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AN ACT
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relating to the creation and functions of the Texas Grain Producer |
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Indemnity Board. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 41.001, Agriculture Code, is amended to |
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read as follows: |
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Sec. 41.001. POLICY. It is in the interest of the public |
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welfare of the State of Texas that the producers of any agricultural |
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commodity be permitted and encouraged to develop, carry out, and |
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participate in programs of research, disease and insect control, |
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predator control, education, indemnification, and promotion |
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designed to encourage the production, marketing, and use of the |
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agricultural commodity. The purpose of this chapter is to |
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authorize and prescribe the necessary procedures by which the |
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producers of an agricultural commodity grown in this state may |
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finance those programs. The programs may be devised to alleviate |
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any circumstance or condition that serves to impede the production, |
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marketing, or use of any agricultural commodity. |
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SECTION 2. Section 41.058(e), Agriculture Code, is amended |
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to read as follows: |
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(e) The board may act separately or in cooperation with any |
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person in developing, carrying out, and participating in programs |
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of research, disease and insect control, predator control, |
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education, indemnification, and promotion designed to encourage |
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the production, marketing, and use of the commodity on which the |
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assessment is levied. |
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SECTION 3. Chapter 41, Agriculture Code, is amended by |
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adding Subchapter I to read as follows: |
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SUBCHAPTER I. TEXAS GRAIN PRODUCER INDEMNITY BOARD |
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Sec. 41.201. DEFINITIONS. In this subchapter: |
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(1) "Board" means the Texas Grain Producer Indemnity |
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Board. |
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(2) "Claim initiation date" means the earliest date on |
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which a grain buyer: |
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(A) files for federal bankruptcy protection; |
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(B) becomes the subject of an involuntary |
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bankruptcy proceeding; |
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(C) is found to be insolvent by a court or a state |
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or federal licensing agency; |
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(D) is ordered by a court having jurisdiction to |
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pay a judgment to a grain producer; or |
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(E) loses its public warehouse license under: |
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(i) the United States Warehouse Act (7 |
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U.S.C. Section 241 et seq.); or |
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(ii) Chapter 14. |
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(3) "Financial failure" means an event described by |
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Subdivision (2)(A), (B), (C), (D), or (E). |
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(4) "Grain" means corn, soybeans, wheat, and grain |
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sorghum. |
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(5) "Grain buyer" means a person who buys grain from a |
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grain producer or stores unsold grain for a grain producer. The |
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term includes: |
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(A) a purchaser; |
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(B) a warehouseman; |
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(C) a processor; or |
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(D) a commercial handler. |
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(6) "Grain producer" means a person, including the |
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owner of a farm on which grain is produced, or the owner's tenant or |
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sharecropper, engaged in the business of producing grain or causing |
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grain to be produced for commercial purposes. |
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Sec. 41.202. DECLARATION OF POLICY. (a) The legislature |
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intends for the board to indemnify grain producers for economic |
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hardships in the event that a grain buyer is unable to pay the grain |
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producer for the grain producer's grain. |
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(b) The board shall be the certified organization to |
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indemnify grain producers under this subchapter. |
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Sec. 41.203. CONFLICT WITH GENERAL COMMODITY LAW |
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PROVISIONS. To the extent that this subchapter conflicts with |
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other provisions of this chapter, this subchapter prevails. |
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Sec. 41.204. BOARD. (a) The board is composed of: |
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(1) one representative of each of the following |
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organizations or their successor organizations who is recommended |
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to the commissioner by the board of directors of the organization |
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and appointed by the commissioner: |
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(A) the Corn Producers Association of Texas; |
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(B) the Texas Wheat Producers Association; |
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(C) the Texas Grain Sorghum Association; |
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(D) the Texas Soybean Association; and |
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(E) the Texas Farm Bureau; and |
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(2) the following members, appointed by the |
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commissioner: |
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(A) one representative of the Texas Agricultural |
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Cooperative Council or its successor organization; |
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(B) one representative of the Texas Grain & Feed |
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Association or its successor organization; |
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(C) one representative of the non-warehouse |
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grain-buying industry; and |
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(D) one member with expertise in production |
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agriculture financing. |
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(b) Members of the board serve staggered terms of two years |
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each and may serve for a maximum of three terms. |
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(c) The directors described by Subsection (a)(1) shall |
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select a chair and vice chair from among those directors. |
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(d) A vacancy on the board, including a vacancy resulting |
