60-01-01. Deposit — Classification.

A deposit may be voluntary or involuntary and may be made for safekeeping or for exchange.

60-01-01.1. Definition.

For purposes of this title, “commissioner” means the agriculture commissioner.

60-01-02. Voluntary deposit — Depositor — Depositary — Definitions.

A voluntary deposit is one which is made by one person giving to another with that person’s consent the possession of personal property to keep for the benefit of the former or of a third person. The person giving is called the depositor and the person receiving the depositary.

60-01-03. Involuntary deposits — Definition — Obligation of depositary.

An involuntary deposit is made:

1. By the accidental leaving or placing of personal property in the possession of any person without negligence on the part of its owner; or
2. In cases of fire, shipwreck, inundation, insurrection, riot, or like extraordinary emergencies, by the owner of personal property committing it out of necessity to the care of any person.

The person with whom a thing is so deposited is bound to take charge of it if able to do so.

60-01-04. Deposit for safekeeping — Definition.

A deposit for safekeeping is one in which the depositary is bound to return the identical thing deposited.

60-01-05. Deposit for exchange — Definition.

A deposit for exchange is one in which the depositary is bound only to return a thing corresponding in kind to that which is deposited.

60-01-06. Gratuitous deposit — Definition.

A gratuitous deposit is a deposit for which the depositary receives no consideration beyond the mere possession of the thing deposited.

60-01-07. Involuntary deposit — Gratuitous.

An involuntary deposit is gratuitous, the depositary being entitled to no reward.

60-01-08. Care required by gratuitous depositary.

A gratuitous depositary must use at least slight care for the preservation of the thing deposited.

60-01-09. Duties of gratuitous depositary — Termination of duties.

The duties of a gratuitous depositary cease:

1. Upon the depositary restoring the thing deposited to its owner; or
2. Upon the depositary giving reasonable notice to the owner to remove it and the owner failing to do so within a reasonable time. An involuntary depositary under subsection 2 of section 60-01-03 cannot give such notice until the emergency that gave rise to the deposit has passed.

60-01-10. Storage — Definition — Depositary for hire — Definition.

Storage shall mean a deposit which is not gratuitous. The depositary in such case shall be called a depositary for hire.

60-01-11. Depositary for hire must use ordinary care.

A depositary for hire must use at least ordinary care for the preservation of the thing deposited.

60-01-12. Depositary for hire — Right to compensation.

In the absence of a different agreement or usage, a depositary for hire is entitled to one week’s hire for the sustenance and shelter of living animals during any fraction of a week and to half a month’s hire for the storage of any other property during any fraction of a half month.

60-01-13. Delivery on demand — Exceptions.

A depositary, on demand, must deliver the thing to the person for whose benefit it was deposited, whether the deposit was made for a specified time or not, unless the depositary has a lien upon the thing deposited or has been forbidden or prevented from doing so by the real owner thereof or by an act of the law, and has given notice as required by section 60-01-16.

60-01-14. Demand — Prerequisite to delivery.

A depositary is not bound to deliver a thing deposited without demand even when the deposit is made for a specified time.

60-01-15. Place of delivery.

A depositary must deliver the thing deposited at the depositary’s residence or place of business as may be most convenient for the depositary.

60-01-16. Prompt notice of adverse claims — Given by depositary.

A depositary must give prompt notice, to the person for whose benefit the deposit was made, of any proceedings taken adversely to the person’s interest in the thing deposited which may tend to excuse the depositary from delivering the same to the person.

60-01-17. Notice of wrongful detention.

A depositary who believes that a thing deposited with the depositary is detained wrongfully from its true owner may give the true owner notice of the deposit. If within a reasonable time afterward the true owner does not claim it and sufficiently establish the true owner’s right thereto and indemnify the depositary against the claim of the depositor, the depositary is exonerated from liability to the person to whom the depositary gave the notice, upon returning the thing to the depositor, or assuming in good faith a new obligation changing the depositary’s position in respect to the thing to the depositary’s prejudice.

60-01-18. Delivery to disagreeing owners by depositary.

If a thing deposited is owned jointly or in common by persons who cannot agree upon the manner of its delivery, the depositary may deliver to each the person’s proper share thereof, if it can be done without injury to the thing.

60-01-19. Indemnity to depositary for damages.

A depositor must indemnify the depositary:

1. For all damage caused to the depositary by the defects or vices of the thing deposited.
2. For all expenses necessarily incurred by the depositary about the thing other than such as are involved in the nature of the undertaking.

60-01-20. Care of animals by depositary.

A depositary of living animals must provide them with suitable food and shelter and must treat them kindly.

60-01-21. Deposit — Permission to use.

A depositary may not use the thing deposited nor permit it to be used for any purpose without the consent of the depositor. The depositary may not open it, if it purposely is fastened by the depositor, without the consent of the latter except in case of necessity.

60-01-22. Damages for wrongful use of deposit.

If a thing deposited with a depositary is damaged by the wrongful use thereof by the depositary, the depositary is liable for such damage unless such damage inevitably must have happened though the property had not been used in that manner.

60-01-23. Sale of deposit by depositary — When permissible.

If a thing deposited is in actual danger of perishing before instructions can be obtained from the depositor, the depositary may sell it for the best price obtainable and retain the proceeds as a deposit, giving immediate notice of these proceedings to the depositor.

60-01-24. Presumption of willfulness or gross negligence.

If a thing is lost or injured during its deposit and the depositary refuses to inform the depositor of the circumstances under which the loss or injury occurred so far as the depositary has information concerning them, or if the depositary willfully misrepresents the circumstances to the depositor, the depositary is presumed to have permitted the loss or injury to occur willfully or by gross negligence.

60-01-25. Measure of liability of depositary for negligence.

The liability of a depositary for negligence cannot exceed the amount which the depositor informs the depositary, or which the depositary has reason to suppose, the thing deposited is worth.

60-01-26. When deposit may be terminated.

In the absence of an agreement as to the length of time during which a deposit is to continue, it may be terminated by the depositor at any time and by the depositary upon reasonable notice.

60-01-27. Termination of deposit by payment for full time.

Notwithstanding an agreement respecting the length of time during which a deposit is to continue, it may be terminated by the depositor on paying all that would become due to the depositary in case the deposit continued for such length of time.

60-01-28. Sale of unclaimed and perishable property.

The provisions of sections 8-03-09 and 8-03-10 relating to the sale of unclaimed and perishable property shall apply to hotelkeepers and warehousemen.

60-01-29. Hotelkeeper’s liability for loss or injury to guest’s property.

No hotelkeeper who constantly has in the hotelkeeper’s inn or hotel a metal safe or suitable vault in good order and fit for the custody of money, bank notes, jewelry, articles of gold and silver manufacture, precious stones, personal ornaments, railroad mileage books or tickets, negotiable or valuable papers and bullion, and who keeps on the doors of the sleeping rooms used by guests suitable locks or bolts, and on the transoms and windows of said rooms suitable fastenings, and who keeps a copy of this section printed in distinct type constantly posted in not less than ten conspicuous places in said hotel or inn, shall be liable for loss or injury suffered by any guest, unless such guest has offered to deliver the same to such innkeeper or hotelkeeper for custody in such metal safe or vault, and such innkeeper or hotelkeeper has omitted or refused to take it and deposit it in such safe or vault for custody and to give such guest a receipt therefor. The keeper of any inn or hotel shall not be obliged to receive from any one guest for deposit in such safe or vault any property hereinbefore described exceeding the total value of three hundred dollars and shall not be liable for any excess for such property, whether received or not.

60-01-30. Special arrangement between hotelkeeper and guest.

A hotelkeeper by a special arrangement with a guest may receive for deposit in a safe or vault of the character mentioned in section 60-01-29 any property upon such terms as such keeper and guest may agree to in writing, but every hotelkeeper shall be liable for any loss of the articles enumerated in section 60-01-29 of a guest in the hotel after said articles have been accepted for deposit, if such loss is caused by theft or negligence of the hotelkeeper or any of the hotelkeeper’s servants.

60-01-31. Duties of guest and hotelkeeper.

Every guest, and everyone intending to be a guest, of any hotel, upon delivering any of the person’s baggage or other article of property to the proprietor of the hotel, or to the proprietor’s servants, for safekeeping elsewhere than in the room assigned to the guest, shall demand a check or receipt for such property to evidence the fact of such delivery, and the proprietor shall give such check or receipt. A hotel proprietor shall not be liable for the loss or injury to such baggage or other article of property of the hotel guest unless the same actually has been delivered by such guest to the hotel proprietor or to the proprietor’s servants for safekeeping, or unless the loss or injury occurred through the negligence of the hotel proprietor or of the proprietor’s servants or employees.

60-01-32. Character of liability — Limitations.

The liability of the keeper of a hotel for the loss of or injury to personal property placed by hotel guests under the keeper’s care, other than that described in sections 60-01-29 through 60-01-31, shall be that of a depositary for hire. Such liability, in no case, shall exceed the sum of one hundred fifty dollars for each trunk and its contents, ten dollars for each box, bundle, or package and its contents, and fifty dollars for all other miscellaneous effects, including wearing apparel and personal belongings, unless the hotelkeeper has consented in writing with such guest to assume a greater liability. If the loss or injury is caused by a fire not intentionally produced by the hotelkeeper or the hotelkeeper’s servants, the hotelkeeper is not liable.

60-01-33. Baggage left at hotel or forwarded to hotel — Liability of hotelkeeper.

Whenever a person allows the person’s baggage or property to remain in a hotel after leaving the hotel as a guest, and after the relation of hotelkeeper and guest has ceased, or whenever a person forwards the person’s baggage to a hotel before becoming a guest thereof, and the same is received in such hotel, the hotelkeeper may hold such baggage or property at the risk of the owner.

60-01-34. Finder — Depositary for hire — Assumption of ownership by finder.

One who finds a thing lost is not bound to take charge of it but, if the person does so, the person is thenceforward a depositary for the owner with the rights and obligations of a depositary for hire. Notwithstanding chapters 36-22 and 47-30.2 or any other provision of law, an individual who finds lost personal property or money and places the property or money in the custody of a law enforcement agency is entitled to assume ownership of the property or money if the property or money is not claimed by its owner within two years after the property or money was placed in the custody of the law enforcement agency.

60-01-35. Finder must notify owner.

If the finder of a thing knows or suspects who is the owner, the finder must give such owner notice of the finding with reasonable diligence. If the finder fails to do so, the finder is liable in damages to the owner and has no claim to any reward offered by the owner for the recovery of the thing nor to any compensation for the finder’s trouble or expenses.

60-01-36. Finder may require proof of ownership.

The finder of a thing, before giving it up, may require in good faith, reasonable proof of ownership from any person claiming it.

60-01-37. Compensation and reward to finder.

The finder of a thing is entitled to compensation for all expenses necessarily incurred by the finder in its preservation and for any other services necessarily performed by the finder about it and to a reasonable reward for keeping it.

60-01-38. Storing releases finder from liability.

The finder of a thing may exonerate the finder from liability at any time by placing it on storage with any responsible person of good character at a reasonable expense.

60-01-39. When finder may sell.

The finder of a thing may sell it, if it is a thing which is commonly the subject of sale, when the owner, with reasonable diligence, cannot be found, or, being found, refuses upon demand to pay the lawful charges of the finder in the following cases:

1. When the thing is in danger of perishing or of losing the greater part of its value; or
2. When the lawful charges of the finder amount to two-thirds of its value.

60-01-40. Manner of sale.

A sale under the provisions of section 60-01-39 must be made as the sale of a thing pledged is made.

60-01-41. Claim against owner exonerated by surrender to finder.

The owner of a thing found may exonerate the owner from the claims of the finder by surrendering it to the finder in satisfaction thereof.

60-01-42. Things abandoned by owner.

The provisions of this chapter have no application to things which intentionally have been abandoned by their owner.

60-01-43. Deposit for exchange — Transfer of title.

A deposit for exchange transfers to the depositary the title to the thing deposited and merely creates between the depositary and the depositor the relation of debtor and creditor.

60-02-01. Definitions.

In this chapter, unless the context or subject matter otherwise requires:

1. “Commissioner” means the agriculture commissioner.
2. “Credit-sale contract” means a written contract for the sale of grain pursuant to which the sale price is to be paid or may be paid more than thirty days after the delivery or release of the grain for sale and which contains the notice provided in section 60-02-19.1. If a part of the sale price of a contract for the sale of grain is to be paid or may be paid more than thirty days after the delivery or release of the grain for sale, only such part of the contract is a credit-sale contract.
3. “Deferred-payment contract” means a credit-sale contract for which the amount owed for the sale of grain has been established, but the payment is postponed until a later date.
4. “Grain” means wheat, durum, oats, rye, barley, buckwheat, flaxseed, speltz, safflower, sunflower seeds, tame mustard, peas, beans, soybeans, corn, clover, millet, alfalfa, and any other commercially grown grain or grass seed. “Grain” as defined in this chapter shall not include grain or grass seeds owned by or in the possession of the warehouseman which have been cleaned, processed, and specifically identified for an intended use of planting for reproduction and for which a warehouse receipt has not been issued.
5. “Noncredit-sale contract” means a contract for the sale of grain other than a credit-sale contract.
6. “Public warehouse” means any elevator, mill, warehouse, subterminal, grain warehouse, terminal warehouse, or other structure in which grain is received for storing, buying, selling, shipping, or processing for compensation. Provided, however, that nothing in this chapter shall be construed to require a processor to receive, store, or purchase any lot or kind of grain at said facility.
7. “Public warehouseman” means the person operating a public warehouse that is located or doing business within this state, whether or not such owner or operator resides within this state. The term does not include a person that is permitted to sell seed under chapter 4.1-53, if that person does not store grain for the public and buys grain only for processing and subsequent resale as seed, or an authorized dealer or agent of a seed company holding a permit in accordance with section 4.1-53-38.
8. “Receipts” means grain warehouse receipts, scale tickets, checks, or other memoranda given by a public warehouseman for, or as evidence of, the receipt, storage, or sale of grain except when such memoranda was received as a result of a credit-sale contract.
9. “Receiving station” means any facility other than an individually licensed warehouse that is used by a licensed public warehouseman to receive and temporarily store grain prior to transferring the grain to the warehouseman’s primary licensed warehouse location or delivering it directly to market.

