Nebraska Administrative Code, Chapter 8, Section 291-8-002 - PUBLIC GRAIN WAREHOUSES | Nebraska Administrative Code

002.01 Licensing Requirement :

No person shall operate a warehouse or act as a warehouseman without a license issued pursuant to the Grain Warehouse Act and these regulations. Warehouses, except warehouses licensed under the United States Warehouse Act, shall be licensed and regulated by the Commission.

002.02 Eligibility Requirements:

002.02A Eligible Warehouses: The following warehouses are eligible for a Public Grain Warehouse License, upon compliance with the statutory provisions of the Grain Warehouse Act and Rules and Regulations of the Commission:

002.02A1 Warehouses which are under the control of the applicant and are permanently equipped for receiving, weighing, storing, conditioning, handling, and loading out grain. A section which is under control of an applicant, but is not by itself eligible for license, may, at the Commission's discretion, be licensed in conjunction with an eligible warehouse.

002.02A2 At the Commission's discretion, a hearing may be set to determine eligibility for license. Upon review by the Commission of all documents submitted, licenses may be issued for such warehouses where the evidence establishes the same to be necessary for the welfare of and service to the public.

002.02B Ineligible Warehouses: Any warehouse of any type, at any location, which is not under the control of the licensed warehouseman will not be licensed. This provision is intended to preclude any agreement or arrangements whereby a grain warehouseman places, keeps, or stores grain in a warehouse not licensed pursuant to these regulations.

002.02C Safety Requirements: All eligible warehouses must meet the following minimum requirements:

002.02C1 Tanks to be licensed must meet the following minimum requirements:

No. of Bins	Depth of Eaves	Requirements
1 thru 9	20 to 29.9 feet high inclusive	Permanent ladder on each tank or permanent ladder on one tank with catwalk to others
Cluster of one 10 or more	20 to 29.9 feet high inclusive	Permanent ladder on one tank with a catwalk to others
1 thru 3	30 to 50 feet high inclusive	Permanent ladder on each tank or permanent ladder on one tank with catwalk to others
Cluster of 4 or more	30 feet or higher	Permanent ladder on one tank with catwalk to others
1 or more	50 feet or higher	Permanent ladder with a safety cage attached with catwalk to others or a manlift

002.02C2 Ladders and catwalks must be constructed with necessary hand rails when required; and,

002.02C3 Ladders, catwalks and manlifts must be in a safe state of repair at all times.

002.03 License Application Requirements:

002.03A Form of Application: All applications for a warehouse license will be submitted on a form prescribed by the Commission, incorporated herein at the end of the chapter and labeled as Attachment 1 (new form).

002.03B Background Check: All applications for a grain warehouse license shall include the primary party. Such primary party shall be subject to fingerprinting and a check of his or her criminal history record information maintained by the Federal Bureau of Investigation through the Nebraska State Patrol:

(1) If the applicant is not an individual, the chief executive officer, president, or general manager; or

(2) if the applicant is an individual, the individual. If the primary party has been subject to a check of his or her criminal history record information pursuant to this section on a prior application, he or she is not subject to another such check upon a subsequent application. If a primary party has been subject to a check of his or her criminal history record information pursuant to another law, the Commission may waive such requirement. A primary party shall furnish to the Nebraska State Patrol a full set of fingerprints to enable a criminal background investigation to be conducted. The primary party (1) may be fingerprinted at a Nebraska State Patrol office, or (2) may request a fingerprint card from the Commission. If a primary party is fingerprinted at a county sheriff's office or a local police department, the primary party shall send the completed fingerprint card to the Nebraska State Patrol, c/o/ Criminal Records & Identification, P.O. Box 94907, Lincoln, Nebraska, 68509-4907. The primary party shall request that the Nebraska State Patrol submit the fingerprints to the Federal Bureau of Investigation for a national criminal history record check. The primary party shall pay the actual cost, if any, of the fingerprinting and check of his or her criminal history record information. The primary party shall authorize release of the national criminal history record check to the commission. The criminal history record information check shall be completed within ninety days after the date the application for a license is received in the commission's office, and if not, the application shall be returned to the applicant. The Commission shall deny a warehouse license to any applicant whose primary party has been convicted of a felony financial crime.

002.03C Fees: All applications for license will include a fee as set by Nebraska statute. The license fee of the applicant shall be computed on the basis of the separate capacities of each warehouse. Any applicant who makes a first-time application for license will pay the prescribed fee, which will not be refundable should the applicant withdraw the application or be unable to meet all licensing requirements within one year from the date of application.

002.03D Separate and Consolidated Licenses: Separate applications must be filed and separate licenses will be required for each warehouse, except:

002.03D1 When a warehouseman operates one or more warehouses in the same city, village, siding, zoned area, or legally described location in conjunction with each other, where only one set of books is kept for the warehouses, and scale tickets, warehouse receipts, and checks of but one series are issued for grain received or stored therein, only one license will be required for the operation of all the warehouses.

002.03D2 When a warehouseman operates two or more warehouses in different cities, villages, sidings or legally described locations, in conjunction with each other, and if only one set of books is kept for the warehouses, only one license may be required for the operation of the warehouses at the discretion of the Commission. In such cases, the license fee and security will be computed on the basis of the separate capacities of each warehouse.

002.03E Terms of License: All warehouse licenses issued or renewed will expire no more than twelve (12) calendar months after the effective date. The expiration date will be either March 31, June 30, September 30, or December 31.

002.04 Financial Requirements:

Each license applicant and warehouse licensee shall file the financial statement prescribed by statute prepared in accordance with accounting principles generally accepted in the United States. If an applicant for a license is a wholly owned subsidiary of a parent company and such a financial statement is not prepared for the subsidiary, the parent company shall submit its audited fiscal year-end financial statement and shall execute an unconditional guarantee agreement as prescribed by the Commission. In determining whether an application should be granted, or a warehouse license renewed or remain in effect, the applicant or licensee shall meet the following requirements:

002.04A Net Worth: An applicant or licensee shall demonstrate and maintain an allowable net worth of $.25 per bushel for each bushel of licensed capacity. A minimum allowable net worth of $10,000 will be required to obtain or maintain a license. An applicant or licensee whose allowable net worth exceeds $10,000, but fails to meet the net worth requirement of $.25 per bushel of licensed capacity, shall file deficiency security with the Commission in an amount equal to the deficiency. No license shall be issued, nor allowed to remain in force, for any warehouseman who possesses an allowable net worth of less than $10,000.

