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CHAPTER 20:10:11

PUBLIC GRAIN WAREHOUSES

Section

20:10:11:01                                Monthly grain reports required -- Contents.

20:10:11:02 and 20:10:11:03     Repealed.

20:10:11:04                                Form of public grain warehouse licensee's bond.

20:10:11:04.01                           Form of public grain warehouse licensee's additional bond.

20:10:11:04.02                           Release of bonds.

20:10:11:05                                Repealed.

20:10:11:06                                Form of acknowledgement.

20:10:11:07                                Corporate surety bond required.

20:10:11:08                                Posting of license required.

20:10:11:09                                License revocation, suspension, or insolvency -- Notice to receipt holders and surety.

20:10:11:09.01                           Pending transfer of ownership – Notice to receipt holders and surety.

20:10:11:10                                License suspension or revocation -- Notice to public.

20:10:11:11                                Requirements for warehouse receipts.

20:10:11:12                                Issuance of warehouse receipts and scale tickets.

20:10:11:12.01                           Numbering of receipts -- No duplication.

20:10:11:12.02                           Power of attorney requirement.

20:10:11:13                                Specifications for temporary public grain storage units.

20:10:11:14                                Financial statement requirements.

20:10:11:15                                Financial criteria for licensing.

20:10:11:16                                Seasonal emergency storage.

20:10:11:17                                Non-seasonal emergency storage.

20:10:11:18                                Request for waiver.


Rule 20:10:11:01 Monthly grain reports required -- Contents.

          20:10:11:01.  Monthly grain reports required -- Contents. On the first day of every month, or within 10 days thereafter, every public grain warehouse licensee shall furnish to the commission in writing upon forms furnished by the commission, or through the use of the online monthly grain report, a report showing the following information as of the last day of the preceding month: the number of bushels of each kind and grade of grain in storage on the last day of the month; the price per bushel or hundred weight which the warehouse upon such date is offering for grain of like kind and grade; the total value of each kind of grain in storage; and the amount of the warehouse licensee's bond held by the public grain warehouse licensee.

 

          Source: SL 1975, ch 16, § 1; 12 SDR 85, effective November 24, 1985; 12 SDR 151, 12 SDR 155, effective July 1, 1986; 24 SDR 190, effective July 15, 1998; 40 SDR 39, effective September 9, 2013.

          General Authority: SDCL 49-43-4.1(1).

          Law Implemented: SDCL 49-43-4.1(1), 49-43-9.

 


Rule 20:10:11:02 Repealed.

          20:10:11:02.  Personal surety bond requirements.Repealed.

          Source: 9 SDR 55, effective November 7, 1982; repealed, 12 SDR 85, effective November 24, 1985.


Rule 20:10:11:03 Repealed.

          20:10:11:03.  Form of public storage warehouse licensee's bond. Repealed.

 

          Source: 12 SDR 85, retroactively effective July 1, 1985; 12 SDR 151, 12 SDR 155, effective July 1, 1986; 13 SDR 40, effective October 14, 1986; 24 SDR 190, effective July 15, 1998; repealed, 35 SDR 48, effective September 9, 2008.

 


Rule 20:10:11:04 Form of public grain warehouse licensee's bond.

          20:10:11:04.  Form of public grain warehouse licensee's bond. The Public Utilities Commission shall furnish the public grain warehouse licensee's bond form required by SDCL 49-43-4.3 and the bond form shall contain the following:

 

          (1)  Name and address of the principal;

          (2)  Name and address of the surety;

          (3)  Purpose of the bond;

          (4)  Location of the warehouse(s);

          (5)  Starting and ending date of the license for which the bond is given;

          (6)  Amount of the bond;

          (7)  Bond obligation;

          (8)  Signatures of the principal and the surety;

          (9)  Acknowledgements;

          (10)  Statutory authority for the bond; and

          (11)  If the bond is for both a grain warehouseman's and a grain buyer's license, a recitation that the bond amounts are separate and not in the aggregate for both bonds.

 

          Source: 12 SDR 85, retroactively effective July 1, 1985; 12 SDR 151, 12 SDR 155, effective July 1, 1986; 13 SDR 40, effective October 14, 1986; 24 SDR 190, effective July 15, 1998; 35 SDR 48, effective September 9, 2008.

          General Authority: SDCL 49-43-4.1(2).

          Law Implemented: SDCL 49-43-4.2, 49-43-4.3, 49-43-5.3.

 


Rule 20:10:11:04.01 Form of public grain warehouse licensee's additional bond.

