By Swinford H.B. No. 2586
77R4518 JMG-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the regulation of public grain warehouse operators;
1-3 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 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 from a public grain warehouse for grain; or
1-18 (C) is lawfully entitled to possession of [the]
1-19 grain stored in a public grain warehouse.
1-20 (2) "Grain" means wheat, grain sorghum, corn, oats,
1-21 barley, rye, soybeans, or any other grain, peas, or beans as
1-22 designated by department rule [for which federal grain standards
1-23 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 to customers of
3-17 the warehouse operator, the term "warehouse operator" includes all
3-18 employees, agents, or other persons authorized by the warehouse
3-19 operator to issue receipts or scale weight tickets or sign
3-20 contracts or other agreements.
3-21 SUBCHAPTER B. GENERAL PROVISIONS
3-22 Sec. 14.011 [14.002]. LIMITATION OF CHAPTER [SUBCHAPTER].
3-23 This chapter [subchapter] does not apply to:
3-24 (1) a public grain warehouse covered by a license for
3-25 the operation of a public grain warehouse issued by the United
3-26 States Department of Agriculture or other federal agency [under the
3-27 United States Warehouse Act];
4-1 (2) an individual producer-owner who does not receive
4-2 from others grain for storage or handling for hire;
4-3 (3) a person whose business is manufacturing grain or
4-4 selling manufactured grain and who receives all grain with the
4-5 intent to manufacture the grain or sell manufactured grain [at
4-6 retail, unless the person also satisfies the definition of a
4-7 warehouseman]; or
4-8 (4) a person who receives grain with the intent of
4-9 using the grain for planting seed or for feeding livestock on the
4-10 premises where the grain is received[, unless the person requests
4-11 in writing to the department to be licensed].
4-12 Sec. 14.012. BUSINESS INFORMATION. (a) The following
4-13 information, prepared by the department in the course of its
4-14 regulatory authority under this chapter or required to be submitted
4-15 to the department in accordance with the department's
4-16 administration of this chapter, is confidential and not subject to
4-17 public disclosure:
4-18 (1) inspection or investigation reports containing
4-19 information regarding grain inventory; and
4-20 (2) financial information provided to the department
4-21 to establish net worth for purposes of licensing.
4-22 (b) Notwithstanding Subsection (a), inspection reports
4-23 containing information regarding grain inventory of a warehouse
4-24 operator or financial information of a warehouse operator provided
4-25 to the department to establish net worth may be:
4-26 (1) entered into evidence without sealing and made
4-27 public in:
5-1 (A) an administrative proceeding commenced by
5-2 the department against a warehouse operator;
5-3 (B) a civil or criminal proceeding commenced by
5-4 a county attorney, a district attorney, or the attorney general,
5-5 either independently or on behalf of the department, against a
5-6 warehouse operator; or
5-7 (C) a civil or criminal proceeding commenced by
5-8 the warehouse operator against the department;
5-9 (2) provided to the issuer of a warehouse operator's
5-10 bond or letter of credit for the purpose of establishing a claim on
5-11 the warehouse operator's bond or letter of credit;
5-12 (3) disclosed to the public after:
5-13 (A) revocation of a warehouse operator's
5-14 license;
5-15 (B) a voluntary closeout of all of the license
5-16 holder's facilities in this state;
5-17 (C) a petition for bankruptcy has been filed; or
5-18 (D) a receiver is appointed for the warehouse
5-19 operator's assets; or
5-20 (4) disclosed to any federal agency or any agency of
5-21 another state conducting a compliance inspection or criminal or
5-22 civil investigation involving the handling, storing, shipping,
5-23 selling, purchasing, or receipt of grain.
5-24 Sec. 14.013. RIGHT TO INTERVENE AND NOTIFICATION OF
5-25 DEPARTMENT. (a) The department may intervene in a suit for
5-26 receivership, garnishment, bankruptcy, or any other legal action
5-27 affecting the assets of a warehouse operator licensed under this
6-1 chapter or the grain assets of a depositor in a warehouse operated
6-2 under a license issued by the department, including, to assert the
6-3 rights of depositors not joined in the suit, a suit brought against
6-4 a bond or surety under Section 14.065.
6-5 (b) Any person who files a suit for receivership,
6-6 garnishment, or bankruptcy or who commences any other legal action
6-7 affecting the assets of a warehouse operator licensed under this
6-8 chapter or the grain assets of a depositor in a warehouse operated
6-9 under a license issued by the department, including a suit against
6-10 a bond or surety under Section 14.065, must give notice to the
6-11 department of the suit or legal action.
6-12 (c) Notice under this section must be in writing and
6-13 delivered to the department by certified mail, registered mail, or
6-14 commercial delivery service not later than the 20th day after the
6-15 date on which the suit or legal action is commenced.
6-16 (d) The judgment in an action described by Subsection (a)
6-17 is voidable if the notice required by this section is not provided.
6-18 (e) The court in which a suit or other legal action
6-19 described by Subsection (a) is commenced may impose appropriate
6-20 sanctions against a party who fails to provide the notice required
6-21 by this section.
6-22 Sec. 14.014. RECEIVERSHIP AFFECTING WAREHOUSE ASSETS. (a) A
6-23 person appointed receiver for the assets of a warehouse operator
6-24 licensed under this chapter is not required to obtain a license
6-25 from the department if the person:
6-26 (1) is bonded and insured as described by Subsection
6-27 (b); and
7-1 (2) after being appointed, does not:
7-2 (A) receive additional grain for storing for
7-3 hire, handling for hire, or shipping for hire; or
7-4 (B) purchase grain for resale.
7-5 (b) A person appointed receiver shall maintain:
7-6 (1) a bond in the same amount required for a licensed
7-7 warehouse operator; and
7-8 (2) casualty insurance in the same amount and type as
7-9 required for a licensed warehouse operator.
7-10 (c) A person appointed receiver shall file proof of proper
7-11 bonding and verification of insurance with the department on or
7-12 before the date the person is appointed to act as receiver.
7-13 Sec. 14.015 [14.003]. POWERS AND DUTIES OF DEPARTMENT.
7-14 [(a)] The department shall administer this chapter [subchapter]
7-15 and may:
7-16 (1) investigate the storing, shipping, and handling of
7-17 grain and complaints relating to these activities through the
7-18 inspection of:
7-19 (A) any public grain warehouse;
7-20 (B) the grain stored in any warehouse; or
7-21 (C) all property and records pertaining to a
7-22 warehouse;
7-23 (2) determine whether a warehouse for which a license
7-24 has been issued or applied for is suitable for properly storing,
7-25 shipping, or handling grain that is stored in or expected to be
7-26 stored in the warehouse;
7-27 (3) include field seed within the definition given to
8-1 "grain" by Section 14.001 [of this code];
8-2 (4) require that a warehouse operator keep records or
8-3 submit reports the department [it] determines are necessary in the
8-4 administration of this chapter [subchapter];
8-5 (5) require a warehouse operator or depositor
8-6 [warehouseman] to terminate storing, shipping, and handling
8-7 agreements within a time specified by the department:
8-8 (A) on closeout or revocation of the warehouse
8-9 operator's [a] license;
8-10 (B) if grain has been abandoned by the warehouse
8-11 operator or a depositor and the warehouse operator or depositor
8-12 cannot be located after diligent effort; or
8-13 (C) on issuance of an injunction ordering an
8-14 unlicensed warehouse operator to cease operations;
8-15 (6) prescribe forms, including the form of receipts,
8-16 bonds, or applications for licenses; [and]
8-17 (7) for purposes of determining compliance with this
8-18 chapter or amounts due to a depositor in an action taken by the
8-19 department against a surety or surety instrument under this
8-20 chapter, determine a warehouse operator's specific obligations to a
8-21 depositor, including:
8-22 (A) the type, quantity, or quality of open
8-23 storage or receipted grain due a depositor;
8-24 (B) the payment owed a depositor if a shortage
8-25 or variance exists in the type, quantity, or quality of a
8-26 depositor's open storage or receipted grain;
8-27 (C) the time and manner of delivery of grain due
9-1 a depositor; and
9-2 (D) whether a warehouse operator has failed to
9-3 deliver a depositor's open storage or receipted grain within a
9-4 reasonable time;
9-5 (8) by written order require a warehouse operator to
9-6 deliver grain of a particular type, quantity, and quality to a
9-7 depositor at a particular time and in a particular manner based on
9-8 the department's determination that the required delivery of grain
9-9 is due the depositor;
9-10 (9) classify grain by category, including open
9-11 storage, receipted, identity-preserved, company-owned, abandoned,
9-12 and genetically modified grain, and adopt rules regarding the
9-13 storage, shipping, or handling of classified grain, including
9-14 recordkeeping and accounting requirements;
9-15 (10) seize the records of a warehouse operator,
9-16 including any electronic records or the equipment or media on which
9-17 the records are stored, during a period of suspension of a
9-18 warehouse operator's license;
9-19 (11) seal or post as sealed, or both seal and post as
9-20 sealed, the warehouse of a warehouse operator:
9-21 (A) whose license has been suspended or revoked;
9-22 (B) whose license has expired; or
9-23 (C) who is unlicensed;
9-24 (12) seal or post as sealed, or both seal and post as
9-25 sealed, a warehouse that is found to be unsafe for inspection or
9-26 unsuitable for the storage of grain;
9-27 (13) during reasonable hours and to determine
10-1 compliance with this chapter, enter any facility where the
10-2 department reasonably believes grain is being handled, stored,
10-3 shipped, purchased, or sold to examine:
10-4 (A) the facility's storage, shipping, handling,
10-5 and financial records;
10-6 (B) grain; and
10-7 (C) physical structures;
10-8 (14) determine the suitability of a warehouse for
10-9 storing, shipping, or handling grain or for adequate and safe
10-10 inspection and, if found unsuitable for any of those purposes,
10-11 order corrective action;
10-12 (15) require the warehouse operator to notify the
10-13 department regarding:
10-14 (A) the handling of commodities that may pose a
10-15 hazard to humans, animals, the grain of other depositors in the
10-16 warehouse operator's warehouse, or the grain industry;
10-17 (B) existing hazards to inspection, including
10-18 recent or ongoing fumigations of warehouse facilities and unsafe or
10-19 inoperable warehouse equipment or structures; or
10-20 (C) any change in ownership, management, or
10-21 legal or financial status of a warehouse licensed under this
10-22 chapter;
10-23 (16) require by rule that sales, purchase, or
10-24 brokerage agreements between a warehouse operator and a producer be
10-25 in writing and contain written terms or provisions the department
10-26 considers appropriate to protect producers, depositors, and
10-27 warehouse operators and to ensure the department's ability to carry
11-1 out its regulatory functions under this chapter;
11-2 (17) regulate a warehouse operator's temporary storage
11-3 of grain in a non-warehouse location or facility;
11-4 (18) require segregation of grain requiring identity
11-5 preservation;
11-6 (19) enter into cooperative agreements with agencies
11-7 of the federal government or other states to carry out the purposes
11-8 of this chapter;
11-9 (20) recover the unused warehouse receipts of a
11-10 warehouse operator:
11-11 (A) during any period of probation or suspension
11-12 of the warehouse operator's license;
11-13 (B) on revocation or voluntary surrender of the
11-14 warehouse operator's license; or
11-15 (C) during any period in which the warehouse
11-16 operator is not licensed, including after a failure to timely renew
11-17 the license;
11-18 (21) order corrective action or impose any reasonable
11-19 condition of probation necessary to accomplish the regulatory goals
11-20 authorized by this chapter; and
11-21 (22) adopt rules necessary to carry out the provisions
11-22 of this chapter [subchapter].
