in-20250305-IR-824250089FNA: The Indiana Grain Buyers and Warehouse Licensing Agency (IGBWLA) is soliciting public comment on adding rules at 824 IAC 2-2-3 and 824 IAC 2-4-15; and amending rules at 824 IAC 2-4-4, 824 IAC 2-4-8, and 824 IAC 2-13-2; concerning fines imposed on licensees for failing to: (1) comply with requirements under IC 26-3-7; and (2) correct deficiencies. IGBWLA seeks comment on the affected citations listed and any other provisions of Title 824 that may be affected by this rulemaking.

Notice of First Public Comment Period LSA Document #25-89 Sec. 3. (a) When the director or director's designated representative requests information, failure, neglect, or refusal to respond to the request is a failure to observe or comply with an order of the agency under IC 26-3-7-17.1(a)(2). (b) If the director or director's designated representative has issued a notice to a licensee or person requesting information and the licensee or person fails to provide that information within the period identified in the first notice, the director may assess a fine of five hundred dollars ($500) for failure to respond to the request for information. Additionally, the director or director's designated representative may issue a second notice to extend the deadline to respond to the request by a period to be specified by the director or director's designated representative in the second notice. The director may assess a fine of five hundred dollars ($500) for failure to respond to the request for information in the first notice. (c) If the director or director's designated representative has issued a second notice to a licensee requesting information and the licensee fails to provide that information within the period identified in the second notice, the director or director's designated representative may, but is not required to, seek an informal meeting with the licensee under IC 26-3-7-17.1(b). (d) If the director or director's designated representative has conducted an informal meeting with a licensee under subsection (c) and determined that the informal meeting, or a consent agreement resulting from the informal meeting, is not reasonably likely to result in the licensee complying with the request for information, the director or director's designated representative shall hold a hearing to determine if the director will suspend or revoke the licensee's license or issue a cease and desist order against the licensee. (e) If the director or director's designated representative has issued a second notice to a licensee or person requesting information and the licensee or person fails to provide that information within the period identified in the second notice, and, because the affected party is a licensee, the director or director's designated representative has determined to not seek an informal meeting with the licensee under subsection (c), the director or director's designated representative shall hold a hearing to determine if the director will suspend or revoke the licensee's license or issue a cease and desist order against the licensee or person. (f) If the director or director's designated representative has been obliged to hold a hearing under either subsection (d) or (e), the director may assess a fine of one thousand dollars ($1,000) for failure to respond to the request for information in the second notice. This fine may be in addition to a fine assessed under subsection (b). (g) Notwithstanding any of the foregoing, the director may take an action authorized under IC 26-3-7-17.1 to respond to a licensee's failure to provide the information requested by the director or director's designated representative within the period identified in the notice of the request. (h) Nothing in this section shall be construed to limit the authority of the agency to assess a fine for the failure of a licensee to timely file the financial statement, renewal form, or renewal fee as required under IC 26-3-7-6.1. Sec. 4. (a) Each A licensee shall file: (b) A bond filed under the Act shall must have the following requirements: (c) An irrevocable letter of credit filed under the Act shall must meet the following requirements: (d) A licensee or an applicant submitting a cash bond required under the Act shall complete the cash bond form supplied by the agency. Agency personnel shall complete the "receipt for cash deposit" section on the form and return a copy to the licensee or applicant. (e) The following shall apply to the agency for all cash bonds received under the Act: (f) If a licensee has not filed a bond rider in the appropriate amount under the requirements of subsection (b)(9), the director or director's designated representative shall issue a notice of deficiency to the licensee within thirty (30) days after the licensee's written notice has been submitted to the director under subsection (b)(9). The notice must specify that the licensee's license will be automatically suspended under IC 26-3-7-14(b)(3) once the director has met the notice requirements of IC 26-3-7-17.5(a)(1) and IC 26-3-7-17.5(a)(2). The suspension shall continue until the licensee complies with the bonding and insurance requirements of the Act. (g) If a licensee does not have and maintain the item or items identified under this section as demonstrated by the licensee's renewal application under section 14 of this rule, the director or director's designated representative shall issue a notice of deficiency to the licensee. The notice must specify that the licensee's license will be automatically suspended under IC 26-3-7-14(b)(3) once the director