60-02-02. Commissioner — Powers and duties.

The commissioner has the powers and duties enumerated under this chapter.

60-02-03. Duties and powers of the commissioner.

The commissioner has the following powers and duties:

1. Exercise general supervision of the public warehouses of this state, including the handling, weighing, and storing of grain, and the management of public warehouses.
2. Investigate all complaints of fraud and injustice, unfair practices, and unfair discrimination.
3. Examine and inspect, during ordinary business hours, any licensed warehouse, including all books, documents, and records.
4. Require the filing of reports pertaining to the operation of the warehouse.
5. Make all proper rules for carrying out and enforcing any law in this state regarding public warehouses.

60-02-04. Federal licensed inspector.

The commissioner may employ a federal licensed inspector whose duties are enumerated under this chapter and may employ other employees as necessary to carry out the provisions of this chapter.

60-02-05. Grain marketing — Procedure for resolving disputes.

1. If any dispute or disagreement arises between the person receiving and the person delivering grain at any public warehouse in this state as to the proper grade, dockage, vomitoxin level, moisture content, or protein content of any grain, an average sample of at least three pints of the grain in dispute may be taken together by both parties interested. The sample must be certified by each party as a true and representative sample of the grain in dispute on the day the grain was delivered. The sample must be forwarded in a suitable container by parcel post or express, prepaid with the name and address of both parties for inspection by a federal licensed inspector, or a mutually agreed-upon third party, who will examine the grain and adjudge what grade, dockage, vomitoxin level, moisture content, or protein content the sample of grain is entitled to under the inspection rules and grades adopted by the secretary of agriculture of the United States. The person requesting the inspection service shall pay for the inspection. If the grain in question is damp, otherwise out of condition, or if moisture content is in dispute, the sample must be placed in an airtight container. Payment for the grain involved in the dispute must be made and accepted on the basis of the determination made by the federal licensed inspector or third party. However, all other quality factors may also be considered in determining the price of the grain. An appeal of the determination made by a third party other than a federal licensed inspector may be made to a federal licensed inspector. An appeal of the determination made by a federal licensed inspector may be made as provided under the United States Grain Standards Act [Pub. L. 103-354; 108 Stat. 3237; 7 U.S.C. 79(c) and (d)] and under 7 CFR 800.125-800.140. A person not abiding by a final determination is liable for damage resulting from not abiding by the determination.
2. If any dispute or disagreement arises between the person delivering grain and the person receiving grain as to the determination of quality factors of grain purchased or delivered in the state for which inspection rules and grades have not been adopted by the secretary of agriculture of the United States, an average sample of at least three pints of the grain in dispute may be taken together by the parties interested. The sample must be certified by each party as a true and representative sample of the grain in dispute on the day the grain was delivered. If the grain is damp or otherwise out of condition, the sample must be placed in an airtight container. The sample must be forwarded in a suitable container by parcel post or express, prepaid with the name and address of both parties, for inspection by a federal licensed inspector, or a mutually agreed-upon third party, who may examine the grain and determine the quality factors in dispute. The person requesting the inspection service shall pay for the inspection. The determination made by the inspector, or the third party, must be used in the settlement of the dispute.

60-02-05.1. Notice of procedures for resolving disputes over grain.

A public warehouse shall post a notice containing the procedures specified in section 60-02-05 for resolving disputes. The commissioner shall prescribe the form of the notice and shall provide a copy of the notice to each public warehouse. The public warehouseman shall post the notice in the grain inspection room of the warehouse. The notice must specifically mention the procedure for resolving disputes applies to the grade, dockage, moisture content, and protein content of grain and to the quality factors of grain for which inspection rules and grades have not been adopted by the secretary of agriculture of the United States.

60-02-06. Printing and publishing rules. [Repealed]

Repealed by S.L. 1983, ch. 672, § 25.

60-02-06.1. Release of records — Confidentiality.

1. As a condition of licensure under section 60-02-07, an applicant shall agree to provide to the commissioner, upon request, any financial record the commissioner deems relevant for purposes related to:
   1. The issuance or renewal of a public warehouse license; or
   2. An investigation after issuance or renewal of a public warehouse license.
2. As a condition of licensure, an applicant shall file a records release with the commissioner, authorizing the commissioner to obtain from any source any financial record the commissioner deems relevant for purposes related to:
   1. The issuance or renewal of a public warehouse license; or
   2. An investigation after issuance or renewal of a public warehouse license.
3. Any information obtained by the commissioner under this section is confidential and may be provided only:
   1. To federal authorities in accordance with federal law;
   2. To the attorney general, state agencies, and law enforcement agencies, for use in the pursuit of official duties; and
   3. As directed by an order of a court pursuant to a showing of good cause.

60-02-06.2. Public warehouse license — Financial criteria to be met.

1. To be eligible to receive an annual license under section 60-02-07, an applicant shall submit current financial documentation to the commissioner verifying the applicant has satisfactory net worth and working capital, as determined by the commissioner.
2. A licensed public warehouseman or an applicant for initial licensure shall report balance sheets and income statements to the commissioner annually at the time of application for initial licensure or license renewal if the applicant purchased up to ten million dollars worth of grain during the previous licensing period, or intends to purchase up to ten million dollars worth of grain during the first year of operation.
3. As a condition of licensure under section 60-02-07, an applicant shall provide to the commissioner, upon request, any financial record or bank verification release the commissioner deems relevant for the purpose of verifying the financial information of an applicant pursuant to the requirements of this section.
4. As a condition of licensure under section 60-02-07, a new applicant must:
   1. Pass a criminal background check;
   2. Have a satisfactory credit score, as determined by the commissioner; and
   3. Be a responsible person with a good business reputation, as determined by the commissioner, who:
      1. Is in the public warehouse business;
      2. Has knowledge of, and experience with, generally accepted grain warehousing and handling practices;
      3. Is competent and willing to operate a public warehouse in accordance with state and federal regulations; and
      4. Has not committed fraud or a criminal offense indicating a lack of business integrity or honesty that undermines the person’s responsibility as a warehouse operator.

60-02-07. Public warehouse license — Fee.

A license must be obtained from the commissioner for each public warehouse in operation in this state.

1. 1. All licenses issued under this section must be for a period of one year and terminate on the thirty-first day of July in the year of expiration.
   2. An initial annual license application that becomes effective on or after June first does not expire until July thirty-first of the following calendar year.
2. A license may not describe more than one public warehouse nor grant permission to operate any public warehouse other than the one described.
3. 1. The annual license fee for a public warehouse is:
      1. Four hundred dollars for a warehouse that purchased up to one million dollars worth of grain during the previous licensing period, or intends to purchase up to one million dollars worth of grain during the first year of operation;
      2. Eight hundred dollars for a warehouse that purchased more than one million dollars worth of grain but not more than ten million dollars worth of grain during the previous licensing period, or intends to purchase more than one million dollars worth of grain but not more than ten million dollars worth of grain during the first year of operation; and
      3. One thousand two hundred dollars for a warehouse that purchased more than ten million dollars worth of grain during the previous licensing period, or intends to purchase more than ten million dollars worth of grain during the first year of operation.
   2. An application for an annual license renewal that is received after July fifteenth must include an additional one hundred dollar fee per warehouse.
4. If a public warehouseman operates two or more warehouses in the same city or siding, in conjunction with each other and with the same working force, and keeps one set of books and records for all such warehouses, and issues one series of scale tickets, warehouse receipts, checks, and credit-sale contracts for the grain stored and purchased therein, only one license is required for the operation of all such warehouses. When two or more warehouses are operated under one license, the license fee is based upon the combined value of the grain purchased by the warehouses during the previous licensing period.

60-02-07.1. Warehouseman to operate warehouse owned by another.

A warehouseman may operate under its warehouse license a warehouse owned by another person. Storage performed for such person in the entire licensed warehouse is excepted from the storage rate and discrimination provisions contained in sections 60-02-17 and 60-02-20 to the extent of the person’s owned capacity in the warehouse.

60-02-07.2. Receiving stations.

A licensed public warehouseman may establish a receiving station without a separate warehouse license for that facility if all of the following conditions are met:

1. The station is colocated with another licensed public warehouse, the operator of which will take delivery of the grain on behalf of the warehouseman who established the receiving station.
2. The storage space used by the receiving station is used solely by the receiving station and is not licensed as part of the warehouse that is located at that site.
3. The grain taken in by the receiving station is not commingled with other grain at that site.
4. The warehouseman establishing the station requests and receives permission from the commissioner to increase licensed capacity to include the space to be used at the receiving station.
5. Grain received at the receiving station is recorded on scale tickets issued by the warehouseman who established the station and is covered by that warehouseman’s bond.
6. Warehouse-receipted grain received at the receiving station is available for redelivery to the receiptholder at that location even if the station has been closed. A charge for redelivery must be stated in the warehouseman’s redelivery policy.

The storage space used by a receiving station need not be physically disconnected from the facilities of the other licensed warehouse located at that site.

60-02-08. Licensing track buyer — Fee — Regulations. [Repealed]

Repealed by S.L. 1983, ch. 672, § 25.

60-02-09. Bond filed by public warehouseman.

1. Before any license is effective for any public warehouseman under this chapter, the applicant for the license shall file a bond with the commissioner which must:
   1. Be in a sum not less than one hundred thousand dollars for any one warehouse.
   2. Be continuous, unless the corporate surety by certified mail notifies the licensee and the commissioner the surety bond will be canceled ninety days after receipt of the notice of cancellation.
   3. Run to the state of North Dakota for the benefit of all persons storing or selling grain in that warehouse.
   4. Be conditioned:
      1. For the faithful performance of the licensee’s duties as a public warehouseman.
      2. For compliance with the provisions of law and the rules of the commissioner relating to the storage and purchase of grain by such warehouseman.
   5. Specify the location of each public warehouse intended to be covered by such bond.
   6. Be for the specific purpose of:
      1. Protecting the holders of outstanding receipts.
      2. Covering the costs incurred by the commissioner in the administration of chapter 60-04 in the event of the licensee’s insolvency.
   7. Not accrue to the benefit of any person entering into a credit-sale contract with a public warehouseman.
2. The aggregate liability of the surety under a bond does not accumulate for each successive annual license renewal period during which the bond is in force but, for losses during any annual license renewal period, is limited in the aggregate to the bond amount stated or changed by appropriate endorsement or rider.
3. The commissioner shall set the amount of the bond and may require an increase in the amount of any bond as the commissioner deems necessary to accomplish the purposes of this section. The amount of the bond must be:
   1. Based on the dollar value of the grain purchased; and
   2. Calculated using the value of the amount of grain intended to be purchased by a new licensee during the first year of operation, or the three-year rolling annual average of the value of grain purchased at the time of license renewal.
4. The surety on the bond must be a corporate surety company, approved by the commissioner, and authorized to do business within the state. The commissioner may accept cash, a negotiable instrument, or a bond executed by personal sureties in lieu of a surety bond if, in the commissioner’s judgment, the cash, negotiable instrument, or personal surety bond properly will protect the holders of outstanding receipts. One bond only may be given for any line of elevators, mills, or warehouses, owned, controlled, or operated by one individual, firm, corporation, or limited liability company, and the bond must be construed to cover the elevators, mills, or warehouses, as a whole and not a specific amount for each.

60-02-09.1. Bond cancellation — Release of surety.

The surety on a bond is released from all future liability accruing on the bond after the expiration of ninety days from the date of receipt by the commissioner of notice of cancellation by the surety or on a later date specified by the surety. This provision does not operate to relieve, release, or discharge the surety from any liability already accrued or which accrues before the expiration of the ninety-day period. Unless the warehouseman files a new bond at least thirty days before liability ceases, the commissioner, without hearing, shall immediately suspend the warehouseman’s license and the suspension may not be removed until a new bond has been filed and approved by the commissioner. If a license is so suspended, the warehouseman shall give notice of such suspension to each receiptholder having grain stored in the warehouse. The warehouseman shall further notify each receiptholder having grain stored in the warehouse that the grain must be removed from the warehouse or the grain will be priced and redeemed in cash in accordance with section 60-02-41.

60-02-10. Warehouse license to be posted.

The license obtained by a public warehouseman shall be posted in a conspicuous place in the public warehouse.

60-02-10.1. Revocation and suspension.