11-23 [(b) In any hearing conducted under this subchapter, the
11-24 State Office of Administrative Hearings may:]
11-25 [(1) examine under oath any person and examine books
11-26 and records of any licensee;]
11-27 [(2) hear testimony and gather evidence for the
12-1 discharge of duties under this subchapter;]
12-2 [(3) administer oaths; and]
12-3 [(4) issue subpoenas, effective in any part of this
12-4 state, and require attendance of witnesses and the production of
12-5 books.]
12-6 [(c) The department may appoint and fix duties and
12-7 compensation of inspectors and other personnel and provide
12-8 equipment necessary to enforce the provisions of this subchapter.]
12-9 [(d) The following information prepared by the department in
12-10 the course of its regulatory authority under this subchapter or
12-11 required to be submitted to the department in accordance with the
12-12 department's administration of this subchapter is confidential and
12-13 not subject to public disclosure:]
12-14 [(1) inspection reports containing information
12-15 regarding grain inventory; and]
12-16 [(2) financial information provided to the department
12-17 to establish net worth for purposes of licensure.]
12-18 SUBCHAPTER C. LICENSING
12-19 Sec. 14.021 [14.004]. LICENSE REQUIRED. A person may not
12-20 operate a public grain warehouse without first obtaining from the
12-21 department a license in the person's name covering the warehouse.
12-22 Sec. 14.022. LICENSING OF MULTIPLE WAREHOUSES. (a) In this
12-23 section:
12-24 (1) "Combination" means a group of two or more public
12-25 grain warehouses or facilities operated under a single set of
12-26 complete records. For purposes of this chapter, a combination is
12-27 treated as if it were a single public grain warehouse.
13-1 (2) "Facility" means two or more public grain
13-2 warehouses located in close proximity on the same general location.
13-3 For purposes of this chapter, and except when part of a
13-4 combination, a facility is treated as if it were a single public
13-5 grain warehouse.
13-6 (b) A warehouse operator may operate all public grain
13-7 warehouses or facilities within an area no larger than 60 miles in
13-8 diameter as a combination if a single license covering the
13-9 combination is obtained from the department and:
13-10 (1) a single recordkeeping system covering only
13-11 warehouses within the combination is maintained by the warehouse
13-12 operator;
13-13 (2) a single, unique set of sequentially numbered
13-14 receipts containing all information required by department rule and
13-15 bearing the name of the license holder and a unique combination
13-16 name, but not bearing individual warehouse or facility names, is
13-17 used for the combination;
13-18 (3) for each scale operated by the warehouse operator,
13-19 the warehouse operator issues and maintains a single, unique set of
13-20 sequentially numbered scale weight tickets containing all
13-21 information required by department rule and bearing the name of the
13-22 license holder and a unique name identifying the facility where the
13-23 scale is located;
13-24 (4) a single daily position report covering all
13-25 storage obligations of the combination and only the combination,
13-26 including company-owned grain, and containing all information
13-27 required by department rule is maintained;
14-1 (5) all original warehouse operator records, except
14-2 for scale weight tickets, relating to transactions or storage
14-3 obligations involving the combination are maintained at a single
14-4 location and separate from all other businesses and separately
14-5 licensed warehouse operations of the warehouse operator; and
14-6 (6) except as provided by department rule, a single
14-7 unique bond or bond substitute is used to cover the combination.
14-8 (c) Except as permitted while operating a combination, a
14-9 warehouse operator may not combine or intermingle assets, storage
14-10 obligations, liabilities of any kind, records or record entries,
14-11 contractual obligations, other transactions of any kind, or any
14-12 other business or operating information from different warehouses
14-13 or businesses owned, managed, or operated by the warehouse
14-14 operator. Each licensed combination or individually licensed
14-15 facility must be operated as a separate entity under a single,
14-16 unique name and, except as provided by department rule, must be
14-17 covered by a single, separate bond or bond substitute.
14-18 Sec. 14.023 [14.005]. LICENSING PROCEDURE. (a) The
14-19 department may issue, renew, or amend a license following a
14-20 determination that:
14-21 (1) the applicant has filed an acceptable bond, a
14-22 financial statement in a form prescribed by the department, and
14-23 proof of casualty [possesses sufficient] insurance required by this
14-24 chapter;
14-25 (2) the warehouse is suitable for storage of grain and
14-26 inspection by department personnel; [and]
14-27 (3) the applicant has complied with this chapter
15-1 [subchapter] and rules adopted under this chapter; and
15-2 (4) the applicant has met the net worth or deficiency
15-3 bond requirements of Section 14.031(e) [subchapter].
15-4 (b) An applicant must file a separate application for each
15-5 license, renewal, or amendment and shall accompany each application
15-6 for a license or renewal with an annual license fee, as provided by
15-7 department rule. The department shall prescribe the information to
15-8 be contained in the application. A person who fails to submit a
15-9 renewal fee on or before the expiration date of the license must
15-10 pay, in addition to the renewal fee, the late fee provided by
15-11 Section 12.024 [of this code].
15-12 (c) If an applicant for a license previously operated a
15-13 grain warehouse in this state or another state and that warehouse
15-14 ceased to operate while the applicant was the operator, the
15-15 applicant must submit with the application evidence acceptable to
15-16 the department that all debts from the previous operation evidenced
15-17 by receipts have been satisfied. The department may not issue a
15-18 license to an applicant who the department determines has not
15-19 satisfied all such debts from a previous operation.
15-20 [Sec. 14.006. MULTIPLE WAREHOUSES OPERATED UNDER A SINGLE
15-21 LICENSE. (a) For the purpose of granting a license, the
15-22 department may consider as one unit all warehouses owned or
15-23 controlled by the warehouseman that are located in close proximity
15-24 on the same general location.]
15-25 [(b) All public grain warehouses operating under a single
15-26 license shall be treated as a single warehouse for the purposes of
15-27 this subchapter, including the issuance of receipts and the receipt
16-1 and shipment of grain. However, the department may approve an
16-2 application requesting that any part of a warehouse be reserved and
16-3 designated "not for public use."]
16-4 Sec. 14.024 [14.007]. REQUIREMENT FOR INCREASING CAPACITY.
16-5 A warehouse operator [warehouseman] may not use any increased
16-6 warehouse capacity without first obtaining written approval from
16-7 the department.
16-8 SUBCHAPTER D. BONDING
16-9 Sec. 14.031 [14.009]. BOND. (a) In accordance with this
16-10 section, each applicant for a license shall file or have on file a
16-11 bond with the department.
16-12 (b) The bond must:
16-13 (1) be payable to the State of Texas;
16-14 (2) be executed by the applicant as principal;
16-15 (3) be issued by a corporate surety licensed to do
16-16 business as surety in the State of Texas; and
16-17 (4) be in a form and contain terms and conditions
16-18 prescribed by the department.
16-19 (c) The bond must be conditioned on faithful performance of:
16-20 (1) each obligation of a warehouse operator
16-21 [warehouseman] as to receipted grain and open storage grain under
16-22 this chapter [subchapter] and rules adopted under this chapter
16-23 [subchapter], from the effective date of the bond until the license
16-24 is revoked or the bond is canceled, whichever occurs first, whether
16-25 or not the warehouse remains licensed; and
16-26 (2) each obligation of a warehouse operator
16-27 [warehouseman] under any contract with a depositor that exists on
17-1 the effective date of the bond or is assumed after the effective
17-2 date of the bond and before the license is revoked or the bond is
17-3 canceled, whichever occurs first and whether or not the warehouse
17-4 remains licensed.
17-5 (d) The bond must be in an amount of not less than $20,000
17-6 and be based on six cents per bushel of storage capacity [$15,000
17-7 nor more than $500,000, based on the following rate:]
17-8 [(1) seven cents per bushel on the first million
17-9 bushels of storage capacity;]
17-10 [(2) five cents per bushel on the second million
17-11 bushels of storage capacity; and]
17-12 [(3) three cents per bushel on all bushels of storage
17-13 capacity above two million bushels].
17-14 (e) If the actual net worth of an applicant equals less than
17-15 25 cents per bushel of storage capacity, the applicant shall file a
17-16 deficiency bond in an amount equal to the difference between the
17-17 actual net worth and an amount determined by multiplying 25 cents
17-18 times each bushel of storage capacity in the applicant's warehouse.
17-19 A deficiency bond is in addition to the bond required of an
17-20 applicant by this section[, and the maximum amount of a bond
17-21 provided by Subsection (d) of this section does not apply].
17-22 (f) [In considering the reissuance of a license, the
17-23 department may accept a certificate from a surety stating that a
17-24 bond filed with the department has been renewed or continued.]
17-25 [(g)] The applicant may give a single bond meeting the
17-26 requirements of this section to cover warehouses licensed as a
17-27 single facility or combination. A single bond may not be used to
18-1 cover more than one individually licensed facility, more than one
18-2 combination, or one or more individually licensed facilities and
18-3 one or more combinations [all licensed facilities operated by him
18-4 or her, except that each warehouse operated by the applicant must
18-5 be covered by the bond in the amount of at least $15,000].
18-6 (g) [(h)] The liability of the surety of a bond required by
18-7 this chapter [subchapter] is limited to the face amount of the bond
18-8 and does not accumulate for each successive license period during
18-9 which the bond is in force.
18-10 (h) [(i)] Subject to the approval of the department, a
18-11 warehouse operator [warehouseman] may deposit the following with
18-12 the department, for the term of the license plus two years, in lieu
18-13 of a bond required by this section:
18-14 (1) cash;
18-15 (2) an irrevocable letter of credit, payable to the
18-16 State of Texas; or
18-17 (3) a certificate of deposit from a federally insured
18-18 bank or savings and loan institution authorized to do business in
18-19 this state, assigned to the State of Texas[; or]
18-20 [(4) negotiable securities approved by the department
18-21 as providing the same protection as a surety bond for the grain
18-22 depositor].