002.04B Working Capital: Current liabilities to allowable current assets shall show a working capital ratio of not less than 1 to 1. Applicants whose statements fail to meet this requirement before a license is granted, or licensees whose financial condition fails to meet this requirement, shall provide additional data sufficient to satisfy the Commission that additional operating capital can be obtained to meet the requirement.

002.04C For purposes of the financial review conducted by the Commission to determine whether an applicant or licensee meets financial requirements, the following shall apply unless waived by the Commission. In addition to those listed in this section, assets may be disallowed, in whole or in part, based upon the individual circumstances of the licensee or applicant:

002.04C1 Physical Assets:

002.04C1a Depreciable assets not covered by insurance are disallowed.

002.04C1b Personal assets, including but not limited to residences, household Items, recreational items, restricted retirement accounts and vehicles, are disallowed, net of debt on each asset.

002.04C1c Other assets that are not itemized are disallowed.

002.04C1d Appraised valuations of assets not substantiated by a satisfactory appraisal are disallowed. An applicant or licensee may submit a valuation of assets by competent appraisal to the Commission for inclusion in computing net worth. If a valuation of assets is submitted and satisfies Commission requirements, no more than seventy percent of appraised value over the book value of the assets may be used in determining compliance with net worth requirements. Acceptance of an appraisal is subject to the following:

002.04C1d(1) The appraisal must be prepared by an independent certified appraiser.

002.04C1d(2) : The appraisal must be prepared on market, income, and cost approaches.

002.04C1d(3) : A one to one working capital ratio must be maintained.

002.04C1d(4) : Any value claimed over the insured value will be disallowed.

002.04C1d(5) : Appraisals will only be allowed for three years following the date of the appraisal.

002.04C2 Receivables:

002.04C2a Accounts or notes receivables due from related parties, affiliates, or employees are disallowed.

002.04C2b Accounts receivables due after one year are disallowed.

002.04C2c Accounts or notes receivable under litigation are disallowed.

002.04C2d Unsecured notes receivables are disallowed.

002.04C2e Other receivables that are not itemized are disallowed.

002.04C3 Other:

002.04C3a Prepaid expenses that are not itemized are disallowed.

002.04C3b Prepaid taxes are disallowed.

002.04C3c Prepaid loan fees are disallowed.

002.04C3d Returned checks are disallowed.

002.04C3e Organization costs are disallowed.

002.04C3f Stock subscriptions are disallowed.

002.04C3g Intangible assets including but not limited to goodwill are disallowed.

002.04C3h Refundable and deferred income taxes are disallowed.

002.04D Filing: Each warehouse licensee shall comply with the statutory filing within ninety (90) calendar days after its fiscal year closes, provided that the Commission may grant, upon request and reasonable cause shown, one filing extension of thirty (30) days whereupon the financial report shall be filed with the Commission not later than one hundred twenty (120) calendar days after a warehouseman's fiscal close.

002.04E Current Financial Reports: Upon complaint filed with the Commission, and after hearing, the Commission may require a warehouse licensee to file current financial reports showing that the warehouse licensee is maintaining the requirements set forth in Section 002.04 and the subsections thereunder.

002.04F Additional Financial Requirements: In addition to the reviewed fiscal year-end financial statement required by Section 88-528 and to detect noncompliance with financial requirements established by the Commission pursuant to Section 88-530, the Commission shall, for good cause shown as determined by considering the criteria set forth below, require (1) a verified report of the total grain inventory or (2) an audited financial statement. A verified report of grain inventory or audited financial statement shall be prepared in accordance with generally accepted accounting principles by a person or firm which holds a permit granted by the Nebraska State Board of Public Accountancy.

002.04F1 Verified inventory criteria, any one of which may be deemed by the Commission to be sufficient to require a verified inventory:

A) Repeat or consecutive grain shortage within company owned.

B) Repeat or consecutive losses that do not leave the licensee below Commission required net worth and working capital.

C) Oversold grain position.

D) Examination indicating inaccurate grain inventory being used in financial statement.

E) Failure to maintain an accurate Daily Position Record.

F) Insufficient funds check found on examination.

G) Grain quality not meeting requirement.

H) Failure to respond to an exception report issued for shortage or lack of adequate handling or moisture shrink.

002.04F2 : Audit criteria, any one of which may be deemed by the Commission to be sufficient to require an audit:

A) Repeat or consecutive grain shortage not within company owned.

B) Repeat or consecutive losses that leave the licensee below Commission net worth or working capital requirements.

C) Oversold grain position and collateral warehouse receipt(s) was outstanding.

D) Repeat failure to maintain an accurate Daily Position Record.

E) Repeat insufficient fund checks found on examinations.

F) Not paying for grain on demand or as required by contract terms.

G) Withdrawing capital, paying dividends or making a loan that leaves the licensee below the Commission net worth or working capital requirements.

H) Working capital deficiency and issuance of collateral warehouse receipts for unpaid grain.

I) Repeat or consecutive oversold grain position.

002.05 Security Requirements:

002.05A Amount: Pursuant to the statutory requirements, each licensee shall provide a bond, irrevocable letter of credit, certificate of deposit, United States bonds or treasury notes, or other debt obligations of the United States, or combination thereof, in the amount determined by the Commission according to the following requirements:

002.05A1 Security Calculations: The security amount shall be calculated by multiplying the separate capacity of each warehouse by $.20 per bushel, except that warehouse sections exceeding 5,000 bushels in capacity, without permanent turning or aerating capabilities, will be calculated at $.40 per bushel. The security amount shall be rounded to the next highest $100 increment.

002.05A2 Minimum and Maximum Requirements Per Licensed Entity: The security requirements shall not be less than $25,000 or greater than $500,000, except as outlined in Subsection 002.05A3.

