These regulations govern any person required to be licensed as a grain buyer in this State. The following terms have the meanings indicated. Terms Defined. “Certified public accountant” means any person permitted to engage in the practice of public accounting by the State Board of Accountancy. “Department” means the Maryland Department of Agriculture. “Fair market value” means the market value established by a contract or by the Department for a loss of grain at the time of the loss. “Grain” means corn, wheat, rye, oats, barley, sorghum, soybeans, and sunflowers. “Grain dealer” means a person who is in the business of buying, receiving, exchanging, or storing grain from a person who grows grain. Grain dealer does not mean a farmer who buys, receives, exchanges, or stores grain for use in the farming business of that farmer. “Person” means: An individual or a corporation, government or governmental subdivision or agency, business trust, estate, trust, partnership, or association; Two or more persons having a joint or common interest; Any other legal or commercial entity. “Secretary” means Secretary of Agriculture or the Secretary's designee. A person may not be a grain dealer without first obtaining a grain dealer's license from the Secretary as provided by this chapter. By way of example but not limitation, a licensed grain dealer shall be a person who: Receives grain, in the course of his business, from a grower under a deferred payment contract. “Deferred payment contract” means a grain sales contract when the grower conveys title to the grain to a person for an agreed price, but payment for the grain is delayed until an agreed later date. Receives grain, in the course of his business, from a grower under a deferred price contract. “Deferred price contract” includes such contracts as a so-called “price later contract”, “open price contract”, “delayed price contract”, and means a grain sales contract when the title to grain is conveyed to a person from a grower, but when the grower (seller) is allowed to determine the price of grain at a later date either based on a future month's price for grain set by a commodity exchange or by some other mutually agreed method of price determination. In the course of his business, stores grain for a grower for later use by the grower for: Feed; Seed; A crop cover; or Resale by the grower. Is in the business of buying, receiving, exchanging, or storing grain for a person whose grain is grown by an agent, tenant, or employee. Types of Licenses. The type of license an applicant shall obtain and the license fee the applicant shall pay is dependent on the number of bushels he anticipates handling in the year of the application as shown in the chart below: The license shall be effective until the following December 31, unless suspended or revoked. If a person who has been issued a license is handling an amount of grain greater than the amount he was licensed to handle he shall: Immediately notify the Department of this change in status; and Be issued a new license by the Department after he has done the following: Correctly revised his application, Paid additional money toward his license fee so that the sum total of what he paid previously and his new payment equals an amount that meets the requirements of §C of this regulation, Revised his financial statement to comply with Regulation .06, if necessary, or Posted additional sums of monies to comply with Regulation .05, if necessary. A license may not be issued or renewed by the Department unless the applicant has: Applied on a form provided by the Department; Paid the fee that is required for the license being obtained as set forth in Regulation .03C of this chapter; Complied with one of the following options: Posted a surety bond, irrevocable letter of credit, or cash guaranty, as required by Regulation .05 of this chapter, or Filed a financial statement as required by Regulation .06 of this chapter; Provided proof of insurance coverage as required by Regulation .07 of this chapter; and Provided additional financial information when requested by the Secretary. If the applicant chooses to post a surety bond, letter of credit or If the applicant does not file a financial statement, the Department may not issue a: Type A license if the applicant posts an amount less than $15,000; Type B license if the applicant posts an amount less than $35,000; and Type C or D license if the applicant posts an amount less than $100,000. If the applicant chooses the posting option, he shall: Show the same name for the following matters: The named applicant, in his grain dealer's license application, The named principal, if he posts a surety bond, or The named obligor or guarantor, if he posts either an irrevocable letter of credit or cash guaranty; Name the Maryland Department of Agriculture as the obligee or as the beneficiary of the surety bond, irrevocable letter of credit or cash guaranty. If the applicant chooses to file a financial statement, he shall indicate in the statement a minimum net worth for each type of grain dealer's license as follows: If the applicant does not post a surety bond, irrevocable letter of credit or cash guaranty, the Department may not issue a: Type A license if the financial statement indicates a minimum net worth less than $15,000; Type B license if the financial statement indicates a minimum net worth less than $35,000; and Type C or D license if the financial statement indicates a minimum net worth less than $100,000. An applicant for a Type A or B license shall submit a financial statement that: Is prepared and signed by a person who is not the applicant or a member of the applicant's business or family; Establishes a net worth for the applicant; and Is signed by the applicant. An applicant for a Type C or D license shall file a: Financial statement reviewed by a certified public accountant establishing the net worth of the applicant's business as provided in §A of this regulation; or Letter from a certified public accountant stating that a review of the applicant's business records shows a net worth as provided in §A of this regulation. A person licensed under this chapter shall insure, and at all times keep insured, in that licensed person's name or as a co-insurer, all of the grain received into the actual physical control or possession of the licensed person. The amount of insurance shall be the fair