The commissioner may suspend or revoke the license of any warehouseman for cause upon notice and hearing. Notwithstanding any other provisions of this chapter, the license of a warehouseman must automatically be suspended for failure at any time to have or to maintain either a bond or insurance policy in the amount and type required. During a suspension of a license the warehouseman may, upon the commissioner’s approval, operate the warehouse and purchase or redeliver grain previously received, but may not receive additional grain for purchase, storage, shipping, or processing. Grain may be sold only with the prior approval of the commissioner.

60-02-11. Scale ticket — Contents — Conversion.

1. 1. Every public warehouseman, upon receiving grain into the warehouse, shall issue a uniform scale ticket for each load of grain received. The scale tickets must be numbered consecutively, and one copy of each ticket must be retained and remain as a permanent record. The original ticket must be delivered to the person from which the grain is received, upon receipt of each load of grain.
   2. All scale tickets must be converted into cash, noncredit-sale contracts, credit-sale contracts, or warehouse receipts, within thirty days after the grain is delivered to the warehouse.
2. Nothing in this chapter requires a warehouseman to receive grain for storage. A warehouseman shall publish and post, in a conspicuous place in the warehouse, a publication identifying whether storage will be available to patrons or whether grain will be accepted via cash or a credit-sale contract arrangement.
3. A producer that fails to convert a scale ticket in accordance with subdivision b of subsection 1 forfeits any trust fund or credit-sale contract indemnity fund protection provided under sections 60-02-09, 60-02-19.1, and 60-04-03.1, and chapter 60-10.

60-02-12. Violations of chapter — Criminal penalty — Civil penalty.

1. Any person violating any of the provisions of this chapter or any rule adopted pursuant to this chapter, if punishment is not specifically provided for, is:
   1. Guilty of an infraction; and
   2. Subject to a civil penalty in an amount not to exceed five thousand dollars for each violation.
2. The civil penalty may be adjudicated by a court or by the agriculture commissioner through an administrative hearing .

60-02-13. Purchase by warehouseman — Form of receipt.

There may be printed on each warehouse receipt issued by a warehouseman a receipt executed by the owner for use in case the grain represented thereby is purchased by the warehouseman. The warehouseman shall record the purchase, as to the amount paid per bushel, on the stub record or copy of its warehouse receipt books. The receipt must be in substantially the following form:

Received from , dollars and cents net, in full payment for the grain represented by this warehouse receipt. Gross price per bushel , storage per bushel , net price per bushel . I certify that I am the owner of the grain for which this receipt was issued, and that there are no liens, chattel mortgages, or other claims against the grain represented by this receipt. Dated , . Signed Owner.

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Nothing in this section contained may be construed to affect in any manner the conditions of the storage contract specified in sections 60-02-17 and 60-02-18.

60-02-14. Warehouse receipts — Copy.

Provision must be made for a stub record or copy of each warehouse receipt issued by a warehouseman, showing:

1. The serial number and date of receipt.
2. The kind and grade of grain.
3. The dockage and net weight of the grain.

The record or copy must remain in the possession of the warehouseman for inspection by the commissioner and persons properly interested.

60-02-15. Warehouse receipts issued by public terminal elevators. [Repealed]

Repealed by S.L. 1983, ch. 672, § 25.

60-02-16. Warehouse receipt — Contents and provisions.

A warehouse receipt shall:

1. Be issued only upon the actual delivery of grain to the warehouse for storage.
2. Contain the following provisions:
   1. The place and date when the grain was received;
   2. The name and address of the owner of the grain;
   3. The kind and grade of the grain according to the official standards established by the secretary of agriculture of the United States, except that receipts issued for dry edible beans must reference, in lieu of a grade designation, the number of the scale tickets containing a description of the beans, including the percentage of foreign material, splits, check seed coats, total pick, and moisture; and
   4. The gross weight, dockage, and net weight of the grain according to North Dakota standard weight.
3. Be numbered consecutively and no two receipts bearing the same number and series shall be issued during the same year.
4. Not be altered by any warehouseman by the insertion in such receipt of any language limiting or modifying its liability as imposed by the laws of this state.
5. Contain, either on its face or reverse side, the warehouse and storage contract provided for in section 60-02-17.
6. Have printed upon it the following words: “All storage contracts on grain in store at public grain warehouses terminate on  _________ , as identified in the publication required by section 60-02-17. If storage charges and warehouseman’s advances remain unpaid at the time of termination, the warehouseman may sell a sufficient amount of grain to pay the charges and advances. The receiptholder shall surrender the receipt to the issuing warehouseman for settlement.”

60-02-17. Warehouse and storage contract — Storage rates — Terminal delivery.

1. A warehouse receipt must contain, either on its face or reverse side, the following warehouse and storage contract:
2. A warehouseman shall publish and post, in a conspicuous place in its warehouse, the fees that will be assessed for receiving, storing, processing, or redelivering grain and the termination date of its warehouse receipts. This publication must be filed with the commissioner as a part of the warehouse license process or annual renewal. The fees and termination date must be stated on the warehouse receipt issued for the grain. The fees or termination date may be changed upon filing a revised publication with the commissioner.

This grain is received, insured, and stored subject to the laws and rules of the state of North Dakota, the terms of this contract, and the charges and conditions stated herein and as filed with the North Dakota agriculture commissioner. Upon surrender of this receipt and payment or tender of all applicable charges, the amount, kind, and grade of grain identified in this receipt will be delivered to the person named above or the person’s order as rapidly as due diligence, care, and prudence will permit. At the option of the holder of this receipt, the amount, kind, and grade of grain for which this receipt is issued, upon demand, must be delivered back to the holder at any terminal point customarily shipped to, or at the place where received, upon the payment of any charges for receiving, handling, storage, and insurance and in case of terminal delivery, the payment in addition to the above of the regular freight charges on the gross amount called for by this ticket or in lieu thereof, a receipt issued by a bonded warehouse or elevator company doing business at the terminal point. This receipt does not require the delivery of the identical grain specified herein, but an equal amount of grain of the same kind and grade must be delivered.

60-02-17.1. Warehouse charges for grain owned by the United States. [Repealed]

Repealed by S.L. 1999, ch. 533, § 9.

60-02-18. Covenant against liens may be inserted in warehouse receipt.

A public warehouseman also may insert in the warehouse receipt the following provision:

If any of the grain embraced in this receipt shall prove to be covered by a chattel mortgage or other lien, or the partial or absolute title shall prove to be in someone other than the person to whom this receipt was issued, the same, if discovered before the delivery of the grain, shall be sufficient reason for the refusal to deliver to the holder of the receipt, or if discovered after the delivery of the grain, such delivery shall be deemed an overdelivery for which said holder of this receipt, to whom such delivery is made, shall be accountable.

60-02-19. Warehouse receipts issued for grain in special bin. [Repealed]

Repealed by S.L. 1983, ch. 672, § 25.

60-02-19.1. Credit-sale contracts.

1. A warehouseman may not purchase grain by a credit-sale contract except as provided in this section. All credit-sale contracts must be in writing and must be consecutively numbered at the time of printing the contract. The warehouseman shall maintain an accurate record of all credit-sale contract numbers, including the disposition of each numbered form, whether by execution, destruction, or otherwise. Each credit-sale contract must contain or provide for all of the following:
   1. The seller’s name and address.
   2. The conditions of delivery.
   3. The amount and kind of grain delivered.
   4. The price per unit or basis of value.
   5. The date payment is to be made.
   6. The duration of the credit-sale contract.
   7. Notice in a clear and prominent manner that the sale is not protected by the bond coverage provided for in section 60-02-09. However, if the warehouseman has obtained bond coverage in addition to that required by section 60-02-09 and such coverage extends to the benefit of credit-sale contracts, the warehouseman may state the same in the credit-sale contract along with the extent of such coverage.
2. The contract must be signed by both parties and executed in duplicate. An electronic signature satisfies the requirement. An unsigned contract must be considered an unconverted scale ticket in accordance with section 60-02-11. One copy shall be retained by the warehouseman and one copy shall be delivered to the seller. Upon revocation, termination, or cancellation of a warehouseman’s license, the payment date for all credit-sale contracts shall, at the seller’s option, be advanced to a date not later than thirty days after the effective date of the revocation, termination, or cancellation, and the purchase price for all unpriced grain shall be determined as of the effective date of revocation, termination, or cancellation in accordance with all other provisions of the contract. When a public warehouse is transferred under this chapter, credit-sale contracts may be assigned to another licensed public warehouseman.
3. A warehouseman that uses deferred-payment contracts shall offer bond protection to producers.

60-02-20. Discrimination by public warehouseman prohibited — Posting prices.

No public warehouseman shall discriminate:

1. In the buying, selling, receiving, and handling of grain or in the charges made or the service rendered to owners of stored grain;
2. In the receiving of grain offered for sale or storage;
3. In regard to the persons offering such grain for sale or storage; nor
4. Between points or stations except as the marketing factors or transportation costs or grain quality premiums may warrant.

No public warehouseman shall be required to receive for storage any grain which is heating or otherwise out of condition. Storing grain free of charge is prohibited except as prescribed by law. A warehouseman shall post grain prices paid in a conspicuous place in the office or driveway of the warehouseman’s place of business.

60-02-21. Issuance of informal memoranda forbidden — Penalty.

A warehouseman who fails to issue a receipt, as is provided in sections 60-02-13 and 60-02-14, or who issues slips, memoranda, or any other form of receipt embracing a different warehouse or storage contract than is provided for specifically in this chapter, shall be guilty of a class A misdemeanor.

60-02-22. Liability of warehouseman.

A public warehouseman is liable to the owner for the delivery of the kind, grade, quality, and quantity of grain called for by the warehouse receipt. Unless otherwise agreed, the value of any difference in kind, grade, quality, and quantity must be settled at the price on the local market on the day the warehouseman receives written request for delivery. The warehouseman may withhold from delivery a sufficient quantity of grain, based upon the local market price, to satisfy the value of any difference in kind, grade, or quality.

60-02-23. Records to be kept by public warehouseman.

Every public warehouseman shall keep a record of all grain received, stored, and shipped, stating the:

1. Weight.
2. Grade.
3. Dockage for dirt or other causes.
4. Name of owner.
5. Price paid.
6. Storage charge collected.

Any warehouseman whose principal office or headquarters is located outside the state of North Dakota shall make available, if requested, all books, documents, and records relevant to the North Dakota warehouse for inspection during ordinary business hours at any of its warehouses located in the state of North Dakota or other mutually acceptable place.

60-02-24. Reports to be made by public warehouseman — Penalty for failure.

1. Each licensed and bonded public warehouseman shall:
   1. Prepare for each month a report giving facts and information called for on the form of report prepared by the commissioner. The report must contain or be verified by a written declaration the report is made under the penalties of perjury. The report may be called for more frequently if the commissioner deems necessary. Information pertaining to the volume of grain handled is a confidential trade secret and is not a public record. The commissioner may make the information available for use by other governmental entities, but the commissioner may not release the information in a manner that jeopardizes the confidentiality of individual licensees.
   2. File the report with the commissioner not later than the last day of the following month, and failure to file this report promptly will be considered cause for revoking the warehouse license after due notice and hearing.
   3. Keep a separate account of the grain business, if the warehouseman is engaged in handling or selling any other commodity, and under no circumstances may the grain account and other accounts be mixed.
   4. Submit additional information requested by the commissioner pursuant to a report or an inspection within five business days.
2. The commissioner may refuse to renew a license to any public warehouseman that fails to make a required report.

60-02-25. Bailment not a sale.

Whenever any grain shall be delivered to any public warehouse and an unconverted scale ticket or a warehouse receipt is issued therefor, such delivery shall be a bailment and not a sale of the grain so delivered. In no case shall the grain so delivered be liable to seizure upon process of any court in any action against such bailee, except in an action by an owner of such unconverted scale ticket or warehouse receipt to enforce the terms thereof or obtain redelivery of such delivered grain. In the event of the failure or insolvency of the warehouseman, all the grain in the warehouse, whether the same is stored or not, first shall be applied at all times to the satisfaction of receipts issued by the warehouseman.

60-02-25.1. Receiptholder’s lien.

Grain contained in a warehouse, including grain owned by the warehouseman, is subject to a first priority lien in favor of outstanding receiptholders storing, selling, or depositing grain in the warehouse. The lien created under this section shall be preferred to any lien or security interest in favor of any creditor of the warehouseman regardless of the time when the creditor’s lien or security interest attached to the grain. Notice of the lien created under this section need not be filed in order to perfect the lien. The lien created by this section is discharged as to grain sold by the warehouseman to a buyer in the ordinary course of business. Such sale does not discharge the lien in favor of an individual receiptholder in the remaining grain in the warehouse.

60-02-26. Standard weights to be used — Exception.

No person purchasing, selling, or storing grain in any public warehouse in this state shall use any measure for such grain other than the standard bushel, and no number of pounds shall be used or called a bushel other than the number of pounds provided by law as the standard weight of the kind of grain in question, except that during the months of October and November, not exceeding eighty-two pounds [37.19 kilograms], and during the months of December and January, not exceeding seventy-six pounds [34.47 kilograms], may be used as the standard weight per bushel of new ear corn.

60-02-27. Federal grades to control — Grades to be posted.

