1-1 By: Swinford (Senate Sponsor - Bivins) H.B. No. 2586
1-2 (In the Senate - Received from the House April 26, 2001;
1-3 April 27, 2001, read first time and referred to Committee on
1-4 Natural Resources; May 10, 2001, reported favorably by the
1-5 following vote: Yeas 4, Nays 0; May 10, 2001, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to the regulation of public grain warehouse operators and
1-9 other public warehouse operators; providing penalties.
1-10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11 SECTION 1. Chapter 14, Agriculture Code, is reorganized and
1-12 amended as Chapters 14 and 14A to read as follows:
1-13 CHAPTER 14. REGULATION OF PUBLIC GRAIN WAREHOUSE OPERATORS
1-14 [REGULATION]
1-15 SUBCHAPTER A. DEFINITIONS [PUBLIC GRAIN WAREHOUSES]
1-16 Sec. 14.001. DEFINITIONS. (a) In this chapter
1-17 [subchapter]:
1-18 (1) "Depositor" means a person who:
1-19 (A) delivers [deposits] grain to [in] a public
1-20 grain warehouse for storing of the grain for hire, handling of the
1-21 grain for hire, or shipping of the grain for hire;
1-22 (B) is the owner or legal holder of an
1-23 outstanding receipt for grain stored in the public grain warehouse
1-24 issuing the receipt; or
1-25 (C) is lawfully entitled to possession of [the]
1-26 grain stored in a public grain warehouse.
1-27 (2) "Grain" means wheat, grain sorghum, corn, oats,
1-28 barley, rye, soybeans, or any other grain, peas, or beans for which
1-29 federal grain standards are established.
1-30 (3) "Open storage grain" means grain that:
1-31 (A) is received for storage by a public grain
1-32 warehouse located in this state;
1-33 (B) is not covered by a negotiable warehouse
1-34 receipt; and
1-35 (C) is not owned by the lessee, owner, or
1-36 operator of the warehouse in which it is stored.
1-37 (4) "Public grain warehouse" means a building, bin, or
1-38 similar structure located in this state and used for:
1-39 (A) the [receiving,] storing of grain for hire,
1-40 shipping of grain for hire, or handling of grain for hire; or
1-41 (B) the purchasing and selling of grain,
1-42 including grain on which payment is deferred.
1-43 (5) "Receipt" means a negotiable Texas grain warehouse
1-44 receipt issued by a warehouse operator [warehouseman] licensed
1-45 under this chapter [subchapter].
1-46 (6) "License" includes a renewal of or an amendment to
1-47 a license.
1-48 (7) "Scale weight ticket" means a load slip other than
1-49 a receipt given to a depositor or other person by a warehouse
1-50 operator [warehouseman] licensed under this chapter [subchapter]
1-51 on:
1-52 (A) initial delivery of the grain to the
1-53 warehouse; or
1-54 (B) weighing of the grain on the grain warehouse
1-55 operator's scale, regardless of the destination of the grain.
1-56 (8) "Receipted grain" means grain that is stored in a
1-57 public grain warehouse and for which a Texas grain warehouse
1-58 receipt has been issued and has not been canceled.
1-59 (9) "Warehouse operator" ["Storage grain" means grain
1-60 that:]
1-61 [(A) is received in a public grain warehouse
1-62 located in this state; and]
1-63 [(B) is not purchased by the lessee, owner, or
1-64 manager of the warehouse receiving the grain.]
2-1 [(10) "Warehouseman"] means a person engaged in the
2-2 business of operating a public grain warehouse.
2-3 (b) For purposes of this chapter, the term "public grain
2-4 warehouse" as defined by Subsection (a)(4) does not include
2-5 railcars, trucks, boats, or other vehicles when used to transport
2-6 grain.
2-7 (c) For purposes of this chapter, in those sections that
2-8 require the warehouse operator to cooperate with or provide
2-9 information to the department or issue documents or deliver grain
2-10 to customers of the warehouse operator and in those sections that
2-11 require notice to be provided to the warehouse operator by the
2-12 department, the term "warehouse operator" includes all employees,
2-13 agents, or other persons authorized by the warehouse operator to
2-14 issue receipts or scale weight tickets or sign contracts or other
2-15 agreements.
2-16 SUBCHAPTER B. GENERAL PROVISIONS
2-17 Sec. 14.011 [14.002]. LIMITATION OF CHAPTER [SUBCHAPTER].
2-18 This chapter [subchapter] does not apply to:
2-19 (1) a public grain warehouse covered by a license for
2-20 the operation of a public grain warehouse issued by the United
2-21 States Department of Agriculture or other federal agency [under the
2-22 United States Warehouse Act];
2-23 (2) an individual producer-owner who does not receive
2-24 from others grain for storage or handling for hire;
2-25 (3) a person whose business is manufacturing grain or
2-26 selling manufactured grain and who receives all grain with the
2-27 intent to manufacture the grain or sell manufactured grain [at
2-28 retail, unless the person also satisfies the definition of a
2-29 warehouseman]; or
2-30 (4) a person who receives grain with the intent of
2-31 using the grain for planting seed or for feeding livestock on the
2-32 premises where the grain is received[, unless the person requests
2-33 in writing to the department to be licensed].
2-34 Sec. 14.012. BUSINESS INFORMATION. (a) The following
2-35 information, prepared by the department in the course of its
2-36 regulatory authority under this chapter or required to be submitted
2-37 to the department in accordance with the department's
2-38 administration of this chapter, is confidential and not subject to
2-39 public disclosure:
2-40 (1) inspection or investigation reports containing
2-41 information regarding grain inventory; and
2-42 (2) financial information provided to the department
2-43 to establish net worth for purposes of licensing.
2-44 (b) Notwithstanding Subsection (a), inspection reports
2-45 containing information regarding grain inventory of a warehouse
2-46 operator or financial information of a warehouse operator provided
2-47 to the department to establish net worth may be:
2-48 (1) entered into evidence without sealing and made
2-49 public in:
2-50 (A) an administrative proceeding commenced by
2-51 the department against a warehouse operator;
2-52 (B) a civil or criminal proceeding commenced by
2-53 a county attorney, a district attorney, or the attorney general,
2-54 either independently or on behalf of the department, against a
2-55 warehouse operator; or
2-56 (C) a civil proceeding commenced by the
2-57 warehouse operator against the department;
2-58 (2) provided to the issuer of a warehouse operator's
2-59 bond or letter of credit for the purpose of establishing a claim on
2-60 the warehouse operator's bond or letter of credit;
2-61 (3) disclosed to the public after:
2-62 (A) revocation of a warehouse operator's
2-63 license;
2-64 (B) a voluntary closeout of all of the license
2-65 holder's facilities in this state;
2-66 (C) a petition for bankruptcy has been filed; or
2-67 (D) a receiver is appointed for the warehouse
2-68 operator's assets; or
2-69 (4) disclosed to any federal agency or any agency of
3-1 another state conducting a compliance inspection or criminal or
3-2 civil investigation involving the handling, storing, shipping,
3-3 selling, purchasing, or receipt of grain.
3-4 Sec. 14.013. RIGHT TO INTERVENE AND NOTIFICATION OF
3-5 DEPARTMENT. (a) The department may intervene in a suit for
3-6 receivership, garnishment, bankruptcy, or any other legal action
3-7 affecting the assets of a warehouse operator licensed under this
3-8 chapter or the grain assets of a depositor in a warehouse operated
3-9 under a license issued by the department, including, to assert the
3-10 rights of depositors not joined in the suit, a suit brought against
3-11 a bond or surety under Section 14.065.
3-12 (b) Any person who files a suit for receivership,
3-13 garnishment, or bankruptcy or who commences any other legal action
3-14 affecting the assets of a warehouse operator licensed under this
3-15 chapter or the grain assets of a depositor in a warehouse operated
3-16 under a license issued by the department, including a suit against
3-17 a bond or surety under Section 14.065, must give notice to the
3-18 department of the suit or legal action.
3-19 (c) Notice under this section must be in writing and
3-20 delivered to the department by certified mail, registered mail, or
3-21 commercial delivery service not later than the 20th day after the
3-22 date on which the suit or legal action is commenced.
3-23 (d) The judgment in an action described by Subsection (a)
3-24 is voidable if the notice required by this section is not provided.
3-25 (e) The court in which a suit or other legal action
3-26 described by Subsection (a) is commenced may impose appropriate
3-27 sanctions against a party who fails to provide the notice required
3-28 by this section.
3-29 Sec. 14.014. RECEIVERSHIP AFFECTING WAREHOUSE ASSETS. (a) A
3-30 person appointed receiver for the assets of a warehouse operator
3-31 licensed under this chapter is not required to obtain a license
3-32 from the department if the person:
3-33 (1) is bonded and insured as described by Subsection
3-34 (b); and
3-35 (2) after being appointed, does not:
3-36 (A) receive additional grain for storing for
3-37 hire, handling for hire, or shipping for hire; or
3-38 (B) purchase grain for resale.
3-39 (b) A person appointed receiver shall maintain:
3-40 (1) a bond in the same amount required for a licensed
3-41 warehouse operator; and
3-42 (2) casualty insurance in the same amount and type as
3-43 required for a licensed warehouse operator.
3-44 (c) A person appointed receiver shall file proof of proper
3-45 bonding and verification of insurance with the department on or
3-46 before the date the person is appointed to act as receiver.
3-47 Sec. 14.015 [14.003]. POWERS AND DUTIES OF DEPARTMENT.
