For AI agents: read the machine-readable documentation index at /llms.txt or the single-file full reference at /llms-full.txt.
Form a Business

GRAIN WAREHOUSES

KRS tit. XXI, ch. 251
in effect

KRS 251.010 Definitions for chapter

251.010. Definitions for chapter As used in this chapter, unless the context requires otherwise: (1) "Board" means the State Board of Agriculture; (2) "Claimant" means a person who: (a) Possesses scale tickets, settlement sheets, ledger cards, or other written evidence of ownership of fund-covered grain stored or possessed by a licensee; (b) Possesses warehouse receipts relating to fund-covered grain owned, stored, or possessed by a licensee; or (c) Possesses written evidence of a sale of fund-covered grain to a licensee but did not receive full payment for the grain sold; (3) "Cooperative agreement" means an agreement made by the board with a state or federal agency for the purpose of carrying out the provisions of this chapter; (4) "Department" means the Kentucky Department of Agriculture; (5) "Depositor" means any person who deposits grain in a grain warehouse for storage, handling, shipment, or is the owner or legal holder of an outstanding warehouse receipt, or who is lawfully entitled to possession of the grain; (6) "Facility" means a single location with one (1) or more structures used for the storage or handling of grain; (7) "Failure" means the occurrence of one (1) or more of the following events: (a) A licensee's inability to pay for storage obligations in accordance with requirements set forth in statute, administrative regulation, or contract; (b) A public declaration of insolvency; (c) A revocation of a grain dealer license or grain warehouse operator license and an outstanding obligation or indebtedness by the licensee; (d) A failure to pay a producer in the ordinary course of business and a bona fide dispute does not exist between the licensee and the producer; (e) A failure to deliver a grain to a depositor in the ordinary course of business and a bona fide dispute does not exist between the licensee and the depositor; (f) A failure to make timely application for license renewal; or (g) A denial of license renewal application; (8) "Forward pricing contract" means an agreement for sale which provides that: (a) Title passes at the time of delivery; and (b) The price will be determined at a later date; (9) "Fund" means the Kentucky grain insurance fund established by KRS 251.640; (10) "Fund-covered grain" means grain as used in KRS 251.385; (11) "Grain" means corn, wheat, soybeans, rye, barley, oats, grain sorghums, or popcorn; (12) "Grain dealer" means any person engaged in the business of buying grain from producers for resale, milling, or processing. A producer of grain buying grain for the producer's own use as seed or feed shall not be considered to be engaging in the business of buying grain for resale, milling, or processing; (13) "Grain warehouse operator" means a person who owns, controls, operates, or manages any public grain warehouse in which grain is stored for compensation; (14) "Gross value" means the value of grain after deductions for quality discounts, including but not limited to discounts for excessive moisture or foreign matter, but before deductions for storage or marketing charges; (15) "Person" means any individual, partnership, firm, corporation, limited liability company, or other corporate entity created under the laws of the Commonwealth or any other jurisdiction; (16) "Producer" means the owner, tenant, or operator of land who has an economic or financial interest in grain or receives all or any part of the proceeds from the sale of grain; (17) "Seed" means grain that is set aside to be used for the purpose of producing new plants; (18) "Warehouse" means any building, structure, or other protected enclosure, permanent or temporary, used or useable for the storage or conditioning of grain. Buildings used in connection with or operation of the grain warehouse shall be deemed part of the warehouse; and (19) "Warehouse receipt" means a document of title issued by a person engaged in the business of storing grains for compensation. Effective: August 1, 2019 History: Repealed and reenacted 2019 Ky. Acts ch. 88, sec. 3, effective August 1, 2019. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 30c-2.

KRS 251.015 Repealed, 2019

251.015. Repealed, 2019 Catchline at repeal: Division of Regulation and Inspection. History: Repealed 2019 Ky. Acts ch. 88, sec. 27, effective August 1, 2019. -- Amended 2004 Ky. Acts ch. 88, sec. 7, effective July 13, 2004. -- Amended 2002 Ky. Acts ch. 49, sec. 6, effective July 15, 2002. -- Created 1990 Ky. Acts ch. 393, sec. 8, effective July 13, 1990.

