HOUSE BILL No. 5434 November 1, 2001, Introduced by Reps. Meyer, Van Woerkom, Gilbert, Hager, Stewart and Spade and referred to the Committee on Agriculture and Resource Management. A bill to amend 1939 PA 141, entitled "Grain dealers act," by amending the title and sections 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 18, 19, 20, 21, and 22 (MCL 285.62, 285.63, 285.64, 285.65, 285.66, 285.67, 285.68, 285.69, 285.70, 285.71, 285.72, 285.73, 285.74, 285.75, 285.76, 285.78, 285.79, 285.80, 285.81, and 285.82), the title as amended by 1984 PA 169, sections 2, 3, 5, 6, and 18 as amended and section 21 as added by 1996 PA 311, and section 7 as amended by 1982 PA 33, and by adding sections 17, 23, 24, 25, 26, and 27; and to repeal acts and parts of acts. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 02998'01 DAM 2 1 TITLE 2 An actto permit the director of the department of agricul-3ture of this stateto regulate the storage, warehousing, buying, 4 and selling of farm produce within this state; to provide for the 5 licensing, regulation, and bonding of grain dealers; to provide 6 for warehouse receipts, ACKNOWLEDGMENT FORMS, and price later 7 agreements and their USE AND priority; to provide for the cre- 8 ation of security interests; to provide forthe establishment of9an inspection service and personnel for licensed grain dealers10 CERTAIN POWERS AND DUTIES OF THE DEPARTMENT OF AGRICULTURE AND 11 ITS DIRECTOR; TO IMPOSE CERTAIN DUTIES ON INSURANCE COMPANIES AND 12 SURETIES; and to provide ADMINISTRATIVE REMEDIES AND penalties 13 for the violation of this act. 14 Sec. 2. As used in this act: 15(a) "Farm produce" means individually and collectively, dry16edible beans, soy beans, small grains, cereal grains, corn, grass17seeds, hay, and legume seeds in a raw or natural state, produced18or grown for storage or purchase by a person.19(b) "Person" means a person, partnership, firm, corporation,20association, cooperative organization, or other legal entity21operating within this state that buys, exchanges, or sells farm22produce grown, stored, handled, or shipped either into or out of23this state.24(c) "Grain dealer" means a person engaged in the business of25receiving, buying, exchanging, selling, or storing farm produce.26Grain dealer does not include the following:02998'01 3 1(i) A grower or producer selling farm produce that the2grower or producer actually produces.3(ii) A person who buys farm produce pursuant to a cash sale4as a feeder of the person's own livestock or poultry.5(iii) A retailer who sells farm produce if the sales are an6incidental portion of the retailer's business.7(iv) Grain hauler.8(v) A person who does all of the following:9(A) Purchases farm produce from a nongrower.10(B) Purchases farm produce pursuant to a cash sale.11(C) Does not take possession of the farm produce.12(D) Is not required to offer warehouse receipts, price later13agreements, or scale tickets.14(d) "Director" means the director of the state department of15agriculture and the director's authorized agents and16representatives.17(e) "Price later agreement" means a written agreement by18which a grain dealer takes title to farm produce for a sale price19which is not fixed at the time of delivery.20(f) "Acknowledgment form" means a written receipt issued by21a grain dealer or his or her authorized representative to a farm22produce owner which identifies the farm produce being transferred23from the physical jurisdiction of the owner to the grain dealer.24"Scale ticket" is synonymous with acknowledgment form if used to25describe weighed quantities of farm produce.26(g) "Cash sale" means farm produce whose title is27transferred only after a price is decided upon not later than the02998'01 4 1time of delivery and in which payment is made to the grower or2producer by check or cash.3(h) "Grain bank" or "feed bank" means the storage of farm4produce on a warehouse receipt intended to be, periodically, par-5tially withdrawn by the owner.6(i) "Warehouse receipt" means a written acknowledgment7issued by the grain dealer to a farm produce owner upon accep-8tance of the farm produce for storage in the grain dealer's9facility.10(j) "Financial institution" means a commercial bank whose11deposits are insured by the federal deposit insurance corporation12or a national bank for cooperatives subject to the farm credit13act of 1971, Public Law 92-181, 85 Stat. 583.14(k) "Grain hauler" means a person whose primary source of15income and whose primary occupation involve farming and who pur-16chases, sells, exchanges, or receives farm produce upon payment17in cash or check as an incidental activity. Grain hauler does18not include:19(i) A grower or producer selling farm produce that the20grower or producer actually produces.21(ii) A person who buys farm produce as a feeder of the22person's own livestock or poultry.23(iii) A retailer who sells farm produce if the sales are an24incidental portion of the retailer's business.25(iv) A person who does all of the following:26(A) Purchases farm produce from a nongrower.02998'01 5 1(B) Does not take possession of the farm produce.2(C) Is not required to offer warehouse receipts, price later3agreements, or scale tickets.4 (A) "ACKNOWLEDGMENT FORM" MEANS A SCALE WEIGHT TICKET, A 5 LOAD SLIP, OR ANY OTHER EVIDENCE OF DEPOSIT ISSUED BY A GRAIN 6 DEALER OR HIS OR HER AUTHORIZED REPRESENTATIVE TO A DEPOSITOR 7 THAT IDENTIFIES THE FARM PRODUCE BEING TRANSFERRED FROM THE POS- 8 SESSION OF THE DEPOSITOR TO THE POSSESSION OF THE GRAIN DEALER. 9 (B) "ALLOWABLE NET ASSETS" DOES NOT INCLUDE INTANGIBLE 10 ASSETS OR ASSETS THAT THE DEPARTMENT OR A CERTIFIED PUBLIC 11 ACCOUNTANT DETERMINES HAVE NO ASSESSABLE VALUE. 12 (C) "CASH SALE" MEANS A SALE IN WHICH THE TITLE TO FARM 13 PRODUCE IS TRANSFERRED ONLY AFTER A PRICE IS DECIDED UPON BEFORE 14 OR AT THE TIME OF DELIVERY AND PAYMENT FOR THE FARM PRODUCE MEETS 15 1 OF THE FOLLOWING: 16 (i) PAYMENT OF THE PRICE IS MADE TO THE DEPOSITOR IN CASH OR 17 BY CHECK, MONEY ORDER, WIRE TRANSFER, OR DRAFT WITHIN 10 DAYS OF 18 DELIVERY. 19 (ii) PAYMENT OF THE PRICE IS MADE BY PLACING THE AMOUNT OF 20 THE PRICE IN THE DEPOSITOR'S ACCOUNT AND A CREDIT STATEMENT IS 21 SENT TO THE DEPOSITOR WITHIN 10 DAYS OF DELIVERY. 22 (D) "CLAIMANT" MEANS A PERSON TO WHOM A GRAIN DEALER OWES A 23 FINANCIAL OBLIGATION FOR FARM PRODUCE OR WHO IS ENTITLED TO THE 24 FARM PRODUCE DELIVERED TO THE GRAIN DEALER OR THE PROCEEDS OF THE 25 FARM PRODUCE. 02998'01 6 1 (E) "COLLATERAL WAREHOUSE RECEIPT" MEANS A WAREHOUSE RECEIPT 2 ISSUED TO A FINANCIAL INSTITUTION BY A GRAIN DEALER FOR GRAIN 3 OWNED BY THAT GRAIN DEALER. 4 (F) "DEPARTMENT" MEANS THE DEPARTMENT OF AGRICULTURE. 5 (G) "DEPOSITOR" MEANS EITHER OF THE FOLLOWING: 6 (i) A PERSON WHO DELIVERS FARM PRODUCE TO A LICENSED GRAIN 7 DEALER FOR STORAGE, PROCESSING, SHIPMENT, OR SALE AND HAS TITLE 8 TO THE FARM PRODUCE AT THE TIME OF DELIVERY. 9 (ii) A PERSON WHO OWNS OR WHO IS LEGAL HOLDER OF AN ACKNOWL- 10 EDGMENT FORM OR WAREHOUSE RECEIPT ISSUED BY A LICENSED GRAIN 11 DEALER FOR FARM PRODUCE. 12 (H) "DIRECTOR" MEANS THE DIRECTOR OF THE DEPARTMENT OR HIS 13 OR HER DESIGNEE. 14 (I) IN A FARM PRODUCE TRANSACTION, "DISPOSITION" MEANS A 15 CASH SALE OR OTHER TRANSFER OF FARM PRODUCE OR PLACEMENT OF FARM 16 PRODUCE ON A WAREHOUSE RECEIPT OR PRICE LATER AGREEMENT. 17 (J) "FACILITY" MEANS AN EDIFICE, SILO, TANK, BIN, CRIB, 18 INTERSTICE, OR PROTECTED ENCLOSED STRUCTURE, OR MORE THAN 1 EDI- 19 FICE, SILO, TANK, BIN, CRIB, INTERSTICE, OR PROTECTED ENCLOSED 20 STRUCTURE LOCATED CONTIGUOUS TO EACH OTHER, USED TO RECEIVE, 21 DEPOSIT, OR STORE FARM PRODUCE IN BULK. 22 (K) "FAILURE" OF A LICENSEE OR GRAIN DEALER MEANS ANY OF THE 23 FOLLOWING: 24 (i) INABILITY OF A LICENSEE OR GRAIN DEALER TO FINANCIALLY 25 SATISFY CLAIMANTS. 26 (ii) A PUBLIC DECLARATION OF INSOLVENCY BY A LICENSEE OR 27 GRAIN DEALER. 02998'01 7 1 (iii) REVOCATION, DENIAL, SUSPENSION, OR VOLUNTARY SURRENDER 2 OF A LICENSEE'S LICENSE AT A TIME WHEN THE LICENSEE HAS OUTSTAND- 3 ING UNSECURED INDEBTEDNESS OWED TO CLAIMANTS. 4 (l) "FARM PRODUCE" MEANS 1 OR MORE OF DRY EDIBLE BEANS, SOY- 5 BEANS, SMALL GRAINS, CEREAL GRAINS, OR CORN. 6 (M) "FARM PRODUCE HANDLED" MEANS THE NUMBER OF BUSHELS OR 7 HUNDREDWEIGHT OF FARM PRODUCE THAT A LICENSEE RECEIVES OR IS OTH- 8 ERWISE OBLIGATED FOR IN A FISCAL PERIOD. 9 (N) "FARM PRODUCE HANDLING" MEANS ANY OF THE FOLLOWING: 10 (i) ENGAGING OR PARTICIPATING IN THE BUSINESS OF PURCHASING 11 FARM PRODUCE. 12 (ii) OPERATING A GRAIN ELEVATOR FOR THE RECEIVING, STORING, 13 SHIPPING, OR PROCESSING OF FARM PRODUCE. 14 (iii) RECEIVING FARM PRODUCE INTO A FACILITY UNDER A PRICE 15 LATER AGREEMENT. 16 (O) "FARM PRODUCE TRUCKER" MEANS A PERSON ENGAGED IN THE 17 BUSINESS OF HAULING FARM PRODUCE THAT ISSUES PRICE LATER AGREE- 18 MENTS OR ACKNOWLEDGMENT FORMS, TRANSFERS WAREHOUSE RECEIPTS, OR 19 IS RESPONSIBLE FOR PAYMENT TO A DEPOSITOR, BUT THAT DOES NOT OWN 20 A FACILITY. 21 (P) "FINANCIAL INSTITUTION" MEANS A STATE OR NATIONALLY 22 CHARTERED BANK OR A STATE OR FEDERALLY CHARTERED SAVINGS AND LOAN 23 ASSOCIATION, SAVINGS BANK, OR CREDIT UNION WHOSE DEPOSITS ARE 24 INSURED BY AN AGENCY OF THE UNITED STATES GOVERNMENT AND THAT 25 MAINTAINS A PRINCIPAL OFFICE OR BRANCH OFFICE LOCATED IN THIS 26 STATE, OR A NATIONAL BANK FOR COOPERATIVES SUBJECT TO THE FARM 27 CREDIT ACT OF 1971, PUBLIC LAW 92-181, 85 STAT. 583. 02998'01 8 1 (Q) "GRAIN BANK" OR "FEED BANK" MEANS FARM PRODUCE STORED ON 2 A WAREHOUSE RECEIPT THAT THE OWNER INTENDS TO PERIODICALLY, PAR- 3 TIALLY WITHDRAW. 4 (R) "GRAIN DEALER" MEANS A PERSON ENGAGED IN THE BUSINESS OF 5 RECEIVING, BUYING, EXCHANGING, SELLING, OR STORING FARM PRODUCE 6 IN THIS STATE. THE TERM INCLUDES A FARM PRODUCE TRUCKER, GRAIN 7 MERCHANDISER, OR PROCESSOR. THE TERM DOES NOT INCLUDE A PERSON 8 SOLELY ENGAGED IN 1 OF THE FOLLOWING: 9 (i) SELLING FARM PRODUCE PRODUCED BY THE PERSON. 10 (ii) BUYING FARM PRODUCE IN A CASH SALE TO FEED THE PERSON'S 11 LIVESTOCK OR POULTRY. 12 (iii) IF THE PERSON HANDLED LESS THAN 30,000 BUSHELS OF FARM 13 PRODUCE IN THE PERSON'S PRECEDING FISCAL YEAR AND IN THE PERSON'S 14 CURRENT FISCAL YEAR, BUYING FARM PRODUCE IN A CASH SALE. 15 (iv) PURCHASING FARM PRODUCE FROM A PERSON OTHER THAN THE 16 GROWER OR PRODUCER OF THE FARM PRODUCE IN A CASH SALE. 17 (v) CONTRACTING FOR LAND OR SERVICES TO PRODUCE SEED FOR 18 SOWING OR PROPAGATION. 19 (S) "GRAIN MERCHANDISER" MEANS A PERSON ENGAGED IN THE BUSI- 20 NESS OF RECEIVING, BUYING, EXCHANGING, SELLING, OR TAKING TITLE 21 TO FARM PRODUCE AND WHO IS RESPONSIBLE FOR PAYMENT TO A DEPOSITOR 22 BUT DOES NOT OWN A TRUCK OR A FACILITY. 23 (T) "LICENSE" MEANS A LICENSE ISSUED BY THE DEPARTMENT TO A 24 GRAIN DEALER IN THE MANNER PROVIDED UNDER THIS ACT. THE TERM 25 INCLUDES A PERMIT ISSUED UNDER SECTION 6. 26 (U) "LICENSEE" MEANS A GRAIN DEALER LICENSED UNDER THIS 27 ACT. 02998'01 9 1 (V) "OPEN STORAGE" MEANS THE STORAGE OF FARM PRODUCE FOR 30 2 DAYS OR LESS UNDER AN ACKNOWLEDGMENT FORM THAT DOES NOT CONTAIN A 3 DESIGNATION OF A SPECIFIC TRANSACTION TYPE. 4 (W) "OPERATING WITHIN THIS STATE" INCLUDES THE TRANSFER OF 5 PHYSICAL POSSESSION OR TITLE OF FARM PRODUCE FROM AN OWNER TO A 6 PERSON WITHIN THE BOUNDARIES OF THIS STATE. 7 (X) "PERSON" MEANS AN INDIVIDUAL, CORPORATION, LIMITED 8 LIABILITY COMPANY, PARTNERSHIP, ASSOCIATION, COOPERATIVE ORGANI- 9 ZATION, OR OTHER LEGAL ENTITY. 