Grain Warehouse More Info

(800)-Tell-TDA
835-5832

Home > Production Agriculture > Grain Warehouse > Grain Warehouse More Info

Grain Warehouse License Information

Requirements of a licensed Public Grain Warehouse - Sec. 14.001, Rule §13.3

A Grain Warehouse License is required to operate a grain elevator or a business engaged in the operation of a public grain warehouse. “Public Grain Warehouse” means a building, bin, or similar structure located in this state and used for:

· The storing of grain for hire (compensation or fee), shipping of grain for hire, or handling grain for hire; or

· The purchase and selling of grain, including grain on which payment is deferred.

For a grain warehouse to be considered suitable for storing, shipping and handling grain, the building, bin, or structure used in a “Public Grain Warehouse” is required to:

· Be suitable for properly storing, shipping, or handling grain that is stored in or expected to be stored in the warehouse. It must be weather tight to protect grain from the elements at all times, structurally sound;

· In order to determine if the suitability, the building, bin, or structure must have adequate and safe access for inspection.

All new licenses applied for after September 1, 2005 will expire on the last day of the month corresponding to the license anniversary date. A person failing to renew their license after it has expired is subject to late fees. A grain warehouse license expires each year unless the license is renewed, canceled or suspended.

Exemption from a Public Grain Warehouse license - Sec. 14.011

· A public grain warehouse licensed by the United States Department of Agriculture or other federal agency.

· An individual producer-owner who does not receive from others grain for storage or handling for hire.

· A person whose is in business of selling or processing of grain.

· A person who receives grain with the intent of using the grain for planting seed or for feeding livestock on the premises where the grain is received.

If the person who receives grain meets the requirements for a license, then a public grain warehouse license is required.

Steps for obtaining a Public Grain Warehouse License

1.   TDA Form RGW-300 Application to Operate a Public Grain Warehouse.

2.   TDA Form RGW-301 Schedule A. If applying for a combination license.

3.   New Facility Inspection. (Capacity is determined based on Wheat Pack Factors).

4.   Fees (Application or Renewal Fees) to include Inspection Fees.

5.   Reviewed or Audited Financial Statement.

6.   Net Worth Requirement.

7.   Bonding Requirement.

8.   Certificate of Insurance or if Insurance is not required.

1. TDA Form RGW-300 Application to Operate a Public Grain Warehouse.

Licensing Options for Single and Combination Public Grain Warehouses - Sec. 14.022

During to the 77th Texas Legislative Session, grain warehouse licensing requirements were modified. Effective September 1, 2001, the grain warehouse law allows a grain warehouse operator to either combine facilities within a 60 miles diameter under one license or to continue to license each facility individually.

Requirements for a Single License - Sec. 14.021

A warehouse operator may license each facility individually. In order to utilize the single licensing option, the following are required:

· One record keeping system must be maintained at each location.

· One complete set of books must be maintained at each location.

· The Daily position report (DPR) for the facility must be kept at the facility location.

The DPR must include records and accounts of:

· Grain received and withdrawn from the warehouse;

· Unissued receipts in the warehouse operator's possession;

· Receipts and scale weight tickets issued by the warehouse operator; and

· Receipts returned to and canceled by the warehouse operator.

Application to Operate a Public Grain Warehouse, (RGW-300 Form), (RGW-300 Instructions)

2. Requirements for a Combination License - Sec. 14.021

A warehouse operator has the option to combine several facilities under one license. In order to utilize this option, the following are required:

· All facilities under the combination must be located within a 60-mile diameter of its headquarters.

· The warehouse operator at a designated headquarters must maintain a single record keeping system covering only warehouses within the combination license.

· A single, unique set of sequentially numbered receipts containing all information required by department rule and bearing the name of the license holder and a unique combination name, but not bearing individual warehouse or facility names, must be used for the combination.

· For each scale operated by the warehouse operator, the warehouse operator must issue and maintain a single, unique set of sequentially numbered scale weight tickets containing all information required by department rule and bearing the name of the license holder and a unique name identifying the facility where the scale is located.

· A single Daily Position Report (DPR) covering all storage obligations of the combination and only the combination, including company-owned grain, and containing all information required by the department rule must be maintained.

· All original warehouse operator records, except for scale weight tickets, relating to transactions or storage obligations involving the combination must be maintained at the designated headquarters location and separate from all other businesses including separately licensed warehouse operations of the warehouse operator. All scale weight tickets from a particular scale, operated by the warehouse operator, shall be kept and maintained at the location of the particular scale.

· A warehouse operator may not combine or intermingle assets, storage obligations, liabilities of any kind, records or record entries, contractual obligations, other transactions of any kind, or any other business or operating information from different warehouses or businesses owned, managed, or operated by the warehouse operator.

Note: In situations where regulatory action at one facility results in license suspension, revocation, or other action, all facilities in a combination will be affected.

When applying for a combination license, RGW-301 is required along with the RGW-300.

(RGW-301) (RGW-301 Instructions).

3.   New Facility Inspection completed by TDA Inspector

      Once the capacity is determined, fees may be applied:

4.   Fees (Application or Renewal Fees) to include Inspection Fees.

      · License Application and Renewal Fees (Required Annually)

1. Single Facility License Fees: The annual application and renewal fee for a single license or a combination license is $500 or

2. Combination Facility License Fees: The annual application and renewal fee license is $500 for headquarters and $300 for each additional facility.