          20:10:11:04.01.  Form of public grain warehouse licensee's additional bond. If a public grain warehouse licensee furnishes an additional bond so that the total bond is equal to one-half of the local market value of grain the warehouse licensee is storing, the additional bond may be an increase rider executed by the corporate surety who issued the original bond filed with the commission or an additional bond executed by a second bondsperson or insurer.

 

          An increase rider or additional bond shall be in substantially the same form as required by § 20:10:11:04 for original bonds. It shall state the name and location of the warehouse licensee's facilities covered by the bond.

 

          At a minimum, the increase rider or additional bond shall cover defaults occurring during the period beginning 30 days before a monthly grain report showing need for a bond increase is filed with the commission and ending when the total amount of grain stored in the warehouse decreases so that the original bond covers one-half of the local market value of the stored grain.

 

          Source: 13 SDR 40, effective October 14, 1986; 24 SDR 190, effective July 15, 1998; 35 SDR 48, effective September 9, 2008.

          General Authority: SDCL 49-43-4.1(2).

          Law Implemented: SDCL 49-43-4.2, 49-43-4.3, 49-43-5.3.

 


Rule 20:10:11:04.02 Release of bonds.

          20:10:11:04.02.  Release of bonds. The commission may release an increase rider or additional bond to the warehouse licensee if it determines, after inspection or the submission of an updated grain report as required by § 20:10:11:01, that the original bond is adequate to cover one-half of the local market value of grain in the warehouse licensee's facilities.

 

          An original bond filed with the commission for the license year may not be released unless a new bond is executed to replace the original bond for the entire license year.

 

          Source: 13 SDR 40, effective October 14, 1986; 14 SDR 62, effective October 28, 1987; 24 SDR 190, effective July 15, 1998; 40 SDR 39, effective September 9, 2013.

          General Authority: SDCL 49-43-4.1(3).

          Law Implemented: SDCL 49-43-4.1(3), 49-43-4.3, 49-43-5.3.

 

          Cross-Reference: Claim against warehouseman, SDCL 49-43-5.9.

 


Rule 20:10:11:05 Repealed.

          20:10:11:05.  Alternative form permissible.Repealed.

          Source: 12 SDR 85, retroactively effective July 1, 1985; 12 SDR 151, 12 SDR 155, effective July 1, 1986; 13 SDR 40, effective October 14, 1986; repealed, 24 SDR 190, effective July 15, 1998.


Rule 20:10:11:06 Form of acknowledgement.

          20:10:11:06.  Form of acknowledgement. The surety bonds set forth in § 20:10:11:04 shall be acknowledged by the principal and the corporate surety before a notary public. The surety shall attach a valid power of attorney.

 

          Source: 12 SDR 85, retroactively effective July 1, 1985; 12 SDR 151, 12 SDR 155, effective July 1, 1986; 24 SDR 190, effective July 15, 1998; 35 SDR 48, effective September 9, 2008.

          General Authority: SDCL 49-43-4.1(2).

          Law Implemented: SDCL 49-43-4.2, 49-43-4.3, 49-43-5.3.

 


Rule 20:10:11:07 Corporate surety bond required.

          20:10:11:07.  Corporate surety bond required. The public grain warehouse licensee's bond filed with the commission shall be provided by a corporate surety company authorized to do business in the state of South Dakota.

 

          Source: 12 SDR 85, retroactively effective July 1, 1985; 12 SDR 151, 12 SDR 155, effective July 1, 1986; 24 SDR 190, effective July 15, 1998; 35 SDR 48, effective September 9, 2008.

          General Authority: SDCL 49-43-4.1(2).

          Law Implemented: SDCL 49-43-4.2, 49-43-4.3, 49-43-5.3.

 


Rule 20:10:11:08 Posting of license required.

          20:10:11:08.  Posting of license required. The license granted to a public grain warehouse licensee shall be posted for public view in a conspicuous place in the public grain warehouse licensee's place of business at all times.

 

          Source: 12 SDR 85, effective November 24, 1985; 12 SDR 151, 12 SDR 155, effective July 1, 1986; 24 SDR 190, effective July 15, 1998; 35 SDR 48, effective September 9, 2008.

          General Authority: SDCL 49-43-4.1(4).

          Law Implemented: SDCL 49-43-4.2, 49-43-4.3, 49-43-5.3.

 


Rule 20:10:11:09 License revocation, suspension, or insolvency -- Notice to receipt holders and surety.