002.05A3 Additional Security Required: Security may be required, in addition to the amount determined in Subsections 002.05A1 and 002.05A2, if one or more of the following conditions occur:

A) For an applicant who has filed a reviewed fiscal year-end financial statement pursuant to section 88-528, the Commission shall require additional security in an amount of $.02 per bushel but not less than $25,000 or more than $500,000.

B) The Commission finds, after administrative review, that the financial statement of an applicant or licensee is inadequate for the warehouseman's particular operation, therefore requiring the filing of deficiency security.

C) A situation arises in which the Commission finds, after hearing, that conditions exist at a warehouse which warrant that additional security be filed.

D) If the warehouseman forwards receipted grain to other licensed locations for storage, additional security must be furnished in the same manner and on the same basis as if the warehouseman increased the storage capacity, up to the $500,000 maximum security requirement.

002.05B Persons Entitled to Security: The security shall be payable to the Nebraska Public Service Commission for the benefit of all depositors, storers and/or owners and qualified sellers of stored grain.

002.05C Single Security Filing Per Entity: When an entity has more than one license, only one security filing shall be required to cover the aggregate amount of security required for all of the entity's licenses. The minimum aggregate total will be $25,000 for each license and the maximum total will not exceed $500,000 for the combined licenses.

002.05D Types of Security:

002.05D1 Public Grain Warehouse Bond: A bond shall be issued by a company authorized to conduct business in Nebraska, on a form prescribed by the Commission, incorporated herein at the end of the chapter and labeled as Attachment 2. Changes to a bond must be made on a form prescribed by the Commission, incorporated herein at the end of the chapter and labeled as Attachment 3.

002.05D2 Certificate of Deposit: A warehouseman may deliver certificates of deposit to the Commission in an amount equal to the security required. The certificates of deposit will be:

A) Issued by a financial institution which is insured by the Federal Deposit Insurance Corporation (FDIC);

B) In amounts not to exceed the amount for which the accounts may be insured at the issuing institution; and,

C) Payable to the Nebraska Public Service Commission with interest to be paid to the beneficiary designated by the buyer of the certificate.

D) Upon the deposit of a qualified certificate of deposit with the Commission, the certificate of deposit will be transferred to a financial institution for safe keeping. Any certificate of deposit furnished in lieu of a bond shall not be considered as part of the assets of the warehouse and will have the same legal significance as a bond.

002.05D3 Irrevocable Letter of Credit: A warehouseman may deliver an irrevocable letter of credit to the Commission in an amount equal to or greater than the security required. Such irrevocable letter of credit will be:

A) Issued by a financial institution which is insured by the Federal Deposit Insurance Corporation (FDIC) or issued by farm credit institutions chartered by the Farm Credit Administration;

B) Issued for a period at least six (6) months longer than the expiration date of the underlying license;

C) Provide for payment to the Commission up to the security liability of the warehouseman; and,

D) On a form prescribed by the Commission, incorporated herein at the end of the chapter and labeled as Attachment 4. Changes to an irrevocable letter of credit must be made on a form prescribed by the Commission, incorporated herein at the end of the chapter and labeled as Attachment 5.

002.05D4 Other Types of Security Allowed: In accordance with Neb. Rev. Stat. Section 88-530 (1994) the Commission may accept as security a public debt obligation of the United States which is unconditionally guaranteed as to both principal and interest by the United States and pledged to the Commission in the amount as prescribed by the Commission.

002.05E Combination of Security Types: If two or more allowable security types are filed with the Commission to satisfy the security requirement, claims against the security will be paid using a pro rata share of each security filing, up to the limit of liability of each filing.

002.05F Release or Reduction of Security:

002.05F1 Release: No security shall be released until one hundred eighty (180) days have elapsed from the cancellation, revocation, or expiration of the license, unless one of the following occurs:

A) The warehouseman files another type or types of security as a replacement; or,

B) The warehouseman transfers all storage obligations to another licensed warehouseman.

002.05F2 Reduction: The Commission may, at its discretion, reduce a security filing; provided that the security filing shall not be reduced below the requirements stated in Subsection 002.05A.

002.06 Stock Insurance Requirements:

002.06A Necessity of Insurance: No license will be issued before satisfactory proof of insurance coverage has been filed with the Commission. Failure to maintain insurance will be grounds for revocation of a license after due notice and hearing.

002.06B Proof of Insurance: Proof of insurance coverage shall be filed on a form prescribed by the Commission, incorporated herein at the end of the chapter and labeled as Attachment 6.

002.06C Minimum Insurance Coverage: The warehouseman must maintain a policy or policies of combustion, fire, lightning, and tornado insurance in an amount sufficient to cover the total loss upon all grain in the licensed warehouse, as valued by the formula set forth in Subsection 002.08H2. Without in any way limiting the warehouseman's liability under this section, the warehouseman may carry a standard form of insurance policy approved for grain warehousemen, with a total deductible not to exceed $10,000; provided that the Commission may require a lower deductible based on the warehouseman's financial condition. Any applicant or licensee seeking a deductible higher than $10,000 will submit an application to the Commission for consideration.

002.07 Records and Filing Requirements:

Each warehouseman shall maintain at a place of business accurate, complete, and current records of all grain handled by the warehouse. The required records shall include, but are not limited to, the following:

002.07A Scale Tickets: Scale tickets must contain the following information and be filed numerically:

002.07A1 Be prenumbered.

002.07A2 Name of the warehouse.

002.07A3 Name of the depositor, storer, owner, or consignee of the grain.

002.07A4 Issue date.

002.07A5 Gross, tare and net weight, and whether driver is on or off truck.

002.07A6 Commodity.

002.07A7 Signature or initials of the warehouseman or duly authorized agent.

002.07B Priced Scale Tickets : Priced scale tickets must contain the information required for a scale ticket ( 002.07A ). In addition the grain represented by Priced Scale Tickets must be paid for by the licensee within thirty (30) days of delivery or the licensee must obtain a duly executed contract within the thirty (30) day period.

002.07C Direct Delivery Ticket: Direct delivery ticket is the means by which a dealer/warehouseman shall maintain records of direct delivery grain. A direct delivery ticket shall be issued no later than fifteen (15) days after the date of the last shipment of the contract, be filed numerically, and shall contain the following information:

002.07C1 Be prenumbered.

