(A) "Agricultural commodity" means barley, corn, oats, rye, | 8 |
grain sorghum, soybeans, wheat, sunflower, speltz, or any other | 9 |
agricultural crop that the director of agriculture may designate | 10 |
by rule. "Agricultural commodity" does not mean any grain that is | 11 |
purchased for sale as seed. | 12 |
(e) Any other unencumbered funds, property, or equity in | 141 |
funds or property, wherever located, that can be directly traced | 142 |
to the sale of agricultural commodities by the handler, provided | 143 |
both that the funds, property, or equity in funds or property | 144 |
shall not be considered to be encumbered unless the encumbrance | 145 |
results from good and valuable considerations advanced by any | 146 |
secured party on a good faith basis and that the encumbrance is | 147 |
not the result of the taking of funds, property, or equity in | 148 |
funds or property as additional collateral for an antecedent debt; | 149 |
(C) The lien that shall secure all claims described in | 168 |
division (D) of this section, shall arise, attach to the | 169 |
agricultural commodity assets of an agricultural commodity | 170 |
handler, and become effective at the time of the delivery of the | 171 |
agricultural commodity for sale or for storage under a bailment | 172 |
agreement, commencement of the storage obligation, or when funds | 173 |
are advanced by the lender, and shall terminate when the liability | 174 |
of the agricultural commodity handler to the claimant is | 175 |
discharged, provided that the priority of each lien among the | 176 |
respective claimants shall not relate to the date the claim arises | 177 |
but shall be governed by the priorities established in division | 178 |
(D) of this section. In the event of a failure, the lien claims of | 179 |
all claimants shall be considered to be assigned by operation of | 180 |
this section to the department of agriculture, and in the event of | 181 |
a failure and subsequent liquidation, the lien shall transfer over | 182 |
to assets or proceeds of assets either received or liquidated by | 183 |
the department. The lien established under this section shall have | 184 |
priority over all competing lien claims asserted against the | 185 |
agricultural commodity assets. | 186 |
(2) Second priority against all agricultural commodity assets | 203 |
shall be to claimants who possess written evidence of the sale of | 204 |
an agricultural commodity, including, but not limited to, tickets, | 205 |
delayed price agreements, or similar agricultural commodity | 206 |
delivery contracts who completed delivery and pricing within | 207 |
thirty days immediately prior to the failure of the handler. | 208 |
(E) In the event that any adversary proceeding is commenced | 215 |
to recover agricultural commodity assets upon which the lien | 216 |
imposed in this section is imposed and the department declines to | 217 |
enter the proceeding, the director, upon application to the | 218 |
director by any claimant, shall assign to the claimant the | 219 |
applicable lien to permit the claimant to pursue the claimant's | 220 |
lien in the adversary proceeding to the extent the action will not | 221 |
delay the resolution of the proceeding, the prompt liquidation of | 222 |
the assets, or the ultimate distribution of the assets to all | 223 |
claimants. | 224 |
(B)(1) On the effective date of this amendment, eachEach | 231 |
applicant for a handler's license, or renewal thereof, shall have | 232 |
and maintain current assets equal to or greater than current | 233 |
liabilities and a total net worth equal to at least tenfifteen | 234 |
cents per bushel for the total number of bushels of agricultural | 235 |
commodities that the applicant handled during the immediately | 236 |
preceding twelve-month period to cover any indebtedness arising | 237 |
from the applicant's operations as a licensed handler. One year | 238 |
after the effective date of this amendment, the total net worth | 239 |
requirement shall increase to eleven cents per bushel. For the | 240 |
next four years, the requirement shall continue to increase by one | 241 |
cent per bushel each year on the anniversary of the effective date | 242 |
of this amendment, so that five years after the effective date of | 243 |
this amendment, an applicant's total net worth shall be equal to | 244 |
at least fifteen cents per bushel for the total number of bushels | 245 |
of agricultural commodities that the applicant handled during the | 246 |
immediately preceding twelve-month period. | 247 |
(2) On the effective date of this amendment, ifIf an | 248 |
applicant is applying for a handler's license for the first time | 249 |
and did not handle any agricultural commodities during the | 250 |
immediately preceding twelve-month period, the applicant shall | 251 |
have an allowable total net worth of at least twenty-fivefifty | 252 |
thousand dollars to cover any indebtedness arising from the | 253 |
applicant's operations as a licensed handler. One year after the | 254 |
effective date of this amendment, this allowable total net worth | 255 |
requirement shall increase to thirty thousand dollars. For the | 256 |
next four years, the requirement shall continue to increase by | 257 |
five thousand dollars each year on the anniversary of the | 258 |
effective date of this amendment, so that five years after the | 259 |
effective date of this amendment, an applicant's total net worth | 260 |
shall be at least fifty thousand dollars. | 261 |
(3) On the effective date of this amendment, noNo person | 262 |