18-23 (i) [(j)] The cash, letter of credit, or certificate of
18-24 deposit[, or securities deposited] under Subsection (h) [(i) of
18-25 this section] must be in the same amount or have a value in the
18-26 same amount as required for the warehouse bond.
18-27 (j) [(k)] Any interest or income earned on an assigned
19-1 certificate of deposit [or securities] accrues to the owner of the
19-2 certificate [or securities] during the time of the assignment.
19-3 Sec. 14.032 [14.012]. ADDITIONAL BOND [OR INSURANCE]. (a)
19-4 If the department determines that an approved bond [or insurance
19-5 policy] is insufficient, the department shall require the warehouse
19-6 operator [warehouseman] to give additional bond [or insurance].
19-7 (b) If a license has been suspended or revoked or has
19-8 expired, the department may require a bond from the warehouse
19-9 operator [warehouseman] to protect depositors of grain for as long
19-10 as any receipts or open storage accounts remain outstanding.
19-11 Sec. 14.033 [14.013]. BOND [OR INSURANCE] CANCELLATION. (a)
19-12 A warehouse operator [warehouseman] may not cancel a bond [or
19-13 insurance policy] approved by the department unless the department
19-14 first gives written approval of a substitute bond [or policy].
19-15 (b) The surety [or insurer] may cancel a bond [or insurance
19-16 policy] by sending notice of intent to cancel by registered or
19-17 certified mail to the department. Cancellation of a bond may not
19-18 be effective before the 91st day following the day on which the
19-19 surety mails notice of intent to cancel. [Cancellation of an
19-20 insurance policy may not be effective before the 31st day following
19-21 the day on which the insurer mails notice of intent to cancel.] On
19-22 receipt of notice of cancellation of a bond [or insurance policy],
19-23 the department shall promptly notify the warehouse operator
19-24 [warehouseman] involved. Liability under the bond ceases to accrue
19-25 on the effective date of cancellation. Notwithstanding
19-26 cancellation under this section, the department or a depositor may
19-27 collect under the bond for any claim that arose during the period
20-1 during which the bond was in effect, provided that the claim is
20-2 filed within the limitations period established under Section
20-3 14.065(h).
20-4 (c) The surety [or insurer] shall send a copy of the notice
20-5 required by this section to any government agency requesting it.
20-6 (d) Notwithstanding any other provision of this chapter, a
20-7 public grain warehouse license is automatically suspended if the
20-8 warehouse operator [subchapter, the department shall automatically
20-9 suspend the license if the warehouseman] fails[:]
20-10 [(1)] to file a new bond before the cancellation of a
20-11 bond is effective[; or]
20-12 [(2) to file a new certificate of insurance before the
20-13 cancellation of an insurance policy is effective].
20-14 (e) The suspension of a license under this section continues
20-15 as long as the warehouse operator [warehouseman] fails to maintain
20-16 the bond [or insurance] required by this chapter [subchapter].
20-17 Sec. 14.034. CANCELLATION OF LETTER OF CREDIT. (a) A
20-18 warehouse operator may not cancel a letter of credit approved by
20-19 the department in lieu of a bond unless the department gives
20-20 written approval of a substitute bond.
20-21 (b) The issuer of the letter of credit may cancel a letter
20-22 of credit by sending notice of intent to cancel by registered or
20-23 certified mail to the department. Cancellation of a letter of
20-24 credit may not take effect before the 91st day after the date the
20-25 issuer mails notice of intent to cancel. On receipt of notice of
20-26 cancellation of a letter of credit, the department shall promptly
20-27 notify the warehouse operator involved. Liability under the letter
21-1 of credit ceases to accrue on the effective date of cancellation.
21-2 Notwithstanding cancellation under this subsection or other law to
21-3 the contrary, the department or a depositor may collect under the
21-4 letter of credit for any claim that arose during the period during
21-5 which the letter of credit was in effect, provided that the claim
21-6 is filed within the limitations period established under Section
21-7 14.065(h).
21-8 (c) The issuer of a letter of credit shall send a copy of
21-9 the notice required by this section to any government agency
21-10 requesting the copy. Notwithstanding any other provision of this
21-11 chapter, a public grain warehouse license is automatically
21-12 suspended if the warehouse operator fails to file a new bond before
21-13 the cancellation of a letter of credit is effective.
21-14 (d) The suspension of a license under this section continues
21-15 as long as the warehouse operator fails to maintain the bond
21-16 required by this chapter.
21-17 Sec. 14.035. CANCELLATION OF CERTIFICATE OF DEPOSIT OR CASH.
21-18 (a) A warehouse operator may not repossess a certificate of
21-19 deposit or cash approved by and deposited with the department in
21-20 lieu of a bond unless:
21-21 (1) the department gives written approval of a
21-22 substitute bond; and
21-23 (2) at least two years have passed after the
21-24 expiration of the last licensing period during which the
21-25 certificate of deposit or cash was deposited with the department in
21-26 lieu of a bond.
21-27 (b) Notwithstanding Subsection (a), the department may not
22-1 release a certificate of deposit or cash deposited with the
22-2 department while a claim filed within the limitations period
22-3 established under Section 14.065(h) is pending before the
22-4 department or a court.
22-5 SUBCHAPTER E. INSURANCE
22-6 Sec. 14.041 [14.011]. CASUALTY INSURANCE. (a) Except as
22-7 provided by Subsection (c) [of this section], an applicant for a
22-8 license must file or have on file with the department a certificate
22-9 of insurance evidencing that:
22-10 (1) the applicant has an effective policy of insurance
22-11 issued by an insurance company authorized to do business in this
22-12 state or, with the approval of the department, by an eligible [a]
22-13 surplus lines insurer that meets the requirements of Article
22-14 1.14-2, Insurance Code, and rules adopted by the commissioner
22-15 [State Board of Insurance] under that article; and
22-16 (2) the policy insures, in the name of the applicant,
22-17 all grain that is or may be in the public grain warehouse for its
22-18 full market value against loss by or due to water or other fluid,
22-19 malicious mischief, vandalism, theft, intentional waste or
22-20 destruction, smoke, fire, internal explosion, lightning, hail,
22-21 windstorm, hurricane [cyclone], or tornado.
22-22 (b) If water or other fluid, malicious mischief, vandalism,
22-23 theft, intentional waste or destruction, smoke, [a] fire, [an]
22-24 internal explosion, lightning, hail, [a] windstorm, hurricane [a
22-25 cyclone], or [a] tornado destroys or damages grain in a public
22-26 grain warehouse, the warehouse operator [warehouseman] shall, on
22-27 demand by the depositor and presentation of a receipt or other
23-1 evidence of ownership, make settlement with the depositor of the
23-2 grain. The amount of the settlement shall be the average price
23-3 paid for grain of the same grade and quality on the date of the
23-4 loss at the location of the warehouse, minus the warehouse
23-5 operator's [warehouseman's] charges and advances. If a settlement
23-6 is not made before the 31st day following the date of demand, the
23-7 depositor is entitled to seek recovery from the insurance company.
23-8 (c) An applicant is not required to file a certificate of
23-9 insurance if the applicant certifies in writing, at or before the
23-10 time the certificate of insurance is due, that all grain within the
23-11 warehouse at the time the license is to be effective is owned by
23-12 the applicant free of any lien. The applicant shall file the
23-13 required certificate of insurance on or before the first day any
23-14 grain not owned by the applicant free of any lien is received for
23-15 hire, stored for hire, handled for hire, or shipped for hire.
23-16 Sec. 14.042. INSURANCE CANCELLATION. (a) A warehouse
23-17 operator may not cancel an insurance policy approved by the
23-18 department unless the department gives written approval of a
23-19 substitute policy.
23-20 (b) The insurer may cancel an insurance policy by sending
23-21 notice of intent to cancel by registered or certified mail to the
23-22 department. Cancellation of an insurance policy is not effective
23-23 before the 31st day following the date the insurer mails notice of
23-24 intent to cancel. On receipt of notice of cancellation of an
23-25 insurance policy, the department shall promptly notify the
23-26 warehouse operator involved.
23-27 (c) The insurer shall send a copy of the notice required by
24-1 this section to any government agency requesting the copy.
24-2 (d) Notwithstanding any other provision of this chapter, a
24-3 public grain warehouse license is automatically suspended if the
24-4 warehouse operator fails to file a new certificate of insurance
24-5 before the cancellation of an insurance policy is effective or
24-6 fails to provide a certification of ownership under Section
24-7 14.041(c).
24-8 (e) The suspension of a license under this section continues
24-9 as long as the warehouse operator fails to maintain the insurance
24-10 required by this chapter.
24-11 Sec. 14.043. ADDITIONAL INSURANCE. (a) If the department
24-12 determines that an approved insurance policy is insufficient, the
24-13 department shall require the warehouse operator to obtain
24-14 additional insurance.
24-15 (b) If a license has been suspended or revoked or has
24-16 expired, the department may require continued insurance coverage by
24-17 the warehouse operator to protect depositors of grain for as long
24-18 as any receipts or open storage accounts remain outstanding.
24-19 (c) The warehouse operator shall obtain the additional
24-20 insurance required by this section and provide verification of the
24-21 additional insurance within a time specified by the department, and
24-22 the additional insurance shall be maintained or continued as
24-23 necessary to meet the requirements of this chapter.
24-24 SUBCHAPTER F. WAREHOUSE OPERATOR OBLIGATIONS
24-25 Sec. 14.051 [14.008]. POSTING OF LICENSE. Each warehouse
24-26 operator [warehouseman] shall immediately on receipt of a license
24-27 post the original [it] in a conspicuous place at [in] the primary
25-1 recordkeeping location for the individually licensed facility or
25-2 combination. A copy of the license must be conspicuously posted at
25-3 each facility where grain is received for hire, stored for hire,
25-4 handled for hire, or shipped for hire [office of the public grain
25-5 warehouse].
25-6 Sec. 14.052 [14.0091]. WAREHOUSE OPERATOR OBLIGATIONS [OF
25-7 WAREHOUSEMAN]. (a) The obligations of a warehouse operator
25-8 [warehouseman] include the obligation to:
25-9 (1) deliver grain [a commodity] to a person holding a
25-10 receipt for grain [a commodity] stored in the warehouse; and
25-11 (2) maintain the quantity and quality of all grain not
25-12 owned by the warehouse operator, including open storage grain [a
25-13 commodity as evidenced by and indicated on a warehouse receipt].