10 (Y) "PRICE LATER AGREEMENT" MEANS A WRITTEN OR ELECTRONI- 11 CALLY TRANSMITTED AGREEMENT BETWEEN A DEPOSITOR AND A GRAIN 12 DEALER WHERE THE GRAIN DEALER RECEIVES TITLE TO FARM PRODUCE AND 13 THE DEPOSITOR RETAINS THE OPTION TO PRICE THE FARM PRODUCE AFTER 14 DELIVERY BASED ON CONDITIONS IN THE AGREEMENT. 15 (Z) "PROCESSING" MEANS DRYING, CLEANING, PACKAGING, OR OTH- 16 ERWISE CHANGING THE PHYSICAL CHARACTERISTICS OF FARM PRODUCE. 17 (AA) "PROCESSOR" MEANS A PERSON WHO PROCESSES FARM PRODUCE 18 AND STORES THE FARM PRODUCE FOR A PERIOD OF 24 HOURS OR MORE. 19 (BB) "RECEIVING POINT" MEANS A FACILITY WHERE FARM PRODUCE 20 IS RECEIVED AND WEIGHED AND AN ACKNOWLEDGMENT FORM IS ISSUED. 21 (CC) WITH RESPECT TO A FINANCIAL STATEMENT, "REVIEWED" MEANS 22 PERFORMING INQUIRY AND ANALYTICAL PROCEDURES THAT PROVIDE AN 23 ACCOUNTANT WITH A REASONABLE BASIS FOR EXPRESSING LIMITED ASSUR- 24 ANCE THAT THERE ARE NO MATERIAL MODIFICATIONS THAT SHOULD BE MADE 25 TO THE STATEMENT FOR IT TO CONFORM WITH GENERALLY ACCEPTED 26 ACCOUNTING PRINCIPLES. 02998'01 10 1 (DD) "REVOCATION" MEANS THE REMOVAL OF A GRAIN DEALER'S 2 LICENSE UNDER THIS ACT IN ACCORDANCE WITH THE ADMINISTRATIVE 3 PROCEDURES ACT OF 1969, 1969 PA 306, MCL 24.201 TO 24.328. THE 4 TERM DOES NOT INCLUDE A SUSPENSION OF A GRAIN DEALER'S LICENSE 5 UNDER THIS ACT. 6 (EE) "SHORTAGE" MEANS THAT A GRAIN DEALER DOES NOT HAVE A 7 SUFFICIENT AMOUNT OF FARM PRODUCE BY CLASS AND QUALITY TO COVER 8 THE GRAIN DEALER'S OUTSTANDING OBLIGATION FOR THAT FARM PRODUCE. 9 (FF) "STORAGE" MEANS THE DEPOSIT OF FARM PRODUCE IN TRUST 10 WITH A GRAIN DEALER BY A DEPOSITOR. 11 (GG) "WAREHOUSE RECEIPT" MEANS A WRITTEN OR ELECTRONICALLY 12 TRANSMITTED RECEIPT ISSUED BY A GRAIN DEALER TO A DEPOSITOR AT 13 THE TIME THE GRAIN DEALER ACCEPTS FARM PRODUCE FOR STORAGE. A 14 WAREHOUSE RECEIPT IS 1 OF THE FOLLOWING: 15 (i) A NEGOTIABLE WAREHOUSE RECEIPT IF IT STATES THAT THE 16 GRAIN DEALER WILL DELIVER THE FARM PRODUCE TO THE BEARER OF THE 17 RECEIPT OR TO THE ORDER OF A PERSON NAMED IN THE RECEIPT. 18 (ii) A NONNEGOTIABLE WAREHOUSE RECEIPT. ANY WAREHOUSE 19 RECEIPT THAT DOES NOT SATISFY SUBPARAGRAPH (i) IS A NONNEGOTIABLE 20 WAREHOUSE RECEIPT. 21 Sec. 3.(1) The director shall enforce this act by the use22of personnel including a certified public accountant or an indi-23vidual with accounting background and specialized investigative24training and experience, rules, and procedures as are necessary25to carry out the intent of this act, including the inspection of26grain dealers' records, taking of inventories, and measurements.02998'01 11 1(2) A grain dealer shall keep complete and accurate records2of his or her business, including a daily position report. The3daily position report shall be submitted to the department not4less than once each month, at a time determined by the department5by rule. The director may require a dealer to submit reports6more frequently. All financial information and daily position7report information submitted to the department by applicants and8or licensees in compliance with the requirements set forth in9this act is confidential, and is not subject to public disclosure10as provided for in the freedom of information act, Act No. 442 of11the Public Acts of 1976, as amended, being sections 15.231 to1215.246 of the Michigan Compiled Laws.13(3) The daily position report shall include all of the fol-14lowing, on a form approved by the director:15(a) The quantity of farm produce in inventory.16(b) The quantity of price later agreements and warehouse17receipts in other dealers' facilities, and outstanding warehouse18receipts and price later agreements.19(c) The total amount of loans against grain inventory.20(d) All other farm produce obligations resulting in the bal-21ance position of farm produce.22(e) If a deficiency concerning price later agreements23exists, the quantity of offsetting purchase commitments shall be24stated on the form.25(4) If a deficiency concerning price later agreements26exists, the grain dealer shall secure offsetting purchase27commitments.02998'01 12 1(5) Periodically, the books, records, and accounts of a2grain dealer shall be examined.3(6) The rules shall be promulgated pursuant to the adminis-4trative procedures act of 1969, Act No. 306 of the Public Acts of51969, being sections 24.201 to 24.328 of the Michigan Compiled6Laws.7(7) The department shall regularly consult with representa-8tives of producers, grain dealers, and their trade associations9to assist in the implementation of this act.10(8) On forms provided by the director, a grain hauler shall11make a record of the specific type of farm produce subject to the12cash sale, the amount of the farm produce, and the date of the13cash sale. The form shall be signed by both the grain hauler and14the seller of the farm produce, and each party shall retain a15signed copy of the form. The grain hauler is required to retain16a copy of the signed form for at least 2 years and is required to17make it available to the department of agriculture upon request.18The form shall include a statement in boldfaced type substan-19tially conforming to the following: "The cash sale with this20grain hauler is not regulated by the Michigan grain dealers act21and the protection provided for a seller of farm produce under22the grain dealers act does not apply to this cash sale.".23 (1) A PERSON SHALL NOT ACT OR OFFER TO ACT AS A GRAIN DEALER 24 IN THIS STATE WITHOUT A LICENSE FROM THE DEPARTMENT ISSUED UNDER 25 THIS ACT. 26 (2) A GRAIN DEALER SHALL NOT PROCESS OR STORE FARM PRODUCE, 27 ISSUE A WAREHOUSE RECEIPT, CHARGE OR COLLECT A FEE FOR STORAGE OF 02998'01 13 1 FARM PRODUCE, ISSUE A PRICE LATER AGREEMENT, OR ISSUE AN 2 ACKNOWLEDGMENT OF RECEIPT FOR DELIVERY OF FARM PRODUCE EXCEPT IN 3 COMPLIANCE WITH THIS ACT. 4 (3) SUBJECT TO SUBSECTION (4), THE DEPARTMENT MAY REFUSE TO 5 ISSUE OR RENEW A LICENSE TO A GRAIN DEALER UNLESS THE GRAIN 6 DEALER MEETS ANY OF THE FOLLOWING AT THE TIME THE GRAIN DEALER 7 SUBMITS THE APPLICATION: 8 (A) HAS ALLOWABLE NET ASSETS OF MORE THAN $1,000,000.00. 9 (B) HAS ALLOWABLE NET ASSETS OF $50,000.00 OR MORE AND HAN- 10 DLED 500,000 OR FEWER BUSHELS OF FARM PRODUCE IN THE GRAIN 11 DEALER'S MOST RECENT FISCAL YEAR. 12 (C) HAS ALLOWABLE NET ASSETS THAT EQUAL OR EXCEED THE PRO- 13 DUCT OF 10 CENTS MULTIPLIED BY THE NUMBER OF BUSHELS OF FARM 14 PRODUCE HANDLED BY THE GRAIN DEALER IN THE GRAIN DEALER'S MOST 15 RECENT COMPLETED FISCAL YEAR. 16 (4) IF A GRAIN DEALER FAILS TO MEET ANY OF THE ALLOWABLE NET 17 ASSET REQUIREMENTS UNDER SUBSECTION (3), THE DEPARTMENT MAY ISSUE 18 OR RENEW THE LICENSE IF THE GRAIN DEALER PROVIDES THE DEPARTMENT 19 WITH A NEGOTIABLE BOND OR TRUST DEPOSIT, ACCEPTABLE TO THE 20 DEPARTMENT AND OF WHICH THE DEPARTMENT IS THE BENEFICIARY, THAT 21 IS IN AN AMOUNT EQUAL TO THE AMOUNT BY WHICH THE GRAIN DEALER'S 22 ALLOWABLE NET ASSETS FAILED TO MEET THE ALLOWABLE NET ASSET 23 REQUIREMENT APPLICABLE UNDER SUBSECTION (3). 24 (5) A PERSON WHO ACTS OR OFFERS TO ACT AS A GRAIN DEALER 25 WITHOUT A LICENSE IS GUILTY OF A MISDEMEANOR. EACH DAY THAT THE 26 PERSON ACTS OR OFFERS TO ACT AS A GRAIN DEALER WITHOUT A LICENSE 27 IS A SEPARATE MISDEMEANOR. 02998'01 14 1 (6) IF THE DIRECTOR HAS PROBABLE CAUSE TO BELIEVE THAT A 2 PERSON IS ACTING OR OFFERING TO ACT AS A GRAIN DEALER WITHOUT A 3 LICENSE, THE DIRECTOR MAY REVIEW THE BOOKS AND RECORDS RELATING 4 TO THE OPERATIONS OF THE PERSON. 5 (7) UPON APPLICATION OF THE DEPARTMENT, A COURT IN THIS 6 STATE SHALL ISSUE A TEMPORARY OR PERMANENT INJUNCTION ENJOINING A 7 PERSON FROM ACTING AS A GRAIN DEALER WITHOUT A LICENSE, ISSUING A 8 WAREHOUSE RECEIPT OR PRICE LATER AGREEMENT WITHOUT A LICENSE, OR 9 INTERFERING WITH AN EMPLOYEE OF THE DEPARTMENT OR A RECEIVER 10 APPOINTED UNDER THIS ACT THAT IS PERFORMING HIS OR HER DUTIES 11 UNDER THIS ACT. 12 Sec. 4.A grain dealer shall not offer storage facilities13for farm produce or accept farm produce for storage; or issue14warehouse receipts thereon; or charge or collect storage charges15therefor; or issue price later agreements; or issue acknowledg-16ments of receipts of delivery of farm produce contrary to this17act.18 (1) THE DEPARTMENT MAY ISSUE, AMEND, OR RENEW A LICENSE IF 19 THE DEPARTMENT DETERMINES THAT THE APPLICANT HAS COMPLIED WITH 20 THIS ACT AND RULES PROMULGATED UNDER THIS ACT. 21 (2) A LICENSEE MAY RECEIVE FARM PRODUCE FOR STORAGE, ASSESS 22 AND COLLECT STORAGE CHARGES ON FARM PRODUCE STORED, ISSUE WARE- 23 HOUSE RECEIPTS ON STORED FARM PRODUCE, ISSUE PRICE LATER AGREE- 24 MENTS, COLLECT HANDLING CHARGES ON PRICE LATER AGREEMENTS, AND 25 ISSUE ACKNOWLEDGMENT FORMS. 26 (3) EXCEPT AS PROVIDED IN SUBSECTION (4), A LICENSE IS 27 ISSUED FOR A TERM OF 1 YEAR. A LICENSE IS NOT TRANSFERABLE BY 02998'01 15 1 THE LICENSEE. A LICENSEE SHALL PROMINENTLY DISPLAY HIS OR HER 2 LICENSE ON THE VEHICLE OF A LICENSEE WHO IS A FARM PRODUCE 3 TRUCKER AT THE PRINCIPAL PLACE OF BUSINESS OF A LICENSEE WHO IS A 4 GRAIN MERCHANDISER OR AT A FACILITY, AS APPLICABLE. 5 (4) THE DEPARTMENT MAY, IN ITS DISCRETION, ISSUE A NEW 6 LICENSE FOR A TERM OF UP TO 21 MONTHS. 7 Sec. 5.(1) A person shall not act or offer to act as a8grain dealer without annually securing a license from the9director. The director shall not issue a license to a grain10dealer unless the grain dealer has allowable net assets of not11less than $20,000.00.12(2) A person shall not act or offer to act as a grain hauler13without being registered as a grain hauler under section 6.14(3) A person acting or offering to act as a grain dealer or15grain hauler without being licensed or registered as required16under this act or without being exempt from licensure or regis-17tration under this act is guilty of a misdemeanor. Each day of18operation in violation of this act is a separate and distinct19misdemeanor.20 (1) THE DEPARTMENT MAY REVOKE A GRAIN DEALER'S LICENSE, BUT 21 THE GRAIN DEALER MAY APPLY FOR A NEW LICENSE, IF ANY OF THE FOL- 22 LOWING EVENTS OCCUR: 23 (A) THE LICENSEE IS A PARTY TO A MERGER, CONSOLIDATION, CON- 24 VERSION, OR SIMILAR TRANSACTION. THE DEPARTMENT MAY DECIDE NOT 25 TO REVOKE THE LICENSE IF THE SUCCESSOR TO THE LICENSEE IS 26 LICENSED UNDER THIS ACT AND EXECUTES A SUCCESSOR'S AGREEMENT 27 ACCEPTABLE TO THE DEPARTMENT. 02998'01 16 1 (B) FIFTY PERCENT OR MORE OF THE SHARES, OTHER THAN PUBLICLY 2 TRADED SHARES, OR OTHER OWNERSHIP INTERESTS IN THE LICENSEE ARE 3 SOLD, EXCHANGED, OR OTHERWISE TRANSFERRED. THE DEPARTMENT MAY 4 DECIDE NOT TO REVOKE THE LICENSE IF THE TRANSFEREE IS LICENSED 5 UNDER THIS ACT AND EXECUTES A SUCCESSOR'S AGREEMENT ACCEPTABLE TO 6 THE DEPARTMENT. 7 (C) FIFTY PERCENT OR MORE OF THE PROPERTY AND ASSETS OF THE 8 LICENSEE ARE SOLD, LEASED, EXCHANGED, OR OTHERWISE TRANSFERRED. 9 THE DEPARTMENT MAY WAIVE THIS REQUIREMENT IF THE TRANSFEREE IS 10 LICENSED UNDER THIS ACT AND EXECUTES A SUCCESSOR'S AGREEMENT 11 ACCEPTABLE TO THE DEPARTMENT. 12 (D) THE LICENSEE CEASES TO PAY ITS DEBTS IN THE ORDINARY 13 COURSE OF BUSINESS, CANNOT PAY ITS DEBTS AS THEY BECOME DUE, OR 14 IS INSOLVENT UNDER AN APPLICABLE BANKRUPTCY OR INSOLVENCY LAW. 15 (E) IF THE GRAIN DEALER HAS 100 OR MORE STOCKHOLDERS, MEM- 16 BERS, PARTNERS, OR OWNERS, AS APPLICABLE, MORE THAN 1/2 OF THE 17 GRAIN DEALER'S BOARD OF DIRECTORS OR OTHER GOVERNING BODY OR 18 BOARD ARE REPLACED WITH DIFFERENT INDIVIDUALS. 19 (F) THE NAME OF THE GRAIN DEALER IS CHANGED. 20 (2) IF AN EVENT DESCRIBED IN SUBSECTION (1) OCCURS, THE 21 GRAIN DEALER SHALL FILE A NOTICE OF THE EVENT WITH THE DEPARTMENT 22 WITHIN 1 BUSINESS DAY OF THE EVENT. 23 Sec. 6.