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from the failure of a board member to fulfill the board member's |
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responsibilities, shall be filled in the manner provided by |
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Subsection (a). If a vacancy on the board is the result of an |
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organization described by Subsection (a) dissolving or failing to |
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fulfill its responsibilities under this subchapter, the |
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commissioner may fill the vacancy by appointing an individual from |
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the sector or industry represented by the organization. |
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Sec. 41.205. DUTIES OF BOARD. (a) The board shall meet at |
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least quarterly to: |
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(1) review expenses of the board, claims made to the |
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board by grain producers, and amounts paid on claims by the board; |
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(2) coordinate all matters relating to the board, |
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including the board's budget under Section 41.059, and the revenues |
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necessary to accomplish the purposes of the board; |
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(3) establish, maintain, or adjust the rate of |
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assessments collected under Section 41.206; and |
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(4) determine the most effective use of the board's |
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budget to provide protection to grain producers. |
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(b) Notwithstanding Chapter 551, Government Code, the board |
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may hold an open or closed meeting by telephone conference call or |
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videoconference if: |
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(1) immediate action or a quarterly meeting is |
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required; and |
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(2) the location at which a quorum of the board |
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convenes is inconvenient for any member of the board. |
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(c) A meeting under Subsection (b) is subject to the notice |
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requirements of Chapter 551, Government Code. |
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(d) Notice of a meeting under Subsection (b) must specify |
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that the location at which meetings of the board are usually held is |
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the location of the meeting. |
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(e) Each part of an open meeting under Subsection (b) shall |
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be conducted in a manner that is audible to the public at the |
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location specified in the notice of the meeting. The board shall |
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ensure that each open meeting is tape recorded and that the tape |
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recording is made available to the public after the meeting. |
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Sec. 41.206. COLLECTION OF ASSESSMENT. (a) Except as |
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provided by this subsection, a grain buyer shall collect |
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assessments in the manner prescribed for processors under Section |
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41.081. Section 41.081(b) does not apply to the collection of |
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assessments under this section. |
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(b) Except as provided by Subsection (c), not later than the |
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10th day of each quarter of the calendar year, the grain buyer shall |
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remit the amount collected during the preceding quarter to the |
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secretary-treasurer of the board for deposit with the bank selected |
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by the board under Section 41.060. |
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(c) The grain buyer may retain a portion of the assessment |
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in an amount determined by the board to cover the grain buyer's |
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administrative costs in collecting the assessment. |
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(d) The board shall notify the grain producer of the manner |
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by which the grain producer may initiate a claim under Section |
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41.208. The notice may be provided in a manner determined by the |
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board. |
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Sec. 41.207. ASSESSMENTS; APPLICABILITY OF OTHER LAW. |
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(a) An assessment levied on grain producers shall be applied by |
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the board to efforts relating to the indemnification of grain |
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producers in this state, including administrative costs of |
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conducting an assessment referendum. |
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(b) Assessments collected by the board are not state funds |
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and are not required to be deposited in the state treasury. |
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(c) Sections 41.082 and 41.083 do not apply to an assessment |
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collected under this subchapter. |
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Sec. 41.208. INITIATION OF CLAIM. (a) A grain producer who |
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has delivered grain to a grain buyer may initiate a claim with the |
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board as provided by board rule if: |
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(1) the grain buyer has suffered a financial failure |
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and: |
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(A) has failed to pay to a grain producer an |
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amount owed to the grain producer; or |
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(B) is unable to deliver to the grain producer |
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grain held by the grain buyer for the grain producer as a bailment; |
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and |
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(2) the grain producer provides to the board: |
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(A) written documentation showing that the grain |
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was delivered to the grain buyer; and |
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(B) a copy of the written contract for purchase |
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of the grain signed by the grain producer and the grain buyer and |
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showing: |
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(i) the agreed price for the grain; |
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(ii) the amount of grain purchased; and |
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(iii) any other relevant term required by |
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the board to establish facts related to the claim. |
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(b) A claim under this section must: |
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(1) be initiated: |
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(A) not more than 60 days after the applicable |
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claim initiation date; or |
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(B) before a date determined by the board to be |
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reasonable, if the board determines such a date; and |
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(2) be for a loss of grain delivered to the grain buyer |
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not more than one year before the applicable claim initiation date. |
