which the lien imposed in this section is imposed and the department declines to enter the proceeding, the director, upon application to him by any claimant, shall assign to the claimant the applicable lien to permit the claimant to pursue his lien in the adversary proceeding to the extent the action will not delay the resolution of the proceeding, the prompt liquidation of the assets, or the ultimate distribution of the assets to all claimants.

Section B. Because permits must be issued for the forthcoming year and in order to ensure an orderly transition, this act is deemed necessary for the immediate preservation of the public health, welfare, peace and safety, and is hereby declared to be an emergency act within the meaning of the constitution, and this act shall be in full force and effect upon its passage and approval.