77R10965 JMG-D
By Swinford H.B. No. 2586
Substitute the following for H.B. No. 2586:
By McReynolds C.S.H.B. No. 2586
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the regulation of public grain warehouse operators and
1-3 other public warehouse operators; providing penalties.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Chapter 14, Agriculture Code, is reorganized and
1-6 amended as Chapters 14 and 14A to read as follows:
1-7 CHAPTER 14. REGULATION OF PUBLIC GRAIN WAREHOUSE OPERATORS
1-8 [REGULATION]
1-9 SUBCHAPTER A. DEFINITIONS [PUBLIC GRAIN WAREHOUSES]
1-10 Sec. 14.001. DEFINITIONS. (a) In this chapter
1-11 [subchapter]:
1-12 (1) "Depositor" means a person who:
1-13 (A) delivers [deposits] grain to [in] a public
1-14 grain warehouse for storing of the grain for hire, handling of the
1-15 grain for hire, or shipping of the grain for hire;
1-16 (B) is the owner or legal holder of an
1-17 outstanding receipt for grain stored in the public grain warehouse
1-18 issuing the receipt; or
1-19 (C) is lawfully entitled to possession of [the]
1-20 grain stored in a public grain warehouse.
1-21 (2) "Grain" means wheat, grain sorghum, corn, oats,
1-22 barley, rye, soybeans, or any other grain, peas, or beans for which
1-23 federal grain standards are established.
1-24 (3) "Open storage grain" means grain that:
2-1 (A) is received for storage by a public grain
2-2 warehouse located in this state;
2-3 (B) is not covered by a negotiable warehouse
2-4 receipt; and
2-5 (C) is not owned by the lessee, owner, or
2-6 operator of the warehouse in which it is stored.
2-7 (4) "Public grain warehouse" means a building, bin, or
2-8 similar structure located in this state and used for:
2-9 (A) the [receiving,] storing of grain for hire,
2-10 shipping of grain for hire, or handling of grain for hire; or
2-11 (B) the purchasing and selling of grain,
2-12 including grain on which payment is deferred.
2-13 (5) "Receipt" means a negotiable Texas grain warehouse
2-14 receipt issued by a warehouse operator [warehouseman] licensed
2-15 under this chapter [subchapter].
2-16 (6) "License" includes a renewal of or an amendment to
2-17 a license.
2-18 (7) "Scale weight ticket" means a load slip other than
2-19 a receipt given to a depositor or other person by a warehouse
2-20 operator [warehouseman] licensed under this chapter [subchapter]
2-21 on:
2-22 (A) initial delivery of the grain to the
2-23 warehouse; or
2-24 (B) weighing of the grain on the grain warehouse
2-25 operator's scale, regardless of the destination of the grain.
2-26 (8) "Receipted grain" means grain that is stored in a
2-27 public grain warehouse and for which a Texas grain warehouse
3-1 receipt has been issued and has not been canceled.
3-2 (9) "Warehouse operator" ["Storage grain" means grain
3-3 that:]
3-4 [(A) is received in a public grain warehouse
3-5 located in this state; and]
3-6 [(B) is not purchased by the lessee, owner, or
3-7 manager of the warehouse receiving the grain.]
3-8 [(10) "Warehouseman"] means a person engaged in the
3-9 business of operating a public grain warehouse.
3-10 (b) For purposes of this chapter, the term "public grain
3-11 warehouse" as defined by Subsection (a)(4) does not include
3-12 railcars, trucks, boats, or other vehicles when used to transport
3-13 grain.
3-14 (c) For purposes of this chapter, in those sections that
3-15 require the warehouse operator to cooperate with or provide
3-16 information to the department or issue documents or deliver grain
3-17 to customers of the warehouse operator and in those sections that
3-18 require notice to be provided to the warehouse operator by the
3-19 department, the term "warehouse operator" includes all employees,
3-20 agents, or other persons authorized by the warehouse operator to
3-21 issue receipts or scale weight tickets or sign contracts or other
3-22 agreements.
3-23 SUBCHAPTER B. GENERAL PROVISIONS
3-24 Sec. 14.011 [14.002]. LIMITATION OF CHAPTER [SUBCHAPTER].
3-25 This chapter [subchapter] does not apply to:
3-26 (1) a public grain warehouse covered by a license for
3-27 the operation of a public grain warehouse issued by the United
4-1 States Department of Agriculture or other federal agency [under the
4-2 United States Warehouse Act];
4-3 (2) an individual producer-owner who does not receive
4-4 from others grain for storage or handling for hire;
4-5 (3) a person whose business is manufacturing grain or
4-6 selling manufactured grain and who receives all grain with the
4-7 intent to manufacture the grain or sell manufactured grain [at
4-8 retail, unless the person also satisfies the definition of a
4-9 warehouseman]; or
4-10 (4) a person who receives grain with the intent of
4-11 using the grain for planting seed or for feeding livestock on the
4-12 premises where the grain is received[, unless the person requests
4-13 in writing to the department to be licensed].
4-14 Sec. 14.012. BUSINESS INFORMATION. (a) The following
4-15 information, prepared by the department in the course of its
4-16 regulatory authority under this chapter or required to be submitted
4-17 to the department in accordance with the department's
4-18 administration of this chapter, is confidential and not subject to
4-19 public disclosure:
4-20 (1) inspection or investigation reports containing
4-21 information regarding grain inventory; and
4-22 (2) financial information provided to the department
4-23 to establish net worth for purposes of licensing.
4-24 (b) Notwithstanding Subsection (a), inspection reports
4-25 containing information regarding grain inventory of a warehouse
4-26 operator or financial information of a warehouse operator provided
4-27 to the department to establish net worth may be:
5-1 (1) entered into evidence without sealing and made
5-2 public in:
5-3 (A) an administrative proceeding commenced by
5-4 the department against a warehouse operator;
5-5 (B) a civil or criminal proceeding commenced by
5-6 a county attorney, a district attorney, or the attorney general,
5-7 either independently or on behalf of the department, against a
5-8 warehouse operator; or
5-9 (C) a civil proceeding commenced by the
5-10 warehouse operator against the department;
5-11 (2) provided to the issuer of a warehouse operator's
5-12 bond or letter of credit for the purpose of establishing a claim on
5-13 the warehouse operator's bond or letter of credit;
5-14 (3) disclosed to the public after:
5-15 (A) revocation of a warehouse operator's
5-16 license;
5-17 (B) a voluntary closeout of all of the license
5-18 holder's facilities in this state;
5-19 (C) a petition for bankruptcy has been filed; or
5-20 (D) a receiver is appointed for the warehouse
5-21 operator's assets; or
5-22 (4) disclosed to any federal agency or any agency of
5-23 another state conducting a compliance inspection or criminal or
5-24 civil investigation involving the handling, storing, shipping,
5-25 selling, purchasing, or receipt of grain.
5-26 Sec. 14.013. RIGHT TO INTERVENE AND NOTIFICATION OF
5-27 DEPARTMENT. (a) The department may intervene in a suit for
6-1 receivership, garnishment, bankruptcy, or any other legal action
6-2 affecting the assets of a warehouse operator licensed under this
6-3 chapter or the grain assets of a depositor in a warehouse operated
6-4 under a license issued by the department, including, to assert the
6-5 rights of depositors not joined in the suit, a suit brought against
6-6 a bond or surety under Section 14.065.
6-7 (b) Any person who files a suit for receivership,
6-8 garnishment, or bankruptcy or who commences any other legal action
6-9 affecting the assets of a warehouse operator licensed under this
6-10 chapter or the grain assets of a depositor in a warehouse operated
6-11 under a license issued by the department, including a suit against
6-12 a bond or surety under Section 14.065, must give notice to the
6-13 department of the suit or legal action.
6-14 (c) Notice under this section must be in writing and
6-15 delivered to the department by certified mail, registered mail, or
6-16 commercial delivery service not later than the 20th day after the
6-17 date on which the suit or legal action is commenced.
6-18 (d) The judgment in an action described by Subsection (a)
6-19 is voidable if the notice required by this section is not provided.
6-20 (e) The court in which a suit or other legal action
6-21 described by Subsection (a) is commenced may impose appropriate
6-22 sanctions against a party who fails to provide the notice required
6-23 by this section.
6-24 Sec. 14.014. RECEIVERSHIP AFFECTING WAREHOUSE ASSETS. (a) A
6-25 person appointed receiver for the assets of a warehouse operator
6-26 licensed under this chapter is not required to obtain a license
6-27 from the department if the person:
7-1 (1) is bonded and insured as described by Subsection
7-2 (b); and
7-3 (2) after being appointed, does not:
7-4 (A) receive additional grain for storing for
7-5 hire, handling for hire, or shipping for hire; or
7-6 (B) purchase grain for resale.
7-7 (b) A person appointed receiver shall maintain:
7-8 (1) a bond in the same amount required for a licensed
7-9 warehouse operator; and
7-10 (2) casualty insurance in the same amount and type as
7-11 required for a licensed warehouse operator.
7-12 (c) A person appointed receiver shall file proof of proper
7-13 bonding and verification of insurance with the department on or
7-14 before the date the person is appointed to act as receiver.
7-15 Sec. 14.015 [14.003]. POWERS AND DUTIES OF DEPARTMENT.
