Current through Register Vol. 47, No. 6, September 18, 2024
(1)
Financial statements -audit or bond or irrevocable
letter of credit. A grain dealer shall not purchase grain by a
credit-sale contract until the licensee Cornplies with paragraph"a
" or"b. " If the grain dealer elects to be authorized
to issue credit-sale contracts under paragraph"b, " the grain
dealer shall also Cornply with rule
21-91.8
(203).
a. Financial statements filed pursuant
to this rule shall be acCornpanied by an unqualified opinion based upon an
audit performed by a certified public accountant licensed in this state. The
bureau may accept a qualification in an opinion that is unavoidable by any
audit procedure. Opinions that are qualified because of the limited audit
procedure or because the scope of an audit is limited shall not be accepted by
the bureau. A sole proprietor who desires to be authorized to issue credit-sale
contracts shall file a financial statement on the proprietorship business which
is acCornpanied by an unqualified opinion based upon an audit performed by a
certified public accountant licensed in this state, and shall file a personal
financial statement which conforms with the provisions of subrule
91.8(3).
b. The grain dealer bond
or irrevocable letter of credit filed pursuant to this rule shall be in the
amount of $100,000 payable to the department. Bonds or irrevocable letters of
credit shall be on the forms prescribed and furnished by the bureau.
(2)
Credit-sale contract
net worth requirements. When the grain dealer's net worth falls below
the amount required by Iowa Code section
203.15(4),
the grain dealer shall immediately cease purchasing grain by credit-sale
contract. Failure to cease purchasing grain by credit-sale contract shall
result in the suspension of the grain dealer license. Bonds or irrevocable
letters of credit filed to correct the deficiency shall be on the forms
prescribed and furnished by the bureau. The procedure for the filing of a
deficiency bond or irrevocable letter of credit shall be the same as set forth
in Iowa Code section
203.3.
Bonds or irrevocable letters of credit shall be written so as to provide a
source of funds to protect sellers who have sold grain by means of a
credit-sale contract to the licensed grain dealer Advances to sellers on grain
purchased by credit-sale contract will be considered when the 50 cents per
bushel net worth requirement is calculated. The amount and percentage of
advances shall be shown on the face of the credit-sale contract or on a listing
which identifies the contracts and the amount of the advance.
(3)
Suspension of authorization to
issue credit-sale contracts. The department may suspend the right of a
grain dealer to purchase grain by credit-sale contract based on any of the
following conditions:
a. The grain dealer
holding a federal or state warehouse operator license does not have a
sufficient quantity or quality of grain to satisfy the warehouse operator's
obligation based on an examination by the department or the United States
Department of Agriculture.
b.
Collateral receipts cannot be issued for grain represented by credit-sale
contract except for the percentage of bushels paid for through advances to
sellers on grain purchased by credit-sale contract. The amount and percentage
of advances shall be shown on the face of the credit-sale contract or on a
listing which identifies the contracts and the amount of the
advances.
c. A grain dealer shall
not purchase grain on credit-sale contracts during any time period in which the
grain dealer's current assets are less than 100 percent of current liabilities,
or in which the grain dealer's net worth is less than $75,000.
d. The grain dealer violates Iowa Code
section
203.15.
e. The grain dealer's total liabilities are
greater than 75 percent of the grain dealer's total assets. The valuation of
fixed assets as stated by an approved appraisal on file with the bureau
pursuant to subrule 91.8(8) will not be used to determine this
percentage.
f. The grain dealer has
made payment by use of an electronic funds transfer or a financial instrument
which is a check, share draft, draft, or written order on a financial
institution, and a financial institution refuses payment on the electronic
funds transfer or on the financial instrument because of insufficient funds in
a grain dealer's account.
g. The
department discovers that a grain dealer has delayed payment for grain
purchased since the department last inspected the grain dealer pursuant to Iowa
Code section
203.9.
This rule is intended to implement Iowa Code section
203.15.