(1) The director shall prepare and, upon accep-24tance of a completed application and payment of the license fee25provided in subsection (2), issue a grain dealer's license to the26applicant. The license shall be of 1 year's duration and is27renewable annually. A grain dealer's license is subject to02998'01 17 1suspension or revocation for cause by the director, shall carry a2serial identification number, is nontransferable, and shall be3prominently displayed on the location or vehicle of the holder of4the license. A separate license is required for each business5location of the grain dealer. If the grain dealer receives farm6produce and later disposes of it without depositing that farm7produce at a licensed business location of the grain dealer, the8grain dealer shall secure a grain dealer's license for each vehi-9cle used in such business transactions. The grain dealer's10license shall grant authority to the holder to do the following11under the rules promulgated by the director under this act:12(a) Receive farm produce for storage if the holder is in13compliance with the bonding or letter of credit requirements14imposed in section 7a.15(b) Assess and collect storage charges on the stored farm16produce.17(c) Issue warehouse receipts on the stored farm produce.18(d) Issue price later agreements.19(e) Issue acknowledgment forms regarding farm produce.20(2) The license fee for a grain dealer's license shall be21based upon the following schedule:22(a) For a facility having a total bushel capacity of:23(i) Not more than 50,000 ...........................$125.0024(ii) More than 50,000, and less than or equal to25100,000 ............................................$150.0026(iii) More than 100,000, and less than or equal to27200,000 ............................................$200.0002998'01 18 1(iv) More than 200,000, and less than or equal to2300,000 ............................................$270.003(v) More than 300,000, and less than or equal to4400,000 ............................................$325.005(vi) More than 400,000, and less than or equal to6500,000 ............................................$375.007(vii) More than 500,000 ............................$400.008(b) For 1 vehicle ..................................$200.009(c) For each additional vehicle ................... $ 50.00.10(3) The director shall prepare and, upon acceptance of a11completed application and payment of the $50.00 registration fee,12issue a grain hauler registration to the applicant. The regis-13tration shall be of 1 year in duration and is renewable14annually. The applicant for a grain hauler registration also15annually shall submit an affidavit stating that farming is the16intended primary occupation and that grain hauling is an inciden-17tal activity. A grain hauler registration is subject to suspen-18sion or revocation for cause by the director, is nontransferable,19and shall be made available for viewing to a grower or producer20upon request.21 (1) IF A GRAIN DEALER HAS APPLIED FOR A LICENSE BUT NEEDS 22 ADDITIONAL TIME TO COMPLY WITH THE REQUIREMENTS OF THIS ACT FOR 23 ISSUANCE OF A LICENSE, THE DEPARTMENT MAY ISSUE 1 TEMPORARY 24 PERMIT TO THE APPLICANT. A PERMIT ISSUED UNDER THIS SECTION 25 EXPIRES ON THE EXPIRATION DATE SET BY THE DEPARTMENT, WHICH MAY 26 NOT BE MORE THAN 30 DAYS AFTER THE PERMIT IS ISSUED, WHEN A 27 LICENSE IS ISSUED, OR WHEN THE APPLICATION FOR LICENSE IS DENIED, 02998'01 19 1 WHICHEVER OCCURS FIRST. THE DEPARTMENT MAY GRANT 1 EXTENSION OF 2 UP TO 30 DAYS OF A PERMIT ISSUED UNDER THIS SECTION. 3 (2) A GRAIN DEALER WHO HAS BEEN GRANTED A PERMIT UNDER THIS 4 SECTION HAS THE SAME RIGHTS AND OBLIGATIONS OF A LICENSEE UNDER 5 THIS ACT. 6 Sec. 7.An application for a grain dealer's license pro-7vided for in section 6 shall be made by the applicant to the8director on forms supplied by the director. Except an applica-9tion of a grower or producer who sells farm produce the grower or10producer actually produces, each application shall be accompanied11by a financial statement prepared in accordance with generally12accepted accounting principles, and sworn as to accuracy by the13owner, principal officer, or a partner of the applicant. The14financial statement shall be prepared by a certified public15accountant or by an accountant who meets the requirements of the16accreditation council for accountancy or its successor organiza-17tion, and shall include, to the extent permitted by the occupa-18tional code, Act No. 299 of the Public Acts of 1980, as amended,19being sections 339.101 to 339.2601 of the Michigan Compiled Laws,20a letter from the preparer to the applicant or producer stating21any qualifications, reservations, or departures determined by the22preparer to be applicable to the financial statement. The direc-23tor shall promulgate rules pursuant to the administrative proce-24dures act of 1969, Act No. 306 of the Public Acts of 1969, as25amended, being sections 24.201 to 24.315 of the Michigan Compiled26Laws, to prescribe the specific contents of the financial27statement required by this section. Each application shall be02998'01 20 1accompanied by the payment of the required license fee, which2shall be returned to the applicant if the application is3rejected. The applicant shall disclose, under oath, pertinent4information relating to the location of each facility where farm5produce is received and storage capacity of each storage facility6for each specific farm produce on which storage is to be offered;7the ownership or control agreement covering each storage facility8of the applicant; the form of warehouse receipt, price later9agreement, and acknowledgment of delivery the applicant desires10to use, and other pertinent information as the director may11require; and agreement by the applicant to comply with this act12and the rules promulgated under this act. The application for13license of the applicant shall be approved or rejected within 1514days after receipt by the director if the application is of15proper form and detail. A rejection of application shall be16accompanied by a statement from the director of the additional17requirements necessary to license, and the applicant may resubmit18application.19 (1) A GRAIN DEALER SHALL FILE AN APPLICATION FOR A NEW 20 LICENSE OR FOR RENEWAL OR AMENDMENT OF A LICENSE WITH THE 21 DEPARTMENT. THE DEPARTMENT MAY DETERMINE THE TIME WHEN AN APPLI- 22 CATION SHALL BE FILED, THE FORM OF THE APPLICATION, AND THE 23 INFORMATION AND DOCUMENTATION THAT THE APPLICANT MUST INCLUDE AS 24 PART OF THE APPLICATION. AT A MINIMUM, A COMPLETE APPLICATION 25 SHALL INCLUDE ALL OF THE FOLLOWING: 26 (A) THE NAME AND OWNERSHIP INTEREST OF EACH OWNER, 27 STOCKHOLDER, MEMBER, OR PARTNER OF THE GRAIN DEALER WHO OWNS AT 02998'01 21 1 LEAST 5% OF THE SHARES, OTHER THAN PUBLICLY TRADED SHARES, OR 2 OTHER OWNERSHIP INTERESTS OF THE GRAIN DEALER, OR FOR A GRAIN 3 DEALER DESCRIBED IN SECTION 9(3), AT LEAST 5% OF THE SHARES, 4 OTHER THAN PUBLICLY TRADED SHARES, OR OTHER OWNERSHIP INTERESTS 5 OF THE PARENT CORPORATION. 6 (B) THE LOCATION AND STORAGE CAPACITY OF EACH FACILITY OF 7 THE GRAIN DEALER. 8 (C) PROOF OF INSURANCE FOR ALL FARM PRODUCE STORED AT EACH 9 FACILITY OF THE GRAIN DEALER. 10 (D) A STATEMENT THAT NONE OF THE EVENTS DESCRIBED IN SECTION 11 10 HAVE OCCURRED WITHIN THE 5 YEARS PRECEDING THE DATE OF THE 12 LICENSE APPLICATION, OR IF ANY OF THOSE EVENTS HAVE OCCURRED, A 13 DESCRIPTION OF THOSE EVENTS. 14 (E) A STATEMENT OF THE TOTAL BUSHELS OF FARM PRODUCE HANDLED 15 BY THE GRAIN DEALER DURING THE GRAIN DEALER'S MOST RECENT COM- 16 PLETED FISCAL YEAR. 17 (F) IF THE GRAIN DEALER'S MOST RECENT COMPLETED FISCAL YEAR 18 WAS FOR A PERIOD OF LESS THAN 12 MONTHS OR THE GRAIN DEALER MATE- 19 RIALLY CHANGED ITS FARM PRODUCE HANDLING PRACTICES IN THAT FISCAL 20 YEAR, A PROJECTION OF THE TOTAL BUSHELS OF FARM PRODUCE THE GRAIN 21 DEALER EXPECTS TO HANDLE IN THE CURRENT FISCAL YEAR. 22 (G) COPIES OF ALL WAREHOUSE RECEIPT FORMS, PRICE LATER 23 AGREEMENT FORMS, AND ACKNOWLEDGMENT FORMS USED BY THE GRAIN 24 DEALER. 25 (H) IF THE GRAIN DEALER DOES NOT MAINTAIN AN OFFICE IN THIS 26 STATE AND DOES NOT HAVE A RESIDENT AGENT IN THIS STATE, THE 27 APPLICATION SHALL INCLUDE A WRITTEN APPOINTMENT OF A STATUTORY 02998'01 22 1 AGENT UPON WHOM PROCESS, NOTICE, OR DEMAND MAY BE SERVED. THE 2 STATUTORY AGENT SHALL BE AN INDIVIDUAL RESIDING IN THIS STATE OR 3 A CORPORATION WHOSE PRINCIPAL PLACE OF BUSINESS IS LOCATED IN 4 THIS STATE. IF THE IDENTITY OR ADDRESS OF THE STATUTORY AGENT 5 CHANGES WHILE THE APPLICATION IS PENDING OR AFTER A LICENSE IS 6 ISSUED, THE GRAIN DEALER SHALL WITHIN 3 DAYS FILE WITH THE 7 DEPARTMENT A WRITTEN APPOINTMENT OF THE NEW STATUTORY AGENT OR 8 WRITTEN NOTICE OF THE NEW ADDRESS, AS APPLICABLE. 9 (2) THE DEPARTMENT SHALL ISSUE OR DENY A LICENSE WITHIN 30 10 DAYS AFTER RECEIPT OF THE COMPLETED APPLICATION UNDER THIS SEC- 11 TION, LICENSE FEE DESCRIBED IN SECTION 8, AND FINANCIAL STATEMENT 12 DESCRIBED IN SECTION 9. 13 (3) FOR A LICENSE RENEWAL, THE LICENSEE SHALL SUBMIT THE 14 APPLICATION, LICENSE FEE, AND FINANCIAL STATEMENT TO THE DEPART- 15 MENT AT LEAST 30 DAYS BEFORE THE EXPIRATION OF THE CURRENT 16 LICENSE TERM. 17 (4) IF AN APPLICATION IS WITHDRAWN BEFORE A LICENSE OR 18 RENEWAL IS APPROVED, THE DEPARTMENT SHALL RETAIN $50.00 FOR PRO- 19 CESSING AND RETURN THE REMAINDER OF THE LICENSE FEE TO THE GRAIN 20 DEALER. 21 (5) BY SUBMITTING AN APPLICATION, A GRAIN DEALER CONSENTS TO 22 INSPECTION AND AUDITING OF ITS FARM PRODUCE AND FINANCIAL RECORDS 23 AND ITS OPERATIONS BY THE DEPARTMENT. THE GRAIN DEALER SHALL 24 MAKE THE RECORDS AVAILABLE TO THE DEPARTMENT IN THIS STATE IF THE 25 DEPARTMENT MAKES A REQUEST TO INSPECT OR AUDIT THE RECORDS. 26 Sec. 8.Acceptance of farm produce for storage by a grain27dealer for which a warehouse receipt is issued shall be a02998'01 23 1bailment and not a sale, and farm produce so stored shall not be2liable to seizure upon process of a court in an action against3the bailee, except upon action by owners of the warehouse4receipts to enforce the terms thereof, but the farm produce shall5at all times, in the event of the failure or insolvency of the6bailee, be first applied exclusively to the redemption of out-7standing storage receipts for farm produce so stored with the8bailee, and in that event, farm produce on hand in a particular9warehouse of the bailee shall be first applied to the redemption10and satisfaction of the warehouse receipts issued by that grain11dealer as the bailee.12 (1) A GRAIN DEALER SHALL PAY A LICENSE FEE TO THE DEPARTMENT 13 WITH AN APPLICATION FOR A LICENSE OR RENEWAL OF A LICENSE. THE 14 LICENSE FEE IS THE SUM OF ALL OF THE FOLLOWING THAT APPLY TO THE 15 GRAIN DEALER: 16 (A) FOR EACH FACILITY OF THE GRAIN DEALER THAT HAS TOTAL 17 BUSHEL CAPACITY OF: 18 (i) 100,000 OR LESS..................................$150.00 19 (ii) MORE THAN 100,000 AND 200,000 OR LESS...........$225.00 20 (iii) MORE THAN 200,000 AND 300,000 OR LESS..........$300.00 21 (iv) MORE THAN 300,000 AND 400,000 OR LESS...........$375.00 22 (v) MORE THAN 400,000................................$450.00 23 (B) FOR VEHICLES OWNED BY A FARM PRODUCE TRUCKER: 24 (i) FOR 1 VEHICLE....................................$200.00 25 (ii) FOR EACH ADDITIONAL VEHICLE.....................$100.00 26 (C) FOR A GRAIN MERCHANDISER'S LICENSE...............