(1) It is unlawful to issue paper negotiable warehouse receipts other than those furnished by the department. A licensee shall issue these receipts consecutively, as numbered, and each receipt must state the date on which it is actually issued.
(2) Nothing in this part 2 prevents the issuance of nonnegotiable scale tickets or other nonnegotiable evidence of a similar nature showing the date on which the commodities were received, the quantities received, and the condition of the commodities upon their delivery.
(3) When partial withdrawal of a commodity is made by an owner, the warehouse operator shall make an appropriate notation of the partial withdrawal on the depositor's nonnegotiable warehouse receipt or on such other records as may be prescribed by the department. If, before the partial withdrawal of the commodity, the warehouse operator has issued a negotiable warehouse receipt to the owner, the warehouse operator shall claim, cancel, and replace it with a new negotiable warehouse receipt, showing the amount of the owner's commodity remaining in the public warehouse.
(4) Every commodity handler or small-volume commodity handler receiving commodities for storage or handling shall immediately, upon receipt of each load, issue to every person delivering the commodity a scale ticket, which must contain the net weight of each separate draft or load of the commodity and the dockage, if any, to be levied at the time of delivery, and such other information as may be required by the department.
(5) Acceptance of commodities for storage by a warehouse operator for which a negotiable warehouse receipt is issued constitutes a bailment process and not a sale. If a warehouse operator fails to claim and cancel a negotiable warehouse receipt issued on delivery for commodities stored in the warehouse operator's public warehouse and the negotiation of which would transfer the right of possession of that commodity, the warehouse operator is liable, to a good faith purchaser for value, for the warehouse operator's failure to deliver to the purchaser all the commodities specified in the receipt. This liability applies whether the purchaser acquired title to the negotiable warehouse receipt before, on, or after the delivery of any part of the commodity by the warehouse operator.
Source: L. 2020: Entire article amended with relocations, (HB 20-1213), ch. 160, p. 730, � 2, effective June 29.
Editor's note: This section is similar to former � 35-36-113 as it existed prior to 2020.
35-36-211. Commodity handler records - separate and distinct - time of maintenance - definition. (1) A commodity handler or small-volume commodity handler operating another business in conjunction with, or in proximity to, the handler's commodity handling business shall keep a complete set of records for the commodity handling business, entirely separate and distinct from the accounts and records of that other business. The deposits of commodities for the account of another business or for commodities owned by the commodity handler or small-volume commodity handler shall be entered in the books of the commodity handler or small-volume commodity handler in the same manner as those of other depositors. For the purpose of this section, other business means any other separate and legally established enterprise that is distinct and separate from the legal and financial transactions of the commodity handling business.
(2) Commodity handlers or small-volume commodity handlers shall maintain adequate records and systems for the filing and accounting of negotiable warehouse receipts, canceled negotiable warehouse receipts, scale tickets, and other documents and transactions necessary or common to the commodity handling industry. A commodity handler or small-volume commodity handler shall retain canceled negotiable warehouse receipts, copies of scale tickets, and copies of other documents evidencing ownership or ownership liability for a period of at least three years after the date of cancellation.
(3) A commodity handler or small-volume commodity handler shall post a position report daily; however, if a daily position report poses a substantial hardship, the commissioner may authorize, in writing, a weekly position report. The position report must include, but need not be limited to, total stocks by commodities received or loaded out, forwarding of commodities to terminal storage, conversions of whole commodities to feed, negotiable warehouse receipt obligations, open storage obligations, credit sale contracts, and public-warehouse-owned commodities.
(4) A scale ticket shall be issued for each receipt of commodities. A copy of the scale ticket shall be given to the owner. A commodity handler or small-volume commodity handler shall file the commodity handler's or small-volume commodity handler's copy with all other such copies in numerical sequence and shall file and retain voided scale tickets at the commodity handler's or small-volume commodity handler's place of business. Scale tickets shall be issued in numerical sequence. An issued scale ticket must contain the following: Sequential number; date; owner's name; commodity handler's or small-volume commodity handler's name; commodity; test weight with dockage, if applicable; grade, if assigned; gross weight; tare weight; and net weights, in the case of weights from hopper scales.
(5) A settlement sheet shall be maintained for each owner and shall contain the following: Owner's name; scale ticket numbers; total receipts; total withdrawals; test weight; and grade, if assigned. A copy of a current settlement sheet shall be provided to the owner upon request.
Source: L. 2020: Entire article amended with relocations, (HB 20-1213), ch. 160, p. 731, � 2, effective June 29.