002.07C2 Name of the dealer/warehouse.

002.07C3 Name of the owner.

002.07C4 Issue date.

002.07C5 Gross, tare and net weight.

002.07C6 Commodity.

002.07C7 Signature or initials of the warehouseman or duly authorized agent.

002.07D Settlement Sheets : The settlement sheets shall contain the following information and be filed systematically:

002.07D1 Name of the warehouse.

002.07D2 Name of the depositor, storer, owner, or consignee of the grain.

002.07D3 Scale ticket dates and numbers.

002.07D4 Commodity.

002.07D5 Net weight or net bushels.

002.07D6 Discount factors, if used to adjust the value of the grain.

002.07D7 Agreed price, if price was not shown on the scale ticket.

002.07D8 Date and description of the disposition, if settled, and/or reference transfer, if posted to another settlement sheet.

002.07E Warehouse Receipts :

002.07E1 The warehouseman's copy of each receipt issued must be filed numerically and maintained at the warehouseman's place of business.

002.07E2 Each redeemed original warehouse receipt must be attached to the warehouseman's copy of the receipt, to be cancelled by the Commission as outlined in Subsection 002.08E.

002.07F Electronic Warehouse Receipts : Receipts are maintained on electronic media provided by a third party under agreement with the Commission. The Commission may enter into provider agreements under which electronic receipts may be issued, registered, transferred and cancelled.

002.07G Checks : Checks shall contain the following information and be filed in numerical order, by month:

002.07G1 Name of warehouse.

002.07G2 Be prenumbered.

002.07G3 Name of depositor, storer and/or owner.

002.07G4 Issue date.

002.07H Contracts: Contracts shall contain the following information and be filed in numerical order:

002.07H1 Be prenumbered.

002.07H2 Name of the warehouse.

002.07H3 Name of the depositor, storer and/or owner.

002.07H4 Commodity and quantity.

002.07H5 Title to the grain has passed from the depositor, storer and/or owner to the warehouseman.

002.07H6 Be signed and dated by all parties.

002.07I In-Store Transfer Notice: An in-store transfer operates to transfer warehouse-owned grain physically stored in the warehouse by a warehouse licensee, to a person in satisfaction of a direct delivery obligation and the grain remains in the warehouse, To be considered a valid in-store transfer notice, proper documentation must be issued pursuant to Neb. Rev. Stat. Section 88-543(1)(b). An in-store transfer notice shall contain the following information and be filed in numerical order:

002.07I1 Be Pre-numbered.

002.07I2 Name of the warehouse.

002.07I3 Name of the producer.

002.07I4 Commodity and quantity.

002.07I5 Be signed and dated by the warehouseman.

002.07I6 A statement thattitle to the grain stored in the warehouse passes from the warehouse licensee to the person with the direct delivery obligation upon execution of the in-store transfer notice in satisfaction of the direct delivery obligation.

002.07JDaily Position Record: The Daily Position Record shall contain the following information and be in a format approved by the Commission:

002.07J1 Total quantity of each kind and class of grain received and loaded out.

002.07J2 Quantity of each kind and class of grain remaining in the warehouse as of the close of each business day.

002.07J3 Total amount of grain in terminal storage.

002.07J4 Quantity of grain for which negotiable receipts have been issued.

002.07J5 Quantity of grain in open storage.

002.07J6 Quantity of grain in any Grain Bank accounts the warehouseman maintains.

002.07J7 Quantity of grain to which the warehouse- man has title and for which payment has not been made, including, but not limited to, grain on deferred or delayed payment and deferred price contracts.

002.07J8 Quantity of grain for which payment has been made.

002.07J9 Total quantity of warehouse owned grain (total of Subsections 002.07F7 and 002.07F8).

002.07J10 Allow for documenting at least one other type of storage situation which may be required.

002.07J11 Be posted each business day.

002.07J12 Reason(s) for any adjustment entry.

002.07J13 Filing: If the Daily Position Record is computerized, a hard copy printout of the record, as of the close of each business day, must be generated and retained in the warehouseman's place of business.

002.07J14 Corruption of the Daily Position Record: No warehouse may record grain in the warehouse daily position record as physically received or physically loaded out that has not been physically deposited in or removed from the warehouse.

002.07K Record of Kind and Class of Grain in Each Bin: A current record must be maintained which shows the kind and class of grain in each bin.

002.07L Shipping Ledgers: All grain loaded out of a warehouse by rail or barge must be posted to a shipping ledger. All other grain loaded out of a warehouse must be weighed on an approved scale and posted to a scale ticket or sales invoice. Ledger information must include, but is not limited to, the following:

002.07L1 Rail car or barge identification numbers;

002.07L2 The destination, if known;

002.07L3 The billed weight of the grain; and,

002.07L4 The actual settlement weight of the grain.

002.07M Insurance Reports : A copy of the warehouseman's stock insurance report, for reporting policies, must be maintained at the warehouseman's place of business. All reports must be filed with the insurance carrier no later than the 15th day of the month following the month covered by the report.

002.07N Notice to Depositors, Storers and/or Owners: The warehouseman must retain one copy of each notice sent to comply with Subsection 002.12B.

002.07O Retention: The warehouseman shall, unless otherwise authorized by the Commission, retain the required records for not less than five (5) years.

002.07P A post-direct delivery storage position may not be created at any time the warehouse licensee does not have sufficient warehouse owned grain.

002.08 Grain Warehouse Receipt Requirements :

002.08A Forms:

002.08A1 Purchases: Warehouse receipts are furnished by the Commission in quadruplicate in lots of 50. The purchase price of all warehouse receipts will be established by the Commission, in conformity with the applicable statutes.

002.08A2 Refund for Unused Receipts: The Commission shall refund the purchase price of any unused lot of 50 warehouse receipts, after return to the Commission by the purchaser, or a successor in business, guardian, administrator, or other lawfully authorized representative. This provision will not apply to receipts that have been specially printed for a warehouseman or to receipts which contain outdated language or information.

