As Introduced                            1            

122nd General Assembly                                             4            

   Regular Session                                 H. B. No. 425   5            

      1997-1998                                                    6            


                 REPRESENTATIVES THOMPSON-HAINES                   8            


                                                                   10           

                           A   B I L L                                          

             To amend sections 926.01, 926.021, 926.05, 926.06,    12           

                926.10, 926.16, 926.18, 926.19, 926.29, 926.30,    13           

                926.32, and 926.99 and to enact sections 926.051   14           

                and 926.36 of the Revised Code to change the       15           

                definition of an agricultural  commodity handler,  16           

                to increase the total net worth that an applicant  17           

                for an agricultural commodity handler's license    18           

                must maintain, to increase the penalty for         19           

                engaging in agricultural commodity handling        20           

                without a license, and to make  other revisions    21           

                to the law governing agricultural commodity        22           

                handling.                                          23           




BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:        25           

      Section 1.  That sections 926.01, 926.021, 926.05, 926.06,   27           

926.10, 926.16, 926.18, 926.19, 926.29, 926.30, 926.32, and        28           

926.99 be amended and sections 926.051 and 926.36 of the Revised   29           

Code be enacted to read as follows:                                31           

      Sec. 926.01.  As used in this chapter:                       40           

      (A)  "Agricultural commodity" means barley, corn, oats,      42           

rye, grain sorghum, soybeans, wheat, sunflower, speltz, and OR     43           

any other agricultural crop which the director of agriculture may  45           

designate by rule.  "Agricultural commodity" does not mean any     46           

grain that is purchased for sale as seed.                          47           

      (B)  "Agricultural commodity handling" or "handling" means:  49           

      (1)  Engaging in or participating in the business of         51           

purchasing an agricultural commodity for sale, resale,             52           

                                                          2      

                                                                 
processing, or for any other use in THE FOLLOWING volumes          53           

exceeding:                                                         54           

      (a)  IN THE CASE OF PURCHASES MADE FROM PRODUCERS, MORE      56           

THAN ten thousand bushels annually;                                58           

      (b)  IN THE CASE OF PURCHASES MADE FROM AGRICULTURAL         61           

COMMODITY HANDLERS, MORE THAN ONE HUNDRED THOUSAND BUSHELS         62           

ANNUALLY;                                                                       

      (c)  IN THE CASE OF TOTAL PURCHASES MADE FROM PRODUCERS      65           

COMBINED WITH TOTAL PURCHASES MADE FROM HANDLERS, MORE THAN ONE    66           

HUNDRED THOUSAND BUSHELS ANNUALLY.                                 67           

      (2)  Operating a warehouse as a bailee for the receiving,    69           

storing, shipping, or conditioning of an agricultural commodity;   70           

      (3)  Receiving into a warehouse an agricultural commodity    72           

purchased under a delayed price agreement;                         73           

      (4)  PROVIDING MARKETING FUNCTIONS, INCLUDING STORAGE,       75           

DELAYED PRICE MARKETING, DEFERRED PAYMENT, FEED AGREEMENTS, OR     76           

ANY OTHER MARKETING TRANSACTION WHEREBY CONTROL IS EXERTED OVER    77           

THE MONETARY PROCEEDS OF A PRODUCER'S AGRICULTURAL COMMODITIES BY  79           

A PERSON OTHER THAN THE PRODUCER.                                               