3-48 [(a)] The department shall administer this chapter [subchapter]
3-49 and may:
3-50 (1) investigate the storing, shipping, and handling of
3-51 grain and complaints relating to these activities through the
3-52 inspection of:
3-53 (A) any public grain warehouse;
3-54 (B) the grain stored in any warehouse; or
3-55 (C) all property and records pertaining to a
3-56 warehouse;
3-57 (2) determine whether a warehouse for which a license
3-58 has been issued or applied for is suitable for properly storing,
3-59 shipping, or handling grain that is stored in or expected to be
3-60 stored in the warehouse;
3-61 (3) include field seed within the definition given to
3-62 "grain" by Section 14.001 [of this code];
3-63 (4) require that a warehouse operator keep records or
3-64 submit reports the department [it] determines are necessary in the
3-65 administration of this chapter [subchapter];
3-66 (5) require a warehouse operator or depositor
3-67 [warehouseman] to terminate storing, shipping, and handling
3-68 agreements within a time specified by the department:
3-69 (A) on closeout or revocation of the warehouse
4-1 operator's [a] license;
4-2 (B) if grain has been abandoned by the warehouse
4-3 operator or a depositor and the warehouse operator or depositor
4-4 cannot be located after diligent effort; or
4-5 (C) on issuance of an injunction ordering an
4-6 unlicensed warehouse operator to cease operations;
4-7 (6) prescribe forms, including the form of receipts,
4-8 bonds, or applications for licenses; [and]
4-9 (7) for purposes of determining compliance with this
4-10 chapter or amounts due to a depositor in an action taken by the
4-11 department against a surety or surety instrument under this
4-12 chapter, determine a warehouse operator's specific obligations to a
4-13 depositor, including:
4-14 (A) the type, quantity, or quality of open
4-15 storage or receipted grain due a depositor;
4-16 (B) the payment owed a depositor if a shortage
4-17 or variance exists in the type, quantity, or quality of a
4-18 depositor's open storage or receipted grain;
4-19 (C) the time and manner of delivery of grain due
4-20 a depositor; and
4-21 (D) whether a warehouse operator has failed to
4-22 deliver a depositor's open storage or receipted grain within a
4-23 reasonable time;
4-24 (8) by written order require a warehouse operator to
4-25 deliver grain of a particular type, quantity, and quality to a
4-26 depositor at a particular time and in a particular manner based on
4-27 the department's determination that the required delivery of grain
4-28 is due the depositor;
4-29 (9) classify grain by category, including open
4-30 storage, receipted, identity-preserved, company-owned, and
4-31 abandoned grain, and adopt rules regarding the storage, shipping,
4-32 or handling of classified grain, including recordkeeping and
4-33 accounting requirements;
4-34 (10) seize the records of a warehouse operator,
4-35 including any electronic records or the equipment or media on which
4-36 the records are stored, during a period of suspension of a
4-37 warehouse operator's license;
4-38 (11) seal or post as sealed, or both seal and post as
4-39 sealed, the warehouse of a warehouse operator:
4-40 (A) whose license has been suspended or revoked;
4-41 (B) whose license has expired; or
4-42 (C) who is unlicensed;
4-43 (12) seal or post as sealed, or both seal and post as
4-44 sealed, a warehouse that is found to be unsafe for inspection or
4-45 unsuitable for the storage of grain;
4-46 (13) during reasonable hours and to determine
4-47 compliance with this chapter, enter any facility where the
4-48 department reasonably believes grain is being handled, stored,
4-49 shipped, purchased, or sold to examine:
4-50 (A) the facility's storage, shipping, handling,
4-51 and financial records;
4-52 (B) grain; and
4-53 (C) physical structures;
4-54 (14) determine the suitability of a warehouse for
4-55 storing, shipping, or handling grain or for adequate and safe
4-56 inspection and, if found unsuitable for any of those purposes,
4-57 order corrective action;
4-58 (15) require the warehouse operator to notify the
4-59 department regarding:
4-60 (A) the handling of commodities that may pose a
4-61 hazard to humans, animals, the grain of other depositors in the
4-62 warehouse operator's warehouse, or the grain industry;
4-63 (B) existing hazards to inspection, including
4-64 recent or ongoing fumigations of warehouse facilities and unsafe or
4-65 inoperable warehouse equipment or structures; or
4-66 (C) any change in ownership, management, or
4-67 legal or financial status of a warehouse licensed under this
4-68 chapter;
4-69 (16) require by rule that sales, purchase, or
5-1 brokerage agreements between a warehouse operator and a producer be
5-2 in writing and contain written terms or provisions the department
5-3 considers appropriate to protect producers, depositors, and
5-4 warehouse operators and to ensure the department's ability to carry
5-5 out its regulatory functions under this chapter;
5-6 (17) regulate a warehouse operator's temporary storage
5-7 of grain in a non-warehouse location or facility;
5-8 (18) require segregation of grain requiring identity
5-9 preservation;
5-10 (19) enter into cooperative agreements with agencies
5-11 of the federal government or other states to carry out the purposes
5-12 of this chapter;
5-13 (20) recover the unused warehouse receipts of a
5-14 warehouse operator:
5-15 (A) during any period of probation or suspension
5-16 of the warehouse operator's license;
5-17 (B) on revocation or voluntary surrender of the
5-18 warehouse operator's license; or
5-19 (C) during any period in which the warehouse
5-20 operator is not licensed, including after a failure to timely renew
5-21 the license;
5-22 (21) order corrective action or impose any reasonable
5-23 condition of probation necessary to accomplish the regulatory goals
5-24 authorized by this chapter; and
5-25 (22) adopt rules necessary to carry out the provisions
5-26 of this chapter [subchapter].
5-27 [(b) In any hearing conducted under this subchapter, the
5-28 State Office of Administrative Hearings may:]
5-29 [(1) examine under oath any person and examine books
5-30 and records of any licensee;]
5-31 [(2) hear testimony and gather evidence for the
5-32 discharge of duties under this subchapter;]
5-33 [(3) administer oaths; and]
5-34 [(4) issue subpoenas, effective in any part of this
5-35 state, and require attendance of witnesses and the production of
5-36 books.]
5-37 [(c) The department may appoint and fix duties and
5-38 compensation of inspectors and other personnel and provide
5-39 equipment necessary to enforce the provisions of this subchapter.]
5-40 [(d) The following information prepared by the department in
5-41 the course of its regulatory authority under this subchapter or
5-42 required to be submitted to the department in accordance with the
5-43 department's administration of this subchapter is confidential and
5-44 not subject to public disclosure:]
5-45 [(1) inspection reports containing information
5-46 regarding grain inventory; and]
5-47 [(2) financial information provided to the department
5-48 to establish net worth for purposes of licensure.]
5-49 SUBCHAPTER C. LICENSING
5-50 Sec. 14.021 [14.004]. LICENSE REQUIRED. A person may not
5-51 operate a public grain warehouse without first obtaining from the
5-52 department a license in the person's name covering the warehouse.
5-53 Sec. 14.022. LICENSING OF MULTIPLE WAREHOUSES. (a) In this
5-54 section:
5-55 (1) "Combination" means a group of two or more public
5-56 grain warehouses or facilities operated under a single set of
5-57 complete records. For purposes of this chapter, a combination is
5-58 treated as if it were a single public grain warehouse.
5-59 (2) "Facility" means two or more public grain
5-60 warehouses located in close proximity on the same general location.
5-61 For purposes of this chapter, and except when part of a
5-62 combination, a facility is treated as if it were a single public
5-63 grain warehouse.
5-64 (b) A warehouse operator may operate all public grain
5-65 warehouses or facilities within an area no larger than 60 miles in
5-66 diameter as a combination if a single license covering the
5-67 combination is obtained from the department and:
5-68 (1) a single recordkeeping system covering only
5-69 warehouses within the combination is maintained by the warehouse
6-1 operator;
6-2 (2) a single, unique set of sequentially numbered
6-3 receipts containing all information required by department rule and
6-4 bearing the name of the license holder and a unique combination
6-5 name, but not bearing individual warehouse or facility names, is
6-6 used for the combination;
6-7 (3) for each scale operated by the warehouse operator,
6-8 the warehouse operator issues and maintains a single, unique set of
6-9 sequentially numbered scale weight tickets containing all
6-10 information required by department rule and bearing the name of the
6-11 license holder and a unique name identifying the facility where the
6-12 scale is located;
6-13 (4) a single daily position report covering all
6-14 storage obligations of the combination and only the combination,
6-15 including company-owned grain, and containing all information
6-16 required by department rule is maintained;
6-17 (5) all original warehouse operator records, except
6-18 for scale weight tickets, relating to transactions or storage
6-19 obligations involving the combination are maintained at a single
6-20 location and separate from all other businesses and separately
6-21 licensed warehouse operations of the warehouse operator; and
6-22 (6) except as provided by department rule, a single
6-23 unique bond or bond substitute is used to cover the combination.
6-24 (c) Except as permitted while operating a combination, a
6-25 warehouse operator may not combine or intermingle assets, storage
6-26 obligations, liabilities of any kind, records or record entries,
6-27 contractual obligations, other transactions of any kind, or any
6-28 other business or operating information from different warehouses
6-29 or businesses owned, managed, or operated by the warehouse
6-30 operator. Each licensed combination or individually licensed
6-31 facility shall be operated as a separate entity under a single,
6-32 unique name and, except as provided by department rule, shall be
6-33 covered by a single, separate bond or bond substitute.
6-34 Sec. 14.023 [14.005]. LICENSING PROCEDURE. (a) The
6-35 department may issue, renew, or amend a license following a
6-36 determination that:
6-37 (1) the applicant has filed an acceptable bond, a
6-38 financial statement in a form prescribed by the department, and
6-39 proof of casualty [possesses sufficient] insurance required by this
6-40 chapter;
6-41 (2) the warehouse is suitable for storage of grain and
6-42 inspection by department personnel; [and]
6-43 (3) the applicant has complied with this chapter
6-44 [subchapter] and rules adopted under this chapter; and
6-45 (4) the applicant has met the net worth or deficiency
6-46 bond requirements of Section 14.031(e) [subchapter].
6-47 (b) An applicant must file a separate application for each
6-48 license, renewal, or amendment and shall accompany each application
6-49 for a license or renewal with an annual license fee, as provided by
6-50 department rule. The department shall prescribe the information to
6-51 be contained in the application. A person who fails to submit a
6-52 renewal fee on or before the expiration date of the license must
6-53 pay, in addition to the renewal fee, the late fee provided by
6-54 Section 12.024 [of this code].
6-55 (c) If an applicant for a license previously operated a
6-56 grain warehouse in this state or another state and that warehouse
6-57 ceased to operate while the applicant was the operator, the
6-58 applicant must submit with the application evidence acceptable to
6-59 the department that all debts from the previous operation evidenced
6-60 by receipts have been satisfied. The department may not issue a
6-61 license to an applicant who the department determines has not
6-62 satisfied all such debts from a previous operation.
6-63 [Sec. 14.006. MULTIPLE WAREHOUSES OPERATED UNDER A SINGLE
6-64 LICENSE. (a) For the purpose of granting a license, the
6-65 department may consider as one unit all warehouses owned or
6-66 controlled by the warehouseman that are located in close proximity
6-67 on the same general location.]
6-68 [(b) All public grain warehouses operating under a single
6-69 license shall be treated as a single warehouse for the purposes of
7-1 this subchapter, including the issuance of receipts and the receipt
7-2 and shipment of grain. However, the department may approve an
7-3 application requesting that any part of a warehouse be reserved and
7-4 designated "not for public use."]
7-5 Sec. 14.024 [14.007]. REQUIREMENT FOR INCREASING CAPACITY.
7-6 A warehouse operator [warehouseman] may not use any increased
7-7 warehouse capacity without first obtaining written approval from
7-8 the department.
7-9 SUBCHAPTER D. BONDING
7-10 Sec. 14.031 [14.009]. BOND. (a) In accordance with this
7-11 section, each applicant for a license shall file or have on file a
7-12 bond with the department.
7-13 (b) The bond must:
7-14 (1) be payable to the State of Texas;
7-15 (2) be executed by the applicant as principal;
7-16 (3) be issued by a corporate surety licensed to do
7-17 business as surety in the State of Texas; and
7-18 (4) be in a form and contain terms and conditions
7-19 prescribed by the department.
7-20 (c) The bond must be conditioned on faithful performance of:
7-21 (1) each obligation of a warehouse operator
7-22 [warehouseman] as to receipted grain and open storage grain under
7-23 this chapter [subchapter] and rules adopted under this chapter
7-24 [subchapter], from the effective date of the bond until the license
7-25 is revoked or the bond is canceled, whichever occurs first, whether
7-26 or not the warehouse remains licensed; and
7-27 (2) except for a contract for the purchase of grain or
7-28 to act as broker for the grain, each obligation of a warehouse
7-29 operator [warehouseman] under any contract with a depositor that
7-30 exists on the effective date of the bond or is assumed after the
7-31 effective date of the bond and before the license is revoked or the
7-32 bond is canceled, whichever occurs first and whether or not the
7-33 warehouse remains licensed.