market value of the grain and shall include coverage against theft, loss or damage by fire, lightning, inherent explosion, water, windstorm, cyclone, tornado, or other act of God. If any loss or damage to grain or to the warehouse or warehouses occurs, whether the loss was insured against, the dealer shall immediately notify the Secretary, and at the grain dealer's own expense, promptly take the steps necessary to collect any monies which may be due as indemnity for the loss or damage. The applicant shall submit one of the following items as proof of insurance: An insurance policy certified to be true by the insurance company or agency; or An insurance binder or other evidence of insurance that contains or refers to other papers accompanying these forms that contain the information specified in §§B, C, and E of this regulation, if the policy is: Not yet available from the insurance company, and Made available for inspection by the Department within 90 days of the policy's effective date. The Department may not accept as proof of insurance any insurance policy that does not contain a clause requiring the insurer to notify the Secretary at least 45 days in advance of any policy's cancellation or nonrenewal. A person licensed under this chapter may not receive grain into that person's physical control or possession unless insured as required by this regulation. Immediately upon receipt, a person shall post the grain dealer license in a conspicuous place at each place of business where grain is received. Records showing the total amount of grain bought, received, exchanged, or stored in the dealer's grain business shall be kept at each place of business or at one central location within the boundaries of the State. If records are stored at one central location from more than one location, it shall be noted at each location the central location and the date the transfer of records occurred. Records of grain transactions shall be kept for 3 years. Grain records shall be available to the Secretary upon request. If not, the Secretary may take action as provided by Regulation .10 of this chapter. Upon request, the Secretary may review grain records of a grain dealer during normal business hours. The Secretary may subpoena the business records of any person believed to be acting as a grain dealer. If a person fails to comply with a subpoena, the Secretary may petition a court of competent jurisdiction to gain compliance. After a hearing, the Secretary may refuse to issue a license or may suspend or revoke a license for: Fraudulent or deceptive statements on an application for a license; Conviction of a violation of any of the provisions of this chapter; Failure to maintain adequate insurance on all grain received into the physical control or possession of the grain dealer; or Failure to notify the Secretary and to comply with the requirements of Regulation .03E of this chapter by a person who is handling more grain than allowed by the scope of the license. If a license is suspended or revoked, it shall be returned immediately to the Secretary. Instead of, or in addition to, suspension or revocation of a license, the Secretary may impose a civil penalty as provided under §D of this regulation on a person who: Makes fraudulent or deceptive statements on an application for a license; Submits fraudulent or deceptive financial or insurance documentation; Fails to maintain adequate insurance on all grain received into the physical control or possession of the grain dealer; Refuses to make business records available upon request; Operates as a grain dealer without first obtaining a license; or Violates any other provisions of this chapter. Classification of Violations for the Purpose of Determining Penalties. In this regulation, “violation” means a criminal conviction or an administrative finding that a person has committed any of the acts provided under §A of this regulation. For a violation of an act referenced under §A of this regulation, a civil penalty may be imposed by the Secretary, considering the nature and gravity of each violation, consistent with the following standards: For the first violation, a penalty of not more than $500; For the second violation, a penalty of not more than $1,000; and For the third and any subsequent violation, a penalty of not more than $5,000. Payment of Penalty. Unless a stay has been granted, a person against whom a civil penalty has been imposed under this chapter shall promptly pay the amount of the penalty to the Department within the time specified in the Department's notice to that person, or as otherwise agreed upon by the Department and the person. Appeal. A person may appeal the Secretary's decision to impose a civil penalty as provided in Agriculture Article, §2-405, Annotated Code of Maryland. The person shall be notified by the Department of this right to appeal. A person who violates the provisions of this chapter is guilty of a misdemeanor, and upon conviction by a court of competent jurisdiction is subject to a fine of $10,000. An injunction prohibiting a person from engaging in a violation of this subtitle may be sought by the Attorney General. Agriculture Article, §§13-201—13-216, Annotated Code of Maryland Effective date: October 11, 1982 (9:20 Md. R. 1981) Regulation .02B amended effective April 20, 1987 (14:8 Md. R. 939); October 19, 1987 (14:21 Md. R. 2223) Regulation .03 amended effective April 20, 1987 (14:8 Md. R. 939) Regulation .03C—E adopted effective October 19, 1987 (14:21 Md. R. 2223) Regulation .04 amended effective April 20, 1987 (14:8 Md. R. 939); October 19, 1987 (14:21 Md. R. 2223) Regulation .05B amended effective April 20, 1987 (14:8 Md. R. 939) Regulation .06 amended effective April 20, 1987 (14:8 Md. R. 939) Regulations .05 and .06 repealed and new Regulations .05 and .06 adopted effective October 19, 1987 (14:21 Md. R. 2223) Regulation .07 amended effective April 20, 1987 (14:8 Md. R. 939) Regulation .07D amended effective October 19, 1987 (14:21 Md. R. 2223) Regulation .08 amended effective April 20, 1987 (14:8 Md. R. 939) Regulations .09 and .10 repealed and new Regulations .09—.12 adopted effective April 20, 1987 (14:8 Md. R. 939) Regulation .11A amended effective September 4, 2000 (27:17 Md. R. 1621) Regulation .12 amended and recodified to Regulations .13 and .14, and new regulation .12 adopted effective September 4, 2000 (27:17 Md. R. 1621)