7-16 [(a)] The department shall administer this chapter [subchapter]
7-17 and may:
7-18 (1) investigate the storing, shipping, and handling of
7-19 grain and complaints relating to these activities through the
7-20 inspection of:
7-21 (A) any public grain warehouse;
7-22 (B) the grain stored in any warehouse; or
7-23 (C) all property and records pertaining to a
7-24 warehouse;
7-25 (2) determine whether a warehouse for which a license
7-26 has been issued or applied for is suitable for properly storing,
7-27 shipping, or handling grain that is stored in or expected to be
8-1 stored in the warehouse;
8-2 (3) include field seed within the definition given to
8-3 "grain" by Section 14.001 [of this code];
8-4 (4) require that a warehouse operator keep records or
8-5 submit reports the department [it] determines are necessary in the
8-6 administration of this chapter [subchapter];
8-7 (5) require a warehouse operator or depositor
8-8 [warehouseman] to terminate storing, shipping, and handling
8-9 agreements within a time specified by the department:
8-10 (A) on closeout or revocation of the warehouse
8-11 operator's [a] license;
8-12 (B) if grain has been abandoned by the warehouse
8-13 operator or a depositor and the warehouse operator or depositor
8-14 cannot be located after diligent effort; or
8-15 (C) on issuance of an injunction ordering an
8-16 unlicensed warehouse operator to cease operations;
8-17 (6) prescribe forms, including the form of receipts,
8-18 bonds, or applications for licenses; [and]
8-19 (7) for purposes of determining compliance with this
8-20 chapter or amounts due to a depositor in an action taken by the
8-21 department against a surety or surety instrument under this
8-22 chapter, determine a warehouse operator's specific obligations to a
8-23 depositor, including:
8-24 (A) the type, quantity, or quality of open
8-25 storage or receipted grain due a depositor;
8-26 (B) the payment owed a depositor if a shortage
8-27 or variance exists in the type, quantity, or quality of a
9-1 depositor's open storage or receipted grain;
9-2 (C) the time and manner of delivery of grain due
9-3 a depositor; and
9-4 (D) whether a warehouse operator has failed to
9-5 deliver a depositor's open storage or receipted grain within a
9-6 reasonable time;
9-7 (8) by written order require a warehouse operator to
9-8 deliver grain of a particular type, quantity, and quality to a
9-9 depositor at a particular time and in a particular manner based on
9-10 the department's determination that the required delivery of grain
9-11 is due the depositor;
9-12 (9) classify grain by category, including open
9-13 storage, receipted, identity-preserved, company-owned, and
9-14 abandoned grain, and adopt rules regarding the storage, shipping,
9-15 or handling of classified grain, including recordkeeping and
9-16 accounting requirements;
9-17 (10) seize the records of a warehouse operator,
9-18 including any electronic records or the equipment or media on which
9-19 the records are stored, during a period of suspension of a
9-20 warehouse operator's license;
9-21 (11) seal or post as sealed, or both seal and post as
9-22 sealed, the warehouse of a warehouse operator:
9-23 (A) whose license has been suspended or revoked;
9-24 (B) whose license has expired; or
9-25 (C) who is unlicensed;
9-26 (12) seal or post as sealed, or both seal and post as
9-27 sealed, a warehouse that is found to be unsafe for inspection or
10-1 unsuitable for the storage of grain;
10-2 (13) during reasonable hours and to determine
10-3 compliance with this chapter, enter any facility where the
10-4 department reasonably believes grain is being handled, stored,
10-5 shipped, purchased, or sold to examine:
10-6 (A) the facility's storage, shipping, handling,
10-7 and financial records;
10-8 (B) grain; and
10-9 (C) physical structures;
10-10 (14) determine the suitability of a warehouse for
10-11 storing, shipping, or handling grain or for adequate and safe
10-12 inspection and, if found unsuitable for any of those purposes,
10-13 order corrective action;
10-14 (15) require the warehouse operator to notify the
10-15 department regarding:
10-16 (A) the handling of commodities that may pose a
10-17 hazard to humans, animals, the grain of other depositors in the
10-18 warehouse operator's warehouse, or the grain industry;
10-19 (B) existing hazards to inspection, including
10-20 recent or ongoing fumigations of warehouse facilities and unsafe or
10-21 inoperable warehouse equipment or structures; or
10-22 (C) any change in ownership, management, or
10-23 legal or financial status of a warehouse licensed under this
10-24 chapter;
10-25 (16) require by rule that sales, purchase, or
10-26 brokerage agreements between a warehouse operator and a producer be
10-27 in writing and contain written terms or provisions the department
11-1 considers appropriate to protect producers, depositors, and
11-2 warehouse operators and to ensure the department's ability to carry
11-3 out its regulatory functions under this chapter;
11-4 (17) regulate a warehouse operator's temporary storage
11-5 of grain in a non-warehouse location or facility;
11-6 (18) require segregation of grain requiring identity
11-7 preservation;
11-8 (19) enter into cooperative agreements with agencies
11-9 of the federal government or other states to carry out the purposes
11-10 of this chapter;
11-11 (20) recover the unused warehouse receipts of a
11-12 warehouse operator:
11-13 (A) during any period of probation or suspension
11-14 of the warehouse operator's license;
11-15 (B) on revocation or voluntary surrender of the
11-16 warehouse operator's license; or
11-17 (C) during any period in which the warehouse
11-18 operator is not licensed, including after a failure to timely renew
11-19 the license;
11-20 (21) order corrective action or impose any reasonable
11-21 condition of probation necessary to accomplish the regulatory goals
11-22 authorized by this chapter; and
11-23 (22) adopt rules necessary to carry out the provisions
11-24 of this chapter [subchapter].
11-25 [(b) In any hearing conducted under this subchapter, the
11-26 State Office of Administrative Hearings may:]
11-27 [(1) examine under oath any person and examine books
12-1 and records of any licensee;]
12-2 [(2) hear testimony and gather evidence for the
12-3 discharge of duties under this subchapter;]
12-4 [(3) administer oaths; and]
12-5 [(4) issue subpoenas, effective in any part of this
12-6 state, and require attendance of witnesses and the production of
12-7 books.]
12-8 [(c) The department may appoint and fix duties and
12-9 compensation of inspectors and other personnel and provide
12-10 equipment necessary to enforce the provisions of this subchapter.]
12-11 [(d) The following information prepared by the department in
12-12 the course of its regulatory authority under this subchapter or
12-13 required to be submitted to the department in accordance with the
12-14 department's administration of this subchapter is confidential and
12-15 not subject to public disclosure:]
12-16 [(1) inspection reports containing information
12-17 regarding grain inventory; and]
12-18 [(2) financial information provided to the department
12-19 to establish net worth for purposes of licensure.]
12-20 SUBCHAPTER C. LICENSING
12-21 Sec. 14.021 [14.004]. LICENSE REQUIRED. A person may not
12-22 operate a public grain warehouse without first obtaining from the
12-23 department a license in the person's name covering the warehouse.
12-24 Sec. 14.022. LICENSING OF MULTIPLE WAREHOUSES. (a) In this
12-25 section:
12-26 (1) "Combination" means a group of two or more public
12-27 grain warehouses or facilities operated under a single set of
13-1 complete records. For purposes of this chapter, a combination is
13-2 treated as if it were a single public grain warehouse.
13-3 (2) "Facility" means two or more public grain
13-4 warehouses located in close proximity on the same general location.
13-5 For purposes of this chapter, and except when part of a
13-6 combination, a facility is treated as if it were a single public
13-7 grain warehouse.
13-8 (b) A warehouse operator may operate all public grain
13-9 warehouses or facilities within an area no larger than 60 miles in
13-10 diameter as a combination if a single license covering the
13-11 combination is obtained from the department and:
13-12 (1) a single recordkeeping system covering only
13-13 warehouses within the combination is maintained by the warehouse
13-14 operator;
13-15 (2) a single, unique set of sequentially numbered
13-16 receipts containing all information required by department rule and
13-17 bearing the name of the license holder and a unique combination
13-18 name, but not bearing individual warehouse or facility names, is
13-19 used for the combination;
13-20 (3) for each scale operated by the warehouse operator,
13-21 the warehouse operator issues and maintains a single, unique set of
13-22 sequentially numbered scale weight tickets containing all
13-23 information required by department rule and bearing the name of the
13-24 license holder and a unique name identifying the facility where the
13-25 scale is located;
13-26 (4) a single daily position report covering all
13-27 storage obligations of the combination and only the combination,
14-1 including company-owned grain, and containing all information
14-2 required by department rule is maintained;
14-3 (5) all original warehouse operator records, except
14-4 for scale weight tickets, relating to transactions or storage
14-5 obligations involving the combination are maintained at a single
14-6 location and separate from all other businesses and separately
14-7 licensed warehouse operations of the warehouse operator; and
14-8 (6) except as provided by department rule, a single
14-9 unique bond or bond substitute is used to cover the combination.
14-10 (c) Except as permitted while operating a combination, a
14-11 warehouse operator may not combine or intermingle assets, storage
14-12 obligations, liabilities of any kind, records or record entries,
14-13 contractual obligations, other transactions of any kind, or any
14-14 other business or operating information from different warehouses
14-15 or businesses owned, managed, or operated by the warehouse
14-16 operator. Each licensed combination or individually licensed
14-17 facility shall be operated as a separate entity under a single,
14-18 unique name and, except as provided by department rule, shall be
14-19 covered by a single, separate bond or bond substitute.
14-20 Sec. 14.023 [14.005]. LICENSING PROCEDURE. (a) The
14-21 department may issue, renew, or amend a license following a
14-22 determination that:
14-23 (1) the applicant has filed an acceptable bond, a
14-24 financial statement in a form prescribed by the department, and
14-25 proof of casualty [possesses sufficient] insurance required by this
14-26 chapter;
14-27 (2) the warehouse is suitable for storage of grain and
15-1 inspection by department personnel; [and]
15-2 (3) the applicant has complied with this chapter
15-3 [subchapter] and rules adopted under this chapter; and
15-4 (4) the applicant has met the net worth or deficiency
15-5 bond requirements of Section 14.031(e) [subchapter].
15-6 (b) An applicant must file a separate application for each
15-7 license, renewal, or amendment and shall accompany each application
15-8 for a license or renewal with an annual license fee, as provided by
15-9 department rule. The department shall prescribe the information to
15-10 be contained in the application. A person who fails to submit a
15-11 renewal fee on or before the expiration date of the license must
15-12 pay, in addition to the renewal fee, the late fee provided by
15-13 Section 12.024 [of this code].
15-14 (c) If an applicant for a license previously operated a
15-15 grain warehouse in this state or another state and that warehouse
15-16 ceased to operate while the applicant was the operator, the
15-17 applicant must submit with the application evidence acceptable to
15-18 the department that all debts from the previous operation evidenced
15-19 by receipts have been satisfied. The department may not issue a
15-20 license to an applicant who the department determines has not
15-21 satisfied all such debts from a previous operation.
15-22 [Sec. 14.006. MULTIPLE WAREHOUSES OPERATED UNDER A SINGLE
15-23 LICENSE. (a) For the purpose of granting a license, the
15-24 department may consider as one unit all warehouses owned or
15-25 controlled by the warehouseman that are located in close proximity
15-26 on the same general location.]
15-27 [(b) All public grain warehouses operating under a single
16-1 license shall be treated as a single warehouse for the purposes of
16-2 this subchapter, including the issuance of receipts and the receipt
16-3 and shipment of grain. However, the department may approve an
16-4 application requesting that any part of a warehouse be reserved and
16-5 designated "not for public use."]
16-6 Sec. 14.024 [14.007]. REQUIREMENT FOR INCREASING CAPACITY.
16-7 A warehouse operator [warehouseman] may not use any increased
16-8 warehouse capacity without first obtaining written approval from
16-9 the department.
16-10 SUBCHAPTER D. BONDING
16-11 Sec. 14.031 [14.009]. BOND. (a) In accordance with this
16-12 section, each applicant for a license shall file or have on file a
16-13 bond with the department.
16-14 (b) The bond must:
16-15 (1) be payable to the State of Texas;
16-16 (2) be executed by the applicant as principal;
16-17 (3) be issued by a corporate surety licensed to do
16-18 business as surety in the State of Texas; and
16-19 (4) be in a form and contain terms and conditions
16-20 prescribed by the department.
16-21 (c) The bond must be conditioned on faithful performance of:
16-22 (1) each obligation of a warehouse operator
16-23 [warehouseman] as to receipted grain and open storage grain under
16-24 this chapter [subchapter] and rules adopted under this chapter
16-25 [subchapter], from the effective date of the bond until the license
16-26 is revoked or the bond is canceled, whichever occurs first, whether
16-27 or not the warehouse remains licensed; and
17-1 (2) except for a contract for the purchase of grain or
17-2 to act as broker for the grain, each obligation of a warehouse
17-3 operator [warehouseman] under any contract with a depositor that
17-4 exists on the effective date of the bond or is assumed after the
17-5 effective date of the bond and before the license is revoked or the
17-6 bond is canceled, whichever occurs first and whether or not the
17-7 warehouse remains licensed.