25-14 (b) [Sec. 14.021. OBLIGATION TO DELIVER.] The obligation of
25-15 a warehouse operator [warehouseman] to deliver grain to a person
25-16 holding a receipt for grain stored in the public grain warehouse is
25-17 controlled by Section 7.403, Business & Commerce Code.
25-18 (c) If a warehouse operator accepts for storage, shipping,
25-19 handling, purchase, or sale any grain that is nonfungible or for
25-20 which identity must be preserved, the warehouse operator must
25-21 safeguard the grain from intermingling with grain that would impair
25-22 or destroy the identity-preserved or nonfungible nature of the
25-23 grain. Nothing in this section requires the warehouse operator to
25-24 accept grain that is nonfungible or that requires identity
25-25 preservation.
25-26 (d) The warehouse operator remains liable for the quality
25-27 and quantity of grain deposited at the warehouse and for any other
26-1 obligations established under this chapter for any period during
26-2 which the warehouse has been sealed or during any period of
26-3 probation, suspension, or revocation imposed under this chapter or
26-4 for grain abandoned by the warehouse operator unless:
26-5 (1) the warehouse operator makes a written request to
26-6 the department for access to the warehouse;
26-7 (2) the request adequately describes why access is
26-8 necessary to meet the warehouse operator's obligations under this
26-9 chapter;
26-10 (3) the request adequately describes what type of
26-11 access is necessary to meet the warehouse operator's obligations
26-12 under this chapter;
26-13 (4) the request for access is reasonable;
26-14 (5) allowing access would not impair the department's
26-15 ability to preserve evidence, warehouse operator records, or
26-16 depositor grain assets; and
26-17 (6) the request is denied by the department or the
26-18 department imposes unreasonable restrictions that prevent the
26-19 operator from meeting the obligations described in the request.
26-20 (e) The department is entitled, on behalf of depositors, to
26-21 recover from the warehouse operator's bond the cost of damages
26-22 suffered by depositors as a result of sealing the warehouse or as a
26-23 result of the warehouse operator abandoning the warehouse and the
26-24 grain contained in the warehouse.
26-25 Sec. 14.053 [14.020]. RECEIPT FORMS. (a) A warehouse
26-26 operator shall use one set of serially numbered and sequentially
26-27 issued receipts for all warehouses operated under a single license.
27-1 In addition to a unique serial number, each receipt form must
27-2 contain all of the information prescribed by department rule. If
27-3 further provided by department rule, the warehouse operator shall
27-4 request the receipt forms from the printer on a form approved,
27-5 prescribed, or furnished by the department.
27-6 (b) The warehouse operator shall provide the department with
27-7 an exemplar of the receipt forms and an affidavit from the printer
27-8 showing the number of receipts printed and their serial numbers
27-9 before issuing any receipt from the printed set. The exemplar and
27-10 affidavit required by this subsection must be provided each time a
27-11 new set of receipts is printed.
27-12 (c) The warehouse operator may use an electronic receipt
27-13 system if the provider of the electronic receipt system has been
27-14 approved by the department or by the United States Department of
27-15 Agriculture or any other federal agency that issues a license for
27-16 the operation of a public grain warehouse.
27-17 (d) The department may require a warehouse operator to
27-18 provide a bond to cover any loss resulting from unlawful use of a
27-19 receipt. [The department shall supply all receipt forms unless the
27-20 department in writing approves a privately printed receipt form
27-21 requested by the warehouseman. The warehouseman shall request
27-22 receipt forms on a form furnished by the department and shall
27-23 accompany a request with payment to cover estimated costs of
27-24 printing, packaging, and shipping, as determined by the department.
27-25 If the receipts are privately printed, the printer shall provide
27-26 the department with an affidavit showing the number of the receipts
27-27 printed and their serial numbers. The department may require a
28-1 warehouseman who uses privately printed receipts to provide a bond
28-2 to cover any loss resulting from the unlawful use of a receipt.]
28-3 The department shall determine the form and the amount of the bond,
28-4 but the amount may not exceed $5,000.
28-5 [(b) The department shall recover all receipts remaining
28-6 unused after a license required by this subchapter is revoked or
28-7 suspended.]
28-8 Sec. 14.054 [14.017]. ISSUANCE OF SCALE WEIGHT TICKET OR
28-9 RECEIPT. (a) On receiving grain, a warehouse operator
28-10 [warehouseman] shall issue to the person delivering the grain a
28-11 serially numbered scale weight ticket in a form approved by the
28-12 department.
28-13 (b) On application of a depositor, the warehouse operator
28-14 [warehouseman] shall issue to the depositor a Texas grain warehouse
28-15 receipt, which must be:
28-16 (1) in a form prescribed by the department; and
28-17 (2) in conformity with Chapter 7, Business & Commerce
28-18 Code.
28-19 (c) A Texas grain warehouse receipt issued under this
28-20 subchapter is subject to the provisions of Chapter 7, Business &
28-21 Commerce Code.
28-22 (d) A Texas grain warehouse receipt is a negotiable document
28-23 of title. A scale weight ticket is not a negotiable document of
28-24 title.
28-25 (e) Except as provided by Section 14.055 [14.019 of this
28-26 code] for duplicate receipts, a warehouse operator may not issue
28-27 two scale weight tickets or two receipts bearing the same number
29-1 during any calendar year.
29-2 (f) Unless previously canceled in accordance with the
29-3 provisions of Chapter 7, Business & Commerce Code, a Texas grain
29-4 [commodity] warehouse receipt issued under this chapter expires 10
29-5 years after the date of issuance.
29-6 Sec. 14.055 [14.019]. DUPLICATE RECEIPTS. (a) Except as
29-7 otherwise provided by this section [subsection], if a receipt
29-8 issued under this chapter [subchapter] is outstanding, another
29-9 receipt covering all or part of the grain covered by the initial
29-10 receipt may not be issued by the warehouse operator [warehouseman]
29-11 or any other person. If a receipt is lost, stolen, or destroyed,
29-12 the owner is entitled to a new receipt as a duplicate or substitute
29-13 for the missing receipt. The duplicate or substitute receipt has
29-14 the same legal effect as the original receipt and must:
29-15 (1) state that it is in lieu of the original receipt;
29-16 and
29-17 (2) bear the number and date of the original receipt.
29-18 (b) Before issuing a duplicate receipt, the warehouse
29-19 operator [warehouseman] shall require from the owner an indemnity
29-20 bond of double the market value of the grain covered by the missing
29-21 receipt. The bond must be in a form and with a surety prescribed
29-22 by the department to fully protect all rights under the missing
29-23 receipt.
29-24 (c) A warehouse operator [warehouseman] may not obtain,
29-25 purchase, or become a surety on a bond for a lost, stolen, or
29-26 destroyed receipt.
29-27 (d) A court may not order delivery of grain covered by a
30-1 lost, stolen, or destroyed receipt without requiring the bond
30-2 provided by this section.
30-3 Sec. 14.056 [14.018]. RECEIPT FOR GRAIN OWNED BY WAREHOUSE
30-4 OPERATOR [OWNER]. A warehouse operator [warehouseman] may issue a
30-5 receipt for grain that is owned by the warehouse operator
30-6 [warehouseman], in whole or part, and located in the warehouse
30-7 operator's [warehouseman's] warehouse. The negotiation, transfer,
30-8 sale, or pledge of that receipt may not be defeated because of its
30-9 ownership.
30-10 Sec. 14.057 [14.022]. RECORDS. (a) Every warehouse operator
30-11 [warehouseman] shall keep in a safe place complete and correct
30-12 records and accounts pertaining to the public grain warehouse,
30-13 including records and accounts of:
30-14 (1) grain received and withdrawn from the warehouse;
30-15 (2) unissued receipts in the warehouse operator's
30-16 [warehouseman's] possession;
30-17 (3) receipts and scale weight tickets issued by the
30-18 warehouse operator [warehouseman]; and
30-19 (4) receipts returned to and canceled by the warehouse
30-20 operator [warehouseman].
30-21 (b) The warehouse operator [warehouseman] shall retain the
30-22 records required by this section for the period of time prescribed
30-23 by the department. The warehouse operator [warehouseman] shall
30-24 retain copies of receipts or other documents evidencing ownership
30-25 of grain or liability of a warehouse operator [warehouseman] as
30-26 long as the documents are outstanding. If the documents are
30-27 canceled, the warehouse operator [warehouseman] shall retain the
31-1 documents or receipts for a period of not less than two years from
31-2 the date of cancellation.
31-3 (c) The warehouse operator [warehouseman] shall:
31-4 (1) clearly mark all canceled receipts "canceled" and
31-5 mark on the face of each receipt the date of the cancellation;
31-6 (2) keep records and accounts required by this section
31-7 separate from the records and accounts of other businesses; [and]
31-8 (3) issue in numerical order all scale weight tickets
31-9 and receipts; and
31-10 (4) keep in numerical order copies of the scale weight
31-11 tickets and receipts issued by the warehouse operator.
31-12 (d) In records kept under this section, grain may be
31-13 designated as company-owned grain only if:
31-14 (1) the grain has been paid for and is wholly owned by
31-15 the warehouse operator; or
31-16 (2) the ownership of the grain has been transferred to
31-17 the warehouse operator under a written contract of purchase.
31-18 (e) The warehouse operator [warehouseman] shall report to
31-19 the department on forms furnished by the department the following
31-20 information on scale weight tickets used in the warehouse
31-21 operator's [warehouseman's] business:
31-22 (1) the number of scale weight tickets printed;
31-23 (2) the serial numbers of the scale weight tickets
31-24 printed; and
31-25 (3) the printer of the scale weight tickets.
31-26 (f) The warehouse operator shall make [department may
31-27 inspect] any records required by this section or department rule
32-1 accessible and available for inspection by the department at any
32-2 reasonable time.
32-3 Sec. 14.058 [14.036]. POSTING OF STORAGE RATES, [OR]
32-4 TARIFFS, FEES, AND SHRINK RATES. (a) A public grain [commodity]
32-5 warehouse licensed under this chapter [subchapter] shall post a
32-6 copy of all [the] storage rates, [and] tariffs, fees, and shrink
32-7 rates charged by the warehouse operator at the main warehouse
32-8 office and at each warehouse facility operating under the license.
32-9 (b) The [public] warehouse operator shall post any change to
32-10 the posted storage rates, [or] tariffs, fees, or shrink rates not
32-11 later than the third [14th] day before the day on which the change
32-12 is to take effect.
32-13 (c) [(b)] Department inspectors shall check compliance with
32-14 this section during inspections of a public grain [commodity]
32-15 warehouse under this chapter [subchapter].
