Regulating the marketing of grain, and making penalties applicable

BACKGROUND. The department of agriculture and land stewardship (DALS) regulates grain marketing transactions under three interrelated Code chapters. The first two Code chapters regulate grain marketers, including Code chapter 203 providing for the regulation of a grain dealer purchasing grain from a seller and Code chapter 203C providing for the regulation of a warehouse operator storing grain for a depositor. Code chapter 203D establishes the grain depositors and sellers indemnity fund (indemnity fund) created to indemnify a seller or depositor against a financial loss due to the management of the grain by the grain dealer or warehouse operator. 8).8).15). _____ 203C, DALS regulates a grain dealer and warehouse operator by issuing a license and conducting inspections of their business operations.6). However, a class license is required for a grain dealer who enters into a credit-sale contract regardless of the size of the grain dealer’s operation. A class or class licensee must annually submit to DALS a financial statement accompanied by an unqualified opinion based upon an audit performed by a certified public accountant (CPA) licensed in this state. In 2025, the general assembly enacted 2025 Iowa Acts, chapter 105 (2025 Act), which eliminated provisions that allowed a licensed grain dealer or licensed grain warehouse operator to submit a financial statement accompanied by a report of a state-licensed CPA based upon a review in lieu of an unqualified opinion.6A).6A). A license of a grain dealer or warehouse operator may cease due to any one of three causes, including revocation by DALS, cancellation by the grain dealer, or the expiration of the license by operation of law.10. Upon any of these causes, a seller may claim the purchase price for the sold grain, which may trigger a claim for a loss under the indemnity fund. BILL’S PROVISIONS. _____ contract, title to grain sold by credit-sale contract is deemed to have transferred to the grain dealer upon two conditions: (1) the credit-sale contract is signed by both the grain dealer and the seller and (2) the grain dealer or another person has possession of the grain in accordance with the terms of the credit-sale contract.6A by allowing a grain dealer (except a grain dealer entering into a credit-sale contract) or a warehouse operator to again submit a financial statement accompanied by a report of a state-licensed CPA based upon a review in lieu of an unqualified opinion. Divisions I and II of the bill provide that a claim for a loss incurred by a seller or depositor may be triggered by the filing of a bankruptcy petition by a grain dealer or warehouse operator.10, which describe those types of actions.6 by providing for the indemnification of a seller for grain purchased by a grain dealer that the seller was required to pay back later in bankruptcy. The claim may proceed upon a determination that an eligible repayment claim was filed with DALS by the seller as required by statute.6A by providing for the timeliness of a repayment claim in the case of a bankruptcy court’s default judgment. In that case, the seller must file a claim not later than days after the court’s judgment or a settlement agreement is approved, whichever is later.