$450.00 02998'01 24 1 (2) THE GRAIN DEALERS FEES FUND IS CREATED IN THE STATE 2 TREASURY. THE DEPARTMENT SHALL DEPOSIT LICENSE FEES AND 3 ADMINISTRATIVE FINES RECEIVED UNDER THIS ACT IN THE GRAIN DEALERS 4 FEES FUND, TO BE USED PURSUANT TO LEGISLATIVE APPROPRIATION BY 5 THE DIRECTOR IN CARRYING OUT THOSE DUTIES REQUIRED BY LAW. AFTER 6 THE PAYMENT OF THE AMOUNTS APPROPRIATED BY THE LEGISLATURE FOR 7 THE NECESSARY EXPENSES INCURRED IN THE ADMINISTRATION OF THIS 8 ACT, THE MONEY REMAINING IN THE GRAIN DEALERS FEES FUND SHALL NOT 9 REVERT OR BE CREDITED TO THE GENERAL FUND AT THE CLOSE OF THE 10 FISCAL YEAR BUT SHALL REMAIN IN THE GRAIN DEALERS FEES FUND. 11 (3) A LICENSE FEE DETERMINED PURSUANT TO SUBSECTION (1) IS 12 THE FEE FOR A 1-YEAR LICENSE. IF THE DEPARTMENT HAS ISSUED A 13 LICENSE FOR A PERIOD OF LONGER THAN 1 YEAR UNDER SECTION 4(3), IT 14 SHALL REQUIRE A LICENSE FEE INCREASED ON A PROPORTIONATE BASIS TO 15 REFLECT THE LONGER TERM OF THE LICENSE. 16 (4) EVERY 3 YEARS, THE DEPARTMENT MAY ADJUST THE FEE SCHED- 17 ULE IN SUBSECTION (1) BY AN AMOUNT DETERMINED BY THE STATE TREA- 18 SURER TO REFLECT THE CUMULATIVE ANNUAL PERCENTAGE CHANGE IN THE 19 DETROIT CONSUMER PRICE INDEX OVER THE 3-YEAR PERIOD. AN ADJUST- 20 MENT UNDER THIS SUBSECTION SHALL NOT EXCEED 5% EVEN IF THE AMOUNT 21 DETERMINED BY THE STATE TREASURER TO REFLECT THE CUMULATIVE 22 ANNUAL PERCENTAGE CHANGE OVER THE 3-YEAR PERIOD IS MORE THAN 5%. 23 A FEE ADJUSTED UNDER THIS SUBSECTION SHALL BE ROUNDED TO THE 24 NEAREST WHOLE DOLLAR. AS USED IN THIS SUBSECTION, "DETROIT CON- 25 SUMER PRICE INDEX" MEANS THE MOST COMPREHENSIVE INDEX OF CONSUMER 26 PRICES AVAILABLE FOR THE DETROIT AREA FROM THE BUREAU OF LABOR 27 STATISTICS OF THE UNITED STATES DEPARTMENT OF LABOR. 02998'01 25 1 Sec. 9.(1) Upon delivery of farm produce for storage by a2person to a grain dealer licensed under this act, the grain3dealer within 30 days after delivery shall deliver to the owner4of the farm produce stored a warehouse receipt of a form approved5by the director which shall embody within its written or printed6terms:7(a) The location of the warehouse where the farm produce is8stored.9(b) The statement whether the farm produce will be delivered10to the bearer, to a specified person, or to a specified person or11his or her order.12(c) The date of issuance of the receipt.13(d) The rate of storage charges or the basis for the14charges.15(e) The net weight and percentage of dockage together with16the grade established.17(f) The words "not negotiable", "nonnegotiable", or18"negotiable", according to the nature of the receipt, clearly and19conspicuously printed or stamped on the receipt.20(g) The signature of the grain dealer, which may be made by21his or her authorized agent.22(h) A declaration of the ownership of the farm produce,23whether wholly or jointly or in common with others.24(i) A statement of the amounts of advances made or liability25incurred for which the grain dealer claims a lien, or instead of26a lien a statement that advances have been made or liabilities02998'01 26 1incurred and the purpose of the advances or liabilities is2sufficient.3(j) A statement as to whether the farm produce stored is to4be stored separately or commingled as fungible goods. A grain5dealer shall be liable under the provisions of Act No. 303 of6the Public Acts of 1909, as amended, being sections 443.50 to7443.55 of the Michigan Compiled Laws, to a person injured, for8all damages caused by omission from a warehouse receipt of any of9the terms required by this act for the negotiable or nonnegotia-10ble receipt as issued.11(2) An exact copy of each warehouse receipt shall be avail-12able for examination in the dealer's facility of issuance for 213years after cancellation or expiration. All warehouse receipts14shall be serially numbered and issued in numerical sequence. All15voided forms shall be held as if used.16 (1) A GRAIN DEALER SHALL INCLUDE WITH AN APPLICATION FOR A 17 LICENSE OR RENEWAL A FINANCIAL STATEMENT FOR THE GRAIN DEALER'S 18 MOST RECENT COMPLETED FISCAL YEAR. THE FINANCIAL STATEMENT SHALL 19 BE A REVIEWED OR AUDITED FINANCIAL STATEMENT, PREPARED BY A CER- 20 TIFIED PUBLIC ACCOUNTANT IN ACCORDANCE WITH GENERALLY ACCEPTED 21 ACCOUNTING PRINCIPLES. THE END OF THE GRAIN DEALER'S MOST RECENT 22 COMPLETED FISCAL YEAR SHALL BE WITHIN 6 MONTHS OF THE EXPIRATION 23 DATE OF THE GRAIN DEALER'S CURRENT LICENSE. THE FINANCIAL STATE- 24 MENT SHALL INCLUDE AT LEAST ALL OF THE FOLLOWING: 25 (A) AN ACCOUNTANT'S REPORT, A BALANCE SHEET, AN INCOME 26 STATEMENT, AND NOTES AND DISCLOSURES. 02998'01 27 1 (B) A STATEMENT OF THE GRAIN DEALER'S ALLOWABLE NET ASSETS 2 FOR PURPOSES OF SECTION 3. 3 (2) IF A FINANCIAL STATEMENT DESCRIBED IN SUBSECTION (1) 4 DISCLOSES THAT THE GRAIN DEALER DURING THE PRECEDING FISCAL YEAR 5 HAD A CURRENT ASSET TO CURRENT LIABILITY RATIO OF LESS THAN 1 TO 6 1, THE LICENSEE SHALL INCLUDE WITH THE APPLICATION A PLAN TO 7 INCREASE THE CURRENT ASSET TO CURRENT LIABILITY RATIO TO 1 TO 1 8 OR MORE. 9 (3) IF A FINANCIAL STATEMENT DESCRIBED IN SUBSECTION (1) IS 10 A FINANCIAL STATEMENT OF THE LICENSEE'S PARENT CORPORATION OR A 11 CONSOLIDATED FINANCIAL STATEMENT OF THE LICENSEE AND ITS PARENT 12 CORPORATION, THE APPLICATION SHALL INCLUDE A DECLARATION OF 13 LIABILITY SIGNED BY AN AUTHORIZED REPRESENTATIVE OF THE PARENT 14 CORPORATION, BY WHICH THE PARENT CORPORATION ASSUMES ALL FINAN- 15 CIAL OBLIGATIONS INCURRED BY THE LICENSEE DURING THE TERM OF THE 16 LICENSE. 17 Sec. 10.Failure of a grain dealer to issue a warehouse18certificate of a form approved by the director to a person stor-19ing any farm produce with him, or the use of subterfuge by a20grain dealer to avoid the issuance of a warehouse certificate for21farm produce which is in fact stored with him, shall be suffi-22cient cause for revocation of license of the grain dealer.AFTER 23 A HEARING CONDUCTED IN ACCORDANCE WITH THE ADMINISTRATIVE PROCE- 24 DURES ACT OF 1969, 1969 PA 306, MCL 24.201 TO 24.328, THE DEPART- 25 MENT MAY REVOKE OR REFUSE TO ISSUE OR RENEW A LICENSE, OR REQUIRE 26 A FIDELITY BOND IN AN AMOUNT AND ON TERMS DETERMINED BY THE 02998'01 28 1 DEPARTMENT, IF ANY OF THE FOLLOWING OCCURRED WITHIN THE 5 YEARS 2 PRECEDING THE DATE OF THE LICENSE APPLICATION: 3 (A) THE APPLICANT, A MANAGER EMPLOYED BY THE APPLICANT, OR 4 ANY OTHER INDIVIDUAL WITH MANAGEMENT RESPONSIBILITIES FOR THE 5 FARM PRODUCE HANDLING BUSINESS OF THE APPLICANT WAS A PRINCIPAL 6 IN A GRAIN DEALER RECEIVERSHIP OR INSOLVENCY PROCEEDING THAT 7 RESULTED IN LOSSES TO CREDITORS OR DEPOSITORS. 8 (B) THE APPLICANT, A MANAGER EMPLOYED BY THE APPLICANT, OR 9 ANY OTHER INDIVIDUAL WITH MANAGEMENT RESPONSIBILITIES FOR THE 10 FARM PRODUCE HANDLING BUSINESS OF THE APPLICANT PLED GUILTY OR 11 WAS CONVICTED OF ANY FELONY INVOLVING FRAUD, CONVERSION, OR 12 EMBEZZLEMENT. 13 (C) THE APPLICANT'S LICENSE UNDER THE UNITED STATES WARE- 14 HOUSE ACT, 39 STAT. 486, 7 U.S.C. 241 TO 273, WAS REVOKED OR 15 CANCELED DUE TO A VIOLATION OF THAT ACT. 16 Sec. 11.A form of acknowledgment of receipt of farm17produce, issued by a grain dealer for farm produce delivered to18the grain dealer, that does not contain the essential terms of a19warehouse receipt as required by section 9, as approved by the20director shall have prominently printed on the face of the form21the words "Not a storage warehouse receipt".22 (1) A GRAIN DEALER WHO USES A TEMPORARY FACILITY SHALL 23 REPORT TO THE DEPARTMENT ON THE DAILY POSITION REPORT REQUIRED 24 UNDER SECTION 15 THE ADDRESS AND BUSHEL CAPACITY OF THE TEMPORARY 25 FACILITY FOR ANY PERIOD THAT THE TEMPORARY FACILITY IS IN USE. 26 THE GRAIN DEALER SHALL PROVIDE THE DEPARTMENT WITH A COPY OF THE 02998'01 29 1 LEASE AGREEMENT AND BIN CHARTS, IF ANY, FOR THE TEMPORARY 2 FACILITY IF THE GRAIN DEALER HAS NOT PREVIOUSLY PROVIDED THEM. 3 (2) A GRAIN DEALER USING A TEMPORARY FACILITY SHALL PAY AN 4 ADDITIONAL LICENSE FEE, CALCULATED UNDER SECTION 8, BASED ON THE 5 BUSHEL CAPACITY OF THE TEMPORARY FACILITY. THE GRAIN DEALER 6 SHALL PAY THE ADDITIONAL LICENSE FEE TO THE DEPARTMENT WITH THE 7 POSITION REPORT FOR THE FIRST MONTH THE GRAIN DEALER USES THE 8 TEMPORARY FACILITY. 9 Sec. 12.A grain dealer shall at all times keep all farm10produce stored by him insured in some reliable insurance company11authorized to do business in Michigan, against loss by fire,12inherent explosion, and tornado, to the extent of its full market13value, and failure to so do shall be sufficient cause for revoca-14tion of license. The average market value of farm produce so15stored as evidenced by the warehouse receipt or price later16agreement as held by any owner on the date of destruction by any17of the insurable causes shall be the basis of settlement in case18of loss.19 (1) A LICENSEE SHALL MAINTAIN ON FILE WITH THE DEPARTMENT A 20 CURRENT CERTIFICATE OF INSURANCE EVIDENCING AN EFFECTIVE POLICY 21 OF INSURANCE ISSUED BY AN INSURANCE COMPANY AUTHORIZED TO DO 22 BUSINESS IN THIS STATE. THE POLICY SHALL INSURE IN THE NAME OF 23 THE GRAIN DEALER ALL FARM PRODUCE IN THE FACILITIES OF THE GRAIN 24 DEALER FOR THE FULL MARKET VALUE OF THE FARM PRODUCE AGAINST LOSS 25 BY FIRE, EXPLOSION, LIGHTNING, AND WINDSTORM. IN ADDITION TO ANY 26 OTHER REMEDY AVAILABLE UNDER THIS ACT, THE DEPARTMENT MAY DENY, 27 REVOKE, OR SUSPEND A LICENSE FOR A VIOLATION OF THIS SUBSECTION. 02998'01 30 1 (2) IF FIRE, EXPLOSION, LIGHTNING, OR WINDSTORM DESTROYS OR 2 DAMAGES ANY FARM PRODUCE IN A FACILITY OPERATED BY A LICENSEE, 3 AND THE DEPOSITOR OF THE FARM PRODUCE DEMANDS REIMBURSEMENT AND 4 PROVIDES THE LICENSEE WITH A WAREHOUSE RECEIPT OR OTHER EVIDENCE 5 OF OWNERSHIP OF THE FARM PRODUCE, THE LICENSEE SHALL REIMBURSE 6 THE DEPOSITOR OF THE FARM PRODUCE FOR THE MARKET PRICE OF THE 7 FARM PRODUCE MINUS ANY CHARGES OR ADVANCES TO THE DEPOSITOR. AS 8 USED IN THIS SUBSECTION, "MARKET PRICE" MEANS THE AVERAGE PRICE 9 PAID FOR FARM PRODUCE OF THE SAME TYPE, GRADE, AND QUALITY ON THE 10 DATE OF THE LOSS AT THE LOCATION OF THE FACILITY. 11 (3) A GRAIN DEALER SHALL REIMBURSE ALL DEPOSITORS WHOSE FARM 12 PRODUCE IS DESTROYED OR DAMAGED BY FIRE, EXPLOSION, LIGHTNING, OR 13 WINDSTORM, WITHIN 10 DAYS AFTER THE LICENSEE RECEIVES PAYMENT 14 FROM AN INSURER UNDER A POLICY DESCRIBED IN SUBSECTION (1). IN 15 ADDITION TO ANY OTHER REMEDY AVAILABLE UNDER THIS ACT, THE 16 DEPARTMENT MAY DENY, REVOKE, OR SUSPEND A LICENSE FOR A VIOLATION 17 OF THIS SUBSECTION. 18 (4) IF THE DEPARTMENT DETERMINES THAT A LICENSEE'S INSURANCE 19 IS INSUFFICIENT, EVEN IF THE INSURANCE WAS PREVIOUSLY ACCEPTABLE 20 TO THE DEPARTMENT, THE DEPARTMENT SHALL REQUIRE THAT THE LICENSEE 21 OBTAIN ADDITIONAL INSURANCE THAT CONFORMS TO THE REQUIREMENTS OF 22 THIS ACT. 23 (5) AN INSURANCE COMPANY MAY NOT CANCEL OR NONRENEW INSUR- 24 ANCE REQUIRED BY THIS ACT, INCLUDING INSURANCE PROVIDED BY 25 BINDER, UNLESS IT SENDS A NOTICE OF INTENT TO CANCEL OR NONRENEW 26 TO THE DEPARTMENT BY CERTIFIED OR REGISTERED MAIL MORE THAN 15 02998'01 31 1 DAYS BEFORE THE CANCELLATION OR NONRENEWAL OF THE INSURANCE IS 2 EFFECTIVE. 