7-34 (d) The bond must be in an amount of not less than $20,000
7-35 and be based on six cents per bushel of storage capacity [$15,000
7-36 nor more than $500,000, based on the following rate:]
7-37 [(1) seven cents per bushel on the first million
7-38 bushels of storage capacity;]
7-39 [(2) five cents per bushel on the second million
7-40 bushels of storage capacity; and]
7-41 [(3) three cents per bushel on all bushels of storage
7-42 capacity above two million bushels].
7-43 (e) If the actual net worth of an applicant equals less than
7-44 25 cents per bushel of storage capacity, the applicant shall file a
7-45 deficiency bond in an amount equal to the difference between the
7-46 actual net worth and an amount determined by multiplying 25 cents
7-47 times each bushel of storage capacity in the applicant's warehouse.
7-48 A deficiency bond is in addition to the bond required of an
7-49 applicant by this section[, and the maximum amount of a bond
7-50 provided by Subsection (d) of this section does not apply].
7-51 (f) [In considering the reissuance of a license, the
7-52 department may accept a certificate from a surety stating that a
7-53 bond filed with the department has been renewed or continued.]
7-54 [(g)] Except as provided by department rule, the [The]
7-55 applicant must [may] give a single bond meeting the requirements of
7-56 this section to cover warehouses licensed as a single facility or
7-57 combination. A single bond may not be used to cover more than one
7-58 individually licensed facility, more than one combination, or one
7-59 or more individually licensed facilities and one or more
7-60 combinations [all licensed facilities operated by him or her,
7-61 except that each warehouse operated by the applicant must be
7-62 covered by the bond in the amount of at least $15,000].
7-63 (g) [(h)] The liability of the surety of a bond required by
7-64 this chapter [subchapter] is limited to the face amount of the bond
7-65 and does not accumulate for each successive license period during
7-66 which the bond is in force.
7-67 (h) [(i)] Subject to the approval of the department, a
7-68 warehouse operator [warehouseman] may deposit the following with
7-69 the department, for the term of the license plus two years, in lieu
8-1 of a bond required by this section:
8-2 (1) cash;
8-3 (2) an irrevocable letter of credit, payable to the
8-4 State of Texas; or
8-5 (3) a certificate of deposit from a federally insured
8-6 bank or savings and loan institution authorized to do business in
8-7 this state, assigned to the State of Texas[; or]
8-8 [(4) negotiable securities approved by the department
8-9 as providing the same protection as a surety bond for the grain
8-10 depositor].
8-11 (i) [(j)] The cash, letter of credit, or certificate of
8-12 deposit[, or securities deposited] under Subsection (h) [(i) of
8-13 this section] must be in the same amount or have a value in the
8-14 same amount as required for the warehouse bond.
8-15 (j) [(k)] Any interest or income earned on an assigned
8-16 certificate of deposit [or securities] accrues to the owner of the
8-17 certificate [or securities] during the time of the assignment.
8-18 Sec. 14.032 [14.012]. ADDITIONAL BOND [OR INSURANCE]. (a)
8-19 If the department determines that an approved bond [or insurance
8-20 policy] is insufficient, the department shall require the warehouse
8-21 operator [warehouseman] to give additional bond [or insurance].
8-22 (b) If a license has been suspended or revoked or has
8-23 expired, the department may require a bond from the warehouse
8-24 operator [warehouseman] to protect depositors of grain for as long
8-25 as any receipts or open storage accounts remain outstanding.
8-26 Sec. 14.033 [14.013]. BOND [OR INSURANCE] CANCELLATION. (a)
8-27 A warehouse operator [warehouseman] may not cancel a bond [or
8-28 insurance policy] approved by the department unless the department
8-29 first gives written approval of a substitute bond [or policy].
8-30 (b) The surety [or insurer] may cancel a bond [or insurance
8-31 policy] by sending notice of intent to cancel by registered or
8-32 certified mail to the department. Cancellation of a bond may not
8-33 be effective before the 91st day following the day on which the
8-34 surety mails notice of intent to cancel. [Cancellation of an
8-35 insurance policy may not be effective before the 31st day following
8-36 the day on which the insurer mails notice of intent to cancel.] On
8-37 receipt of notice of cancellation of a bond [or insurance policy],
8-38 the department shall promptly notify the warehouse operator
8-39 [warehouseman] involved. Liability under the bond ceases to accrue
8-40 on the effective date of cancellation. Notwithstanding
8-41 cancellation under this section, the department or a depositor may
8-42 collect under the bond for any claim that arose during the period
8-43 during which the bond was in effect, provided that the claim is
8-44 filed within the applicable limitations period established under
8-45 Section 14.065.
8-46 (c) The surety [or insurer] shall send a copy of the notice
8-47 required by this section to any government agency requesting it.
8-48 (d) Notwithstanding any other provision of this chapter, a
8-49 public grain warehouse license is automatically suspended if the
8-50 warehouse operator [subchapter, the department shall automatically
8-51 suspend the license if the warehouseman] fails[:]
8-52 [(1)] to file a new bond before the cancellation of a
8-53 bond is effective[; or]
8-54 [(2) to file a new certificate of insurance before the
8-55 cancellation of an insurance policy is effective].
8-56 (e) The suspension of a license under this section continues
8-57 as long as the warehouse operator [warehouseman] fails to maintain
8-58 the bond [or insurance] required by this chapter [subchapter].
8-59 Sec. 14.034. CANCELLATION OF LETTER OF CREDIT. (a) A
8-60 warehouse operator may not cancel a letter of credit approved by
8-61 the department in lieu of a bond unless the department gives
8-62 written approval of a substitute bond or letter of credit.
8-63 (b) The issuer of the letter of credit may cancel a letter
8-64 of credit by sending notice of intent to cancel by registered or
8-65 certified mail to the department. Cancellation of a letter of
8-66 credit may not take effect before the 91st day after the date the
8-67 issuer mails notice of intent to cancel. On receipt of notice of
8-68 cancellation of a letter of credit, the department shall promptly
8-69 notify the warehouse operator involved. Liability under the letter
9-1 of credit ceases to accrue on the effective date of cancellation.
9-2 Notwithstanding cancellation under this subsection or other law to
9-3 the contrary, the department or a depositor may collect under the
9-4 letter of credit for any claim that arose during the period during
9-5 which the letter of credit was in effect, provided that the claim
9-6 is filed within the applicable limitations period established under
9-7 Section 14.065.
9-8 (c) The issuer of a letter of credit shall send a copy of
9-9 the notice required by this section to any government agency
9-10 requesting the copy. Notwithstanding any other provision of this
9-11 chapter, a public grain warehouse license is automatically
9-12 suspended if the warehouse operator fails to file a new bond or
9-13 letter of credit before the cancellation of a letter of credit is
9-14 effective.
9-15 (d) The suspension of a license under this section continues
9-16 as long as the warehouse operator fails to maintain the bond or
9-17 letter of credit required by this chapter.
9-18 Sec. 14.035. CANCELLATION OF CERTIFICATE OF DEPOSIT OR CASH.
9-19 (a) A warehouse operator may not repossess a certificate of
9-20 deposit or cash approved by and deposited with the department in
9-21 lieu of a bond unless:
9-22 (1) the department gives written approval of a
9-23 substitute bond or letter of credit; and
9-24 (2) at least two years have passed after the
9-25 expiration of the last licensing period during which the
9-26 certificate of deposit or cash was deposited with the department in
9-27 lieu of a bond.
9-28 (b) Notwithstanding any other provision of this chapter, the
9-29 department may not release a certificate of deposit or cash
9-30 deposited with the department while a claim filed within the
9-31 applicable limitations period established under Section 14.065 is
9-32 pending before the department or a court.
9-33 (c) A warehouse operator may, on written request to the
9-34 department, recover cash or a certificate of deposit from the
9-35 department before the expiration of the two-year period specified
9-36 in Subsection (a)(2) if:
9-37 (1) the department performs a closeout inspection;
9-38 (2) the department determines on the best available
9-39 evidence that no outstanding obligations exist at the time of the
9-40 closeout inspection;
9-41 (3) the warehouse operator submits with the written
9-42 request a bond:
9-43 (A) in an amount equal to six cents per bushel
9-44 for 50 percent of the total storage capacity of the facility or
9-45 combination covered by the cash or certificate of deposit the
9-46 warehouse operator is attempting to recover; and
9-47 (B) covering any failure of obligation that may
9-48 have occurred during all licensing periods covered by the cash or
9-49 certificate of deposit the warehouse operator is attempting to
9-50 recover; and
9-51 (4) at least 30 days have passed since the closeout
9-52 inspection.
9-53 (d) A claim against the bond required by Subsection (c) must
9-54 be filed with the department or in a court of competent
9-55 jurisdiction not later than the second anniversary of the date of
9-56 the closeout inspection.
9-57 SUBCHAPTER E. INSURANCE
9-58 Sec. 14.041 [14.011]. CASUALTY INSURANCE. (a) Except as
9-59 provided by Subsection (c) [of this section], an applicant for a
9-60 license must file or have on file with the department a certificate
9-61 of insurance evidencing that:
9-62 (1) the applicant has an effective policy of insurance
9-63 issued by an insurance company authorized to do business in this
9-64 state or, with the approval of the department, by an eligible [a]
9-65 surplus lines insurer that meets the requirements of Article
9-66 1.14-2, Insurance Code, and rules adopted by the commissioner
9-67 [State Board of Insurance] under that article; and
9-68 (2) the policy insures, in the name of the applicant,
9-69 all grain that is or may be in the public grain warehouse for its
10-1 full market value against loss by or due to water or other fluid,
10-2 malicious mischief, vandalism, theft, intentional waste or
10-3 destruction, smoke, fire, internal explosion, lightning, hail,
10-4 windstorm, hurricane [cyclone], or tornado.
10-5 (b) If water or other fluid, malicious mischief, vandalism,
10-6 theft, intentional waste or destruction, smoke, [a] fire, [an]
10-7 internal explosion, lightning, hail, [a] windstorm, hurricane [a
10-8 cyclone], or [a] tornado destroys or damages grain in a public
10-9 grain warehouse, the warehouse operator [warehouseman] shall, on
10-10 demand by the depositor and presentation of a receipt or other
10-11 evidence of ownership, make settlement with the depositor of the
10-12 grain. The amount of the settlement shall be the average price
10-13 paid for grain of the same grade and quality on the date of the
10-14 loss at the location of the warehouse, minus the warehouse
10-15 operator's [warehouseman's] charges and advances. If a settlement
10-16 is not made before the 31st day following the date of demand, the
10-17 depositor is entitled to seek recovery from the insurance company.
10-18 (c) An applicant is not required to file a certificate of
10-19 insurance if the applicant certifies in writing, at or before the
10-20 time the certificate of insurance is due, that all grain within the
10-21 warehouse at the time the license is to be effective is or will be
10-22 owned by the applicant free of any lien. The applicant shall file
10-23 the required certificate of insurance on or before the first day
10-24 any grain not owned by the applicant free of any lien is stored for
10-25 hire, handled for hire, or shipped for hire.
10-26 Sec. 14.042. INSURANCE CANCELLATION. (a) A warehouse
10-27 operator may not cancel an insurance policy approved by the
10-28 department unless the department gives written approval of a
10-29 substitute policy.