      (C)  "Agricultural commodity handler" or "handler" means     81           

any person who is engaged in the business of agricultural          82           

commodity handling.  Any "AGRICULTURAL COMMODITY HANDLER" OR       83           

"HANDLER" DOES NOT INCLUDE A person whose purchases of all         84           

agricultural commodities do not exceed ten thousand bushels        85           

annually and who does not handle agricultural commodities as a     86           

bailee is not an AND WHO PURCHASES AGRICULTURAL COMMODITIES IN     87           

THE FOLLOWING VOLUMES:                                             88           

      (1)  TEN THOUSAND OR FEWER BUSHELS ANNUALLY FROM PRODUCERS;  90           

      (2)  ONE HUNDRED THOUSAND OR FEWER BUSHELS ANNUALLY FROM     92           

agricultural commodities handler COMMODITY HANDLERS.               93           

      A PERSON WHO DOES NOT HANDLE AGRICULTURAL COMMODITIES AS A   96           

BAILEE AND WHO ANNUALLY PURCHASES TEN THOUSAND OR FEWER BUSHELS    97           

OF AGRICULTURAL COMMODITIES FROM PRODUCERS AND ONE HUNDRED         98           

THOUSAND OR FEWER BUSHELS OF AGRICULTURAL COMMODITIES FROM         99           

                                                          3      

                                                                 
AGRICULTURAL COMMODITY HANDLERS SHALL BE CONSIDERED TO BE AN       100          

AGRICULTURAL COMMODITY HANDLER IF THE COMBINED ANNUAL VOLUME OF    101          

PURCHASES FROM THE PRODUCERS AND THE AGRICULTURAL COMMODITY                     

HANDLERS EXCEEDS ONE HUNDRED THOUSAND BUSHELS.                     102          

      (D)  "Depositor" means:                                      104          

      (1)  Any person who delivers an agricultural commodity to a  106          

licensed handler for storage, conditioning, shipment, or sale;     107          

      (2)  Any owner or legal holder of a ticket or receipt        109          

issued for an agricultural commodity who is a creditor of the      110          

licensed handler for the value of the agricultural commodity;      111          

      (3)  Any licensed handler storing an agricultural commodity  113          

that he THE LICENSED HANDLER owns solely, jointly, or in common    114          

with others in a warehouse owned or controlled by him THE          116          

LICENSED HANDLER or any other licensed handler.                    118          

      (E)  "Receipt" means a warehouse receipt issued by a         120          

licensed handler.                                                  121          

      (F)  "Nonnegotiable receipt" means a receipt on which it is  123          

stated that the agricultural commodity received will be delivered  124          

to the depositor or to the order of any other person named in the  125          

receipt.                                                           126          

      (G)  "Negotiable receipt" means a receipt on which it is     128          

stated that the agricultural commodity received will be delivered  129          

to the bearer or to the order of any person named in the receipt.  130          

      (H)  "Ticket" means a scale weight ticket, a load slip, or   132          

any evidence, other than a receipt, given to a depositor by a      133          

licensed handler upon delivery of an agricultural commodity to     134          

the handler.                                                       135          

      (I)  "Warehouse" means any building, bin, protected          137          

enclosure, or similar premises under the control of a licensed or  138          

unlicensed handler used for receiving, storing, shipping, or       139          

handling an agricultural commodity.                                140          

      (J)  "Storage" means the deposit of an agricultural          142          

commodity into a warehouse either for the account of the licensed  143          

handler operating the warehouse or for the account of a            144          

                                                          4      

                                                                 
depositor.                                                         145          

      (K)  "Producer" means any person who grows an agricultural   147          

commodity on land that he THE PERSON owns or leases.               148          

      (L)  "Agent" means any person, other than a producer, who    150          

delivers an agricultural commodity to a licensed handler, either   151          

for sale or for storage, for the account of the producer.          152          

      (M)  "Agricultural commodity tester" or "tester" means a     154          

person who operates a moisture meter and other quality testing     155          

devices to determine the quality of an agricultural commodity.     156          

      (N)  "Federally licensed grain inspector" means a person     158          

who is licensed by the United States department of agriculture     159          

under the "United States Grain Standards Act," 39 Stat. 482        160          

(1916), 7 U.S.C. 71, as amended, to test and grade grain, as       161          

"grain" is defined in that act.                                    162          

      (O)  "Bailee" means a person to whom an agricultural         164          

commodity is delivered in trust for storage in a warehouse with    165          

title remaining in the name of the depositor.                      166          

      (P)  "Bailor" means a person who delivers an agricultural    168          

commodity to a bailee in trust for storage in a warehouse with     169          

title remaining in the name of the depositor.                      170          

      (Q)  "Bailment agreement" means a bailor-bailee agreement    172          

between a depositor and a licensed handler as stated in the terms  173          

of a receipt that is issued for an agricultural commodity in       174          

storage and subject to the requirements of this chapter governing  175          

the use of a receipt.                                              176          

      (R)  "Delayed price agreement" means a written executory     178          

contract executed by and between a licensed handler and a          179          

depositor that covers the sale and transfer of title of an         180          

agricultural commodity and states in its written terms the         181          

service charges and the method for pricing the commodity at a      182          

later date.                                                        183          

      (S)  "Delayed price marketing" means the sale and transfer   185          

of title of an agricultural commodity with the price to be         186          

established at a later date according to the terms of a delayed    187          

                                                          5      

                                                                 
price agreement.                                                   188          

      (T)  "DEFERRED PAYMENT" MEANS THE DEFERRAL OF PAYMENT TO A   191          

DEPOSITOR BY A LICENSED HANDLER FOR AN AGRICULTURAL COMMODITY TO   192          

WHICH THE LICENSED HANDLER HAS TAKEN TITLE, FOR THE PURPOSE OF     193          

DEFERRING INCOME OF THE DEPOSITOR FROM ONE TAX YEAR TO ANOTHER.    194          

      (U)  "FEED AGREEMENT" MEANS A WRITTEN CONTRACT EXECUTED BY   197          

AND BETWEEN A LICENSED HANDLER AND A PRODUCER OR DEPOSITOR WHO     198          

DELIVERS AN AGRICULTURAL COMMODITY TO THE LICENSED HANDLER FOR     199          

STORAGE WHEREBY EACH OF THE FOLLOWING APPLIES:                     200          

      (1)  THE PRODUCER OR DEPOSITOR TRANSFERS TITLE TO THE        202          

AGRICULTURAL COMMODITY TO THE LICENSED HANDLER IN EXCHANGE FOR A   203          

NOMINAL SUM;                                                       204          

      (2)  THE PRODUCER, UPON DELIVERY OF THE AGRICULTURAL         206          

COMMODITY TO THE LICENSED HANDLER, BECOMES A CREDITOR OF THE       207          

LICENSED HANDLER DUE TO THE LIEN THAT ARISES UNDER SECTION         208          

926.021 OF THE REVISED CODE;                                       210          

      (3)  ALL OR PART OF THE AGRICULTURAL COMMODITY IS RETURNED   213          

TO THE PRODUCER AT A LATER DATE AND USED FOR FEED PURPOSES.        214          

      (V)  NOTWITHSTANDING SECTION 1.02 OF THE REVISED CODE,       218          

"AND" SHALL NOT BE READ "OR" AND "OR" SHALL NOT BE READ "AND."     219          

      Sec. 926.021.  (A)  As used in this section:                 228          

      (1)  "Claimant" means a person who is unable to secure       230          

satisfaction of financial obligations due from TO WHOM an          231          

agricultural commodity handler OWES A FINANCIAL OBLIGATION FOR     233          

AGRICULTURAL COMMODITIES OR THE ACTUAL MONETARY PROCEEDS FROM      234          

AGRICULTURAL COMMODITIES THAT HAVE BEEN DELIVERED TO THE HANDLER.  235          

      (2)  "Failure" means any of the following involving an       237          

agricultural commodity handler:                                    238          

      (a)  An inability to financially satisfy claimants           240          

FINANCIALLY;                                                                    

      (b)  A public declaration of insolvency;                     242          

      (c)  A revocation, SUSPENSION, OR CONDITIONAL SUSPENSION of  244          

license with outstanding indebtedness to claimants;                246          

      (d)  Nonpayment in the ordinary course of business where a   248          

                                                          6      

                                                                 
good faith dispute does not exist;                                 249          

      (e)  No application for license renewal;                     251          

      (f)  Denial of license renewal;                              253          

      (g)  Voluntarily surrendering a license.                     255          

      (3)  "Agricultural commodity assets" involving a failed AN   257          

agricultural commodity handler mean MEANS any of the following:    258          

      (a)  All agricultural commodities owned or stored,           260          

including agricultural commodities in transit shipped by the       261          

failed handler but not yet paid for;                               262          

      (b)  Redeposited agricultural commodities;                   264          

      (c)  Proceeds from the sale of agricultural commodities due  266          

or to become due;                                                  267          

      (d)  The equity less any secured financing directly          269          

associated therewith in assets in hedging or speculative margin    270          

accounts held by commodity or security exchanges or dealers        271          

representing the exchanges, and any moneys due or to become due    272          

less any secured financing directly associated therewith from any  273          

transactions on the exchanges;                                     274          

      (e)  Any other unencumbered funds, property, or equity in    276          

funds or property, wherever located, that can be directly traced   277          

to the sale of agricultural commodities by the failed handler,     278          

provided both that the funds, property, or equity in funds or      279          

property shall not be considered to be encumbered unless the       280          

encumbrance results from good and valuable considerations          281          

advanced by any secured party on a good faith basis and that the   282          

encumbrance is not the result of the taking of funds, property,    283          

or equity in funds or property as additional collateral for an     284          

antecedent debt;                                                   285          

      (f)  Any other unencumbered funds, property, or equity in    287          

assets.                                                            288          

      (B)  A lien shall exist on all agricultural commodity        290          

assets of a failed AN agricultural commodity handler in favor of   291          

any of the following:                                              293          

      (1)  Claimants, including lenders, who possess receipts      295          

                                                          7      

                                                                 
covering grain owned or stored by the handler;                     296          

      (2)  Claimants who possess written evidence of ownership     298          

other than a receipt disclosing a storage obligation of the        299          

handler, including tickets;                                        300          

      (3)  Claimants who surrendered receipts as part of an        302          

agricultural commodity sales transaction but were not fully paid   303          

FULLY for the agricultural commodity and the handler failed        304          

within twenty TWENTY-ONE days after the surrender;                 305          

      (4)  Claimants who possess any other written evidence of     307          

the sale of agricultural commodities to the failed handler for     308          

which they were not fully paid FULLY, INCLUDING THE SALE OF        309          

AGRICULTURAL COMMODITIES FOR A NOMINAL SUM UNDER A FEED            310          

AGREEMENT.                                                                      

      (C)  The lien which THAT shall secure all claims described   312          

in division (D) of this section, shall arise, ATTACH TO THE        313          

AGRICULTURAL COMMODITY ASSETS OF AN AGRICULTURAL COMMODITY         314          

HANDLER, AND BECOME EFFECTIVE at the time of the delivery of the   317          

agricultural commodity for sale OR FOR STORAGE UNDER A BAILMENT    318          

AGREEMENT, commencement of the storage obligation, or when funds   319          

are advanced by the lender, and shall terminate when the           320          

liability of the agricultural commodity handler to the claimant    321          

is discharged, provided that the priority of each lien among the   322          

respective claimants shall not relate to the date the claim        323          

arises but shall be governed by the priorities established in      324          

division (D) of this section.  The IN THE EVENT OF A FAILURE, THE  325          

lien claims of all claimants shall be considered to be assigned    326          

by operation of this section to the department of agriculture,     327          

and in the event of a failure and subsequent liquidation, the      328          

lien shall transfer over to assets or proceeds of assets either    329          

received or liquidated by the department of agriculture.           330          

      (D)  In EXCEPT AS PROVIDED IN DIVISION (E) OF THIS SECTION,  332          

IN the event of a failure, the director of agriculture shall       334          

POSSESS EXCLUSIVE AUTHORITY TO enforce the lien claims and                      

allocate the proceeds as follows:                                  336          

                                                          8      

                                                                 
      (1)  First priority against all agricultural commodity       338          

assets shall be the following:                                     339          

      (a)  Claimants, including lenders, who possess receipts      341          

covering grain owned or stored by the agricultural commodity       342          

handler;                                                           343          

      (b)  Claimants who possess written evidence of ownership     345          

other than receipts disclosing a storage obligation of the         346          

handler, including tickets;                                        347          

      (c)  Claimants who surrendered receipts as part of an        349          

agricultural commodity transaction, but were not fully paid for    350          

the agricultural commodity and the handler failed within           351          

twenty-one days after the surrender.                               352          

      (2)  Second priority against all agricultural commodity      354          

assets shall be to claimants who possess written evidence of the   355          

sale of an agricultural commodity, including, but not limited to,  357          

tickets, delayed price agreements, or similar agricultural         358          

commodity delivery contracts who completed delivery and pricing    359          

within thirty days immediately prior to the failure of the         360          

handler.                                                           361          

      (3)  To the extent not necessary to satisfy first and        363          

second priority claimants, all other claimants who possess         364          

written evidence of the sale of agricultural commodities to the    365          

failed handler shall participate in the pro rata distribution of   366          

the remainder of the agricultural commodity assets in an amount    367          

not to exceed the value of their EACH claim.                       368          

      (E)  In the event that any adversary proceeding is           370          

commenced to recover agricultural commodity assets upon which the  371          

lien imposed in this section is imposed and the department of      372          

agriculture declines to enter the proceeding, the director of      373          

agriculture, upon application to him THE DIRECTOR by any           374          

claimant, shall assign to the claimant the applicable lien to      376          

permit the claimant to pursue his THE CLAIMANT'S lien in the       377          

adversary proceeding to the extent the action will not delay the   379          

resolution of the proceeding, the prompt liquidation of the        380          

                                                          9      

                                                                 
assets, or the ultimate distribution of the assets of TO all       381          

claimants.                                                                      

