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The purpose of the Grain Warehouse Program is to protect the producers or other depositors of agricultural commodities in public storage. The Texas Department of Agriculture has licensees in virtually every legislative district of Texas, from the smallest country elevator to the export elevator and large integrated commercial feed manufacturers. The Grain Warehouse Inspection program administers and enforces the Texas Public Warehouse Laws relating to grain storage. It requires that any entity that stores grain for the public to be licensed. A commodity warehouse is defined as an "elevator, mill warehouse, sub terminal grain warehouse, or other structure or facility in which, for compensation, grain is received for storage, handling, processing, or shipment" and must obtain a license and bonding before operating. Each warehouse must be insured for loss of grain stocks for its full market value and must provide proof of insurance. Facilities that maintain a United States Warehouse Act license need not apply for the state's license. The operator of a public warehouse must maintain current records of all agricultural commodities stored, conditioned, handled, or shipped by the facility. The Grain Warehouse Program ensures that Texas grain producers have safe, solvent warehouses where they may store their commodities. To achieve this, the program examines state-licensed facilities once each year. The department is also authorized to make additional inspections as considered necessary or upon request by the warehouseman. Examinations help: - Eliminate fraud in the grain industry,
- Ensure the quantity and quality of stored commodities in Texas licensed warehouses, and
- Maintain the percentage of loss to producers as close to zero as possible.
Grain Warehouse Licenses Requirement A Grain Warehouse License is required to operate a grain elevator or a business engaged in the operation of a public grain warehouse where grain is stored. A license allows warehousemen to store and commingle grain owned by others for compensation. 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 will be subject to late fees. A grain warehouse license expires each year unless the license is canceled or suspended. Application Process A business that is required to be licensed must submit an application to TDA, along with a bond, financial statement and verification of insurance. The Department usually processes a grain warehouse license application in 10 days. For a grain warehouse to be considered suitable for storing, shipping and handling grain, it must be weather tight to protect grain from the elements at all times, structurally sound and provide a safe and adequate means of entry and exit. Records are required to be maintained at each grain warehouse location unless otherwise approved by the Department. The warehouseman must allow inspectors access to all facilities and records at least once a year. Fees The annual and renewal fee for a single license or a combination license is $150 The annual and renewal fee license is $150 for headquarters and $100 for every additional facility. The fee for an annual or requested inspection is $12 for each 10,000 bushels or fraction of 10,000 bushels of licensed storage capacity or $100 whichever is greater. TDA Grain Warehouse Inspection A TDA grain warehouse inspector will inspect the licensed grain elevator for inventory amounts and report those amounts to the program. The inspector will specify the commodities in storage and verify the warehouseman's records pertaining to these commodities. The inspector will measure the commodities in storage and check it against the warehouseman's records. If there is a shortage in excess of 3 percent, the warehouseman must reconcile the shortage. The inspection report is a confidential document and not subject to public disclosure. The inspector reports his findings to the program and program staff processes the reports and verifies the inventory amounts or investigates any potential problems. A grain warehouseman must apply for a permit to increase or decrease capacity. They must amend their surety and meet net worth requirements if needed. The grain warehouse inspector will measure or delete the storage that the warehouseman deems necessary. The inspector will also conduct close-out inspections whenever an elevator closes or is no longer operating. The inspector will conduct new inspections for elevators that have new owners or change names. The warehouseman may also request an inspection for a fee. A re-inspection is conducted on warehouses when program staff feels it is necessary. All of these inspection reports are sent to the program staff for review. TDA Legal Actions TDA can subpoena, apply for an injunction or collect on bond proceeds if a warehouseman fails to uphold the provisions of the Public Grain Warehouse Law. There are penalties for operating without a license, grain fraud, unlawful delivery, fraudulently issuing a scale weight ticket or receipt or changing a receipt or scale weight ticket after issuance, depositing grain without title, stealing grain or receiving stolen grain. Grain Warehouse Licensing Requirements 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. The following outlines license options for a warehouse operator: Single Licensing Option A warehouse operator may license each facility individually. In order to utilize the single licensing option, the following are required: 1. One record keeping system must be maintained at each location. 2. One complete set of books must be maintained at each location. 3. The Daily position report (DPR) for the facility must be kept at the facility location. The DPR must including 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. 4. A single bond or bond substitute. (See Bonding Requirements). 5. Insurance. (See Insurance Requirements). 6. Certified balance sheet/financial statement. Combination Licensing Option A warehouse operator now has the option to combine several facilities under one license. In order to utilize this option, the following are required: 1. All facilities under the combination must be located within a 60 mile diameter. 2. A single record keeping system covering only warehouses within the combination must be maintained by the warehouse operator at a designated headquarters location. 3. A single, unique set of sequentially number receipts containing all information required by the 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. 4. 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. 5. 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. 6. 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. 7. A single bond or bond substitute must be used to cover the combination. (See Bonding Requirements) 8. Insurance. (See Insurance Requirements) 9. Certified balance sheet/financial statement. 10. 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.
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