10-30 (b) The insurer may cancel an insurance policy by sending
10-31 notice of intent to cancel by registered or certified mail to the
10-32 department. Cancellation of an insurance policy is not effective
10-33 before the 31st day following the date the insurer mails notice of
10-34 intent to cancel. On receipt of notice of cancellation of an
10-35 insurance policy, the department shall promptly notify the
10-36 warehouse operator involved.
10-37 (c) The insurer shall send a copy of the notice required by
10-38 this section to any government agency requesting the copy.
10-39 (d) Notwithstanding any other provision of this chapter, a
10-40 public grain warehouse license is automatically suspended if the
10-41 warehouse operator fails to file a new certificate of insurance
10-42 before the cancellation of an insurance policy is effective or
10-43 fails to provide a certification of ownership under Section
10-44 14.041(c).
10-45 (e) The suspension of a license under this section continues
10-46 as long as the warehouse operator fails to maintain the insurance
10-47 required by this chapter.
10-48 Sec. 14.043. ADDITIONAL INSURANCE. (a) If the department
10-49 determines that an approved insurance policy is insufficient, the
10-50 department shall require the warehouse operator to obtain
10-51 additional insurance.
10-52 (b) If a license has been suspended or revoked or has
10-53 expired, the department may require continued insurance coverage by
10-54 the warehouse operator to protect depositors of grain for as long
10-55 as any receipts or open storage accounts remain outstanding.
10-56 (c) The warehouse operator shall obtain the additional
10-57 insurance required by this section and provide verification of the
10-58 additional insurance within a time specified by the department, and
10-59 the additional insurance shall be maintained or continued as
10-60 necessary to meet the requirements of this chapter.
10-61 SUBCHAPTER F. WAREHOUSE OPERATOR OBLIGATIONS
10-62 Sec. 14.051 [14.008]. POSTING OF LICENSE. Each warehouse
10-63 operator [warehouseman] shall immediately on receipt of a license
10-64 post the original [it] in a conspicuous place at [in] the primary
10-65 recordkeeping location for the individually licensed facility or
10-66 combination. A copy of the license must be conspicuously posted at
10-67 each facility where grain is stored for hire, handled for hire, or
10-68 shipped for hire [office of the public grain warehouse].
10-69 Sec. 14.052 [14.0091]. WAREHOUSE OPERATOR OBLIGATIONS [OF
11-1 WAREHOUSEMAN]. (a) The obligations of a warehouse operator
11-2 [warehouseman] include the obligation to:
11-3 (1) deliver grain [a commodity] to a person holding a
11-4 receipt for grain [a commodity] stored in the warehouse; and
11-5 (2) maintain the quantity and quality of all grain not
11-6 owned by the warehouse operator, including open storage grain [a
11-7 commodity as evidenced by and indicated on a warehouse receipt].
11-8 (b) Except as otherwise provided by this chapter or by
11-9 department rule, the [Sec. 14.021. OBLIGATION TO DELIVER. The]
11-10 obligation of a warehouse operator [warehouseman] to deliver grain
11-11 to a person holding a receipt for grain stored in the public grain
11-12 warehouse is controlled by Section 7.403, Business & Commerce Code.
11-13 (c) If a warehouse operator accepts for storage, shipping,
11-14 handling, purchase, or sale any grain that is nonfungible or for
11-15 which identity must be preserved, the warehouse operator shall
11-16 safeguard the grain from intermingling with grain that would impair
11-17 or destroy the identity-preserved or nonfungible nature of the
11-18 grain. Nothing in this section requires the warehouse operator to
11-19 accept grain that is nonfungible or that requires identity
11-20 preservation.
11-21 (d) The warehouse operator remains liable for the quality
11-22 and quantity of grain deposited at the warehouse and for any other
11-23 obligations established under this chapter for any period during
11-24 which the warehouse has been sealed or during any period of
11-25 probation, suspension, or revocation imposed under this chapter or
11-26 for grain abandoned by the warehouse operator unless:
11-27 (1) the warehouse operator makes a written request to
11-28 the department for access to the warehouse;
11-29 (2) the request adequately describes why access is
11-30 necessary to meet the warehouse operator's obligations under this
11-31 chapter;
11-32 (3) the request adequately describes what type of
11-33 access is necessary to meet the warehouse operator's obligations
11-34 under this chapter;
11-35 (4) the request for access is reasonable;
11-36 (5) allowing access would not impair the department's
11-37 ability to preserve evidence, warehouse operator records, or
11-38 depositor grain assets; and
11-39 (6) the request is denied by the department or the
11-40 department imposes unreasonable restrictions that prevent the
11-41 operator from meeting the obligations described in the request.
11-42 (e) The department is entitled, on behalf of depositors, to
11-43 recover from the warehouse operator's bond the cost of damages
11-44 suffered by depositors as a result of sealing the warehouse or as a
11-45 result of the warehouse operator abandoning the warehouse and the
11-46 grain contained in the warehouse.
11-47 Sec. 14.053 [14.020]. RECEIPT FORMS. (a) A warehouse
11-48 operator shall use one set of serially numbered and sequentially
11-49 issued receipts for all warehouses operated under a single license.
11-50 In addition to a unique serial number, each receipt form must
11-51 contain all of the information prescribed by department rule. If
11-52 further provided by department rule, the warehouse operator shall
11-53 request the receipt forms from the printer on a form approved,
11-54 prescribed, or furnished by the department.
11-55 (b) The warehouse operator shall provide the department with
11-56 an exemplar of the receipt forms and an affidavit from the printer
11-57 showing the number of receipts printed and their serial numbers
11-58 before issuing any receipt from the printed set. The exemplar and
11-59 affidavit required by this subsection shall be provided each time a
11-60 new set of receipts is printed.
11-61 (c) The warehouse operator may use an electronic receipt
11-62 system if the provider of the electronic receipt system has been
11-63 approved by the department or by the United States Department of
11-64 Agriculture or any other federal agency that issues a license for
11-65 the operation of a public grain warehouse.
11-66 (d) The department may require a warehouse operator to
11-67 provide a bond to cover any loss resulting from unlawful use of a
11-68 receipt. [The department shall supply all receipt forms unless the
11-69 department in writing approves a privately printed receipt form
12-1 requested by the warehouseman. The warehouseman shall request
12-2 receipt forms on a form furnished by the department and shall
12-3 accompany a request with payment to cover estimated costs of
12-4 printing, packaging, and shipping, as determined by the department.
12-5 If the receipts are privately printed, the printer shall provide
12-6 the department with an affidavit showing the number of the receipts
12-7 printed and their serial numbers. The department may require a
12-8 warehouseman who uses privately printed receipts to provide a bond
12-9 to cover any loss resulting from the unlawful use of a receipt.]
12-10 The department shall determine the form and the amount of the bond,
12-11 but the amount may not exceed $5,000.
12-12 [(b) The department shall recover all receipts remaining
12-13 unused after a license required by this subchapter is revoked or
12-14 suspended.]
12-15 Sec. 14.054 [14.017]. ISSUANCE OF SCALE WEIGHT TICKET OR
12-16 RECEIPT. (a) On receiving grain, a warehouse operator
12-17 [warehouseman] shall issue to the person delivering the grain a
12-18 serially numbered scale weight ticket in a form approved by the
12-19 department.
12-20 (b) On application of a depositor, the warehouse operator
12-21 [warehouseman] shall issue to the depositor a Texas grain warehouse
12-22 receipt, which must be:
12-23 (1) in a form prescribed by the department; and
12-24 (2) in conformity with Chapter 7, Business & Commerce
12-25 Code.
12-26 (c) A Texas grain warehouse receipt issued under this
12-27 subchapter is subject to the provisions of Chapter 7, Business &
12-28 Commerce Code.
12-29 (d) A Texas grain warehouse receipt is a negotiable document
12-30 of title. A scale weight ticket is not a negotiable document of
12-31 title.
12-32 (e) Except as provided by Section 14.055 [14.019 of this
12-33 code] for duplicate receipts, a warehouse operator may not issue
12-34 two scale weight tickets or two receipts bearing the same number
12-35 during any calendar year.
12-36 (f) Unless previously canceled in accordance with the
12-37 provisions of Chapter 7, Business & Commerce Code, a Texas grain
12-38 [commodity] warehouse receipt issued under this chapter expires 10
12-39 years after the date of issuance.
12-40 Sec. 14.055 [14.019]. DUPLICATE RECEIPTS. (a) Except as
12-41 otherwise provided by this section [subsection], if a receipt
12-42 issued under this chapter [subchapter] is outstanding, another
12-43 receipt covering all or part of the grain covered by the initial
12-44 receipt may not be issued by the warehouse operator [warehouseman]
12-45 or any other person. If a receipt is lost, stolen, or destroyed,
12-46 the owner is entitled to a new receipt as a duplicate or substitute
12-47 for the missing receipt. The duplicate or substitute receipt has
12-48 the same legal effect as the original receipt and must:
12-49 (1) state that it is in lieu of the original receipt;
12-50 and
12-51 (2) bear the number and date of the original receipt.
12-52 (b) Before issuing a duplicate receipt, the warehouse
12-53 operator [warehouseman] shall require from the owner an indemnity
12-54 bond of double the market value of the grain covered by the missing
12-55 receipt. The bond must be in a form and with a surety prescribed
12-56 by the department to fully protect all rights under the missing
12-57 receipt.
12-58 (c) A warehouse operator [warehouseman] may not obtain,
12-59 purchase, or become a surety on a bond for a lost, stolen, or
12-60 destroyed receipt.
12-61 (d) A court may not order delivery of grain covered by a
12-62 lost, stolen, or destroyed receipt without requiring the bond
12-63 provided by this section.
12-64 Sec. 14.056 [14.018]. RECEIPT FOR GRAIN OWNED BY WAREHOUSE
12-65 OPERATOR [OWNER]. A warehouse operator [warehouseman] may issue a
12-66 receipt for grain that is owned by the warehouse operator
12-67 [warehouseman], in whole or part, and located in the warehouse
12-68 operator's [warehouseman's] warehouse. The negotiation, transfer,
12-69 sale, or pledge of that receipt may not be defeated because of its
13-1 ownership.
13-2 Sec. 14.057 [14.022]. RECORDS. (a) Every warehouse operator
13-3 [warehouseman] shall keep in a safe place complete and correct
13-4 records and accounts pertaining to the public grain warehouse,
13-5 including records and accounts of:
13-6 (1) grain received and withdrawn from the warehouse;
13-7 (2) unissued receipts in the warehouse operator's
13-8 [warehouseman's] possession;
13-9 (3) receipts and scale weight tickets issued by the
13-10 warehouse operator [warehouseman]; and
13-11 (4) receipts returned to and canceled by the warehouse
13-12 operator [warehouseman].
13-13 (b) The warehouse operator [warehouseman] shall retain the
13-14 records required by this section for the period of time prescribed
13-15 by the department. The warehouse operator [warehouseman] shall
13-16 retain copies of receipts or other documents evidencing ownership
13-17 of grain or liability of a warehouse operator [warehouseman] as
13-18 long as the documents are outstanding. If the documents are
13-19 canceled, the warehouse operator [warehouseman] shall retain the
13-20 documents or receipts for a period of not less than two years from
13-21 the date of cancellation.