          20:10:11:09.  License revocation, suspension, or insolvency -- Notice to receipt holders and surety. Following the revocation or suspension of a public grain warehouse license, the commission shall notify each outstanding warehouse receipt holder, each open storage scale ticket holder, each grain bank depositor, and the surety named in the public grain warehouse licensee's bond of the license revocation or suspension. The commission may recommend that receipt holders, open storage scale ticket holders, and grain bank depositors remove all stored grain from the warehouse by a designated date. No grain may thereafter be removed or released from storage without prior commission authorization. If the commission has knowledge of any acts of insolvency by a public grain warehouse licensee, including the filing of a petition in bankruptcy naming the warehouse licensee as debtor, the commission shall notify the surety named in the warehouse licensee's bond of such acts. Notices required by this section shall be by first class mail.

 

          Source: 12 SDR 85, effective November 24, 1985; 12 SDR 151, 12 SDR 155, effective July 1, 1986; 24 SDR 190, effective July 15, 1998; 35 SDR 48, effective September 9, 2008.

          General Authority: SDCL 49-43-4.1(5).

          Law Implemented: SDCL 49-43-5.6, 49-43-5.8.

 


Rule 20:10:11:09.01 Pending transfer of ownership -- Notice to receipt holders and surety.

          20:10:11:09.01.  Pending transfer of ownership – Notice to receipt holders and surety. At least 30 days before the transfer of ownership of a public grain warehouse licensed by the commission, the warehouse licensee shall notify, in writing, each outstanding warehouse receipt holder, each open storage scale ticket holder, each grain bank depositor and surety named in the public grain warehouse bond of the pending transfer of ownership. A public grain warehouse licensee which transfers ownership of a public grain warehouse licensed by the commission shall notify the commission of the pending transfer seven days before notifying outstanding warehouse receipt holders and the surety named in the public grain warehouse bond.

 

          Source: 24 SDR 190, effective July 15, 1998; 35 SDR 48, effective September 9, 2008.

          General Authority: SDCL 49-43-4.1(5).

          Law Implemented: SDCL 49-43-4.2, 49-43-4.3, 49-43-4.4.

 


Rule 20:10:11:10 License suspension or revocation -- Notice to public.

          20:10:11:10.  License suspension or revocation -- Notice to public. Following the suspension or revocation of a public grain warehouse license, notice thereof shall be posted by an agent or employee of the commission in a conspicuous place on the premises of each location where grain is received. If necessary to protect the public, the notice shall also be published by the commission in at least one newspaper of general circulation in the area served by the grain warehouse.

 

          Source: 12 SDR 85, effective November 24, 1985; 12 SDR 151, 12 SDR 155, effective July 1, 1986; 24 SDR 190, effective July 15, 1998; 40 SDR 39, effective September 9, 2013.

          General Authority: SDCL 49-43-4.1(5).

          Law Implemented: SDCL 49-43-4.1(5), 49-43-4.5, 49-43-5.6.

 


Rule 20:10:11:11 Requirements for warehouse receipts.

          20:10:11:11.  Requirements for warehouse receipts. Grain warehouse receipts shall be in a form approved by the commission.

 

          Source: 12 SDR 85, effective November 24, 1985; 12 SDR 151, 12 SDR 155, effective July 1, 1986; 24 SDR 190, effective July 15, 1998; 35 SDR 48, effective September 9, 2008.

          General Authority: SDCL 49-43-4.1(6).

          Law Implemented: SDCL 49-43-2.1.

 


Rule 20:10:11:12 Issuance of warehouse receipts and scale tickets.

          20:10:11:12.  Issuance of warehouse receipts and scale tickets. Any warehouse receipts issued by a public grain warehouse licensee shall be numbered consecutively. Receipts bearing the same number may not be issued by the same public grain warehouse during any one year. When issuing warehouse receipts, the original receipt shall be given to the owner of grain deposited for storage, and at least one copy of the receipt shall be retained by the public grain warehouse licensee as a part of its records. Upon receipt of grain, each public grain warehouse licensee shall by conspicuous language indicate in writing on each scale ticket if the grain received is to be stored on a warehouse receipt, placed in open storage, or sold. The grain warehouse licensee shall clearly mark in writing on each scale ticket whether the grain received is to be stored or sold. If no indication is made on the scale ticket at the time of delivery the grain shall be considered placed in open storage. Each scale ticket issued by any public grain warehouse licensee shall also conspicuously bear the following language: This scale ticket is not negotiable.

 

          Source: 12 SDR 85, effective November 24, 1985; 12 SDR 151, 12 SDR 155, effective July 1, 1986; 24 SDR 190, effective July 15, 1998; 35 SDR 48, effective September 9, 2008.

          General Authority: SDCL 49-43-4.1(6).

          Law Implemented: SDCL 49-43-2.1.

 


Rule 20:10:11:12.01 Numbering of receipts -- No duplication.