17-8 (d) The bond must be in an amount of not less than $20,000
17-9 and be based on six cents per bushel of storage capacity [$15,000
17-10 nor more than $500,000, based on the following rate:]
17-11 [(1) seven cents per bushel on the first million
17-12 bushels of storage capacity;]
17-13 [(2) five cents per bushel on the second million
17-14 bushels of storage capacity; and]
17-15 [(3) three cents per bushel on all bushels of storage
17-16 capacity above two million bushels].
17-17 (e) If the actual net worth of an applicant equals less than
17-18 25 cents per bushel of storage capacity, the applicant shall file a
17-19 deficiency bond in an amount equal to the difference between the
17-20 actual net worth and an amount determined by multiplying 25 cents
17-21 times each bushel of storage capacity in the applicant's warehouse.
17-22 A deficiency bond is in addition to the bond required of an
17-23 applicant by this section[, and the maximum amount of a bond
17-24 provided by Subsection (d) of this section does not apply].
17-25 (f) [In considering the reissuance of a license, the
17-26 department may accept a certificate from a surety stating that a
17-27 bond filed with the department has been renewed or continued.]
18-1 [(g)] Except as provided by department rule, the [The]
18-2 applicant must [may] give a single bond meeting the requirements of
18-3 this section to cover warehouses licensed as a single facility or
18-4 combination. A single bond may not be used to cover more than one
18-5 individually licensed facility, more than one combination, or one
18-6 or more individually licensed facilities and one or more
18-7 combinations [all licensed facilities operated by him or her,
18-8 except that each warehouse operated by the applicant must be
18-9 covered by the bond in the amount of at least $15,000].
18-10 (g) [(h)] The liability of the surety of a bond required by
18-11 this chapter [subchapter] is limited to the face amount of the bond
18-12 and does not accumulate for each successive license period during
18-13 which the bond is in force.
18-14 (h) [(i)] Subject to the approval of the department, a
18-15 warehouse operator [warehouseman] may deposit the following with
18-16 the department, for the term of the license plus two years, in lieu
18-17 of a bond required by this section:
18-18 (1) cash;
18-19 (2) an irrevocable letter of credit, payable to the
18-20 State of Texas; or
18-21 (3) a certificate of deposit from a federally insured
18-22 bank or savings and loan institution authorized to do business in
18-23 this state, assigned to the State of Texas[; or]
18-24 [(4) negotiable securities approved by the department
18-25 as providing the same protection as a surety bond for the grain
18-26 depositor].
18-27 (i) [(j)] The cash, letter of credit, or certificate of
19-1 deposit[, or securities deposited] under Subsection (h) [(i) of
19-2 this section] must be in the same amount or have a value in the
19-3 same amount as required for the warehouse bond.
19-4 (j) [(k)] Any interest or income earned on an assigned
19-5 certificate of deposit [or securities] accrues to the owner of the
19-6 certificate [or securities] during the time of the assignment.
19-7 Sec. 14.032 [14.012]. ADDITIONAL BOND [OR INSURANCE]. (a)
19-8 If the department determines that an approved bond [or insurance
19-9 policy] is insufficient, the department shall require the warehouse
19-10 operator [warehouseman] to give additional bond [or insurance].
19-11 (b) If a license has been suspended or revoked or has
19-12 expired, the department may require a bond from the warehouse
19-13 operator [warehouseman] to protect depositors of grain for as long
19-14 as any receipts or open storage accounts remain outstanding.
19-15 Sec. 14.033 [14.013]. BOND [OR INSURANCE] CANCELLATION. (a)
19-16 A warehouse operator [warehouseman] may not cancel a bond [or
19-17 insurance policy] approved by the department unless the department
19-18 first gives written approval of a substitute bond [or policy].
19-19 (b) The surety [or insurer] may cancel a bond [or insurance
19-20 policy] by sending notice of intent to cancel by registered or
19-21 certified mail to the department. Cancellation of a bond may not
19-22 be effective before the 91st day following the day on which the
19-23 surety mails notice of intent to cancel. [Cancellation of an
19-24 insurance policy may not be effective before the 31st day following
19-25 the day on which the insurer mails notice of intent to cancel.] On
19-26 receipt of notice of cancellation of a bond [or insurance policy],
19-27 the department shall promptly notify the warehouse operator
20-1 [warehouseman] involved. Liability under the bond ceases to accrue
20-2 on the effective date of cancellation. Notwithstanding
20-3 cancellation under this section, the department or a depositor may
20-4 collect under the bond for any claim that arose during the period
20-5 during which the bond was in effect, provided that the claim is
20-6 filed within the applicable limitations period established under
20-7 Section 14.065.
20-8 (c) The surety [or insurer] shall send a copy of the notice
20-9 required by this section to any government agency requesting it.
20-10 (d) Notwithstanding any other provision of this chapter, a
20-11 public grain warehouse license is automatically suspended if the
20-12 warehouse operator [subchapter, the department shall automatically
20-13 suspend the license if the warehouseman] fails[:]
20-14 [(1)] to file a new bond before the cancellation of a
20-15 bond is effective[; or]
20-16 [(2) to file a new certificate of insurance before the
20-17 cancellation of an insurance policy is effective].
20-18 (e) The suspension of a license under this section continues
20-19 as long as the warehouse operator [warehouseman] fails to maintain
20-20 the bond [or insurance] required by this chapter [subchapter].
20-21 Sec. 14.034. CANCELLATION OF LETTER OF CREDIT. (a) A
20-22 warehouse operator may not cancel a letter of credit approved by
20-23 the department in lieu of a bond unless the department gives
20-24 written approval of a substitute bond or letter of credit.
20-25 (b) The issuer of the letter of credit may cancel a letter
20-26 of credit by sending notice of intent to cancel by registered or
20-27 certified mail to the department. Cancellation of a letter of
21-1 credit may not take effect before the 91st day after the date the
21-2 issuer mails notice of intent to cancel. On receipt of notice of
21-3 cancellation of a letter of credit, the department shall promptly
21-4 notify the warehouse operator involved. Liability under the letter
21-5 of credit ceases to accrue on the effective date of cancellation.
21-6 Notwithstanding cancellation under this subsection or other law to
21-7 the contrary, the department or a depositor may collect under the
21-8 letter of credit for any claim that arose during the period during
21-9 which the letter of credit was in effect, provided that the claim
21-10 is filed within the applicable limitations period established under
21-11 Section 14.065.
21-12 (c) The issuer of a letter of credit shall send a copy of
21-13 the notice required by this section to any government agency
21-14 requesting the copy. Notwithstanding any other provision of this
21-15 chapter, a public grain warehouse license is automatically
21-16 suspended if the warehouse operator fails to file a new bond or
21-17 letter of credit before the cancellation of a letter of credit is
21-18 effective.
21-19 (d) The suspension of a license under this section continues
21-20 as long as the warehouse operator fails to maintain the bond or
21-21 letter of credit required by this chapter.
21-22 Sec. 14.035. CANCELLATION OF CERTIFICATE OF DEPOSIT OR CASH.
21-23 (a) A warehouse operator may not repossess a certificate of
21-24 deposit or cash approved by and deposited with the department in
21-25 lieu of a bond unless:
21-26 (1) the department gives written approval of a
21-27 substitute bond or letter of credit; and
22-1 (2) at least two years have passed after the
22-2 expiration of the last licensing period during which the
22-3 certificate of deposit or cash was deposited with the department in
22-4 lieu of a bond.
22-5 (b) Notwithstanding any other provision of this chapter, the
22-6 department may not release a certificate of deposit or cash
22-7 deposited with the department while a claim filed within the
22-8 applicable limitations period established under Section 14.065 is
22-9 pending before the department or a court.
22-10 (c) A warehouse operator may, on written request to the
22-11 department, recover cash or a certificate of deposit from the
22-12 department before the expiration of the two-year period specified
22-13 in Subsection (a)(2) if:
22-14 (1) the department performs a closeout inspection;
22-15 (2) the department determines on the best available
22-16 evidence that no outstanding obligations exist at the time of the
22-17 closeout inspection;
22-18 (3) the warehouse operator submits with the written
22-19 request a bond:
22-20 (A) in an amount equal to six cents per bushel
22-21 for 50 percent of the total storage capacity of the facility or
22-22 combination covered by the cash or certificate of deposit the
22-23 warehouse operator is attempting to recover; and
22-24 (B) covering any failure of obligation that may
22-25 have occurred during all licensing periods covered by the cash or
22-26 certificate of deposit the warehouse operator is attempting to
22-27 recover; and
23-1 (4) at least 30 days have passed since the closeout
23-2 inspection.
23-3 (d) A claim against the bond required by Subsection (c) must
23-4 be filed with the department or in a court of competent
23-5 jurisdiction not later than the second anniversary of the date of
23-6 the closeout inspection.
23-7 SUBCHAPTER E. INSURANCE
23-8 Sec. 14.041 [14.011]. CASUALTY INSURANCE. (a) Except as
23-9 provided by Subsection (c) [of this section], an applicant for a
23-10 license must file or have on file with the department a certificate
23-11 of insurance evidencing that:
23-12 (1) the applicant has an effective policy of insurance
23-13 issued by an insurance company authorized to do business in this
23-14 state or, with the approval of the department, by an eligible [a]
23-15 surplus lines insurer that meets the requirements of Article
23-16 1.14-2, Insurance Code, and rules adopted by the commissioner
23-17 [State Board of Insurance] under that article; and
23-18 (2) the policy insures, in the name of the applicant,
23-19 all grain that is or may be in the public grain warehouse for its
23-20 full market value against loss by or due to water or other fluid,
23-21 malicious mischief, vandalism, theft, intentional waste or
23-22 destruction, smoke, fire, internal explosion, lightning, hail,
23-23 windstorm, hurricane [cyclone], or tornado.
23-24 (b) If water or other fluid, malicious mischief, vandalism,
23-25 theft, intentional waste or destruction, smoke, [a] fire, [an]
23-26 internal explosion, lightning, hail, [a] windstorm, hurricane [a
23-27 cyclone], or [a] tornado destroys or damages grain in a public
24-1 grain warehouse, the warehouse operator [warehouseman] shall, on
24-2 demand by the depositor and presentation of a receipt or other
24-3 evidence of ownership, make settlement with the depositor of the
24-4 grain. The amount of the settlement shall be the average price
24-5 paid for grain of the same grade and quality on the date of the
24-6 loss at the location of the warehouse, minus the warehouse
24-7 operator's [warehouseman's] charges and advances. If a settlement
24-8 is not made before the 31st day following the date of demand, the
24-9 depositor is entitled to seek recovery from the insurance company.
24-10 (c) An applicant is not required to file a certificate of
24-11 insurance if the applicant certifies in writing, at or before the
24-12 time the certificate of insurance is due, that all grain within the
24-13 warehouse at the time the license is to be effective is or will be
24-14 owned by the applicant free of any lien. The applicant shall file
24-15 the required certificate of insurance on or before the first day
24-16 any grain not owned by the applicant free of any lien is stored for
24-17 hire, handled for hire, or shipped for hire.
24-18 Sec. 14.042. INSURANCE CANCELLATION. (a) A warehouse
24-19 operator may not cancel an insurance policy approved by the
24-20 department unless the department gives written approval of a
24-21 substitute policy.