13-22 (c) The warehouse operator [warehouseman] shall:
13-23 (1) clearly mark all canceled receipts "canceled" and
13-24 mark on the face of each receipt the date of the cancellation;
13-25 (2) keep records and accounts required by this section
13-26 separate from the records and accounts of other businesses; [and]
13-27 (3) issue in numerical order all scale weight tickets
13-28 and receipts; and
13-29 (4) keep in numerical order copies of the scale weight
13-30 tickets and receipts issued by the warehouse operator.
13-31 (d) In records kept under this section, grain may be
13-32 designated as company-owned grain only if:
13-33 (1) the grain has been paid for and is wholly owned by
13-34 the warehouse operator; or
13-35 (2) the ownership of the grain has been transferred to
13-36 the warehouse operator under a written contract of purchase.
13-37 (e) The warehouse operator [warehouseman] shall report to
13-38 the department on forms furnished by the department the following
13-39 information on scale weight tickets used in the warehouse
13-40 operator's [warehouseman's] business:
13-41 (1) the number of scale weight tickets printed;
13-42 (2) the serial numbers of the scale weight tickets
13-43 printed; and
13-44 (3) the printer of the scale weight tickets.
13-45 (f) The warehouse operator shall make [department may
13-46 inspect] any records required by this section or department rule
13-47 accessible and available for inspection by the department at any
13-48 reasonable time.
13-49 Sec. 14.058 [14.036]. POSTING OF STORAGE RATES OR TARIFFS.
13-50 (a) A public grain [commodity] warehouse licensed under this
13-51 chapter [subchapter] shall post a copy of all [the] storage rates
13-52 and tariffs charged by the warehouse operator at the main warehouse
13-53 office and at each warehouse facility operating under the license.
13-54 (b) The [public] warehouse operator shall post any change to
13-55 the posted storage rates or tariffs not later than the third [14th]
13-56 day before the day on which the change is to take effect.
13-57 (c) [(b)] Department inspectors shall check compliance with
13-58 this section during inspections of a public grain [commodity]
13-59 warehouse under this chapter [subchapter].
13-60 Sec. 14.059 [14.014]. INSPECTIONS; FEE. (a) On request by
13-61 the department, a warehouse operator [warehouseman] shall report to
13-62 the department on the condition, [conduct,] operation, and business
13-63 of each public grain warehouse that the warehouse operator
13-64 [warehouseman] operates and all grain stored in those warehouses.
13-65 (b) [A warehouseman shall permit the department to enter and
13-66 inspect each public grain warehouse, its contents, and all records
13-67 related to the grain stored in the warehouse. The warehouseman
13-68 shall render to the department any assistance necessary for an
13-69 inspection under this section.]
14-1 [(c)] The department shall inspect each public grain
14-2 warehouse at least once annually and may make additional
14-3 inspections as the department considers necessary. A warehouse
14-4 operator [warehouseman] may request that the department make
14-5 additional inspections.
14-6 (c) [(d)] The department shall collect from the warehouse
14-7 operator [warehouseman] whose public grain warehouse is inspected
14-8 an inspection fee for an annual inspection or an inspection
14-9 requested by the warehouse operator [warehouseman], but may not
14-10 collect an inspection fee for other inspections unless the
14-11 inspection is conducted:
14-12 (1) under the terms of an agreed or ordered suspension
14-13 or probation;
14-14 (2) in response to a complaint that the warehouse
14-15 operator has not complied with the duties and obligations provided
14-16 for by this chapter and the complaint is determined by the
14-17 department to be valid;
14-18 (3) as a follow-up inspection to:
14-19 (A) determine whether a shortage of grain
14-20 discovered by the department has been corrected;
14-21 (B) obtain records not immediately available at
14-22 the location designated as the recordkeeping location in department
14-23 records or to which access was refused during a previous
14-24 inspection;
14-25 (C) ensure that recordkeeping discrepancies
14-26 discovered during a previous inspection have been corrected; or
14-27 (D) monitor a suspension or probation under this
14-28 chapter; or
14-29 (4) to monitor termination of arrangements for
14-30 storing, shipping, or handling of grain under this chapter.
14-31 (d) The department by rule shall set the inspection fee.
14-32 SUBCHAPTER G. REMEDIES AND CLAIMS
14-33 Sec. 14.061 [14.0261]. WAREHOUSE RECEIPT AS PRIMA FACIE
14-34 EVIDENCE. In an action involving a warehouse operator
14-35 [warehouseman] that is brought under this chapter [subchapter], a
14-36 warehouse receipt constitutes prima facie evidence of the truth of
14-37 the facts stated in the receipt.
14-38 Sec. 14.062. INVALID RECEIPTS. Notwithstanding any other
14-39 provision of this code or the Business & Commerce Code, a receipt
14-40 for grain is void as to any person who receives the receipt with
14-41 knowledge that the grain purported to be covered by the receipt was
14-42 not, at the time the receipt was issued, actually stored in the
14-43 warehouse of the warehouse operator issuing the receipt.
14-44 Sec. 14.063 [14.023]. TERMINATION OF STORAGE. (a) A
14-45 warehouse operator [warehouseman] desiring to terminate the storage
14-46 of grain in the warehouse operator's [warehouseman's] warehouse,
14-47 including grain that is abandoned or is unclaimed prior to the sale
14-48 of a warehouse, shall do so in accordance with Sections 7.206 and
14-49 7.210, Business & Commerce Code, except that the warehouse operator
14-50 [warehouseman] is not required to hold the balance of the proceeds
14-51 of a sale, but may transfer the balance to the comptroller, who
14-52 shall treat the money in the same manner as an escheated bank
14-53 account.
14-54 (b) A purchaser in good faith of grain sold under Section
14-55 7.210, Business & Commerce Code, takes the grain free of any rights
14-56 of the holder of the receipt, but the receipt is evidence of
14-57 entitlement to the escheated funds deposited with the comptroller
14-58 under Subsection (a) [of this section].
14-59 Sec. 14.064. CERTAIN LOADOUT FEES PROHIBITED. (a) A
14-60 warehouse operator may not charge a fee for loading out grain if
14-61 the loadout was the result of the misconduct of the warehouse
14-62 operator.
14-63 (b) Misconduct under this section includes:
14-64 (1) violation of this chapter as established by final,
14-65 unappealable order of the commissioner;
14-66 (2) conviction of a crime, including a plea of nolo
14-67 contendere, described as an offense under this chapter; and
14-68 (3) conviction of a crime, including a plea of nolo
14-69 contendere, described as an offense under the Penal Code and
15-1 involving any type of fraud or theft related to the storing,
15-2 shipping, handling, sale, or purchase of grain or the sale or
15-3 purchase of grain handling, shipping, or storage equipment or
15-4 warehouse structures or other assets.
15-5 (c) A loadout fee collected during a period of suspension of
15-6 a warehouse operator's license by the department, after revocation
15-7 of a warehouse operator's license, or during a period in which
15-8 criminal charges are pending against a warehouse operator, shall be
15-9 placed in an escrow account by the warehouse operator until:
15-10 (1) the department's suspension is lifted;
15-11 (2) the prosecutor ceases to pursue criminal charges;
15-12 (3) the indictment or information is dismissed by a
15-13 court; or
15-14 (4) the warehouse operator is acquitted.
15-15 (d) If misconduct is finally determined to have occurred as
15-16 provided by Subsection (b), the loadout fees placed in escrow shall
15-17 be returned to the person originally paying those fees. The
15-18 loadout fees placed in escrow shall be returned to the warehouse
15-19 operator if the warehouse operator is found not to have committed
15-20 misconduct by acquittal, by the dismissal of the criminal charges,
15-21 or by final order of the commissioner.
15-22 Sec. 14.065 [14.010]. RECOVERY ON BOND; LIABILITY OF
15-23 WAREHOUSE OPERATOR [WAREHOUSEMAN]. (a) If no action on the bond or
15-24 cash, certificate of deposit, or letter of credit deposited in lieu
15-25 of a bond of a warehouse operator [warehouseman] is begun before
15-26 the 31st day after the date of a written demand to the department,
15-27 a depositor has a right of action on the bond or cash, certificate
15-28 of deposit, or letter of credit deposited in lieu of a bond for
15-29 recovery of damages suffered by the depositor as a result of the
15-30 failure of the warehouse operator [warehouseman] to comply with any
15-31 condition of the bond, or if cash, a certificate of deposit, or a
15-32 letter of credit is deposited in lieu of a bond, failure to comply
15-33 with any obligation of the warehouse operator under this chapter
15-34 that would have been covered by a bond.
15-35 (b) Recovery on a bond shall be prorated if claims exceed
15-36 liability on a bond, but a depositor suing on a bond is not
15-37 required to join other depositors in a suit. The burden of
15-38 establishing proration is on the surety as a matter of defense or
15-39 is on the department as intervenor on behalf of other depositors.
15-40 (c) A warehouse operator [warehouseman] is liable for
15-41 damages for loss of or injury to grain [a commodity] caused by the
15-42 warehouse operator's [warehouseman's] failure to exercise the care
15-43 that a reasonably prudent person would exercise in regard to the
15-44 grain [commodity] under similar circumstances, but, unless
15-45 otherwise agreed, a warehouse operator [warehouseman] is not liable
15-46 for damages to grain [a commodity] that could not have been avoided
15-47 through the exercise of that care.
15-48 (d) A person who files an action on a bond under this
15-49 section must serve notice of the suit on the department in the same
15-50 manner and within the same period as for the defendant or surety
15-51 who issued the bond.
15-52 (e) On authentication by the department, the court shall
15-53 accept into evidence as a public record any report prepared by the
15-54 department under this chapter that describes potential bond claims
15-55 by other depositors, regardless of whether any of those depositors
15-56 are joined in the suit.
15-57 (f) A person is prohibited from filing a claim on an invalid
15-58 receipt.
15-59 (g) An action under this section must be brought not later
15-60 than the second anniversary of the date of expiration of the
15-61 public grain warehouse license in effect at the time the claim
15-62 arose.
15-63 (h) The department by rule may set a limitations period for
15-64 filing claims with the department on a bond filed with the
15-65 department or cash, a certificate of deposit, or a letter of credit
15-66 deposited with the department in lieu of a bond.
15-67 Sec. 14.066. APPEAL OF DEPARTMENT ACTION BY WAREHOUSE
15-68 OPERATOR. (a) A department action or order affecting a warehouse
15-69 operator under this chapter, other than by rulemaking, assessment
16-1 of an administrative penalty, or imposition of a license sanction,
16-2 including a suspension under Section 14.083(c), is appealable in
16-3 accordance with this section.
16-4 (b) Not later than the 10th day after the date the
16-5 department takes an action or issues an order described by
16-6 Subsection (a), the warehouse operator may serve notice on the
16-7 department to appear in a district court of Travis County or the
16-8 district court of the county in which the public grain warehouse is
16-9 located. The court shall fix the time of the hearing not less than
16-10 3 days or more than 20 days after the date of service of the
16-11 notice.
16-12 (c) The burden is on the warehouse operator to show by a
16-13 preponderance of the evidence that the action taken or order issued
16-14 by the department was not authorized under this chapter or, if
16-15 authorized, was an abuse of the department's discretion.
16-16 SUBCHAPTER H. OFFENSES
16-17 Sec. 14.071 [14.027]. GENERAL PENALTY. (a) A person commits
16-18 an offense if the person violates a provision of this chapter for
16-19 which an offense is not expressly provided [subchapter other than
16-20 Section 14.022(d)].
