Current through March 20, 2024
003.01
Licensing Requirements:
All grain dealers doing business in Nebraska are required to
procure and maintain a license from the Commission.
003.02
License Application
Requirements:
003.02A
Form: All applications for a grain dealer license
shall be submitted on the form prescribed by the Commission, incorporated
herein at the end of the chapter and labeled as Attachment 14 (new
form).
003.02B
Determining Volume of Business for New Applicant: A
new applicant may obtain a license on the basis of an estimate of the volume of
business the applicant expects to do during the term of the license for which
the application is made. When a first year applicant obtains a license on the
basis of an estimate of its purchases for the year, and the licensee, in fact,
buys an amount of grain equal to or more than the initial estimate, the
licensee shall revise the estimate and immediately furnish sufficient
additional security to cover the additional projected purchases.
003.02C
Background
Check: All applications for a grain dealer 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 dealer license to any applicant whose primary party has
been convicted of a felony financial crime.
003.02D
Application
Fee: All applications for license will include a fee as set by
Neb. Rev. Stat. Section
75-903.
Any application fees paid will be non-refundable should the applicant withdraw
the application or be unable to meet all licensing requirements within one (1)
year from the date of application.
003.02E
Term of
License: A grain dealer license shall expire at midnight on the
following March 31, June 30, September 30, or December 31.
003.03
Financial
Requirements:
Each grain dealer or applicant shall submit a reviewed or
audited fiscal year-end financial statement prepared by an independent
certified public accounting firm. If licensing as an individual, the financial
statement shall be prepared in accordance with Other Comprehensive Basis of
Accountancy for a personal financial statement, using historical cost and
accrual basis of accounting. If licensing as a partnership, corporation, or
limited liability company, the financial statement must be prepared in
accordance with generally accepted accounting principles . If an applicant for
a grain dealer 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 reviewed or audited fiscal year-end financial
statement and shall execute an unconditional guarantee agreement as prescribed
by the Commission. The financial statement shall include, but is not limited
to, the following:
003.03A Statement
of income (Profit and Loss)
003.03B
Balance sheet
003.03C Statement of
cash flows
003.03D Statement of
proprietor's capital or retained earnings.
003.03E The volume and dollar value of grain
dealer purchases the licensee made in Nebraska during the fiscal year. If the
volume and dollar value of the grain purchases is not reported, the grain
dealer shall file the maximum grain dealer security as required by the Grain
Dealer Act.
003.03F This section
applies to all licensees who hold both a warehouse and dealer license. The
volume and dollar value of transactions in which direct delivery grain is
exchanged for a post-direct delivery storage position and the post-direct
delivery storage position is not created by an in-store transfer on the same
date as the delivery of the direct delivery grain.
003.03F1 The value shall be calculated as set
forth in Section
003.04A1.
003.03F2 The statement shall specifically
show:
003.03F2a The total volume and dollar
value of the direct delivery grain exchanged for a post-direct delivery storage
position,
003.03F2b The total
volume and dollar value of the direct delivery grain exchanged for a
post-direct delivery storage position created by an in-store transfer on the
same date as the delivery of the direct delivery grain, and
003.03F2c The net volume and dollar value of
the direct delivery grain exchanged for a post-direct delivery storage position
that will be used for calculation of the grain dealer security as set forth in
Section 3.04.
003.03G The accounting firm's certification,
assurances, opinions, and comments and the notes with respect to the financial
statement.
003.03H
Net
Worth: Each grain dealer or applicant shall demonstrate and
maintain a minimum allowable net worth of $10,000 to obtain and maintain a
license.
003.03I
Working Capital: Each grain dealer or applicant shall
demonstrate and maintain a working capital ratio (current liabilities to
allowable current assets) of not less than 1 to 1. Applicants or licensees who
fail to meet this requirement shall provide additional data sufficient to
satisfy the Commission that additional operating capital can be obtained to
meet the requirement.
003.03J For
purposes of determining whether an applicant or grain dealer meets financial
requirements, the following shall apply unless waived by the Commission. In
addition to those listed in this section, items may be disallowed, in whole or
in part, depending upon the individual circumstances of the grain dealer or
applicant:
003.03J1
Physical
Assets
003.03J1a 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.
003.03J1b Other assets that are not itemized
are disallowed.
003.03J1c 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 (70%) of appraised value over book value of the
assets may be used in determining compliance with net worth requirements.
Acceptance of an appraisal is subject to the following:
003.03J1c(1) The appraisal must be prepared
by an independent certified appraiser.
