209.02.15 Ark. Code R. 003
The Arkansas Grain Dealers Act is established to regulate grain dealers in the state of Arkansas that are not licensed under the Arkansas Public Grain Warehouse Law, the United States Warehouse Act and are not end users of grain. The Director of the Arkansas State Plant Board is appointed as the administrator of this law. The director shall administer this chapter and shall be the ultimate authority in the administration of this chapter. The agency may employ all necessary employees, counsel, and consultants to carry out the provisions of this law and is vested with the power necessary to fully and effectively carry out the provisions and objectives of this chapter.
The Arkansas Grain Dealers Act will be administered by the Arkansas State Plant Board. The Director or appointed representative is hereby designated as having the authority to carry out the activities needed to administer the Arkansas Grain Dealers Act. All proceedings and hearings will be conducted in accordance with A.C.A. § 2-24-101 et seq. and A.C.A. § 25-15-201 et seq.
Application Form, GD-1 or GD-2, is to be used in securing a license under this Act, whether for a new license or the renewal of a license. This form will be supplied, upon request by the applicant, by the Plant Board. For renewals the form will be sent to all licensees from the previous year prior to the renewal deadline. Renewal applications should be delivered to the Plant Board at least thirty (30) days before the current license expires. The licensing period shall be from July 1 through June 30 of each year, with the exception of those licenses issued during the inception of the regulations. Those licenses will be inclusive of the time between their issuance and June 30, 2016.
Each application for a license or license renewal shall be accompanied with a financial statement and signed report of a CPA or registered public accountant which must be a representation of an examined audit report, a review report or a compilation report. Additional reports required are a balance sheet, a schedule of notes payable, a statement of cash flows and other reports that may be stipulated by the Plant Board. All financial reports for year two and beyond of licensing are to be submitted to the Plant Board within
120 days of the company's fiscal year end. All financial statements must be in bound copy or in electronic pdf from the accountant. New companies, just being established and having less than one complete fiscal year of operation, need only a trial balance and estimated purchases for their first year to apply for a license. All financial records will be handled as dictated by A.C.A. 25-19-101 et seq. (Arkansas Freedom of Information Act.)
The Bond Form, Letter of Credit Form, and a Certificate of Deposit Form for the purpose of securing bonding for the grain dealer will be supplied in the application packet. Only one type of bonding is required.
Bonding requirements are as follows:
Purchases In do (Ra | of Grain llars nge) | Bonding in dollars |
1 | 5,000,000 | $50,000.00 |
5,000,001 | 20,000,000 | $100,000.00 |
20,000,001 | 40,000,000 | $200,000.00 |
40,000,001 | 60,000,000 | $400,000.00 |
60,000,001 | 80,000,000 | $600,000.00 |
80,000,001 | 100,000,000 | $800,000.00 |
100,000,001 | 000 and over | $1,000,000.00 |
As required by law, the application fee for a newly established business (a business with less than one (1) fiscal year of operation) is $150.00. The fee for an established business (a business with more than one (1) fiscal year of operation) is as follows:
Purchases In do (Ra | of Grain llars nge) | License Fee |
1 | 5,000,000 | $250.00 |
5,000,001 | 20,000,000 | $300.00 |
20,000,001 | 40,000,000 | $400.00 |
40,000,001 | 60,000,000 | $500.00 |
60,000,001 | 80,000,000 | $600.00 |
80,000,001 | 100,000,000 | $700.00 |
100,000,001 | and over | $800.00 |
One examination is to be made each year on each licensed dealer, the cost of which is included in the application fee. Additional examinations may be made at any time and at the discretion of the Director. If during the additional examinations a material discrepancy is found, the licensed dealer will be required to reimburse the State Plant Board at the rate of $40.00 per hour for the time required to make the additional examination(s).
Violations
Operating without a license, refusing to provide records during an audit, or knowingly violating the grain dealers act is a Class D felony. A person who negligently violates this law is guilty of a Class A misdemeanor. Upon conviction both are punishable by a criminal fine up to $100 dollars. Civil penalties may apply as well. The director may issue a cease and desist order for any violation of this law.
Minor Violations
Upon the first offense, violations that are clerical and believed to be accidental in nature will be considered to be minor violations. Examples of such violations include, but are not limited to, the loss of voided scale tickets, settlements or contracts and not conducting business as prescribed by the grain dealer act.
Penalty Violations: Violations that fall under the civil penalty matrix.
Penalty Matrix ( See Appendix 1)
The slow-pay hotline number will be on every license that the State Plant Board issues to grain dealers. Also, grain dealers must have the slow-pay hotline number on all purchase agreements. The hotline number will be published and provided to all licensees upon establishment of the number.
Recordkeeping and Retention Requirements
Grain dealers will provide all records required by the director upon request and are required to keep said records for a period of not less than 5 fiscal years of the dealer. Required records will include all purchase contracts, all sales contracts, all scale tickets, all settlement sheets, all delivery tickets and any other document acquired in relation to the buying and selling of each lot of grain handled.
