1.1                          A bill for an act 
  1.2             relating to agriculture; increasing the amount of 
  1.3             livestock dealer bonds; clarifying status of certain 
  1.4             grain buying transactions; changing certain grain 
  1.5             storage provisions; amending Minnesota Statutes 1998, 
  1.6             sections 17A.05, subdivision 2; 223.17, subdivision 5; 
  1.7             223.175; 232.21, by adding a subdivision; and 232.23, 
  1.8             subdivisions 3 and 6. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  Minnesota Statutes 1998, section 17A.05, 
  1.11  subdivision 2, is amended to read: 
  1.12     Subd. 2.  [LIVESTOCK DEALERS.] The amount of each livestock 
  1.13  dealer bond filed with the commissioner shall be not less 
  1.14  than $5,000 $10,000 or such larger amount as required, based on 
  1.15  the commissioner's consideration of the principal's financial 
  1.16  statement, the volume of business reported, or any other factor 
  1.17  the commissioner deems pertinent for the protection of the 
  1.18  public.  Each such bond shall contain the condition clause 
  1.19  applicable when the principal buys on commission or as a 
  1.20  dealer.  A livestock dealer's bond shall be executed on a form 
  1.21  furnished by the commissioner or in accordance with the Packers 
  1.22  and Stockyards Act, 1921, as amended, (United States Code, title 
  1.23  7, section 181 et seq.). 
  1.24     When a bond is executed on a state form furnished by the 
  1.25  commissioner, the bond shall be for the protection of both the 
  1.26  buyer and the seller named in the transaction when the principal 
  1.27  fails to pay when due for livestock purchased or sold for the 
  2.1   principal's own account or the account of others and shall be 
  2.2   limited to the protection of claimants whose residence or 
  2.3   principal place of livestock business is in the state of 
  2.4   Minnesota at the time of the transaction.  If the bond is filed 
  2.5   on a form in accordance with the Packers and Stockyards Act, the 
  2.6   bond shall cover claimants regardless of place of residence. 
  2.7      Sec. 2.  Minnesota Statutes 1998, section 223.17, 
  2.8   subdivision 5, is amended to read: 
  2.9      Subd. 5.  [CASH SALES; MANNER OF PAYMENT.] For a cash sale 
  2.10  of a shipment of grain which is part of a multiple shipment 
  2.11  sale, the grain buyer shall tender payment to the seller in cash 
  2.12  or by check not later than ten days after the sale of that 
  2.13  shipment, except that when the entire sale is completed, payment 
  2.14  shall be tendered not later than the close of business on the 
  2.15  next day, or within 48 hours, whichever is later.  For other 
  2.16  cash sales the grain buyer, before the close of business on the 
  2.17  next business day after the sale, shall tender payment to the 
  2.18  seller in cash or by check, or shall wire or mail funds to the 
  2.19  seller's account in the amount of at least 80 percent of the 
  2.20  value of the grain at the time of delivery.  The grain buyer 
  2.21  shall complete final settlement as rapidly as possible through 
  2.22  ordinary diligence.  Any transaction which is not a cash sale in 
  2.23  compliance with the provisions of this subdivision constitutes a 
  2.24  voluntary extension of credit which is not afforded protection 
  2.25  under the grain buyer's bond, and which must comply with 
  2.26  sections 223.175 and 223.177. 
  2.27     Sec. 3.  Minnesota Statutes 1998, section 223.175, is 
  2.28  amended to read: 
  2.29     223.175 [WRITTEN VOLUNTARY EXTENSION OF CREDIT CONTRACTS; 
  2.30  FORM.] 
  2.31     A written confirmation required under section 223.177, 
  2.32  subdivision 2, and a written voluntary extension of credit 
  2.33  contract must include those items prescribed by the commissioner 
  2.34  by rule.  A contract shall include a statement of the legal and 
  2.35  financial responsibilities of grain buyers and sellers 
  2.36  established in this chapter.  A contract shall also include the 
  3.1   following statement in not less than ten point, all capital 
  3.2   type, framed in a box with space provided for the seller's 
  3.3   signature:  "THIS CONTRACT CONSTITUTES A VOLUNTARY EXTENSION OF 
  3.4   CREDIT.  THIS CONTRACT IS NOT COVERED BY ANY GRAIN BUYER'S 
  3.5   BOND."  If a written contract is provided at the time the grain 
  3.6   is delivered to the grain buyer, the seller shall sign the 
  3.7   contract in the space provided beneath the statement.  A 
  3.8   transaction that does not meet the provisions of a voluntary 
  3.9   extension of credit, including the issuance and signing of a 
  3.10  voluntary extension of credit contract, is a cash sale. 
  3.11     Sec. 4.  Minnesota Statutes 1998, section 232.21, is 
  3.12  amended by adding a subdivision to read: 
  3.13     Subd. 14.  [OPEN STORAGE.] "Open storage" means grain or 
  3.14  agricultural products received by a warehouse operator from a 
  3.15  depositor for which warehouse receipts have not been issued or a 
  3.16  purchase made and the records documented accordingly. 
  3.17     Sec. 5.  Minnesota Statutes 1998, section 232.23, 
  3.18  subdivision 3, is amended to read: 
  3.19     Subd. 3.  [GRAIN DELIVERED CONSIDERED SOLD STORED.] All 
  3.20  grain delivered to a public grain warehouse operator shall be 
  3.21  considered sold stored at the time of delivery, unless 
  3.22  arrangements have been made with the public grain warehouse 
  3.23  operator prior to or at the time of delivery to apply the grain 
  3.24  on contract, for shipment or consignment or for storage cash 
  3.25  sale.  Grain may be held in open storage or placed on a 
  3.26  warehouse receipt.  Warehouse receipts must be issued for all 
  3.27  grain held in open storage within six months of delivery to the 
  3.28  warehouse unless the depositor has signed a statement that the 
  3.29  depositor does not desire a warehouse receipt.  The warehouse 
  3.30  operator's tariff applies for any grain that is retained in open 
  3.31  storage or under warehouse receipt.  
  3.32     Sec. 6.  Minnesota Statutes 1998, section 232.23, 
  3.33  subdivision 6, is amended to read: 
  3.34     Subd. 6.  [LIABILITY.] A public grain warehouse 
  3.35  operator issuing a grain warehouse receipt is liable to the 
  3.36  depositor for the delivery of the kind, grade, and net quantity 
  4.1   of grain called for by the grain warehouse receipt. or scale 
  4.2   ticket marked "store."