3 Sec. 13.If authorized by agreement or custom, grain deal-4ers may commingle fungible farm produce with other farm produce5of like kind and grade. In such case, the various depositors of6the mingled goods shall own the entire mass in common, and each7depositor shall be entitled to the portion as the amount depos-8ited by him bears to the whole, and the grain dealer shall be9liable, severally, to each depositor for the care and redelivery10of his share of the mass to the same extent and under the same11circumstances as if the goods had been kept separate. A grain12dealer may dispose of only that quantity of a part of a fungible13mass of farm produce that is in excess of the amount covered by14outstanding warehouse receipts issued by him.15 (1) THE DIRECTOR MAY REQUIRE THAT A GRAIN DEALER MAKE ITS 16 BOOKS AND RECORDS AVAILABLE FOR AUDIT OR INSPECTION IF NECESSARY 17 TO ADMINISTER THIS ACT. 18 (2) EXCEPT AS PROVIDED IN SUBSECTION (3), FINANCIAL INFORMA- 19 TION AND DAILY POSITION REPORT INFORMATION SUBMITTED TO THE 20 DEPARTMENT BY AN APPLICANT OR LICENSEE FOR PURPOSES OF THIS ACT 21 ARE CONFIDENTIAL AND ARE NOT SUBJECT TO THE DISCLOSURE REQUIRE- 22 MENTS OF THE FREEDOM OF INFORMATION ACT, 1976 PA 442, MCL 15.231 23 TO 15.246, EXCEPT THAT DISCLOSURE OF FINANCIAL INFORMATION OR 24 DAILY POSITION REPORT INFORMATION MAY BE MADE IN ANY OF THE FOL- 25 LOWING CIRCUMSTANCES: 26 (A) WITH THE WRITTEN CONSENT OF THE APPLICANT OR LICENSEE. 02998'01 32 1 (B) PURSUANT TO A COURT PROCEEDING. 2 (C) THE DISCLOSURE IS MADE TO AN AGENT OR EMPLOYEE OF THE 3 DEPARTMENT. 4 (D) THE DISCLOSURE IS MADE TO AN AGENT OR EMPLOYEE OF A 5 STATE OR THE FEDERAL GOVERNMENT AUTHORIZED BY LAW TO SEE OR 6 REVIEW THE INFORMATION. 7 (3) THE DEPARTMENT MAY DISCLOSE INFORMATION DESCRIBED IN 8 SUBSECTION (2) IN THE FORM OF AN INFORMATION SUMMARY OR PROFILE, 9 OR AS PART OF A STATISTICAL STUDY THAT INCLUDES DATA ON MORE THAN 10 1 GRAIN DEALER THAT DOES NOT IDENTIFY THE GRAIN DEALER TO WHOM 11 ANY SPECIFIC INFORMATION APPLIES. 12 Sec. 14.The grades of farm produce as stated upon any13warehouse receipt or price later agreement issued by a grain14dealer shall conform to the official grade standards as estab-15lished by the state department of agriculture, if those grades16have been or are established, and in the absence of official17state grades, shall conform to the official United States grade18standards as established by the bureau of agricultural economics19of the United States department of agriculture, for the specific20farm produce specified in the warehouse receipt as issued.21 (1) UPON REQUEST, THE DEPARTMENT SHALL PROVIDE TO EACH GRAIN 22 DEALER A CURRENT COPY OF THIS ACT, ANY RULES PROMULGATED UNDER 23 THIS ACT, AND ANY AMENDMENTS TO THE ACT OR RULES. 24 (2) A LICENSEE MAY COMMINGLE A DEPOSITOR'S FARM PRODUCE WITH 25 OTHER FUNGIBLE FARM PRODUCE, UNLESS THE LICENSEE AND DEPOSITOR 26 HAVE EXECUTED A WRITTEN AGREEMENT THAT REQUIRES THE LICENSEE TO 27 KEEP THE DEPOSITOR'S FARM PRODUCE SEPARATE FROM OTHER FARM 02998'01 33 1 PRODUCE AND AVAILABLE FOR IDENTIFICATION AND DELIVERY TO OR AS 2 DIRECTED BY THE DEPOSITOR. 3 (3) A LICENSEE THAT ELECTS TO LIMIT THE TYPES OF FARM 4 PRODUCE TRANSACTIONS IT OFFERS SHALL POST A LIST OF THE TYPES OF 5 FARM PRODUCE TRANSACTIONS IT OFFERS AT A READILY VISIBLE LOCATION 6 IN EACH OFFICE OR AT EACH SCALE OF THE LICENSEE. 7 (4) IF A WAREHOUSE RECEIPT OR ACKNOWLEDGMENT FORM ISSUED 8 UNDER THIS ACT IS OUTSTANDING BY THE GRAIN DEALER WHO ISSUED IT, 9 THE GRAIN DEALER SHALL NOT ISSUE ANOTHER WAREHOUSE RECEIPT OR 10 ACKNOWLEDGMENT FORM FOR ALL OR ANY PART OF THAT FARM PRODUCE 11 EXCEPT AS PROVIDED IN THIS SUBSECTION. IF A WAREHOUSE RECEIPT OR 12 ACKNOWLEDGMENT FORM IS LOST, STOLEN, OR DESTROYED, THE HOLDER OF 13 THE WAREHOUSE RECEIPT OR ACKNOWLEDGMENT FORM IS ENTITLED TO A 14 SUBSTITUTE WAREHOUSE RECEIPT OR ACKNOWLEDGMENT FORM. A SUBSTI- 15 TUTE WAREHOUSE RECEIPT OR ACKNOWLEDGMENT FORM ISSUED UNDER THIS 16 SUBSECTION HAS THE SAME LEGAL EFFECT AS THE ORIGINAL WAREHOUSE 17 RECEIPT OR ACKNOWLEDGMENT FORM. A SUBSTITUTE WAREHOUSE RECEIPT 18 OR ACKNOWLEDGMENT FORM SHALL STATE THE NUMBER AND DATE OF THE 19 ORIGINAL WAREHOUSE RECEIPT OR ACKNOWLEDGMENT FORM; SHALL CONTAIN 20 A NOTARIZED STATEMENT BY THE HOLDER THAT THE ORIGINAL WAS LOST, 21 STOLEN, OR DESTROYED; AND SHALL CONTAIN A NOTARIZED STATEMENT OF 22 THE HOLDER AND GRAIN DEALER THAT THE SUBSTITUTE WAREHOUSE RECEIPT 23 OR ACKNOWLEDGMENT FORM IS ISSUED TO REPLACE THE ORIGINAL WARE- 24 HOUSE RECEIPT OR ACKNOWLEDGMENT FORM. IF THE LOST, STOLEN, OR 25 DESTROYED INSTRUMENT IS A NEGOTIABLE WAREHOUSE RECEIPT, THE 26 HOLDER SHALL PROVIDE THE GRAIN DEALER WITH A LOST INSTRUMENT BOND 27 IN AN AMOUNT EQUAL TO 2 TIMES THE CURRENT MARKET VALUE OF THE 02998'01 34 1 FARM PRODUCE COVERED BY THAT WAREHOUSE RECEIPT, IN A FORM 2 PRESCRIBED BY THE DEPARTMENT FROM A SURETY AUTHORIZED TO CONDUCT 3 BUSINESS IN THIS STATE. 4 (5) A GRAIN DEALER SHALL EXERCISE DUE CARE AS THE CUSTODIAN 5 OF THE FARM PRODUCE IN HIS OR HER CUSTODY. 6 (6) IF A DEPOSITOR FAILS TO REMOVE OR SELL FARM PRODUCE IN 7 ACCORDANCE WITH THE WRITTEN TERMS OF THE DEPOSITOR'S AGREEMENT 8 WITH THE LICENSEE, THE LICENSEE MAY SELL THE FARM PRODUCE IN 9 ACCORDANCE WITH THE WRITTEN TERMS OF THE DEPOSITOR'S AGREEMENT. 10 (7) A GRAIN DEALER MAY NOT BORROW MONEY OR HOLD AN OUTSTAND- 11 ING LOAN BALANCE SECURED BY FARM PRODUCE INVENTORY IN AN AMOUNT 12 GREATER THAN THE NET POSITIVE ACCUMULATED DOLLAR VALUE OF FARM 13 PRODUCE, AS REPORTED ON ITS DAILY POSITION REPORT, AT ANY POINT 14 IN TIME. 15 Sec. 15.A grain dealer shall not accept for storage farm16produce in excess of his licensed storage capacity, under penalty17of revocation of his license, except to the extent the grain18dealer has and maintains in effect unencumbered bona fide con-19tracts with other licensed grain dealers for storage facilities20sufficient to maintain, and does so maintain in storage suffi-21cient quantities of each farm produce of the proper grade to at22all times satisfy all outstanding warehouse receipts issued by23him, and failure to do so shall be sufficient cause for revoca-24tion of license. The director shall revoke the license of a25grain dealer upon evidence of his failure to comply with this26section of this act.02998'01 35 1 (1) A GRAIN DEALER SHALL KEEP A COMPLETE AND ACCURATE DAILY 2 POSITION REPORT. THE GRAIN DEALER SHALL SUBMIT THE DAILY 3 POSITION REPORT FOR THE LAST BUSINESS DAY OF THE PRECEDING FISCAL 4 MONTH TO THE DEPARTMENT DURING THE FIRST 10 BUSINESS DAYS OF THE 5 GRAIN DEALER'S FISCAL MONTH. 6 (2) A DAILY POSITION REPORT SHALL INCLUDE ALL OF THE FOLLOW- 7 ING INFORMATION ABOUT THE GRAIN DEALER'S OPERATIONS, AS OF THE 8 LAST BUSINESS DAY OF THE PRECEDING FISCAL MONTH, IN A FORM 9 APPROVED BY THE DIRECTOR: 10 (A) THE QUANTITY OF EACH TYPE OF FARM PRODUCE IN INVENTORY. 11 (B) THE QUANTITY OF FARM PRODUCE COVERED BY OUTSTANDING 12 WAREHOUSE RECEIPTS, OPEN STORAGE, AND PRICE LATER AGREEMENTS, 13 INCLUDING PRICE LATER AGREEMENTS AND WAREHOUSE RECEIPTS FOR FARM 14 PRODUCE IN OTHER GRAIN DEALERS' FACILITIES. 15 (C) THE QUANTITY OF FARM PRODUCE COVERED BY COLLATERAL WARE- 16 HOUSE RECEIPTS. 17 (D) THE TOTAL DOLLAR AMOUNTS OF LOANS AGAINST GRAIN 18 INVENTORY. 19 (E) A DESCRIPTION AND QUANTITY OF ANY OTHER FARM PRODUCE 20 OBLIGATIONS RESULTING IN THE GRAIN DEALER'S BALANCE POSITION OF 21 FARM PRODUCE. 22 (F) IF A DEFICIENCY CONCERNING PRICE LATER AGREEMENTS 23 EXISTS, THE QUANTITY OF OFFSETTING PURCHASE COMMITMENTS. 24 (3) IF THE DEPARTMENT DETERMINES THAT THERE IS A DEFICIENCY 25 IN ANY WAREHOUSE RECEIPT POSITION, THE DEPARTMENT SHALL NOTIFY 26 THE GRAIN DEALER AND REQUIRE THAT THE GRAIN DEALER COVER THE 27 SHORTAGE OR FURNISH BOND OR SECURITY IN AN AMOUNT AND ON TERMS 02998'01 36 1 REQUIRED BY THE DEPARTMENT. IF THE GRAIN DEALER FAILS TO COMPLY, 2 THE DEPARTMENT MAY SEIZE GRAIN ASSETS FOR THE BENEFIT OF 3 CLAIMANTS. 4 (4) IF A NET DEFICIENCY CONCERNING PRICE LATER AGREEMENTS 5 EXISTS, BASED UPON DAILY BID PRICES, THE GRAIN DEALER SHALL COVER 6 THE DEFICIENCY BY PLACING IN AN ESCROW ACCOUNT CASH, CASH EQUIVA- 7 LENTS, OR MARKETABLE SECURITIES EQUAL TO 80% OF THE DEFICIENCY 8 AND OFFSETTING PURCHASE COMMITMENTS EQUAL TO 20% OF THE 9 DEFICIENCY. THE GRAIN DEALER SHALL FILE A COPY OF THE ESCROW 10 AGREEMENT WITH THE DEPARTMENT. THE ESCROW AGREEMENT SHALL 11 REQUIRE THAT THE ESCROW INSTITUTION SUBMIT A MONTHLY STATEMENT 12 FOR THE ESCROW ACCOUNT TO THE DEPARTMENT. 13 (5) A VIOLATION OF THIS SECTION BY A GRAIN DEALER MAY RESULT 14 IN A FINE OR SUSPENSION OR REVOCATION OF THE GRAIN DEALER'S 15 LICENSE UNDER SECTION 22. IF THE VIOLATION IS THE INTENTIONAL 16 FILING OF A FALSE DAILY POSITION REPORT, THE VIOLATION IS A 17 FELONY AND IN ADDITION TO LICENSE REVOCATION, THE GRAIN DEALER 18 MAY BE SUBJECT TO A FINE OR IMPRISONMENT, OR BOTH, FOR EACH 19 VIOLATION. 20 Sec. 16.A grain dealer under license shall designate to21the director the personnel authorized by the grain dealer to22accept farm produce for storage and issue warehouse receipts23therefor, or who shall be responsible in any manner for the grain24dealer's compliance with this act. A grain dealer shall promptly25notify the director of any changes made in the personnel as26designated. The director, in his discretion, may require02998'01 37 1fidelity bonds of a grain dealer for the personnel so designated,2and to stipulate the form and amount of the bonds.3 (1) A LICENSEE SHALL KEEP A COMPLETE AND ACCURATE SET OF 4 RECORDS AND ACCOUNTS OF ALL TRANSACTIONS PERTAINING TO THE OPERA- 5 TION OF EACH FACILITY, INCLUDING, BUT NOT LIMITED TO, RECORDS AND 6 ACCOUNTS OF ALL FARM PRODUCE RECEIVED IN OR WITHDRAWN FROM A 7 FACILITY, OF ALL UNISSUED WAREHOUSE RECEIPTS AND ACKNOWLEDGMENT 8 FORMS IN THE GRAIN DEALER'S POSSESSION, AND OF ALL ISSUED WARE- 9 HOUSE RECEIPTS AND ACKNOWLEDGMENT FORMS, COPIES OF ALL CONTRACTS, 10 AND ANY WAREHOUSE RECEIPTS AND ACKNOWLEDGMENT FORMS RETURNED TO 11 AND SETTLED BY THE LICENSEE. A GRAIN DEALER SHALL RETAIN A COPY 12 OF A WAREHOUSE RECEIPT, ACKNOWLEDGMENT FORM, OR OTHER DOCUMENT 13 EVIDENCING OWNERSHIP OF ANY FARM PRODUCE OR LIABILITY AS A GRAIN 14 DEALER FOR AT LEAST THE PERIOD THAT THE DOCUMENT IS OUTSTANDING, 15 AND IF THE DOCUMENT HAS BEEN CANCELED, FOR A PERIOD OF NOT LESS 16 THAN 3 YEARS FROM THE DATE OF CANCELLATION. A GRAIN DEALER SHALL 17 RETAIN ANY OTHER RECORDS AND THE ACCOUNTS FOR AT LEAST 7 YEARS. 18 (2) A LICENSEE SHALL KEEP ITS RECORDS AND ACCOUNTS CONCERN- 19 ING ITS FARM PRODUCE HANDLING BUSINESS SEPARATE AND DISTINCT FROM 20 THE RECORDS AND ACCOUNTS OF ANY OTHER BUSINESS CONDUCTED BY THE 21 LICENSEE. 22 (3) THE DEPARTMENT MAY EXAMINE THE RECORDS AND ACCOUNTS PER- 23 TAINING TO THE GRAIN DEALER'S FARM PRODUCE HANDLING BUSINESS AT 24 ANY TIME DURING NORMAL BUSINESS HOURS. 25 (4) A GRAIN DEALER SHALL NOT INTENTIONALLY MAINTAIN FALSE OR 26 MISLEADING BOOKS AND RECORDS. A VIOLATION OF THIS SUBSECTION IS 27 A FELONY. 02998'01 38 1 SEC. 17. (1) IF A GRAIN DEALER INTENDS TO DISCONTINUE HIS 2 OR HER FARM PRODUCE HANDLING BUSINESS AT OR BEFORE THE EXPIRATION 3 OF HIS OR HER LICENSE, AT LEAST 30 DAYS BEFORE THE DATE THE GRAIN 4 DEALER INTENDS TO DISCONTINUE THE BUSINESS, THE GRAIN DEALER 5 SHALL BY REGISTERED OR CERTIFIED MAIL PROVIDE NOTICE OF INTENT TO 6 DISCONTINUE BUSINESS TO THE DIRECTOR, EACH PERSON STORING FARM 7 PRODUCE IN A FACILITY OF THE GRAIN DEALER, AND EACH KNOWN HOLDER 8 OF A WAREHOUSE RECEIPT, ACKNOWLEDGMENT FORM, OR OPEN STORAGE OR 9 PRICE LATER AGREEMENT ISSUED BY THE GRAIN DEALER. IF THE HOLDER 10 OF A WAREHOUSE RECEIPT, ACKNOWLEDGMENT FORM, OR OPEN STORAGE OR 11 PRICE LATER AGREEMENT IS NOT KNOWN, THE GRAIN DEALER SHALL PUB- 12 LISH THE NOTICE IN A NEWSPAPER OF GENERAL CIRCULATION IN EACH 13 COUNTY IN WHICH A FACILITY IS LOCATED. 14 (2) IF A GRAIN DEALER HAS PROVIDED OR PUBLISHED A NOTICE OF 15 INTENT TO DISCONTINUE BUSINESS UNDER SUBSECTION (1) AND THE 16 DEPARTMENT DETERMINES THAT THERE IS SUFFICIENT FARM PRODUCE TO 17 COVER WAREHOUSE RECEIPTS AND OPEN STORAGE ARRANGEMENTS, A DEPOSI- 18 TOR OF FARM PRODUCE UNDER A WAREHOUSE RECEIPT OR OPEN STORAGE 19 ARRANGEMENT IN A FACILITY OF THE GRAIN DEALER MAY REMOVE OR 20 DIRECT THE REMOVAL OF THE FARM PRODUCE FROM THE FACILITY BEFORE 21 THE EXPIRATION OF THE 30-DAY PERIOD DESCRIBED IN SUBSECTION (1). 