002.08B Issuance:

002.08B1 Time: Upon demand, or within fifteen (15) days thereafter, every warehouseman shall issue a receipt to the depositor, storer and/or owner of grain delivered to a warehouse for storage.

002.08B2 Preserved Identity of Grain: If the depositor, storer and/or owner and warehouseman agree that the identical grain stored will be delivered and not be commingled with grain of the same kind and grade, the warehouseman shall write on the face of the receipt the following: "Identity Preserved".

002.08B3 Partial Load Out or Sale of Grain on Receipt:

A) Non-Negotiable Receipts: If demand is made for a portion of the grain represented by a non-negotiable receipt, the amount shall be entered on the face of the receipt.

B) Negotiable Receipts: If demand is made for a portion of grain represented by a negotiable receipt, the receipt shall be cancelled, as outlined in Subsection 002.08E.

002.08C Time and Manner of Delivery: On the same day as issuance of a receipt, the warehouseman will deliver the original and fourth copy of the receipt to the depositor, storer and/or owner or other specified person. Receipts will be delivered either by mail or personal delivery.

002.08D Registration:

002.08D1 Procedure for Registration of Receipts: A warehouseman shall register a receipt by mailing or delivering, on the same day that the receipt is issued, the third copy to the Commission for registration. Any holder of an original receipt may request the Commission to register the receipt. When an error has been made, changes or corrections will be allowed as prescribed by the Grain Ware-house Director.

002.08D2 Procedure for Registration of Collateral Warehouse Receipts: A warehouseman shall register the third copy of a collateral warehouse receipt as prescribed in Subsection 002.08D1. In addition, the Commission may require the registration of the original collateral warehouse receipt or a certified copy of the original receipt if it becomes aware of problems or irregularities in the issuance or endorsement of the receipt.

002.08D3 Endorsement: When the Commission receives an original receipt issued on the form prescribed by the Commission, incorporated herein at the end of the chapter and labeled as Attachments 7A, 7B and 8, it shall register the receipt by stamping and endorsing thereon the following:

NEBRASKA PUBLIC SERVICE COMMISSION REGISTERED

(Month)

(Day)

(Year)

________________________________________________

_

By

________________________________________________

_

Grain Warehouse Director

002.08D4 Disposition of Receipt: The Commission, after registering the original receipt, shall deliver the original copy to the warehouseman or, upon request, to the person designated to be the holder of the receipt. The Commission shall retain the third copy.

002.08E Cancellation of Registered Receipts:

002.08E1 Negotiable Receipts: Upon endorsement and surrender of the original receipt by the holder of a negotiable receipt, the warehouseman shall indicate on the face of the receipt, the date and description of the disposition of the grain. The warehouseman shall retain possession of the receipt and the registration of the receipt shall be cancelled by the Commission by stamping and endorsing thereon during the next warehouse examination.

002.08E2 Non-Negotiable Receipts: The procedure for cancelling non-negotiable receipts is the same as outlined in Subsection 002.08E1, except that the original receipt does not require endorsement by the receipt holder.

002.08E3 Collateral Receipts: Upon release of a collateral receipt by the lending institution, the lender shall endorse the back of the receipt with an authorized signature and release date before mailing or delivering the receipt to the warehouse man. The warehouseman shall retain possession of the receipt for cancellation during the next grain warehouse examination, as stated in Subsection 002.08E1.

002.08F Lost or Destroyed Receipts:

002.08F1 Negotiable Receipts: If a registered negotiable receipt is lost or destroyed prior to cancellation, the holder thereof shall submit an application to the Commission, on a form prescribed by the Commission, incorporated herein at the end of the chapter and labeled as Attachment 9, together with a corporate or personal surety bond. This procedure will be followed whether the receipt holder chooses to take delivery of the grain, sell the grain, or have a duplicate receipt issued. If the holder of the receipt is the warehouseman, a surety bond is not required.

002.08F2 Non-negotiable Receipts: If a registered non-negotiable receipt is lost or destroyed prior to cancellation, the Commission may, at its discretion, require the same provisions as for a negotiable receipt. However, in the case of a non-negotiable receipt, the Commission may accept a verified statement from the warehouseman, signed by the party to whom the receipt was issued, showing settlement in full, and no security would be required to indemnify the warehouseman. If the ware-houseman chooses this method, he or she should be aware that if a dispute arises in which there is reasonable doubt, the warehouseman would not be protected against the possibility that the missing document would, in the hands of an innocent purchaser for value, be held negotiable.

002.08F3 Prior to Registration or Delivery: If all copies of a negotiable or non-negotiable receipt are lost or destroyed prior to registration or delivery, the Commission may accept a signed statement from the warehouseman describing the cause of the receipt's loss or destruction.

002.08G Duplicate Registered Receipts:

002.08G1 Application: The application for a duplicate registered receipt must be verified and contain the following information:

A) The date and place of issuance of the lost or destroyed receipt.

B) The name and address of the person to whom it was issued.

C) The commodity, amount, and grade.

D) The value of the commodity on the date of the application.

E) The receipt number.

F) The date of registration.

002.08G2 Bond: The applicant shall submit with the application a bond of indemnity, with corporate or personal surety, duly executed in the form pre-scribed by the Commission, incorporated herein at the end of the chapter and labeled as Attachment 2. The bond will be conditioned to indemnify the ware-houseman or any holder or other person entitled to the grain, against any loss, liability, or expense which may be sustained by reason of such delivery. The amount of the bond will be determined by the Commission.

002.08G3 Procedure for Issuance: A copy of the application and a letter of authority shall be forwarded to the warehouseman if the Commission approves the application. The bond and original application will remain on file with the Commission. The warehouseman shall attach the documents received from the Commission to the warehouseman's copy of the lost registered receipt in the warehouse receipt book on file. The warehouseman shall issue a new receipt and stamp or write on the face the following:

"This receipt is issued as a duplicate, replacing receipt number (number of lost receipt), as approved by the Nebraska Public Service Commission on (date)."

002.08H Redemption of Receipt When Grain is Destroyed:

002.08H1 Notification of Destruction: In the event that all or part of the grain contained in a warehouse, for which receipts are outstanding, is destroyed by any means whatsoever, the warehouseman shall notify the Commission of such destruction.