24-22 (b) The insurer may cancel an insurance policy by sending
24-23 notice of intent to cancel by registered or certified mail to the
24-24 department. Cancellation of an insurance policy is not effective
24-25 before the 31st day following the date the insurer mails notice of
24-26 intent to cancel. On receipt of notice of cancellation of an
24-27 insurance policy, the department shall promptly notify the
25-1 warehouse operator involved.
25-2 (c) The insurer shall send a copy of the notice required by
25-3 this section to any government agency requesting the copy.
25-4 (d) Notwithstanding any other provision of this chapter, a
25-5 public grain warehouse license is automatically suspended if the
25-6 warehouse operator fails to file a new certificate of insurance
25-7 before the cancellation of an insurance policy is effective or
25-8 fails to provide a certification of ownership under Section
25-9 14.041(c).
25-10 (e) The suspension of a license under this section continues
25-11 as long as the warehouse operator fails to maintain the insurance
25-12 required by this chapter.
25-13 Sec. 14.043. ADDITIONAL INSURANCE. (a) If the department
25-14 determines that an approved insurance policy is insufficient, the
25-15 department shall require the warehouse operator to obtain
25-16 additional insurance.
25-17 (b) If a license has been suspended or revoked or has
25-18 expired, the department may require continued insurance coverage by
25-19 the warehouse operator to protect depositors of grain for as long
25-20 as any receipts or open storage accounts remain outstanding.
25-21 (c) The warehouse operator shall obtain the additional
25-22 insurance required by this section and provide verification of the
25-23 additional insurance within a time specified by the department, and
25-24 the additional insurance shall be maintained or continued as
25-25 necessary to meet the requirements of this chapter.
25-26 SUBCHAPTER F. WAREHOUSE OPERATOR OBLIGATIONS
25-27 Sec. 14.051 [14.008]. POSTING OF LICENSE. Each warehouse
26-1 operator [warehouseman] shall immediately on receipt of a license
26-2 post the original [it] in a conspicuous place at [in] the primary
26-3 recordkeeping location for the individually licensed facility or
26-4 combination. A copy of the license must be conspicuously posted at
26-5 each facility where grain is stored for hire, handled for hire, or
26-6 shipped for hire [office of the public grain warehouse].
26-7 Sec. 14.052 [14.0091]. WAREHOUSE OPERATOR OBLIGATIONS [OF
26-8 WAREHOUSEMAN]. (a) The obligations of a warehouse operator
26-9 [warehouseman] include the obligation to:
26-10 (1) deliver grain [a commodity] to a person holding a
26-11 receipt for grain [a commodity] stored in the warehouse; and
26-12 (2) maintain the quantity and quality of all grain not
26-13 owned by the warehouse operator, including open storage grain [a
26-14 commodity as evidenced by and indicated on a warehouse receipt].
26-15 (b) Except as otherwise provided by this chapter or by
26-16 department rule, the [Sec. 14.021. OBLIGATION TO DELIVER. The]
26-17 obligation of a warehouse operator [warehouseman] to deliver grain
26-18 to a person holding a receipt for grain stored in the public grain
26-19 warehouse is controlled by Section 7.403, Business & Commerce Code.
26-20 (c) If a warehouse operator accepts for storage, shipping,
26-21 handling, purchase, or sale any grain that is nonfungible or for
26-22 which identity must be preserved, the warehouse operator shall
26-23 safeguard the grain from intermingling with grain that would impair
26-24 or destroy the identity-preserved or nonfungible nature of the
26-25 grain. Nothing in this section requires the warehouse operator to
26-26 accept grain that is nonfungible or that requires identity
26-27 preservation.
27-1 (d) The warehouse operator remains liable for the quality
27-2 and quantity of grain deposited at the warehouse and for any other
27-3 obligations established under this chapter for any period during
27-4 which the warehouse has been sealed or during any period of
27-5 probation, suspension, or revocation imposed under this chapter or
27-6 for grain abandoned by the warehouse operator unless:
27-7 (1) the warehouse operator makes a written request to
27-8 the department for access to the warehouse;
27-9 (2) the request adequately describes why access is
27-10 necessary to meet the warehouse operator's obligations under this
27-11 chapter;
27-12 (3) the request adequately describes what type of
27-13 access is necessary to meet the warehouse operator's obligations
27-14 under this chapter;
27-15 (4) the request for access is reasonable;
27-16 (5) allowing access would not impair the department's
27-17 ability to preserve evidence, warehouse operator records, or
27-18 depositor grain assets; and
27-19 (6) the request is denied by the department or the
27-20 department imposes unreasonable restrictions that prevent the
27-21 operator from meeting the obligations described in the request.
27-22 (e) The department is entitled, on behalf of depositors, to
27-23 recover from the warehouse operator's bond the cost of damages
27-24 suffered by depositors as a result of sealing the warehouse or as a
27-25 result of the warehouse operator abandoning the warehouse and the
27-26 grain contained in the warehouse.
27-27 Sec. 14.053 [14.020]. RECEIPT FORMS. (a) A warehouse
28-1 operator shall use one set of serially numbered and sequentially
28-2 issued receipts for all warehouses operated under a single license.
28-3 In addition to a unique serial number, each receipt form must
28-4 contain all of the information prescribed by department rule. If
28-5 further provided by department rule, the warehouse operator shall
28-6 request the receipt forms from the printer on a form approved,
28-7 prescribed, or furnished by the department.
28-8 (b) The warehouse operator shall provide the department with
28-9 an exemplar of the receipt forms and an affidavit from the printer
28-10 showing the number of receipts printed and their serial numbers
28-11 before issuing any receipt from the printed set. The exemplar and
28-12 affidavit required by this subsection shall be provided each time a
28-13 new set of receipts is printed.
28-14 (c) The warehouse operator may use an electronic receipt
28-15 system if the provider of the electronic receipt system has been
28-16 approved by the department or by the United States Department of
28-17 Agriculture or any other federal agency that issues a license for
28-18 the operation of a public grain warehouse.
28-19 (d) The department may require a warehouse operator to
28-20 provide a bond to cover any loss resulting from unlawful use of a
28-21 receipt. [The department shall supply all receipt forms unless the
28-22 department in writing approves a privately printed receipt form
28-23 requested by the warehouseman. The warehouseman shall request
28-24 receipt forms on a form furnished by the department and shall
28-25 accompany a request with payment to cover estimated costs of
28-26 printing, packaging, and shipping, as determined by the department.
28-27 If the receipts are privately printed, the printer shall provide
29-1 the department with an affidavit showing the number of the receipts
29-2 printed and their serial numbers. The department may require a
29-3 warehouseman who uses privately printed receipts to provide a bond
29-4 to cover any loss resulting from the unlawful use of a receipt.]
29-5 The department shall determine the form and the amount of the bond,
29-6 but the amount may not exceed $5,000.
29-7 [(b) The department shall recover all receipts remaining
29-8 unused after a license required by this subchapter is revoked or
29-9 suspended.]
29-10 Sec. 14.054 [14.017]. ISSUANCE OF SCALE WEIGHT TICKET OR
29-11 RECEIPT. (a) On receiving grain, a warehouse operator
29-12 [warehouseman] shall issue to the person delivering the grain a
29-13 serially numbered scale weight ticket in a form approved by the
29-14 department.
29-15 (b) On application of a depositor, the warehouse operator
29-16 [warehouseman] shall issue to the depositor a Texas grain warehouse
29-17 receipt, which must be:
29-18 (1) in a form prescribed by the department; and
29-19 (2) in conformity with Chapter 7, Business & Commerce
29-20 Code.
29-21 (c) A Texas grain warehouse receipt issued under this
29-22 subchapter is subject to the provisions of Chapter 7, Business &
29-23 Commerce Code.
29-24 (d) A Texas grain warehouse receipt is a negotiable document
29-25 of title. A scale weight ticket is not a negotiable document of
29-26 title.
29-27 (e) Except as provided by Section 14.055 [14.019 of this
30-1 code] for duplicate receipts, a warehouse operator may not issue
30-2 two scale weight tickets or two receipts bearing the same number
30-3 during any calendar year.
30-4 (f) Unless previously canceled in accordance with the
30-5 provisions of Chapter 7, Business & Commerce Code, a Texas grain
30-6 [commodity] warehouse receipt issued under this chapter expires 10
30-7 years after the date of issuance.
30-8 Sec. 14.055 [14.019]. DUPLICATE RECEIPTS. (a) Except as
30-9 otherwise provided by this section [subsection], if a receipt
30-10 issued under this chapter [subchapter] is outstanding, another
30-11 receipt covering all or part of the grain covered by the initial
30-12 receipt may not be issued by the warehouse operator [warehouseman]
30-13 or any other person. If a receipt is lost, stolen, or destroyed,
30-14 the owner is entitled to a new receipt as a duplicate or substitute
30-15 for the missing receipt. The duplicate or substitute receipt has
30-16 the same legal effect as the original receipt and must:
30-17 (1) state that it is in lieu of the original receipt;
30-18 and
30-19 (2) bear the number and date of the original receipt.
30-20 (b) Before issuing a duplicate receipt, the warehouse
30-21 operator [warehouseman] shall require from the owner an indemnity
30-22 bond of double the market value of the grain covered by the missing
30-23 receipt. The bond must be in a form and with a surety prescribed
30-24 by the department to fully protect all rights under the missing
30-25 receipt.
30-26 (c) A warehouse operator [warehouseman] may not obtain,
30-27 purchase, or become a surety on a bond for a lost, stolen, or
31-1 destroyed receipt.
31-2 (d) A court may not order delivery of grain covered by a
31-3 lost, stolen, or destroyed receipt without requiring the bond
31-4 provided by this section.
31-5 Sec. 14.056 [14.018]. RECEIPT FOR GRAIN OWNED BY WAREHOUSE
31-6 OPERATOR [OWNER]. A warehouse operator [warehouseman] may issue a
31-7 receipt for grain that is owned by the warehouse operator
31-8 [warehouseman], in whole or part, and located in the warehouse
31-9 operator's [warehouseman's] warehouse. The negotiation, transfer,
31-10 sale, or pledge of that receipt may not be defeated because of its
31-11 ownership.
31-12 Sec. 14.057 [14.022]. RECORDS. (a) Every warehouse operator
31-13 [warehouseman] shall keep in a safe place complete and correct
31-14 records and accounts pertaining to the public grain warehouse,
31-15 including records and accounts of:
31-16 (1) grain received and withdrawn from the warehouse;
31-17 (2) unissued receipts in the warehouse operator's
31-18 [warehouseman's] possession;
31-19 (3) receipts and scale weight tickets issued by the
31-20 warehouse operator [warehouseman]; and
31-21 (4) receipts returned to and canceled by the warehouse
31-22 operator [warehouseman].
31-23 (b) The warehouse operator [warehouseman] shall retain the
31-24 records required by this section for the period of time prescribed
31-25 by the department. The warehouse operator [warehouseman] shall
31-26 retain copies of receipts or other documents evidencing ownership
31-27 of grain or liability of a warehouse operator [warehouseman] as
32-1 long as the documents are outstanding. If the documents are
32-2 canceled, the warehouse operator [warehouseman] shall retain the
32-3 documents or receipts for a period of not less than two years from
32-4 the date of cancellation.
