§3412.1. Grain and Cotton Indemnity Fund; creation; assessment; rules and regulations;
suspension of assessment; eligibility for reimbursement; availability of money;
prorated claims; reimbursement for administrative expenses; failure to pay;
subrogation
A. The commission may operate a Grain and Cotton Indemnity Fund for grain
dealers and cotton merchants licensed under this Chapter for the sole purpose of having
funds available for use in meeting the licensee's obligations with respect to the
reimbursement of any producer who sold agricultural commodities to the licensee and who
was not fully compensated.
B. The commission shall charge an assessment at the rate of one twenty-fifth of one
percent on the value of all agricultural commodities regulated under this Chapter which are
sold to grain dealers and cotton merchants. The assessments shall be due and payable to the
commission by the licensee at the first point of sale.
C. The assessments charged under this Section shall be subject to the following
provisions:
(1) All assessments received pursuant to this Section shall be deposited immediately
in the state treasury.
(2) After compliance with the requirements of Article VII, Section 9 of the
Constitution of Louisiana relative to the Bond Security and Redemption Fund, and prior to
monies being placed in the state general fund, an amount equal to that deposited as required
by Paragraph (1) of this Subsection shall be credited to a special fund hereby created in the
state treasury to be known as the Grain and Cotton Indemnity Fund. The monies in this fund
shall be used solely as provided in Paragraph (3) of this Subsection and only in the amounts
appropriated by the legislature. All unexpended and unencumbered monies in this fund at
the end of each fiscal year shall be transferred to the Louisiana Agricultural Finance
Authority to provide solely for the administration and operation of the fund provided for in
this Section. The monies in this fund shall be invested by the state treasurer in the same
manner as monies in the state general fund, and interest earned on the investment of these
monies shall be credited to this fund, again, following compliance with the requirement of
Article VII, Section 9 of the Constitution of Louisiana relative to the Bond Security and
Redemption Fund.
(3) The monies in the Grain and Cotton Indemnity Fund shall be used solely for the
administration and operation of the Grain and Cotton Indemnity Fund provided for in this
Section.
(4) Repealed by Acts 2020, No. 151, §2.
D. The commission shall adopt rules and regulations, in accordance with the
Administrative Procedure Act, necessary for the efficient administration of the Grain and
Cotton Indemnity Fund. Such rules shall include:
(1) Procedures for claims on the Grain and Cotton Indemnity Fund.
(2) Reimbursement limitations.
(3) Any rules and regulations necessary for the administration of the Grain and
Cotton Indemnity Fund.
(4) The establishment of civil penalties for violations of this Section.
E. Beginning on July 1st following the fiscal year in which the balance within the
Louisiana Agricultural Finance Authority reaches a level of twelve million dollars, the
commission shall suspend collection of the assessment required by this Section. If after
suspension of collection the balance is less than ten million dollars, the commission shall
require collection of the assessment. Any assessments collected after the balance reaches
twelve million dollars, but prior to the suspension of collection, shall remain within the
Louisiana Agricultural Finance Authority.
F. A producer shall be eligible to receive indemnity payments from the Grain and
Cotton Indemnity Fund if:
(1) The licensed grain dealer becomes insolvent.
(2) The licensed cotton merchant becomes insolvent.
(3) The licensed grain dealer or cotton merchant, as a result of the insolvency, does
not fully compensate the producer in accordance with a sale of agricultural commodities.
G. Upon the insolvency of a licensed grain dealer or cotton merchant, the
commission shall make the proceeds of the Grain and Cotton Indemnity Fund available for
use in meeting the licensee's obligations with respect to the reimbursement of any producer
who sold grain or cotton to the licensee and who was not fully compensated.
H. If claims for indemnity payments from the Grain and Cotton Indemnity Fund
exceed the amount in the fund, the commission shall prorate the claims and pay the prorated
amounts. As future assessments are collected, the commission shall continue to forward
indemnity payments to each eligible person until the person receives the maximum amount
payable in accordance with this Section.
I. Notwithstanding any other provision of law to the contrary, if the commission pays
a claim in accordance with this Section, then all payments shall be made jointly payable to
the claimant and to all secured parties and lienholders that were included in the most recent
master listing of farm products within the central registry as provided in R.S. 3:3654, or
addendum thereto, published by the secretary of state prior to the payment date and hold a
security interest in or a lien on the crops, farm products, or agricultural commodities,
perfected by the filing of a financing statement that:
(1) Identified those crops, farm products, or agricultural commodities as collateral.
(2) Was indexed under that producer's name as debtor.
(3) Was filed in the office designated for filing a financing statement against the
producer covering that collateral.
J. Expenses incurred by the commission in administrating the Grain and Cotton
Indemnity Fund shall be reimbursable from the fund. Administrative expenses shall be paid
in priority to all other payments.
K. Any licensee who knowingly or intentionally refuses or fails to collect the
assessment required under this Section or to submit any assessment collected from producers
to the commission for deposit in the Grain and Cotton Indemnity Fund shall be subject to
civil penalties.
L. Money paid from the Grain and Cotton Indemnity Fund in satisfaction of a valid
claim constitutes a debt obligation of the person against whom the claim was made. The
commission may take action on behalf of the fund against a person to recover the amount of
payment made, plus reasonable costs, including court costs, incurred by the commission in
obtaining recovery, legal interest from the date of payment of any claim, and reasonable
attorney fees. As a condition of payment of a claim from the Grain and Cotton Indemnity
Fund, the claimant shall subrogate its interest, if any, to the commission in a cause of action
against all parties, to the amount of the loss that the claimant was reimbursed by the fund.
Acts 2015, No. 430, §1; Acts 2016, No. 12, §1; Acts 2020, No. 151, §§1, 2.