32-16 Sec. 14.059 [14.014]. INSPECTIONS; FEE. (a) On request by
32-17 the department, a warehouse operator [warehouseman] shall report to
32-18 the department on the condition, [conduct,] operation, and business
32-19 of each public grain warehouse that the warehouse operator
32-20 [warehouseman] operates and all grain stored in those warehouses.
32-21 (b) [A warehouseman shall permit the department to enter and
32-22 inspect each public grain warehouse, its contents, and all records
32-23 related to the grain stored in the warehouse. The warehouseman
32-24 shall render to the department any assistance necessary for an
32-25 inspection under this section.]
32-26 [(c)] The department shall inspect each public grain
32-27 warehouse at least once annually and may make additional
33-1 inspections as the department considers necessary. A warehouse
33-2 operator [warehouseman] may request that the department make
33-3 additional inspections.
33-4 (c) [(d)] The department shall collect from the warehouse
33-5 operator [warehouseman] whose public grain warehouse is inspected
33-6 an inspection fee for an annual inspection or an inspection
33-7 requested by the warehouse operator [warehouseman], but may not
33-8 collect an inspection fee for other inspections unless the
33-9 inspection is conducted:
33-10 (1) under the terms of an agreed or ordered suspension
33-11 or probation;
33-12 (2) in response to a complaint that the warehouse
33-13 operator has not complied with the duties and obligations provided
33-14 for by this chapter and the complaint is determined by the
33-15 department to be valid;
33-16 (3) as a follow-up inspection to:
33-17 (A) determine whether a shortage of grain
33-18 discovered by the department has been corrected;
33-19 (B) obtain records not immediately available at
33-20 the location designated as the recordkeeping location in department
33-21 records or to which access was refused during a previous
33-22 inspection;
33-23 (C) ensure that recordkeeping discrepancies
33-24 discovered during a previous inspection have been corrected; or
33-25 (D) monitor a suspension or probation under this
33-26 chapter; or
33-27 (4) to monitor termination of arrangements for
34-1 storing, shipping, or handling of grain under this chapter.
34-2 (d) The department by rule shall set the inspection fee.
34-3 SUBCHAPTER G. REMEDIES AND CLAIMS
34-4 Sec. 14.061 [14.0261]. WAREHOUSE RECEIPT AS PRIMA FACIE
34-5 EVIDENCE. In an action involving a warehouse operator
34-6 [warehouseman] that is brought under this chapter [subchapter], a
34-7 warehouse receipt constitutes prima facie evidence of the truth of
34-8 the facts stated in the receipt.
34-9 Sec. 14.062. INVALID RECEIPTS. Notwithstanding any other
34-10 provision of this code or the Business & Commerce Code, a receipt
34-11 for grain is void as to any person who receives the receipt with
34-12 knowledge that the grain purported to be covered by the receipt was
34-13 not, at the time the receipt was issued, actually stored in the
34-14 warehouse of the warehouse operator issuing the receipt.
34-15 Sec. 14.063 [14.023]. TERMINATION OF STORAGE. (a) A
34-16 warehouse operator [warehouseman] desiring to terminate the storage
34-17 of grain in the warehouse operator's [warehouseman's] warehouse,
34-18 including grain that is abandoned or is unclaimed prior to the sale
34-19 of a warehouse, shall do so in accordance with Sections 7.206 and
34-20 7.210, Business & Commerce Code, except that the warehouse operator
34-21 [warehouseman] is not required to hold the balance of the proceeds
34-22 of a sale, but may transfer the balance to the comptroller, who
34-23 shall treat the money in the same manner as an escheated bank
34-24 account.
34-25 (b) A purchaser in good faith of grain sold under Section
34-26 7.210, Business & Commerce Code, takes the grain free of any rights
34-27 of the holder of the receipt, but the receipt is evidence of
35-1 entitlement to the escheated funds deposited with the comptroller
35-2 under Subsection (a) [of this section].
35-3 Sec. 14.064. CERTAIN LOADOUT FEES PROHIBITED. (a) A
35-4 warehouse operator may not charge a fee for loading out grain if
35-5 the loadout was the result of the misconduct of the warehouse
35-6 operator.
35-7 (b) Misconduct under this section includes:
35-8 (1) violation of this chapter as established by final,
35-9 unappealable order of the commissioner;
35-10 (2) conviction of a crime, including a plea of nolo
35-11 contendere, described as an offense under this chapter; and
35-12 (3) conviction of a crime, including a plea of nolo
35-13 contendere, described as an offense under the Penal Code and
35-14 involving any type of fraud or theft related to the storing,
35-15 shipping, handling, sale, or purchase of grain or the sale or
35-16 purchase of grain handling, shipping, or storage equipment or
35-17 warehouse structures or other assets.
35-18 (c) A loadout fee collected during a period of suspension of
35-19 a warehouse operator's license by the department, after revocation
35-20 of a warehouse operator's license, or during a period in which
35-21 criminal charges are pending against a warehouse operator, must be
35-22 placed in an escrow account by the warehouse operator until:
35-23 (1) the department's suspension is lifted;
35-24 (2) the prosecutor ceases to pursue criminal charges;
35-25 (3) the indictment or information is dismissed by a
35-26 court; or
35-27 (4) the warehouse operator is acquitted.
36-1 (d) If misconduct is finally determined to have occurred as
36-2 provided by Subsection (b), the loadout fees placed in escrow must
36-3 be returned to the person originally paying those fees. The
36-4 loadout fees placed in escrow shall be returned to the warehouse
36-5 operator if the warehouse operator is found not to have committed
36-6 misconduct by acquittal, by the dismissal of the criminal charges,
36-7 or by final order of the commissioner.
36-8 Sec. 14.065 [14.010]. RECOVERY ON BOND; LIABILITY OF
36-9 WAREHOUSE OPERATOR [WAREHOUSEMAN]. (a) If no action on the bond or
36-10 cash, certificate of deposit, or letter of credit deposited in lieu
36-11 of a bond of a warehouse operator [warehouseman] is begun before
36-12 the 31st day after the date of a written demand to the department,
36-13 a depositor has a right of action on the bond or cash, certificate
36-14 of deposit, or letter of credit deposited in lieu of a bond for
36-15 recovery of damages suffered by the depositor as a result of the
36-16 failure of the warehouse operator [warehouseman] to comply with any
36-17 condition of the bond, or if cash, a certificate of deposit, or a
36-18 letter of credit is deposited in lieu of a bond, failure to comply
36-19 with any obligation of the warehouse operator under this chapter
36-20 that would have been covered by a bond.
36-21 (b) Recovery on a bond shall be prorated if claims exceed
36-22 liability on a bond, but a depositor suing on a bond is not
36-23 required to join other depositors in a suit. The burden of
36-24 establishing proration is on the surety as a matter of defense or
36-25 is on the department as intervenor on behalf of other depositors.
36-26 (c) A warehouse operator [warehouseman] is liable for
36-27 damages for loss of or injury to grain [a commodity] caused by the
37-1 warehouse operator's [warehouseman's] failure to exercise the care
37-2 that a reasonably prudent person would exercise in regard to the
37-3 grain [commodity] under similar circumstances, but, unless
37-4 otherwise agreed, a warehouse operator [warehouseman] is not liable
37-5 for damages to grain [a commodity] that could not have been avoided
37-6 through the exercise of that care.
37-7 (d) A person who files an action on a bond under this
37-8 section must serve notice of the suit on the department in the same
37-9 manner and within the same period as for the defendant or surety
37-10 who issued the bond.
37-11 (e) On authentication by the department, the court shall
37-12 accept into evidence as a public record any report prepared by the
37-13 department under this chapter that describes potential bond claims
37-14 by other depositors, regardless of whether any of those depositors
37-15 join in the suit.
37-16 (f) A person is prohibited from filing a claim on an invalid
37-17 receipt.
37-18 (g) An action under this section must be brought not later
37-19 than the second anniversary of the date of expiration of the
37-20 public grain warehouse license in effect at the time the claim
37-21 arose.
37-22 (h) The department by rule may set a limitations period for
37-23 filing claims on a bond filed with the department or cash, a
37-24 certificate of deposit, or a letter of credit deposited with the
37-25 department in lieu of a bond.
37-26 Sec. 14.066. APPEAL OF DEPARTMENT ACTION BY WAREHOUSE
37-27 OPERATOR. (a) A department action or order affecting a warehouse
38-1 operator under this chapter, other than by rulemaking, assessment
38-2 of an administrative penalty, or imposition of a license sanction,
38-3 including a suspension under Section 14.083(c), is appealable in
38-4 accordance with this section.
38-5 (b) Not later than the 10th day after the date the
38-6 department takes an action or issues an order described by
38-7 Subsection (a), the warehouse operator may serve notice on the
38-8 department to appear in a district court of Travis County or the
38-9 district court of the county in which the public grain warehouse is
38-10 located. The court shall fix the time of the hearing not less than
38-11 3 days or more than 20 days after the date of service of the
38-12 notice.
38-13 (c) The burden is on the warehouse operator to show by a
38-14 preponderance of the evidence that the action taken or order issued
38-15 by the department is not authorized under this chapter or, if
38-16 authorized, not warranted by the circumstances that caused the
38-17 action to be taken or the order to be issued.
38-18 SUBCHAPTER H. OFFENSES
38-19 Sec. 14.071 [14.027]. GENERAL PENALTY. (a) A person commits
38-20 an offense if the person violates a provision of this chapter for
38-21 which an offense is not expressly provided [subchapter other than
38-22 Section 14.022(d)].
38-23 (b) An offense under this section is a Class B misdemeanor.
38-24 Sec. 14.072 [14.028]. PENALTY FOR OPERATING WITHOUT A
38-25 LICENSE. (a) A person commits an offense if the person:
38-26 (1) transacts any public grain warehouse business
38-27 without first obtaining a license required by this chapter
39-1 [subchapter]; or
39-2 (2) continues to transact public grain warehouse
39-3 business after a license has been revoked or suspended, or the
39-4 license holder has been placed on probation, except as permitted
39-5 under Section 14.084 [14.016 of this subchapter].
39-6 (b) An offense under this section is a felony of the third
39-7 degree.
39-8 (c) A person commits a separate offense for each day
39-9 business prohibited by this section is carried on.
