# Title 4.1 — Agriculture

## Chapter 4.1-61 — Credit-Sale Contract Indemnity

### § 4.1-61-01. Credit-sale contracts - Assessment on grain - Submission of assessment.

An assessment at the rate of two-tenths of one percent is placed on the value of all grain
sold in this state under a credit-sale contract, as provided for in sections 4.1-58-17 and
### § 4.1-59-13. The licensee purchasing the grain shall note the assessment on the contract required

under sections 4.1-58-21 and 4.1-59-14 and shall deduct the assessment from the purchase
price payable to the seller. The licensee shall submit any assessment collected under this
section to the commissioner no later than thirty days after each calendar quarter. The
commissioner shall deposit the assessments received under this section in the credit-sale
contract indemnity fund.
### § 4.1-61-02. Credit-sale contract indemnity fund - Creation - Continuing appropriation.

There is created in the state treasury the credit-sale contract indemnity fund. The state
treasurer shall invest available moneys in the fund in accordance with section 21-10-07 and in
cooperation with the commissioner shall deposit any income earned through the investments
into the fund. The fund and earnings of the fund are appropriated to the commissioner on a
continuing basis to be used exclusively to carry out the intent and purpose of this chapter.
### § 4.1-61-03. Credit-sale contract indemnity fund - Suspension of assessment.

At the end of the calendar quarter in which the credit-sale contract indemnity fund reaches a
level of six million dollars, the commissioner shall suspend collection of the assessment
required by this chapter. If after suspension of collection the balance in the fund is less than
three million dollars, the commissioner shall require collection of the assessment.
### § 4.1-61-04. Credit-sale contract indemnity fund - Eligibility for reimbursement.

A person is eligible to receive indemnity payments from the credit-sale contract indemnity
fund if:
1. After August 1, 2003, the person sold grain to a licensed warehouse or a grain buyer in
this state under a credit-sale contract;
2. The licensed warehouse to which the person sold grain or the grain buyer to which the
person sold grain becomes insolvent; and
3. The licensed warehouse or the grain buyer, as a result of the insolvency, does not fully
compensate the person in accordance with the credit-sale contract.
### § 4.1-61-05. Credit-sale contract indemnity fund - Availability of money.

Upon the insolvency of a licensed warehouse or a grain buyer and a declaration the
commissioner serve as the trustee, the commissioner shall make the proceeds of the credit-sale
contract indemnity fund available for use in meeting the licensee's obligations with respect to
the reimbursement of a person that sold grain to the licensee under a credit-sale contract and
who was not fully compensated in accordance with the contract.
### § 4.1-61-06. Credit-sale contract indemnity fund - Reimbursement limit.

The amount payable to an eligible person from the credit-sale contract indemnity fund for
each insolvency may not exceed the lesser of eighty percent of the amount owed to that eligible
person in accordance with all of that person's unsatisfied credit-sale contracts or two hundred
eighty thousand dollars.
### § 4.1-61-07. Credit-sale contract indemnity fund - Prorated claims.

If claims for indemnity payments from the credit-sale contract indemnity fund exceed the
amount in the fund, the commissioner shall prorate the claims and pay the prorated amounts. As
future assessments are collected, the commissioner shall continue to forward indemnity
payments to each eligible person until the person receives the maximum amount payable in
accordance with this chapter.

### § 4.1-61-08. Reimbursement for later insolvencies.

The commissioner shall ensure all persons eligible for payment from the indemnity fund as
a result of an insolvency are fully compensated to the extent permitted by this chapter before
any payments from the indemnity fund are initiated as a result of a later insolvency. The
chronological order of insolvencies is determined by the date the commissioner is appointed
trustee under section 4.1-58-40 or 4.1-59-21.
### § 4.1-61-09. Credit-sale contract indemnity fund - Reimbursement for administrative

expenses.
Any expense incurred by the commissioner in administrating the credit-sale contract
indemnity must be reimbursed from the fund before any other claim for indemnity is paid.
### § 4.1-61-10. Credit-sale contract indemnity fund assessment - Failure to collect

assessment - Penalty.
A person that knowingly or intentionally refuses or fails to collect the assessment required
under this chapter from producers or to submit any assessment collected from producers to the
commissioner for deposit in the credit-sale contract indemnity fund is guilty of a class A
misdemeanor.
### § 4.1-61-11. Revocation and suspension.

The commissioner may suspend or revoke the license of a licensee for cause upon notice
and hearing for violation of this chapter.
### § 4.1-61-12. Cease and desist.

If a person engages in an activity or practice contrary to this chapter or rules adopted by the
commissioner, the commissioner, upon the commissioner's own motion without complaint and
with or without a hearing, may order the person to cease and desist from the activity until further
order of the commissioner. The order may include any corrective action up to and including
license suspension. A cease and desist order must be accompanied by a notice of opportunity
to be heard on the order within fifteen days of the issuance of the order.
### § 4.1-61-13. Claims.

A claim concerning a grain buyer must be administered in a manner consistent with chapter
4.1-59. A claim concerning a state licensed grain warehouse must be administered in a manner
consistent with chapter 4.1-58. A payment may not be made from the credit-sale contract
indemnity fund for a claim based on losses resulting from the sale of grain to a person not
licensed under chapter 4.1-58, chapter 4.1-59, or the United States Warehouse Act [Pub. L.
106-472; 114 Stat. 2061; 7 U.S.C. 241 et seq.].
### § 4.1-61-14. Subrogation.

Money paid from the credit-sale contract indemnity fund in satisfaction of a valid claim
constitutes a debt obligation of the person against which the claim was made. The
commissioner may take action on behalf of the fund against a person to recover the amount of
payment made, plus costs and attorney's fees. Recovery for reimbursement to the fund must
include interest computed at the weight average prime rate charged by the Bank of North
Dakota. Upon payment of a claim from the credit-sale contract indemnity fund, the claimant shall
subrogate the interest of the claimant, if any, to the commissioner in a cause of action against all
parties, to the amount of the loss that the claimant was reimbursed by the fund.
### § 4.1-61-15. Roving grain buyers - Exception - Applicability of provisions.

Notwithstanding any other law, this chapter does not apply to a person that purchases,
solicits, or merchandises grain, that has been cleaned, processed, and made ready for
consumption, from a public warehouseman licensed and bonded under chapter 4.1-58. If the
person engages in any activity other than those described in this section, the person is subject
to the law governing those other activities.
