GRAIN WAREHOUSE BILL BECOMES LAW

Per-Bushel Fee to be Reinstated July 1, 2004

Legislation amending the Ohio Agricultural Commodity Handler Law has now become law.

The legislation made several changes to the law governing the Agricultural Commodity Depositors Fund. The Agricultural Commodity Depositors Fund is used to pay for claims brought by farmers against insolvent licensed handlers. The fund consists of a per-bushel fee remitted by licensed handlers, plus any money ODA collects via legal actions on behalf of the fund. Since 1999 there have been five grain warehouse insolvencies. The cost to the fund has been approximately $450,000 for a case in 1999 to the most recent one of $2.5 million this year.

The key areas of the Commodity Handler Law addressed in the legislation are:

1. First and foremost the bill increased the balance of the Agricultural Commodity Depositors Fund from $4 million to $10, 000 million. Also, it allows the Director to reinstate the per-bushel fee if the fund balance is less then $8 million.
   
2. The bill expanded the situations in which the fund pays 100% of the loss for valid claims.
   
3. Another key component is that earned interest from the fund is to be credited to the fund. Originally monies from the Agricultural Commodity Depositors Fund could only be used to indemnify depositors and for no other purpose. Now the Director may request no more the $500,000 per fiscal year be transferred to pay for program administration.
   
4. The Senate version amended the definition of a quorum for meetings of the Commodity Advisory Commission. A quorum now consists of any 4 members present rather then 2 farmers and 2 licensed handlers. The Commission composed of 7 members 3 farmers, 3 licensed handlers and a banker act in an advisory capacity in matters relating to the law.

All licensed grain handlers should have received a certified letter from ODA explaining the implementation process and time frame for collecting the per-bushel fee.