39-10 Sec. 14.073 [14.029]. PENALTY FOR FRAUD. (a) A person
39-11 commits an offense if the person:
39-12 (1) issues or aids in issuing a receipt or scale
39-13 weight ticket knowing that the grain covered by the receipt or
39-14 scale weight ticket has not been actually received at the [public]
39-15 grain warehouse;
39-16 (2) issues or aids in issuing a duplicate or
39-17 additional negotiable receipt for grain knowing that a former
39-18 negotiable receipt for the same grain or any part of the grain is
39-19 outstanding except as permitted by Section 14.055 [14.019 of this
39-20 code]; or
39-21 (3) fraudulently and without proper authority
39-22 represents, forges, alters, counterfeits, or simulates any license,
39-23 scale weight ticket, or receipt provided for by this chapter
39-24 [subchapter].
39-25 (b) An offense under this section is a felony of the second
39-26 degree.
39-27 Sec. 14.074 [14.030]. PENALTY FOR UNLAWFUL DELIVERY. (a) A
40-1 person commits an offense if the person:
40-2 (1) delivers grain out of a public grain warehouse
40-3 knowing that a negotiable receipt for the grain is outstanding and
40-4 without possessing that receipt; or
40-5 (2) delivers grain [a commodity] out of a public grain
40-6 warehouse:
40-7 (A) knowing that a nonnegotiable receipt or
40-8 scale weight ticket is outstanding;
40-9 (B) without the prior approval of the person
40-10 lawfully entitled to delivery; and
40-11 (C) without the delivery being shown on the
40-12 appropriate records of the warehouse operator [warehouseman].
40-13 (b) It is an affirmative [a] defense to prosecution under
40-14 this section that the person's action is:
40-15 (1) a sale or other disposition of grain in lawful
40-16 enforcement of a warehouse operator's [warehouseman's] lien;
40-17 (2) [or on] a warehouse operator's [warehouseman's]
40-18 lawful termination of a storing, shipping, or handling agreement;
40-19 (3) a delivery to the person lawfully entitled to
40-20 delivery;
40-21 (4) a delivery authorized by prior approval of the
40-22 person lawfully entitled to delivery and the delivery is shown on
40-23 the appropriate records of the warehouse operator;
40-24 (5) necessary to prevent destruction of the grain;
40-25 (6) taken under the order of a state or federal court;
40-26 or
40-27 (7) [(2)] permitted by a rule of the department
41-1 necessary to carry out this chapter [subchapter].
41-2 (c) An offense under this section is a felony of the second
41-3 degree.
41-4 Sec. 14.075 [14.031]. PENALTY FOR FRAUDULENTLY ISSUING A
41-5 SCALE WEIGHT TICKET OR RECEIPT. (a) A person commits an offense if
41-6 the person fraudulently issues or aids in fraudulently issuing a
41-7 receipt or scale weight ticket knowing that it contains a false
41-8 statement.
41-9 (b) An offense under this section is a felony of the second
41-10 degree.
41-11 Sec. 14.076 [14.032]. PENALTY FOR CHANGING A RECEIPT OR
41-12 SCALE WEIGHT TICKET AFTER ISSUANCE. (a) A person commits an
41-13 offense if the person changes a receipt or scale weight ticket
41-14 after its issuance.
41-15 (b) It is a defense to prosecution under this section that
41-16 the change on the receipt or scale weight ticket is a notation by
41-17 the warehouse operator [warehouseman] for partial delivery or
41-18 corrections made by the warehouse operator [warehouseman] to
41-19 reflect accuracy of accounts.
41-20 (c) An offense under this section is a felony of the second
41-21 degree.
41-22 Sec. 14.077 [14.033]. PENALTY FOR DEPOSITING GRAIN WITHOUT
41-23 TITLE. (a) A person commits an offense if the person:
41-24 (1) deposits grain without having title to the grain
41-25 or deposits grain on which there is a lien or mortgage;
41-26 (2) receives for the grain a negotiable receipt; and
41-27 (3) negotiates the receipt for value with intent to
42-1 deceive and without disclosing the person's lack of title or the
42-2 existence of a lien or mortgage on the grain.
42-3 (b) An offense under this section is a felony of the second
42-4 degree.
42-5 Sec. 14.078 [14.034]. PENALTY FOR STEALING GRAIN OR
42-6 RECEIVING STOLEN GRAIN. (a) A person commits an offense if the
42-7 person:
42-8 (1) obtains or exercises control over grain stored in
42-9 a public grain warehouse without the owner's effective consent and
42-10 with the intent to deprive the owner of the grain;
42-11 (2) obtains from another person grain stolen from a
42-12 public grain warehouse knowing that the grain is stolen; or
42-13 (3) exercises control over grain stolen from a public
42-14 grain warehouse knowing that the grain is stolen.
42-15 (b) An offense under this section is a felony of the second
42-16 degree.
42-17 Sec. 14.079. PENALTY FOR INTERFERING WITH SEALED WAREHOUSE OR
42-18 DEPARTMENT INSPECTION OR INVESTIGATION. (a) A person commits an
42-19 offense if the person:
42-20 (1) without the department's consent and with the
42-21 intent to obstruct the department's regulation, management, or
42-22 control of sealed grain, obtains or exercises control over grain
42-23 stored in a building, bin, or other similar structure sealed by the
42-24 department;
42-25 (2) breaks, removes, vandalizes, or otherwise
42-26 interferes with a department seal placed on a building, bin, or
42-27 other similar structure used for the receiving of grain for hire,
43-1 shipping of grain for hire, storing of grain for hire, or handling
43-2 of grain for hire;
43-3 (3) without the department's consent and with the
43-4 intent to obstruct the department's regulation, management, or
43-5 control of sealed grain, interferes with the department's access to
43-6 or control of grain stored in a building, bin, or other similar
43-7 structure sealed by the department; or
43-8 (4) interferes with the lawful investigation or
43-9 inspection of the facilities, records, or grain deposits of a
43-10 public grain warehouse by a department inspector or other
43-11 department official.
43-12 (b) It is an affirmative defense to prosecution under this
43-13 section that the person's action is:
43-14 (1) necessary to prevent destruction of stored grain
43-15 or the sealed structure; or
43-16 (2) taken under the order of a state or federal court.
43-17 (c) An offense under this section is a felony of the third
43-18 degree.
43-19 SUBCHAPTER I. ENFORCEMENT
43-20 Sec. 14.081. OFFENSE IS VIOLATION; STANDARD OF PROOF. (a)
43-21 Commission of an offense under this chapter is also a violation for
43-22 purposes of administrative enforcement by the department.
43-23 (b) Proof of a violation under this chapter for purposes of
43-24 administrative enforcement, by assessment of an administrative
43-25 penalty or license sanction, is by a preponderance of the evidence.
43-26 (c) In an administrative enforcement action against a person
43-27 for the commission of an offense under this chapter, the department
44-1 is required to prove any intent element provided by the description
44-2 of the offense.
44-3 (d) Both an administrative enforcement action and a criminal
44-4 prosecution may be maintained against a person who violates this
44-5 chapter.
44-6 Sec. 14.082 [14.024]. DISCOVERY OF SHORTAGE; REFUSAL OF
44-7 INSPECTION. (a) If the department determines that a warehouse
44-8 operator [warehouseman] does not possess sufficient grain to cover
44-9 outstanding receipts and outstanding scale weight tickets issued or
44-10 assumed by the warehouse operator [warehouseman], or if a warehouse
44-11 operator [warehouseman] refuses or is unable to submit records or
44-12 property for lawful inspection or the department is unable to
44-13 conduct an inspection of the warehouse due to the condition of the
44-14 warehouse or grain stored in the warehouse, the department may seal
44-15 the warehouse to prevent delivery or receipt of grain except as
44-16 authorized by the department and give notice to the warehouse
44-17 operator [warehouseman] requiring the warehouse operator
44-18 [warehouseman] to[:]
44-19 [(1)] cover a shortage of a particular type of grain
44-20 by:
44-21 (1) storing to the credit of or delivering to each
44-22 depositor affected by the shortage grain of the same type and
44-23 quality that is stored at any of the warehouse operator's licensed
44-24 warehouses in this state and that has been designated as
44-25 company-owned grain by the warehouse operator;
44-26 (2) purchasing and storing to the credit of or
44-27 delivering to each depositor affected by the shortage grain of the
45-1 same type and quality;
45-2 (3) selling company-owned grain of a different type
45-3 and paying to each depositor affected by the shortage, on a pro
45-4 rata basis, the market value of the depositor's grain as determined
45-5 on the day the shortage was discovered by the department; or
45-6 (4) using any combination of the remedies described by
45-7 Subdivisions (1)-(3) or another fair and reasonable method for
45-8 meeting the shortage approved by the department[;]
45-9 [(2) give additional bond;]
45-10 [(3) submit to an inspection considered necessary by
45-11 the department; or]
45-12 [(4) comply with any combination of the requirements
45-13 authorized by this subsection].
45-14 (b) A warehouse operator [warehouseman] shall comply with
45-15 the requirements of a notice issued under Subsection (a) [of this
45-16 section] within 24 hours of notification by the department or
45-17 within a longer time allowed by the department. If the warehouse
45-18 operator [warehouseman] fails to comply, the department may
45-19 petition the district court for the county where the warehouse
45-20 operator's [warehouseman's] principal place of business is located,
45-21 as shown by the license application, for a court order authorizing
45-22 the department to take possession of:
45-23 (1) all or a portion of the grain located in the
45-24 public grain warehouse or warehouses; and
45-25 (2) all relevant records and property of the warehouse
45-26 operator [warehouseman].
45-27 (c) If the department takes possession of grain under
46-1 Subsection (b) [of this section], the department shall give written
46-2 notice of its action to the surety on the bond of the warehouse
46-3 operator [warehouseman] and may notify the holders of all receipts
46-4 and scale weight tickets issued for grain, as shown by the
46-5 warehouse operator's [warehouseman's] records, to present their
46-6 receipts or scale weight tickets for inspection or account for the
46-7 absence of the receipts or scale weight tickets. The department
46-8 may then audit and investigate the affairs of the public grain
46-9 warehouse, especially with respect to the grain of which there is
46-10 an apparent shortage. The purpose of the audit and investigation
46-11 is to determine the amount of the shortage[,] and, if practicable,
46-12 to compute the shortage as to each depositor, as shown by the
46-13 warehouse operator's [warehouseman's] records. The department
46-14 shall notify the warehouse operator [warehouseman] and the surety
46-15 on the warehouse operator's [warehouseman's] bond of the
46-16 approximate amount of the shortage. The department shall notify
46-17 each depositor affected by the shortage by sending notice to the
46-18 depositor's last known address, as shown by the warehouse
46-19 operator's [warehouseman's] records.
46-20 (d) The department shall retain possession of grain obtained
46-21 under this section until:
46-22 (1) the warehouse operator [warehouseman] or surety on
46-23 the bond satisfies the claims of all depositors, within the
46-24 limitations on liability imposed by this chapter; or
46-25 (2) the court orders the department to surrender
46-26 possession.
