A grain dealer shall not purchase grain by a credit-sale contract except as provided in this section.
 1. The grain dealer shall be licensed pursuant to section 203.3. All of the following shall apply to a grain dealer required to be licensed under that section who purchases grain by credit-sale contract:

 a. The grain dealer shall give written notice to the department prior to engaging in the purchase of grain by credit-sale contract. The notice shall contain information required by the department.
 b. All credit-sale contract forms in the possession of the grain dealer shall have been permanently and consecutively numbered at the time of printing of the forms. The grain dealer shall maintain an accurate record of all credit-sale contract forms and numbers obtained by that dealer. The record shall include the disposition of each numbered form, whether by execution, destruction, or otherwise.
 c. The grain dealer who purchases grain by credit-sale contract shall maintain records as required by the department in compliance with this section.

Terms Used In Iowa Code 203.15

  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Bond: means a bond issued by a surety company or an irrevocable letter of credit issued by a financial institution described in subsection 7. See Iowa Code 203.1
  • Check: includes instruments commonly referred to as a check, draft, share draft, or other negotiable instrument for the payment of money. See Iowa Code 203.1
  • Contract: A legal written agreement that becomes binding when signed.
  • Credit-sale contract: means a contract for the sale of grain pursuant to which the sale price is to be paid more than thirty days after the delivery of the grain to the buyer, or a contract which is titled as a credit-sale contract, including but not limited to those contracts commonly referred to as deferred-payment contracts, deferred-pricing contracts, and price-later contracts. See Iowa Code 203.1
  • Delivery: means the transfer of title to and possession of grain by a seller to a grain dealer or to another person in accordance with the agreement of the seller and the grain dealer. See Iowa Code 203.8
  • Department: means the department of agriculture and land stewardship. See Iowa Code 203.1
  • Financial institution: means any of the following:
     a. See Iowa Code 203.1
  • following: when used by way of reference to a chapter or other part of a statute mean the next preceding or next following chapter or other part. See Iowa Code 4.1
  • Fund: means the grain depositors and sellers indemnity fund created in section 203D. See Iowa Code 203D.1
  • Grain: means any grain for which the United States department of agriculture has established standards pursuant to the United States Grain Standards Act, 7 U. See Iowa Code 203.1
  • Grain dealer: means a person who cumulatively purchases at least one thousand bushels of grain from producers during any calendar month, if such grain is delivered within or into this state for purposes of resale, milling, or processing in this state. See Iowa Code 203.1
  • Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
  • Licensed grain dealer: means a person who has obtained a license to engage in the business of a grain dealer pursuant to section 203. See Iowa Code 203D.1
  • Payment: means the actual payment or tender of payment by a grain dealer to a seller of the agreed purchase price, or in the case of disputes as to sales of grain, the undisputed portion of the purchase price without reduction for any separate claim of the grain dealer against the seller. See Iowa Code 203.8
  • Seller: means a person who sells grain which the person has produced or caused to be produced to a licensed grain dealer, and includes a person who executes a credit-sale contract as a seller. See Iowa Code 203.1
  • state: when applied to the different parts of the United States, includes the District of Columbia and the territories, and the words "United States" may include the said district and territories. See Iowa Code 4.1
  • United States: includes all the states. See Iowa Code 4.1
  • Warehouse operator: means the same as defined in section 203C. See Iowa Code 203.1
 2. In addition to other information as may be required, a credit-sale contract shall contain or provide for all of the following:

 a. The seller‘s name and address.
 b. The conditions of delivery.
 c. The amount and kind of grain delivered.
 d. The price per bushel or basis of value.
 e. The date payment is to be made.
 f. The duration of the credit-sale contract, which shall not exceed twelve months from the date the contract is executed.
 3. Title to all grain sold by a credit-sale contract is in the purchasing grain dealer as of the time the contract is executed, unless the contract provides otherwise. The contract must be signed and dated by both parties and executed in duplicate. One copy shall be retained by the grain dealer and one copy shall be delivered to the seller. Upon the cessation of the grain dealer’s license by revocation, cancellation, or expiration, the payment date for all credit-sale contracts shall be advanced to a date not later than thirty days after the effective date of the cessation, and the purchase price for all unpriced grain shall be determined as of the effective date of the cessation in accordance with all other provisions of the contract. However, if the business of the grain dealer is sold to another licensed grain dealer, credit-sale contracts may be assigned to the purchaser of the business.
 4. a. A grain dealer shall not purchase grain on credit-sale contract during any time period in which the grain dealer fails to maintain fifty cents of net worth for each outstanding bushel of grain purchased under credit. The grain dealer may maintain a deficiency bond or an irrevocable letter of credit in the amount of two thousand dollars for each one thousand dollars or fraction thereof of deficiency in net worth.

 b. A grain dealer who is also a warehouse operator licensed by the department under chapter 203C or the United States department of agriculture under the United States Warehouse Act, and who does not have a sufficient quantity or quality of grain to satisfy the warehouse operator’s obligations based on an examination by the department or the United States department of agriculture shall not purchase grain on credit-sale contract to correct the shortage of grain.
 c. (1) A grain dealer must meet at least either of the following conditions:

 (a) The grain dealer’s last financial statement required to be submitted to the department pursuant to section 203.3 is accompanied by an unqualified opinion based upon an audit performed by a certified public accountant licensed in this state.
 (b) The grain dealer files a bond with the department in the amount of one hundred thousand dollars payable to the department.
 (2) (a) The bond filed with the department under this paragraph shall be used to indemnify sellers for losses resulting from a breach of a credit-sale contract as provided by rules adopted by the department. The rules shall include but are not limited to procedures and criteria for providing notice, filing claims, valuing losses, and paying claims. The bond provided in this paragraph shall be in addition to any other bond required in this chapter.

 (b) The bond shall not be canceled by the issuer on less than ninety days’ notice by certified mail to the department and the principal. However, if an adequate replacement bond is filed with the department, the department may authorize the cancellation of the original bond before the end of the ninety-day period.
 (c) If an adequate replacement bond is not received by the department within sixty days of the issuance of the notice of cancellation, the department shall suspend the grain dealer’s license. The department shall cause an inspection of the licensed grain dealer immediately at the end of the sixty-day period. If a replacement bond is not filed within another thirty days following the suspension, the department shall revoke the grain dealer’s license .
 (3) When a license is revoked, the department shall provide notice of the revocation by ordinary mail to the last known address of each holder of an outstanding credit-sale contract and all known sellers.
 5. 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 who is also a warehouse operator licensed by the department under chapter 203C or the United States department of agriculture under the United States Warehouse Act does not have a sufficient quantity or quality of grain to satisfy the warehouse operator’s obligations based on an examination by the department or the United States department of agriculture.
 b. The grain dealer who is also a warehouse operator licensed by the department under chapter 203C or the United States department of agriculture under the United States Warehouse Act issues back to the grain dealer a warehouse receipt for purposes of providing collateral, if the grain which is the subject of the warehouse receipt was purchased on credit and is unpaid for by the grain dealer.
 c. The grain dealer fails to maintain requirements relating to net worth or fails to maintain a ratio of current assets to current liabilities, as required in section 203.3.
 d. The grain dealer violates this section.
 e. The grain dealer’s total liabilities are greater than seventy-five percent of the grain dealer’s total assets.
 f. The grain dealer has made payment by use of a check or electronic funds transfer, and a financial institution refuses payment 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 section 203.9.
 6. A grain dealer who purchases grain by credit-sale contract shall obtain from the seller a signed acknowledgment stating that the seller has received notice that grain purchased by credit-sale contract is not protected by the grain depositors and sellers indemnity fund. The form for the acknowledgment shall be prescribed by the department, and the licensed grain dealer and the seller shall each be provided a copy.
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