002.08H2 Settlement:

A) The warehouseman may redeem the receipts upon delivery of grain, upon payment for the grain represented by the receipt, or upon any other basis as may be agreed upon by the warehouseman and the holder of the receipt.

B) If no settlement is reached, the warehouseman shall redeem the receipts by application of the following formula: The prevailing price at the nearest terminal market on the date the grain was destroyed, less the freight cost on the date of destruction for transporting a like kind and quantity of grain from the warehouse to the closest terminal market, less load out costs, and less all warehouse storage charges accrued but unpaid on the date of destruction.

C) The receipt holders shall, upon due notice, accept the offered settlement and surrender the receipts.

002.08H3 Existing Rights or Liabilities: The Commission does not intend that this section will in any way alter the legal rights or liabilities of either the warehouseman or the holder of a ware-house receipt. Thus it is contemplated that the Commission shall direct payment only upon a finding that the warehouseman is liable for the loss.

002.09 Posting Requirements:

002.09A License: Each warehouseman shall, at all times, post in a conspicuous place in the warehouseman's place of business, the license issued by the Commission.

002.09B Security Filing and Storage Rates: Each licensed warehouseman shall, at all times, post in a conspicuous place in the warehouseman's place of business, a notice furnished by the Commission stating the amount of security filed with the Commission and approved storage, receiving, and load out charges for each type of grain stored or handled.

002.09C Unsafe Entry: A warning sign will be posted on all bins which may have been fumigated and/or are unsafe for inspection purposes. The sign may be removed when the bin is safe to enter.

002.10 Duty to Receive Grain:

Every warehouseman shall receive, so far as the capacity and policy of the warehouse will permit, all grain tendered for storage.

002.11 Payment Requirement:

Payment to the depositor, storer and/or owner for grain purchased by a warehouseman shall be made upon demand, except as provided by written contract between the parties.

002.12 Storage Rate Requirements:

002.12A Rates and Charges:

002.12A1 Storage and Handling: At least once each year, the Commission shall fix reasonable storage and handling rates, as outlined in Commission Rate Schedules "A" and "E". The charges shall be full compensation for the receiving, handling, storing, insuring, and load out of the grain. No discrimination shall be made between different customers by any warehouseman either in facilities, charges, or handling of any grain, except that members of a cooperative may be given preference in storage facilities in warehouses of the cooperative. The rates charged to any governmental agency shall be exempt from Commission regulation.

002.12A2 Special Rates: No warehouseman shall charge a lesser or greater rate, except upon application to, and a hearing before, the Commission. If, after hearing, the Commission finds that a lesser or greater rate should be ordered, it shall enter a supplemental order fixing a different rate for the applicant. The Commission shall charge a fee for the application as established pursuant to Rules of Commission Procedure, Section 025.

002.12A3 Storage Rate Changes: Prior to increasing or decreasing storage rates, a warehouseman must notify the Commission in writing of the changes, except that a rate increase shall require written notice to the Commission and all depositors, storers and/or owners not less than thirty (30) days prior to the rate increase.

002.12B Notification to Depositors, Storers and/or Owners: At least once each calendar year, and not later than one year from the date of receipt of the previous written notice, each warehouseman shall send written notice to each depositor, storer and/or owner of grain in the warehouse, at the person's last-known address, specifying the type and amount of grain in storage, the location at which the grain is being stored, and the current rate of storage. Notification to the Commodity Credit Corporation is not required.

002.13 Storage Contract Termination Requirements:

002.13A Termination by Warehouseman: At the election of the warehouseman, storage in the warehouse may be terminated upon application to the Commission and good cause shown.

002.13A1 Application: The warehouseman shall submit, not less than thirty (30) days prior to the termination date, a verified application, on a form prescribed by the Commission, incorporated herein at the end of the chapter and labeled as Attachment 10, stating the name and address of the applicant, name and address of the depositor, storer and/or owner of the grain, commodity, amount, grade, value of the commodity on the date of the application, warehouse receipt number(s) (if receipted), and a statement of the reason why the warehouseman wants to terminate the contract (s).

002.13A2 Notices: Not less than fifteen (15) days prior to the termination date, the warehouseman shall:

A) Post a notice of termination in a conspicuous place in the warehouseman's place of business listing each storage contract and showing the name of the last-known depositor, storer and/or owner of such storage contract, and specifying the date of termination;

B) Transmit one copy of the notice by first-class mail to each person named in the notice, at the last-known address;

C) File one copy of the notice with the Grain Warehouse Director; and,

D) Furnish a copy of the notice to any person requesting one.

002.13A3 Letter of Authority: Upon approval by the Commission of the warehouseman's application for termination, the Commission shall enter an order and forward a copy to the applicant. The order will constitute authority to terminate the contract.

002.13A4 Settlement by Warehouseman: Upon termination of any storage contract by a warehouseman, the warehouseman may:

A) Deliver the grain to the depositor, storer and/or owner;

B) Sell the grain in the open market on the business day following the day of termination; or,

C) Purchase the grain at the price determined by the formula set forth in Subsection 002.08H2. The price will be determined as of the close of business on the business day following the day of termination.

002.13A5 The warehouseman shall deduct from, and retain out of the proceeds of the sale or purchase, all lawful accrued charges and necessary expenses incurred in making and completing the sale, and pay the balance of the proceeds to the depositor, storer and/or owner upon surrender of the warehouse receipts, if applicable.

002.13B Termination by Depositor, Storer and/or Owner: The depositor, storer and/or owner of grain in a licensed warehouse may terminate, at any time, the storage contract on any or all grain, by:

002.13B1 Presenting a demand for delivery or request to sell the grain, along with any endorsed warehouse receipts covering the grain;

002.13B2 Paying all lawful charges due the warehouseman for the storage of the grain; and,

002.13B3 Furnishing transportation for loading out the grain provided that if the depositor, storer and/or owner does not notify the warehouseman of an intention to furnish transportation, the warehouse-man shall procure the transportation as the agent of the depositor, storer and/or owner, as promptly as may be done in the exercise of ordinary diligence. The storage charges shall not cease until load out is completed.