46-27 (e) If, during or after an audit or investigation authorized
47-1 by this section or at any other time, the department has evidence
47-2 that the warehouse operator [warehouseman] is insolvent or unable
47-3 to satisfy the claims of all depositors, the department may
47-4 petition the district court for appointment of a receiver to
47-5 operate or liquidate the business of the warehouse operator
47-6 [warehouseman] in accordance with law.
47-7 (f) At any time before the 11th day following the day on
47-8 which the department takes possession of grain under this section,
47-9 the warehouse operator [warehouseman] may serve notice on the
47-10 department to appear in the district court of the county in which
47-11 the public grain warehouse is located to show cause why possession
47-12 should not be restored to the warehouse operator [warehouseman].
47-13 The court shall fix the time of the hearing not less than 5 nor
47-14 more than 15 days from the date of service of the notice.
47-15 Sec. 14.083 [14.015]. DENIAL, REVOCATION, MODIFICATION, OR
47-16 SUSPENSION OF LICENSE OR PROBATION. (a) The department may deny an
47-17 application for a license or license renewal if the applicant fails
47-18 to comply with a requirement of this chapter, [subchapter or] a
47-19 rule adopted by the department under this chapter, or a lawful
47-20 order of the commissioner or the commissioner's designee
47-21 [subchapter].
47-22 (b) The department may [shall] revoke, modify, or suspend a
47-23 license or[,] assess an administrative penalty against, place on
47-24 probation [a person whose license has been suspended], or reprimand
47-25 a license holder [licensee] for a violation of this chapter,
47-26 [subchapter or] a rule adopted by the department under this
47-27 chapter, or a lawful order of the commissioner or the
48-1 commissioner's designee [subchapter].
48-2 (c) If the department considers it necessary, the department
48-3 may suspend a license without a hearing for one or more periods not
48-4 to cumulatively [a period not to] exceed 30 days in one licensing
48-5 period.
48-6 (d) During a period of license suspension or probation, the
48-7 department may seal and restrict access to the warehouse operator's
48-8 buildings, bins, or other similar structures used to receive,
48-9 store, ship, or handle grain, for hire, and require the warehouse
48-10 operator [If a license suspension is probated, the department may
48-11 require the person] to:
48-12 (1) maintain additional information in the records of
48-13 the warehouse or report regularly to the department on matters that
48-14 are the basis of the suspension or probation;
48-15 (2) limit practice to the areas prescribed by the
48-16 department; [or]
48-17 (3) operate under conditions or by methods prescribed
48-18 by the department; or
48-19 (4) continue or renew professional education until the
48-20 person attains a degree of skill satisfactory to the department in
48-21 those areas that are the basis of the suspension or probation.
48-22 (e) Except as provided by Subsection (c) [of this section],
48-23 if the department proposes to deny, revoke, modify, or suspend a
48-24 person's application or license or place a warehouse operator on
48-25 probation, the person is entitled to a hearing conducted under
48-26 Section 12.032. The decision of the department is appealable in
48-27 the same manner as provided for contested cases under Chapter 2001,
49-1 Government Code.
49-2 Sec. 14.084 [14.016]. OPERATION AFTER REVOCATION OR
49-3 SUSPENSION OF A LICENSE OR PROBATION. (a) If a license is revoked,
49-4 the warehouse operator [warehouseman] shall terminate, in a manner
49-5 prescribed by the department, all arrangements concerning storing,
49-6 shipping, [or] handling, and purchasing or selling of grain [in the
49-7 warehouse].
49-8 (b) During a period of suspension of a license or probation,
49-9 the warehouse operator:
49-10 (1) shall [warehouseman may, under the direction and
49-11 supervision of the department,] operate the warehouse in a manner
49-12 prescribed by the department;
49-13 (2) may [and] deliver grain previously received,
49-14 subject to the department's written conditions of suspension, if
49-15 any; and
49-16 (3) [but] may not receive grain for storing, shipping,
49-17 or handling without the department's written authorization.
49-18 Sec. 14.085 [14.025]. INJUNCTION. (a) If, after [15 days']
49-19 notice, a warehouse operator [warehouseman] refuses to comply with
49-20 this chapter [subchapter], the department may [shall] apply for an
49-21 injunction in a district court in Travis County or in a district or
49-22 county court in the county where the warehouse is located.
49-23 (b) The courts of this state are vested with jurisdiction to
49-24 issue a temporary or permanent injunction against:
49-25 (1) operation of a public grain warehouse or issuance
49-26 of receipts or scale weight tickets either without a license or
49-27 during a period of suspension of a warehouse operator's license or
50-1 during a period when the warehouse operator is under probation;
50-2 [and]
50-3 (2) interference by any person with the carrying out
50-4 by the department, or by a receiver appointed under this chapter
50-5 [Section 14.024 of this code], of duties and powers granted by this
50-6 chapter; or
50-7 (3) any other violation of this chapter for which
50-8 injunctive relief is an appropriate remedy [subchapter].
50-9 (c) The notice provided for in Subsection (a) shall be
50-10 delivered to the warehouse operator not less than 10 business days
50-11 before the date the department applies for an injunction under
50-12 Subsection (b)(1).
50-13 (d) The notice provided for in Subsection (a) shall be
50-14 delivered to the warehouse operator not less than two business days
50-15 before the date the department applies for an injunction under
50-16 Subsection (b)(2) or (3).
50-17 Sec. 14.086. CIVIL PENALTY. (a) A person who violates this
50-18 chapter is liable for a civil penalty of not less than $500 or more
50-19 than $10,000 for each violation. Each day a violation occurs or
50-20 continues may be considered a separate violation for purposes of a
50-21 civil penalty assessment.
50-22 (b) On request of the department, the attorney general or
50-23 the county attorney or the district attorney of the county in which
50-24 the violation is alleged to have occurred shall file suit to
50-25 collect the penalty. The attorney general, a county attorney, or a
50-26 district attorney may file suit under this section without a
50-27 request from the department.
51-1 (c) A county attorney, a district attorney, or the attorney
51-2 general shall sue in the name of the state for the collection of a
51-3 penalty provided by this section.
51-4 (d) A civil penalty collected under this section shall be
51-5 deposited in the state treasury to the credit of the general
51-6 revenue fund. All civil penalties recovered in suits initially
51-7 instituted by a local government or governments under this section
51-8 shall be divided equally between the state and the local government
51-9 or governments, with 50 percent of the recovery to be paid to the
51-10 general revenue fund and the other 50 percent to be paid equally to
51-11 the local government or governments initially instituting the suit.
51-12 (e) A civil penalty may not be collected for any violation
51-13 that constituted the basis for a department proceeding to assess an
51-14 administrative penalty, regardless of whether the department was
51-15 successful in collecting the administrative penalty.
51-16 [Sec. 14.026. COURT ENFORCEMENT OF DEPARTMENT SUBPOENA. A
51-17 judge of a district or county court may order the attendance of
51-18 witnesses or the production of relevant books and records
51-19 subpoenaed by the department for the purpose of enforcing the
51-20 provisions of this subchapter. The judge may enter the order
51-21 whether the court is in term or on vacation. The judge may compel
51-22 obedience to an order by proceedings for contempt.]
51-23 Sec. 14.087 [14.0262]. RECOVERY OF COURT COSTS. (a) On
51-24 prevailing in an action commenced by the department through the
51-25 attorney general under this chapter or in a hearing commenced by
51-26 the warehouse operator under Section 14.082(f) [subchapter], the
51-27 department and the attorney general are each entitled to recover:
52-1 (1) investigation costs and fees;
52-2 (2) reasonable attorney's fees;
52-3 (3) court costs; and
52-4 (4) other costs relating to the action, including the
52-5 cost of depositions and other forms of discovery and copying
52-6 charges.
52-7 (b) The costs recoverable under this section are in addition
52-8 to other relief available to the department or attorney general.
52-9 Sec. 14.088 [14.035]. VENUE. (a) Venue for a criminal
52-10 prosecution under this chapter [subchapter] is in the county in
52-11 which the alleged offense occurred.
52-12 (b) Except for an action for injunctive relief, venue for a
52-13 civil action under this chapter commenced by the attorney general
52-14 or a county or district attorney, either independently or on behalf
52-15 of the department, is in any county in which all or part of the
52-16 cause of the action accrued.
52-17 (c) Venue for an action for injunctive relief under this
52-18 chapter is in a district court in Travis County or in a district or
52-19 county court in the county where the warehouse is located.
52-20 (d) Venue for an administrative action commenced under this
52-21 chapter is governed by Chapter 2001, Government Code, or, to the
52-22 extent not inconsistent with Chapter 2001, the rules of the State
52-23 Office of Administrative Hearings or the department.
52-24 [SUBCHAPTER C. OTHER PUBLIC WAREHOUSEMEN]
52-25 [Sec. 14.201. DEFINITIONS. In this subchapter:]
52-26 [(1) "Public warehouseman" means a person who stores
52-27 cotton, wheat, rye, oats, or rice, or any kind of produce.]
53-1 [(2) "Warehouse" means a house, building, or room in
53-2 which the commodities listed in Subdivision (1) of this section are
53-3 stored and protected from damage by the elements.]
53-4 [Sec. 14.202. POWERS OF THE DEPARTMENT. A warehouse
53-5 operating under this subchapter is under the supervision of the
53-6 department.]
53-7 [Sec. 14.203. WAREHOUSE EXAMINERS. (a) The department may
53-8 appoint warehouse examiners to examine warehouses.]
53-9 [(b) In order to be an examiner, a person must:]
53-10 [(1) be a cotton grader and classer and a competent
53-11 bookkeeper; and]
53-12 [(2) not own an interest in or be an officer or
53-13 employee of:]
53-14 [(A) a warehouse company or corporation; or]
53-15 [(B) a firm engaged in purchasing or selling
53-16 farm, ranch, or orchard products.]
53-17 [(c) Each examiner shall post a $5,000 bond payable to the
53-18 State of Texas, approved by the department, and conditioned on
53-19 faithful performance of duties by the examiner.]
53-20 [(d) Each examiner shall file with the department an
53-21 affidavit stating that the examiner will make fair and impartial
53-22 examinations and will not:]
53-23 [(1) accept any gift or payment for an examination
53-24 other than payment fixed by law; or]
53-25 [(2) reveal to anyone other than the department or a
53-26 court of law the condition of or information about an examined
53-27 corporation or warehouse.]
54-1 [(e) An examiner is not eligible to be appointed receiver of
54-2 a corporation or warehouse that the examiner has examined.]
54-3 [(f) An examiner is entitled to reimbursement for actual and
54-4 necessary expenses incurred in performing official duties.]
