Louisiana Revised Statutes 3:3412.1 – A. The commission may operate a Grain and Cotton Indemnity Fund for grain dealers and cotton merchants licensed under this Chapter for the sole purpose of having funds available for
Terms Used In Louisiana Revised Statutes 3:3412.1
- Commission: means the Louisiana Agricultural Commodities Commission. See Louisiana Revised Statutes 3:3402
- commodities: means cotton, all agricultural products commonly classed as grain, including rice, rough rice, corn, wheat, oats, rye, soybeans, barley, and grain sorghum, and any other agricultural commodity or other farm product which the commission may, by regulation, declare to be a commodity subject to this Chapter. See Louisiana Revised Statutes 3:3402
- Cotton merchant: means every person, firm, corporation, association, or other legal entity who purchases or contracts to purchase, either directly or through a cotton agent, cotton grown or to be grown by producers in this state. See Louisiana Revised Statutes 3:3402
- Farm products: means products employed directly in the cultivation, production, or harvesting of any agricultural commodities or containers for agricultural commodities or other farm products. See Louisiana Revised Statutes 3:3402
- Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
- Grain: means corn, wheat, oats, rye, soybeans, barley, and grain sorghum. See Louisiana Revised Statutes 3:3402
- Grain dealer: means any person who purchases any agricultural commodities from producers or represents producers in the sale of agricultural commodities. See Louisiana Revised Statutes 3:3402
- Lien: A claim against real or personal property in satisfaction of a debt.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Person: means any individual, partnership, company, firm, association, cooperative association, corporation, or any other legal entity engaged in any of the activities regulated under this Chapter. See Louisiana Revised Statutes 3:3402
- Producer: means the owner, tenant, lessee, or operator of land within this state who has an interest in or receives all or any part of the proceeds from the sale of agricultural commodities produced thereon. See Louisiana Revised Statutes 3:3402
- Security: means any financial instrument or document issued for the benefit of or given to the commission by a licensee, or participation in any self-insurance fund program authorized by this Chapter as assurance for the fulfillment of the obligations imposed on the licensee by applicable law or regulations. See Louisiana Revised Statutes 3:3402
A. The commission may operate a Grain and Cotton Indemnity Fund for grain dealers and cotton merchants licensed under this Chapter for the sole purpose of having funds available for use in meeting the licensee’s obligations with respect to the reimbursement of any producer who sold agricultural commodities to the licensee and who was not fully compensated.
B. The commission shall charge an assessment at the rate of one twenty-fifth of one percent on the value of all agricultural commodities regulated under this Chapter which are sold to grain dealers and cotton merchants. The assessments shall be due and payable to the commission by the licensee at the first point of sale.
C. The assessments charged under this Section shall be subject to the following provisions:
(1) All assessments received pursuant to this Section shall be deposited immediately in the state treasury.
(2) After compliance with the requirements of La. Const. Art. VII, § 9 relative to the Bond Security and Redemption Fund, and prior to monies being placed in the state general fund, an amount equal to that deposited as required by Paragraph (1) of this Subsection shall be credited to a special fund hereby created in the state treasury to be known as the Grain and Cotton Indemnity Fund. The monies in this fund shall be used solely as provided in Paragraph (3) of this Subsection and only in the amounts appropriated by the legislature. All unexpended and unencumbered monies in this fund at the end of each fiscal year shall be transferred to the Louisiana Agricultural Finance Authority to provide solely for the administration and operation of the fund provided for in this Section. The monies in this fund shall be invested by the state treasurer in the same manner as monies in the state general fund, and interest earned on the investment of these monies shall be credited to this fund, again, following compliance with the requirement of La. Const. Art. VII, § 9 relative to the Bond Security and Redemption Fund.
(3) The monies in the Grain and Cotton Indemnity Fund shall be used solely for the administration and operation of the Grain and Cotton Indemnity Fund provided for in this Section.
(4) Repealed by Acts 2020, No. 151, §2.
D. The commission shall adopt rules and regulations, in accordance with the Administrative Procedure Act, necessary for the efficient administration of the Grain and Cotton Indemnity Fund. Such rules shall include:
(1) Procedures for claims on the Grain and Cotton Indemnity Fund.
(2) Reimbursement limitations.
(3) Any rules and regulations necessary for the administration of the Grain and Cotton Indemnity Fund.
(4) The establishment of civil penalties for violations of this Section.
E. Beginning on July 1st following the fiscal year in which the balance within the Louisiana Agricultural Finance Authority reaches a level of twelve million dollars, the commission shall suspend collection of the assessment required by this Section. If after suspension of collection the balance is less than ten million dollars, the commission shall require collection of the assessment. Any assessments collected after the balance reaches twelve million dollars, but prior to the suspension of collection, shall remain within the Louisiana Agricultural Finance Authority.
F. A producer shall be eligible to receive indemnity payments from the Grain and Cotton Indemnity Fund if:
(1) The licensed grain dealer becomes insolvent.
(2) The licensed cotton merchant becomes insolvent.
(3) The licensed grain dealer or cotton merchant, as a result of the insolvency, does not fully compensate the producer in accordance with a sale of agricultural commodities.
G. Upon the insolvency of a licensed grain dealer or cotton merchant, the commission shall make the proceeds of the Grain and Cotton Indemnity Fund available for use in meeting the licensee’s obligations with respect to the reimbursement of any producer who sold grain or cotton to the licensee and who was not fully compensated.
H. If claims for indemnity payments from the Grain and Cotton Indemnity Fund exceed the amount in the fund, the commission shall prorate the claims and pay the prorated amounts. As future assessments are collected, the commission shall continue to forward indemnity payments to each eligible person until the person receives the maximum amount payable in accordance with this Section.
I. Notwithstanding any other provision of law to the contrary, if the commission pays a claim in accordance with this Section, then all payments shall be made jointly payable to the claimant and to all secured parties and lienholders that were included in the most recent master listing of farm products within the central registry as provided in La. Rev. Stat. 3:3654, or addendum thereto, published by the secretary of state prior to the payment date and hold a security interest in or a lien on the crops, farm products, or agricultural commodities, perfected by the filing of a financing statement that:
(1) Identified those crops, farm products, or agricultural commodities as collateral.
(2) Was indexed under that producer’s name as debtor.
(3) Was filed in the office designated for filing a financing statement against the producer covering that collateral.
J. Expenses incurred by the commission in administrating the Grain and Cotton Indemnity Fund shall be reimbursable from the fund. Administrative expenses shall be paid in priority to all other payments.
K. Any licensee who knowingly or intentionally refuses or fails to collect the assessment required under this Section or to submit any assessment collected from producers to the commission for deposit in the Grain and Cotton Indemnity Fund shall be subject to civil penalties.
L. Money paid from the Grain and Cotton Indemnity Fund in satisfaction of a valid claim constitutes a debt obligation of the person against whom the claim was made. The commission may take action on behalf of the fund against a person to recover the amount of payment made, plus reasonable costs, including court costs, incurred by the commission in obtaining recovery, legal interest from the date of payment of any claim, and reasonable attorney fees. As a condition of payment of a claim from the Grain and Cotton Indemnity Fund, the claimant shall subrogate its interest, if any, to the commission in a cause of action against all parties, to the amount of the loss that the claimant was reimbursed by the fund.
Acts 2015, No. 430, §1; Acts 2016, No. 12, §1; Acts 2020, No. 151, §§1, 2.