All public warehousemen shall purchase and store grain except dry edible beans in accordance with the official grades established from time to time by the secretary of agriculture of the United States, except as otherwise provided in rules and regulations applicable thereto adopted by federal officials pursuant to law. Public warehousemen shall post in a conspicuous place in the public warehousemen’s warehouse the official grades so established and also any change that may be made from time to time. Warehousemen of dry edible beans shall purchase, store, and deliver beans in accordance with the policy of the warehousemen which must be filed with the commissioner and posted in a conspicuous place in the warehouse of the public warehousemen. Other grading standards may be used if mutually agreed to in writing by the warehouseman and the owner of the grain. However, the owner may demand the use of federal grading standards. The commissioner, after hearing, may prohibit the use of nonfederal grades.

60-02-28. Grading of grain.

All public warehousemen before testing for grade any grain handled by them shall remove therefrom and make due allowance for any dockage of such grain made by reason of the presence of straw, weed seeds, dirt, or any other foreign matter.

60-02-29. Allowance for dockage — Penalty for violation.

Any public warehouseman within this state, who shall violate the provisions of section 60-02-28, shall be guilty of a class B misdemeanor.

60-02-30. Termination of public grain warehouse storage contracts — Notice to receiptholder.

1. All storage contracts terminate on the date identified in the publication required by section 60-02-17. If a different termination date is not identified in the publication, then all storage contracts on grain in a public grain warehouse terminate on June thirtieth of each year, except for storage contracts on dry edible beans which terminate on April thirtieth of each year.
2. Storage on grain in a public grain warehouse may be terminated by the receiptholder at any time before the applicable date by the payment of all legal charges and the surrender of the warehouse receipt, together with a demand for delivery of the grain in storage, or notice to the public warehouseman to sell the stored grain.
3. Upon the expiration of the storage contract, the warehouseman is not obligated to renew the storage contract.
4. At least thirty days before the termination date of a storage contract, the public warehouseman shall notify the receiptholder by mail of the warehouseman’s intention to terminate the storage contract on the date identified in the storage contract, unless the receiptholder, before that time, demands redelivery, authorizes sale, extends the storage contract, or enters a new contract with the public warehouseman for restorage. Failure to notify the receiptholder, as required by this section, results in the forfeiture of storage charges accrued for the grain during the previous twelve months.
5. In the absence of a demand for delivery, an order to sell, or an agreement between the public warehouseman and the receiptholder for storage after the termination date of the storage contract, the warehouseman, upon the expiration of the storage contract, may sell at the local market price on the close of business on that day, all stored grain of the receiptholder and tender to the receiptholder the proceeds of the sale, less accrued storage charges and the public warehouseman’s advances upon any previous storage contract of the receiptholder.

60-02-31. Notice to owner of termination of storage contract. [Repealed]

Repealed by S.L. 2007, ch. 550, § 2.

60-02-31.1. Delivery of dry edible beans to warehouse receiptholder. [Repealed]

Repealed by S.L. 1991, ch. 696, § 6.

60-02-32. Reissue warehouse receipts — Provisions.

Upon payment of all legal accrued charges and the surrender to the warehouseman of a receipt, if the receiptholder and the warehouseman agree to continue the storage contract, the warehouseman then may extend the storage contract or issue a new warehouse receipt to the owner and cancel the former receipt by endorsing thereon the words: “Canceled by the issuance of warehouse receipt no. _________ ”, inserting the number of the reissue warehouse receipt thereafter, and the holder’s name shall be signed thereto by the holder or by the holder’s authorized agent. The reissue warehouse receipt shall be so designated by stamping thereon: “Reissue of warehouse receipt no. _________ ”.

60-02-33. Delivery of grain — Demand terminates storage charge.

On the return and surrender of any receipt and the payment of all lawful charges, the grain represented therein shall be deliverable to the owner and shall not be subject to any further charge for storage after demand for delivery shall have been made and proper facilities for receiving or shipping the same have been provided. The owner of the receipt shall order the receptacle in which the grain covered by the owner’s receipt is to be transported, and the grain shall be delivered when the receptacle so ordered is in proper condition for loading and is placed at the warehouse. The licensee may not assess receiving or redelivery fees on the grain that is redelivered during a suspension, following a revocation, or when the owner of the grain is taking redelivery because the licensee is unable to pay for the grain.

60-02-34. Refusal to deliver grain — Larceny. [Repealed]

Repealed by S.L. 1975, ch. 106, § 673.

60-02-35. Grain to be kept insured for benefit of owner by warehouseman.

A public warehouseman license is not effective unless all grain in storage or on deposit in the warehouse is kept fully insured at the expense of the warehouseman for the benefit of the owner at the current market value of the grain against loss by fire, lightning, internal explosion, windstorm, cyclone, tornado, and such other risks of direct physical loss as provided by the insurer in a policy approved by the insurance commissioner. An insurance policy covering grain in a public warehouse may not be transferred or assigned to any person for any purpose, except for grain that is not on warehouse receipt or deposit. The insurance policy must be continuous and may only be canceled in accordance with section 60-02-35.1.

60-02-35.1. Insurance — Cancellation — Suspension of license.

An insurance company shall give at least sixty days’ notice to the commissioner and the insured by certified mail return receipt requested before cancellation of an insurance policy required in section 60-02-35. Unless the warehouseman files proof of new or renewed insurance at least thirty days before the existing policy ceases, the commissioner, without hearing, shall immediately suspend the warehouseman’s license and the suspension may not be removed until a new policy has been filed and approved by the commissioner. If a license is so suspended, the warehouseman shall give notice of the suspension to each receiptholder having grain stored in the warehouse. The warehouseman shall further notify each receiptholder having grain stored in the warehouse the grain must be removed from the warehouse or the grain will be priced and redeemed in cash in accordance with section 60-02-41.

60-02-36. Destruction of grain in public warehouse — First lien by holder of outstanding receipt.

The holder of an unconverted scale ticket or warehouse receipt issued by any public warehouseman shall have a first lien, to the extent of the value of the grain at the time of loss at the place where held, on all insurance of the warehouse for any loss sustained by the receiptholder, on account of the loss of such grain by fire, tornado, or any other cause covered by such insurance policy.

60-02-37. Destruction of warehouse — Duty to notify commission. [Repealed]

Repealed by S.L. 2005, ch. 587, § 9.

60-02-38. Refund of license fee by commissioner.

If requested in writing, the commissioner shall refund the license fee of a public warehouse, or so much as in the commissioner’s judgment is just and reasonable, if satisfactory proof is furnished the warehouse has been transferred to some other person, and the new owner has obtained a license for the same warehouse for the unexpired period for which the original license was issued. If a warehouse is destroyed by fire or other cause, the license fee may be prorated as the commissioner may determine.

60-02-39. Warehouse not to be closed without permission from commission — Penalty. [Repealed]

60-02-40. Transfer of warehouse — Redemption of receipts.

If a public warehouseman desires to transfer a warehouse, either by sale or lease to any other individual, firm, or corporation, the warehouseman shall:

1. Notify the commissioner first of the warehouseman’s intention to transfer the warehouse, giving the name and address of the proposed lessee or purchaser.
2. Furnish a statement of all proper claims that may be filed or pending against the warehouseman pertaining to the storage, inspection, and marketing of grain, together with a statement of:
   1. The number of bushels [cubic meters] of grain of each kind and grade in store in the warehouse;
   2. The number and amount of receipts outstanding; and
   3. The names and addresses of the receiptholders.
3. Serve notice by registered or certified mail, at least thirty days before the transfer, upon all receiptholders having claims against the warehouse to call for delivery of the grain covered by the receipts, and to pay all storage charges due, the warehouseman in such case to make no charge for redelivery. The commissioner may waive the thirty-day notice period upon receipt of written consent of all receiptholders.
4. Transfer all stored grain undelivered at the expiration of such thirty-day period to the warehouseman’s successor, if licensed, or to the nearest licensed warehouse for restorage, taking receipts for the same in favor of the owner of the grain so transferred.
5. Surrender to the commissioner the warehouseman’s license for cancellation, at which time the proposed lessee or purchaser shall file in due form for a new license and tender a new bond for review by the commissioner, at which time, the commissioner, first being duly satisfied all the outstanding receipts have been redeemed, or that the redemption of all outstanding receipts has been provided for, the commissioner may permit a new license to become effective for the lessee or purchaser.

No sale, lease, or transfer of any warehouse will be recognized by the commissioner except when made in accordance with the provisions of this section.

60-02-41. Going out of business — Redemption of receipts.

If a public warehouseman ceases business through the destruction of a warehouse by fire or other cause, or through insolvency, the warehouseman shall redeem all outstanding unconverted scale tickets or warehouse receipts at the price prevailing on the date the warehouse was destroyed or closed because of insolvency. The holder of such receipts, upon due notice, shall accept this price and surrender the receipts. Any public warehouseman who voluntarily ceases business or fails to renew an existing warehouse license or whose warehouse license is revoked shall notify the commissioner and all outstanding receiptholders of such closing and redeem all outstanding unconverted scale tickets or warehouse receipts at the price prevailing on the date the warehouse closed or at the option of the owner of the receipt redeliver the kind, grade, and quantity of grain called for by the unconverted scale ticket or warehouse receipt. On commingled grain the value of over and under deliveries in quantity, grade, and protein must be settled in cash and priced on the market on the day of closing.

60-02-42. Cease and desist.

If an entity engages in an activity or practice contrary to the provisions of this chapter or related rules, the commissioner, upon the commissioner’s own motion without complaint, with or without hearing, may order the entity to cease and desist from the activity until further order of the commissioner. Such orders may include any corrective action up to and including license suspensions. Cease and desist orders must be accompanied by a notice of opportunity to be heard on the order within fifteen days of the issuance of the order.

60-02-43. Agricultural contracts — Mediation or arbitration.

If a written contract for the sale of grain does not contain provisions to settle disagreements concerning factors not governed by section 60-02-05, the parties shall attempt to resolve the disagreements through mediation or arbitration.

60-02-44. Licensed warehouse capacity and condominium storage.

Unless an entire warehouse facility is used for nonpublic purposes, all physically connected portions of the facility must be licensed in accordance with this chapter. The warehouseman shall issue receipt memoranda for all grain received. Facilities that are physically connected to the licensed warehouse may be sold under a condominium arrangement or leased to other entities for nonpublic use and sales and lease agreements must be based on the capacity of the bins involved and not on the number of bushels held in the space. The licensee shall provide contents insurance and bond coverage for the space. In case of licensee insolvency, the contents of the space must be considered an asset to the trust fund established under chapter 60-04 and owners and lessees are entitled to trust fund protection in a manner equal to all other valid grain receiptholders.

60-02.1-01. Definitions.

In this chapter, unless the context or subject matter otherwise requires:

1. “Commissioner” means the agriculture commissioner.
2. “Credit-sale contract” means a written contract for the sale of grain pursuant to which the sale price is to be paid or may be paid more than thirty days after the delivery or release of the grain for sale and which contains the notice provided in section 60-02.1-14. If a part of the sale price of a contract for the sale of grain is to be paid or may be paid more than thirty days after the delivery or release of the grain for sale, only such part of the contract is a credit-sale contract.
3. “Deferred-payment contract” means a credit-sale contract for which the amount owed for the sale of grain has been established, but the payment is postponed until a later date.
4. “Facility” means a structure in which grain purchased by a grain buyer is received or held.
5. “Grain” means wheat, durum, oats, rye, barley, buckwheat, flaxseed, speltz, safflower, sunflower seeds, tame mustard, peas, beans, soybeans, corn, clover, millet, alfalfa, and any other commercially grown grain or grass seed. “Grain” does not include grain or grass seeds owned by or in the possession of the grain buyer which have been cleaned, processed, and specifically identified for an intended use of planting for reproduction and for which a warehouse receipt has not been issued.
6. “Grain broker” means a person that:
   1. Is involved in the negotiation of grain transactions in the state;
   2. Receives compensation from at least one party to the transaction; and
   3. Does not take title to the grain and is not under any financial or contractual obligation related to the transaction.
7. “Grain buyer” means any person, other than a public warehouseman as defined in chapter 60-02, that purchases or otherwise merchandises grain for compensation. The term includes roving grain buyers, grain brokers, and grain processors. The term does not include:
   1. A producer of grain that purchases grain from other producers to complete a carload or truckload in which the greater portion of the load is grain grown by the producer or on-farm feedlot operations in which at least fifty percent of the livestock is owned by the owner of the farm.
   2. A person that is permitted to sell seed under chapter 4.1-53, if that person buys grain only for processing and subsequent resale as seed.
   3. A person that is an authorized dealer or agent of a seed company holding a permit in accordance with section 4.1-53-38.
8. “Grain processor” means an entity that purchases grain to process into end products of a substantially different makeup or nature than the original grain.
9. “Noncredit-sale contract” means a contract for the sale of grain other than a credit-sale contract.
10. “Receipts” means scale tickets, checks, or other memoranda given by a grain buyer for, or as evidence of, the receipt or sale of grain except when such memoranda was received as a result of a credit-sale contract.
11. “Roving grain buyer” means a grain buyer that does not operate a facility where grain is received.

60-02.1-02. Commissioner — Powers and duties.

The powers and duties of the commissioner are enumerated in this chapter.

60-02.1-03. Duties and powers of the commissioner.

The commissioner has the duty and power to:

1. Exercise general supervision of grain buyers of this state.
2. Investigate all complaints of fraud and injustice, unfair practices, and unfair discrimination.
3. Examine and inspect, during ordinary business hours, any books, documents, and records.
4. Make all proper rules for carrying out and enforcing any law in this state regarding grain buyers.

60-02.1-03.1. Commissioner’s authority — Grain buyer — Trust assets.

