Application For License And Security Requirements

(1) The application for the license shall include: (a) Name of the owner of the public grain warehouse; (b) The name of the operator of the warehouse; (c) The location of the warehouse; (d) The storage capacity of the warehouse; (e) The annual volume of storage at the warehouse over the past twelve (12) months; (f) The types of grain stored in the warehouse over the past twelve (12) months. (2) The application shall be accompanied by a surety bond or irrevocable letter of credit or certificate of deposit which shall be in an amount equivalent to twenty cents ($.20) per bushel storage capacity or equal to 10% of the aggregated dollar amount paid by the applicant (to the nearest $1,000) to producers for grain purchased from them during the applicant’s last completed fiscal year, which ever is larger. In the case of an applicant who has been engaged in business as a grain dealer or warehouseman for less than one year or who has not heretofore engaged in such business, 10% of the estimated aggregate dollar amount to be paid by the applicant to producers for grain purchased from them during the next fiscal year. These bonding requirements are subject to a twenty thousand dollar ($20,000) minimum and a one hundred thousand ($100,000) dollar maximum limit. (3) Any warehouseman who is of the opinion that his net worth and assets are sufficient to guarantee payment to producers for grain stored or purchased by him may request the department relieve it from the obligation of filing a bond in excess of the minimum bond of $20,000. Such request shall be accompanied by a reviewed financial statement prepared by a certified public accountant or a licensed public accountant and shall include a balance sheet and an income statement of retained earnings, cash flow statements and notes to financial statements. (4) The department may waive that portion of the required bond in excess of $20,000; if the department is otherwise satisfied as to the financial ability and resources of the applicant; if the financial statements submitted disclose a net worth of an amount equal to at least 3 times the amount of bond required; and if the applicant or licensee has met the following requirements: (a) The applicant or licensee’s financial statement and balance sheet show a current ratio of total adjusted current assets to the total adjusted current liabilities of at least one to one. Adjusted current assets shall be calculated by deducting from the stated current assets shown on the balance sheet submitted by the applicant or licensee, any non-liquid current assets including, but not limited to, notes receivable from officers and stock holders, stock subscriptions receivable, intra company receivables or receivables from an affiliate or any related party receivables. Any disallowed asset shall be netted against any related liability and the net result, COMMODITIY WAREHOUSE REGULATIONS CHAPTER-0080-5-14 if an asset, shall be subtracted from the current assets, or if a liability, it shall remain an adjusted current liability. (b) The financial statement and balance sheet show an adjusted debt to adjusted equity ratio of not more than 3 to one when calculated as follows: 1. Adjusted debt shall be obtained by totaling current and long term liabilities and reducing the amount of current liabilities, up to the amount of current liabilities, by the liquid assets appearing in the current assets section of the balance sheet submitted by the applicant or licensee. Liquid assets shall include but not be limited to cash, marketable securities, accounts receivable from the sale of grain, grain in transit, drying and storage receivables on stored grain, grain inventory, margin accounts and tax funds. 2. Adjusted equity shall be calculated by deducting from the stated net worth shown on the balance sheet submitted by the applicant after disallowing any non-liquid current assets including, but not limited to, notes receivable from officers or stockholders, accounts receivable from officers or stockholders, stock subscriptions receivable, intra-company receivables or receivables from an affiliate or any other related party receivables. Any disallowed asset shall be netted against any related liability and the net result, if an asset, shall be subtracted from the financial statement, or if a liability, it shall remain a liability. (c) Such person’s financial statement and balance sheet show an adjusted equity of at least $50,000 as determined pursuant to the method specified in paragraph (2), subparagraph (b). However, in the case of a grain dealer whose net worth is not equal to three times the amount of the bond required, the. department may allow such grain dealers to waive, in $1,000 increments, a portion of the bond required in excess of $20,000. The percentage factor to be applied to the bond required in excess of $20,000 shall be determined by dividing actual net worth by the net worth required to waive all bond in excess of $20,000. If the result of this computation provides a percentage factor of 80 percent or greater, then that same percentage of the amount in excess of $20,000 may be waived. The grain dealer shall then provide to the department a surety bond in the amount of $20,000 plus any additional bond required in excess thereof. (5) Having a license as a warehouse in accordance with this chapter shall mean that warehouse is also licensed as a dealer under chapter 0080-5-13.