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Sec. 41.209. PAYMENT OF CLAIM. (a) After a claim is |
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initiated by a grain producer under Section 41.208, the board may |
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take any action necessary to: |
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(1) investigate the grain producer's claim; and |
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(2) determine the amount due to the grain producer |
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within the limit prescribed by Subsection (b) and subject to |
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Subsection (f). |
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(b) In determining the amount due to a grain producer under |
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Subsection (a) for a loss of grain, the board may award the grain |
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producer not more than 90 percent of: |
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(1) the value of the grain on the claim initiation |
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date, as determined by board rule, if the grain has not been sold; |
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or |
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(2) the contract price of the grain, if the grain has |
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been sold. |
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(c) The board shall make a determination under Subsection |
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(a) within a reasonable period of time as established by the board. |
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(d) Except as provided by Subsection (e), the board shall, |
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not later than the 30th day after the date the board makes a |
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determination under Subsection (a): |
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(1) pay to the grain producer the amount determined |
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under Subsection (a); or |
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(2) notify the grain producer that the grain |
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producer's claim is denied. |
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(e) If claims filed with the board that are due to grain |
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producers under this section exceed the amount of the board's |
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budget allocated for the payment of claims, the board shall pay each |
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grain producer on a prorated basis without regard to the order in |
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which claims are made or approved. The board shall pay the |
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remainder of the amount owed to each grain producer on a prorated |
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basis from future revenue as the revenue is collected. |
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(f) The board may deny a grain producer's claim in whole or |
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in part: |
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(1) if the grain producer has failed to pay |
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assessments for the current growing season under Section 41.206; |
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(2) if the applicable grain buyer has a history of |
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failure to collect assessments as required by Section 41.206; |
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(3) if the documentation submitted by the grain |
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producer in support of the grain producer's claim is incomplete, |
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false, or fraudulent; |
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(4) to prevent the grain producer from recovering from |
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multiple payments an amount greater than the amount the grain |
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producer lost due to the financial failure of a grain buyer or to |
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the grain buyer's refusal, failure, or inability to deliver to the |
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grain producer grain held by the grain buyer as a bailment, |
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including: |
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(A) payments made by the board; |
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(B) payments made from a grain warehouse |
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operator's bond; |
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(C) payments ordered by a bankruptcy court; or |
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(D) a recovery under a state or federal crop |
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insurance policy or program; or |
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(5) if documentation submitted by the grain producer |
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demonstrates that deferred payment on sold grain was beyond normal |
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and customary practices. |
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(g) Notwithstanding Subsection (f)(3), if the board |
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determines that the documentation submitted in support of a grain |
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producer's claim is incomplete, the board shall give the grain |
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producer an opportunity to provide complete documentation. |
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(h) The board may adopt rules specifying the circumstances |
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under which a claim may be denied in whole or in part under |
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Subsection (f). |
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Sec. 41.210. REIMBURSEMENT OF BOARD BY GRAIN BUYER; |
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SUBROGATION OF RIGHTS. (a) If the board pays a claim against a |
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grain buyer, the board is subrogated to all rights of the grain |
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producer against: |
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(1) the grain buyer, to the extent of the amount paid |
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to a grain producer by the board; and |
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(2) any other entity from which the grain producer is |
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entitled to a payment for the loss giving rise to the grain |
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producer's claim under this subchapter. |
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(b) Funds recovered under this section shall be deposited |
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with the depository bank selected by the board under Section |
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41.060. |
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Sec. 41.211. RULES. Except as provided by Section 41.212, |
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the board may adopt rules as necessary to implement this |
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subchapter, including rules relating to: |
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(1) notice and collection of assessments; |
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(2) the management of the board's budget; |
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(3) administration of the board's duties; |
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(4) the statewide referendum conducted under Section |
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41.212; |
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(5) the selection of agents, designees, or devices to |
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carry out the intent of the board; and |
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(6) guidelines for industry practices that do or do |
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not qualify for indemnification by the board. |
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Sec. 41.212. REFERENDUM; BALLOTING. (a) The commissioner |
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shall conduct a referendum of grain producers to determine the |
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maximum amount that may be assessed to a grain producer under |
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Section 41.206. |
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(b) Only a grain producer who has sold grain to a grain buyer |