Upon the commissioner’s determination that continued operation of a grain buyer is likely to result in probable loss of assets to receiptholders, the commissioner immediately may suspend, close, or take control of the assets held in a trust fund described in section 60-02.1-30, or take any combination of these actions as the commissioner deems necessary to begin an orderly liquidation of those trust fund assets as provided in this chapter.

60-02.1-04. Federal licensed inspector.

The commissioner may employ a federal licensed inspector whose duties are enumerated in this chapter and may employ other employees as necessary to carry out the provisions of this chapter.

60-02.1-05. Grain marketing — Procedure for resolving disputes.

1. If any dispute or disagreement arises between the person receiving and the person delivering grain as to the proper grade, dockage, vomitoxin level, moisture content, or protein content of any grain, an average sample of at least three pints [1.65 liters] of the grain in dispute may be taken together by both interested parties. The sample must be certified by each party as a true and representative sample of the grain in dispute on the day the grain was transferred. The sample must be forwarded in a suitable container by parcel post or express, prepaid with the name and address of both parties for inspection by a federal licensed inspector, or a mutually agreed-upon third party, who will examine the grain and adjudge what grade, dockage, vomitoxin level, moisture content, or protein content the sample of grain is entitled to under the inspection rules and grades adopted by the secretary of agriculture of the United States. The person requesting the inspection service shall pay for the inspection. If the grain in question is damp, otherwise out of condition, or if moisture content is in dispute, the sample must be placed in an airtight container. Payment for the grain involved in the dispute must be made and accepted on the basis of the determination made by the federal licensed inspector or third party. However, all other quality factors may also be considered in determining the price of the grain. An appeal of the determination made by a third party other than a federal licensed inspector may be made to a federal licensed inspector. An appeal of the determination made by a federal licensed inspector may be made as provided under the United States Grain Standards Act [Pub. L. 103-354; 108 Stat. 3237; 7 U.S.C. 79(c) and (d)] and under 7 CFR 800.125-800.140. A person not abiding by a final determination is liable for damage resulting from not abiding by the determination.
2. If any dispute or disagreement arises between the person delivering grain and the person receiving grain as to the determination of quality factors of grain purchased or delivered in the state for which inspection rules and grades have not been adopted by the secretary of agriculture of the United States, an average sample of at least three pints [1.65 liters] of the grain in dispute may be taken together by the interested parties. The sample must be certified by each party as a true and representative sample of the grain in dispute on the day the grain was transferred. If the grain is damp or otherwise out of condition, the sample must be placed in an airtight container. The sample must be forwarded in a suitable container by parcel post or express, prepaid with the name and address of both parties, for inspection by a federal licensed inspector, or a mutually agreed-upon third party, who may examine the grain and determine the quality factors in dispute. The person requesting the inspection service shall pay for the inspection. The determination made by the inspector, or the third party, must be used in the settlement of the dispute.

60-02.1-06. Notice of procedures for resolving disputes over grain. [Repealed]

60-02.1-06.1. Release of records — Confidentiality.

1. As a condition of licensure under section 60-02.1-07, an applicant shall agree to provide to the commissioner, upon request, any financial record the commissioner deems relevant for purposes related to:
   1. The issuance or renewal of a grain buyer license; or
   2. An investigation after issuance or renewal of a grain buyer license.
2. As a condition of licensure, an applicant shall file a records release with the commissioner, authorizing the commissioner to obtain from any source any financial record the commissioner deems relevant for purposes related to:
   1. The issuance or renewal of a grain buyer license; or
   2. An investigation after issuance or renewal of a grain buyer license.
3. Any information obtained by the commissioner under this section is confidential and may be provided only:
   1. To federal authorities in accordance with federal law;
   2. To the attorney general, state agencies, and law enforcement agencies for use in the pursuit of official duties; and
   3. As directed by an order of a court pursuant to a showing of good cause.

60-02.1-06.2. Grain buyer license — Financial criteria to be met.

1. To be eligible to receive an annual license under section 60-02.1-07, an applicant shall submit current financial documentation to the commissioner verifying the applicant has satisfactory net worth and working capital, as determined by the commissioner.
2. A licensed grain buyer or an applicant for initial licensure shall report balance sheets and income statements to the commissioner annually at the time of application for initial licensure or license renewal if the applicant purchased up to ten million dollars worth of grain during the previous licensing period, or intends to purchase up to ten million dollars worth of grain during the first year of operation.
3. As a condition of licensure under section 60-02.1-07, an applicant shall provide to the commissioner, upon request, any financial record or bank verification release the commissioner deems relevant for the purpose of verifying the financial information of an applicant pursuant to the requirements of this section.
4. As a condition of licensure under section 60-02.1-07, a new applicant must:
   1. Pass a criminal background check;
   2. Have a satisfactory credit score, as determined by the commissioner; and
   3. Be a responsible individual with a good business reputation, as determined by the commissioner, who:
      1. Is in the grain buying business;
      2. Has knowledge of, and experience with, generally accepted grain buying and handling practices;
      3. Is competent and willing to operate as a grain buyer in accordance with state and federal regulations; and
      4. Has not committed fraud or a criminal offense indicating a lack of business integrity or honesty that undermines the person’s responsibility as a grain buyer.

60-02.1-07. Grain buyer license — How obtained — Fee.

1. Grain buyers that purchase, solicit, merchandise, or take possession of grain in this state shall obtain an annual license from the commissioner. Except as provided in this section, each license expires on July thirty-first of each year. If a licensee’s initial license is issued effective after May thirty-first, that license expires on July thirty-first of the following year. The annual license fee for a grain buyer is:
   1. Four hundred dollars for a grain buyer that purchased up to one million dollars worth of grain during the previous licensing period, or intends to purchase up to one million dollars worth of grain during the first year of operation;
   2. Eight hundred dollars for a grain buyer that purchased more than one million dollars worth of grain but not more than ten million dollars worth of grain during the previous licensing period, or intends to purchase more than one million dollars worth of grain but not more than ten million dollars worth of grain during the first year of operation; and
   3. One thousand two hundred dollars for a grain buyer that purchased more than ten million dollars worth of grain during the previous licensing period, or intends to purchase more than ten million dollars worth of grain during the first year of operation.
2. A license renewal application that is received after July fifteenth must be assessed an additional one hundred dollar fee per receiving location.
3. A license issued under this section is not transferable.
4. The commissioner may refuse to issue, renew, or may revoke a license:
   1. If the licensee or applicant has been convicted of a criminal offense;
   2. If the licensee or applicant has failed to comply with the requirements of this section;
   3. If the commissioner has evidence the licensee negotiated in bad faith; or
   4. For any other reason determined by the commissioner.
5. A licensed grain buyer shall submit a monthly report to the commissioner by the tenth day of each month. The report must include the total volume of each commodity brokered in the preceding month.
6. A licensed grain buyer shall notify each potential commodity seller of the identity of the potential commodity buyer before the final confirmation of the transaction.
7. Before a license is effective for a grain buyer under this section, the licensee or applicant shall file a bond with the commissioner for not less than one hundred thousand dollars.

60-02.1-07.1. Roving grain buyer license — How obtained — Fee. [Repealed]

60-02.1-08. Bond filed by grain buyer.

1. Before any license is effective for any grain buyer under this chapter, the applicant for the license shall file a bond with the commissioner which must:
   1. Be in a sum not less than one hundred thousand dollars.
   2. Be continuous, unless the corporate surety by certified mail notifies the licensee and the commissioner the surety bond will be canceled ninety days after receipt of the notice of cancellation.
   3. Run to the state of North Dakota for the benefit of all persons selling grain to or through the grain buyer.
   4. Be conditioned:
      1. For the faithful performance of the licensee’s duties as a grain buyer.
      2. For compliance with the provisions of law and the rules of the commissioner relating to the purchase of grain by such grain buyer.
   5. Be for the specific purpose of:
      1. Protecting the sellers of grain.
      2. Covering the costs incurred by the commissioner in the administration of the licensee’s insolvency.
   6. Not accrue to the benefit of any person entering a credit-sale contract with a grain buyer.
2. The aggregate liability of the surety under a bond does not accumulate for each successive annual license renewal period during which the bond is in force but, for losses during any annual license renewal period, is limited in the aggregate to the bond amount stated or changed by appropriate endorsement or rider.
3. The commissioner shall set the amount of the bond and may require an increase in the amount of any bond as the commissioner deems necessary to accomplish the purposes of this section.
4. The amount of the bond for a grain buyer must be based on the dollar value of the grain purchased, solicited, or merchandised.
5. A grain buyer shall report purchases, solicitations, and merchandising agreements to the commissioner monthly.
6. The surety on the bond must be a corporate surety company, approved by the commissioner, and authorized to do business within the state. The commissioner may accept cash, a negotiable instrument, or a bond executed by personal sureties in lieu of a surety bond when, in the commissioner’s judgment, cash, a negotiable instrument, or a personal surety bond properly will protect the holders of outstanding receipts.

60-02.1-09. Bond cancellation — Release of surety.

The surety on a bond is released from all future liability accruing on the bond after the expiration of ninety days from the date of receipt by the commissioner of notice of cancellation by the surety or on a later date specified by the surety. This provision does not operate to relieve, release, or discharge the surety from any liability already accrued or which accrues before the expiration of the ninety-day period. Unless the grain buyer files a new bond at least thirty days before liability ceases, the commissioner, without hearing, shall immediately suspend the grain buyer’s license and the suspension may not be removed until a new bond has been filed and approved by the commissioner.

60-02.1-10. Grain buyer license to be posted or carried — Penalty.

A grain buyer shall have the buyer’s license in possession at all times. A grain buyer that transacts business without first procuring a license and giving a bond is guilty of a class B misdemeanor.

60-02.1-11. Revocation and suspension.

The commissioner may suspend or revoke the license of any grain buyer for cause upon notice and hearing. Notwithstanding any other provisions of this chapter, the license of a grain buyer must automatically be suspended for failure at any time to maintain a bond.

60-02.1-12. Scale ticket — Contents.

Every grain buyer, upon receiving grain, shall issue a uniform scale ticket or comparable receipt for each load of grain received. Receipts must be numbered consecutively and one copy of each receipt must be retained and remain as a permanent record. The original receipt must be delivered to the person from whom the grain is received, upon receipt of each load of grain.

60-02.1-13. Violations of chapter — Criminal penalty — Civil penalty.

1. Any person violating any provision of this chapter or any rule adopted pursuant to this chapter, if punishment is not specifically provided for, is:
   1. Guilty of an infraction; and
   2. Subject to a civil penalty in an amount not to exceed five thousand dollars for each violation.
2. The civil penalty may be adjudicated by a court or by the agriculture commissioner through an administrative hearing.

60-02.1-14. Credit-sale contracts.

1. A grain buyer may not purchase grain by a credit-sale contract except as provided in this section. All credit-sale contracts must be in writing and must be consecutively numbered at the time of printing the contract. The grain buyer shall maintain an accurate record of all credit-sale contract numbers, including the disposition of each numbered form, whether by execution, destruction, or otherwise. Each credit-sale contract must contain or provide for all of the following:
   1. The seller’s name and address.
   2. The conditions of delivery.
   3. The amount and kind of grain delivered.
   4. The price per unit or basis of value.
   5. The date payment is to be made.
   6. The duration of the credit-sale contract.
   7. Notice in a clear and prominent manner that the sale is not protected by the bond coverage provided for in section 60-02.1-08. However, if the grain buyer has obtained bond coverage in addition to that required by section 60-02.1-08 and the coverage extends to the benefit of credit-sale contracts, the grain buyer may state that fact in the credit-sale contract along with the extent of such coverage.
2. The contract must be signed by both parties and executed in duplicate. An electronic signature satisfies the requirement. A holder of an unsigned contract is not eligible for any protection provided by chapter 60-10. One copy must be retained by the grain buyer and one copy must be delivered to the seller. Upon revocation, termination, or cancellation of a grain buyer’s license, the payment date for all credit-sale contracts, at the seller’s option, must be advanced to a date not later than thirty days after the effective date of the revocation, termination, or cancellation, and the purchase price for all unpriced grain must be determined as of the effective date of revocation, termination, or cancellation in accordance with all other provisions of the contract.
3. A buyer that offers deferred-payment contracts shall offer bond protection to producers.

60-02.1-15. Discrimination by grain buyer prohibited.

1. A grain buyer may not discriminate:
   1. In the buying, selling, receiving, and handling of grain or in the charges made or the service rendered to owners of purchased grain;
   2. In the receiving of grain offered for sale, but this chapter may not be construed to require a processor to receive or purchase any lot or kinds of grain;
   3. In regard to the persons offering such grain for sale; or
   4. Between points or stations except as the marketing factors or transportation costs or grain quality premiums may warrant.
2. A grain buyer is not required to receive any grain that is heating or otherwise out of condition.

60-02.1-16. Records required to be kept by grain buyers.

Each grain buyer shall keep such accounts, records, and memoranda concerning the buyer’s dealing as such grain buyer as may be required by the commissioner and shall make such reports of purchases of grain as may be required by the rules adopted by the commissioner. The commissioner at all times must have access to such accounts, records, and memoranda.

60-02.1-17. Reports to be made by grain buyers — Penalty for failure.