      Sec. 926.05.  (A)  Each person desiring to obtain or renew   390          

a handler's license shall file an application annually with the    391          

director of agriculture at such times, on such forms, and          392          

containing such information as he THE DIRECTOR prescribes,         394          

INCLUDING, IF APPLICABLE, THE APPOINTMENT OF A STATUTORY AGENT     395          

UNDER SECTION 926.051 OF THE REVISED CODE.                                      

      (B)  Each application for a license or license renewal       397          

shall be accompanied by an application fee of two hundred dollars  398          

for the first facility operated by the applicant plus one hundred  399          

dollars for each additional facility operated by the same          400          

applicant and by an examination fee, established by rule of the    401          

director pursuant to section 926.02 of the Revised Code, for each  402          

facility operated by the applicant.  "Facility" means all          403          

warehouse storage located on one premises, including any           404          

additional warehouse storage located within one thousand yards of  405          

that premises.  The director may charge fees for examinations in   406          

an amount not to exceed those fees charged by the United States    407          

department of agriculture for comparable examinations.             408          

      The director shall deposit all fees collected under this     410          

section in the commodity handler regulatory program fund created   411          

in section 926.19 of the Revised Code.                             412          

      (C)  The director shall approve or reject each application   414          

for a license within fifteen days after receipt thereof, provided  415          

that such application is in proper form and contains the           416          

information required under division (A) of this section.  A        417          

rejection of an application shall be accompanied by a statement    418          

from the director of the additional requirements necessary for a   419          

license.  The applicant may resubmit his THE application without   420          

payment of any additional fee.                                     421          

      (D)  A handler's license shall expire on the date            423          

prescribed by rule of the director.  Whenever the director         424          

considers it advisable to cancel the unexpired portion of an       425          

                                                          10     

                                                                 
outstanding license in order to renew it according to a new or     426          

existing system of expiration dates, he THE DIRECTOR shall refund  428          

to the handler the unexpired portion of the fees paid under        429          

division (B) of this section.  Whenever the director issues an     430          

initial license on a date that does not conform to the existing    431          

system, he THE DIRECTOR shall issue the license for whatever A     433          

period of time, not less than six nor more than eighteen months,   435          

that makes it THE DATE conform to the existing system.  The        437          

application fee for that initial license shall be proportionate    438          

to the fee for a one-year license.                                              