      · Inspection Fees (Required Annually)

Inspection Fees for Single and Combination Facilities: The fee for an annual or requested inspection is $38 for every 10,000 bushels of licensed storage capacity or a fraction there of or $150 whichever is greater.

5.   Requirements of a Reviewed or Audited Financial Statement

A warehouse operator shall file with the department a reviewed or audited financial statement showing net worth of the operator’s grain warehouse business as part of the operator’s application for a new license and thereafter, shall file with the department a new reviewed or audited financial statement reflecting the net worth of the operator’s grain warehouse business at the end of the operator’s most recent fiscal year, no later than the 90 days following the end of the operators most recent fiscal year. NOTE: The RGW-306 is no longer accepted.

The required reviewed or audited financial statement shall be prepared in accordance with the generally accepted account principles (accrual basis) for financial statements and related information established by the American Institute of Certified Public Accounts and shall include, but not limited to, each of the following:

o   A balance sheet;

o   A statement of income (profit and loss);

o   A statement of retained earnings;

o   A statement of cash flows; and

o   All accountants’ certifications, assurances, opinions, comments, and notes to the financial statement.

The financial statement required by this section shall be accompanied by:

o   A certification, under penalty of perjury, that the financial statement, as prepared, accurately reflects the financial condition of the operator's grain warehouse business as of the date designated, and fairly represents the result of operations for the period designated;

o   A detailed list of company-owned grain (paid contracted or the operator's own production), unpaid contracted grain, non-collateral receipted grain, collateral receipted grain, open storage grain, and grain received on consignment as of the date designated in paragraph (1) of this subsection;

o   A list of all parties in any pending litigation that claim a monetary judgment against the warehouse operator, the amount of the claim of each such party, and the status of the litigation; and

o   A list of all final unpaid monetary judgments against the warehouse operator.

6.   Net Worth Requirement

If the actual net worth of a warehouse operator equals less than 25 cents per bushel of rated storage capacity or a minimum of $200,000, a net worth deficiency bond is required. The warehouse operator shall file a deficiency bond in an amount equal to the difference between the actual net worth and the amount determined by multiplying 25 cents times each bushel of rated storage capacity of the warehouse. Temporary storage shall be included in determining net worth bonding requirements and additional net worth bonding may be required before a temporary storage permit is issued.

7.   Bonding Requirements (Single or Combination Licenses), (See Bonding Requirements).

·   The bonding requirements for a grain warehouse are now a flat rate of 10 cents per bushel of rated storage capacity.

·   The minimum bond amount is $35,000 regardless if the warehouse operator has a single or a combination license.

·   The maximum bond amount for a grain warehouse license is $500,000.

·   There may only be one bonding instrument per license. If a warehouse operator decides to combine facilities under one license, only one bond is required for the combination. You may no longer cover separately licensed facilities under one bond.

·   If an increase in capacity is required during the license year, more than one bonding instrument may be used. However, the licensee must consolidate all bonding instruments at or before license renewal.

·   A bond must have the term of the license plus two year.

Grain Warehouse Schedule D - Operator Bond Form, (RGW-304 Form), (RGW-304 Instructions),

When applying for a combination license, RGW-305 is required along with the RGW-304.

(RGW-305 Form) (RGW-305 Instructions).

Other Financial Assurance Options (Single or Combination Licenses)

Subject to the approval of the department, a warehouse operator may deposit the following with the department, in lieu of a bond and must be in the same amount or have a value in the same amount as required for a warehouse bond:

o    Cash (Contact Grain Warehouse Program).

o    An irrevocable letter of credit, payable to the state of Texas; (Contact Grain Warehouse Program) or

o    A certificate of deposit from a federally insured bank or savings and loan institution authorized to do business in this state, assigned to the State of Texas. NOTE: Any interest or income earned on an assigned certificate of deposit accrues to the owner of the certificate during the time of the assignment.

Grain Warehouse Schedule C Irrevocable Assignment Of Certificate Of Deposit

(RGW-303 Form), (RGW-303 Instructions).

8.   Grain Warehouse Certificate of Insurance Form,  (RGW-302 Form) (RGW-302 Instructions)

An Applicant/license must have a policy issued by an insurance company authorized to do business in the State of Texas.

The policy must insure, in the name of the applicant, all grain that is or may be in the public grain warehouse for its full market value against loss by or due to water or other fluid, malicious mischief, vandalism, theft, intentional waste or destruction, smoke, fire, internal explosion, lightning, hail, windstorm, hurricane, or tornado.

Insurance not required if an applicant is not required to file a certificate of insurance if the applicant certifies in writing, at or before the time the certificate of insurance is due, that all grain within the warehouse at the time the license is to be effected or will be owned by the applicant free of any lien. The applicant shall file the required certificate of insurance on or before the first day any grain not owned by the applicant, free of any lien that is stored for hire, handled for hire, or shipped for hire.

NOTE: A Certificate of Insurance must be completed for each separately licensed facility. Do not complete this certificate unless the policy complies with the requirements, as specified above, of Chapter 14 of the Texas Agriculture Code.

Resources

Forms