Dear Neighbors,
As we saw in December, with the Porter Grain Elevator filing for bankruptcy, there is serious concern that if a grain elevator were to file for bankruptcy, farmers may be left in limbo without any confirmation that they would receive payment for grain sold or credited to the elevator.
In an effort to address this problem, I introduced legislation this week that eliminates the sales tax on grain bins and establishes an indemnity account for payment to farmers who would not receive payments in the event of a grain elevator filing for bankruptcy.
This is similar, in some ways, to a program currently operating in North Dakota.
House File 3186 would do a couple different things:
- Repeal the sales tax on grain bins, beginning in 2019.
- Establish a grain credit indemnity program that would compensate farmers if a grain elevator files for bankruptcy and is unable to pay for outstanding payments to producers. The indemnity program is funded using a portion of the sales tax on grain bins.
- Direct the Commissioner of Agriculture to implement a gross receipts sales tax on grain bins in future years—after the sales tax is eliminated in 2019—if the grain credit indemnity program account is anticipated to be less than $2,000,000. The gross receipts tax blinks off if the account will be above $6,000,000.
- Increase bond amounts for licensed grain buyers, particularly for those who purchase larger amounts of grain.
The legislation has an effective date of 2015, allowing farmers impacted by the Porter elevator closing to receive payments if they qualify.
As a farmer myself, I understand the problem that the Porter incident presents and I am looking forward to work with my colleagues to see this bill become law.
Stay tuned for more updates as this moves through the legislature.
Have a great weekend,
Chris