002.14 Changes in Storage Capacity:

No warehouseman shall increase or decrease the licensed capacity without first meeting the eligibility requirements of Subsection 002.02A and obtaining Commission approval. The Commission shall charge a fee as established pursuant to Rules of Commission Procedure, Section 025, for the change in licensed capacity. An increase in capacity will require an increased storage fee as outlined in the Commission's fee schedule, except that a new warehouse added to an existing license will require a fee as outlined in Subsection 002.03B. The fee shall be non-refundable if the application is withdrawn.

002.15 Warehouse Transfer or Change in Form of Business:

002.15A Transfer of a Warehouse: The transferor shall notify the Commission prior to transferring a warehouse licensed pursuant to Section 002. The transferee shall submit an application to the Commission as set forth in Subsections 002.03 or 002.14, as applicable. The Commission shall not issue a license to the transferee unless the transferee has filed with the Commission a Successor's Agreement, as prescribed by the Commission, incorporated herein at the end of the chapter and labeled as Attachments 11 and 12, as applicable, whereby the transferee assumes all storage obligations of the transferor.

002.15B Change in Form of Business: A change from a sole proprietorship, partnership, limited liability company, or corporation to any other form of organization will require compliance with Subsection 002.15A.

002.16 Transfers of Stored Grain:

No grain may be transferred from one warehouse to a warehouse at a different location, except as provided in this section. The depositor, storer and/or owner of grain, unless otherwise agreed, may recover grain at the same location where it was deposited.

002.16A Warehouseman Who Operates Two or More Warehouses at Different Locations Under One License: When a warehouseman operates two or more warehouses at different locations under one license, the warehouseman may transfer grain received at one location to a different location operated under the same license.

002.16B Unreceipted Grain: When a warehouseman has grain stored in facilities for which no receipt has been issued, the warehouseman may transfer the grain to a licensed warehouse at a different location for storage.

002.16C Transfer of Unreceipted Grain by Joint Marketing or Shipping Agreement: A warehouseman may include in total stocks of grain on its daily position record quantities of grain by commodity and class, represented by non-negotiable warehouse receipts issued to the warehouseman by other licensed warehousemen provided that:

002.16C1 The participating warehousemen maintain a copy of the agreement and current and complete accounts of all transactions involved;

002.16C2 The non-negotiable warehouse receipts issued as a part of such transaction shall contain the declaration: "Held in trust for the depositor (s), storer(s) and/or owner(s) of (name of original receiving warehouseman)"; and,

002.16C3 The warehouseman storing the grain represented by the non-negotiable receipts shall not forward receipted grain for storage under Subsection 002.16D.

002.16D Emergency Forward Shipment of Warehouse Receipted Grain for Storage: Upon determination by the Commission that an emergency storage situation exists, a warehouseman who has grain stored in licensed facilities for which warehouse receipts have been issued, may transfer the grain to a licensed warehouse for storage, subject to the following provisions:

002.16D1 The warehouseman shall apply to the Commission, on a form prescribed by the Commission, incorporated herein at the end of the chapter and labeled as Attachment 13, for approval to forward receipted grain for storage.

002.16D2 The warehouseman shall demonstrate and maintain net worth in accordance with Subsection 002.04 for each bushel of receipted grain forwarded for storage, as determined by the Commission.

002.16D3 The warehouseman shall post additional security, in amounts required for the licensing of additional warehouse space, as prescribed in Subsection 002.05.

002.16D4 Each warehouseman authorized by the Commission to forward receipted grain for storage shall obtain a non-negotiable warehouse receipt to cover grain in storage at the receiving warehouse. Each non-negotiable receipt issued under this section shall contain the declaration, "Held in trust for the depositor(s), storer(s) and/or owner(s) of (name of original receiving warehouse)."

002.16D5 Prior to the approval of an application to forward warehouse receipted grain for storage, the receiving warehouseman must agree to store all grain in licensed space.

002.16D6 Each warehouseman which has received and is storing warehouse receipted grain for another warehouseman shall be prohibited from forwarding receipted grain for storage.

002.16D7 Any warehouseman who has transferred receipted grain for storage shall regain sufficient quantities and quality of grain in its licensed facilities to cover all warehouse receipted obligations no later than one hundred twenty (120) days after an emergency storage situation has ended, as determined by the Commission.

002.17 Warehouse Examinations:

002.17A Examination Frequency Requirement: All licensed warehouses will be examined by the Commission, or its representatives, at least once every twelve (12) months. Upon demand made by an agent of the Commission, the warehouseman will make available all books and records of the warehouseman relating directly to the operation of the warehouse.

002.17B Requested Examinations: When examinations are requested of the Commission, the Commission may charge a fee as established pursuant to Rules of Commission Procedure, Section 025.

002.17C Additional Examinations: If the Commission determines that additional examinations are necessary after a regular examination is completed at a warehouse, the Commission may charge such warehouse for the cost of the additional examinations according to the Commission's fee schedule. Warehouses shall only be charged if such examinations are for reasons of irregularities from the previous examination or if financial conditions warrant additional examinations.

002.18 Warehouse Surveillance; Closure of a Warehouse:

002.18A Surveillance: If any examination reveals a deficiency in quantity, quality, or both, of the grain stored in a warehouse, the Commission shall have the authority to place an agent of the Commission at the warehouse so as to supervise all operations conducted at said warehouse which would involve stored grain, until the deficiency is corrected. The Commission shall have authority to take possession of the warehouse and supervise the operations to see that no grain moves in or out except at the discretion and/or direction of the Commission. The Commission shall have complete authority to inspect books, records, accounts, papers, and proceedings and, through its agent, monitor and supervise access to and control of the warehouseman's records for the protection and preservation of the depositor, storer and/or owner accounts. The Commission may monitor the records until any litigation, which it has initiated for the benefit of any depositor, storer and/or owner of grain, is completed.

002.18B Closure of Warehouse; Revocation of License: The Commission may close a warehouse because of one or more of the following circumstances:

002.18B1 If the Commission determines that a shortage of grain exists or that the quality of grain in storage is insufficient to meet the obligations at a warehouse;

002.18B2 If a license expires and is not renewed;

002.18B3 If a license is surrendered to, cancelled or revoked by the Commission for violation of any statute or the Commission's Rules and Regulations; or,

002.18B4 If a warehouse is operated without a license.