Editor's note: This section is similar to former � 35-36-114 as it existed prior to 2020.
35-36-212. Warehouse operator's liability for disposal of tainted commodities. (1) A warehouse operator is liable for any loss or deterioration of commodities in a public warehouse caused by the warehouse operator's failure to exercise reasonable care of the commodities.
(2) If a warehouse operator discovers that, as a result of a condition of a commodity placed in the warehouse operator's public warehouse of which the warehouse operator had no notice at the time of deposit, the commodity is a hazard to other commodities or to persons or to the public warehouse and if the commodity is not immediately removed by the owner upon the warehouse operator's request, the warehouse operator may sell the commodity after reasonable notice to all persons known to claim an interest in the commodity. If the warehouse operator is unable to sell the commodity after a reasonable effort, the warehouse operator may dispose of it in any other lawful manner, and shall incur no liability to the owner for the disposition.
(3) At any time before the sale or disposition authorized in this section, the warehouse operator shall deliver the commodity to any person entitled to it upon proper demand and payment of all charges incurred for the specific lot of that commodity.
(4) The commissioner may reject as unsuitable for storage any area of the warehouse operator's premises, unless that area is used for storing the warehouse operator's own commodities.
Source: L. 2020: Entire article amended with relocations, (HB 20-1213), ch. 160, p. 732, � 2, effective June 29.
Editor's note: This section is similar to former � 35-36-115 as it existed prior to 2020.
35-36-213. Enforcement - inspection of commodity handlers' property - confidentiality. (1) The department has the power to inspect commodity handlers' places of business. The department shall investigate any complaint concerning the operation of any commodity handler or any person attempting or offering to act as a commodity handler, subject to this part 2.
(2) Complaints of record made to the commissioner and the results of the commissioner's investigations may, in the discretion of the commissioner, be closed to public inspection during the investigatory period and until dismissed or until notice of hearing and charges is served on a licensee, unless otherwise provided by court order.
(3) The commissioner, upon consent of the licensee or upon obtaining an administrative search warrant, has the right to inspect any commodity handler's place of business where commodities are stored, handled, or received and any records pertaining to storage obligations and commodity positions kept by the commodity handler that pertain to the operation of the place of business. The property, books, records, accounts, and papers pertaining to storage obligations and commodity positions of every commodity handler are subject to inspection and copying by the commissioner.
(4) The commissioner has full authority to administer oaths and take statements, to issue subpoenas requiring the attendance of witnesses and the production of all books, memoranda, papers, and other documents, articles, or instruments, and to compel the disclosure by the witnesses of all facts known to them relative to the matters under investigation. Upon the failure or refusal of a witness to obey a subpoena, the commissioner may petition the district court, and, upon a proper showing, the court may enter an order compelling the witness to appear and testify or produce documentary evidence. Failure to obey such an order of the court is punishable as a contempt of court.
(5) The commissioner may examine the ledgers, books, accounts, memoranda, and other documents and the commodities, scales, measures, and other items in connection with the business of any licensee relating to whatever transactions may be involved.
(6) The commissioner is not required to investigate or act upon complaints regarding transactions that occurred more than one hundred twenty days before the date upon which the commissioner received the written complaint.
(7) If the investigation is against a licensee, the commissioner shall proceed to ascertain the names and addresses of all producers, dealers, or owners of commodities, together with the accounts unaccounted for or due and owing to them by the licensee, and shall request the producers, dealers, or owners to file verified statements of their respective claims with the commissioner. If a producer, dealer, or owner fails, refuses, or neglects to file a verified statement in the office of the commissioner within thirty days after the date of the request, the commissioner is relieved of any further duty or action under this part 2 on behalf of the producer, dealer, or owner.
(8) In the course of any investigation, the commissioner may attempt to effectuate a settlement between the respective parties.
(9) (a) If the commissioner determines, after concluding an investigation on any complaint, that reasonable grounds exist to believe that a licensee has violated this part 2, the commissioner shall notify the licensee that the complaint is valid and shall inform the licensee of the licensee's opportunity to request a hearing, in writing, on the complaint within ten days after the date of the notice.
(b) Upon the receipt of a request for a hearing from a licensee or if the commissioner determines that a hearing concerning any licensee is necessary, the commissioner shall cause a copy of the complaint or the grounds specified in section 35-36-205, together with a notice of the time and place of the hearing, to be served personally or by mail upon the licensee. Service shall be made at least ten days before the hearing, which shall be held in the city or town in which the business location of the licensee is situated or in which the transactions involved allegedly occurred or at any convenient place designated by the commissioner.
