203C.6 - ISSUANCE OF LICENSE AND FINANCIAL RESPONSIBILITY.
203C.6 ISSUANCE OF LICENSE AND FINANCIAL
RESPONSIBILITY.
1. The department, upon application to it, may issue to a
warehouse operator or to a person about to become a warehouse
operator a license for the operation of a warehouse in accordance
with this chapter and the rules adopted by the department under
section 203C.5. A single license to operate two or more warehouses
located anywhere within the state may be issued.
2. The type of license required shall be determined as follows:
a. A class 1 license is required if the storage capacity of a
warehouse is more than one hundred thousand bushels.
b. A class 2 license is required for a warehouse that is not
required to have a class 1 license.
3. An application for a warehouse license shall be accompanied by
a complete financial statement of the applicant setting forth the
assets, liabilities and net worth of the applicant. The financial
statement must be prepared according to generally accepted accounting
principles. Assets shall be shown at original cost less
depreciation. Upon written request, the department may allow asset
valuations in accordance with a competent appraisal. Unpriced
contracts shall be shown as a liability and valued at the applicable
current market price of grain as of the date the financial statement
is prepared.
4. In order to receive and retain a class 1 license, the
following conditions must be satisfied:
a. The warehouse operator shall have and maintain a net worth
of at least twenty-five cents per bushel of warehouse capacity, or
maintain a deficiency bond or an irrevocable letter of credit in the
amount of two thousand dollars for each one thousand dollars or
fraction thereof of net worth deficiency. However, a person shall
not be licensed as a class 1 warehouse operator if the person has a
net worth of less than twenty-five thousand dollars.
b. The warehouse operator shall submit, as required by the
department, a financial statement that is accompanied by an
unqualified opinion based upon an audit performed by a certified
public accountant licensed in this state. However, the department
may accept a qualification in an opinion that is unavoidable by any
audit procedure that is permitted under generally accepted accounting
principles. An opinion that is qualified because of a limited audit
procedure or because the scope of an audit is limited shall not be
accepted by the department. The department shall not require that a
warehouse operator submit more than one such unqualified opinion per
year. The warehouse operator may elect, however, to submit a
financial statement that is accompanied by the report of a certified
public accountant licensed in this state that is based upon a review
performed by the certified public accountant in lieu of the audited
financial statement specified in this paragraph. However, at any
time the department may require a financial statement that is
accompanied by the report of a certified public accountant licensed
in this state that is based upon a review performed by a certified
public accountant if the department has good cause. A warehouse
operator shall submit financial statements to the department in
addition to those required in this paragraph if the department
determines that it is necessary to verify the warehouse operator's
financial status or compliance with this subsection.
5. In order to receive and maintain a class 2 license, the
following conditions must be satisfied:
a. The warehouse operator shall have and maintain a net worth
of at least twenty-five cents per bushel of warehouse capacity, or
maintain a deficiency bond or an irrevocable letter of credit in the
amount of two thousand dollars for each one thousand dollars or
fraction thereof of net worth deficiency. However, a person shall
not be licensed as a class 2 warehouse operator if the person has a
net worth of less than ten thousand dollars.
b. The warehouse operator shall submit, as required by the
department, a financial statement that is accompanied by an
unqualified opinion based upon an audit performed by a certified
public accountant licensed in this state. However, the department
may accept a qualification in an opinion that is unavoidable by any
audit procedure that is permitted under generally accepted accounting
principles. An opinion that is qualified because of a limited audit
procedure or because the scope of an audit is limited shall not be
accepted by the department. The department shall not require that a
warehouse operator submit more than one such unqualified opinion per
year. The warehouse operator may elect, however, to submit a
financial statement that is accompanied by the report of a certified
public accountant licensed in this state that is based upon a review
performed by the certified public accountant in lieu of the audited
financial statement specified in this paragraph. However, at any
time the department may require a financial statement that is
accompanied by the report of a certified public accountant licensed
in this state that is based upon a review performed by a certified
public accountant if the department has good cause. A warehouse
operator shall submit financial statements to the department in
addition to those required in this paragraph if the department
determines that it is necessary to verify the warehouse operator's
financial status or compliance with this subsection.
6. The department may adopt rules governing the timing and form
of financial statements to be submitted to it. The department may
require additional information or verification with respect to the
financial resources of the applicant or licensee and the applicant's
or licensee's ability to maintain the quantity and quality of stored
grain.
7. If an applicant has had a license under chapter 203 or this
chapter revoked for cause within the past three years, or has been
convicted of a felony involving violations of chapter 203 or this
chapter, or is owned or controlled by a person who has had a license
so revoked or who has been so convicted, the department may deny a
license to the applicant.
8. The department may deny a license to an applicant if any of
the following apply:
a. The applicant has caused liability to the Iowa grain
depositors and sellers indemnity fund through operations under a
license issued under this chapter or chapter 203, and the liability
has not been discharged, settled, or satisfied.
b. The applicant is owned or controlled by a person who has
caused liability to the fund through operations under a license
issued under this chapter or chapter 203, and the liability has not
been discharged, settled, or satisfied.
9. A deficiency bond or irrevocable letter of credit filed with
the department pursuant to this section shall not be canceled by the
issuer on less than one hundred twenty days' notice by certified mail
to the department and the principal. Section History: Early Form
[C24, 27, 31, § 9722; C35, § 9751-g4; C39, § 9751.04; C46, 50,
54, 58, 62, 66, 71, 73, 75, 77, § 543.4; C79, 81, § 543.6; 81 Acts,
ch 180, § 21] Section History: Recent Form
86 Acts, ch 1152, § 18, 19; 87 Acts, ch 147, §6, 7; 88 Acts, ch
1134, §98; 89 Acts, ch 143, § 303, 304, 702, 801, 802; 92 Acts, ch
1239, §69, 70
C93, § 203C.6
2003 Acts, ch 69, §48; 2007 Acts, ch 22, §49; 2008 Acts, ch 1083,
§11, 12
Referred to in § 203.11B, 203C.1, 203C.2, 203C.3, 203C.4, 203C.7,
203C.11, 203C.36, 203C.39