002.18C The Commission may take one or more of the following actions in determining whether to close a warehouse or revoke a license:

002.18C1 Conduct an examination.

002.18C2 Issue an order requiring the licensee to show cause why the license should not be revoked upon filing of a verified complaint by the Grain Warehouse Director.

002.18C3 Issue a temporary suspension.

002.18C4 Take possession of the warehouse.

002.18C5 Take title to all grain stored in the warehouse in trust, for all valid depositors, storers and/or owners and qualified sellers of stored grain.

002.18C6 Conduct surveillance.

002.18C7 Hold a hearing on the complaint and any order to show cause which may have been served on the licensee, followed by a Commission order.

002.18C8 Upon revocation of a warehouse license, take custody of the warehouseman's records for the protection and preservation of the depositor, storer and/or owner accounts, and retain custody of these records until the matter has been completely litigated. Requests to review the records must be approved by the Commission.

002.18C9 Make redelivery of the grain on a pro rata basis to all valid depositors, storers and/or owners, or,

A) Sell the grain using a broker hired by the Commission, through a bidding procedure, auction or any other means which in the Commission's judgment would be best for' the depositors, storers and/or owners of grain in the warehouse and qualified sellers of stored grain.

B) Award a contract to the highest bidder or bidders, with the Commission reserving the right to reject any or all bids. The Commission may reserve the right to reject all bids submitted pursuant to an offering and re offer the grain for sale until it is satisfied that it has been tendered an adequate price.

C) Deposit money from the sale of grain in an interest-bearing trust account for the benefit of the valid depositors, storers and/or owners and qualified sellers of stored grain.

002.18C10 Supervise the load out and delivery of grain. The Commission, after reviewing and giving consideration to all conditions and circumstances, shall determine how the costs will be borne in each individual case. All liquidation expenses shall be paid from the Warehouse Surveillance Cash Fund or the grain sale proceeds.

002.18C11 Publish notice to potential claimants in newspapers published in the area served by the licensee.

002.18C12 Review the records to determine apparently valid claims of depositors, storers and/or owners and qualified sellers of stored grain.

002.18C13 Hold a public hearing for potential claimants to provide evidence of their claims.

002.18C14 Enter a final order with notice to all claimants of record. After the final order, an appeal may be made to the Court of Appeals.

002.18C15 If required, request that all or part of the security be forfeited to the Commission.

002.18C16 Distribute grain sale and/or security proceeds.

002.18C17 Assess the assets of the warehouseman a surveillance fee as established pursuant to Rules of Commission Procedure, Section 025, for actual expenses incurred by the Commission.

002.18C18 Request the redelivery of, or cash payment for, any grain transferred to any person within ten (10) days prior to the closing. Any grain which has been received at the warehouse and forwarded to another location for storage or sale, on which settlement has not been made, shall be subject to the same procedure, with the exception that the ten (10) day provision would not apply. The receiving location is entitled to legitimate storage and handling charges.

002.18D Upon the Commission's closure of a warehouse and taking title to grain pursuant to Section 002.18, grain seized pursuant to Section 002.18, including grain owned by the warehouse licensee, is subject to a first priority lien in favor of valid owners, depositors, or storers of grain who are holders of evidence of ownership of grain. The lien created under this section shall be preferred to any lien or security interest in favor of any creditor of the warehouse licensee regardless of the time when the creditor's lien or security interest attached to the grain. Notice of the first priority lien referred to herein need not be filed in order to perfect the lien. All the grain in the warehouse, whether stored or not, first shall be applied at all times to the satisfaction of all valid owners, depositors, or storers of grain who hold evidence of ownership of grain.

002.18D1 In the event no distribution is made to valid owners, depositors, or storers of grain who are holders of evidence of ownership of grain and the Commission transfers title to the grain back to the warehouse or to another person, then the first priority lien created shall terminate. Such termination shall not affect any other rights, including rights of ownership in grain stored at the warehouse, of valid owners, depositors, or storer of grain who are holders of evidence of ownership of grain. Nothing shall prevent the Commission from subsequently closing the warehouse and taking other action permitted under law.

002.18D2 Prior to or within ten days after any creditor of the warehouse licensee commences a judicial proceeding to reduce to judgment, foreclose, or otherwise enforce any claim on a creditor's lien or security interest attached to grain contained in the warehouse, the creditor shall serve written notice on the executive director of the commission.

002.18D3 If the Commission closes the warehouse and takes title to the grain, such action shall operate as a stay of the commencement or continuation, including the issuance or employment of process, of any judicial, administrative, or other action or proceeding to take title to the grain that was or could have been commenced before such action by the Commission.

002.19 Civil Penalty:

Any person who violates the grain warehouse act may be assessed a civil penalty by the commission for one or more, but is not limited to the following violations:

A) Failure to timely file renewal application.

B) Failure to timely complete application process.

C) Failure to timely file financial statement.

D) Failure to timely file security replacement or extension.

E) Failure to timely file replacement stock insurance.

F) Failure to maintain accurate, complete or current records.

G) Failure to make payment on demand.

H) Failure to charge posted storage and handling rates.

I) Failure to notify the Commission of changes in storage capacity.

J) Failure to maintain Commission financial requirements.

K) Repeat or consecutive grain shortage.

L) Insufficient funds check found on examination.

M) Grain quality not meeting requirement.

N) Failure to timely respond to exception report.

O) Repeat oversold position.

Nebraska Administrative CodeTopic - PUBLIC SERVICE COMMISSIONTitle 291 - NEBRASKA PUBLIC SERVICE COMMISSIONChapter 8 - GRAIN WAREHOUSE RULES AND REGULATIONSSection 291-8-002 - PUBLIC GRAIN WAREHOUSES

Nebraska Administrative Code
Topic - PUBLIC SERVICE COMMISSION
Title 291 - NEBRASKA PUBLIC SERVICE COMMISSION
Chapter 8 - GRAIN WAREHOUSE RULES AND REGULATIONS
Section 291-8-002 - PUBLIC GRAIN WAREHOUSES