16-21 (b) An offense under this section is a Class B misdemeanor.
16-22 Sec. 14.072 [14.028]. PENALTY FOR OPERATING WITHOUT A
16-23 LICENSE. (a) A person commits an offense if the person:
16-24 (1) transacts any public grain warehouse business
16-25 without first obtaining a license required by this chapter
16-26 [subchapter]; or
16-27 (2) continues to transact public grain warehouse
16-28 business after a license has been revoked or suspended, or the
16-29 license holder has been placed on probation, except as permitted
16-30 under Section 14.084 [14.016 of this subchapter].
16-31 (b) An offense under this section is a felony of the third
16-32 degree.
16-33 (c) A person commits a separate offense for each day
16-34 business prohibited by this section is carried on.
16-35 Sec. 14.073 [14.029]. PENALTY FOR FRAUD. (a) A person
16-36 commits an offense if the person:
16-37 (1) issues or aids in issuing a receipt or scale
16-38 weight ticket knowing that the grain covered by the receipt or
16-39 scale weight ticket has not been actually received at the [public]
16-40 grain warehouse;
16-41 (2) issues or aids in issuing a duplicate or
16-42 additional negotiable receipt for grain knowing that a former
16-43 negotiable receipt for the same grain or any part of the grain is
16-44 outstanding except as permitted by Section 14.055 [14.019 of this
16-45 code]; or
16-46 (3) fraudulently and without proper authority
16-47 represents, forges, alters, counterfeits, or simulates any license,
16-48 scale weight ticket, or receipt provided for by this chapter
16-49 [subchapter].
16-50 (b) An offense under this section is a felony of the second
16-51 degree.
16-52 Sec. 14.074 [14.030]. PENALTY FOR UNLAWFUL DELIVERY. (a) A
16-53 person commits an offense if the person:
16-54 (1) delivers grain out of a public grain warehouse
16-55 knowing that a negotiable receipt for the grain is outstanding and
16-56 without possessing that receipt; or
16-57 (2) delivers grain [a commodity] out of a public grain
16-58 warehouse:
16-59 (A) knowing that a nonnegotiable receipt or
16-60 scale weight ticket is outstanding;
16-61 (B) without the prior approval of the person
16-62 lawfully entitled to delivery; and
16-63 (C) without the delivery being shown on the
16-64 appropriate records of the warehouse operator [warehouseman].
16-65 (b) It is an affirmative [a] defense to prosecution under
16-66 this section that the person's action is:
16-67 (1) a sale or other disposition of grain in lawful
16-68 enforcement of a warehouse operator's [warehouseman's] lien;
16-69 (2) [or on] a warehouse operator's [warehouseman's]
17-1 lawful termination of a storing, shipping, or handling agreement;
17-2 (3) a delivery to the person lawfully entitled to
17-3 delivery;
17-4 (4) a delivery authorized by prior approval of the
17-5 person lawfully entitled to delivery and the delivery is shown on
17-6 the appropriate records of the warehouse operator;
17-7 (5) necessary to prevent destruction of the grain;
17-8 (6) taken under the order of a state or federal court;
17-9 or
17-10 (7) [(2)] permitted by a rule of the department
17-11 necessary to carry out this chapter [subchapter].
17-12 (c) An offense under this section is a felony of the second
17-13 degree.
17-14 Sec. 14.075 [14.031]. PENALTY FOR FRAUDULENTLY ISSUING A
17-15 SCALE WEIGHT TICKET OR RECEIPT. (a) A person commits an offense if
17-16 the person fraudulently issues or aids in fraudulently issuing a
17-17 receipt or scale weight ticket knowing that it contains a false
17-18 statement.
17-19 (b) An offense under this section is a felony of the second
17-20 degree.
17-21 Sec. 14.076 [14.032]. PENALTY FOR CHANGING A RECEIPT OR
17-22 SCALE WEIGHT TICKET AFTER ISSUANCE. (a) A person commits an
17-23 offense if the person changes a receipt or scale weight ticket
17-24 after its issuance.
17-25 (b) It is a defense to prosecution under this section that
17-26 the change on the receipt or scale weight ticket is a notation by
17-27 the warehouse operator [warehouseman] for partial delivery or
17-28 corrections made by the warehouse operator [warehouseman] to
17-29 reflect accuracy of accounts.
17-30 (c) An offense under this section is a felony of the second
17-31 degree.
17-32 Sec. 14.077 [14.033]. PENALTY FOR DEPOSITING GRAIN WITHOUT
17-33 TITLE. (a) A person commits an offense if the person:
17-34 (1) deposits grain without having title to the grain
17-35 or deposits grain on which there is a lien or mortgage;
17-36 (2) receives for the grain a negotiable receipt; and
17-37 (3) negotiates the receipt for value with intent to
17-38 deceive and without disclosing the person's lack of title or the
17-39 existence of a lien or mortgage on the grain.
17-40 (b) An offense under this section is a felony of the second
17-41 degree.
17-42 Sec. 14.078 [14.034]. PENALTY FOR STEALING GRAIN OR
17-43 RECEIVING STOLEN GRAIN. (a) A person commits an offense if the
17-44 person:
17-45 (1) obtains or exercises control over grain stored in
17-46 a public grain warehouse without the owner's effective consent and
17-47 with the intent to deprive the owner of the grain;
17-48 (2) obtains from another person grain stolen from a
17-49 public grain warehouse knowing that the grain is stolen; or
17-50 (3) exercises control over grain stolen from a public
17-51 grain warehouse knowing that the grain is stolen.
17-52 (b) An offense under this section is a felony of the second
17-53 degree.
17-54 Sec. 14.079. PENALTY FOR INTERFERING WITH SEALED WAREHOUSE OR
17-55 DEPARTMENT INSPECTION OR INVESTIGATION. (a) A person commits an
17-56 offense if the person:
17-57 (1) without the department's consent and with the
17-58 intent to obstruct the department's regulation, management, or
17-59 control of sealed grain, obtains or exercises control over grain
17-60 stored in a building, bin, or other similar structure sealed by the
17-61 department;
17-62 (2) breaks, removes, vandalizes, or otherwise
17-63 interferes with a department seal placed on a building, bin, or
17-64 other similar structure used for the receiving of grain for hire,
17-65 shipping of grain for hire, storing of grain for hire, or handling
17-66 of grain for hire;
17-67 (3) without the department's consent and with the
17-68 intent to obstruct the department's regulation, management, or
17-69 control of sealed grain, interferes with the department's access to
18-1 or control of grain stored in a building, bin, or other similar
18-2 structure sealed by the department; or
18-3 (4) interferes with the lawful investigation or
18-4 inspection of the facilities, records, or grain deposits of a
18-5 public grain warehouse by a department inspector or other
18-6 department official.
18-7 (b) It is an affirmative defense to prosecution under this
18-8 section that the person's action is:
18-9 (1) necessary to prevent destruction of stored grain
18-10 or the sealed structure; or
18-11 (2) taken under the order of a state or federal court.
18-12 (c) An offense under this section is a felony of the third
18-13 degree.
18-14 SUBCHAPTER I. ENFORCEMENT
18-15 Sec. 14.081. OFFENSE IS VIOLATION; STANDARD OF PROOF. (a)
18-16 Commission of an offense under this chapter is also a violation for
18-17 purposes of administrative enforcement by the department.
18-18 (b) Proof of a violation under this chapter for purposes of
18-19 administrative enforcement, by assessment of an administrative
18-20 penalty or license sanction, is by a preponderance of the evidence.
18-21 (c) In an administrative enforcement action against a person
18-22 for the commission of an offense under this chapter, the department
18-23 is required to prove any intent element provided by the description
18-24 of the offense.
18-25 (d) Both an administrative enforcement action and a criminal
18-26 prosecution may be maintained against a person who violates this
18-27 chapter.
18-28 Sec. 14.082 [14.024]. DISCOVERY OF SHORTAGE; REFUSAL OF
18-29 INSPECTION. (a) If the department determines that a warehouse
18-30 operator [warehouseman] does not possess sufficient grain to cover
18-31 outstanding receipts and outstanding scale weight tickets issued or
18-32 assumed by the warehouse operator [warehouseman], or if a warehouse
18-33 operator [warehouseman] refuses or is unable to submit records or
18-34 property for lawful inspection or the department is unable to
18-35 conduct an inspection of the warehouse due to the condition of the
18-36 warehouse or grain stored in the warehouse, the department may seal
18-37 the warehouse to prevent delivery or receipt of grain except as
18-38 authorized by the department and give notice to the warehouse
18-39 operator [warehouseman] requiring the warehouse operator
18-40 [warehouseman] to[:]
18-41 [(1)] cover a shortage of a particular type of grain
18-42 by:
18-43 (1) storing to the credit of or delivering to each
18-44 depositor affected by the shortage grain of the same type and
18-45 quality that is stored at any of the warehouse operator's licensed
18-46 warehouses in this state and that has been designated as
18-47 company-owned grain by the warehouse operator;
18-48 (2) purchasing and storing to the credit of or
18-49 delivering to each depositor affected by the shortage grain of the
18-50 same type and quality;
18-51 (3) selling company-owned grain of a different type
18-52 and paying to each depositor affected by the shortage, on a pro
18-53 rata basis, the market value of the depositor's grain as determined
18-54 on the day the shortage was discovered by the department; or
18-55 (4) using any combination of the remedies described by
18-56 Subdivisions (1)-(3) or another fair and reasonable method for
18-57 meeting the shortage approved by the department[;]
18-58 [(2) give additional bond;]
18-59 [(3) submit to an inspection considered necessary by
18-60 the department; or]
18-61 [(4) comply with any combination of the requirements
18-62 authorized by this subsection].
18-63 (b) A warehouse operator [warehouseman] shall comply with
18-64 the requirements of a notice issued under Subsection (a) [of this
18-65 section] within 24 hours of notification by the department or
18-66 within a longer time allowed by the department. If the warehouse
18-67 operator [warehouseman] fails to comply, the department may
18-68 petition the district court for the county where the warehouse
18-69 operator's [warehouseman's] principal place of business is located,
19-1 as shown by the license application, for a court order authorizing
19-2 the department to take possession of:
19-3 (1) all or a portion of the grain located in the
19-4 public grain warehouse or warehouses; and
19-5 (2) all relevant records and property of the warehouse
19-6 operator [warehouseman].
19-7 (c) If the department takes possession of grain under
19-8 Subsection (b) [of this section], the department shall give written
19-9 notice of its action to the surety on the bond of the warehouse
19-10 operator [warehouseman] and may notify the holders of all receipts
19-11 and scale weight tickets issued for grain, as shown by the
19-12 warehouse operator's [warehouseman's] records, to present their
19-13 receipts or scale weight tickets for inspection or account for the
19-14 absence of the receipts or scale weight tickets. The department
19-15 may then audit and investigate the affairs of the public grain
19-16 warehouse, especially with respect to the grain of which there is
19-17 an apparent shortage. The purpose of the audit and investigation
19-18 is to determine the amount of the shortage[,] and, if practicable,
19-19 to compute the shortage as to each depositor, as shown by the
19-20 warehouse operator's [warehouseman's] records. The department
19-21 shall notify the warehouse operator [warehouseman] and the surety
19-22 on the warehouse operator's [warehouseman's] bond of the
19-23 approximate amount of the shortage. The department shall notify
19-24 each depositor affected by the shortage by sending notice to the
19-25 depositor's last known address, as shown by the warehouse
19-26 operator's [warehouseman's] records.