has met the notice requirements of IC 26-3-7-17.5(a)(1) and IC 26-3-7-17.5(a)(2). The suspension shall continue until the licensee complies with the bonding and insurance requirements of the Act. (h) If a licensee has not corrected a minimum bonding or letter of credit deficiency within thirty (30) days after receiving a notice of deficiency under subsection (f) or (g), the director may assess a fine of one thousand dollars ($1,000) to be paid by the licensee. (i) Notwithstanding any of the foregoing, the director may take an action authorized under IC 26-3-7-17.1 to respond to a licensee's failure to timely file a bond rider under subsection (b)(9) or maintain the item or items identified under this section, as demonstrated by the licensee's renewal application under section 14 of this rule. Sec. 8. (a) In determining a licensee's net worth, the following shall apply: (b) When there are loans to related parties or owners in a licensee's financial statement, the agency may require additional financial statements from the related parties or owners, but the financial statements of the related parties or owners are not required to be reviewed. (c) In calculating the licensee's net worth, the director may utilize use the fair market value or market appraisal of the licensee's assets as determined and certified by a competent and disinterested appraiser. (d) Complete, current narrative market value appraisals of land, building, buildings, and equipment will be acceptable if prepared by one (1) of the following: (e) Acceptance of appraised values shall be subject to the following: (f) The amount of the market appraisal that can be allowed to meet the net worth requirement shall be is seventy percent (70%) of the appraised value less the book value. (g) If a licensee's net worth fails to meet or exceed the minimum positive net worth requirements of the Act, as demonstrated by the licensee's financial statements submitted to the director under IC 26-3-7-6.1 or documents required by the director upon waiver of a reviewed financial statement under section 7(b) of this rule, the director shall issue a notice of deficiency to the licensee stating that the licensee has thirty (30) days to correct the deficiency. (h) If a licensee has not corrected a net worth deficiency as prescribed under IC 26-3-7-10 within thirty (30) days after receiving the notice of deficiency under subsection (g) issued by the director to the licensee, the director may assess a fine of one thousand dollars ($1,000) to be paid by the licensee. (i) If a licensee has not corrected a net worth deficiency as prescribed under IC 26-3-7-10 within thirty (30) days after receiving the notice of deficiency under subsection (g) and the director has assessed a fine under subsection (h), the director shall issue a second notice of net worth deficiency. The second notice must specify that if the licensee has not corrected the deficiency of net worth within sixty (60) days after receiving the notice of the assessment of the fine, the director may temporarily suspend the licensee's license for not more than thirty (30) days, provided the director or director's designated representative shall grant an opportunity for a hearing on the temporary suspension as soon as possible following the temporary suspension. The second notice may also specify any certain additional action or actions that may be taken by the director under IC 26-3-7. (j) Notwithstanding any of the foregoing, the director may require additional bonding to respond to a licensee's failure to meet the minimum positive net worth requirements of the Act, as demonstrated by the licensee's financial statements submitted to the director under IC 26-3-7-6.1 or documents required by the director upon waiver of a reviewed financial statement under section 7(b) of this rule. (k) A licensee's compliance with the director's requirement of additional bonding under this subsection shall not alone remedy the licensee's failure to meet the minimum positive net worth requirements of the Act, as demonstrated by the licensee's financial statements submitted to the director under IC 26-3-7-6.1 or documents required by the director upon waiver of a reviewed financial statement under section 7(b) of this rule. (l) Notwithstanding any of the foregoing, the director may take an action authorized under IC 26-3-7-17.1 to respond to a licensee's failure to meet the minimum positive net worth requirements of the Act, as demonstrated by the licensee's financial statements submitted to the director under IC 26-3-7-6.1 or documents required by the director upon waiver of a reviewed financial statement under section 7(b) of this rule. Sec. 15. (a) If a licensee fails to maintain a current asset to current liability ratio of 1:1 or better as demonstrated by the licensee's financial statements submitted to the director under IC 26-3-7-6.1 or documents required by the director upon waiver of a reviewed financial statement under section 7(b) of this rule, the director or director's designated representative shall issue a notice of deficiency to the licensee stating the licensee has thirty (30) days to correct the deficiency. (b) If a licensee has not corrected a current asset to current liability ratio deficiency within thirty (30) days after receiving the notice in subsection (a), the director may assess a fine of one thousand dollars ($1,000) to be paid by the licensee. (c) If a licensee has not corrected a current asset to current liability ratio deficiency within thirty (30) days after receiving the notice in subsection (a), the director or director's designated representative may issue a second notice of current asset to current liability ratio deficiency. The second notice may specify any certain additional action or actions that may be taken by the director under IC 26-3-7. (d) Notwithstanding any of the foregoing, the director may require additional bonding to respond to a licensee's failure to satisfy the current asset to current liability ratio requirements of the Act, as demonstrated by the licensee's financial statements submitted to the director under IC 26-3-7-6.1 or documents required by the director upon waiver of a reviewed financial statement under section 7(b) of this rule. (e) A licensee's compliance with the director's requirement of additional bonding shall not alone remedy the licensee's failure to satisfy the current asset to current liability ratio requirements of the Act. (f) Notwithstanding any of the foregoing, the director may take an action authorized under IC 26-3-7-17.1 to respond to a licensee's failure to satisfy the current asset to current liability ratio requirements of the Act. Sec. 2. (a) Only grain buyer and buyer-warehouse licensees are entitled to purchase grain from producers under price later contracts, deferred pricing agreements, also known as price later contracts, deferred pricing, or DP contracts. (b) In addition to the minimum contract requirements in section 1 price later contracts shall of this rule, deferred pricing agreements must also include the following: (1) a statements statement printed in bold letters: "NOT STORAGE–TITLE TO THE GRAIN PASSES TO BUYER UPON DELIVERY". (c) A buyer-warehouse licensee shall not issue a collateral warehouse receipt on grain purchased by a price later contract deferred pricing agreement unless the deferred pricing agreement meets all the requirements for a contract under section 1(b) of this rule and until the full purchase price has been paid to the producer by that licensee. (d) A buyer-warehouse licensee purchasing grain from a grain producer under a deferred pricing agreement shall maintain inventories of sufficient quantity and grade of grain commensurate to the grain purchased under the deferred pricing agreement until the deferred pricing agreement meets all the requirements for a contract under section 1(b) of this rule. If a buyer-warehouse licensee has received grain purchased from a grain producer under a deferred pricing agreement that does not yet meet all the requirements for a contract under section 1(b) of this rule, the buyer-warehouse licensee shall have a storage obligation to the grain producer from whom the grain was purchased until the deferred pricing agreement satisfies the requirements for a contract under section 1(b) of this rule. (e) A grain buyer licensee purchasing grain from a grain producer under a deferred pricing agreement shall not convey, process, or make use of grain purchased under the deferred pricing agreement until the deferred pricing agreement meets all of the requirements for a contract under section 1(b) of this rule. (f) If the director or director's designated representative determines that a licensee has entered into a deferred pricing agreement in connection with grain purchases that extends beyond the crop year for the relevant delivered grain, or transferred a deferred pricing agreement to a new contract beyond the crop year for the relevant delivered grain, the director shall issue a notice stating that the licensee has thirty (30) days from the date on which the director issued the notice to price the relevant grain for the initial deferred pricing agreement, and to provide evidence of the pricing to the director or director's designated representative. (g) If the licensee fails to price the grain identified in subsection (f) and provide evidence of the pricing to the director or director's designated representative within thirty (30) days from the date on which the director issued the notice under subsection (f), the director may assess a fine of one thousand dollars ($1,000) to be paid by the licensee. (h) If the licensee fails to price the grain identified in subsection (f) and provide evidence of the pricing to the director or director's designated representative within sixty (60) days from the date on which the director issued the notice under subsection (f), the director may assess a monthly fine of two thousand five hundred dollars ($2,500) to be paid by the licensee. (i) A monthly fine assessed under subsection (h) will be assessed on the same day of the month as the day the director assessed a fine under subsection (g), and continues on that same day each month until the licensee has: (j) Notwithstanding any of the foregoing, the director may take an action authorized under IC 26-3-7-17.1 to respond to a licensee's failure to price grain identified under subsection (f) and provide evidence of the pricing to the director or director's designated representative within thirty (30) days from the date on which the director or director's designated representative issued the notice. (k) The limited time for a licensee to act on a notice under this section begins after any notice provided under this section has been issued, without regard for whether the licensee has received, or is considered to have received, the notice under 824 IAC 2-2-3 as required under IC 26-3-7-26.5. (l) As used in this section, "price" means either: (m) As used in this section and for all purposes under the Act, "deferred pricing agreement" and "price later contract" have the meaning set forth in IC 26-3-7-2(9).