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in the 36 months preceding the date of the referendum is eligible to |
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vote in the referendum. |
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(c) An eligible grain producer may vote only once in a |
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referendum. |
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(d) Each grain producer's vote is entitled to equal weight |
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regardless of the grain producer's volume of production. |
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(e) A referendum is approved if the referendum meets the |
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requirements of Section 41.031. |
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(f) Individual voter information, including an individual's |
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vote in a referendum conducted under this section, is confidential |
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and not subject to disclosure under Chapter 552, Government Code. |
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(g) The board shall locate private sources, including the |
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organizations described by Section 41.204(a)(1), to pay all |
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expenses incurred in conducting a referendum. |
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(h) The commissioner shall adopt rules as necessary to |
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implement this section. |
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Sec. 41.213. NOTICE OF REFERENDUM. (a) The commissioner |
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shall give public notice of: |
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(1) the date, hours, and polling places for voting in |
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the referendum conducted under Section 41.212; |
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(2) the estimated amount of the assessment proposed to |
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be collected, as determined by the board, and the basis for which |
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the assessment will be collected; and |
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(3) a description of the manner in which the |
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assessment is to be collected and the proceeds administered and |
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used. |
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(b) The commissioner shall publish the notice under |
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Subsection (a) in one or more statewide or regional newspapers that |
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provide reasonable notice throughout the state. The notice shall |
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be published at least 90 days before the date of the referendum. In |
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addition, at least 90 days before the date of the referendum the |
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commissioner shall give direct written notice to the county agent |
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in each county of this state. |
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Sec. 41.214. REFUND OF ASSESSMENTS. (a) Except as provided |
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by Subsection (d), a grain producer who has paid an assessment under |
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Section 41.206 may obtain a refund of the amount paid by filing an |
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application for refund with the board. |
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(b) The application must: |
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(1) be in writing, on a form prescribed by the board |
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for that purpose; and |
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(2) be accompanied by: |
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(A) proof of payment of the assessment; and |
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(B) an affidavit stating that the grain producer |
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does not wish to participate in or be covered by the indemnification |
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established under this subchapter. |
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(c) A grain producer who receives a refund under this |
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section may not make a claim for indemnification under Section |
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41.208 for the grain for which the refund was received. |
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(d) If requests for refunds under this section exceed the |
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amount of the board's budget allocated for the payment of claims, |
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the board shall issue refunds to each grain producer on a prorated |
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basis without regard to the order in which requests for refunds are |
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made. The board shall pay the remainder of the amount owed to each |
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grain producer on a prorated basis from future revenue as the |
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revenue is collected. |
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Sec. 41.215. ANNUAL REPORT. (a) The board shall submit a |
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report to the commissioner annually that contains a summary of the |
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board's activities and a review of the board's effectiveness. |
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(b) The board shall post the report online on the board's |
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Internet website. |
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SECTION 4. (a) As soon as practicable on or after the |
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effective date of this Act, but not later than December 31, 2011, |
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the entities specified in Section 41.204, Agriculture Code, as |
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added by this Act, shall recommend and the commissioner of |
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agriculture shall appoint the members of the Texas Grain Producer |
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Indemnity Board in compliance with that section to serve terms that |
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begin January 1, 2012. |
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(b) The members of the board appointed under Subsection (a) |
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of this section shall draw lots to determine which initial terms of |
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four members expire January 1, 2013, and which initial terms of five |
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members expire January 1, 2014. |
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SECTION 5. This Act takes effect September 1, 2011. |
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______________________________ |
______________________________ |
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President of the Senate |
Speaker of the House |
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I certify that H.B. No. 1840 was passed by the House on May 5, |
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2011, by the following vote: Yeas 144, Nays 2, 2 present, not |
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voting; and that the House concurred in Senate amendments to H.B. |
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No. 1840 on May 18, 2011, by the following vote: Yeas 144, Nays 2, |
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2 present, not voting. |
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______________________________ |
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Chief Clerk of the House |
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I certify that H.B. No. 1840 was passed by the Senate, with |
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amendments, on May 13, 2011, by the following vote: Yeas 31, Nays |
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0. |
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______________________________ |
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Secretary of the Senate |
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APPROVED: __________________ |
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Date |
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__________________ |
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Governor |