H.B. No. 2501 1-1 AN ACT 1-2 relating to the regulation of warehouses and certain cotton buyers. 1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-4 SECTION 1. Section 14.003, Agriculture Code, is amended by 1-5 adding Subsection (d) to read as follows: 1-6 (d) The following information prepared by the department in 1-7 the course of its regulatory authority under this subchapter or 1-8 required to be submitted to the department in accordance with the 1-9 department's administration of this subchapter is confidential and 1-10 not subject to public disclosure: 1-11 (1) inspection reports containing information 1-12 regarding grain inventory; and 1-13 (2) financial information provided to the department 1-14 to establish net worth for purposes of licensure. 1-15 SECTION 2. Subchapter A, Chapter 14, Agriculture Code, is 1-16 amended by adding Section 14.0091 to read as follows: 1-17 Sec. 14.0091. OBLIGATIONS OF WAREHOUSEMAN. The obligations 1-18 of a warehouseman include the obligation to: 1-19 (1) deliver a commodity to a person holding a receipt 1-20 for a commodity stored in the warehouse; and 1-21 (2) maintain the quantity and quality of a commodity 1-22 as evidenced by and indicated on a warehouse receipt. 1-23 SECTION 3. The heading of Section 14.010, Agriculture Code, 1-24 is amended to read as follows: 2-1 Sec. 14.010. RECOVERY ON BOND; LIABILITY OF WAREHOUSEMAN. 2-2 SECTION 4. Section 14.010, Agriculture Code, is amended by 2-3 adding Subsection (c) to read as follows: 2-4 (c) A warehouseman is liable for damages for loss of or 2-5 injury to a commodity caused by the warehouseman's failure to 2-6 exercise the care that a reasonably prudent person would exercise 2-7 in regard to the commodity under similar circumstances, but, unless 2-8 otherwise agreed, a warehouseman is not liable for damages to a 2-9 commodity that could not have been avoided through the exercise of 2-10 that care. 2-11 SECTION 5. Section 14.017, Agriculture Code, is amended by 2-12 adding Subsection (f) to read as follows: 2-13 (f) Unless previously canceled in accordance with the 2-14 provisions of Chapter 7, Business & Commerce Code, a Texas 2-15 commodity warehouse receipt issued under this chapter expires 10 2-16 years after the date of issuance. 2-17 SECTION 6. Subchapter A, Chapter 14, Agriculture Code, is 2-18 amended by adding Section 14.0261 to read as follows: 2-19 Sec. 14.0261. WAREHOUSE RECEIPT AS PRIMA FACIE EVIDENCE. In 2-20 an action involving a warehouseman that is brought under this 2-21 subchapter, a warehouse receipt constitutes prima facie evidence of 2-22 the truth of the facts stated in the receipt. 2-23 SECTION 7. Subchapter A, Chapter 14, Agriculture Code, is 2-24 amended by adding Section 14.0262 to read as follows: 2-25 Sec. 14.0262. RECOVERY OF COURT COSTS. (a) On prevailing 2-26 in an action commenced by the department through the attorney 2-27 general under this subchapter, the department and the attorney 3-1 general are each entitled to recover: 3-2 (1) investigation costs and fees; 3-3 (2) reasonable attorney's fees; 3-4 (3) court costs; and 3-5 (4) other costs relating to the action, including the 3-6 cost of depositions and other forms of discovery and copying 3-7 charges. 3-8 (b) The costs recoverable under this section are in addition 3-9 to other relief available to the department or attorney general. 3-10 SECTION 8. Subchapter A, Chapter 14, Agriculture Code, is 3-11 amended by adding Section 14.036 to read as follows: 3-12 Sec. 14.036. POSTING OF STORAGE RATES OR TARIFFS. (a) A 3-13 public commodity warehouse licensed under this subchapter shall 3-14 post a copy of the storage rates and tariffs charged by the 3-15 warehouse at the main warehouse office and at each warehouse 3-16 operating under the license. The public warehouse shall post any 3-17 change to the posted rates or tariffs not later than the 14th day 3-18 before the day on which the change is to take effect. 3-19 (b) Department inspectors shall check compliance with this 3-20 section during inspections of a public commodity warehouse under 3-21 this subchapter. 3-22 SECTION 9. Title 132A, Revised Statutes, is amended by 3-23 adding Article 9103 to read as follows: 3-24 Art. 9103. NONAGRICULTURAL PUBLIC WAREHOUSES 3-25 Sec. 1. DEFINITIONS. In this article: 3-26 (1) "Department" means the Texas Department of 3-27 Licensing and Regulation. 4-1 (2) "Public warehouse" means a house, building, or 4-2 room in which personal property that is not an agricultural 4-3 commodity is stored and protected by a public warehouseman from 4-4 damage by the elements. "Public warehouse" does not include a 4-5 self-service storage facility as defined in Chapter 59, Property 4-6 Code. 4-7 (3) "Public warehouseman" means a person who stores 4-8 personal property that is not an agricultural commodity for hire 4-9 and issues a negotiable warehouse receipt for such property. 4-10 (4) "Agricultural commodity" means wheat, grain 4-11 sorghum, corn, oats, barley, rye, soybeans, cotton, rice, peas, 4-12 beans, or any other agricultural product customarily stored in a 4-13 public warehouse. 4-14 Sec. 2. WAREHOUSE REGULATION. A public warehouse operating 4-15 under this article is under the supervision of the department. 4-16 Sec. 3. CERTIFICATE TO TRANSACT BUSINESS. No person may 4-17 operate a public warehouse without first obtaining a certificate to 4-18 transact business as a public warehouseman from the department. 