1. Each licensed and bonded grain buyer shall:
   1. Prepare for each month a report giving facts and information called for on the form of report prepared by the commissioner. The report must contain or be verified by a written declaration the report is made under the penalties of perjury. The report may be called for more frequently if the commissioner deems necessary. Information pertaining to the volume of grain handled is a confidential trade secret and is not a public record. The commissioner may make this information available for use by other governmental entities, but the information may not be released by those entities in a manner that jeopardizes the confidentiality of individual licensees.
   2. File the report with the commissioner not later than the last day of the following month. Failure to file this report promptly will be considered cause for revoking the grain buyer license after due notice and hearing.
   3. Keep a separate account of the grain business, if the grain buyer is engaged in handling or selling any other commodity, and under no circumstances may the grain account and other accounts be mixed.
   4. Submit additional information requested by the commissioner pursuant to a report or an inspection within five business days.
2. The commissioner may refuse to renew a license to any grain buyer that fails to make a required report.

60-02.1-18. Standard weights to be used — Exception.

A person purchasing grain may not use any measure for such grain other than the standard bushel, and a number of pounds may not be used or called a bushel other than the number of pounds provided by law as the standard weight of the kind of grain in question, except that during the months of October and November, not exceeding eighty-two pounds [37.19 kilograms], and during the months of December and January, not exceeding seventy-six pounds [34.47 kilograms], may be used as the standard weight per bushel of new ear corn.

60-02.1-19. Federal grades to control — Grades to be posted.

All grain buyers shall purchase grain, except dry edible beans, in accordance with the official grades established from time to time by the secretary of agriculture of the United States, except as otherwise provided in applicable rules and regulations adopted by federal officials pursuant to law. A grain buyer of dry edible beans shall purchase and deliver beans in accordance with the buyer’s policy, which must be filed with the commissioner and, if applicable, posted in a conspicuous place in the buyer’s facility. Other grading standards may be used if mutually agreed to in writing by the grain buyer and the owner of the grain. However, the owner may demand the use of federal grading standards. After hearing, the commissioner may prohibit the use of nonfederal grades.

60-02.1-20. Grading of grain — Penalty.

All grain buyers before testing for grade any grain handled by them shall remove therefrom and make due allowance for any dockage of such grain made by reason of the presence of straw, weed seeds, dirt, or any other foreign matter. Any grain buyer within this state who violates this provision is guilty of a class B misdemeanor.

60-02.1-21. Grain to be kept insured for benefit of owner by grain buyer.

A license may not be issued to a grain processor unless all company-owned and unconverted scale ticket grain is kept fully insured at the expense of the grain buyer for the benefit of the owner at the current market value of the grain against loss by fire, lightning, internal explosion, windstorm, cyclone, tornado, and such other risks of direct physical loss as provided by the insurer in a policy approved by the insurance commissioner. An insurance policy may not be transferred or assigned to any person for any purpose.

60-02.1-22. Insurance — Cancellation — Suspension of license.

An insurance company shall give at least sixty days’ notice to the commissioner and the insured by registered mail return receipt requested before cancellation of an insurance policy required in section 60-02.1-21. Unless the grain buyer files proof of new or renewed insurance at least thirty days before the existing policy ceases, the commissioner, without hearing, shall immediately suspend the grain buyer’s license and the suspension may not be removed until a new policy has been filed and approved by the commissioner.

60-02.1-23. Destruction of grain — First lien by holder of outstanding receipt.

The holder of an unconverted scale ticket or other comparable receipt issued by any grain processor shall have a first lien, to the extent of the value of the grain at the time of loss at the place where held, on all insurance of the grain buyer for any loss sustained by the receiptholder, on account of the loss of such grain by fire, tornado, or any other cause covered by such insurance policy.

60-02.1-24. Destruction of facility — Duty to notify commission. [Repealed]

Repealed by S.L. 2005, ch. 588, § 4.

60-02.1-25. Facility not to be closed without permission from commission — Penalty. [Repealed]

60-02.1-26. Transfer of facility — Redemption of receipts. [Repealed]

60-02.1-27. Going out of business — Redemption of receipts. [Repealed]

60-02.1-28. Insolvency of grain buyer.

A licensee is insolvent when the licensee refuses, neglects, or is unable upon proper written demand, including electronic communication, to make payment for grain purchased or marketed by the licensee or is unable to make redelivery upon proper written demand, including electronic communication. The licensee may not assess receiving or redelivery fees on grain that is redelivered during a suspension, following a revocation, or when the owner of the grain is taking redelivery because the licensee is unable to pay for the grain.

60-02.1-29. Appointment of commissioner.

Upon the insolvency of any grain buyer, the commissioner shall act as trustee of the trust fund described in section 60-02.1-30.

60-02.1-30. Trust fund established.

Upon the insolvency of any licensee, a trust fund must be established for the benefit of noncredit-sale receiptholders and to pay the costs incurred by the commissioner in the administration of the insolvency. The trust fund must consist of the following:

1. Nonwarehouse receipt grain of the insolvent licensee held in storage or the proceeds obtained from the conversion of such grain.
2. The proceeds, including accounts receivable, from any grain sold from the time of the filing of the claim that precipitated an insolvency until the commissioner is appointed trustee must be remitted to the commissioner and included in the trust fund.
3. The proceeds of insurance policies on destroyed grain.
4. The claims for relief, and proceeds from the claims for relief, for damages upon bond given by the licensee to ensure faithful performance of the duties of a licensee.
5. The claim for relief, and proceeds from the claim for relief, for the conversion of any grain stored in the warehouse.
6. Unencumbered accounts receivable for grain sold prior to the filing of the claim that precipitated an insolvency.
7. Unencumbered equity in grain hedging accounts.
8. Unencumbered grain product assets.

60-02.1-31. Joinder of surety — Deposit of proceeds.

Each surety on the insolvent licensee’s bonds must be joined as a party to the insolvency proceeding. If it is in the best interests of the receiptholders, the court may order a surety to deposit some or all of the penal sum of the bond into the trustee’s trust account pending determination of the surety’s liability under the bond.

60-02.1-31.1. Joinder — Grain broker.

A licensed grain broker may be joined as a party to an insolvency proceeding if the commissioner determines the grain broker negotiated a grain transaction:

1. With an insolvent grain buyer; or
2. That was discriminatory, predatory, or in bad faith.

60-02.1-32. Notice to receiptholders and credit-sale contract claimants.

Upon the commissioner’s appointment, the commissioner may take possession of relevant books and records of the licensee. If the insolvency involves a roving grain buyer, the commissioner shall publish a notice of the commissioner’s appointment once each week for two consecutive weeks in all daily newspapers in the state and may notify, by ordinary mail, the holders of record of outstanding receipts and those who are potential credit-sale contract claimants, disclosed by the licensee’s records. If the insolvency involves a grain processor, the notice must be published once each week for two consecutive weeks in a newspaper in the county in which the facility is located. The notice must require outstanding receiptholders and credit-sale contract claimants to file their claims with the commissioner along with the receipts, contracts, or other evidence of the claims required by the commissioner. If an outstanding receiptholder or credit-sale contract claimant fails to submit a claim within forty-five days after the last publication of the notice or a longer time set by the commissioner, the commissioner is relieved of further duty in the administration of the insolvency on behalf of the receiptholder or credit-sale contract claimant and the receiptholder may be barred from participation in the trust fund, and the credit-sale contract claimant may be barred from payment for any amount due. Outstanding receiptholders and credit-sale contract claimants are not parties to the insolvency action unless admitted by the court upon a motion for intervention.

60-02.1-33. Remedy of receiptholders.

A receiptholder does not have a separate claim for relief upon any insolvent licensee’s bond, nor for insurance, nor against any person converting grain, nor against any other receiptholder, except through the trustee, unless, upon demand of five or more receiptholders, the commissioner fails or refuses to apply for the commissioner’s own appointment or unless the district court denies the application. This chapter does not prohibit any receiptholder, either individually or in conjunction with other receiptholders, from pursuing concurrently any other remedy against the person or property of the licensee.

60-02.1-34. Commissioner to marshall trust assets.

Upon the commissioner’s appointment, the commissioner shall marshall all of the trust fund assets. The commissioner may maintain suits in the name of the state of North Dakota for the benefit of all receiptholders against the licensee’s bonds, insurers of grain, any person who may have converted any grain, and any person who may have received preferential treatment by being paid by the insolvent licensee after the first default.

60-02.1-35. Power of commissioner to prosecute or compromise claims.

The commissioner may:

1. Prosecute any action provided in sections 60-02.1-28 through 60-02.1-38 in any court in this state or in any other state.
2. Appeal from any adverse judgment to the courts of last resort.
3. Settle and compromise any action if it will be in the best interests of the receiptholders.
4. Settle and compromise any action if it is in the best interests of the credit-sale contract claimants.
5. Upon payment of the amount of any settlement or of the full amount of any bond, exonerate the person so paying from further liability growing out of the action.

60-02.1-36. Money received by trustee — Deposited in Bank of North Dakota.

All funds received by the commissioner as trustee must be deposited in the Bank of North Dakota.

60-02.1-37. Report of trustee to court — Approval — Distribution.

1. Upon the receipt and evaluation of claims, the commissioner shall file with the court a report showing the amount and validity of each claim after recognizing:
   1. Relevant liens or pledges.
   2. Relevant assignments.
   3. Relevant deductions due to advances or offsets accrued in favor of the licensee.
   4. In case of relevant cash claims or checks, the amount of the claim.
   5. In case of a relevant credit-sale contract or noncredit-sale contract, the amount remaining to be paid based on the terms of the contract.
2. The report must also contain the proposed reimbursement to the commissioner for the expenses of administering the insolvency, the proposed distribution of the trust fund assets to receiptholders, less expenses incurred by the commissioner in the administration of the insolvency, and the proposed credit-sale contract indemnity fund payments to credit-sale contract claimants. If the trust fund is insufficient to redeem all receiptholder claims in full, the report should list the funds as prorated.
3. The court shall set a hearing and the appropriate notice for interested persons to show cause why the commissioner’s report should not be approved and distribution of the trust fund be made as proposed. Copies of the report and notice of hearing must be served by the commissioner by certified mail upon the licensee and the surety and by ordinary mail upon all persons having claims filed with the commissioner.
4. Any aggrieved person having an objection to the commissioner’s report shall file the objection with the court and serve copies on the commissioner, the licensee, and the surety at least twenty days before the hearing. Failure to file and serve objections in the time set is a waiver of the objection.
5. Following the hearing, the court shall approve or modify the report and issue an order directing payment of the necessary bond proceeds, distribution of the trust fund, payments from the credit-sale contract indemnity fund, and discharge of the commissioner from the commissioner’s trust.

60-02.1-38. Filing fees and court costs — Expenses.

The commissioner may not be required to pay any filing fee or other court costs or disbursements. The attorney general may appoint outside legal counsel to assist the commissioner in the prosecution of the action and the cost of employing outside counsel must be paid from the trust fund and the credit-sale contract indemnity fund as appropriate. All other necessary expenses incurred by the commissioner in carrying out the provisions of this chapter, including adequate insurance to protect the commissioner, the commissioner’s employees, and others engaged in carrying out the provisions of sections 60-02.1-28 through 60-02.1-38, must be reimbursed to the commissioner from the trust fund and credit-sale contract indemnity funds as appropriate.

60-02.1-39. Cease and desist.

If an entity engages in an activity or practice that is contrary to the provisions of this chapter or related rules, the commissioner, upon the commissioner’s own motion without complaint, with or without hearing, may order the entity to cease and desist from the activity until further order of the commissioner. Such orders may include any corrective action up to and including license suspensions. Cease and desist orders must be accompanied by a notice of opportunity to be heard on the order within fifteen days of the issuance of the order.

60-02.1-40. Agricultural contracts — Mediation and arbitration.

If a written contract for the sale of grain does not contain provisions to settle disagreements concerning factors not governed by section 60-02.1-05, the parties shall attempt to resolve the disagreements through mediation or arbitration.

60-02.1-41. Roving grain buyers — Exception — Applicability of provisions.

Notwithstanding any other law, this chapter does not apply to any person that purchases, solicits, or merchandises grain, which has been cleaned, processed, and made ready for consumption, from a public warehouseman licensed and bonded under chapter 60-02. If the person engages in any activity other than those described in this section, the person is subject to the law governing those other activities.

60-03-01. Definitions. [Repealed]

60-03-01.1. Duties and powers of the commission. [Repealed]

60-03-02. License — How obtained — Fee. [Repealed]

60-03-03. Subject to public warehouse laws. [Repealed]

Repealed by S.L. 1999, ch. 534, § 16.

60-03-04. Bond filing by hay buyer. [Repealed]

60-03-04.1. Credit-sale contract. [Repealed]

60-03-05. Hay buyer must carry license — Penalty for transacting business without license and giving a bond. [Repealed]

60-03-06. Penalty. [Repealed]

60-03-07. Commission makes rules and regulations governing roving grain or hay buyers. [Repealed]

Repealed by S.L. 1983, ch. 673, § 10.

60-03-08. Revocation and suspension. [Repealed]

60-03-09. Procedure for revocation of license. [Repealed]

Repealed by S.L. 1983, ch. 673, § 10.

60-03-09.1. Complaint procedure. [Repealed]

Repealed by S.L. 1989, ch. 743, § 17.