22 (3) WITHIN 14 DAYS OF DISCONTINUING HIS OR HER FARM PRODUCE 23 HANDLING BUSINESS, THE GRAIN DEALER SHALL FILE A LIST OF ALL FARM 24 PRODUCE LIABILITIES ASSUMED BY A PURCHASER OF THE BUSINESS, OR 25 ANY PERSON OTHER THAN THE LICENSEE, WITH THE DEPARTMENT. 26 Sec. 18.(1) The director may revoke, suspend, or deny the27license of a grain dealer or the registration of a grain hauler02998'01 39 1after notification of an alleged violation and providing an2opportunity for public hearing on those violations to the grain3dealer or grain hauler pursuant to the administrative procedures4act of 1969, Act No. 306 of the Public Acts of 1969, being5sections 24.201 to 24.328 of the Michigan Compiled Laws.6(2) Within 15 days after the conclusion of the hearing, the7department shall render a decision as to suspension, revocation,8or denial of the license of the grain dealer or the registration9of a grain hauler.10 (1) A GRAIN DEALER SHALL ACKNOWLEDGE RECEIPT OF FARM PRODUCE 11 BY ISSUING AN ACKNOWLEDGMENT FORM TO THE DEPOSITOR. THE DEPOSI- 12 TOR OR HIS OR HER AUTHORIZED AGENT MUST SIGN THE ACKNOWLEDGMENT 13 FORM IF IT WILL BE USED AS A PRICE LATER AGREEMENT, AND THE 14 DEPOSITOR AND GRAIN DEALER ARE NOT PARTIES TO A PRIOR WRITTEN 15 AGREEMENT GOVERNING TITLE AND DELIVERY OF THE FARM PRODUCE. THE 16 GRAIN DEALER SHALL PROVIDE A COPY OF THE ACKNOWLEDGMENT FORM TO 17 THE DEPOSITOR AT THE TIME THE FARM PRODUCE IS DELIVERED TO THE 18 GRAIN DEALER. 19 (2) AN ACKNOWLEDGMENT FORM MUST CONTAIN ALL OF THE 20 FOLLOWING: 21 (A) THE NAME AND ADDRESS OF THE GRAIN DEALER. 22 (B) THE DATE OF TRANSFER, WEIGHT, AND TYPE OF FARM PRODUCE 23 DEPOSITED. 24 (C) A STATEMENT THAT UNLESS THE PARTIES AGREE TO ANOTHER 25 DISPOSITION WITHIN 30 DAYS OF THE DELIVERY TO THE GRAIN DEALER, 26 THE FARM PRODUCE TRANSACTION IS A PRICE LATER AGREEMENT 27 TRANSACTION. 02998'01 40 1 (3) A GRAIN DEALER SHALL POST AT EACH FACILITY A NOTICE THAT 2 STATES THAT THE GRAIN DEALER RESERVES THE RIGHT TO TERMINATE 3 STORAGE, PROCESSING, SHIPPING, AND HANDLING ARRANGEMENTS AND COL- 4 LECT OUTSTANDING CHARGES IF THE GRAIN DEALER'S LICENSE IS SUS- 5 PENDED OR REVOKED. 6 (4) FARM PRODUCE DELIVERED TO A GRAIN DEALER IS IN OPEN 7 STORAGE, AND THE RESPONSIBILITIES OF THE GRAIN DEALER AND DEPOSI- 8 TOR UNDER AN ACKNOWLEDGMENT FORM ARE THE SAME AS IF A NONNEGOTIA- 9 BLE WAREHOUSE RECEIPT HAD BEEN ISSUED FOR THE FARM PRODUCE, 10 UNLESS 1 OF THE FOLLOWING OCCURS: 11 (A) THE ACKNOWLEDGMENT FORM SATISFIES THE REQUIREMENTS 12 APPLICABLE TO A PRICE LATER AGREEMENT AND IS SIGNED BY THE DEPOS- 13 ITOR AND GRAIN DEALER. 14 (B) THE FARM PRODUCE IS SOLD FOR A SET PRICE AT THE TIME OF 15 DELIVERY TO THE GRAIN DEALER AT THE CURRENT MARKET PRICE OR A 16 DISPOSITION OCCURS. 17 (5) IF A DEPOSITOR OBTAINS FARM PRODUCE FROM A LOCATION 18 OTHER THAN THE FACILITY OF A GRAIN DEALER AND THE FARM PRODUCE IS 19 NOT BEING DELIVERED TO A FACILITY OF THE GRAIN DEALER, THE GRAIN 20 DEALER SHALL ISSUE A TEMPORARY ACKNOWLEDGMENT FORM IDENTIFYING 21 THE ESTIMATED QUANTITY, TYPE OF FARM PRODUCE, GRAIN DEALER'S NAME 22 AND ADDRESS, AND THE NAME OF THE DRIVER OF THE TRANSPORTING 23 VEHICLE. 24 (6) A GRAIN DEALER SHALL RECORD THE DISPOSITION OF THE FARM 25 PRODUCE ON THE ACKNOWLEDGMENT FORM UNLESS HE OR SHE PROVIDES 26 OTHER SETTLEMENT DOCUMENTATION REFERENCING THE ACKNOWLEDGMENT 27 FORM. 02998'01 41 1 (7) IF A DEPOSITOR DEPOSITS FARM PRODUCE AT A FACILITY IN 2 THE NAME OF ANOTHER GRAIN DEALER, THE GRAIN DEALER IN WHOSE NAME 3 THE FARM PRODUCE IS DEPOSITED SHALL ISSUE THE ACKNOWLEDGMENT FORM 4 FOR THE FARM PRODUCE. 5 (8) IF A GRAIN DEALER'S LICENSE IS REVOKED OR TERMINATED, 6 THE GRAIN DEALER SHALL DELIVER ALL UNUSED ACKNOWLEDGMENT FORMS TO 7 THE DEPARTMENT. 8 Sec. 19.For the protection of holders of warehouse9receipts or price later agreements of a grain dealer during a10proceeding of suspension or revocation of license, the director11may act as their agent, and shall seize and protect in the name12of the state of Michigan by any legal, civil, or criminal proce-13dure necessary, the assets of the grain dealer involved for the14account of the holders of his outstanding warehouse receipts and15price later agreements. Upon revocation of a grain dealer's16license, the director may liquidate, for the account of the hold-17ers of the warehouse receipts and price later agreements, the18grain dealer's assets and provide for an equitable distribution19of those assets among the holders of warehouse receipts and price20later agreements to the extent of their value, if possible, and21provide for the return to the grain dealer of any remaining22assets.A LICENSEE RECEIVING FARM PRODUCE FOR STORAGE SHALL 23 WEIGH AND INSPECT THE FARM PRODUCE. 24 Sec. 20.The director shall establish and maintain a ware-25house inspection service and personnel adequate for the enforce-26ment of this act. The fees collected under this act shall be02998'01 42 1turned over to the state treasury and shall be credited to the2general fund.3 (1) IF THE LICENSEE AND DEPOSITOR AGREE, A LICENSEE SHALL 4 ISSUE A WAREHOUSE RECEIPT FOR ANY FARM PRODUCE RECEIVED FROM A 5 DEPOSITOR FOR STORAGE. 6 (2) IF A GRAIN DEALER ISSUES A WAREHOUSE RECEIPT FOR A 7 DEPOSIT, THE WAREHOUSE RECEIPT MUST BE ON A FORM APPROVED BY THE 8 DEPARTMENT THAT INCLUDES SPACES FOR INSERTING ALL OF THE FOLLOW- 9 ING INFORMATION AND STATEMENTS, AS APPLICABLE: 10 (A) THE LOCATION OF THE FACILITY. 11 (B) THE DATE THE WAREHOUSE RECEIPT IS ISSUED. 12 (C) THE GRAIN DEALER'S STORAGE RATE AND THE CALCULATION OF 13 THE DEPOSITOR'S STORAGE CHARGE. 14 (D) THE NET WEIGHT AND GRADE FACTORS OF THE FARM PRODUCE. 15 (E) WHETHER THE WAREHOUSE RECEIPT IS NEGOTIABLE OR NONNEGO- 16 TIABLE, WHICH SHALL BE CONSPICUOUSLY PRINTED ON THE FORM. 17 (F) THE SIGNATURE OF THE GRAIN DEALER OR HIS OR HER AUTHO- 18 RIZED AGENT. A GRAIN DEALER SHALL NOT ALLOW ANY OTHER PERSON TO 19 SIGN OR ISSUE A WAREHOUSE RECEIPT. 20 (G) AN EXPIRATION DATE. AT THE EXPIRATION DATE, THE GRAIN 21 DEALER AND HOLDER SHALL RENEGOTIATE THE TERMS OF STORAGE OR 22 SETTLE AT MARKET PRICE. 23 (H) A STATEMENT OF THE AMOUNT OF ADVANCES MADE OR LIABILITY 24 INCURRED FOR WHICH THE GRAIN DEALER CLAIMS A LIEN. IF THE EXACT 25 AMOUNT OF ADVANCES MADE OR LIABILITIES INCURRED AT THE TIME OF 26 ISSUANCE OF THE WAREHOUSE RECEIPT IS UNKNOWN TO THE GRAIN DEALER, 02998'01 43 1 THE WAREHOUSE RECEIPT SHALL INCLUDE A STATEMENT OF THE FACT THAT 2 ADVANCES HAVE BEEN MADE OR LIABILITIES INCURRED. 3 (I) A STATEMENT THAT THE WAREHOUSE RECEIPT IS ISSUED SUBJECT 4 TO THIS ACT AND RULES PROMULGATED UNDER THIS ACT. 5 (3) THE HOLDER OF A NEGOTIABLE WAREHOUSE RECEIPT HAS LEGAL 6 TITLE TO FARM PRODUCE HELD UNDER THE WAREHOUSE RECEIPT. 7 (4) A GRAIN DEALER SHALL SEQUENTIALLY NUMBER ITS WAREHOUSE 8 RECEIPTS AND ISSUE THEM IN NUMERICAL SEQUENCE AND RETAIN ANY 9 VOIDED WAREHOUSE RECEIPTS. 10 (5) IF A GRAIN DEALER'S LICENSE IS REVOKED OR TERMINATED, 11 THE GRAIN DEALER SHALL DELIVER ALL UNUSED WAREHOUSE RECEIPTS TO 12 THE DEPARTMENT. 13 (6) A PERSON SHALL NOT DO ANY OF THE FOLLOWING: 14 (A) ISSUE A WAREHOUSE RECEIPT FOR FARM PRODUCE EXCEPT ON A 15 FORM APPROVED BY THE DIRECTOR UNDER THIS SECTION. 16 (B) FALSELY MAKE, ALTER, FORGE, OR COUNTERFEIT A WAREHOUSE 17 RECEIPT. 18 (C) KNOWINGLY DEPOSIT FARM PRODUCE UNDER A WAREHOUSE RECEIPT 19 WITHOUT DISCLOSING ANY LIEN OR LACK OF TITLE. 20 (7) IF A GRAIN DEALER DELIVERS FROM STORAGE A PORTION OF THE 21 FARM PRODUCE FOR WHICH HE OR SHE HAS ISSUED A NEGOTIABLE WARE- 22 HOUSE RECEIPT, THE GRAIN DEALER SHALL CANCEL THE ORIGINAL WARE- 23 HOUSE RECEIPT AND ISSUE A NEW WAREHOUSE RECEIPT FOR THE REMAINDER 24 OF THE FARM PRODUCE STILL IN STORAGE. THE NEW WAREHOUSE RECEIPT 25 SHALL CONTAIN THE NUMBER AND DATE OF THE ORIGINAL WAREHOUSE 26 RECEIPT IN ADDITION TO MEETING THE OTHER REQUIREMENTS OF THIS 27 SECTION. 02998'01 44 1 (8) A WAREHOUSE RECEIPT ISSUED FOR FARM PRODUCE IDENTIFIED 2 AND STORED SEPARATELY SHALL DESCRIBE THE STORAGE LOCATION OF THE 3 FARM PRODUCE. 4 (9) A LICENSEE MAY ISSUE A COLLATERAL WAREHOUSE RECEIPT ONLY 5 AGAINST FARM PRODUCE OWNED BY THE LICENSEE AT THE TIME OF 6 ISSUANCE. 7 (10) A GRAIN DEALER SHALL PLACE FARM PRODUCE HELD IN A GRAIN 8 BANK OR FEED BANK ON A WAREHOUSE RECEIPT. 9 Sec. 21.(1) A grain hauler who fails or neglects to10present a seller of farm produce with the completed record form11described in section 3(8) or who fails to pay for any type of12farm produce by cash or check at the time of delivery is guilty13of a misdemeanor punishable by a fine of not less than $2,000.0014and not more than $5,000.00 or imprisonment for not more than 9015days, or both.16(2) The court shall order restitution from a person con-17victed under this section.18 (1) IF THERE IS NO OTHER DISPOSITION, A LICENSEE AND DEPOSI- 19 TOR SHALL EXECUTE A PRICE LATER AGREEMENT WITHIN 30 DAYS AFTER 20 THE DELIVERY OF FARM PRODUCE TO THE GRAIN DEALER UNDER THE 21 AGREEMENT. 22 (2) TITLE OF FARM PRODUCE SUBJECT TO A PRICE LATER AGREEMENT 23 IS TRANSFERRED TO THE GRAIN DEALER AT THE TIME THE PRICE LATER 24 AGREEMENT IS EXECUTED. 25 (3) A GRAIN DEALER SHALL MAINTAIN A FILE OF NONCANCELED 26 PRICE LATER AGREEMENTS THAT IS AVAILABLE FOR INSPECTION DURING 27 NORMAL BUSINESS HOURS BY THE DEPARTMENT. THE GRAIN DEALER SHALL 02998'01 45 1 INCLUDE IN THE RECORDS AN ACCOUNT OF ANY INFORMATION REQUIRED BY 2 THE DIRECTOR TO DOCUMENT THE GRAIN DEALER'S OBLIGATION TO A 3 DEPOSITOR UNDER A PRICE LATER AGREEMENT. THE GRAIN DEALER SHALL 4 PROVIDE THE DEPARTMENT WITH ANY REPORTS, FORMS, OR OTHER INFORMA- 5 TION REQUIRED BY RULE BY THE DIRECTOR CONCERNING THE GRAIN 6 DEALER'S HANDLING AND MARKETING OF FARM PRODUCE UNDER PRICE LATER 7 AGREEMENTS. 8 (4) A GRAIN DEALER SHALL NOT INCLUDE A CHARGE FOR STORAGE IN 9 ANY TRANSACTION THAT INCLUDES A PRICE LATER AGREEMENT. 10 (5) THE FORM AND CONTENT OF A PRICE LATER AGREEMENT SHALL BE 11 APPROVED BY THE DEPARTMENT. EACH PRICE LATER AGREEMENT MUST CON- 12 TAIN BLANK LINES OR SPACES FOR INSERTING ALL OF THE FOLLOWING 13 INFORMATION, STATEMENTS, AND PROVISIONS, AS APPLICABLE: 14 (A) THE DATE OF RECEIPT OF THE FARM PRODUCE. 15 (B) THE GRAIN DEALER'S HANDLING CHARGE RATES AND THE CALCU- 16 LATION OF THE DEPOSITOR'S CHARGES. 17 (C) THE NET WEIGHT, TYPE, AND GRADE FACTORS OF THE FARM 18 PRODUCE. 19 (D) THE SIGNATURE OF THE GRAIN DEALER OR HIS OR HER AUTHO- 20 RIZED AGENT. 21 (E) THE NAME AND ADDRESS OF THE DEPOSITOR. 22 (F) THE SIGNATURE OF THE DEPOSITOR OR, IF SIGNED BY AN 23 AUTHORIZED AGENT OF THE DEPOSITOR, THE NAME AND SIGNATURE OF THE 24 DEPOSITOR'S AUTHORIZED AGENT. 25 (G) AN EXPIRATION DATE. 26 (H) A STATEMENT THAT THE PRICE LATER AGREEMENT IS ISSUED 27 SUBJECT TO THIS ACT AND RULES PROMULGATED UNDER THIS ACT. 02998'01 46 1 (6) A PERSON SHALL NOT KNOWINGLY DEPOSIT FARM PRODUCE UNDER 2 A PRICE LATER AGREEMENT WITHOUT DISCLOSING ANY LIEN ON OR LACK OF 3 TITLE TO THE FARM PRODUCE. 4 (7) A PRICE LATER AGREEMENT SHALL NOT BE CONVERTED TO A 5 WAREHOUSE RECEIPT. 6 (8) AT THE EXPIRATION DATE OF A PRICE LATER AGREEMENT, A 7 GRAIN DEALER SHALL RENEGOTIATE OR SETTLE AT MARKET PRICE. 