shall be licensed as a handler unless the person has an allowable | 263 |
total net worth of at least twenty-fivefifty thousand dollars. | 264 |
One year after the effective date of this amendment, this | 265 |
allowable total net worth requirement shall increase to thirty | 266 |
thousand dollars. For the next four years, the requirement shall | 267 |
continue to increase by five thousand dollars each year on the | 268 |
anniversary of the effective date of this amendment, so that five | 269 |
years after the effective date of this amendment, the person's | 270 |
total net worth shall be at least fifty thousand dollars. | 271 |
(4) On the effective date of this amendment, anyAny | 272 |
deficiency in required total net worth may be compensated for by | 273 |
an indemnity agreement executed by a person pledging personal | 274 |
assets for the benefit of commodity creditors should the licensed | 275 |
handler default in the licensed handler's obligations to the | 276 |
creditors; a bond issued by a corporate surety company that is | 277 |
authorized to do business under the laws of this state; or, at the | 278 |
director's discretion, an irrevocable letter of credit issued by a | 279 |
bank or other lending institution that is authorized by this state | 280 |
or the United States to issue such letters of credit and is | 281 |
subject to service of process in this state for any suit on the | 282 |
bond or letter of credit. An indemnity agreement executed by a | 283 |
person pledging personal assets shall be accompanied by financial | 284 |
statements that reflect the person's financial position as an | 285 |
individual and comply with the requirements of division (C) of | 286 |
this section. A bond shall be made to the treasurer of state to be | 287 |
deposited in the agricultural commodity depositors fund created | 288 |
under section 926.16 of the Revised Code for the benefit of any | 289 |
person who may be injured by the handler's failure to meet | 290 |
obligations arising under this chapter. A letter of credit shall | 291 |
be issued for the benefit of the department of agriculture and the | 292 |
agricultural commodity depositors fund. | 293 |
(6) On the effective date of this amendment, regardless | 297 |
Regardless of the total number of bushels of agricultural | 298 |
commodities that an applicant handled during the immediately | 299 |
preceding twelve-month period, the applicant's total net worth | 300 |
need not exceed a maximum of threefour hundred fifty thousand | 301 |
dollars. One year after the effective date of this amendment, this | 302 |
maximum total net worth need not exceed three hundred thirty | 303 |
thousand dollars. For the next four years, this maximum total net | 304 |
worth shall continue to increase by thirty thousand dollars each | 305 |
year on the anniversary of the effective date of this amendment, | 306 |
so that five years after the effective date of this amendment, an | 307 |
applicant's total net worth need not exceed four hundred fifty | 308 |
thousand dollars. | 309 |
(C) In order for the director to determine if an applicant | 310 |
meets the standards of financial responsibility required under | 311 |
division (B) of this section, the applicant for a handler's | 312 |
license, or renewal of a handler's license, shall submit financial | 313 |
statements that have been prepared in accordance with generally | 314 |
accepted accounting principles and that have been audited or | 315 |
reviewed by an independent certified public accountant. The | 316 |
financial statements shall consist of the applicant's balance | 317 |
sheet, income statement, statement of retained earnings or | 318 |
statement of stockholder's equity, and statement of cash flows, | 319 |
together with any explanatory footnotes or supplementary | 320 |
information accompanying these statements and with the independent | 321 |
accountant's report on the statements. | 322 |
The applicant or licensee to whom a denial, suspension, or | 377 |
conditional suspension order is issued shall be afforded a hearing | 378 |
in accordance with Chapter 119. of the Revised Code, after which | 379 |
the director shall issue or deny the license applied for in the | 380 |
pending application or reinstate or revoke the suspended or | 381 |
conditionally suspended license. The director may suspend, | 382 |
conditionally suspend, or revoke a license after a hearing held in | 383 |
accordance with Chapter 119. of the Revised Code for any other | 384 |
violations of this chapter or any rules adopted under it. | 385 |
The director shall cause a notice to be posted on the | 386 |
property of a person whose license has been suspended, | 387 |
conditionally suspended, or revoked stating the limitations or | 388 |
restrictions imposed on the person in the handling of agricultural | 389 |
commodities as a result of the suspension, conditional suspension, | 390 |
or revocation. The notice shall not be removed from the property | 391 |
without written authorization from the director. | 392 |
Sec. 926.17. (A) The director of agriculture shall annually | 399 |
review the debits of and credits to the agricultural commodity | 400 |
depositors fund created in section 926.16 of the Revised Code and | 401 |
shall make any adjustments in the fee required under that section | 402 |
that are necessary to maintain the fund within the limits | 403 |
established under this section. Not later than the first day of | 404 |
March of each year, the director shall determine the proposed | 405 |
amount of the fee based on the expected volume of agricultural | 406 |