32-5 (c) The warehouse operator [warehouseman] shall:
32-6 (1) clearly mark all canceled receipts "canceled" and
32-7 mark on the face of each receipt the date of the cancellation;
32-8 (2) keep records and accounts required by this section
32-9 separate from the records and accounts of other businesses; [and]
32-10 (3) issue in numerical order all scale weight tickets
32-11 and receipts; and
32-12 (4) keep in numerical order copies of the scale weight
32-13 tickets and receipts issued by the warehouse operator.
32-14 (d) In records kept under this section, grain may be
32-15 designated as company-owned grain only if:
32-16 (1) the grain has been paid for and is wholly owned by
32-17 the warehouse operator; or
32-18 (2) the ownership of the grain has been transferred to
32-19 the warehouse operator under a written contract of purchase.
32-20 (e) The warehouse operator [warehouseman] shall report to
32-21 the department on forms furnished by the department the following
32-22 information on scale weight tickets used in the warehouse
32-23 operator's [warehouseman's] business:
32-24 (1) the number of scale weight tickets printed;
32-25 (2) the serial numbers of the scale weight tickets
32-26 printed; and
32-27 (3) the printer of the scale weight tickets.
33-1 (f) The warehouse operator shall make [department may
33-2 inspect] any records required by this section or department rule
33-3 accessible and available for inspection by the department at any
33-4 reasonable time.
33-5 Sec. 14.058 [14.036]. POSTING OF STORAGE RATES OR TARIFFS.
33-6 (a) A public grain [commodity] warehouse licensed under this
33-7 chapter [subchapter] shall post a copy of all [the] storage rates
33-8 and tariffs charged by the warehouse operator at the main warehouse
33-9 office and at each warehouse facility operating under the license.
33-10 (b) The [public] warehouse operator shall post any change to
33-11 the posted storage rates or tariffs not later than the third [14th]
33-12 day before the day on which the change is to take effect.
33-13 (c) [(b)] Department inspectors shall check compliance with
33-14 this section during inspections of a public grain [commodity]
33-15 warehouse under this chapter [subchapter].
33-16 Sec. 14.059 [14.014]. INSPECTIONS; FEE. (a) On request by
33-17 the department, a warehouse operator [warehouseman] shall report to
33-18 the department on the condition, [conduct,] operation, and business
33-19 of each public grain warehouse that the warehouse operator
33-20 [warehouseman] operates and all grain stored in those warehouses.
33-21 (b) [A warehouseman shall permit the department to enter and
33-22 inspect each public grain warehouse, its contents, and all records
33-23 related to the grain stored in the warehouse. The warehouseman
33-24 shall render to the department any assistance necessary for an
33-25 inspection under this section.]
33-26 [(c)] The department shall inspect each public grain
33-27 warehouse at least once annually and may make additional
34-1 inspections as the department considers necessary. A warehouse
34-2 operator [warehouseman] may request that the department make
34-3 additional inspections.
34-4 (c) [(d)] The department shall collect from the warehouse
34-5 operator [warehouseman] whose public grain warehouse is inspected
34-6 an inspection fee for an annual inspection or an inspection
34-7 requested by the warehouse operator [warehouseman], but may not
34-8 collect an inspection fee for other inspections unless the
34-9 inspection is conducted:
34-10 (1) under the terms of an agreed or ordered suspension
34-11 or probation;
34-12 (2) in response to a complaint that the warehouse
34-13 operator has not complied with the duties and obligations provided
34-14 for by this chapter and the complaint is determined by the
34-15 department to be valid;
34-16 (3) as a follow-up inspection to:
34-17 (A) determine whether a shortage of grain
34-18 discovered by the department has been corrected;
34-19 (B) obtain records not immediately available at
34-20 the location designated as the recordkeeping location in department
34-21 records or to which access was refused during a previous
34-22 inspection;
34-23 (C) ensure that recordkeeping discrepancies
34-24 discovered during a previous inspection have been corrected; or
34-25 (D) monitor a suspension or probation under this
34-26 chapter; or
34-27 (4) to monitor termination of arrangements for
35-1 storing, shipping, or handling of grain under this chapter.
35-2 (d) The department by rule shall set the inspection fee.
35-3 SUBCHAPTER G. REMEDIES AND CLAIMS
35-4 Sec. 14.061 [14.0261]. WAREHOUSE RECEIPT AS PRIMA FACIE
35-5 EVIDENCE. In an action involving a warehouse operator
35-6 [warehouseman] that is brought under this chapter [subchapter], a
35-7 warehouse receipt constitutes prima facie evidence of the truth of
35-8 the facts stated in the receipt.
35-9 Sec. 14.062. INVALID RECEIPTS. Notwithstanding any other
35-10 provision of this code or the Business & Commerce Code, a receipt
35-11 for grain is void as to any person who receives the receipt with
35-12 knowledge that the grain purported to be covered by the receipt was
35-13 not, at the time the receipt was issued, actually stored in the
35-14 warehouse of the warehouse operator issuing the receipt.
35-15 Sec. 14.063 [14.023]. TERMINATION OF STORAGE. (a) A
35-16 warehouse operator [warehouseman] desiring to terminate the storage
35-17 of grain in the warehouse operator's [warehouseman's] warehouse,
35-18 including grain that is abandoned or is unclaimed prior to the sale
35-19 of a warehouse, shall do so in accordance with Sections 7.206 and
35-20 7.210, Business & Commerce Code, except that the warehouse operator
35-21 [warehouseman] is not required to hold the balance of the proceeds
35-22 of a sale, but may transfer the balance to the comptroller, who
35-23 shall treat the money in the same manner as an escheated bank
35-24 account.
35-25 (b) A purchaser in good faith of grain sold under Section
35-26 7.210, Business & Commerce Code, takes the grain free of any rights
35-27 of the holder of the receipt, but the receipt is evidence of
36-1 entitlement to the escheated funds deposited with the comptroller
36-2 under Subsection (a) [of this section].
36-3 Sec. 14.064. CERTAIN LOADOUT FEES PROHIBITED. (a) A
36-4 warehouse operator may not charge a fee for loading out grain if
36-5 the loadout was the result of the misconduct of the warehouse
36-6 operator.
36-7 (b) Misconduct under this section includes:
36-8 (1) violation of this chapter as established by final,
36-9 unappealable order of the commissioner;
36-10 (2) conviction of a crime, including a plea of nolo
36-11 contendere, described as an offense under this chapter; and
36-12 (3) conviction of a crime, including a plea of nolo
36-13 contendere, described as an offense under the Penal Code and
36-14 involving any type of fraud or theft related to the storing,
36-15 shipping, handling, sale, or purchase of grain or the sale or
36-16 purchase of grain handling, shipping, or storage equipment or
36-17 warehouse structures or other assets.
36-18 (c) A loadout fee collected during a period of suspension of
36-19 a warehouse operator's license by the department, after revocation
36-20 of a warehouse operator's license, or during a period in which
36-21 criminal charges are pending against a warehouse operator, shall be
36-22 placed in an escrow account by the warehouse operator until:
36-23 (1) the department's suspension is lifted;
36-24 (2) the prosecutor ceases to pursue criminal charges;
36-25 (3) the indictment or information is dismissed by a
36-26 court; or
36-27 (4) the warehouse operator is acquitted.
37-1 (d) If misconduct is finally determined to have occurred as
37-2 provided by Subsection (b), the loadout fees placed in escrow shall
37-3 be returned to the person originally paying those fees. The
37-4 loadout fees placed in escrow shall be returned to the warehouse
37-5 operator if the warehouse operator is found not to have committed
37-6 misconduct by acquittal, by the dismissal of the criminal charges,
37-7 or by final order of the commissioner.
37-8 Sec. 14.065 [14.010]. RECOVERY ON BOND; LIABILITY OF
37-9 WAREHOUSE OPERATOR [WAREHOUSEMAN]. (a) If no action on the bond or
37-10 cash, certificate of deposit, or letter of credit deposited in lieu
37-11 of a bond of a warehouse operator [warehouseman] is begun before
37-12 the 31st day after the date of a written demand to the department,
37-13 a depositor has a right of action on the bond or cash, certificate
37-14 of deposit, or letter of credit deposited in lieu of a bond for
37-15 recovery of damages suffered by the depositor as a result of the
37-16 failure of the warehouse operator [warehouseman] to comply with any
37-17 condition of the bond, or if cash, a certificate of deposit, or a
37-18 letter of credit is deposited in lieu of a bond, failure to comply
37-19 with any obligation of the warehouse operator under this chapter
37-20 that would have been covered by a bond.
37-21 (b) Recovery on a bond shall be prorated if claims exceed
37-22 liability on a bond, but a depositor suing on a bond is not
37-23 required to join other depositors in a suit. The burden of
37-24 establishing proration is on the surety as a matter of defense or
37-25 is on the department as intervenor on behalf of other depositors.
37-26 (c) A warehouse operator [warehouseman] is liable for
37-27 damages for loss of or injury to grain [a commodity] caused by the
38-1 warehouse operator's [warehouseman's] failure to exercise the care
38-2 that a reasonably prudent person would exercise in regard to the
38-3 grain [commodity] under similar circumstances, but, unless
38-4 otherwise agreed, a warehouse operator [warehouseman] is not liable
38-5 for damages to grain [a commodity] that could not have been avoided
38-6 through the exercise of that care.
38-7 (d) A person who files an action on a bond under this
38-8 section must serve notice of the suit on the department in the same
38-9 manner and within the same period as for the defendant or surety
38-10 who issued the bond.
38-11 (e) On authentication by the department, the court shall
38-12 accept into evidence as a public record any report prepared by the
38-13 department under this chapter that describes potential bond claims
38-14 by other depositors, regardless of whether any of those depositors
38-15 join in the suit.
38-16 (f) A person is prohibited from filing a claim on an invalid
38-17 receipt.
38-18 (g) An action under this section must be brought not later
38-19 than the second anniversary of the date of expiration of the
38-20 public grain warehouse license in effect at the time the claim
38-21 arose.
38-22 (h) The department by rule may set a limitations period for
38-23 filing claims on a bond filed with the department or cash, a
38-24 certificate of deposit, or a letter of credit deposited with the
38-25 department in lieu of a bond.
38-26 Sec. 14.066. APPEAL OF DEPARTMENT ACTION BY WAREHOUSE
38-27 OPERATOR. (a) A department action or order affecting a warehouse
39-1 operator under this chapter, other than by rulemaking, assessment
39-2 of an administrative penalty, or imposition of a license sanction,
39-3 including a suspension under Section 14.083(c), is appealable in
39-4 accordance with this section.
39-5 (b) Not later than the 10th day after the date the
39-6 department takes an action or issues an order described by
39-7 Subsection (a), the warehouse operator may serve notice on the
39-8 department to appear in a district court of Travis County or the
39-9 district court of the county in which the public grain warehouse is
39-10 located. The court shall fix the time of the hearing not less than
39-11 3 days or more than 20 days after the date of service of the
39-12 notice.
39-13 (c) The burden is on the warehouse operator to show by a
39-14 preponderance of the evidence that the action taken or order issued
39-15 by the department was not authorized under this chapter or, if
39-16 authorized, was an abuse of the department's discretion.
39-17 SUBCHAPTER H. OFFENSES
39-18 Sec. 14.071 [14.027]. GENERAL PENALTY. (a) A person commits
39-19 an offense if the person violates a provision of this chapter for
39-20 which an offense is not expressly provided [subchapter other than
39-21 Section 14.022(d)].