4-19 Sec. 4. APPLICATION FOR CERTIFICATE. (a) To obtain a 4-20 certificate to transact business under this article, a person must 4-21 apply in writing to the department on a form prescribed by the 4-22 department. The application must state the name and location of 4-23 the public warehouse and: 4-24 (1) the name of each person with an interest as owner 4-25 or principal in the public warehouse; or 4-26 (2) the name of the president, secretary, and 4-27 treasurer of the corporation if a corporation owns or manages the 5-1 public warehouse. 5-2 (b) The department shall issue the certificate and retain 5-3 for department records a copy of the application. 5-4 Sec. 5. BOND. (a) A person receiving a certificate to 5-5 transact business shall file a bond with the department. 5-6 (b) The bond must be: 5-7 (1) payable to the state; 5-8 (2) of good and sufficient surety; 5-9 (3) conditioned on faithful performance of the 5-10 applicant's duty as a public warehouseman; and 5-11 (4) in the amount of $5,000. 5-12 (c) A bond is subject to approval by the department. 5-13 Sec. 6. RECEIPTS. (a) The owner or depositor of property 5-14 stored in a public warehouse may request from the public 5-15 warehouseman a negotiable receipt for the property stored in the 5-16 warehouse. 5-17 (b) The receipt shall be signed by the public warehouseman 5-18 or the warehouseman's agent and state the information required by 5-19 Section 7.202 of the Uniform Commercial Code. 5-20 (c) The public warehouseman shall number receipts 5-21 consecutively in the order of their issue and shall keep a correct 5-22 record of receipts issued that is available for public inspection 5-23 at reasonable hours. 5-24 Sec. 7. DUPLICATE RECEIPTS. (a) A public warehouseman may 5-25 not issue a duplicate receipt or two receipts bearing the same 5-26 number from the same public warehouse during the same calendar 5-27 year, except as provided by Subsection (b) of this section. 6-1 (b) If a receipt is lost or destroyed, the public 6-2 warehouseman shall issue a new receipt that: 6-3 (1) bears the same date and number as the original 6-4 receipt; 6-5 (2) is plainly marked "duplicate" on its face; and 6-6 (3) is secured with a deposit: 6-7 (A) made by the person requesting the duplicate 6-8 receipt; and 6-9 (B) acceptable to the warehouseman to protect a 6-10 person who may hold the original receipt in good faith and for 6-11 valuable consideration. 6-12 Sec. 8. RECEIPT TO BE ISSUED ONLY ON DELIVERY. A public 6-13 warehouseman may not issue a receipt until the goods secured by the 6-14 receipt are actually delivered to the public warehouse and are 6-15 under the control of the public warehouseman issuing the receipt. 6-16 Sec. 9. DELIVERY. (a) A public warehouseman shall 6-17 immediately deliver property held in the warehouse on: 6-18 (1) presentation of a properly endorsed receipt issued 6-19 by the warehouseman to represent the property; and 6-20 (2) payment by the holder of the receipt of all proper 6-21 warehouse charges on property represented by the receipt. 6-22 (b) Unless a receipt has been lost or canceled, a public 6-23 warehouseman may not deliver property represented by a receipt 6-24 until the receipt is surrendered and canceled. 6-25 (c) On delivery of goods represented by a receipt, the 6-26 public warehouseman shall cancel the receipt by writing "canceled" 6-27 in ink on the receipt and placing the warehouseman's name on the 7-1 face of the receipt. A canceled receipt is void and may not be 7-2 circulated. 7-3 (d) A public warehouseman who fails to strictly comply with 7-4 this section is liable to the legal holder of the receipt for the 7-5 full value at the time of the default of the property represented 7-6 by the receipt. 7-7 Sec. 10. EXCEPTIONS. (a) This article does not apply to 7-8 private warehouses or the issuance of receipts by the owners or 7-9 managers of private warehouses. 7-10 (b) This article does not prohibit a public warehouseman 7-11 from issuing the same type of receipt issued by a private 7-12 warehouse, provided that the face of the receipt is plainly 7-13 marked: "Not a public warehouse receipt." 7-14 (c) This article does not apply to public warehouses owned, 7-15 controlled, operated, or leased by motor carriers licensed by and 7-16 within the jurisdiction of the Railroad Commission of Texas under 7-17 the provisions of Article 911b, Vernon's Texas Civil Statutes, or 7-18 their agents. 7-19 Sec. 11. STORAGE CHARGES. (a) The department may set 7-20 minimum storage charges for a public warehouse operating under this 7-21 article. 7-22 (b) The department is not required to set equal charges at 7-23 all places or all times and may take into consideration the local 7-24 conditions and volume of business of each public warehouse. 7-25 Sec. 12. REVOCATION OF CERTIFICATE. After a hearing the 7-26 commissioner may deny, suspend, or revoke a certificate to transact 7-27 business and may impose administrative sanctions and penalties and 8-1 seek injunctive relief and civil penalties against a public 8-2 warehouseman as provided by Article 9100, Revised Statutes. 8-3 SECTION 10. Chapter 113, Agriculture Code, is repealed. 8-4 SECTION 11. This Act takes effect September 1, 1993. 8-5 SECTION 12. The importance of this legislation and the 8-6 crowded condition of the calendars in both houses create an 8-7 emergency and an imperative public necessity that the 8-8 constitutional rule requiring bills to be read on three several 8-9 days in each house be suspended, and this rule is hereby suspended.