commodities on which the fee is to be collected and that are | 407 |
likely to be handled under this chapter. The director shall make | 408 |
any changes in the previous year's fee in accordance with Chapter | 409 |
119. of the Revised Code. The fee shall become effective on the | 410 |
following first day of June. It shall in no case exceed one-half | 411 |
of one cent per bushel on all agricultural commodities on which | 412 |
the fee is to be paid. | 413 |
(B)(1) If, at the end of any fiscal year, the fund balance | 414 |
exceeds tenfifteen million dollars, less any encumbered balances | 415 |
or pending or unsettled claims, the fee required under division | 416 |
(B) of section 926.16 of the Revised Code shall be waived until | 417 |
the director, with the consent of the commodity advisory | 418 |
commission created in section 926.32 of the Revised Code, | 419 |
reinstates the fee to maintain the liquidity of the fund as | 420 |
provided in division (B)(2) of this section. | 421 |
(2) If, at any time, the director determines that the fund | 422 |
balance, less any encumbered balances or pending or unsettled | 423 |
claims, is less than eightten million dollars, the director, with | 424 |
the consent of the commodity advisory commission, may reinstate | 425 |
the fee required under division (B) of section 926.16 of the | 426 |
Revised Code. If the director reinstates the fee, the director | 427 |
shall notify all licensed handlers by certified mail, return | 428 |
receipt requested, to begin collecting the fee not later than | 429 |
ninety days after being notified. | 430 |
Sec. 926.18. (A) When a depositor has made a demand for | 431 |
settlement of an obligation concerning an agricultural commodity | 432 |
on which a fee was required to be remitted under section 926.16 of | 433 |
the Revised Code and the licensed handler is experiencing failure, | 434 |
as "failure" is defined in section 926.021 of the Revised Code, | 435 |
and has failed to honor the demand, the depositor, after providing | 436 |
the director of agriculture or the director's authorized | 437 |
representative with evidence of the depositor's demand and the | 438 |
dishonoring of that demand, may file a claim with the director not | 439 |
later than six months after dishonor of the demand for | 440 |
indemnification of the depositor's damages, from the agricultural | 441 |
commodity depositors fund, to be measured as follows: | 442 |
(1) The commodity advisory commission created in section | 443 |
926.32 of the Revised Code shall establish the dollar value of the | 444 |
loss incurred by a depositor holding a receipt or a ticket for | 445 |
agricultural commodities on which a fee was required and that the | 446 |
depositor delivered to the handler under a delayed price | 447 |
agreement, bailment agreement, or feed agreement, or that the | 448 |
depositor delivered to the handler before delivery was due under a | 449 |
contract or other agreement between the depositor and handler. The | 450 |
value shall be based on the fair market price being paid to | 451 |
producers by handlers for the commodities on the date on which the | 452 |
director received notice that the receipt or ticket was dishonored | 453 |
by the handler. All depositors filing claims under this division | 454 |
shall be bound by the value determined by the commission. | 455 |
(iv) The commodities were priced at the time of delivery to | 484 |
the handler, the delivery occurred not more than ninety days prior | 485 |
to the director's suspension of the handler's license under | 486 |
division (E), (G), or (H) of section 926.10 of the Revised Code, | 487 |
the commodities were subject to a written agreement for deferred | 488 |
payment by the handler not later than ninety days following the | 489 |
date of delivery, and the handler failed to pay for the | 490 |
commodities on or before the payment date established in the | 491 |
written agreement. | 492 |
(C) The director, with the approvalrecommendation of the | 506 |
commodity advisory commission, shall determine the validity of all | 507 |
claims presented against the fund. A claim filed under this | 508 |
section for losses on agricultural commodities other than | 509 |
commodities stored under a bailment agreement shall not be valid | 510 |
unless the depositor has made a demand for settlement of the | 511 |
obligation within twelve months after the commodities are priced. | 512 |
Any depositor whose claim has been refused by the director and the | 513 |
commission may appeal the refusal either to the court of common | 514 |
pleas of Franklin county or the court of common pleas of the | 515 |
county in which the depositor resides. | 516 |
(F) If, prior to June 20, 1994, a lawsuit, adversary | 539 |
proceeding, or other legal proceeding is brought against a | 540 |
depositor to recover money or payments from funds to which a | 541 |
depositor has a right of indemnification under this section, and | 542 |
the depositor retains legal counsel resulting in a cost or expense | 543 |
to the depositor, upon the rendering of a judgment or other | 544 |
resolution of the lawsuit, adversary proceeding, or other legal | 545 |
proceeding, the director, in the director's discretion and with | 546 |
the approval of the commodity advisory commission, may authorize | 547 |
indemnification from the fund for attorney's fees paid by the | 548 |
depositor. Any claim made by a depositor for the payment of | 549 |
attorney's fees under this division shall be made in the same | 550 |
manner as a claim under division (A) of this section. | 551 |