60-03-10. Records required to be kept by hay buyer — Reports. [Repealed]

60-03-11. Hay buyer’s fee — Paid into state treasury. [Repealed]

60-03-12. Insolvency of hay buyer. [Repealed]

60-03-13. Appointment of commission. [Repealed]

60-03-14. Trust fund established. [Repealed]

60-03-15. Joinder of surety — Deposit of proceeds. [Repealed]

60-03-16. Notice to claimants. [Repealed]

60-03-17. Remedy of claimants. [Repealed]

60-03-18. Commission to marshall trust assets. [Repealed]

60-03-19. Power of commission to prosecute or compromise claims. [Repealed]

60-03-20. Money received by trustee — Deposited in Bank of North Dakota. [Repealed]

60-03-21. Report of trustee to court — Approval — Distribution. [Repealed]

60-03-22. Filing fees and court costs — Expenses. [Repealed]

60-04-01. Definitions.

In this chapter, unless the context or subject matter otherwise requires:

1. “Commissioner” means the agriculture commissioner.
2. “Credit-sale contract” means a written contract for the sale of grain pursuant to which the sale price is to be paid or may be paid more than thirty days after the delivery or release of the grain for sale and which contains the notice provided in section 60-02-19.1. When a part of the sale price of a contract for the sale of grain is to be paid or may be paid more than thirty days after the delivery or release of the grain for sale, only such part of the contract is a credit-sale contract.
3. “Grain” means wheat, durum, oats, rye, barley, buckwheat, flaxseed, speltz, safflower, sunflower seeds, tame mustard, peas, beans, soybeans, corn, clover, millet, alfalfa, and any other commercially grown domestic grain or grass seed. “Grain” as defined in this chapter does not include grain or grass seeds owned by or in the possession of the warehouseman that have been cleaned, processed, and specifically identified for an intended use of planting for reproduction and for which a warehouse receipt has not been issued.
4. “Public warehouse” means any elevator, mill, warehouse, subterminal, grain warehouse, terminal warehouse, or other structure or facility in which grain is received for storing, buying, selling, or shipping for compensation. Provided, however, that nothing in this chapter requires any warehouseman doing manufacturing business only, to receive, store, or purchase any kind of grain at said mill.
5. “Public warehouseman” means the person owning or operating a public warehouse which is located or doing business within this state, whether such owner or operator resides within this state or not.
6. “Receipts” means grain warehouse receipts, scale tickets, checks, or other memoranda given by a public warehouseman for, or as evidence of, the receipt, storage, or sale of grain except when such memoranda was received as a result of a credit-sale contract.

60-04-02. Insolvency of warehouseman.

A licensee is insolvent when the licensee refuses, neglects, or is unable upon proper written demand, including electronic communication, to make payment for grain purchased or marketed by the licensee or to make redelivery or payment for grain stored.

60-04-03. Appointment of commissioner.

Upon the insolvency of any warehouseman, the commissioner shall act as trustee of the trust fund described in section 60-04-03.1.

60-04-03.1. Trust fund established.

1. Upon the insolvency of any warehouseman, a trust fund must be established:
   1. For the benefit of noncredit-sale receiptholders of the insolvent warehouseman, other than those who have waived their rights as beneficiaries of the trust fund in accordance with section 60-02-11; and
   2. To pay the costs incurred by the commissioner in the administration of this chapter.
2. The trust fund consists of the following:
   1. The grain in the warehouse of the insolvent warehouseman or the proceeds as obtained through the sale of such grain;
   2. The proceeds, including accounts receivable, from any grain sold from the time of the filing of the claim that precipitated an insolvency until the commissioner is appointed trustee;
   3. The proceeds of insurance policies upon grain destroyed in the elevator;
   4. The claims for relief, and proceeds from the claims for relief, for damages upon any bond given by the warehouseman to ensure faithful performance of the duties of a warehouseman;
   5. The claims for relief, and proceeds from the claims for relief, for the conversion of any grain stored in the warehouse;
   6. Unencumbered accounts receivable for grain sold before the filing of the claim that precipitated an insolvency;
   7. Unencumbered equity in grain hedging accounts; and
   8. Unencumbered grain product assets.

60-04-03.2. Possession of grain.

Upon the commissioner’s appointment by the district court, the commissioner shall seek possession of the grain to be included in the trust fund. Upon the commissioner’s possession of any grain in the warehouse, the commissioner shall sell such grain and apply the proceeds to the trust fund.

60-04-03.3. Joinder of surety — Deposit of proceeds.

The surety on the warehouseman’s bond must be joined as a party to the insolvency proceeding upon a motion by the commissioner if the commissioner believes proceeds from the warehouseman’s bond may be needed to redeem outstanding receipts issued by the warehouseman. If it appears in the best interests of the receiptholders, the court may order the surety to deposit the penal sum of the bond, or so much of the sum as may be deemed necessary, into the trustee’s trust account pending a final determination of the surety’s liability under the bond.

60-04-04. Notice to receiptholders and credit-sale contract claimants.

Upon the commissioner’s appointment by the district court, the commissioner may take possession of relevant books and records of the warehouseman. The commissioner shall cause a notice of the commissioner’s appointment to be published once each week for two consecutive weeks in a newspaper in the county in which the warehouse is located and may notify by ordinary mail the holders of record of outstanding receipts and those who are potential credit-sale contract claimants, as shown by the warehouseman’s records. The notices must require outstanding receiptholders and credit-sale contract claimants to file their claims against the warehouseman with the commissioner along with the receipts, contracts, or any other evidence of the claims as required by the commissioner. If an outstanding receiptholder or credit-sale contract claimant fails to submit a claim within forty-five days after the last publication of the notice or a longer time as prescribed by the commissioner, the commissioner is relieved of further duty or action under this chapter on behalf of the receiptholder or credit-sale contract claimant and the receiptholder or credit-sale contract claimant may be barred from payment for any amount due. Outstanding receiptholders and credit-sale contract claimants are not parties to the insolvency action unless admitted by the court upon a motion for intervention.

60-04-05. Remedy of receiptholders.

A receiptholder does not have a separate claim for relief upon the warehouseman’s bond, nor for insurance, nor against any person converting grain, nor against any other receiptholder, except through the trustee, unless, upon demand of five or more receiptholders, the commissioner fails or refuses to apply for the commissioner’s own appointment from the district court or unless the district court denies the application for appointment. This chapter does not prohibit or prevent any receiptholder, either individually or in conjunction with other receiptholders, from pursuing concurrently such other remedy against the person or property of the warehouseman, for the whole, or any deficiency occurring in the redemption, of the receipts.

60-04-06. Commissioner to marshall trust assets.

Upon the commissioner’s appointment by the district court, the commissioner may maintain suits at law or in equity, or any special proceeding, in the name of the state of North Dakota, upon the commissioner’s own relation, but for the benefit of all such receiptholders against:

1. The insurers of grain;
2. The warehouseman’s bond;
3. Any person who may have converted any grain; or
4. Any receiptholder who received more than the receiptholder’s just and pro rata share of grain,

for the purpose of marshalling all of the trust fund assets and distributing the same among the receiptholders. The commissioner shall seek possession of any grain in the warehouse before recourse is had against the insurers of grain, and the remedy against the insurers of grain must be exhausted before recourse is had against the bond, and against the bond before recourse is had against the person honestly converting grain, unless the commissioner deems it necessary to the redemption of the receipts that all the above remedies be pursued at the same time.

60-04-07. Power of commissioner to prosecute or compromise claims.

The commissioner may:

1. Prosecute any action provided in this chapter in any court in this state or in any other state.
2. Appeal from any adverse judgment to the courts of last resort.
3. Settle and compromise any action if it is in the best interests of the receiptholders.
4. Settle and compromise any action if it is in the best interests of the credit-sale contract claimants.
5. Upon payment of the amount of the compromise or of the full amount of any insurance policy, bond, or conversion claim, exonerate the person so compromising or paying in full from further liability growing out of the action.

60-04-07.1. Commissioner’s authority — Warehouseman — Trust assets.

Upon the commissioner’s determination that continued operation of a warehouseman is likely to result in probable loss of assets to receiptholders, the commissioner immediately may suspend, close, or take control of the assets held in a trust fund described in section 60-04-03.1, or take any combination of these actions as the commissioner deems necessary to begin an orderly liquidation of those trust fund assets as provided in this chapter.

60-04-08. Money received by trustee — Deposited in Bank of North Dakota.

All moneys collected and received by the commissioner as trustee under this chapter, pending the marshalling of the fund, must be deposited in the Bank of North Dakota.

60-04-09. Report of trustee to court — Approval — Distribution. [Repealed]

60-04-10. Filing fees and court costs — Expenses.

In any action in a state court in this state, the commissioner may not be required to pay any filing fee or other court costs or disbursements if the fees accrue to the county or to the state. The attorney general may employ outside legal services to assist the commissioner in the prosecution of such action as in the attorney general’s judgment may be necessary and the commissioner shall deduct the expenses of the same from the trust fund and the credit-sale contract indemnity fund as appropriate. All other necessary expenses incurred by the commissioner in carrying out the provisions of this chapter, including adequate insurance to protect the commissioner, the commissioner’s employees, and others engaged in carrying out the provisions of this chapter, must be reimbursed to the commissioner from the trust fund and credit-sale indemnity funds as appropriate.

60-05-01. Public elevators and warehouses — Commissioner may require uniform accounting system.

The commissioner may require every association, copartnership, corporation, or limited liability company conducting a public elevator or warehouse in this state to adopt a uniform accounting system established by the commissioner.

60-05-02. Examination of financial accounts of elevator or warehouse by competent examiner — Request by percentage of stockholders.

The commissioner may install, and if requested by not less than fifteen percent of the partners, stockholders, or members of any association, copartnership, corporation, or limited liability company conducting such public elevator or warehouse, shall install, the uniform system of accounting mentioned in section 60-05-01. The commissioner on the commissioner’s own motion may, or on request of the required percentage of partners, stockholders, or members, the commissioner shall, send a competent examiner to examine the books and financial accounts of the elevator or warehouse. If a request for the examination of the accounts of any association, copartnership, corporation, or limited liability company has been made to the commissioner, as provided for in this section, subsequent examinations must be made at least once every year until the commissioner is requested to discontinue such examination by resolution adopted by the partners, stockholders, or members at any annual meeting. If such examination has been made, the examiner shall report immediately the results of the examination to the president and the secretary of such association, copartnership, corporation, or limited liability company and to the commissioner.

60-05-03. Certificate issued by commissioner after examination of accounts.

If the commissioner is satisfied from the commissioner’s examination that the person, association, copartnership, corporation, or limited liability company examined is solvent and the method of doing business is such as is likely to be beneficial to all of its members or persons interested therein, the commissioner shall issue a certificate, countersigned by the examiner, to the agent or manager. Such certificate must be kept posted conspicuously in the warehouse or elevator of such person, association, copartnership, corporation, or limited liability company and must state:

1. That said methods of doing business are sound.
2. That such person, association, copartnership, corporation, or limited liability company is solvent.
3. That its books and accounts are kept properly.

If the affairs and methods of doing business of such person, association, copartnership, corporation, or limited liability company do not seem sound or satisfactory to the commissioner, the commissioner shall issue a certificate or statement, countersigned by the person who made the examination, stating in what particular and in what respect the business methods practiced or methods of keeping books and accounts of such person, association, copartnership, corporation, or limited liability company are not deemed safe. The commissioner shall mail a copy of the statement or certificate to each of such shareholders or stockholders as may have requested the commissioner to make such examination. The commissioner also shall send a copy to the president and the secretary of such association, copartnership, corporation, or limited liability company.

60-05-04. Fees of examiner for installing and examining accounting system.

For making installation of a uniform accounting system and examining the financial accounts of an elevator or public warehouse, an association, copartnership, corporation, or limited liability company shall pay the examiner a reasonable fee, as determined by the commissioner. In case any such association, copartnership, corporation, or limited liability company shall wrongfully refuse or neglect to pay such fees, then the commissioner may cancel the license to do business. All such fees must be paid into the state treasury. The expenses incurred by the examiner under the provisions of this chapter shall be paid out of the appropriations made by the legislative assembly for this purpose and such expenses must be audited and paid in the same manner as other expenses are audited and paid.

60-05-05. Penalty for interfering with examiner. [Repealed]

Repealed by S.L. 1975, ch. 106, § 673.

60-06-01. Who may make application for warehouse or elevator on railroad right of way.

Any person, firm, corporation, or limited liability company desirous of erecting and operating at or contiguous to any railroad station or siding a warehouse or elevator for the purchase, sale, shipment, or storage of grain or potatoes for the public for hire, may make application in writing to the person, firm, corporation, or limited liability company owning, leasing, or operating the railway at such station or siding for the right, privilege, and easement of erecting and maintaining a public warehouse.

60-06-02. Public warehouse on railroad right of way — Application — Contents.

A written application by a person, firm, corporation, or limited liability company desirous of erecting and operating a public warehouse on a railroad right of way shall contain the following provisions:

1. A description of that portion of the right of way of said railroad on which said person, firm, corporation, or limited liability company desires to erect a warehouse or elevator.
2. The size and capacity of the warehouse or elevator proposed to be erected.
3. The time for which it is desired to maintain said warehouse or elevator.
4. The amount the applicant deems a reasonable compensation for the right, privilege, and easement the applicant desires to acquire.

60-06-03. When applicant is entitled to erect public warehouse.