39-22 (b) An offense under this section is a Class B misdemeanor.
39-23 Sec. 14.072 [14.028]. PENALTY FOR OPERATING WITHOUT A
39-24 LICENSE. (a) A person commits an offense if the person:
39-25 (1) transacts any public grain warehouse business
39-26 without first obtaining a license required by this chapter
39-27 [subchapter]; or
40-1 (2) continues to transact public grain warehouse
40-2 business after a license has been revoked or suspended, or the
40-3 license holder has been placed on probation, except as permitted
40-4 under Section 14.084 [14.016 of this subchapter].
40-5 (b) An offense under this section is a felony of the third
40-6 degree.
40-7 (c) A person commits a separate offense for each day
40-8 business prohibited by this section is carried on.
40-9 Sec. 14.073 [14.029]. PENALTY FOR FRAUD. (a) A person
40-10 commits an offense if the person:
40-11 (1) issues or aids in issuing a receipt or scale
40-12 weight ticket knowing that the grain covered by the receipt or
40-13 scale weight ticket has not been actually received at the [public]
40-14 grain warehouse;
40-15 (2) issues or aids in issuing a duplicate or
40-16 additional negotiable receipt for grain knowing that a former
40-17 negotiable receipt for the same grain or any part of the grain is
40-18 outstanding except as permitted by Section 14.055 [14.019 of this
40-19 code]; or
40-20 (3) fraudulently and without proper authority
40-21 represents, forges, alters, counterfeits, or simulates any license,
40-22 scale weight ticket, or receipt provided for by this chapter
40-23 [subchapter].
40-24 (b) An offense under this section is a felony of the second
40-25 degree.
40-26 Sec. 14.074 [14.030]. PENALTY FOR UNLAWFUL DELIVERY. (a) A
40-27 person commits an offense if the person:
41-1 (1) delivers grain out of a public grain warehouse
41-2 knowing that a negotiable receipt for the grain is outstanding and
41-3 without possessing that receipt; or
41-4 (2) delivers grain [a commodity] out of a public grain
41-5 warehouse:
41-6 (A) knowing that a nonnegotiable receipt or
41-7 scale weight ticket is outstanding;
41-8 (B) without the prior approval of the person
41-9 lawfully entitled to delivery; and
41-10 (C) without the delivery being shown on the
41-11 appropriate records of the warehouse operator [warehouseman].
41-12 (b) It is an affirmative [a] defense to prosecution under
41-13 this section that the person's action is:
41-14 (1) a sale or other disposition of grain in lawful
41-15 enforcement of a warehouse operator's [warehouseman's] lien;
41-16 (2) [or on] a warehouse operator's [warehouseman's]
41-17 lawful termination of a storing, shipping, or handling agreement;
41-18 (3) a delivery to the person lawfully entitled to
41-19 delivery;
41-20 (4) a delivery authorized by prior approval of the
41-21 person lawfully entitled to delivery and the delivery is shown on
41-22 the appropriate records of the warehouse operator;
41-23 (5) necessary to prevent destruction of the grain;
41-24 (6) taken under the order of a state or federal court;
41-25 or
41-26 (7) [(2)] permitted by a rule of the department
41-27 necessary to carry out this chapter [subchapter].
42-1 (c) An offense under this section is a felony of the second
42-2 degree.
42-3 Sec. 14.075 [14.031]. PENALTY FOR FRAUDULENTLY ISSUING A
42-4 SCALE WEIGHT TICKET OR RECEIPT. (a) A person commits an offense if
42-5 the person fraudulently issues or aids in fraudulently issuing a
42-6 receipt or scale weight ticket knowing that it contains a false
42-7 statement.
42-8 (b) An offense under this section is a felony of the second
42-9 degree.
42-10 Sec. 14.076 [14.032]. PENALTY FOR CHANGING A RECEIPT OR
42-11 SCALE WEIGHT TICKET AFTER ISSUANCE. (a) A person commits an
42-12 offense if the person changes a receipt or scale weight ticket
42-13 after its issuance.
42-14 (b) It is a defense to prosecution under this section that
42-15 the change on the receipt or scale weight ticket is a notation by
42-16 the warehouse operator [warehouseman] for partial delivery or
42-17 corrections made by the warehouse operator [warehouseman] to
42-18 reflect accuracy of accounts.
42-19 (c) An offense under this section is a felony of the second
42-20 degree.
42-21 Sec. 14.077 [14.033]. PENALTY FOR DEPOSITING GRAIN WITHOUT
42-22 TITLE. (a) A person commits an offense if the person:
42-23 (1) deposits grain without having title to the grain
42-24 or deposits grain on which there is a lien or mortgage;
42-25 (2) receives for the grain a negotiable receipt; and
42-26 (3) negotiates the receipt for value with intent to
42-27 deceive and without disclosing the person's lack of title or the
43-1 existence of a lien or mortgage on the grain.
43-2 (b) An offense under this section is a felony of the second
43-3 degree.
43-4 Sec. 14.078 [14.034]. PENALTY FOR STEALING GRAIN OR
43-5 RECEIVING STOLEN GRAIN. (a) A person commits an offense if the
43-6 person:
43-7 (1) obtains or exercises control over grain stored in
43-8 a public grain warehouse without the owner's effective consent and
43-9 with the intent to deprive the owner of the grain;
43-10 (2) obtains from another person grain stolen from a
43-11 public grain warehouse knowing that the grain is stolen; or
43-12 (3) exercises control over grain stolen from a public
43-13 grain warehouse knowing that the grain is stolen.
43-14 (b) An offense under this section is a felony of the second
43-15 degree.
43-16 Sec. 14.079. PENALTY FOR INTERFERING WITH SEALED WAREHOUSE OR
43-17 DEPARTMENT INSPECTION OR INVESTIGATION. (a) A person commits an
43-18 offense if the person:
43-19 (1) without the department's consent and with the
43-20 intent to obstruct the department's regulation, management, or
43-21 control of sealed grain, obtains or exercises control over grain
43-22 stored in a building, bin, or other similar structure sealed by the
43-23 department;
43-24 (2) breaks, removes, vandalizes, or otherwise
43-25 interferes with a department seal placed on a building, bin, or
43-26 other similar structure used for the receiving of grain for hire,
43-27 shipping of grain for hire, storing of grain for hire, or handling
44-1 of grain for hire;
44-2 (3) without the department's consent and with the
44-3 intent to obstruct the department's regulation, management, or
44-4 control of sealed grain, interferes with the department's access to
44-5 or control of grain stored in a building, bin, or other similar
44-6 structure sealed by the department; or
44-7 (4) interferes with the lawful investigation or
44-8 inspection of the facilities, records, or grain deposits of a
44-9 public grain warehouse by a department inspector or other
44-10 department official.
44-11 (b) It is an affirmative defense to prosecution under this
44-12 section that the person's action is:
44-13 (1) necessary to prevent destruction of stored grain
44-14 or the sealed structure; or
44-15 (2) taken under the order of a state or federal court.
44-16 (c) An offense under this section is a felony of the third
44-17 degree.
44-18 SUBCHAPTER I. ENFORCEMENT
44-19 Sec. 14.081. OFFENSE IS VIOLATION; STANDARD OF PROOF. (a)
44-20 Commission of an offense under this chapter is also a violation for
44-21 purposes of administrative enforcement by the department.
44-22 (b) Proof of a violation under this chapter for purposes of
44-23 administrative enforcement, by assessment of an administrative
44-24 penalty or license sanction, is by a preponderance of the evidence.
44-25 (c) In an administrative enforcement action against a person
44-26 for the commission of an offense under this chapter, the department
44-27 is required to prove any intent element provided by the description
45-1 of the offense.
45-2 (d) Both an administrative enforcement action and a criminal
45-3 prosecution may be maintained against a person who violates this
45-4 chapter.
45-5 Sec. 14.082 [14.024]. DISCOVERY OF SHORTAGE; REFUSAL OF
45-6 INSPECTION. (a) If the department determines that a warehouse
45-7 operator [warehouseman] does not possess sufficient grain to cover
45-8 outstanding receipts and outstanding scale weight tickets issued or
45-9 assumed by the warehouse operator [warehouseman], or if a warehouse
45-10 operator [warehouseman] refuses or is unable to submit records or
45-11 property for lawful inspection or the department is unable to
45-12 conduct an inspection of the warehouse due to the condition of the
45-13 warehouse or grain stored in the warehouse, the department may seal
45-14 the warehouse to prevent delivery or receipt of grain except as
45-15 authorized by the department and give notice to the warehouse
45-16 operator [warehouseman] requiring the warehouse operator
45-17 [warehouseman] to[:]
45-18 [(1)] cover a shortage of a particular type of grain
45-19 by:
45-20 (1) storing to the credit of or delivering to each
45-21 depositor affected by the shortage grain of the same type and
45-22 quality that is stored at any of the warehouse operator's licensed
45-23 warehouses in this state and that has been designated as
45-24 company-owned grain by the warehouse operator;
45-25 (2) purchasing and storing to the credit of or
45-26 delivering to each depositor affected by the shortage grain of the
45-27 same type and quality;
46-1 (3) selling company-owned grain of a different type
46-2 and paying to each depositor affected by the shortage, on a pro
46-3 rata basis, the market value of the depositor's grain as determined
46-4 on the day the shortage was discovered by the department; or
46-5 (4) using any combination of the remedies described by
46-6 Subdivisions (1)-(3) or another fair and reasonable method for
46-7 meeting the shortage approved by the department[;]
46-8 [(2) give additional bond;]
46-9 [(3) submit to an inspection considered necessary by
46-10 the department; or]
46-11 [(4) comply with any combination of the requirements
46-12 authorized by this subsection].
46-13 (b) A warehouse operator [warehouseman] shall comply with
46-14 the requirements of a notice issued under Subsection (a) [of this
46-15 section] within 24 hours of notification by the department or
46-16 within a longer time allowed by the department. If the warehouse
46-17 operator [warehouseman] fails to comply, the department may
46-18 petition the district court for the county where the warehouse
46-19 operator's [warehouseman's] principal place of business is located,
46-20 as shown by the license application, for a court order authorizing
46-21 the department to take possession of:
46-22 (1) all or a portion of the grain located in the
46-23 public grain warehouse or warehouses; and
46-24 (2) all relevant records and property of the warehouse
46-25 operator [warehouseman].
46-26 (c) If the department takes possession of grain under
46-27 Subsection (b) [of this section], the department shall give written
47-1 notice of its action to the surety on the bond of the warehouse
47-2 operator [warehouseman] and may notify the holders of all receipts
47-3 and scale weight tickets issued for grain, as shown by the
47-4 warehouse operator's [warehouseman's] records, to present their
47-5 receipts or scale weight tickets for inspection or account for the
47-6 absence of the receipts or scale weight tickets. The department
47-7 may then audit and investigate the affairs of the public grain
47-8 warehouse, especially with respect to the grain of which there is
47-9 an apparent shortage. The purpose of the audit and investigation
47-10 is to determine the amount of the shortage[,] and, if practicable,
47-11 to compute the shortage as to each depositor, as shown by the
47-12 warehouse operator's [warehouseman's] records. The department
47-13 shall notify the warehouse operator [warehouseman] and the surety
47-14 on the warehouse operator's [warehouseman's] bond of the
47-15 approximate amount of the shortage. The department shall notify
47-16 each depositor affected by the shortage by sending notice to the
47-17 depositor's last known address, as shown by the warehouse
47-18 operator's [warehouseman's] records.