      (E)  An application for renewal of a handler's license       440          

shall be filed with the director not later than thirty days        441          

before the current license expires.  An applicant who fails to     442          

file a renewal application in time shall pay a late fee of one     443          

dollar for each day the application is late or fifteen dollars,    444          

whichever is greater.  A renewal license shall not be issued       445          

until a late fee that is due has been paid.                        446          

      (F)  The director, with the approval of the commodity        448          

advisory commission, may revoke or refuse to issue or renew a      449          

handler's license if any of the following occurred within five     450          

years before the application for the license or renewal was        451          

filed:                                                             452          

      (1)  The applicant, or the spouse, parent, sibling, or       454          

child of the applicant, or a manager employed by the applicant,    455          

or any other individual materially involved in the agricultural    456          

commodity handling business of the applicant was a principal in a  457          

receivership or insolvency that resulted in losses to creditors    458          

or to the agricultural commodity depositors fund established in    459          

section 926.16 of the Revised Code;                                460          

      (2)  The applicant pled guilty to or was convicted of any    462          

felony or charge of embezzlement under the laws of this state,     463          

any other state, or of the United States;                          464          

      (3)  The applicant made a delivery of commodities not        466          

authorized under this chapter;                                     467          

                                                          11     

                                                                 
      (4)  The applicant's license under the "United States        469          

Warehouse Act," 39 Stat. 486 (1916), 7 U.S.C. 241, as amended,     470          

was revoked or canceled due to a violation of that act.            471          

      Sec. 926.051.  (A)  AN APPLICANT FOR A HANDLER'S LICENSE OR  474          

RENEWAL ISSUED UNDER SECTION 926.05 OF THE REVISED CODE WHO DOES   476          

NOT CONDUCT BUSINESS AT AN ADDRESS IN THIS STATE AT WHICH THE      477          

APPLICANT USUALLY CAN BE CONTACTED SHALL INCLUDE WITH THE          478          

APPLICATION A WRITTEN APPOINTMENT OF AN AGENT, SOMETIMES REFERRED  479          

TO AS A "STATUTORY AGENT," UPON WHOM ANY PROCESS, NOTICE, OR       480          

DEMAND MAY BE SERVED.  THE APPOINTMENT SHALL BE ACCOMPANIED BY A   481          

WRITTEN ACCEPTANCE OF THE APPOINTMENT SIGNED BY THE AGENT.  THE    482          

AGENT MAY BE A NATURAL PERSON WHO IS A RESIDENT OF THIS STATE OR   483          

A CORPORATION WHOSE PRINCIPAL PLACE OF BUSINESS IS LOCATED IN      484          

THIS STATE.  THE APPOINTMENT SHALL BE ON SUCH FORMS AND CONTAIN    485          

SUCH INFORMATION AS THE DIRECTOR OF AGRICULTURE PRESCRIBES.        486          

FAILURE TO COMPLY WITH THIS DIVISION IS GROUNDS FOR REJECTION OF   487          

THE APPLICATION UNDER DIVISION (C) OF SECTION 926.05 OF THE        490          

REVISED CODE.                                                      491          

      (B)(1)  IF AN AGENT REMOVES FROM THE STATE OR RESIGNS, OR    494          

IF THE APPLICANT REVOKES THE AGENT'S APPOINTMENT, THE APPLICANT    495          

IMMEDIATELY SHALL NOTIFY THE DIRECTOR IN WRITING NOT LATER THAN    496          

THIRTY DAYS PRIOR TO THE REMOVAL, RESIGNATION, OR REVOCATION.  IF  497          

AN AGENT DIES, THE APPLICANT IMMEDIATELY SHALL NOTIFY THE          498          

DIRECTOR IN WRITING.  PRIOR TO THE REMOVAL, RESIGNATION, OR        499          

REVOCATION AND NOT LATER THAN THIRTY DAYS AFTER THE DEATH, THE     500          

APPLICANT SHALL APPOINT ANOTHER AGENT AND FILE WITH THE DIRECTOR   501          

A WRITTEN APPOINTMENT OF THE AGENT, ALONG WITH A WRITTEN           502          

ACCEPTANCE OF THE APPOINTMENT SIGNED BY THE AGENT.                 503          

      (2)  IF THE AGENT'S ADDRESS CHANGES FROM THAT APPEARING ON   505          

THE APPLICATION, THE APPLICANT, NOT LATER THAN THIRTY DAYS PRIOR   506          

TO THE ADDRESS CHANGE, SHALL FILE WITH THE DIRECTOR A WRITTEN      507          

STATEMENT SETTING FORTH THE NEW ADDRESS, ALONG WITH ANY OTHER      508          

INFORMATION THE DIRECTOR REQUESTS.                                 509          

      (C)  FAILURE TO COMPLY WITH DIVISION (B) OF THIS SECTION IS  513          

                                                          12     

                                                                 
GROUNDS FOR SUSPENSION OR CONDITIONAL SUSPENSION OF A HANDLER'S    514          

LICENSE, WITHOUT PRIOR HEARING, UNDER SECTION 926.10 OF THE        515          

REVISED CODE.                                                      516          

      Sec. 926.06.  (A)  The director of agriculture may issue a   525          

handler's license, or renewal thereof, upon the payment of the     526          

prescribed application fee, if the director is satisfied that the  527          

applicant meets the standards of financial responsibility          528          

required under this section and has complied with this chapter     529          

and the rules adopted under it.                                    530          

      (B)  Each (1)  ON THE EFFECTIVE DATE OF THIS AMENDMENT,      532          

EACH applicant for a handler's license, or renewal thereof, shall  534          

have and maintain current assets equal to or greater than current  535          

liabilities and a total net worth of EQUAL TO at least ten cents   537          

per bushel for the total number of bushels of agricultural         538          

commodities that he THE APPLICANT handled during the immediately   539          

preceding twelve-month period to cover any indebtedness arising    540          

from his THE APPLICANT'S operations as a licensed handler.  If     542          

ONE YEAR AFTER THE EFFECTIVE DATE OF THIS AMENDMENT, THE TOTAL     544          

NET WORTH REQUIREMENT SHALL INCREASE TO ELEVEN CENTS PER BUSHEL.   545          

FOR THE NEXT FOUR YEARS, THE REQUIREMENT SHALL CONTINUE TO         546          

INCREASE BY ONE CENT PER BUSHEL EACH YEAR ON THE ANNIVERSARY OF    547          

THE EFFECTIVE DATE OF THIS AMENDMENT, SO THAT FIVE YEARS AFTER     548          

THE EFFECTIVE DATE OF THIS AMENDMENT, AN APPLICANT'S TOTAL NET     549          

WORTH SHALL BE EQUAL TO AT LEAST FIFTEEN CENTS PER BUSHEL FOR THE               

TOTAL NUMBER OF BUSHELS OF AGRICULTURAL COMMODITIES THAT THE       550          

APPLICANT HANDLED DURING THE IMMEDIATELY PRECEDING TWELVE-MONTH    551          

PERIOD.                                                            552          

      (2)  ON THE EFFECTIVE DATE OF THIS AMENDMENT, IF an          554          

applicant is applying for a handler's license for the first time   555          

and did not handle any agricultural commodities during the         556          

immediately preceding twelve-month period, he THE APPLICANT shall  557          

have an allowable total net worth of at least twenty-five          559          

thousand dollars for that purpose.  No ONE YEAR AFTER THE          561          

EFFECTIVE DATE OF THIS AMENDMENT, THIS ALLOWABLE TOTAL NET WORTH   562          

                                                          13     

                                                                 
REQUIREMENT SHALL INCREASE TO THIRTY THOUSAND DOLLARS.  FOR THE    563          

NEXT FOUR YEARS, THE REQUIREMENT SHALL CONTINUE TO INCREASE BY     564          

FIVE THOUSAND DOLLARS EACH YEAR ON THE ANNIVERSARY OF THE          565          

EFFECTIVE DATE OF THIS AMENDMENT, SO THAT FIVE YEARS AFTER THE     566          

EFFECTIVE DATE OF THIS AMENDMENT, AN APPLICANT'S TOTAL NET WORTH   567          

SHALL BE AT LEAST FIFTY THOUSAND DOLLARS.                          568          

      (3)  ON THE EFFECTIVE DATE OF THIS AMENDMENT, NO person      571          

shall be licensed as a handler unless he THE PERSON has an         572          

allowable total net worth of at least twenty-five thousand                      

dollars.  Any ONE YEAR AFTER THE EFFECTIVE DATE OF THIS            574          

AMENDMENT, THIS ALLOWABLE TOTAL NET WORTH REQUIREMENT SHALL        575          

INCREASE TO THIRTY THOUSAND DOLLARS.  FOR THE NEXT FOUR YEARS,     576          

THE REQUIREMENT SHALL CONTINUE TO INCREASE BY FIVE THOUSAND        577          

DOLLARS EACH YEAR ON THE ANNIVERSARY OF THE EFFECTIVE DATE OF      578          

THIS AMENDMENT, SO THAT FIVE YEARS AFTER THE EFFECTIVE DATE OF     579          

THIS AMENDMENT, THE PERSON'S TOTAL NET WORTH SHALL BE AT LEAST     580          

FIFTY THOUSAND DOLLARS.                                            581          

      (4)  ON THE EFFECTIVE DATE OF THIS AMENDMENT, ANY            583          

deficiency in required total net worth may be compensated for by   585          

an indemnity agreement executed by a person pledging personal      586          

assets for the benefit of commodity creditors should the licensed  587          

handler default in his THE LICENSED HANDLER'S obligations to the   588          

creditors; a bond issued by a corporate surety company that is     589          

authorized to do business under the laws of this state; or, at     590          

the director's discretion, an irrevocable letter of credit issued  591          

by a bank or other lending institution that is authorized by this  592          

state or the United States to issue such letters of credit and is  593          

subject to service of process in this state for any suit on the    594          

bond or letter of credit.  AN INDEMNITY AGREEMENT EXECUTED BY A    596          

PERSON PLEDGING PERSONAL ASSETS SHALL BE ACCOMPANIED BY FINANCIAL  597          

STATEMENTS THAT REFLECT THE PERSON'S FINANCIAL POSITION AS AN      598          

INDIVIDUAL AND COMPLY WITH THE REQUIREMENTS OF DIVISION (C) OF     600          

THIS SECTION.  A bond shall be made to the treasurer of the state  602          

of Ohio to be deposited in the agricultural commodity depositors   603          

                                                          14     

                                                                 
fund created under section 926.16 of the Revised Code for the      604          

benefit of any person who may be injured by the handler's failure  605          

to meet obligations arising under this chapter.  A letter of       606          

credit shall be issued for the benefit of the department of        607          

agriculture and the agricultural commodity depositors fund.        608          

      In (5)  THE DIRECTOR SHALL ADOPT RULES IN ACCORDANCE WITH    611          

CHAPTER 119. OF THE REVISED CODE SPECIFYING THE ASSETS FOR WHICH   614          

CREDIT MAY BE GIVEN IN determining AN APPLICANT'S total net        615          

worth, credit may be given for fixed assets such as buildings,     616          

machinery, and equipment, in the amount of the insured value of    617          

such assets under a policy of insurance against loss or damage     619          

or, at the discretion of the director, in the amount of their      620          

current market value as determined by an accredited rural          621          

appraiser or an appraiser certified by the American appraisal      623          

institute.  The appraiser shall be completely independent of any   625          

relationship with the handler.  Capital stock shall not be         626          

considered a liability for the purpose of determining total net    627          

worth.  Regardless.                                                             

      (6)  ON THE EFFECTIVE DATE OF THIS AMENDMENT, REGARDLESS of  629          

the total number of bushels of agricultural commodities that he    631          

AN APPLICANT handled during the immediately preceding              633          

twelve-month period, an THE applicant's total net worth need not   635          

exceed A MAXIMUM OF three hundred thousand dollars.  ONE YEAR      637          

AFTER THE EFFECTIVE DATE OF THIS AMENDMENT, THIS MAXIMUM TOTAL     638          

NET WORTH NEED NOT EXCEED THREE HUNDRED THIRTY THOUSAND DOLLARS.   639          

FOR THE NEXT FOUR YEARS, THIS MAXIMUM TOTAL NET WORTH SHALL        640          

CONTINUE TO INCREASE BY THIRTY THOUSAND DOLLARS EACH YEAR ON THE   641          

ANNIVERSARY OF THE EFFECTIVE DATE OF THIS AMENDMENT, SO THAT FIVE  642          

YEARS AFTER THE EFFECTIVE DATE OF THIS AMENDMENT, AN APPLICANT'S   643          

TOTAL NET WORTH NEED NOT EXCEED FOUR HUNDRED FIFTY THOUSAND        644          

DOLLARS.                                                                        