003.03J1c(2) The appraisal must be prepared
on market, income, and cost approaches.
003.03J1c(3) A one to one working capital
ratio must be maintained.
003.03J1c(4) Appraisals will only be allowed
for three (3) years following the date of the appraisal.
003.03J2
Receivables:
003.03J2a Accounts or notes receivables due
from related parties, affiliates, or employees are disallowed.
003.03J2b Accounts receivables due after one
year are disallowed.
003.03J2c
Accounts or notes receivable under litigation are disallowed.
003.03J2d Unsecured notes receivables are
disallowed.
003.03J2e Other
receivables that are not itemized are disallowed.
003.03J3
Other:
003.03J3a Prepaid expenses that are not
itemized" are disallowed.
003.03J3b
Prepaid taxes are disallowed.
003.03J3c Prepaid loan fees are"
disallowed.
003.03J3d Returned
checks are disallowed.
003.03J3e
Organization costs are disallowed.
003.03J3f Stock subscriptions are
disallowed.
003.03J3g Intangible
assets including but not limited to goodwill are disallowed.
003.03J3h Refundable and deferred income
taxes are disallowed.
003.03K
Filing: Each
grain dealer shall file a financial statement within ninety (90) calendar days
following the close of the licensee's fiscal year, except that, the Commission
may grant, upon request and reasonable cause shown, one filing extension of
thirty (30) calendar days.
003.04
Grain Dealer Security
Requirements:
A grain dealer applicant shall file security which may be a
bond issued by a corporate surety company and payable to the Commission, an
irrevocable letter of credit, or a certificate of deposit, subject to approval
of the Commission for the benefit of any producer doing business with the grain
dealer who files a valid claim arising from a sale to the grain dealer. The
security shall be furnished on the condition that the licensee will pay for any
grain purchased upon demand, not later than fifteen (15) days after taking
possession of the grain purchased. The liability of the surety shall cover
purchases made by the grain dealer during the time the bond is in force.
003.04A
Amount: The
security shall be in the amount of the greater of $35,000 or seven percent (7%)
of grain purchases and exchanges by the applicant, in the preceding license
year or as reported in the fiscal year end financial statement, not to exceed
$300,000. For purposes of calculating the security, grain purchases and
exchanges do not include in-store purchases by a warehouse, or grain that
passes title at the time of delivery.
003.04A1 Amounts used in the calculation of
the security shall include the net volume and dollar value of the direct
delivery grain exchanged for a post-direct delivery storage position valued on
the date delivery is made.
003.04A2
Amounts used in the calculation of the security shall not include any
transactions in which direct delivery grain is exchanged for a post-direct
delivery storage position and the post-direct delivery storage position is
created by an in-store transfer on the same date as the delivery of the direct
delivery grain.
003.04B
Types of Security:
003.04B1
Surety
Bond: The surety 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 15.
Changes to a bond must be on a form prescribed by the Commission, incorporated
herein at the end of the chapter and labeled as Attachment 16.
003.04B2
Certificate of
Deposit: A grain dealer may deliver certificates of deposit to the
Commission in an amount equal to the security required. 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 surety bond shall not be part of
the assets of the grain dealer and will have the same legal significance as a
surety bond. Each certificate of deposit shall be:
A) Issued by a financial institution which is
insured by the Federal Deposit Insurance Corporation (FDIC);
B) In an amount not to exceed the amount for
which the account may be insured at the issuing institution; and,
C) Payable to the Nebraska Public Service
Commission with interest to be paid to the beneficiary.
003.04B3
Irrevocable Letter of
Credit: A grain dealer may deliver an irrevocable letter of credit
or letters of credit to the Commission in an amount equal to or greater than
the security required. Each irrevocable letter of credit shall 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 three (3)
months longer than the expiration date of the underlying license;
C) Payable to the Nebraska Public Service
Commission up to the security liability of the grain dealer; and,
D) Issued on a form prescribed by the
Commission, incorporated herein at the end of the chapter and labeled as
Attachment 17.
003.04C
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.
003.04D
Release or Reduction of Security:
003.04D1
Release: No security shall be released until ninety
(90) days have elapsed from the cancellation, revocation, or expiration of the
license, unless the grain dealer files another type or types of security as
replacement.
003.04D2
Reduction: The Commission may, at its discretion,
reduce a security filing as long as the security filing is not reduced below
the requirements stated in Subsection
003.04A.