19-27 (d) The department shall retain possession of grain obtained
19-28 under this section until:
19-29 (1) the warehouse operator [warehouseman] or surety on
19-30 the bond satisfies the claims of all depositors, within the
19-31 limitations on liability imposed by this chapter; or
19-32 (2) the court orders the department to surrender
19-33 possession.
19-34 (e) If, during or after an audit or investigation authorized
19-35 by this section or at any other time, the department has evidence
19-36 that the warehouse operator [warehouseman] is insolvent or unable
19-37 to satisfy the claims of all depositors, the department may
19-38 petition the district court for appointment of a receiver to
19-39 operate or liquidate the business of the warehouse operator
19-40 [warehouseman] in accordance with law.
19-41 (f) At any time before the 11th day following the day on
19-42 which the department takes possession of grain under this section,
19-43 the warehouse operator [warehouseman] may serve notice on the
19-44 department to appear in the district court of the county in which
19-45 the public grain warehouse is located to show cause why possession
19-46 should not be restored to the warehouse operator [warehouseman].
19-47 The court shall fix the time of the hearing not less than 5 nor
19-48 more than 15 days from the date of service of the notice.
19-49 Sec. 14.083 [14.015]. DENIAL, REVOCATION, MODIFICATION, OR
19-50 SUSPENSION OF LICENSE OR PROBATION. (a) The department may deny an
19-51 application for a license or license renewal if the applicant fails
19-52 to comply with a requirement of this chapter, [subchapter or] a
19-53 rule adopted by the department under this chapter, or a lawful
19-54 order of the commissioner or the commissioner's designee
19-55 [subchapter].
19-56 (b) The department may [shall] revoke, modify, or suspend a
19-57 license or[,] assess an administrative penalty against, place on
19-58 probation [a person whose license has been suspended], or reprimand
19-59 a license holder [licensee] for a violation of this chapter,
19-60 [subchapter or] a rule adopted by the department under this
19-61 chapter, or a lawful order of the commissioner or the
19-62 commissioner's designee [subchapter].
19-63 (c) If the department considers it necessary, the department
19-64 may suspend a license without a hearing for one or more periods not
19-65 to cumulatively [a period not to] exceed 30 days in one licensing
19-66 period.
19-67 (d) During a period of license suspension or probation, the
19-68 department may seal and restrict access to the warehouse operator's
19-69 buildings, bins, or other similar structures used to receive,
20-1 store, ship, or handle grain, for hire, and require the warehouse
20-2 operator [If a license suspension is probated, the department may
20-3 require the person] to:
20-4 (1) maintain additional information in the records of
20-5 the warehouse or report regularly to the department on matters that
20-6 are the basis of the suspension or probation;
20-7 (2) limit practice to the areas prescribed by the
20-8 department; [or]
20-9 (3) operate under conditions or by methods prescribed
20-10 by the department; or
20-11 (4) continue or renew professional education until the
20-12 person attains a degree of skill satisfactory to the department in
20-13 those areas that are the basis of the suspension or probation.
20-14 (e) Except as provided by Subsection (c) [of this section],
20-15 if the department proposes to deny, revoke, modify, or suspend a
20-16 person's application or license or place a warehouse operator on
20-17 probation, the person is entitled to a hearing conducted under
20-18 Section 12.032. The decision of the department is appealable in
20-19 the same manner as provided for contested cases under Chapter 2001,
20-20 Government Code.
20-21 Sec. 14.084 [14.016]. OPERATION AFTER REVOCATION OR
20-22 SUSPENSION OF A LICENSE OR PROBATION. (a) If a license is revoked,
20-23 the warehouse operator [warehouseman] shall terminate, in a manner
20-24 prescribed by the department, all arrangements concerning storing,
20-25 shipping, [or] handling, and purchasing or selling of grain [in the
20-26 warehouse].
20-27 (b) During a period of suspension of a license or probation,
20-28 the warehouse operator:
20-29 (1) shall [warehouseman may, under the direction and
20-30 supervision of the department,] operate the warehouse in a manner
20-31 prescribed by the department;
20-32 (2) may [and] deliver grain previously received,
20-33 subject to the department's written conditions of suspension, if
20-34 any; and
20-35 (3) [but] may not receive grain for storing, shipping,
20-36 or handling without the department's written authorization.
20-37 Sec. 14.085 [14.025]. INJUNCTION. (a) If, after [15 days']
20-38 notice, a warehouse operator [warehouseman] refuses to comply with
20-39 this chapter [subchapter], the department may [shall] apply for an
20-40 injunction in a district court in Travis County or in a district or
20-41 county court in the county where the warehouse is located.
20-42 (b) The courts of this state are vested with jurisdiction to
20-43 issue a temporary or permanent injunction against:
20-44 (1) operation of a public grain warehouse or issuance
20-45 of receipts or scale weight tickets either without a license or
20-46 during a period of suspension of a warehouse operator's license or
20-47 during a period when the warehouse operator is under probation;
20-48 [and]
20-49 (2) interference by any person with the carrying out
20-50 by the department, or by a receiver appointed under this chapter
20-51 [Section 14.024 of this code], of duties and powers granted by this
20-52 chapter; or
20-53 (3) any other violation of this chapter for which
20-54 injunctive relief is an appropriate remedy [subchapter].
20-55 (c) The notice provided for in Subsection (a) shall be
20-56 delivered to the warehouse operator not less than 10 business days
20-57 before the date the department applies for an injunction under
20-58 Subsection (b)(1).
20-59 (d) The notice provided for in Subsection (a) shall be
20-60 delivered to the warehouse operator not less than two business days
20-61 before the date the department applies for an injunction under
20-62 Subsection (b)(2) or (3).
20-63 Sec. 14.086. CIVIL PENALTY. (a) A person who violates this
20-64 chapter is liable for a civil penalty of not less than $500 or more
20-65 than $10,000 for each violation. Each day a violation occurs or
20-66 continues may be considered a separate violation for purposes of a
20-67 civil penalty assessment.
20-68 (b) On request of the department, the attorney general or
20-69 the county attorney or the district attorney of the county in which
21-1 the violation is alleged to have occurred shall file suit to
21-2 collect the penalty. The attorney general, a county attorney, or a
21-3 district attorney may file suit under this section without a
21-4 request from the department.
21-5 (c) A county attorney, a district attorney, or the attorney
21-6 general shall sue in the name of the state for the collection of a
21-7 penalty provided by this section.
21-8 (d) A civil penalty collected under this section shall be
21-9 deposited in the state treasury to the credit of the general
21-10 revenue fund. All civil penalties recovered in suits initially
21-11 instituted by a local government or governments under this section
21-12 shall be divided equally between the state and the local government
21-13 or governments, with 50 percent of the recovery to be paid to the
21-14 general revenue fund and the other 50 percent to be paid equally to
21-15 the local government or governments initially instituting the suit.
21-16 (e) A civil penalty may not be collected for any violation
21-17 that constituted the basis for a department proceeding to assess an
21-18 administrative penalty, regardless of whether the department was
21-19 successful in obtaining a judgment for the administrative penalty.
21-20 [Sec. 14.026. COURT ENFORCEMENT OF DEPARTMENT SUBPOENA. A
21-21 judge of a district or county court may order the attendance of
21-22 witnesses or the production of relevant books and records
21-23 subpoenaed by the department for the purpose of enforcing the
21-24 provisions of this subchapter. The judge may enter the order
21-25 whether the court is in term or on vacation. The judge may compel
21-26 obedience to an order by proceedings for contempt.]
21-27 Sec. 14.087 [14.0262]. RECOVERY OF COURT COSTS. (a) On
21-28 prevailing in an action commenced by the department through the
21-29 attorney general under this chapter or in a hearing commenced by
21-30 the warehouse operator under Section 14.082(f) [subchapter], the
21-31 department and the attorney general are each entitled to recover:
21-32 (1) investigation costs and fees;
21-33 (2) reasonable attorney's fees;
21-34 (3) court costs; and
21-35 (4) other costs relating to the action, including the
21-36 cost of depositions and other forms of discovery and copying
21-37 charges.
21-38 (b) The costs recoverable under this section are in addition
21-39 to other relief available to the department or attorney general.
21-40 Sec. 14.088 [14.035]. VENUE. (a) Venue for a criminal
21-41 prosecution under this chapter [subchapter] is in the county in
21-42 which the alleged offense occurred.
21-43 (b) Except for an action for injunctive relief, venue for a
21-44 civil action under this chapter commenced by the attorney general
21-45 or a county or district attorney, either independently or on behalf
21-46 of the department, is in any county in which all or part of the
21-47 cause of the action accrued.
21-48 (c) Venue for an action for injunctive relief under this
21-49 chapter is in a district court in Travis County or in a district or
21-50 county court in the county where the warehouse is located.
21-51 (d) Venue for an administrative action commenced under this
21-52 chapter is governed by Chapter 2001, Government Code, or, to the
21-53 extent not inconsistent with Chapter 2001, the rules of the State
21-54 Office of Administrative Hearings or the department.
21-55 CHAPTER 14A [SUBCHAPTER C]. OTHER PUBLIC
21-56 WAREHOUSE OPERATORS [WAREHOUSEMEN]
21-57 Sec. 14A.001 [14.201]. DEFINITIONS. In this chapter
21-58 [subchapter]:
21-59 (1) "Public warehouse operator [warehouseman]" means a
21-60 person who stores cotton, wheat, rye, oats, or rice, or any kind of
21-61 produce.
21-62 (2) "Warehouse" means a house, building, or room in
21-63 which the commodities listed in Subdivision (1) [of this section]
21-64 are stored and protected from damage by the elements.
21-65 [Sec. 14.202. POWERS OF THE DEPARTMENT. A warehouse
21-66 operating under this subchapter is under the supervision of the
21-67 department.]
21-68 [Sec. 14.203. WAREHOUSE EXAMINERS. (a) The department may
21-69 appoint warehouse examiners to examine warehouses.]
22-1 [(b) In order to be an examiner, a person must:]
22-2 [(1) be a cotton grader and classer and a competent
22-3 bookkeeper; and]
22-4 [(2) not own an interest in or be an officer or
22-5 employee of:]
22-6 [(A) a warehouse company or corporation; or]
22-7 [(B) a firm engaged in purchasing or selling
22-8 farm, ranch, or orchard products.]
22-9 [(c) Each examiner shall post a $5,000 bond payable to the
22-10 State of Texas, approved by the department, and conditioned on
22-11 faithful performance of duties by the examiner.]
22-12 [(d) Each examiner shall file with the department an
22-13 affidavit stating that the examiner will make fair and impartial
22-14 examinations and will not:]
22-15 [(1) accept any gift or payment for an examination
22-16 other than payment fixed by law; or]
22-17 [(2) reveal to anyone other than the department or a
22-18 court of law the condition of or information about an examined
22-19 corporation or warehouse.]
22-20 [(e) An examiner is not eligible to be appointed receiver of
22-21 a corporation or warehouse that the examiner has examined.]
22-22 [(f) An examiner is entitled to reimbursement for actual and
22-23 necessary expenses incurred in performing official duties.]