(c) The commissioner shall conduct the hearing pursuant to section 24-4-105. Thereafter, the commissioner shall enter a decision specifying the relevant facts established at the hearing. If the commissioner determines from the facts specified that the licensee has not violated this part 2 or section 35-36-104, the commissioner shall dismiss the complaint. If the commissioner determines from the facts specified that the licensee has violated this part 2 or section 35-36-104, and that the licensee has not yet made complete restitution to the person complaining, the commissioner shall determine the amount of damages, if any, to which the person is entitled as the result of the violation and shall enter an order directing the offender to pay the amount to the person complaining on or before the date fixed in the order. A copy of the decision shall be furnished to all the respective parties to the complaint.
(10) As a result of the hearing, the commissioner may also enter any order suspending or revoking the license of a licensee or may place the licensee on probation if the commissioner determines that the licensee has committed any of the unlawful acts specified in section 35-36-217 or that the licensee has violated this part 2 or section 35-36-104.
(11) (a) If a person against whom an order, as specified in subsection (9)(c) of this section, is made and issued fails, neglects, or refuses to obey the order within the time specified in the order, the commissioner may issue a further order to that person directing the person to show cause why the person's license should not be suspended or revoked for failure to comply with the order.
(b) In such case, a copy of the order to show cause, together with a notice of the time and place of the hearing, shall be served personally or by mail upon the person involved. Service shall be made at least ten days before the hearing, which shall be held in the city or town in which the business location of the licensee is situated or at any convenient place designated by the commissioner.
(c) The commissioner shall conduct the hearing pursuant to section 24-4-105 and thereafter shall enter an order and decision specifying the facts established at the hearing and either dismissing the order to show cause, or directing the suspension or revocation of the license held by the licensee, or making such other conditional or probationary orders as may be proper. A copy of the order and decision shall be furnished to the licensee.
(d) Nothing in this section limits the power of the commissioner to revoke or suspend a license when the commissioner is satisfied that one or more of the acts specified in section 35-36-217 was committed.
(12) Whenever the absence of records or other circumstances makes it impossible or unreasonable for the commissioner to ascertain the names and addresses of all persons specified in subsection (7) of this section, the commissioner, after exercising due diligence and making a reasonable inquiry to secure the information from all reasonable and available sources, is not liable or responsible for the claims or the handling of claims that may subsequently appear or be discovered. After ascertaining all claims, assessments, and statements in the manner set forth in subsection (7) of this section, the commissioner may then demand payment on the bond or irrevocable letter of credit on behalf of those claimants whose claims have been determined by the commissioner as valid and, in the instance of a bond, may settle or compromise the claims with the surety company on the bond and execute and deliver a release and discharge of the bond involved. Upon the refusal of the surety company to pay the demand, the commissioner may bring an action on the bond on behalf of the producer, dealer, or owner.
(13) For the purpose of this section, a transaction is deemed to have occurred:
(a) On the date that possession of commodities is transferred by a claimant; or
(b) In the case of delayed payment transactions, on the contractual date of payment or, if there is no contractual date of payment, thirty days following the transfer of title.
(14) A commodity handler or small-volume commodity handler shall maintain a public warehouse in a manner adequate to provide a convenient and safe means of ingress and egress to the various storage bins and compartments by those persons authorized to make inspections.
(15) (a) Each warehouse shall be kept open for the purpose of receiving commodities for storage and delivering commodities out of storage every business day for a period of not less than six hours between the hours of 8 a.m. and 6 p.m., except as provided in subsection (15)(b) of this section. The commodity handler or small-volume commodity handler shall post conspicuously on the door of the public entrance to the commodity handler's or small-volume commodity handler's office and to the commodity handler's or small-volume commodity handler's warehouse a notice showing the hours during which the warehouse will be kept open; except that the notice is not necessary when a warehouse is kept open continuously from 8 a.m. to 6 p.m.
(b) Whenever a warehouse is not to be kept open as required by subsection (15)(a) of this section, the notice posted as prescribed in subsection (15)(a) of this section must state the period during which the warehouse is to be closed and the name, address, and telephone number, if any, of the person who is authorized to deliver commodities stored in the warehouse upon lawful demand by the depositor of the commodity or the holder of the receipt of the commodity, as the case may be.
Source: L. 2020: Entire article amended with relocations, (HB 20-1213), ch. 160, p. 732, � 2, effective June 29.
Editor's note: This section is similar to former � 35-36-116 as it existed prior to 2020.