8 Sec. 22.A person who wilfully alters or destroys any9warehouse receipt or price later agreement, or record of ware-10house receipts or price later agreements required by this act, or11issues a warehouse receipt or price later agreement without pre-12serving a record; or intentionally falsifies a position sheet; or13issues a warehouse receipt when the commodity or commodities enu-14merated in the warehouse receipt are not in fact in the building15or buildings it is certified they are in, or, with intent to16defraud, issues a second or other receipt or agreement for any17commodity for which, or for any part of which, a former valid18receipt or agreement is outstanding and in force; or while any19valid receipt is outstanding and in force, sells, pledges, mort-20gages, or encumbers, or transfers contrary to this act or permits21the same to be done without the written consent of the holder of22the receipt, or, a person who receives the property or helps to23dispose of the property, is guilty of a felony and shall be pun-24ished by a fine of not more than $10,000.00 or by imprisonment25for not more than 5 years, or both.02998'01 47 1 (1) THE DIRECTOR SHALL ADMINISTER AND ENFORCE THIS ACT. IN 2 ADDITION TO ANY OTHER POWERS CONFERRED BY THIS ACT, THE DIRECTOR 3 MAY DO ANY OF THE FOLLOWING: 4 (A) AUDIT AND INVESTIGATE THE RECEIVING, STORING, PROCESS- 5 ING, BUYING, SELLING, AND HANDLING OF FARM PRODUCE AND ANY COM- 6 PLAINTS CONCERNING THE RECEIVING, STORING, PROCESSING, BUYING, 7 SELLING, AND HANDLING OF FARM PRODUCE. 8 (B) INSPECT ANY FACILITY, THE COMMODITIES IN THE FACILITY, 9 AND ANY PROPERTY AND RECORDS PERTAINING TO THE FACILITY. 10 (C) REQUIRE A GRAIN DEALER TO TERMINATE RECEIVING, STORING, 11 PROCESSING, BUYING, SELLING, OR OTHER FARM PRODUCE HANDLING UPON 12 REVOCATION, SUSPENSION, OR SUMMARY SUSPENSION OF HIS OR HER 13 LICENSE. 14 (D) ADMINISTER OATHS AND ISSUE SUBPOENAS TO COMPEL THE 15 ATTENDANCE AND TESTIMONY OF WITNESSES AND THE PRODUCTION OF 16 RECORDS IN CONNECTION WITH ANY INVESTIGATION OR HEARING UNDER 17 THIS ACT. 18 (E) PRESCRIBE AND APPROVE ALL FORMS, WITHIN THE LIMITATIONS 19 SET FORTH IN THIS ACT, INCLUDING THE FORMS OF WAREHOUSE RECEIPTS, 20 ACKNOWLEDGMENT FORMS, AND APPLICATIONS FOR LICENSES. 21 (F) EMPLOY INVESTIGATORY PERSONNEL, INCLUDING, BUT NOT 22 LIMITED TO, A CERTIFIED PUBLIC ACCOUNTANT OR AN INDIVIDUAL WITH 23 ACCOUNTING BACKGROUND AND SPECIALIZED INVESTIGATIVE TRAINING AND 24 EXPERIENCE. 25 (2) THE DEPARTMENT MAY PROMULGATE RULES PURSUANT TO THE 26 ADMINISTRATIVE PROCEDURES ACT OF 1969, 1969 PA 306, MCL 24.201 TO 27 24.328, TO IMPLEMENT AND ADMINISTER THIS ACT. 02998'01 48 1 (3) THE DIRECTOR MAY REVOKE OR SUSPEND THE LICENSE OF A 2 GRAIN DEALER OR DENY A LICENSE TO A GRAIN DEALER IF THE DIRECTOR 3 FINDS THAT THE LICENSEE HAS DONE ANY OF THE FOLLOWING: 4 (A) ENGAGED IN FRAUDULENT OR DECEPTIVE PRACTICES. 5 (B) VIOLATED OR ATTEMPTED TO VIOLATE THIS ACT OR RULES 6 PROMULGATED UNDER THIS ACT. 7 (C) FAILED TO MAINTAIN INSURANCE COVERAGE REQUIRED BY THIS 8 ACT. 9 (D) FAILED TO MAINTAIN ACCURATE AND COMPLETE RECORDS AS 10 REQUIRED BY THIS ACT. 11 (E) FAILED TO PAY A FEE REQUIRED BY THIS ACT. 12 (F) REFUSED TO ALLOW ANY AUTHORIZED REPRESENTATIVE OF THE 13 DEPARTMENT TO EXAMINE THE APPLICANT'S OR LICENSEE'S ACCOUNTING 14 RECORDS, ACCOUNTS, FARM PRODUCE INVENTORIES, OR FACILITIES DURING 15 REGULAR BUSINESS HOURS. 16 (G) FAILED TO POSSESS SUFFICIENT FARM PRODUCE TO COVER THE 17 OUTSTANDING WAREHOUSE RECEIPTS OR ACKNOWLEDGMENT FORMS ISSUED OR 18 ASSUMED BY THE APPLICANT OR LICENSEE. 19 (H) ISSUED A WAREHOUSE RECEIPT IN VIOLATION OF THIS ACT OR 20 ANY RULES ADOPTED UNDER THIS ACT. 21 (I) FAILED TO MAINTAIN THE NET ALLOWABLE ASSETS REQUIRED BY 22 THIS ACT. 23 (J) FAILED TO SUBMIT A FINANCIAL STATEMENT IN COMPLIANCE 24 WITH THIS ACT. 25 (K) FAILED TO SECURE HIS OR HER OBLIGATIONS FOR PRICE LATER 26 AGREEMENTS. 02998'01 49 1 (4) IN A PROCEEDING TO SUSPEND OR REVOKE A LICENSE PURSUANT 2 TO SUBSECTION (3), THE DIRECTOR SHALL COMPLY WITH THE 3 ADMINISTRATIVE PROCEDURES ACT OF 1969, 1969 PA 306, MCL 24.201 TO 4 24.328. THE DIRECTOR MAY ORDER A SUMMARY SUSPENSION OF A LICENSE 5 PURSUANT TO SECTION 92(2) OF THE ADMINISTRATIVE PROCEDURES ACT OF 6 1969, 1969 PA 306, MCL 24.292. 7 (5) THE DIRECTOR SHALL POST A NOTICE ON THE PROPERTY OF A 8 GRAIN DEALER WHOSE LICENSE HAS BEEN RESTRICTED, SUSPENDED, OR 9 REVOKED THAT STATES THE LIMITATIONS OR RESTRICTIONS IMPOSED ON 10 THE GRAIN DEALER. THE NOTICE SHALL NOT BE REMOVED FROM THE PROP- 11 ERTY WITHOUT WRITTEN AUTHORIZATION FROM THE DIRECTOR. 12 (6) IF A GRAIN DEALER'S LICENSE IS SUSPENDED OR REVOKED, THE 13 GRAIN DEALER MAY TERMINATE STORAGE, PROCESSING, SHIPPING, OR HAN- 14 DLING ARRANGEMENTS AND COLLECT OUTSTANDING CHARGES. 15 (7) IF A GRAIN DEALER'S LICENSE IS SUSPENDED OR REVOKED, THE 16 DIRECTOR SHALL NOTIFY ALL KNOWN WAREHOUSE RECEIPT HOLDERS AND 17 UNPAID DEPOSITORS OF THE GRAIN DEALER. 18 (8) IF THE DIRECTOR REVOKES A LICENSE UNDER THIS SECTION OR 19 A LICENSE EXPIRES, THE GRAIN DEALER SHALL TERMINATE ALL ARRANGE- 20 MENTS FOR FARM PRODUCE HANDLING IN ANY FACILITY OF THE GRAIN 21 DEALER COVERED BY THE LICENSE IN THE MANNER PRESCRIBED BY THE 22 DIRECTOR. UNDER THE DIRECTION OR SUPERVISION OF THE DIRECTOR, 23 THE GRAIN DEALER MAY LIQUIDATE FARM PRODUCE PREVIOUSLY RECEIVED 24 BY THE GRAIN DEALER. 25 (9) IF THE DIRECTOR SUSPENDS A GRAIN DEALER'S LICENSE UNDER 26 THIS ACT, THE GRAIN DEALER MAY UNDER DIRECTION OR SUPERVISION OF 27 THE DIRECTOR OPERATE THE GRAIN DEALER'S FACILITIES, BUT SHALL NOT 02998'01 50 1 RECEIVE ANY FARM PRODUCE FOR HANDLING DURING THE TERM OF THE 2 SUSPENSION. 3 (10) DURING A LICENSE SUSPENSION OR REVOCATION PROCEEDING, 4 ON BEHALF OF THIS STATE AND FOR THE PROTECTION OF HOLDERS OF 5 WAREHOUSE RECEIPTS OR OPEN STORAGE OR PRICE LATER AGREEMENTS OF 6 THE LICENSEE, THE DIRECTOR MAY SEIZE AND PROTECT THE ASSETS OF 7 THE LICENSEE BY ANY LEGAL, CIVIL, OR CRIMINAL PROCEEDINGS 8 NECESSARY. IF THE GRAIN DEALER'S LICENSE IS REVOKED, THE DIREC- 9 TOR MAY LIQUIDATE THE GRAIN DEALER'S WAREHOUSE RECEIPTS, OPEN 10 STORAGE AND PRICE LATER AGREEMENTS, AND OTHER ASSETS. THE DIREC- 11 TOR SHALL DISTRIBUTE THE PROCEEDS, FIRST TO THE HOLDERS OF WARE- 12 HOUSE RECEIPTS AND OPEN STORAGE AGREEMENTS, THEN TO THE SECURED 13 HOLDERS OF PRICE LATER AGREEMENTS, AND THEN TO ALL REMAINING 14 HOLDERS OF PRICE LATER AGREEMENTS. THE DIRECTOR SHALL RETURN ANY 15 REMAINING PROCEEDS TO THE GRAIN DEALER. 16 SEC. 23. (1) UNLESS OTHERWISE PROVIDED IN THIS ACT, A 17 PERSON WHO VIOLATES THIS ACT IS GUILTY OF A MISDEMEANOR AND IS 18 ALSO LIABLE FOR ALL DAMAGES SUSTAINED BY A DEPOSITOR FOR FARM 19 PRODUCE HANDLED IN VIOLATION OF THIS ACT. IN AN ENFORCEMENT 20 ACTION, A COURT MAY ORDER RESTITUTION TO A PARTY INJURED BY THE 21 HANDLING OF FARM PRODUCE IN VIOLATION OF THIS ACT IN ADDITION TO 22 ANY OTHER PENALTY PROVIDED BY LAW. 23 (2) A GRAIN DEALER WHO VIOLATES THIS ACT OR A RULE PROMUL- 24 GATED UNDER THIS ACT IS GUILTY OF A MISDEMEANOR AND SHALL BE 25 FINED NOT MORE THAN $5,000.00 FOR EACH OFFENSE. 26 (3) A GRAIN DEALER WHO INTENTIONALLY VIOLATES THIS ACT OR A 27 RULE PROMULGATED UNDER THIS ACT IS GUILTY OF A MISDEMEANOR AND 02998'01 51 1 SHALL BE FINED NOT MORE THAN $10,000.00 FOR EACH OFFENSE. THE 2 COURT MAY ALLOW THE DEPARTMENT TO RECOVER REASONABLE COSTS OF 3 INVESTIGATION INCURRED IN A PROSECUTION RESULTING IN A CONVICTION 4 FOR A VIOLATION DESCRIBED IN THIS SUBSECTION. 5 (4) A PERSON WHO DOES ANY OF THE FOLLOWING IS GUILTY OF A 6 FELONY PUNISHABLE BY A FINE OF NOT MORE THAN $20,000.00 OR BY 7 IMPRISONMENT FOR NOT MORE THAN 5 YEARS, OR BOTH: 8 (A) INTENTIONALLY ALTERS OR DESTROYS A WAREHOUSE RECEIPT OR 9 PRICE LATER AGREEMENT OR A RECORD OF WAREHOUSE RECEIPTS OR PRICE 10 LATER AGREEMENTS REQUIRED BY THIS ACT. 11 (B) INTENTIONALLY FALSIFIES A POSITION SHEET, OR ISSUES A 12 WAREHOUSE RECEIPT IF THE FARM PRODUCE OR COMMODITIES ENUMERATED 13 IN THE WAREHOUSE RECEIPT IS NOT IN FACT IN THE FACILITY STATED IN 14 THE WAREHOUSE RECEIPT. 15 (C) WITH INTENT TO DEFRAUD, ISSUES A SECOND OR OTHER WARE- 16 HOUSE RECEIPT OR AGREEMENT FOR FARM PRODUCE IF A VALID WAREHOUSE 17 RECEIPT OR AGREEMENT IS OUTSTANDING AND IN FORCE FOR THE FARM 18 PRODUCE. 19 (D) WHILE A VALID WAREHOUSE RECEIPT IS OUTSTANDING AND IN 20 FORCE AND WITHOUT THE CONSENT OF THE HOLDER OF THE WAREHOUSE 21 RECEIPT, SELLS, PLEDGES, MORTGAGES, ENCUMBERS, OR TRANSFERS FARM 22 PRODUCE IN VIOLATION OF THIS ACT OR PERMITS THE SALE, PLEDGE, 23 MORTGAGE, ENCUMBRANCE, OR TRANSFER OF FARM PRODUCE IN VIOLATION 24 OF THIS ACT. 25 (E) KNOWINGLY RECEIVES FARM PRODUCE FROM A PERSON IN VIOLA- 26 TION OF SUBDIVISION (D). 02998'01 52 1 SEC. 24. (1) IN ADDITION TO ANY OTHER PENALTY PROVIDED BY 2 LAW, A PERSON WHO INDIVIDUALLY, OR BY THE ACTION OF HIS OR HER 3 AGENT OR EMPLOYEE, OR AS THE EMPLOYEE OR AGENT OF ANOTHER, VIO- 4 LATES THIS ACT OR A RULE PROMULGATED UNDER THIS ACT IS SUBJECT TO 5 1 OF THE FOLLOWING ADMINISTRATIVE FINES: 6 (A) FOR A FIRST VIOLATION, A FINE OF NOT LESS THAN $50.00 OR 7 MORE THAN $1,000.00, PLUS ACTUAL COSTS OF THE INVESTIGATION AND 8 THE AMOUNT OF ANY ECONOMIC BENEFIT ASSOCIATED WITH THE 9 VIOLATION. 10 (B) FOR A SECOND VIOLATION WITHIN 2 YEARS FROM THE DATE OF 11 THE FIRST VIOLATION, A FINE OF NOT LESS THAN $100.00 OR MORE THAN 12 $5,000.00, PLUS ACTUAL COSTS OF THE INVESTIGATION AND THE AMOUNT 13 OF ANY ECONOMIC BENEFIT ASSOCIATED WITH THE VIOLATION. 14 (C) FOR A THIRD VIOLATION WITHIN 2 YEARS FROM THE DATE OF 15 THE FIRST VIOLATION, A FINE OF NOT LESS THAN $500.00 OR MORE THAN 16 $10,000.00, PLUS ACTUAL COSTS OF THE INVESTIGATION AND THE AMOUNT 17 OF ANY ECONOMIC BENEFIT ASSOCIATED WITH THE VIOLATION. 18 (2) UPON THE REQUEST OF A PERSON TO WHOM THE DIRECTOR HAS 19 ASSESSED AN ADMINISTRATIVE FINE UNDER SUBSECTION (1), THE DIREC- 20 TOR SHALL CONDUCT A HEARING PURSUANT TO THE ADMINISTRATIVE PROCE- 21 DURES ACT OF 1969, 1969 PA 306, MCL 24.201 TO 24.328. 22 (3) IF THE DIRECTOR FINDS THAT A VIOLATION OF THIS ACT HAS 23 OCCURRED DESPITE THE EXERCISE OF DUE CARE, THE DIRECTOR MAY ISSUE 24 A WARNING INSTEAD OF IMPOSING AN ADMINISTRATIVE FINE UNDER SUB- 25 SECTION (1). 26 (4) THE DIRECTOR MAY ADVISE THE ATTORNEY GENERAL OF THE 27 FAILURE OF A PERSON TO PAY AN ADMINISTRATIVE FINE IMPOSED UNDER 02998'01 53 1 SUBSECTION (1), AND THE ATTORNEY GENERAL MAY BRING AN ACTION IN A 2 COURT OF COMPETENT JURISDICTION TO RECOVER THE FINE. 3 (5) THE DIRECTOR MAY REVOKE THE LICENSE OF A LICENSEE WHO 4 DOES NOT PAY AN ADMINISTRATIVE FINE IMPOSED UNDER SUBSECTION 5 (1). 6 (6) AN ADMINISTRATIVE FINE, COSTS, AND THE RECOVERY OF ANY 7 ECONOMIC BENEFIT ASSOCIATED WITH A VIOLATION COLLECTED BY THE 8 DEPARTMENT UNDER THIS SECTION SHALL BE RETAINED BY THE DEPARTMENT 9 AND USED PURSUANT TO LEGISLATIVE APPROPRIATION FOR THE ADMINIS- 10 TRATION OF THIS ACT. 11 SEC. 25. (1) THE DIRECTOR MAY BRING AN ACTION TO ENJOIN THE 12 VIOLATION OR THREATENED VIOLATION OF THIS ACT OR A RULE PROMUL- 13 GATED UNDER THIS ACT IN A STATE COURT IN THE COUNTY IN WHICH THE 14 VIOLATION OCCURS OR IS THREATENED TO OCCUR OR IN INGHAM COUNTY. 15 (2) THE PENALTIES PROVIDED FOR A VIOLATION OF THIS ACT DO 16 NOT APPLY TO A PUBLIC OFFICIAL OF THIS STATE OR THE FEDERAL GOV- 17 ERNMENT ENGAGED IN THE PERFORMANCE OF HIS OR HER OFFICIAL DUTIES 18 IN ADMINISTERING THE LAWS, RULES, OR REGULATIONS OF THIS STATE OR 19 THE FEDERAL GOVERNMENT. 20 (3) ENACTMENT OF THIS AMENDATORY ACT DOES NOT TERMINATE OR 21 IN ANY WAY MODIFY ANY CIVIL OR CRIMINAL LIABILITY UNDER THIS ACT 22 IN EXISTENCE ON OR BEFORE THE EFFECTIVE DATE OF THE AMENDATORY 23 ACT ADDING THIS SECTION. 24 (4) A PERSON AGGRIEVED BY AN ORDER OF THE DIRECTOR ISSUED 25 UNDER THIS ACT MAY REQUEST A HEARING PURSUANT TO THE ADMINISTRA- 26 TIVE PROCEDURES ACT OF 1969, 1969 PA 306, MCL 24.201 TO 24.328. 