Purchase Contracts
Destination Contracts -These are written documents prepared to transfer title of a quantity of grain from a Grain Dealer or current title holder to a subsequent buyer.
All destination contracts must be kept on file. These destination contracts, upon delivery of contracted grain, must be supported by additional records that show which purchased grain lots (as indicated by referenced purchase contract numbers) were used to fill the particular sale covered by the destination contract. Additional records such as records listing the transporter of the grain, quantity of grain carried in each load if multiple loads are used to move the total quantity of grain sold are to be kept with the destination contracts. Details of grain transferred, i.e. scale tickets, purchase contract numbers, delivery details, settlement sheets (summaries) and other documents used in the purchase, used to fill the total quantity of the destination contract are to be kept by the dealer.
Delivery Tickets - These documents are to confirm the transfer and receipt of grain from one entity to another with sufficient description to allow positive identification of the grain lot being transferred.
Each grain dealer shall issue to all sellers of grain to the dealer a pre-numbered officially approved delivery ticket which shall be issued in numerical order. All officially approved delivery tickets must contain the original and no fewer than two copies. Delivery tickets shall list, with copies attached, official scale tickets or an official load summary showing the receipt of the grain covered by the delivery ticket.
Settlements - Settlements are documents that fully explain the grain purchase transaction between the parties involved in the transaction.
All grain dealer purchases must be confirmed by preparation of a written settlement document. The documents will be completed in a numerical sequence as they are prepared. All settlements must have the name of the grain seller(s). All purchase settlements must have the date when payment was made and the check number or other means of payment is noted. All settlements must list the purchase contract number(s) applicable to the settlement. All settlements must have a delivery sheet or load summary to attest all scale tickets for all grain being purchased by the settlement.
Daily Position Record - A written record, prepared on a daily basis, to reflect the agreements made for grain purchases that day and agreements to be filled as of that date. Dealers may use a form made available by the Plant Board for this function. Use of this form will constitute compliance with this requirement.
All grain dealers purchasing less than $100,000,000 worth of grain are required to maintain a minimum net worth of $25,000. A grain dealer, who purchases more than $100,000,000 worth of grain, will maintain a minimum net worth of $50,000. To be licensed, a grain dealer who does not meet the minimum financial requirements must post additional bond to cover the short fall in the minimum net worth. This additional bond may be an amendment to the original bond or it may be a new bond to cover the deficiency amount.
If the grain dealer does not maintain an office in this state and does not have a statutory agent in this state, the application shall include a written appointment of a statutory agent upon whom process, notice, or demand may be served. The statutory agent shall be an individual residing in this state or a corporation whose principal place of business is located in the state. If the identity or address of the statutory agent changes, the grain dealer shall, within 3 days, file with the Plant Board a written appointment of the new statutory agent or written notice of the new address, as applicable.
All grain dealers are required to be available for business transactions on days the commodity market is open and in a time frame that would allow sellers to utilize market pricing to facilitate transactions.
Following the suspension of a dealer's license, the State Plant Board may file a verified petition in a court of competent jurisdiction requesting the appointment of a receiver to take custody of the assets of the dealer and provide for the disposition of the assets under the supervision of the court.
A petition for the appointment of a receiver shall be filed in the county in which the dealer, or the registered agent, is located.
Upon receiving a petition for the appointment of a receiver, a court may issue any temporary orders necessary to preserve or protect the assets in receivership, the value of the assets in receivership, and the rights of the dealer's creditors until a plan of disposition is approved.
The board may be appointed as a receiver.
APPENDIX 1
ARKANSAS GRAIN DEALERS ACT CIVIL PENALTY MATRIX
VIOLATIONS | 1ST LEVEL OF ENFORCEMENT | 2ND LEVEL OF ENFORCEMENT | 3RD LEVEL OF ENFORCEMENT | 4TH LEVEL OF ENFORCEMENT | ||||
Action Options | Penalty | Action Options | Penalty | Action Options | Penalty | Action Options | Penalty | |
Recordkeeping mistakes that are clerical and believed to be accidental in nature. Ex: Lost scale tickets, incomplete contracts, settlement mistakes, DPR inaccurate, etc. | A | --- | B&C | $100 to $600 | B,C&D | $600 to $900 | B,C&D | $1,000 |
Failure to pay seller on Due Date. | A,B | $100 to $300 | B,C,D&E | $200 to $600 | B,C,D&E | $600 To $1,000 | B,C,D&E | $1,000 |
Knowingly falsifying records. | B,C&D | $500 | B,C,D&E | $500 to $800 | B,C,D&E | $800 to $1,000 | B,C,D&E | $1,000 |
Refusal to allow inspection of records. | B,C&D | $100 to $300 | B,C&D | $400 to $600 | B,C,D&E | $600 to $900 | B,C,D&E | $1,000 |
Operating without a license | B | $300 to $500 | B&E | $500 to $700 | B&E | $800 to $1,000 | B&E | $1,000 |
[GREATER THAN] Each violation moves grain dealer to the next level of enforcement
[GREATER THAN] Each individual violation is removed 3 years from the date the violation was first proven .
209.02.15 Ark. Code R. 003