      (C)  In order for the director to determine if an applicant  646          

meets the standards of financial responsibility required under     647          

division (B) of this section, the applicant for a handler's        648          

                                                          15     

                                                                 
license, or renewal of a handler's license, shall submit a         649          

current financial statement STATEMENTS THAT HAVE BEEN prepared IN  651          

ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND THAT  652          

HAVE BEEN AUDITED OR REVIEWED by a qualified person who is not     653          

directly associated with the applicant's business AN INDEPENDENT                

CERTIFIED PUBLIC ACCOUNTANT.  The financial statement STATEMENTS   655          

shall consist of a THE APPLICANT'S balance sheet showing the       656          

current and deferred assets and liabilities of the applicant, a,   657          

INCOME statement of income, a statement of retained earnings OR    659          

STATEMENT OF STOCKHOLDER'S EQUITY, a AND statement of changes in   661          

financial position CASH FLOWS, and whatever notes are sufficient   663          

to explain the details contained in the financial statement        664          

TOGETHER WITH ANY EXPLANATORY FOOTNOTES OR SUPPLEMENTARY                        

INFORMATION ACCOMPANYING THESE STATEMENTS AND WITH THE             665          

INDEPENDENT ACCOUNTANT'S REPORT ON THE STATEMENTS.                 666          

      The financial statement STATEMENTS accompanying an           668          

applicant's original application shall show a statement closing    669          

date that is BE FOR A YEAR ENDING within six months of BEFORE the  671          

date of application.  Thereafter, the applicant applying for       673          

renewal shall submit an annual statement SUCH STATEMENTS not       675          

later than ninety days after the close END of his business THE     676          

year COVERED BY THE STATEMENTS.                                                 

      The director may require an applicant for a handler's        678          

license, or renewal of a handler's license, to submit a financial  679          

statement prepared STATEMENTS AUDITED by a AN INDEPENDENT          681          

certified public accountant licensed under the laws of this        682          

state, and may require the attachment to the statement of the      683          

accountant's opinion of the applicant's financial status based on  684          

his examination of the records conducted in accordance with        685          

generally accepted auditing standards if the director determines   686          

that the first financial statement STATEMENTS INITIALLY submitted  687          

under this division is ARE incomplete or otherwise                 689          

unsatisfactory.                                                                 

      (D)  The director may prepare and publish statistical        691          

                                                          16     

                                                                 
abstracts of information obtained under this section without       692          

disclosing details that would identify a particular applicant      693          

with particular statistics.  Such information OTHERWISE is         694          

otherwise confidential for purposes of section 102.03 of the       696          

Revised Code, and records of the department of agriculture         697          

containing such information are not otherwise public records       698          

under section 149.43 of the Revised Code.                          699          

      Sec. 926.10.  The director of agriculture may, by order,     708          

MAY refuse to grant or may suspend or conditionally suspend a      710          

handler's license, without prior hearing, when he THE DIRECTOR     711          

determines that there is reasonable cause to believe that the      713          

applicant or licensee:                                             714          

      (A)  Has failed to maintain the insurance coverage required  716          

under section 926.07 of the Revised Code;                          717          

      (B)  Has failed to maintain accurate and complete records    719          

and accounts as required under section 926.11 of the Revised       720          

Code;                                                              721          

      (C)  Has failed to charge, collect, or remit the fee         723          

required under division (B) of section 926.16 of the Revised       724          

Code;                                                              725          

      (D)  Has refused to allow the director or his THE            727          

DIRECTOR'S authorized representative to examine, at a reasonable   729          

time, his THE APPLICANT'S OR LICENSEE'S accounting records,        731          

accounts, agricultural commodity inventories, or warehouse;        732          

      (E)  Does not have in his possession POSSESS sufficient      734          

agricultural commodities to cover the outstanding receipts or      735          

tickets issued or assumed by him THE APPLICANT OR LICENSEE under   736          

bailment agreements;                                               737          

      (F)  Has issued a receipt in violation of this chapter or    739          

any rules adopted under it;                                        740          

      (G)  Does not have the net assets specified in division (B)  742          

of section 926.06 of the Revised Code or has failed to obtain a    743          

bond or other protection for any deficiency in required net        744          

assets as provided in that division;                               745          

                                                          17     

                                                                 
      (H)  Does not have his THE obligations for agricultural      747          

commodities purchased under delayed price agreements secured or    748          

represented as required under division (B) or (C) of section       749          

926.29 of the Revised Code;                                        750          

      (I)  DOES NOT SUBMIT FINANCIAL STATEMENTS THAT COMPLY WITH   753          

THE REQUIREMENTS OF DIVISION (C) OF SECTION 926.06 OF THE REVISED  755          

CODE WITHIN THE APPLICABLE TIME PERIOD SPECIFIED IN THAT           757          

DIVISION;                                                                       