54-5 [Sec. 14.204. CERTIFICATE TO TRANSACT BUSINESS. No person
54-6 may operate a warehouse without first obtaining a certificate to
54-7 transact business as a public warehouseman from the county clerk of
54-8 the county in which the warehouse is located.]
54-9 [Sec. 14.205. APPLICATION FOR CERTIFICATE. (a) In order to
54-10 obtain a certificate to transact business, a person must apply in
54-11 writing to the county clerk of the county in which the warehouse is
54-12 to be operated. The application must state the name and location
54-13 of the warehouse and:]
54-14 [(1) the name of each person with an interest as owner
54-15 or principal in the warehouse; or]
54-16 [(2) if a corporation owns or manages the warehouse,
54-17 the name of the president, secretary, and treasurer of the
54-18 corporation.]
54-19 [(b) The clerk shall issue the certificate and retain for
54-20 county records a copy of the application.]
54-21 [Sec. 14.206. BOND. (a) A person receiving a certificate to
54-22 transact business shall file a bond with the county clerk granting
54-23 the certificate.]
54-24 [(b) The bond must be:]
54-25 [(1) payable to the State of Texas;]
54-26 [(2) of good and sufficient surety;]
54-27 [(3) conditioned on faithful performance of the
55-1 applicant's duty as a public warehouseman; and]
55-2 [(4) in the amount of $5,000.]
55-3 [(c) A bond is subject to approval by the county clerk and
55-4 the clerk shall file approved bonds in the clerk's office.]
55-5 [Sec. 14.207. RECEIPTS. (a) The owner or depositor of
55-6 property stored in a warehouse may request from the public
55-7 warehouseman a receipt for the property stored in the warehouse.]
55-8 [(b) The receipt shall be signed by the public warehouseman
55-9 or the warehouseman's agent and shall state:]
55-10 [(1) that the receipt is issued by a warehouse;]
55-11 [(2) the date of its issuance;]
55-12 [(3) the name and location of the warehouse in which
55-13 the property is stored; and]
55-14 [(4) the description, quantity, number, and marks of
55-15 the property stored.]
55-16 [(c) The public warehouseman shall number receipts
55-17 consecutively in the order of their issue and shall keep a correct
55-18 record of receipts issued available for public inspection at
55-19 reasonable hours.]
55-20 [Sec. 14.208. RECEIPT FOR COTTON. (a) A public warehouseman
55-21 shall issue a warehouse receipt to any person who deposits cotton
55-22 in the warehouseman's warehouse and requests a receipt.]
55-23 [(b) The receipt shall contain:]
55-24 [(1) all information required to be included on a
55-25 receipt by Section 14.207 of this code;]
55-26 [(2) the date on which the cotton was received in the
55-27 warehouse;]
56-1 [(3) a statement that the cotton represented by the
56-2 receipt is deliverable on return of the receipt properly endorsed
56-3 and payment of charges for storage and insurance stated on the face
56-4 of the receipt; and]
56-5 [(4) a statement of the grade and staple of the cotton
56-6 represented by the receipt.]
56-7 [(c) The statement of grade and staple of cotton required on
56-8 receipts by this section shall be determined by a licensed public
56-9 cotton classer. The public warehouseman may not charge the
56-10 depositor of the cotton more than 25 cents per bale for the
56-11 statement. If no licensed public cotton classer is available, the
56-12 warehouseman may issue a temporary receipt that:]
56-13 [(1) does not contain a statement of grade and staple
56-14 of the cotton;]
56-15 [(2) has the words "temporary receipt" clearly stamped
56-16 on its face; and]
56-17 [(3) is exchangeable at any time after five days from
56-18 the date of its issuance for a permanent warehouse receipt
56-19 containing all information required by Subsection (b) of this
56-20 section.]
56-21 [(d) Failure or neglect by a public warehouseman to comply
56-22 with the provisions of this section is a ground for revocation of a
56-23 certificate to transact business as a public warehouseman.]
56-24 [Sec. 14.209. DUPLICATE RECEIPTS. (a) A public warehouseman
56-25 may not issue a duplicate receipt or two receipts bearing the same
56-26 number from the same warehouse during the same calendar year,
56-27 except as provided by Subsection (b) of this section.]
57-1 [(b) If a receipt is lost or destroyed, the public
57-2 warehouseman shall issue a new receipt that:]
57-3 [(1) bears the same date and number as the original
57-4 receipt;]
57-5 [(2) is plainly marked "duplicate" on its face; and]
57-6 [(3) is secured with a deposit:]
57-7 [(A) made by the person requesting the duplicate
57-8 receipt; and]
57-9 [(B) acceptable to the warehouseman to protect a
57-10 person who may hold the original receipt in good faith and for
57-11 valuable consideration.]
57-12 [Sec. 14.210. EXCHANGE OF COTTON RECEIPTS. (a) A person may
57-13 exchange a nonnegotiable receipt for cotton for a negotiable
57-14 receipt for cotton by:]
57-15 [(1) returning the nonnegotiable receipt to the
57-16 warehouse issuing it; and]
57-17 [(2) complying with the provisions of this subchapter
57-18 relating to negotiable receipts.]
57-19 [(b) When the negotiable receipt is surrendered or canceled,
57-20 the public warehouseman shall mark or stamp "canceled" in ink on
57-21 the face of the receipt.]
57-22 [Sec. 14.211. COTTON UNDER LIEN. A person who buys, sells,
57-23 or deals with cotton on which a lien or encumbrance exists is not
57-24 liable for conversion of the cotton if:]
57-25 [(1) the cotton is stored in a warehouse or is
57-26 evidenced by a negotiable warehouse receipt issued by a public
57-27 warehouseman; and]
58-1 [(2) the person did not have actual knowledge of the
58-2 lien or encumbrance at the time of the alleged conversion.]
58-3 [Sec. 14.212. RECEIPT TO BE ISSUED ONLY ON DELIVERY. A
58-4 public warehouseman may not issue a receipt until the goods secured
58-5 by the receipt are actually delivered to the warehouse and are
58-6 under the control of the warehouseman issuing the receipt.]
58-7 [Sec. 14.213. DELIVERY. (a) A public warehouseman shall
58-8 immediately deliver property held in the warehouse on:]
58-9 [(1) presentation of a properly endorsed receipt
58-10 issued by the warehouseman to represent the property; and]
58-11 [(2) payment by the holder of the receipt of all
58-12 proper warehouse charges on property represented by the receipt.]
58-13 [(b) Unless a receipt has been lost or canceled, a public
58-14 warehouseman may not deliver property represented by a receipt
58-15 until the receipt is surrendered and canceled.]
58-16 [(c) On delivery of goods represented by a receipt, the
58-17 public warehouseman shall cancel the receipt by writing "canceled"
58-18 in ink on the receipt and placing the warehouseman's name on the
58-19 face of the receipt. A canceled receipt is void and may not be
58-20 circulated.]
58-21 [(d) A public warehouseman who fails to strictly comply with
58-22 this section is liable to the legal holder of the receipt for the
58-23 full value of the property represented by the receipt, based on the
58-24 value of the property at the time of the default.]
58-25 [Sec. 14.214. EXCEPTIONS. (a) This subchapter does not
58-26 apply to private warehouses or the issuance of receipts by the
58-27 owners or managers of private warehouses.]
59-1 [(b) This subchapter does not prohibit a public warehouseman
59-2 from issuing the same types of receipts as issued by a private
59-3 warehouse, provided that the faces of the receipts are plainly
59-4 marked with: "not a public warehouse receipt."]
59-5 [Sec. 14.215. STORAGE CHARGES. (a) The department may set
59-6 minimum storage charges for a warehouse operating under this
59-7 subchapter.]
59-8 [(b) The department is not required to set equal charges at
59-9 all places or all times and may take into consideration the local
59-10 conditions and volume of business of each warehouse.]
59-11 [(c) The department shall consider the size of bales in
59-12 setting charges for gin compressed cotton.]
59-13 [Sec. 14.216. REVOCATION OF A CERTIFICATE. (a) A person may
59-14 sue in the district court of the county in which a warehouse is
59-15 situated to revoke the certificate of the warehouse.]
59-16 [(b) The person seeking revocation of the certificate shall
59-17 provide the court with a written petition setting forth particular
59-18 violations of the law, and the court shall conduct the trial with
59-19 the same rules of process, procedure, and evidence used in civil
59-20 cases.]
59-21 SECTION 2. Section 12.020(c), Agriculture Code, is amended to
59-22 read as follows:
59-23 (c) The provisions of this code subject to this section and
59-24 the applicable penalty amounts are as follows:
59-25 Provision Maximum Penalty
59-26 Chapters 13, [14,] 18, 46, 61, 94,
59-27 95, 101, 102, 103, 121, 125,
60-1 132, and 134 $500
60-2 Subchapter B, Chapter 71
60-3 Chapter 19
60-4 Chapter [Chapters 75 and] 76 $2,000
60-5 Subchapters A and C, Chapter 71
60-6 Chapters 72, 73, and 74 $5,000
60-7 Chapter 14 $10,000.
60-8 SECTION 3. Section 59.003(b), Property Code, is amended to
60-9 read as follows:
60-10 (b) Unless a lessor issues a warehouse receipt, bill of
60-11 lading, or other document of title relating to property stored at
60-12 the facility, the following statutes do not apply to a self-service
60-13 storage facility:
60-14 (1) Chapter 7, Business & Commerce Code, as amended;
60-15 and
60-16 (2) [Subchapter A,] Chapter 14, Agriculture Code[, as
60-17 amended; and]
60-18 [(3) Sections 14.201, 14.204 through 14.214, and
60-19 14.216, Agriculture Code].
60-20 SECTION 4. (a) The changes in law made by this Act apply
60-21 only to an application for a license or renewal of a license made
60-22 to the Department of Agriculture on or after the effective date of
60-23 this Act. An application for a license or renewal of a license
60-24 made to the Department of Agriculture immediately before the
60-25 effective date of this Act is governed by the law as it existed
60-26 before the effective date of this Act, and that law is continued in
60-27 effect for that purpose.
61-1 (b) The changes in law made by Subchapters H and I, Chapter
61-2 14, Agriculture Code, as amended by this Act, apply only to an
61-3 offense committed on or after the effective date of this Act. An
61-4 offense committed before the effective date of this Act is governed
61-5 by the law as it existed when the offense was committed, and that
61-6 law is continued in effect for that purpose. For purposes of this
61-7 section, an offense was committed before the effective date of this
61-8 Act if any element of the offense was committed before that date.
61-9 SECTION 5. This Act takes effect September 1, 2001.