02998'01 54 1 (5) BEGINNING ON THE EFFECTIVE DATE OF THE AMENDATORY ACT 2 THAT ADDED THIS SECTION, THIS ACT PREEMPTS AND SUPERSEDES ANY 3 LOCAL ORDINANCE, REGULATION, OR RESOLUTION THAT IMPOSES CONFLICT- 4 ING, DIFFERENT, OR ADDITIONAL STANDARDS OR REQUIREMENTS ON GRAIN 5 DEALERS THAN THOSE CONTAINED IN THIS ACT. A LOCAL UNIT OF GOV- 6 ERNMENT SHALL NOT ADOPT OR ENFORCE AN ORDINANCE, REGULATION, OR 7 RESOLUTION THAT IMPOSES CONFLICTING, DIFFERENT, OR ADDITIONAL 8 STANDARDS OR REQUIREMENTS ON GRAIN DEALERS THAN THOSE CONTAINED 9 IN THIS ACT. 10 SEC. 26. IF A GRAIN DEALER FAILS, THE DIRECTOR SHALL TAKE 11 POSSESSION OF, LIQUIDATE, AND DISTRIBUTE THE ASSETS AND PROCEEDS 12 OF THE ASSETS TO SATISFY CLAIMS AS FOLLOWS: 13 (A) TO ALL OF THE FOLLOWING ON A PRO RATA BASIS, IF ANY: 14 (i) CLAIMANTS, INCLUDING LENDERS, WHO POSSESS WAREHOUSE 15 RECEIPTS FOR FARM PRODUCE STORED BY THE GRAIN DEALER. 16 (ii) CLAIMANTS WHO POSSESS ACKNOWLEDGMENT FORMS OR OTHER 17 WRITTEN EVIDENCE OF OWNERSHIP OTHER THAN WAREHOUSE RECEIPTS THAT 18 DISCLOSE A STORAGE OBLIGATION OF THE GRAIN DEALER. 19 (iii) CLAIMANTS WHO SURRENDERED WAREHOUSE RECEIPTS TO THE 20 GRAIN DEALER AS PART OF A FARM PRODUCE TRANSACTION BUT WERE NOT 21 FULLY PAID FOR THE FARM PRODUCE WITHIN 21 DAYS AFTER THE 22 SURRENDER. 23 (B) IF ASSETS OR PROCEEDS OF ASSETS REMAIN AFTER SATISFYING 24 ALL CLAIMS DESCRIBED IN SUBDIVISION (A), THE REMAINING ASSETS OR 25 PROCEEDS OF ASSETS SHALL BE DISTRIBUTED PRO RATA TO CLAIMANTS WHO 26 POSSESS PRICE LATER AGREEMENTS. 02998'01 55 1 (C) IF ASSETS OR PROCEEDS OF ASSETS REMAIN AFTER SATISFYING 2 ALL CLAIMS DESCRIBED IN SUBDIVISIONS (A) AND (B), THE REMAINING 3 ASSETS OR PROCEEDS OF ASSETS SHALL BE DISTRIBUTED PRO RATA TO 4 CLAIMANTS WHO POSSESS ACKNOWLEDGMENT FORMS, SIMILAR FORMS OF FARM 5 PRODUCE DELIVERY CONTRACTS, OR OTHER WRITTEN EVIDENCE OF THE SALE 6 OF FARM PRODUCE AND WHO COMPLETED DELIVERY AND PRICING OF THE 7 FARM PRODUCE WITHIN 30 DAYS PRIOR TO THE FAILURE OF THE GRAIN 8 DEALER. 9 (D) IF ASSETS OR PROCEEDS OF ASSETS REMAIN AFTER SATISFYING 10 ALL CLAIMS DESCRIBED IN SUBDIVISIONS (A), (B), AND (C), THE 11 REMAINING ASSETS OR PROCEEDS OF ASSETS SHALL BE DISTRIBUTED PRO 12 RATA TO ALL OTHER CLAIMANTS WHO POSSESS WRITTEN EVIDENCE OF THE 13 SALE OF FARM PRODUCE TO THE GRAIN DEALER. 14 (E) IF ASSETS OR PROCEEDS OF ASSETS REMAIN AFTER SATISFYING 15 ALL CLAIMS DESCRIBED IN SUBDIVISIONS (A), (B), (C), AND (D), THE 16 REMAINING ASSETS OR PROCEEDS OF ASSETS SHALL BE DISTRIBUTED TO 17 THE GRAIN DEALER. 18 SEC. 27. (1) BEFORE A LICENSE IS ISSUED TO A GRAIN DEALER 19 OTHER THAN A GRAIN MERCHANDISER, THE GRAIN DEALER SHALL PROVIDE A 20 BOND TO THE DEPARTMENT THAT SECURES ONLY THE GRAIN DEALER'S WARE- 21 HOUSE RECEIPTS AND OPEN STORAGE TRANSACTIONS. EXCEPT AS PROVIDED 22 IN SUBSECTION (3), THE AMOUNT OF THE BOND SHALL BE $15,000.00 FOR 23 THE FIRST 10,000 BUSHELS OF STORAGE CAPACITY OF THE DEALER'S 24 FACILITY USED FOR OPEN STORAGE AND STORAGE UNDER WAREHOUSE 25 RECEIPTS, PLUS $5,000.00 FOR EACH ADDITIONAL 10,000 BUSHEL CAPAC- 26 ITY OR FRACTION OF THAT CAPACITY USED FOR OPEN STORAGE AND 02998'01 56 1 STORAGE UNDER WAREHOUSE RECEIPTS OTHER THAN COLLATERAL WAREHOUSE 2 RECEIPTS. 3 (2) A BOND PROVIDED UNDER THIS SECTION SHALL NAME THE 4 DEPARTMENT AS PAYEE, BE EXECUTED BY THE APPLICANT AS PRINCIPAL, 5 AND BE ISSUED BY A CORPORATE SURETY LICENSED TO DO BUSINESS IN 6 THIS STATE. THE DEPARTMENT SHALL PRESCRIBE THE FORM AND TERMS 7 AND CONDITIONS OF THE BOND. THE BOND SHALL CONTAIN THE ADDRESS 8 AND STORAGE CAPACITY OF THE FACILITY OF THE GRAIN DEALER. 9 (3) A GRAIN DEALER WHO OWNS 2 OR MORE FACILITIES AND IS 10 REQUIRED TO PROVIDE A BOND UNDER SUBSECTION (1) MAY FURNISH SEPA- 11 RATE BONDS FOR EACH FACILITY OR A BLANKET SURETY BOND TO SATISFY 12 HIS OR HER OBLIGATION UNDER SUBSECTION (1). THE AMOUNT OF A 13 BLANKET SURETY BOND SHALL BE THE LESSER OF THE CUMULATIVE AMOUNT 14 DETERMINED BY APPLYING SUBSECTION (1) TO EACH FACILITY OR 15 $400,000.00. A BLANKET SECURITY BOND SHALL CONTAIN THE ADDRESS 16 AND STORAGE CAPACITY OF EACH FACILITY OF THE GRAIN DEALER. 17 (4) A BOND PROVIDED UNDER THIS SECTION SHALL SECURE THE 18 FAITHFUL PERFORMANCE OF THE GRAIN DEALER OF HIS OR HER OBLIGA- 19 TIONS UNDER ALL WAREHOUSE RECEIPTS AND OPEN STORAGE AGREEMENTS 20 OUTSTANDING ON OR AFTER THE EFFECTIVE DATE OF THE BOND AND OUT- 21 STANDING AT THE TIME THE LICENSE OF THE GRAIN DEALER IS REVOKED 22 OR THE BOND IS CANCELED AS PROVIDED IN THIS ACT, WHICHEVER OCCURS 23 FIRST. THE BOND SHALL SECURE THE GRAIN DEALER'S FAITHFUL PER- 24 FORMANCE OF THOSE OBLIGATIONS WHETHER THE GRAIN DEALER IS 25 LICENSED OR NOT. 02998'01 57 1 (5) A BOND PROVIDED UNDER SUBSECTION (1) SHALL HAVE A 2 CONTINUOUS TERM AND SHALL NOT HAVE A FIXED EXPIRATION OR 3 TERMINATION DATE. 4 (6) THE TOTAL AGGREGATE LIABILITY OF A SURETY UNDER A BOND 5 PROVIDED UNDER THIS SECTION IS LIMITED TO THE AMOUNT OF THE BOND 6 WITHOUT REGARD TO THE NUMBER OF CLAIMANTS INVOLVED IN A TRANSAC- 7 TION IN WHICH A CLAIM ON THE BOND IS MADE. THE LIABILITY OF A 8 SURETY ON A BOND PROVIDED UNDER THIS SECTION SHALL NOT ACCUMULATE 9 FOR ANY SUCCESSIVE LICENSE PERIOD. 10 (7) A PERSON REQUIRED TO PROVIDE A BOND TO THE DEPARTMENT 11 UNDER THIS SECTION MAY AT HIS OR HER OPTION PROVIDE THE DEPART- 12 MENT WITH A CERTIFICATE OF DEPOSIT OR OTHER SECURITY ACCEPTABLE 13 TO THE DEPARTMENT IN LIEU OF ALL OR PART OF THE BOND, PAYABLE TO 14 THE DEPARTMENT. THE PRINCIPAL AMOUNT OF THE CERTIFICATE OF 15 DEPOSIT OR OTHER SECURITY PROVIDED, OR THE AGGREGATE AMOUNT OF 16 THE BOND PROVIDED AND THE PRINCIPAL AMOUNT OF THE CERTIFICATE OF 17 DEPOSIT OR OTHER SECURITY PROVIDED, SHALL BE THE SAME AS THE 18 AMOUNT OF THE BOND OTHERWISE REQUIRED UNDER THIS SECTION. THE 19 INTEREST ON THE CERTIFICATE OF DEPOSIT OR OTHER SECURITY PROVIDED 20 UNDER THIS SUBSECTION SHALL BE MADE PAYABLE TO THE APPLICANT OR 21 OTHER PURCHASER OF THE CERTIFICATE OF DEPOSIT OR OTHER SECURITY. 22 THE CERTIFICATE OF DEPOSIT OR OTHER SECURITY SHALL REMAIN ON 23 DEPOSIT UNTIL IT IS RELEASED, CANCELED, OR DISCHARGED AS PROVIDED 24 FOR BY RULE OF THE DEPARTMENT. THE PROVISIONS OF THIS SECTION 25 THAT APPLY TO A BOND REQUIRED UNDER THIS SECTION APPLY TO A CER- 26 TIFICATE OF DEPOSIT OR OTHER SECURITY PROVIDED UNDER THIS 27 SUBSECTION. 02998'01 58 1 (8) HOLDERS OF COLLATERAL WAREHOUSE RECEIPTS OR WAREHOUSE 2 RECEIPTS ISSUED IN THE NAME OF THE GRAIN DEALER MAY NOT RECOVER 3 AGAINST A BOND PROVIDED UNDER SUBSECTION (1). 4 (9) IF THE DEPARTMENT DETERMINES THAT A BOND PREVIOUSLY PRO- 5 VIDED UNDER THIS SECTION IS INSUFFICIENT, THE DEPARTMENT SHALL 6 REQUIRE THAT THE GRAIN DEALER PROVIDE AN ADDITIONAL BOND. THE 7 ADDITIONAL BOND SHALL BE IN AN AMOUNT DETERMINED BY THE DEPART- 8 MENT AND CONFORM WITH ALL OTHER REQUIREMENTS OF THIS SECTION. 9 (10) A GRAIN DEALER SHALL NOT CANCEL A BOND REQUIRED BY THIS 10 SECTION WITHOUT THE CONSENT OF THE DEPARTMENT AND THE 11 DEPARTMENT'S PRIOR APPROVAL OF A SUBSTITUTE BOND. 12 (11) THE SURETY ON A BOND REQUIRED BY THIS SECTION MAY NOT 13 CANCEL THE BOND UNLESS IT SENDS A NOTICE OF INTENT TO CANCEL TO 14 THE DEPARTMENT, AND TO ANY OTHER GOVERNMENTAL AGENCY THAT 15 REQUESTS IT IN WRITING, MORE THAN 60 DAYS BEFORE IT CANCELS THE 16 BOND. IF THE DEPARTMENT RECEIVES A NOTICE FROM A SURETY UNDER 17 THIS SUBSECTION, IT SHALL PROMPTLY NOTIFY THE GRAIN DEALER THAT 18 PROVIDED THE BOND. THE DEPARTMENT MAY SUSPEND OR REVOKE THE 19 LICENSE OF A LICENSEE WHO FAILS TO PROVIDE A NEW BOND WITHIN 50 20 DAYS AFTER THE DEPARTMENT RECEIVES NOTICE OF INTENT TO CANCEL 21 FROM A SURETY. 22 SEC. 28. (1) BEFORE A LICENSE IS ISSUED TO A GRAIN MERCHAN- 23 DISER, THE GRAIN MERCHANDISER SHALL PROVIDE A BOND TO THE DEPART- 24 MENT IN THE AMOUNT OF $100,000.00. 25 (2) A BOND PROVIDED UNDER THIS SECTION SHALL NAME THE 26 DEPARTMENT AS PAYEE, BE EXECUTED BY THE APPLICANT AS PRINCIPAL, 27 AND BE ISSUED BY A CORPORATE SURETY LICENSED TO DO BUSINESS IN 02998'01 59 1 THIS STATE. THE DEPARTMENT SHALL PRESCRIBE THE FORM AND TERMS 2 AND CONDITIONS OF THE BOND. 3 (3) A BOND PROVIDED UNDER THIS SECTION SHALL SECURE THE 4 FAITHFUL PERFORMANCE OF THE GRAIN MERCHANDISER OF HIS OR HER 5 OBLIGATIONS IN ANY FARM PRODUCE TRANSACTION OUTSTANDING ON OR 6 AFTER THE EFFECTIVE DATE OF THE BOND AND OUTSTANDING AT THE TIME 7 THE LICENSE OF THE GRAIN MERCHANDISER IS REVOKED OR THE BOND IS 8 CANCELED AS PROVIDED IN THIS ACT, WHICHEVER OCCURS FIRST. THE 9 BOND SHALL SECURE THE GRAIN MERCHANDISER'S FAITHFUL PERFORMANCE 10 OF THOSE OBLIGATIONS WHETHER THE GRAIN MERCHANDISER IS LICENSED 11 OR NOT. 12 (4) THE TOTAL AGGREGATE LIABILITY OF A SURETY UNDER A BOND 13 PROVIDED UNDER THIS SECTION IS LIMITED TO THE AMOUNT OF THE BOND 14 WITHOUT REGARD TO THE NUMBER OF CLAIMANTS INVOLVED IN A TRANSAC- 15 TION IN WHICH A CLAIM ON THE BOND IS MADE. THE LIABILITY OF A 16 SURETY ON A BOND PROVIDED UNDER THIS SECTION SHALL NOT ACCUMULATE 17 FOR ANY SUCCESSIVE LICENSE PERIOD. 18 (5) A GRAIN MERCHANDISER REQUIRED TO PROVIDE A BOND TO THE 19 DEPARTMENT UNDER THIS SECTION MAY AT HIS OR HER OPTION PROVIDE 20 THE DEPARTMENT WITH A CERTIFICATE OF DEPOSIT OR OTHER SECURITY 21 ACCEPTABLE TO THE DEPARTMENT IN LIEU OF ALL OR PART OF THE BOND, 22 PAYABLE TO THE DEPARTMENT AS TRUSTEE. THE PRINCIPAL AMOUNT OF 23 THE CERTIFICATE OF DEPOSIT OR OTHER SECURITY PROVIDED, OR THE 24 AGGREGATE AMOUNT OF THE BOND PROVIDED AND THE PRINCIPAL AMOUNT OF 25 THE CERTIFICATE OF DEPOSIT OR OTHER SECURITY PROVIDED, SHALL BE 26 THE SAME AS THE AMOUNT OF THE BOND OTHERWISE REQUIRED UNDER THIS 27 SECTION. THE INTEREST ON THE CERTIFICATE OF DEPOSIT OR OTHER 02998'01 60 1 SECURITY PROVIDED UNDER THIS SUBSECTION SHALL BE MADE PAYABLE TO 2 THE APPLICANT OR OTHER PURCHASER OF THE CERTIFICATE OF DEPOSIT OR 3 OTHER SECURITY. THE CERTIFICATE OF DEPOSIT OR OTHER SECURITY 4 SHALL REMAIN ON DEPOSIT UNTIL IT IS RELEASED, CANCELED, OR DIS- 5 CHARGED AS PROVIDED FOR BY RULE OF THE DEPARTMENT. THE PROVI- 6 SIONS OF THIS SECTION THAT APPLY TO A BOND REQUIRED UNDER THIS 7 SECTION APPLY TO A CERTIFICATE OF DEPOSIT OR OTHER SECURITY PRO- 8 VIDED UNDER THIS SUBSECTION. 9 (6) IF THE DEPARTMENT DETERMINES THAT A BOND PREVIOUSLY PRO- 10 VIDED UNDER THIS SECTION IS INSUFFICIENT, THE DEPARTMENT SHALL 11 REQUIRE THAT THE GRAIN MERCHANDISER PROVIDE AN ADDITIONAL BOND. 12 THE ADDITIONAL BOND SHALL BE IN AN AMOUNT DETERMINED BY THE 13 DEPARTMENT AND CONFORM WITH ALL OTHER REQUIREMENTS OF THIS 14 SECTION. 15 (7) A GRAIN MERCHANDISER SHALL NOT CANCEL A BOND REQUIRED BY 16 THIS SECTION WITHOUT THE CONSENT OF THE DEPARTMENT AND THE 17 DEPARTMENT'S PRIOR APPROVAL OF A SUBSTITUTE BOND. 18 (8) THE SURETY ON A BOND REQUIRED BY THIS SECTION MAY NOT 19 CANCEL THE BOND UNLESS IT SENDS A NOTICE OF INTENT TO CANCEL TO 20 THE DEPARTMENT, AND TO ANY OTHER GOVERNMENTAL AGENCY THAT 21 REQUESTS IT IN WRITING, MORE THAN 60 DAYS BEFORE IT CANCELS THE 22 BOND. IF THE DEPARTMENT RECEIVES A NOTICE FROM A SURETY UNDER 23 THIS SUBSECTION, IT SHALL PROMPTLY NOTIFY THE GRAIN MERCHANDISER 24 THAT PROVIDED THE BOND. THE DEPARTMENT SHALL REVOKE THE LICENSE 25 OF A GRAIN MERCHANDISER WHO FAILS TO PROVIDE A NEW BOND WITHIN 90 26 DAYS AFTER THE DEPARTMENT RECEIVES NOTICE OF INTENT TO CANCEL 27 FROM A SURETY. 02998'01 61 1 Enacting section 1. Sections 6a, 6b, 7a, 9a, 11a, and 22a 2 of the grain dealers act, 1939 PA 141, MCL 285.66a, 285.66b, 3 285.67a, 285.69a, 285.71a, and 285.82a, are repealed. 02998'01 Final page. DAM