      (J)  DOES NOT NOTIFY THE DIRECTOR OF A STATUTORY AGENT'S     760          

CHANGE OF ADDRESS OR OF THE DEATH, REMOVAL, RESIGNATION, OR        761          

REVOCATION OF THE APPOINTMENT OF A STATUTORY AGENT OR DOES NOT     762          

APPOINT ANOTHER AGENT IN ACCORDANCE WITH SECTION 926.051 OF THE    764          

REVISED CODE.                                                      765          

      The applicant or licensee to whom a denial or, suspension,   768          

or conditional suspension order is issued shall be afforded a      769          

hearing in accordance with Chapter 119. of the Revised Code,       770          

after which the director shall issue or deny the license applied   771          

for in the pending application or reinstate or revoke the          772          

suspended or conditionally suspended license.  The director may    773          

suspend or, conditionally suspend, or revoke a license after a     775          

hearing held in accordance with Chapter 119. of the Revised Code   776          

for any other violations of this chapter or any rules adopted      777          

under it.                                                          778          

      The director shall cause a notice to be posted on the        780          

property of a person whose license has been suspended,             781          

conditionally suspended, or revoked stating the limitations or     782          

restrictions imposed on the person in the handling of              783          

agricultural commodities as a result of the suspension,            784          

conditional suspension, or revocation.  The notice shall not be    785          

removed from the property without written authorization from the   786          

director.                                                          787          

      Sec. 926.16.  (A)  There is hereby created in the state      796          

treasury the agricultural commodity depositors fund.  The state    797          

shall not be held liable for any claims presented against the      798          

                                                          18     

                                                                 
fund under section 926.18 of the Revised Code.  The fund shall     799          

consist of a per-bushel fee remitted by licensed handlers under    800          

this section, any sums that the director of agriculture may        801          

collect by any legal action on behalf of the fund, and any         802          

property or securities acquired through the use of moneys in the   803          

fund.  The moneys collected under this section and deposited in    804          

the fund shall be used exclusively to indemnify depositors as      805          

provided in section 926.18 of the Revised Code and for no other    806          

purpose.                                                           807          

      (B)  All licensed handlers shall remit such THE fee as is    809          

determined by the director in accordance with section 926.17 of    810          

the Revised Code on:                                               811          

      (1)  All agricultural commodities delivered to them for      813          

storage under a bailment agreement or for sale, exchange, or       814          

negotiation or solicitation of sale by depositors who produced     815          

them or caused them to be produced;                                816          

      (2)  All agricultural commodities delivered to them for      818          

storage under a bailment agreement, regardless of who produced     819          

the commodities, if a receipt is to be issued for the              820          

commodities;                                                       821          

      (3)  All agricultural commodities that are being stored by   823          

licensed handlers who own them solely, jointly, or in common with  824          

others and who are issuing a receipt for them in accordance with   825          

section 926.25 of the Revised Code.  The maximum number of         826          

bushels on which a licensed handler shall be required to pay the   827          

fee under division (B)(3) of this section between the first day    828          

of July and the thirtieth day of June of any marketing year shall  829          

be the greatest number of bushels of all commodities for which     830          

receipts are outstanding at any one time during that period.       831          

      (4)  ALL AGRICULTURAL COMMODITIES THAT ARE NOT INVOLVED IN   833          

A TRANSACTION DESCRIBED IN DIVISION (B)(1), (2), OR (3) OF THIS    834          

SECTION AND THE MONETARY PROCEEDS OF WHICH ARE CONTROLLED BY A     835          

HANDLER WHO IS NOT INVOLVED IN THE PRODUCTION OF THE COMMODITIES   837          

AND WHO SERVES AS AN INTERMEDIARY BETWEEN THE PRODUCER AND A       838          

                                                          19     

                                                                 
HANDLER RECEIVING THE COMMODITIES.  IN SUCH A SITUATION, THE                    

HANDLER RESPONSIBLE FOR PAYING THE PRODUCER SHALL REMIT THE FEE.   839          

      (C)  All licensed handlers shall account for and remit       841          

moneys under division (B) of this section to the director in such  842          

manner and using such forms as the director shall prescribe by     843          

rule.                                                              844          

      (D)  All disbursements from the fund shall be paid by the    846          

treasurer of state pursuant to vouchers authorized by the          847          

director.                                                          848          

      (E)  All interest earned by the fees collected under this    850          

section shall be credited to the fund and, at the request of the   851          

director of agriculture and to the extent necessary to pay the     852          

examination and administrative costs of this chapter as provided   853          

in section 926.19 of the Revised Code, may be transferred by the   854          

director of budget and management to the commodity handler         855          

regulatory program fund created in that section.                   856          

      Sec. 926.18.  (A)  When a depositor has made a demand for    865          

settlement of an obligation concerning an agricultural commodity   866          

on which a fee was required to be remitted under section 926.16    867          

of the Revised Code and the licensed handler has failed to honor   868          

the demand, the depositor, after providing the director of         869          

agriculture or his THE DIRECTOR'S authorized representative with   870          

evidence of his THE DEPOSITOR'S demand and the dishonoring of his  872          

THAT demand, may file a claim with the director NOT LATER THAN     873          

SIX MONTHS AFTER DISHONOR OF THE DEMAND for indemnification of     874          

his THE DEPOSITOR'S damages, from the agricultural commodity       875          

depositors fund, to be measured as follows:                        876          

      (1)  The commodity advisory commission created in section    878          

926.32 of the Revised Code shall establish the dollar value of     879          

the loss incurred by a depositor holding a receipt or a ticket     880          

for agricultural commodities on which a fee was required and that  881          

he THE DEPOSITOR delivered to the handler under a delayed price    882          

agreement or under a, bailment agreement, OR FEED AGREEMENT, OR    884          

THAT THE DEPOSITOR DELIVERED TO THE HANDLER BEFORE DELIVERY WAS    885          

                                                          20     

                                                                 
DUE UNDER A CONTRACT OR OTHER AGREEMENT BETWEEN THE DEPOSITOR AND  886          

HANDLER.  The value shall be based on the fair market price being  888          

paid to producers by handlers for the commodities on the date on   889          

which the director received notice that the receipt or ticket was  890          

dishonored by the handler.  All depositors filing claims under     891          

this division shall be bound by the value determined by the        892          

commission.                                                                     

      (2)  The dollar value of the loss incurred by a depositor    894          

who has sold or delivered for sale, exchange, or solicitation or   895          

negotiation for sale agricultural commodities on which a fee was   896          

required and who is a creditor of the handler for all or a part    897          

of the value of the commodities shall be based on the amount       898          

stated on the obligation on the date of the sale.                  899          

      (B)  The agricultural commodity depositors fund shall be     901          

liable to a depositor for any moneys that are not recovered        902          

through other legal and equitable remedies as follows:             903          

      (1)  For commodities stored with a licensed handler under a  905          

bailment agreement for one hundred per cent of his THE             906          

DEPOSITOR'S loss as determined under division (A)(1) of this       907          

section;                                                                        

      (2)  For commodities stored DEPOSITED with a licensed        909          

handler under an agreement other than a bailment agreement for     911          

one hundred per cent of the first ten thousand dollars of his THE  912          

DEPOSITOR'S loss and eighty per cent of the remaining dollar       913          

value of his THAT loss as determined under divisions (A)(1) and    914          

(2) of this section.  The aggregate amount recovered by a          916          

depositor under all remedies shall not exceed one hundred per      917          

cent of the value of his THE DEPOSITOR'S loss.  If the moneys      918          

recovered by a depositor under all remedies exceed one hundred     919          

per cent of the value of his THE DEPOSITOR'S loss, the depositor   920          

shall reimburse the fund in the amount that exceeds the value of                

his THAT loss.                                                     921          

      (C)  The director, with the approval of the commodity        923          

advisory commission, shall determine the validity of all claims    924          

                                                          21     

                                                                 
presented against the fund.  A claim filed under this section for  925          

losses on agricultural commodities other than commodities stored   926          

under a bailment agreement shall not be valid unless the           927          

depositor has made a demand for settlement of the obligation       928          

within twelve months after the commodities are priced or           929          

delivered for sale, whichever occurs later.  Any depositor whose   930          

claim has been refused by the director and the commission may      931          

appeal the refusal to either TO the court of common pleas of       932          

Franklin county or the court of common pleas of the county in      933          

which the depositor resides.                                       934          

      The director shall provide for payment from the fund to any  936          

depositor whose claim has been found to be valid.                  937          

      (D)  If at any time the fund does not contain sufficient     939          

assets to pay valid claims, the director shall hold those claims   940          

for payment until the fund again contains sufficient assets.       941          

Claims against the fund shall be paid in the order in which they   942          

are presented and found to be valid.                               943          

      (E)  If a depositor files an action for legal or equitable   945          

remedies in a state or federal court having jurisdiction in those  946          

matters that includes a claim against agricultural commodities     947          

upon which the depositor may file a claim against the fund at a    948          

later date, he THE DEPOSITOR ALSO shall also file with the         950          

director a copy of the action filed with the court.                951          

      In the event of payment of a loss under this section, the    953          

director shall be subrogated to the extent of the amount of any    954          

payments to all rights, powers, privileges, and remedies of the    955          

depositor against any person regarding the loss.                   956          

      The depositor shall render all necessary assistance to aid   958          

the director in securing the rights granted in this section.  No   959          

action or claim initiated by the depositor and pending at the      960          

time of payment from the fund may be compromised or settled        961          

without the consent of the director.                               962          

      (F)  If, prior to the effective date of this amendment JUNE  965          

20, 1994, a lawsuit, adversary proceeding, or other legal          966          

                                                          22     

                                                                 
proceeding is brought against a depositor to recover money or                   

payments from funds to which a depositor has a right of            967          

indemnification under this section, and the depositor retains      968          

legal counsel resulting in a cost or expense to the depositor,     969          

upon the rendering of a judgment or other resolution of the        970          

lawsuit, adversary proceeding, or other legal proceeding, the      971          

director, in his THE DIRECTOR'S discretion and with the approval   972          

of the commodity advisory commission, may authorize                             

indemnification from the fund for attorney's fees paid by the      973          

depositor.  Any claim made by a depositor for the payment of       974          

attorney's fees under this division shall be made in the same      975          

manner as a claim under division (A) of this section.              976          

      Attorney's fees payable under this division shall be         978          

limited to the actual hourly fee charged or one hundred dollars    979          

per hour, whichever is less, and to a total maximum amount of      980          

three hundred dollars.                                                          