22-24 Sec. 14A.002 [14.204]. CERTIFICATE TO TRANSACT BUSINESS. No
22-25 person may operate a warehouse without first obtaining a
22-26 certificate to transact business as a public warehouse operator
22-27 [warehouseman] from the county clerk of the county in which the
22-28 warehouse is located.
22-29 Sec. 14A.003 [14.205]. APPLICATION FOR CERTIFICATE. (a) In
22-30 order to obtain a certificate to transact business, a person must
22-31 apply in writing to the county clerk of the county in which the
22-32 warehouse is to be operated. The application must state the name
22-33 and location of the warehouse and:
22-34 (1) the name of each person with an interest as owner
22-35 or principal in the warehouse; or
22-36 (2) if a corporation owns or manages the warehouse,
22-37 the name of the president, secretary, and treasurer of the
22-38 corporation.
22-39 (b) The clerk shall issue the certificate and retain for
22-40 county records a copy of the application.
22-41 Sec. 14A.004 [14.206]. BOND. (a) A person receiving a
22-42 certificate to transact business shall file a bond with the county
22-43 clerk granting the certificate.
22-44 (b) The bond must be:
22-45 (1) payable to the State of Texas;
22-46 (2) of good and sufficient surety;
22-47 (3) conditioned on faithful performance of the
22-48 applicant's duty as a public warehouse operator [warehouseman]; and
22-49 (4) in the amount of $5,000.
22-50 (c) A bond is subject to approval by the county clerk and
22-51 the clerk shall file approved bonds in the clerk's office.
22-52 Sec. 14A.005 [14.207]. RECEIPTS. (a) The owner or depositor
22-53 of property stored in a warehouse may request from the public
22-54 warehouse operator [warehouseman] a receipt for the property stored
22-55 in the warehouse.
22-56 (b) The receipt shall be signed by the public warehouse
22-57 operator [warehouseman] or the warehouse operator's
22-58 [warehouseman's] agent and shall state:
22-59 (1) that the receipt is issued by a warehouse;
22-60 (2) the date of its issuance;
22-61 (3) the name and location of the warehouse in which
22-62 the property is stored; and
22-63 (4) the description, quantity, number, and marks of
22-64 the property stored.
22-65 (c) The public warehouse operator [warehouseman] shall
22-66 number receipts consecutively in the order of their issue and shall
22-67 keep a correct record of receipts issued available for public
22-68 inspection at reasonable hours.
22-69 Sec. 14A.006 [14.208]. RECEIPT FOR COTTON. (a) A public
23-1 warehouse operator [warehouseman] shall issue a warehouse receipt
23-2 to any person who deposits cotton in the warehouse operator's
23-3 [warehouseman's] warehouse and requests a receipt.
23-4 (b) The receipt shall contain:
23-5 (1) all information required to be included on a
23-6 receipt by Section 14A.005 [14.207 of this code];
23-7 (2) the date on which the cotton was received in the
23-8 warehouse;
23-9 (3) a statement that the cotton represented by the
23-10 receipt is deliverable on return of the receipt properly endorsed
23-11 and payment of charges for storage and insurance stated on the face
23-12 of the receipt; and
23-13 (4) a statement of the grade and staple of the cotton
23-14 represented by the receipt.
23-15 (c) The statement of grade and staple of cotton required on
23-16 receipts by this section shall be determined by a licensed public
23-17 cotton classer. The public warehouse operator [warehouseman] may
23-18 not charge the depositor of the cotton more than 25 cents per bale
23-19 for the statement. If no licensed public cotton classer is
23-20 available, the warehouse operator [warehouseman] may issue a
23-21 temporary receipt that:
23-22 (1) does not contain a statement of grade and staple
23-23 of the cotton;
23-24 (2) has the words "temporary receipt" clearly stamped
23-25 on its face; and
23-26 (3) is exchangeable at any time after five days from
23-27 the date of its issuance for a permanent warehouse receipt
23-28 containing all information required by Subsection (b) [of this
23-29 section].
23-30 (d) Failure or neglect by a public warehouse operator
23-31 [warehouseman] to comply with the provisions of this section is a
23-32 ground for revocation of a certificate to transact business as a
23-33 public warehouse operator [warehouseman].
23-34 Sec. 14A.007 [14.209]. DUPLICATE RECEIPTS. (a) A public
23-35 warehouse operator [warehouseman] may not issue a duplicate receipt
23-36 or two receipts bearing the same number from the same warehouse
23-37 during the same calendar year, except as provided by Subsection (b)
23-38 [of this section].
23-39 (b) If a receipt is lost or destroyed, the public warehouse
23-40 operator [warehouseman] shall issue a new receipt that:
23-41 (1) bears the same date and number as the original
23-42 receipt;
23-43 (2) is plainly marked "duplicate" on its face; and
23-44 (3) is secured with a deposit:
23-45 (A) made by the person requesting the duplicate
23-46 receipt; and
23-47 (B) acceptable to the warehouse operator
23-48 [warehouseman] to protect a person who may hold the original
23-49 receipt in good faith and for valuable consideration.
23-50 Sec. 14A.008 [14.210]. EXCHANGE OF COTTON RECEIPTS. (a) A
23-51 person may exchange a nonnegotiable receipt for cotton for a
23-52 negotiable receipt for cotton by:
23-53 (1) returning the nonnegotiable receipt to the
23-54 warehouse issuing it; and
23-55 (2) complying with the provisions of this chapter
23-56 [subchapter] relating to negotiable receipts.
23-57 (b) When the negotiable receipt is surrendered or canceled,
23-58 the public warehouse operator [warehouseman] shall mark or stamp
23-59 "canceled" in ink on the face of the receipt.
23-60 Sec. 14A.009 [14.211]. COTTON UNDER LIEN. A person who buys,
23-61 sells, or deals with cotton on which a lien or encumbrance exists
23-62 is not liable for conversion of the cotton if:
23-63 (1) the cotton is stored in a warehouse or is
23-64 evidenced by a negotiable warehouse receipt issued by a public
23-65 warehouse operator [warehouseman]; and
23-66 (2) the person did not have actual knowledge of the
23-67 lien or encumbrance at the time of the alleged conversion.
23-68 Sec. 14A.010 [14.212]. RECEIPT TO BE ISSUED ONLY ON
23-69 DELIVERY. A public warehouse operator [warehouseman] may not issue
24-1 a receipt until the goods secured by the receipt are actually
24-2 delivered to the warehouse and are under the control of the
24-3 warehouse operator [warehouseman] issuing the receipt.
24-4 Sec. 14A.011 [14.213]. DELIVERY. (a) A public warehouse
24-5 operator [warehouseman] shall immediately deliver property held in
24-6 the warehouse on:
24-7 (1) presentation of a properly endorsed receipt issued
24-8 by the warehouse operator [warehouseman] to represent the property;
24-9 and
24-10 (2) payment by the holder of the receipt of all proper
24-11 warehouse charges on property represented by the receipt.
24-12 (b) Unless a receipt has been lost or canceled, a public
24-13 warehouse operator [warehouseman] may not deliver property
24-14 represented by a receipt until the receipt is surrendered and
24-15 canceled.
24-16 (c) On delivery of goods represented by a receipt, the
24-17 public warehouse operator [warehouseman] shall cancel the receipt
24-18 by writing "canceled" in ink on the receipt and placing the
24-19 warehouse operator's [warehouseman's] name on the face of the
24-20 receipt. A canceled receipt is void and may not be circulated.
24-21 (d) A public warehouse operator [warehouseman] who fails to
24-22 strictly comply with this section is liable to the legal holder of
24-23 the receipt for the full value of the property represented by the
24-24 receipt, based on the value of the property at the time of the
24-25 default.
24-26 Sec. 14A.012 [14.214]. EXCEPTIONS. (a) This chapter
24-27 [subchapter] does not apply to private warehouses or the issuance
24-28 of receipts by the owners or managers of private warehouses.
24-29 (b) This chapter [subchapter] does not prohibit a public
24-30 warehouse operator [warehouseman] from issuing the same types of
24-31 receipts as issued by a private warehouse, provided that the faces
24-32 of the receipts are plainly marked with: "not a public warehouse
24-33 receipt."
24-34 [Sec. 14.215. STORAGE CHARGES. (a) The department may set
24-35 minimum storage charges for a warehouse operating under this
24-36 subchapter.]
24-37 [(b) The department is not required to set equal charges at
24-38 all places or all times and may take into consideration the local
24-39 conditions and volume of business of each warehouse.]
24-40 [(c) The department shall consider the size of bales in
24-41 setting charges for gin compressed cotton.]
24-42 Sec. 14A.013 [14.216]. REVOCATION OF A CERTIFICATE. (a) A
24-43 person may sue in the district court of the county in which a
24-44 warehouse is situated to revoke the certificate of the warehouse.
24-45 (b) The person seeking revocation of the certificate shall
24-46 provide the court with a written petition setting forth particular
24-47 violations of the law, and the court shall conduct the trial with
24-48 the same rules of process, procedure, and evidence used in civil
24-49 cases.
24-50 SECTION 2. Section 12.020(c), Agriculture Code, is amended to
24-51 read as follows:
24-52 (c) The provisions of this code subject to this section and
24-53 the applicable penalty amounts are as follows:
24-54 Provision Maximum Penalty
24-55 Chapters 13, 14A, [14,] 18, 46, 61, 94,
24-56 95, 101, 102, 103, 121, 125,
24-57 132, and 134 $500
24-58 Subchapter B, Chapter 71
24-59 Chapter 19
24-60 Chapter [Chapters 75 and] 76 $2,000
24-61 Subchapters A and C, Chapter 71
24-62 Chapters 72, 73, and 74 $5,000
24-63 Chapter 14 $10,000.
24-64 SECTION 3. Section 59.003(b), Property Code, is amended to
24-65 read as follows:
24-66 (b) Unless a lessor issues a warehouse receipt, bill of
24-67 lading, or other document of title relating to property stored at
24-68 the facility, the following statutes do not apply to a self-service
24-69 storage facility:
25-1 (1) Chapter 7, Business & Commerce Code, as amended;
25-2 and
25-3 (2) [Subchapter A,] Chapter 14, Agriculture Code[, as
25-4 amended; and]
25-5 [(3) Sections 14.201, 14.204 through 14.214, and
25-6 14.216, Agriculture Code].
25-7 SECTION 4. (a) The changes in law made by this Act apply
25-8 only to an application for a license or renewal of a license made
25-9 to the Department of Agriculture on or after the effective date of
25-10 this Act. An application for a license or renewal of a license
25-11 made to the Department of Agriculture immediately before the
25-12 effective date of this Act is governed by the law as it existed
25-13 before the effective date of this Act, and that law is continued in
25-14 effect for that purpose.
25-15 (b) The changes in law made by Subchapters H and I, Chapter
25-16 14, Agriculture Code, as added by this Act, apply only to an
25-17 offense committed on or after the effective date of this Act. An
25-18 offense committed before the effective date of this Act is governed
25-19 by the law as it existed when the offense was committed, and that
25-20 law is continued in effect for that purpose. For purposes of this
25-21 section, an offense was committed before the effective date of this
25-22 Act if any element of the offense was committed before that date.
25-23 SECTION 5. This Act takes effect September 1, 2001.
25-24 * * * * *