47-19 (d) The department shall retain possession of grain obtained
47-20 under this section until:
47-21 (1) the warehouse operator [warehouseman] or surety on
47-22 the bond satisfies the claims of all depositors, within the
47-23 limitations on liability imposed by this chapter; or
47-24 (2) the court orders the department to surrender
47-25 possession.
47-26 (e) If, during or after an audit or investigation authorized
47-27 by this section or at any other time, the department has evidence
48-1 that the warehouse operator [warehouseman] is insolvent or unable
48-2 to satisfy the claims of all depositors, the department may
48-3 petition the district court for appointment of a receiver to
48-4 operate or liquidate the business of the warehouse operator
48-5 [warehouseman] in accordance with law.
48-6 (f) At any time before the 11th day following the day on
48-7 which the department takes possession of grain under this section,
48-8 the warehouse operator [warehouseman] may serve notice on the
48-9 department to appear in the district court of the county in which
48-10 the public grain warehouse is located to show cause why possession
48-11 should not be restored to the warehouse operator [warehouseman].
48-12 The court shall fix the time of the hearing not less than 5 nor
48-13 more than 15 days from the date of service of the notice.
48-14 Sec. 14.083 [14.015]. DENIAL, REVOCATION, MODIFICATION, OR
48-15 SUSPENSION OF LICENSE OR PROBATION. (a) The department may deny an
48-16 application for a license or license renewal if the applicant fails
48-17 to comply with a requirement of this chapter, [subchapter or] a
48-18 rule adopted by the department under this chapter, or a lawful
48-19 order of the commissioner or the commissioner's designee
48-20 [subchapter].
48-21 (b) The department may [shall] revoke, modify, or suspend a
48-22 license or[,] assess an administrative penalty against, place on
48-23 probation [a person whose license has been suspended], or reprimand
48-24 a license holder [licensee] for a violation of this chapter,
48-25 [subchapter or] a rule adopted by the department under this
48-26 chapter, or a lawful order of the commissioner or the
48-27 commissioner's designee [subchapter].
49-1 (c) If the department considers it necessary, the department
49-2 may suspend a license without a hearing for one or more periods not
49-3 to cumulatively [a period not to] exceed 30 days in one licensing
49-4 period.
49-5 (d) During a period of license suspension or probation, the
49-6 department may seal and restrict access to the warehouse operator's
49-7 buildings, bins, or other similar structures used to receive,
49-8 store, ship, or handle grain, for hire, and require the warehouse
49-9 operator [If a license suspension is probated, the department may
49-10 require the person] to:
49-11 (1) maintain additional information in the records of
49-12 the warehouse or report regularly to the department on matters that
49-13 are the basis of the suspension or probation;
49-14 (2) limit practice to the areas prescribed by the
49-15 department; [or]
49-16 (3) operate under conditions or by methods prescribed
49-17 by the department; or
49-18 (4) continue or renew professional education until the
49-19 person attains a degree of skill satisfactory to the department in
49-20 those areas that are the basis of the suspension or probation.
49-21 (e) Except as provided by Subsection (c) [of this section],
49-22 if the department proposes to deny, revoke, modify, or suspend a
49-23 person's application or license or place a warehouse operator on
49-24 probation, the person is entitled to a hearing conducted under
49-25 Section 12.032. The decision of the department is appealable in
49-26 the same manner as provided for contested cases under Chapter 2001,
49-27 Government Code.
50-1 Sec. 14.084 [14.016]. OPERATION AFTER REVOCATION OR
50-2 SUSPENSION OF A LICENSE OR PROBATION. (a) If a license is revoked,
50-3 the warehouse operator [warehouseman] shall terminate, in a manner
50-4 prescribed by the department, all arrangements concerning storing,
50-5 shipping, [or] handling, and purchasing or selling of grain [in the
50-6 warehouse].
50-7 (b) During a period of suspension of a license or probation,
50-8 the warehouse operator:
50-9 (1) shall [warehouseman may, under the direction and
50-10 supervision of the department,] operate the warehouse in a manner
50-11 prescribed by the department;
50-12 (2) may [and] deliver grain previously received,
50-13 subject to the department's written conditions of suspension, if
50-14 any; and
50-15 (3) [but] may not receive grain for storing, shipping,
50-16 or handling without the department's written authorization.
50-17 Sec. 14.085 [14.025]. INJUNCTION. (a) If, after [15 days']
50-18 notice, a warehouse operator [warehouseman] refuses to comply with
50-19 this chapter [subchapter], the department may [shall] apply for an
50-20 injunction in a district court in Travis County or in a district or
50-21 county court in the county where the warehouse is located.
50-22 (b) The courts of this state are vested with jurisdiction to
50-23 issue a temporary or permanent injunction against:
50-24 (1) operation of a public grain warehouse or issuance
50-25 of receipts or scale weight tickets either without a license or
50-26 during a period of suspension of a warehouse operator's license or
50-27 during a period when the warehouse operator is under probation;
51-1 [and]
51-2 (2) interference by any person with the carrying out
51-3 by the department, or by a receiver appointed under this chapter
51-4 [Section 14.024 of this code], of duties and powers granted by this
51-5 chapter; or
51-6 (3) any other violation of this chapter for which
51-7 injunctive relief is an appropriate remedy [subchapter].
51-8 (c) The notice provided for in Subsection (a) shall be
51-9 delivered to the warehouse operator not less than 10 business days
51-10 before the date the department applies for an injunction under
51-11 Subsection (b)(1).
51-12 (d) The notice provided for in Subsection (a) shall be
51-13 delivered to the warehouse operator not less than two business days
51-14 before the date the department applies for an injunction under
51-15 Subsection (b)(2) or (3).
51-16 Sec. 14.086. CIVIL PENALTY. (a) A person who violates this
51-17 chapter is liable for a civil penalty of not less than $500 or more
51-18 than $10,000 for each violation. Each day a violation occurs or
51-19 continues may be considered a separate violation for purposes of a
51-20 civil penalty assessment.
51-21 (b) On request of the department, the attorney general or
51-22 the county attorney or the district attorney of the county in which
51-23 the violation is alleged to have occurred shall file suit to
51-24 collect the penalty. The attorney general, a county attorney, or a
51-25 district attorney may file suit under this section without a
51-26 request from the department.
51-27 (c) A county attorney, a district attorney, or the attorney
52-1 general shall sue in the name of the state for the collection of a
52-2 penalty provided by this section.
52-3 (d) A civil penalty collected under this section shall be
52-4 deposited in the state treasury to the credit of the general
52-5 revenue fund. All civil penalties recovered in suits initially
52-6 instituted by a local government or governments under this section
52-7 shall be divided equally between the state and the local government
52-8 or governments, with 50 percent of the recovery to be paid to the
52-9 general revenue fund and the other 50 percent to be paid equally to
52-10 the local government or governments initially instituting the suit.
52-11 (e) A civil penalty may not be collected for any violation
52-12 that constituted the basis for a department proceeding to assess an
52-13 administrative penalty, regardless of whether the department was
52-14 successful in obtaining a judgment for the administrative penalty.
52-15 [Sec. 14.026. COURT ENFORCEMENT OF DEPARTMENT SUBPOENA. A
52-16 judge of a district or county court may order the attendance of
52-17 witnesses or the production of relevant books and records
52-18 subpoenaed by the department for the purpose of enforcing the
52-19 provisions of this subchapter. The judge may enter the order
52-20 whether the court is in term or on vacation. The judge may compel
52-21 obedience to an order by proceedings for contempt.]
52-22 Sec. 14.087 [14.0262]. RECOVERY OF COURT COSTS. (a) On
52-23 prevailing in an action commenced by the department through the
52-24 attorney general under this chapter or in a hearing commenced by
52-25 the warehouse operator under Section 14.082(f) [subchapter], the
52-26 department and the attorney general are each entitled to recover:
52-27 (1) investigation costs and fees;
53-1 (2) reasonable attorney's fees;
53-2 (3) court costs; and
53-3 (4) other costs relating to the action, including the
53-4 cost of depositions and other forms of discovery and copying
53-5 charges.
53-6 (b) The costs recoverable under this section are in addition
53-7 to other relief available to the department or attorney general.
53-8 Sec. 14.088 [14.035]. VENUE. (a) Venue for a criminal
53-9 prosecution under this chapter [subchapter] is in the county in
53-10 which the alleged offense occurred.
53-11 (b) Except for an action for injunctive relief, venue for a
53-12 civil action under this chapter commenced by the attorney general
53-13 or a county or district attorney, either independently or on behalf
53-14 of the department, is in any county in which all or part of the
53-15 cause of the action accrued.
53-16 (c) Venue for an action for injunctive relief under this
53-17 chapter is in a district court in Travis County or in a district or
53-18 county court in the county where the warehouse is located.
53-19 (d) Venue for an administrative action commenced under this
53-20 chapter is governed by Chapter 2001, Government Code, or, to the
53-21 extent not inconsistent with Chapter 2001, the rules of the State
53-22 Office of Administrative Hearings or the department.
53-23 CHAPTER 14A [SUBCHAPTER C]. OTHER PUBLIC
53-24 WAREHOUSE OPERATORS [WAREHOUSEMEN]
53-25 Sec. 14A.001 [14.201]. DEFINITIONS. In this chapter
53-26 [subchapter]:
53-27 (1) "Public warehouse operator [warehouseman]" means a
54-1 person who stores cotton, wheat, rye, oats, or rice, or any kind of
54-2 produce.
54-3 (2) "Warehouse" means a house, building, or room in
54-4 which the commodities listed in Subdivision (1) [of this section]
54-5 are stored and protected from damage by the elements.
54-6 [Sec. 14.202. POWERS OF THE DEPARTMENT. A warehouse
54-7 operating under this subchapter is under the supervision of the
54-8 department.]
54-9 [Sec. 14.203. WAREHOUSE EXAMINERS. (a) The department may
54-10 appoint warehouse examiners to examine warehouses.]
54-11 [(b) In order to be an examiner, a person must:]
54-12 [(1) be a cotton grader and classer and a competent
54-13 bookkeeper; and]
54-14 [(2) not own an interest in or be an officer or
54-15 employee of:]
54-16 [(A) a warehouse company or corporation; or]
54-17 [(B) a firm engaged in purchasing or selling
54-18 farm, ranch, or orchard products.]
54-19 [(c) Each examiner shall post a $5,000 bond payable to the
54-20 State of Texas, approved by the department, and conditioned on
54-21 faithful performance of duties by the examiner.]
54-22 [(d) Each examiner shall file with the department an
54-23 affidavit stating that the examiner will make fair and impartial
54-24 examinations and will not:]
54-25 [(1) accept any gift or payment for an examination
54-26 other than payment fixed by law; or]
54-27 [(2) reveal to anyone other than the department or a
55-1 court of law the condition of or information about an examined
55-2 corporation or warehouse.]
55-3 [(e) An examiner is not eligible to be appointed receiver of
55-4 a corporation or warehouse that the examiner has examined.]
55-5 [(f) An examiner is entitled to reimbursement for actual and
55-6 necessary expenses incurred in performing official duties.]