      Sec. 926.19.  (A)  There is hereby created in the state      989          

treasury the commodity handler regulatory program fund.  The       990          

moneys in the fund shall be used to pay the examination and        991          

administrative costs of this chapter and shall consist of:         992          

      (1)  All revenues collected by the director of agriculture   994          

from distribution of the receipt forms under division (B) of       995          

section 926.20 of the Revised Code and such other forms and        996          

registration books as the director may require by rule for the     997          

administration of this chapter;                                    998          

      (2)  The application and examination fees collected under    1,000        

division (B) of section 926.05 of the Revised Code;                1,001        

      (3)  The agricultural commodity tester certificate fees      1,003        

collected under division (B) of section 926.30 of the Revised      1,004        

Code;                                                              1,005        

      (4)  Interest income transferred from the agricultural       1,007        

commodity depositors fund under section 926.16 of the Revised      1,008        

Code;                                                              1,009        

      (5)  ALL FINES, PENALTIES, AND COSTS, EXCEPT COURT COSTS,    1,011        

                                                          23     

                                                                 
THAT ARE COLLECTED UNDER SECTION 926.99 OF THE REVISED CODE IN     1,012        

CONSEQUENCE OF A VIOLATION OF THIS CHAPTER;                        1,013        

      (6)  ALL SUMS COLLECTED BY THE DIRECTOR OF AGRICULTURE       1,015        

UNDER A CONTRACT DESCRIBED IN SECTION 926.36 OF THE REVISED CODE.  1,016        

      (B)  The examination and administrative costs of this        1,018        

chapter shall be computed by the director not later than the       1,019        

thirty-first day of December of each even-numbered year to cover   1,020        

the biennium that begins on the following first day of July.  The  1,021        

commodity advisory commission created in section 926.32 of the     1,022        

Revised Code shall approve, and may amend, the examination and     1,023        

administrative costs.  The commission's decision shall be binding  1,024        

on the director.  The commission may also at any time MAY approve  1,026        

for presentation to the controlling board a request to increase    1,027        

or decrease the appropriation authority for the biennial           1,028        

examination and administrative costs if it determines that an      1,029        

increase or decrease in the cost is necessary to carry out the     1,030        

purpose of this chapter.                                           1,031        

      (C)  If at any time the moneys deposited in the fund,        1,033        

including interest income transferred from the agricultural        1,034        

commodity depositors fund under section 926.16 of the Revised      1,035        

Code, are not sufficient to pay the examination and                1,036        

administrative costs of this chapter, the director shall request   1,037        

an appropriation from the general revenue fund to pay those        1,038        

costs.                                                             1,039        

      Sec. 926.29.  (A)  A delayed price agreement is an           1,048        

executory contract which THAT shall be in such a form and contain  1,050        

such terms as the director of agriculture shall adopt by rule      1,051        

under Chapter 119. of the Revised Code.  The agreement shall be    1,052        

executed by and between the licensed handler and the depositor or  1,053        

by their authorized representatives not later than fifteen days    1,054        

after the first delivery of an agricultural commodity is received  1,055        

for delayed pricing under the agreement.  The handler shall        1,056        

maintain a file of executed agreements that are available for      1,057        

inspection at any reasonable time by the director or his THE       1,058        

                                                          24     

                                                                 
DIRECTOR'S designated representative.  The handler ALSO shall      1,060        

also keep records and ledgers the director considers necessary to  1,062        

document the handler's obligation to the depositor under a         1,063        

delayed price agreement.  He THE HANDLER ALSO shall also provide   1,064        

reports, forms, and other evidence the director shall adopt by     1,066        

rule to document the storage and marketing of commodities under    1,067        

the delayed price agreement.                                                    

      (B)  Except SUBJECT TO THE LIEN THAT ATTACHES UNDER SECTION  1,069        

926.021 OF THE REVISED CODE AND EXCEPT as otherwise provided in    1,070        

division (C) of this section, a licensed handler who purchases     1,071        

any agricultural commodity under a delayed price agreement AT ALL  1,072        

TIMES shall at all times maintain the commodity, rights in the     1,074        

commodity, proceeds from the sale of the commodity, or a           1,075        

combination of the commodity, rights, and proceeds equal to at     1,076        

least ninety per cent of the value of his THE HANDLER'S            1,077        

obligation for all commodities that he THE HANDLER has purchased   1,078        

that are not priced under delayed price agreements.  The           1,079        

obligation shall be secured or represented by one or more of the   1,080        

following:                                                         1,081        

      (1)  Maintenance of the commodity in storage in the          1,083        

handler's warehouse;                                               1,084        

      (2)  Rights in commodities as evidenced by a receipt or      1,086        

ticket for storage of the commodities under a bailment agreement   1,087        

in another warehouse approved by the director;                     1,088        

      (3)  Proceeds from the sale of commodities as evidenced or   1,090        

represented by one or more of the following:                       1,091        

      (a)  Cash on hand or held on account in a state or           1,093        

federally licensed financial institution or a lending agency of    1,094        

the farm credit administration;                                    1,095        

      (b)  Short-term investments held in time accounts with       1,097        

state or federally licensed financial institutions or a lending    1,098        

agency of the farm credit administration;                          1,099        

      (c)  Balances in commodity margin accounts;                  1,101        

      (d)  Commodities sold and shipped by the handler under       1,103        

                                                          25     

                                                                 
delayed price agreements that have not been priced less any        1,104        

payments or advances that have been received by the handler;       1,105        

      (e)  Such other evidence of unencumbered assets as may be    1,107        

acceptable to the director, including an irrevocable letter of     1,108        

credit.                                                            1,109        

      (C)  A IN ADDITION TO THE LIEN THAT ATTACHES UNDER SECTION   1,111        

926.021 OF THE REVISED CODE, A depositor who sells an              1,112        

agricultural commodity to a licensed handler under a delayed       1,113        

price agreement may, upon giving notice to the handler either at   1,114        

or prior to the time of delivery, MAY demand as security for       1,115        

payment for the commodity an amount that, at the time of           1,116        

delivery, is equal to one hundred per cent of the national loan    1,117        

rate value of the commodity under the United States department of  1,118        

agriculture price support program, or seventy-five per cent of     1,119        

the average price being paid for the commodity in the state on     1,120        

the date of demand as published by the market news service of the  1,121        

department of agriculture, whichever is less.  The handler shall   1,122        

satisfy a demand for security on a commodity sold under a delayed  1,123        

price agreement at the handler's option by one of the following:   1,124        

      (1)  Payment to the depositor by cash or bank draft on the   1,126        

account of the handler;                                            1,127        

      (2)  Causing an irrevocable letter of credit to be issued    1,129        

to the depositor by a bank designated by the handler securing      1,130        

payment in the specified amount.  The letter of credit shall be    1,131        

subject to Chapter 1305. of the Revised Code and rules adopted by  1,132        

the director pursuant to Chapter 119. of the Revised Code.         1,133        

      Sec. 926.30.  (A)  No licensed handler or employee of a      1,142        

licensed handler who receives an agricultural commodity from a     1,143        

producer, either for sale or for storage under a bailment          1,144        

agreement, shall perform a quality test on the commodity for the   1,145        

purpose of applying a premium, discount, or conditioning charge    1,146        

unless the person making the test has completed a training course  1,147        

or on-the-job training as an agricultural commodity tester AND     1,148        

HAS PASSED AN EXAMINATION ON THE SUBJECT THAT IS OFFERED OR        1,149        

                                                          26     

                                                                 
APPROVED BY THE DIRECTOR OF AGRICULTURE.  The director of          1,151        

agriculture shall establish by rule the curriculum for the         1,152        

training course or on-the-job training that shall include                       

instructions in the use of the official grain standards of the     1,153        

United States as a basis for determining the quality of the        1,154        

commodities tested by an agricultural commodity tester.            1,155        

      (B)  Upon successful completion of the training AND          1,157        

EXAMINATION required under division (A) of this section and upon   1,159        

application by the trainee, the director shall issue to an         1,160        

agricultural commodity tester a certificate that shall be valid    1,161        

for a period of two years.  The director may determine that        1,162        

retraining or review is necessary for the tester as a result of    1,163        

changes in or amendments to the official grain standards of the    1,164        

United States, or if the director has reason to believe that       1,165        

retraining is necessary as a result of complaints relating to the  1,166        

tester's inability to accurately test commodities according to     1,167        

the official grain standards.  A fee to cover the cost of issuing  1,168        

certificates and administering the educational program shall be    1,169        

established by rule of the director adopted under Chapter 119. of  1,170        

the Revised Code and shall be deposited into the commodity         1,171        

handler regulatory program fund created in section 926.19 of the   1,172        

Revised Code.                                                                   

      (C)  The director may suspend or revoke the certificate of   1,174        

an agricultural commodity tester in accordance with Chapter 119.   1,175        

of the Revised Code for failure or inability of the tester to      1,176        

apply the official grain standards of the United States in         1,177        

testing the quality of an agricultural commodity.                  1,178        

      Sec. 926.32.  (A)  There is hereby created the commodity     1,187        

advisory commission consisting of seven members to be appointed    1,188        

by the director of agriculture.  Not later than January 1, 1983,   1,189        

the director shall make appointments to the commission.  Of the    1,190        

initial appointments, three shall be for terms ending January 1,   1,191        

1984, two shall be for terms ending January 1, 1985, and two       1,192        

shall be for terms ending January 1, 1986.  Thereafter, terms of   1,193        

                                                          27     

                                                                 
office shall be for three years, each term ending on the same day  1,194        

of the same month of the year as did the term that it succeeds.    1,195        

Each member shall hold office from the date of his appointment     1,196        

until the end of the term for which he THE MEMBER was appointed.   1,197        

Any member appointed to fill a vacancy occurring prior to the      1,199        

expiration of the term for which his THE MEMBER'S predecessor was  1,200        

appointed shall hold office for the remainder of the term.  Any    1,202        

member shall continue in office subsequent to the expiration date  1,203        

of his THE MEMBER'S term until his THE MEMBER'S successor takes    1,205        

office or until a period of sixty days has elapsed, whichever      1,206        

occurs first.                                                                   