003.04E The grain dealer security shall
provide security for direct delivery grain until any post-direct delivery
storage position is created for a period not to exceed fifteen (15) days after
the date of the last shipment of the contract.
003.04F No seller shall have recourse to the
grain dealer's security unless the seller:
003.04F1 Demands payment from the grain
dealer within fifteen (15) days after the date of the last shipment of any
contract;
003.04F2 Negotiates any
negotiable instrument issued as payment for grain by the grain dealer within
fifteen (15) days after its issuance; and
003.04F3 Notifies the Commission within
fifteen (15) days after any apparent loss to be covered under the terms of the
grain dealer's security.
003.05 Records Requirements
Each grain dealer shall maintain, at its place of business,
accounts of each transaction conducted under its license. The records shall be
subject to inspection by the Commission and must include, but are not limited
to, the following:
003.05A
Receipts: Each grain dealer, upon taking possession of
grain from a seller, shall issue a writing, in the form of a receipt, contract,
bill of lading or other written communication(s) to the seller, or its agent,
that includes, but is not necessarily limited to, the following:
003.05A1 The date the grain dealer or its
agent took possession of the seller's grain.
003.05A2 The name and address of the
buyer.
003.05A3 The name of the
seller.
003.05A4 The name of the
agent of the buyer.
003.05A5 The
kind of grain delivered to the buyer.
003.05A6 The approximate quantity of grain
delivered to the buyer.
003.05A7
The following warning shall be printed on the receipt in eight point type or
larger:
"WARNING TO SELLER: You will have no recourse to the grain
dealer's security posted with the Nebraska Public Service Commission (NPSC)
unless you are a Nebraska producer and you:
(1) demand payment from the grain dealer
within fifteen (15) days after the date of the last shipment of any
contract;
(2) negotiate any
negotiable instrument issued as payment for your grain by the grain dealer
within fifteen (15) days after its issuance; and,
(3) notify the NPSC, PO Box 94927, Lincoln,
NE 68509-4927, within fifteen (15) days after an apparent loss. The grain
dealer's security shall provide security for direct delivery grain until a
post-direct delivery storage position is created for a period not to exceed
fifteen (15) days after date of the last shipment of grain. Direct delivery of
grain may affect the eligibility of the grain for participation in federal
price support programs."
Nebraska Law defines a producer as the owner, tenant, or
operator of land in this state who has an interest in and receives all or part
of the proceeds from the . sale of grain produced on that land.
003.05A8 All receipts,
contracts, bills of lading or other written communications shall be
pre-numbered and copies shall be maintained in numeric order.
003.05B Checks issued as payment
for grain.
003.05C Contracts issued
for grain purchases in Nebraska.
003.05D
Retention:
Each grain dealer shall, unless otherwise authorized by the Commission,
maintain the required records for not less than five (5)year(s).
003.06 Storage Prohibited
No grain dealer may store grain for any person unless
licensed under the Grain Warehouse Act or US Warehouse Act.
003.07 Complaint Proceedings
In the event of a notification of an apparent loss under
Neb. Rev. Stat. Section
75-905
(1996) or if the Grain Warehouse Director or other Commission personnel have
reasonable cause to believe that a grain dealer has violated the statutes or
rules of the Commission, the Director or other Commission personnel
will:
003.08A File a complaint before
the Commission against the grain dealer setting forth the alleged
violation.
003.08B Obtain a hearing
date on the complaint.
003.08C
Notify the grain dealer and its security provider of the complaint and hearing
date on the complaint.
003.08
Suspension or Revocation
of License:
003.09A Suspension:
If the Commission determines that the public good requires it, it may, upon the
filing of a complaint and without hearing, temporarily suspend a grain dealer
license pending the determination of the complaint.
003.09B
Revocation:
The Commission will hold a hearing on any complaint filed against a grain
dealer by Commission personnel according to the Rules of Commission Procedure.
If the Commission finds that the allegations of the complaint are true, it may
revoke the defendant's grain dealer license. Further notice and hearing may be
ordered to determine whether there are claims against the defendant's security.
If any valid claim is determined to exist, the Commission may require the
security to be forfeited in whole or in part to satisfy the claims. If the
security is insufficient to pay all of the valid claims, the Commission may
distribute the security pro rata among the valid claimants.
003.09
Civil
Penalty:
Any person who violates the grain dealer 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 maintain accurate, complete or
current records.
F) Failure to make
payment on demand.
G) Failure to
maintain Commission financial requirements.
H) Failure to issue grain dealer receipt to
seller.
003.10 Civil
Penalty (Repealed)