55-7 Sec. 14A.002 [14.204]. CERTIFICATE TO TRANSACT BUSINESS. No
55-8 person may operate a warehouse without first obtaining a
55-9 certificate to transact business as a public warehouse operator
55-10 [warehouseman] from the county clerk of the county in which the
55-11 warehouse is located.
55-12 Sec. 14A.003 [14.205]. APPLICATION FOR CERTIFICATE. (a) In
55-13 order to obtain a certificate to transact business, a person must
55-14 apply in writing to the county clerk of the county in which the
55-15 warehouse is to be operated. The application must state the name
55-16 and location of the warehouse and:
55-17 (1) the name of each person with an interest as owner
55-18 or principal in the warehouse; or
55-19 (2) if a corporation owns or manages the warehouse,
55-20 the name of the president, secretary, and treasurer of the
55-21 corporation.
55-22 (b) The clerk shall issue the certificate and retain for
55-23 county records a copy of the application.
55-24 Sec. 14A.004 [14.206]. BOND. (a) A person receiving a
55-25 certificate to transact business shall file a bond with the county
55-26 clerk granting the certificate.
55-27 (b) The bond must be:
56-1 (1) payable to the State of Texas;
56-2 (2) of good and sufficient surety;
56-3 (3) conditioned on faithful performance of the
56-4 applicant's duty as a public warehouse operator [warehouseman]; and
56-5 (4) in the amount of $5,000.
56-6 (c) A bond is subject to approval by the county clerk and
56-7 the clerk shall file approved bonds in the clerk's office.
56-8 Sec. 14A.005 [14.207]. RECEIPTS. (a) The owner or depositor
56-9 of property stored in a warehouse may request from the public
56-10 warehouse operator [warehouseman] a receipt for the property stored
56-11 in the warehouse.
56-12 (b) The receipt shall be signed by the public warehouse
56-13 operator [warehouseman] or the warehouse operator's
56-14 [warehouseman's] agent and shall state:
56-15 (1) that the receipt is issued by a warehouse;
56-16 (2) the date of its issuance;
56-17 (3) the name and location of the warehouse in which
56-18 the property is stored; and
56-19 (4) the description, quantity, number, and marks of
56-20 the property stored.
56-21 (c) The public warehouse operator [warehouseman] shall
56-22 number receipts consecutively in the order of their issue and shall
56-23 keep a correct record of receipts issued available for public
56-24 inspection at reasonable hours.
56-25 Sec. 14A.006 [14.208]. RECEIPT FOR COTTON. (a) A public
56-26 warehouse operator [warehouseman] shall issue a warehouse receipt
56-27 to any person who deposits cotton in the warehouse operator's
57-1 [warehouseman's] warehouse and requests a receipt.
57-2 (b) The receipt shall contain:
57-3 (1) all information required to be included on a
57-4 receipt by Section 14A.005 [14.207 of this code];
57-5 (2) the date on which the cotton was received in the
57-6 warehouse;
57-7 (3) a statement that the cotton represented by the
57-8 receipt is deliverable on return of the receipt properly endorsed
57-9 and payment of charges for storage and insurance stated on the face
57-10 of the receipt; and
57-11 (4) a statement of the grade and staple of the cotton
57-12 represented by the receipt.
57-13 (c) The statement of grade and staple of cotton required on
57-14 receipts by this section shall be determined by a licensed public
57-15 cotton classer. The public warehouse operator [warehouseman] may
57-16 not charge the depositor of the cotton more than 25 cents per bale
57-17 for the statement. If no licensed public cotton classer is
57-18 available, the warehouse operator [warehouseman] may issue a
57-19 temporary receipt that:
57-20 (1) does not contain a statement of grade and staple
57-21 of the cotton;
57-22 (2) has the words "temporary receipt" clearly stamped
57-23 on its face; and
57-24 (3) is exchangeable at any time after five days from
57-25 the date of its issuance for a permanent warehouse receipt
57-26 containing all information required by Subsection (b) [of this
57-27 section].
58-1 (d) Failure or neglect by a public warehouse operator
58-2 [warehouseman] to comply with the provisions of this section is a
58-3 ground for revocation of a certificate to transact business as a
58-4 public warehouse operator [warehouseman].
58-5 Sec. 14A.007 [14.209]. DUPLICATE RECEIPTS. (a) A public
58-6 warehouse operator [warehouseman] may not issue a duplicate receipt
58-7 or two receipts bearing the same number from the same warehouse
58-8 during the same calendar year, except as provided by Subsection (b)
58-9 [of this section].
58-10 (b) If a receipt is lost or destroyed, the public warehouse
58-11 operator [warehouseman] shall issue a new receipt that:
58-12 (1) bears the same date and number as the original
58-13 receipt;
58-14 (2) is plainly marked "duplicate" on its face; and
58-15 (3) is secured with a deposit:
58-16 (A) made by the person requesting the duplicate
58-17 receipt; and
58-18 (B) acceptable to the warehouse operator
58-19 [warehouseman] to protect a person who may hold the original
58-20 receipt in good faith and for valuable consideration.
58-21 Sec. 14A.008 [14.210]. EXCHANGE OF COTTON RECEIPTS. (a) A
58-22 person may exchange a nonnegotiable receipt for cotton for a
58-23 negotiable receipt for cotton by:
58-24 (1) returning the nonnegotiable receipt to the
58-25 warehouse issuing it; and
58-26 (2) complying with the provisions of this chapter
58-27 [subchapter] relating to negotiable receipts.
59-1 (b) When the negotiable receipt is surrendered or canceled,
59-2 the public warehouse operator [warehouseman] shall mark or stamp
59-3 "canceled" in ink on the face of the receipt.
59-4 Sec. 14A.009 [14.211]. COTTON UNDER LIEN. A person who buys,
59-5 sells, or deals with cotton on which a lien or encumbrance exists
59-6 is not liable for conversion of the cotton if:
59-7 (1) the cotton is stored in a warehouse or is
59-8 evidenced by a negotiable warehouse receipt issued by a public
59-9 warehouse operator [warehouseman]; and
59-10 (2) the person did not have actual knowledge of the
59-11 lien or encumbrance at the time of the alleged conversion.
59-12 Sec. 14A.010 [14.212]. RECEIPT TO BE ISSUED ONLY ON
59-13 DELIVERY. A public warehouse operator [warehouseman] may not issue
59-14 a receipt until the goods secured by the receipt are actually
59-15 delivered to the warehouse and are under the control of the
59-16 warehouse operator [warehouseman] issuing the receipt.
59-17 Sec. 14A.011 [14.213]. DELIVERY. (a) A public warehouse
59-18 operator [warehouseman] shall immediately deliver property held in
59-19 the warehouse on:
59-20 (1) presentation of a properly endorsed receipt issued
59-21 by the warehouse operator [warehouseman] to represent the property;
59-22 and
59-23 (2) payment by the holder of the receipt of all proper
59-24 warehouse charges on property represented by the receipt.
59-25 (b) Unless a receipt has been lost or canceled, a public
59-26 warehouse operator [warehouseman] may not deliver property
59-27 represented by a receipt until the receipt is surrendered and
60-1 canceled.
60-2 (c) On delivery of goods represented by a receipt, the
60-3 public warehouse operator [warehouseman] shall cancel the receipt
60-4 by writing "canceled" in ink on the receipt and placing the
60-5 warehouse operator's [warehouseman's] name on the face of the
60-6 receipt. A canceled receipt is void and may not be circulated.
60-7 (d) A public warehouse operator [warehouseman] who fails to
60-8 strictly comply with this section is liable to the legal holder of
60-9 the receipt for the full value of the property represented by the
60-10 receipt, based on the value of the property at the time of the
60-11 default.
60-12 Sec. 14A.012 [14.214]. EXCEPTIONS. (a) This chapter
60-13 [subchapter] does not apply to private warehouses or the issuance
60-14 of receipts by the owners or managers of private warehouses.
60-15 (b) This chapter [subchapter] does not prohibit a public
60-16 warehouse operator [warehouseman] from issuing the same types of
60-17 receipts as issued by a private warehouse, provided that the faces
60-18 of the receipts are plainly marked with: "not a public warehouse
60-19 receipt."
60-20 [Sec. 14.215. STORAGE CHARGES. (a) The department may set
60-21 minimum storage charges for a warehouse operating under this
60-22 subchapter.]
60-23 [(b) The department is not required to set equal charges at
60-24 all places or all times and may take into consideration the local
60-25 conditions and volume of business of each warehouse.]
60-26 [(c) The department shall consider the size of bales in
60-27 setting charges for gin compressed cotton.]
61-1 Sec. 14A.013 [14.216]. REVOCATION OF A CERTIFICATE. (a) A
61-2 person may sue in the district court of the county in which a
61-3 warehouse is situated to revoke the certificate of the warehouse.
61-4 (b) The person seeking revocation of the certificate shall
61-5 provide the court with a written petition setting forth particular
61-6 violations of the law, and the court shall conduct the trial with
61-7 the same rules of process, procedure, and evidence used in civil
61-8 cases.
61-9 SECTION 2. Section 12.020(c), Agriculture Code, is amended to
61-10 read as follows:
61-11 (c) The provisions of this code subject to this section and
61-12 the applicable penalty amounts are as follows:
61-13 Provision Maximum Penalty
61-14 Chapters 13, 14A, [14,] 18, 46, 61, 94,
61-15 95, 101, 102, 103, 121, 125,
61-16 132, and 134 $500
61-17 Subchapter B, Chapter 71
61-18 Chapter 19
61-19 Chapter [Chapters 75 and] 76 $2,000
61-20 Subchapters A and C, Chapter 71
61-21 Chapters 72, 73, and 74 $5,000
61-22 Chapter 14 $10,000.
61-23 SECTION 3. Section 59.003(b), Property Code, is amended to
61-24 read as follows:
61-25 (b) Unless a lessor issues a warehouse receipt, bill of
61-26 lading, or other document of title relating to property stored at
61-27 the facility, the following statutes do not apply to a self-service
62-1 storage facility:
62-2 (1) Chapter 7, Business & Commerce Code, as amended;
62-3 and
62-4 (2) [Subchapter A,] Chapter 14, Agriculture Code[, as
62-5 amended; and]
62-6 [(3) Sections 14.201, 14.204 through 14.214, and
62-7 14.216, Agriculture Code].
62-8 SECTION 4. (a) The changes in law made by this Act apply
62-9 only to an application for a license or renewal of a license made
62-10 to the Department of Agriculture on or after the effective date of
62-11 this Act. An application for a license or renewal of a license
62-12 made to the Department of Agriculture immediately before the
62-13 effective date of this Act is governed by the law as it existed
62-14 before the effective date of this Act, and that law is continued in
62-15 effect for that purpose.
62-16 (b) The changes in law made by Subchapters H and I, Chapter
62-17 14, Agriculture Code, as added by this Act, apply only to an
62-18 offense committed on or after the effective date of this Act. An
62-19 offense committed before the effective date of this Act is governed
62-20 by the law as it existed when the offense was committed, and that
62-21 law is continued in effect for that purpose. For purposes of this
62-22 section, an offense was committed before the effective date of this
62-23 Act if any element of the offense was committed before that date.
62-24 SECTION 5. This Act takes effect September 1, 2001.