Upon the payment or tender of money which the applicant deems reasonable compensation for the right, privilege, and easement to erect a public warehouse on a railroad right of way, the applicant immediately shall be entitled to erect, absolutely and unconditionally, the applicant’s warehouse or elevator on such right of way for the time specified in the application made by the applicant and shall become invested immediately with the said right, privilege, and easement. The person, firm, corporation, or limited liability company owning, leasing, or operating said railway at such station or siding immediately shall render the applicant the same service the applicant would be entitled to had the said person, firm, corporation, or limited liability company sold or leased said site to the applicant.

60-06-04. Compensation for right, privilege, and easement — Notice to applicant.

In case the sum tendered under section 60-06-03 is not accepted and the parties cannot agree upon the amount to pay for such right, privilege, and easement, the same shall be ascertained, assessed, and determined by proceedings in the district court of the county in which the station or siding at which the right, privilege, and easement sought is situated. Such court at all times shall be deemed open and in session for the purposes of this chapter. Any person, firm, corporation, or limited liability company to whom application is made for the right to erect and maintain an elevator or warehouse under the provisions of this chapter, within ten days after the receipt of the application, shall notify the applicant in writing of the acceptance or rejection of the amount offered as compensation for the right, privilege, and easement sought to be acquired. Failure to notify the applicant within such time shall be deemed an acceptance of said amount but whether it is accepted or not, the applicant for the site shall be deemed to have acquired the right, privilege, and easement asked for.

60-06-05. Sidetracks to be provided.

Every railroad company or corporation organized under the laws of this state or doing business in this state, upon application in writing, shall provide reasonable sidetrack facilities and running connections between its main track and elevators and warehouses upon or contiguous to its right of way at such stations. Every such railroad corporation shall permit connections to be made and maintained in a reasonable manner with its sidetracks to and from any warehouse or elevator without reference to its size, cost, or capacity, if grain or potatoes are or may be stored. The railroad company is not required to construct or furnish any sidetracks except upon its own land or right of way. Such elevators and warehouses may not be constructed within one hundred feet [30.48 meters] of any existing structure and must be at safe fire distance from the station buildings so as not to conflict essentially with the safe and convenient operation of the road. If stations are ten miles [16.09 kilometers] or more apart the railroad company, if required so to do by the commissioner, shall construct and maintain a sidetrack for the use of shippers between such stations.

60-06-06. Penalty for violation of applicant’s rights. [Repealed]

Repealed by S.L. 1975, ch. 106, § 673.

60-06-06.1. Determination — Expenses.

Any party may petition the commissioner to determine rights governed under this chapter. The commissioner shall determine the matter in accordance with chapter 28-32 and the parties’ rights of appeal are as limited by chapter 28-32. The value of a leaseholder’s improvements may not be considered in determining a reasonable lease rate or selling price. The parties to such a proceeding shall pay the expenses of the proceeding, as determined by the commissioner, directly to the entities owed. The commissioner may adopt rules to carry out this section.

60-06-07. Procedure in district court by applicant.

Proceedings in district court shall be instituted and carried on as follows:

1. The corporation to which the application for the right to maintain and operate an elevator or warehouse on the railroad right of way is made shall present to and file with the district court a petition in writing and under oath specifying and describing:
   1. The right, privilege, and easement sought and attained.
   2. The time for which the same was sought and attained.
   3. The fact that the parties to the proceedings are unable to agree upon the amount of the compensation therefor.
2. A copy of the application for such privilege shall be attached to said petition and thereupon the court at once by its order in writing shall fix a place and a time, not more than twenty days thereafter, where and when the court will try such proceeding and determine the amount of such compensation.
3. A certified copy of this order shall be served at least fifteen days before the time so fixed upon the party who sought and attained the right, privilege, and easement, as a summons is served in a civil action in said court. Such service when made shall be ample notice to and summons for the party so served to appear and join in the proceedings and shall give the court full jurisdiction over the party against whom the proceedings are instituted and the property involved in the proceedings.

60-06-08. Procedure on trial.

At the time and place fixed for determining the compensation for an applicant’s right, privilege, and easement, the court shall proceed immediately to try said matter, without a jury, if the parties consent. If they do not consent and if the time and place fixed for said hearing is at a general or special term of said court where a petit jury has been summoned, the court shall proceed to a hearing of such matter with a jury. In case said proceedings are made returnable at any time other than at a term where a petit jury shall have been summoned, the court shall make an order requiring the selection of twenty-four jurors. Such jury shall be drawn and selected in the manner provided by law for the drawing of jurors for general terms of the district court. From the jurors so returned, a jury shall be selected the same as in civil actions and the trial shall proceed after the manner of trials in civil actions.

60-06-09. Election of gross sum or annual rental.

The court or jury, as the case may be, shall find and assess compensation both in the form of an annual rental and in the form of a gross sum for the right, privilege, and easement sought. Immediately after the finding or verdict has been made, the party against whom the proceedings have been taken shall elect whether to receive the annual rental or the gross sum found. In case such election is not made by such party, then the other party to the proceedings may make such election.

60-06-10. Judgment — What it shall contain.

After election is made as provided in section 60-06-09, judgment shall be rendered adjudging among other things that upon payment of the gross sum found or the annual rental found yearly in advance, as the case may be, the party in whose favor said judgment is rendered shall be entitled to a writ of execution in proper form to invest such party immediately with the right, privilege, and easement of the applicant.

60-06-11. Forfeiture of right, privilege, and easement by applicant.

In case the annual rental method of payment is elected, the same shall be paid yearly in advance, and if not so paid, after a default of thirty days, the right, privilege, and easement shall be forfeited absolutely.

60-06-12. Appeal from judgment.

Within thirty days after the entry of judgment an appeal may be taken by either party to the supreme court. Such appeal shall not stay nor hinder the use or enjoyment to the fullest extent of the right, privilege, and easement asked for by the petition or conferred by the judgment, if the party instituting the proceedings shall make and file a bond with sureties, to be approved by the court, in an amount double the gross sum or annual rental, conditioned to pay such sum or rental and to abide and satisfy any judgment the supreme court may render in the premises.

60-06-13. Costs and disbursements of actions.

Costs and disbursements shall be paid by the unsuccessful party in each court as in civil actions. If the finding of the court or jury is for a less, or the same, amount as was tendered by the applicant before the owner of the railway at such station or siding instituted the proceedings, then the applicant shall be deemed the successful party. If the amount found is larger than the sum tendered, then the owner of the railway at such station or siding shall be deemed to be the successful party.

60-06-14. Erection of warehouses after judgment.

Any person, firm, corporation, or limited liability company taking advantage of the provisions of this chapter, within sixty days after the amount to be paid for the easement acquired thereunder finally is determined, by agreement or by proceedings in court, shall commence the erection of the warehouse or elevator stated in the application referred to in section 60-06-02 and shall complete the same within ninety days thereafter. In case of failure to comply with the provisions of this section, such person, firm, corporation, or limited liability company shall be deemed to have abandoned the right, privilege, and easement acquired, and the part or portion of the railroad right of way described in the application shall be subject to selection by other applicants who may desire to avail themselves of the provisions of this chapter.

60-06-15. Application to existing leaseholds.

The provisions of this chapter apply to the renewal or sale of existing leaseholds on railroad rights of way, and to existing leaseholds on lands that have ceased to be used for railroad rights of way after the leasehold was first created, and so long thereafter as the lease site remains under the ownership or control of the railroad or an entity that was or is under common ownership or control of the railroad. The value of a leaseholder’s improvements may not be considered in determining annual rental or the gross sum for the right, privilege, and easement sought.

60-10-01. Credit-sale contracts — Assessment on grain — Submission of assessment.

An assessment at the rate of two-tenths of one percent is placed on the value of all grain sold in this state under a credit-sale contract, as provided for in sections 60-02-19.1 and 60-02.1-14. The licensee purchasing the grain shall note the assessment on the contract required under sections 60-02-19.1 and 60-02.1-14 and shall deduct the assessment from the purchase price payable to the seller. The licensee shall submit any assessment collected under this section to the commissioner no later than thirty days after each calendar quarter. The commissioner shall deposit the assessments received under this section in the credit-sale contract indemnity fund.

60-10-02. Credit-sale contract indemnity fund — Creation — Continuing appropriation.

There is created in the state treasury the credit-sale contract indemnity fund. The state treasurer shall invest available moneys in the fund in accordance with section 21-10-07 and in cooperation with the commissioner and shall deposit any income earned through the investments into the fund. The fund and earnings of the fund are appropriated to the commissioner on a continuing basis to be used exclusively to carry out the intent and purpose of this chapter.

60-10-03. Credit-sale contract indemnity fund — Suspension of assessment.

At the end of the calendar quarter in which the credit-sale contract indemnity fund reaches a level of six million dollars, the commissioner shall suspend collection of the assessment required by this chapter. If after suspension of collection the balance in the fund is less than three million dollars, the commissioner shall require collection of the assessment.

60-10-04. Credit-sale contract indemnity fund — Eligibility for reimbursement.

A person is eligible to receive indemnity payments from the credit-sale contract indemnity fund if:

1. After August 1, 2003, the person sold grain to a licensed warehouse or a grain buyer in this state under the provisions of a credit-sale contract;
2. The licensed warehouse to which the person sold grain or the grain buyer to whom the person sold grain becomes insolvent; and
3. The licensed warehouse or the grain buyer, as a result of the insolvency, does not fully compensate the person in accordance with the credit-sale contract.

60-10-05. Credit-sale contract indemnity fund — Availability of money.

Upon the insolvency of a licensed warehouse or a grain buyer and a declaration the commissioner serve as the trustee, the commissioner shall make the proceeds of the credit-sale contract indemnity fund available for use in meeting the licensee’s obligations with respect to the reimbursement of any person who sold grain to the licensee under a credit-sale contract and who was not fully compensated in accordance with the contract.

60-10-06. Credit-sale contract indemnity fund — Reimbursement limit.

The amount payable to any eligible person from the credit-sale contract indemnity fund for each insolvency may not exceed the lesser of eighty percent of the amount owed to that eligible person in accordance with all of that person’s unsatisfied credit-sale contracts or two hundred eighty thousand dollars.

60-10-07. Credit-sale contract indemnity fund — Prorated claims.

If claims for indemnity payments from the credit-sale contract indemnity fund exceed the amount in the fund, the commissioner shall prorate the claims and pay the prorated amounts. As future assessments are collected, the commissioner shall continue to forward indemnity payments to each eligible person until the person receives the maximum amount payable in accordance with this chapter.

60-10-08. Reimbursement for later insolvencies.

The commissioner shall ensure all persons eligible for payment from the indemnity fund as a result of an insolvency are fully compensated to the extent permitted by this chapter before any payments from the indemnity fund are initiated as a result of a later insolvency. The chronological order of insolvencies is determined by the date the commissioner is appointed trustee under section 60-02.1-29 or 60-04-03.

60-10-09. Credit-sale contract indemnity fund — Reimbursement for administrative expenses.

Any expense incurred by the commissioner in administrating the credit-sale contract indemnity must be reimbursed from the fund before any other claim for indemnity is paid.

60-10-10. Credit-sale contract indemnity fund assessment — Failure to collect assessment — Penalty.

Any person who knowingly or intentionally refuses or fails to collect the assessment required under this chapter from producers or to submit any assessment collected from producers to the commissioner for deposit in the credit-sale contract indemnity fund is guilty of a class A misdemeanor.

60-10-11. Revocation and suspension.

The commissioner may suspend or revoke the license of any licensee for cause upon notice and hearing for violation of this chapter.

60-10-12. Cease and desist.

If a person engages in an activity or practice that is contrary to this chapter or rules adopted by the commissioner, the commissioner, upon the commissioner’s own motion without complaint and with or without a hearing, may order the person to cease and desist from the activity until further order of the commissioner. The order may include any corrective action up to and including license suspension. A cease and desist order must be accompanied by a notice of opportunity to be heard on the order within fifteen days of the issuance of the order.

60-10-13. Claims.

A claim concerning a grain buyer must be administered in a manner consistent with chapter 60-02.1. A claim concerning a state licensed grain warehouse must be administered in a manner consistent with chapter 60-04. A payment may not be made from the credit-sale contract indemnity fund for a claim based on losses resulting from the sale of grain to a person not licensed under chapter 60-02, chapter 60-02.1, or the United States Warehouse Act [Pub. L. 106-472; 114 Stat. 2061; 7 U.S.C. 241 et seq.].

60-10-14. Subrogation.

Money paid from the credit-sale contract indemnity fund in satisfaction of a valid claim constitutes a debt obligation of the person against whom the claim was made. The commissioner may take action on behalf of the fund against a person to recover the amount of payment made, plus costs and attorney’s fees. Any recovery for reimbursement to the fund must include interest computed at the weight average prime rate charged by the Bank of North Dakota. Upon payment of a claim from the credit-sale contract indemnity fund, the claimant shall subrogate the interest of the claimant, if any, to the commissioner in a cause of action against all parties, to the amount of the loss that the claimant was reimbursed by the fund.

60-10-15. Unlicensed facility-based grain buyer. [Repealed]

60-10-16. Roving grain buyers — Exception — Applicability of provisions.

Notwithstanding any other law, this chapter does not apply to any person that purchases, solicits, or merchandises grain, which has been cleaned, processed, and made ready for consumption, from a public warehouseman licensed and bonded under chapter 60-02. If the person engages in any activity other than those described in this section, the person is subject to the law governing those other activities.