          20:10:11:12.01.  Numbering of receipts -- No duplication. Electronic warehouse receipts shall be numbered and shall be issued consecutively starting with the number specified to the provider by the commission. A warehouse operator may not have an electronic warehouse receipt and a paper warehouse receipt outstanding for the same lot of grain.

 

          Source: 40 SDR 39, effective September 9, 2013.

          General Authority: SDCL 49-43-2.1, 49-43-4.1(6), 49-43-56.

          Law Implemented: SDCL 49-43-2.1, 49-43-4.1(6), 49-43-56.

 


Rule 20:10:11:12.02 Power of attorney requirement.

          20:10:11:12.02.  Power of attorney requirement. A warehouse operator or a third party may not handle electronic warehouse receipts on behalf of a depositor unless a written power of attorney to do so has been provided by the depositor. The power of attorney shall be provided to the commission for inspection and verification upon the commission's request.

 

          Source: 40 SDR 39, effective September 9, 2013.

          General Authority: SDCL 49-43-2.1, 49-43-4.1(6), 49-43-56.

          Law Implemented: SDCL 49-43-2.1, 49-43-4.1(6), 49-43-56.

 


Rule 20:10:11:13 Specifications for temporary public grain storage units.

          20:10:11:13.  Specifications for temporary public grain storage units. A temporary public grain storage unit is defined as a public grain warehouse which does not have a roof, permanent foundation, or sidewalls which are permanently attached to the foundation. Each temporary public grain storage unit must be bonded and licensed and must meet the following specifications:

 

          (1)  Each temporary storage unit must contain aeration equipment;

 

          (2)  Each temporary storage unit must have an asphalt, concrete, compacted limestone, or fly ash base which meets the following minimum specifications;

 

               (a)  Any base must be of such depth and compaction as to permit trucks or other heavy equipment used in loading or unloading to move over the base without breaking, cracking, sinking in, or chipping the base;

 

               (b)  The depth of a limestone base must be at least 4 inches;

 

               (c)  The slope of any base must be sufficient to allow for proper drainage from the center to the edge of the base; and

 

               (d)  Drainage away from the base must be provided to prevent any water from standing or backing up underneath the grain;

 

          (3)  The grain stored within a temporary storage unit must maintain a peak, angle, or arc which will provide drainage from the top over the sidewalls so that no pockets of water form on top of the grain;

 

          (4)  The temporary storage unit must be covered with a cover strong enough to resist tearing under normal use and weather conditions and to allow a person to walk on the cover without penetrating it;

 

          (5)  Covered storage must be constructed in such a way as to provide for air flow through the grain;

 

          (6)  All temporary storage units must have rigid self-supporting sidewalls;

 

          (7)  A warehouse operator must maintain a separate record of all grain stored in a temporary storage unit and must account for that grain in the daily position record; and

 

          (8)  A warehouse operator shall notify the commission prior to storing grain in a newly constructed temporary storage unit.

 

          The commission may inspect finished construction of all new temporary public grain storage units before grain is stored in the unit. The warehouse licensee must remedy any specifications that are not in compliance with this rule before grain is stored within the unit.

 

          A warehouse licensee who is in violation of the specifications in this section will be ordered by the commission to comply.

 

          Source: 14 SDR 62, effective October 28, 1987; 24 SDR 190, effective July 15, 1998; 33 SDR 43, effective September 18, 2006; 35 SDR 48, effective September 9, 2008.

          General Authority: SDCL 49-43-4.1(7).

          Law Implemented: SDCL 49-43-5.1, 49-43-5.3.

 


Rule 20:10:11:14 Financial statement requirements.

          20:10:11:14.  Financial statement requirements. Each applicant for a public grain warehouse license shall submit financial statements for the most recently completed year of operation. The statements shall be prepared by a certified public accountant, independent public accountant, a grain commission or management firm, or other individual skilled in the preparation of financial statements in accordance with generally accepted accounting principles or international financial reporting standards. The financial statements may not be prepared by the applicant or an employee of the applicant, and if the applicant is a partnership or corporation, by an officer, shareholder, partner, or an employee of the partnership or corporation. The commission may require the applicant to submit a second set of financial statements prepared by a certified public accountant at the compilation, review, or audit level if the commission determines that the first financial statements submitted are incomplete or otherwise unsatisfactory.

 

          The financial statements must include a balance sheet and statement of profit and loss. If the applicant's accountant has prepared a statement of retained earnings, a statement of cash flows, a statement of changes in financial position, and notes and disclosures to the financial statements, those items must also be submitted.

