By: Landtroop, et al. H.B. No. 1324

Substitute the following for H.B. No. 1324:

By: Hughes C.S.H.B. No. 1324

A BILL TO BE ENTITLED

AN ACT

relating to the regulation of public grain warehouse operators.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 14.012, Agriculture Code, is amended to read as follows:

Sec. 14.012. BUSINESS INFORMATION. (a) Except as provided by Subsection (b), financial information of a warehouse operator provided to the department [The following information, prepared by the department in the course of its regulatory authority under this chapter or required to be submitted to the department in accordance with the department's administration of this chapter,] is confidential and not subject to public disclosure[:

[(1) inspection or investigation reports containing information regarding grain inventory; and

[(2) financial information provided to the department to establish net worth for purposes of licensing].

(b) Notwithstanding Subsection (a), [inspection reports containing information regarding grain inventory of a warehouse operator or] financial information of a warehouse operator provided to the department [to establish net worth] may be disclosed:

(1) [entered into evidence] without sealing [and made public] in[:

[(A)] an administrative proceeding commenced by the department against the [a] warehouse operator;

(2) to a local or state law enforcement officer, [(B) a civil or criminal proceeding commenced by] a county attorney, a district attorney, or the attorney general, acting either independently or on behalf of the department, investigating the [against a] warehouse operator; [or]

(3) in [(C)] a civil proceeding commenced by the warehouse operator against the department;

(4) in response to a subpoena from a party in a civil proceeding commenced against the warehouse operator;

(5) [(2) provided] to the issuer of the [a] warehouse operator's bond or letter of credit [for the purpose of establishing a claim on the warehouse operator's bond or letter of credit];

(6) [(3) disclosed] to the public after:

(A) revocation of the [a] warehouse operator's license;

(B) a voluntary closeout of all of the license holder's facilities in this state;

(C) a petition for bankruptcy has been filed; or

(D) a receiver [is appointed] for the warehouse operator's assets has been appointed; or

(7) [(4) disclosed] to any federal agency or any agency of another state conducting a compliance inspection or criminal or civil investigation involving the handling, storing, shipping, selling, purchasing, or receipt of grain.

(c) In this section, "financial information" means:

(1) a financial statement or other document provided by the warehouse operator to the department to evaluate net worth requirements under Section 14.031(e);

(2) a financial audit provided by the warehouse operator to the department; and

(3) if the warehouse operator is subject to an ongoing investigation by the department:

(A) the price of grain paid by the warehouse operator to a depositor or other seller of grain delivered to or stored or handled by the warehouse operator;

(B) the price of grain paid by or to the warehouse operator by a depositor or other purchaser of grain delivered to or stored or handled by the warehouse operator; and

(C) the terms of payment for a price described by Paragraph (A) or (B).

(d) Notwithstanding any other provisions of this section:

(1) a party to a contract or other agreement with a warehouse operator may obtain a nonredacted copy of the contract or agreement; and

(2) a person who authored or contributed to the creation of financial information may be provided access to the financial information for the purpose of confirming the authenticity, truthfulness, or accuracy of the information.

SECTION 2. Subsections (d) and (e), Section 14.031, Agriculture Code, are amended to read as follows:

(d) The bond must be in an amount of not less than $35,000 [$20,000] and be based on 10 [six] cents per bushel of storage capacity, not to exceed a maximum of $500,000.

(e) If the actual net worth of an applicant equals less than the greater of either 25 cents per bushel of storage capacity or $200,000, the applicant shall file a deficiency bond in an amount equal to the difference between the actual net worth and the greater of either $200,000 or the [an] amount determined by multiplying 25 cents times each bushel of storage capacity in the applicant's warehouse. A deficiency bond is in addition to the bond required of an applicant by this section.

SECTION 3. Subsection (a), Section 14.066, Agriculture Code, is amended to read as follows:

(a) A department action or order affecting a warehouse operator under this chapter[, other than by rulemaking, assessment of an administrative penalty, or imposition of a license sanction, including a suspension under Section 14.083(c),] is appealable in accordance with this section unless the action involves agency rulemaking, the assessment of an administrative penalty, imposition of a license sanction, or any other action for which a specific administrative or judicial remedy is available under this chapter, Chapter 12 of this code, or Chapter 2001, Government Code.

SECTION 4. Subsections (a) and (f), Section 14.082, Agriculture Code, are amended to read as follows:

(a) If the department determines that a warehouse operator does not possess sufficient grain to cover outstanding receipts and outstanding scale weight tickets issued or assumed by the warehouse operator, or if a warehouse operator refuses or is unable to submit records or property for lawful inspection or the department is unable to conduct an inspection of the warehouse due to the condition of the warehouse or grain stored in the warehouse, the department may seal the warehouse to prevent delivery or receipt of grain except as authorized by the department, suspend the license of the warehouse operator, and give notice to the warehouse operator requiring the warehouse operator to submit records or property for lawful inspection, to correct any condition interfering with the department's inspection of the warehouse or grain, or to cover a shortage of a particular type of grain by:

(1) storing to the credit of or delivering to each depositor affected by the shortage grain of the same type and quality that is stored at any of the warehouse operator's licensed warehouses in this state and that has been designated as company-owned grain by the warehouse operator;

(2) purchasing and storing to the credit of or delivering to each depositor affected by the shortage grain of the same type and quality;

(3) selling company-owned grain of a different type and paying to each depositor affected by the shortage, on a pro rata basis, the market value of the depositor's grain as determined on the day the shortage was discovered by the department; or

(4) using any combination of the remedies described by Subdivisions (1)-(3) or another fair and reasonable method for meeting the shortage approved by the department.

(f) A license suspension issued under this section remains in effect until lifted by the department through written notice to the warehouse operator or as provided by Section 14.066 [At any time before the 11th day following the day on which the department takes possession of grain under this section, the warehouse operator may serve notice on the department to appear in the district court of the county in which the public grain warehouse is located to show cause why possession should not be restored to the warehouse operator. The court shall fix the time of the hearing not less than 5 nor more than 15 days from the date of service of the notice].

SECTION 5. Section 14.083, Agriculture Code, is amended by amending Subsection (c) and adding Subsection (f) to read as follows:

(c) In addition to or in lieu of a license suspension authorized by another provision of this chapter, if [If] the department considers it necessary, the department may suspend a license and prohibit the movement of grain into or out of a warehouse for up to 30 days without a hearing [for one or more periods not to cumulatively exceed 30 days in one licensing period]. For good cause, a suspension under this subsection may be extended for additional periods of up to 30 days each, not to exceed a total of 90 days of suspension in a licensing period.

(f) A license suspension under Subsection (c) remains in effect until lifted by the department through written notice to the warehouse operator or as provided by Section 14.066 or until it expires by operation of law in accordance with the department's notice of suspension or the limitations provided by Subsection (c).

SECTION 6. Subsection (a), Section 14.087, Agriculture Code, is amended to read as follows:

(a) On prevailing in an action commenced by the department through the attorney general under this chapter [or in a hearing commenced by the warehouse operator under Section 14.082(f)], the department and the attorney general are each entitled to recover:

(1) investigation costs and fees;

(2) reasonable attorney's fees;

(3) court costs; and

(4) other costs relating to the action, including the cost of depositions and other forms of discovery and copying charges.

SECTION 7. This Act takes effect September 1, 2011.