      (B)  The commission shall at all times be composed of three  1,208        

farmers who are primarily engaged PRIMARILY in the production of   1,209        

agricultural commodities, one licensed handler who is the manager  1,210        

of a farmers cooperative, one licensed handler who is the owner    1,211        

and operator of a warehouse located in a rural area, one licensed  1,212        

handler representing a warehouse located at a major agricultural   1,213        

commodity transportation center, and one banker who is an officer  1,214        

of a rural bank.  The director shall annually designate ANNUALLY   1,215        

one member of the commission to serve as its chairman CHAIRPERSON  1,217        

and may, after notice and public hearing, MAY remove any member    1,219        

only for neglect of duty or malfeasance in office.                 1,220        

      (C)  A vacancy on the commission shall not impair the right  1,222        

of the other members to exercise all of the commission's powers.   1,223        

Two farmer members and two handler members shall constitute a      1,224        

quorum for the conduct of business of the commission.              1,225        

      (D)  The commission shall meet in Columbus at least three    1,227        

times annually at times that the commission shall set by rule and  1,228        

may meet at other times that the chairman CHAIRPERSON or a         1,229        

majority of the commission members considers appropriate;          1,231        

provided, that no meeting shall be held on the call of the         1,232        

chairman CHAIRPERSON unless at least seven days' written notice    1,234        

is first given to all members of the commission.                   1,235        

      (E)  Each member shall be reimbursed for his THE MEMBER'S    1,237        

                                                          28     

                                                                 
actual and necessary expenses incurred in the discharge of his     1,239        

duties as a commission member.                                     1,240        

      (F)  The commission may adopt, amend, or rescind rules or    1,242        

procedures governing the conduct of its internal affairs.          1,243        

      (G)  The commission may request from the director, and the   1,245        

director shall provide, meeting space, assistance, services, and   1,246        

data to enable it to carry out its functions.                      1,247        

      (H)  All costs of the commission, including all of the       1,249        

expenses of its members and consultants authorized in this         1,250        

section, shall be paid from the commodity handler regulatory       1,251        

program fund created in section 926.19 of the Revised Code         1,252        

pursuant to itemized vouchers approved by the chairman             1,253        

CHAIRPERSON of the commission and the director.                    1,255        

      (I)  The director shall designate an official or employee    1,257        

of the department of agriculture to act as the executive           1,258        

secretary of the commission.  The director ALSO may also request   1,259        

the attendance at meetings of the commission consultants with      1,261        

expertise in agricultural law, marketing, statistics, or any       1,262        

other subject to advise and consult with the commission on         1,263        

matters on the agenda of any regular or special meeting of the     1,264        

commission.  The expenses incurred by consultants attending those  1,265        

meetings shall be reimbursed according to division (H) of this     1,266        

section.  The executive secretary shall keep or cause to be kept   1,267        

a permanent journal of all meetings, proceedings, findings,        1,268        

determinations, and recommendations of the commission, including   1,269        

an itemized statement of the expenses allowed to each member of    1,270        

the commission and consultants under this section.  The journal    1,271        

shall be a public record.                                          1,272        

      (J)  In addition to the authority granted in division (F)    1,274        

of section 926.05, division (B) of section 926.17, divisions (A)   1,275        

and (C) of section 926.18, and division (B) of section 926.19 of   1,276        

the Revised Code, the commission shall advise and counsel the      1,277        

director on all matters relating to:                               1,278        

      (1)  The administration of this chapter;                     1,280        

                                                          29     

                                                                 
      (2)  The development of rules authorized by section 926.02   1,282        

of the Revised Code;                                               1,283        

      (3)  Any other matters that the commission and the director  1,285        

consider appropriate in carrying out this chapter.                 1,286        

      Sec. 926.36.  THE DIRECTOR OF AGRICULTURE MAY ENTER INTO A   1,288        

CONTRACT WITH A MARKETING ASSOCIATION THAT IS INVOLVED IN A        1,289        

PROGRAM DESIGNED TO IMPROVE OR EXPAND THE MARKET FOR AN            1,290        

AGRICULTURAL COMMODITY AND FUNDED BY AN ASSESSMENT THAT IS LEVIED  1,292        

ON PRODUCERS OF THE AGRICULTURAL COMMODITY AND CALCULATED ON THE   1,293        

BASIS OF THE VOLUME OF AGRICULTURAL COMMODITIES PRODUCED BY THE                 

PRODUCER.  UNDER THE CONTRACT, THE MARKETING ASSOCIATION MAY       1,294        

AGREE TO PAY THE DIRECTOR A MUTUALLY ACCEPTABLE SUM AND IN         1,295        

EXCHANGE THE DIRECTOR MAY AGREE TO FURNISH THE MARKETING           1,296        

ASSOCIATION WITH INFORMATION THAT THE DIRECTOR OBTAINS UNDER       1,297        

SECTION 926.11 OF THE REVISED CODE REGARDING THE VOLUME OF         1,299        

COMMODITIES PRODUCED BY PRODUCERS WHO PARTICIPATE IN THE           1,300        

MARKETING PROGRAM, AND RELATED FINANCIAL INFORMATION.              1,301        

      THE MARKETING ASSOCIATION MAY USE THE INFORMATION TO         1,303        

DETERMINE WHETHER A PRODUCER HAS TRUTHFULLY DISCLOSED THE VOLUME   1,304        

OF AGRICULTURAL COMMODITIES PRODUCED BY THE PRODUCER AND WHETHER   1,305        

THE MARKETING ASSOCIATION HAS RECEIVED THE CORRECT AMOUNT IN       1,306        

ASSESSMENTS.                                                       1,307        

      ANY SUM PAID TO THE DIRECTOR UNDER A CONTRACT ENTERED INTO   1,309        

UNDER THIS SECTION SHALL BE DEPOSITED IN THE COMMODITY HANDLER     1,310        

REGULATORY PROGRAM FUND CREATED IN SECTION 926.19 OF THE REVISED   1,312        

CODE.                                                              1,313        

      Sec. 926.99.  (A)  Whoever (1)  EXCEPT AS PROVIDED IN        1,322        

DIVISION (A)(2) OF THIS SECTION, WHOEVER violates section 926.04   1,323        

of the Revised Code is guilty of a minor misdemeanor OF THE FIRST  1,325        

DEGREE ON A FIRST OFFENSE AND A FELONY OF THE FIFTH DEGREE ON      1,326        

EACH SUBSEQUENT OFFENSE.                                                        

      (2)  A PERSON WHO VIOLATES SECTION 926.04 OF THE REVISED     1,331        

CODE AND WHO IS INSOLVENT AND FINANCIALLY UNABLE TO SATISFY A      1,332        

CLAIMANT AS DEFINED IN SECTION 926.021 OF THE REVISED CODE IS      1,334        

                                                          30     

                                                                 
GUILTY OF A FELONY OF THE FIFTH DEGREE IF THE FINANCIAL            1,335        

OBLIGATION OWED BY THE OFFENDER TO THE CLAIMANT IS FIVE HUNDRED    1,336        

DOLLARS OR MORE AND IS LESS THAN FIVE THOUSAND DOLLARS.  IF THE    1,337        

FINANCIAL OBLIGATION IS FIVE THOUSAND DOLLARS OR MORE AND IS LESS  1,338        

THAN ONE HUNDRED THOUSAND DOLLARS, THE OFFENDER IS GUILTY OF A     1,339        

FELONY OF THE FOURTH DEGREE.  IF THE FINANCIAL OBLIGATION IS ONE   1,340        

HUNDRED THOUSAND DOLLARS OR MORE, THE OFFENDER IS GUILTY OF A      1,341        

FELONY OF THE THIRD DEGREE.                                        1,342        

      (B)  Whoever violates division (E) or (F) of section 926.20  1,344        

or division (A) of section 926.22 of the Revised Code is guilty    1,345        

of a minor misdemeanor on a first offense and a misdemeanor of     1,346        

the second degree on each subsequent offense.                      1,347        

      (C)  Whoever violates division (G) of section 926.20 or      1,349        

section 926.34 or 926.35 of the Revised Code is guilty of a        1,350        

felony of the fourth degree.                                       1,351        

      (D)  Whoever violates division (A) of section 926.28, or     1,355        

division (B) of section 926.29, of the Revised Code is guilty of                

a felony of the fifth degree.                                      1,356        

      (E)  Whoever violates section 926.31 of the Revised Code is  1,358        

guilty of a misdemeanor of the fourth degree.                      1,359        

      Section 2.  That existing sections 926.01, 926.021, 926.05,  1,361        

926.06, 926.10, 926.16, 926.18, 926.19, 926.29, 926.30, 926.32,    1,362        

and 926.99 of the Revised Code are hereby repealed.                1,363