 

          If the valuation of any assets are listed at fair market value, those valuations shall be established or confirmed by a person experienced in making assessments of the fair market value of fixed assets. The valuations must be accompanied by a statement signed by the person who establishes or confirms the values stating that such person:

 

          (1)  Has no interest in the property appraised;

          (2)  Is not an employee of the applicant; and

          (3)  Has no personal bias with respect to the parties involved.

 

          Source: 24 SDR 190, effective July 15, 1998; 40 SDR 39, effective September 9, 2013.

          General Authority: SDCL 49-43-4.1(2).

          Law Implemented: SDCL 49-43-4.1(2), 49-43-4.2, 49-43-4.3.

 


Rule 20:10:11:15 Financial criteria for licensing.

          20:10:11:15.  Financial criteria for licensing. At a minimum, the applicant's balance sheet must show a positive net worth. In determining net worth, the commission may disallow the following assets if the assets are withdrawals of equity or are uncollectible:

 

          (1)  Accounts and notes receivable from or advances to stockholders, owners, partners, employees, or affiliates;

          (2)  Accounts receivable over 180 days old;

          (3)  Investments or equities in cooperatives; or

          (4)  Goodwill.

 

          At a minimum, the balance sheet must show current assets greater than current liabilities. In determining working capital, the commission may disallow the following assets if the assets are withdrawals of equity or are uncollectible:

 

          (1)  Accounts and notes receivable from or advances to stockholders, owners, partners, employees, or affiliates;

          (2)  Accounts receivable over 180 days old;

          (3)  Investments or equities in cooperatives; or

          (4)  Goodwill.

 

          Source: 24 SDR 190, effective July 15, 1998; 40 SDR 39, effective September 9, 2013.

          General Authority: SDCL 49-43-4.1(2).

          Law Implemented: SDCL 49-43-4.1(2), 49-43-4.2, 49-43-4.3.

 


Rule 20:10:11:16 Seasonal emergency storage.

          20:10:11:16.  Seasonal emergency storage. A public grain warehouse may store grain outside on a seasonal emergency storage basis between July 1 and January 31 without having to comply with § 20:10:11:13. Seasonal emergency storage is allowed only if the public grain warehouse lacks sufficient permanent roofed storage or temporary storage in conformity with § 20:10:11:13 to accommodate the amount of grain delivered to the warehouse. A public grain warehouse shall maintain its bond coverage in an amount sufficient to cover both its grain stored outside and its other warehouse grain at the coverage level specified in SDCL 49-43-5.3. A warehouse operator must maintain a separate record of all grain stored in a seasonal emergency storage and must account for that grain in the daily position record.

 

          Source: 33 SDR 43, effective September 18, 2006; 40 SDR 39, effective September 9, 2013.

          General Authority: SDCL 49-43-4.1(7).

          Law Implemented: SDCL 49-43-4.1(7), 49-43-4.3, 49-43-5.3, 49-43-5.7, 49-43-9, 49-43-10, 49-43-11, 49-43-22.

 


Rule 20:10:11:17 Non-seasonal emergency storage.

          20:10:11:17.  Non-seasonal emergency storage. A public grain warehouse may submit an application to the commission for approval to store grain outside on a non-seasonal emergency storage basis between February 1 and June 30 without complying with § 20:10:11:13. To be granted approval, the applicant shall demonstrate that it is in sound financial condition, that the storage site does not pose a significant threat to the condition of the grain, and that is has bond coverage of public warehouse grain stored in non-seasonal emergency storage in an amount equal to one hundred percent of the local market value of the grain. In addition, the bond coverage for all other public warehouse grain shall be at the coverage level specified in SDCL 49-43-5.3. A warehouse operator must maintain a separate record of all grain stored in non-seasonal emergency storage and must account for that grain in the daily position record.

 

          Source: 33 SDR 43, effective September 18, 2006; 40 SDR 39, effective September 9, 2013.

          General Authority: SDCL 49-43-4.1(7).

          Law Implemented: SDCL 49-43-4.1(7), 49-43-4.3, 49-43-5.3, 49-43-5.7, 49-43-9, 49-43-10, 49-43-11, 49-43-22.

 


Rule 20:10:11:18 Request for waiver.

          20:10:11:18.  Request for waiver. A licensed public grain warehouse operator may request a waiver of any rule in this chapter. The commission may grant a waiver if it finds that the waiver would not be detrimental to depositors and is in the public interest.

 

          Source: 35 SDR 48, effective September 9, 2008.

          General Authority: SDCL 49-43-4.1(1) to (9), inclusive.

          Law Implemented: SDCL 49-43-1, 49-43-4.2, 49-43-4.3, 49-43-4.4, 49-43-5.1, 49-43-5.3.

 


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