KRS 251.020 Powers and functions of state board -- Administrative regulations -- Cooperative agreements with state and federal agencies, universities, and other entities -- Application to Circuit Court for orders to enjoin -- Power to bring or defend civil actions -- Discipline of current or former licensees

251.020. Powers and functions of state board -- Administrative regulations -- Cooperative agreements with state and federal agencies, universities, and other entities -- Application to Circuit Court for orders to enjoin -- Power to bring or defend civil actions -- Discipline of current or former licensees The board shall have the following powers, and all powers incidental or necessary to same, in carrying out the duties set forth in KRS 251.340, in addition to the powers enumerated elsewhere within this chapter and in other chapters to: (1) Promulgate administrative regulations, in conjunction with the department, necessary for the proper administration and enforcement of the provisions of this chapter, and for the accomplishment of the purposes intended by this chapter; (2) Enter into cooperative agreements with state agencies, federal agencies, universities, and other entities; (3) Make application to the Franklin Circuit Court, or a Circuit Court in the county where the licensed grain facility is located, for an order enjoining actions on the part of any person that would constitute a violation of any section of this chapter or any administrative regulation promulgated under the authority of this chapter; (4) Bring or defend civil actions that relate to the provisions of this chapter, the department's actions, or the board's actions under the authority of this chapter. Legal expenses incurred shall be approved for payment by the board; and (5) Take disciplinary action against any current or former licensee. Effective: August 1, 2019 History: Amended 2019 Ky. Acts ch. 88, sec. 18, effective August 1, 2019. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 30c-3.

KRS 251.030 Repealed, 1982

251.030. Repealed, 1982 Catchline at repeal: Compensation of state board. History: Repealed 1982 Ky. Acts ch. 15, sec. 1, effective July 15, 1982. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 30c-4.

KRS 251.040 Repealed, 2002

251.040. Repealed, 2002 Catchline at repeal: Local boards -- Purpose. History: Repealed 2002 Ky. Acts ch. 240, sec. 1, effective July 15, 2002. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 30c-6.

KRS 251.050 Repealed, 2002

251.050. Repealed, 2002 Catchline at repeal: Local boards -- Appointment -- Qualifications. History: Repealed 2002 Ky. Acts ch. 240, sec. 1, effective July 15, 2002. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. secs. 30c-6, 30c-7, 30c-10, 30c-11.

KRS 251.060 Repealed, 2002

251.060. Repealed, 2002 Catchline at repeal: Term of members -- Filling of vacancies. History: Repealed 2002 Ky. Acts ch. 240, sec. 1, effective July 15, 2002. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 30c-12.

KRS 251.070 Repealed, 2002

251.070. Repealed, 2002 Catchline at repeal: Compensation of local board. History: Repealed 2002 Ky. Acts ch. 240, sec. 1, effective July 15, 2002. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 30c-16.

KRS 251.080 Repealed, 2002

251.080. Repealed, 2002 Catchline at repeal: Officers of local board. History: Repealed 2002 Ky. Acts ch. 240, sec. 1, effective July 15, 2002. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 30c-13.

KRS 251.090 Repealed, 2002

251.090. Repealed, 2002 Catchline at repeal: Bond of secretary-treasurer. History: Repealed 2002 Ky. Acts ch. 240, sec. 1, effective July 15, 2002. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 30c-14.

KRS 251.100 Repealed, 2002

251.100. Repealed, 2002 Catchline at repeal: License, name and number of local board. History: Repealed 2002 Ky. Acts ch. 240, sec. 1, effective July 15, 2002. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. secs. 30c-8, 30c-9.

KRS 251.110 Repealed, 2002

251.110. Repealed, 2002 Catchline at repeal: Refund to owners by local board. History: Repealed 2002 Ky. Acts ch. 240, sec. 1, effective July 15, 2002. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 30c-17.

KRS 251.120 Repealed, 2002

251.120. Repealed, 2002 Catchline at repeal: Sealers -- Appointment and powers. History: Repealed 2002 Ky. Acts ch. 240, sec. 1, effective July 15, 2002. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 30c-18.

KRS 251.130 Repealed, 2002

251.130. Repealed, 2002 Catchline at repeal: Bond and oath of sealer. History: Repealed 2002 Ky. Acts ch. 240, sec. 1, effective July 15, 2002. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 30c-19.

KRS 251.140 Repealed, 2002

251.140. Repealed, 2002 Catchline at repeal: Compensation of sealer. History: Repealed 2002 Ky. Acts ch. 240, sec. 1, effective July 15, 2002. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. secs. 30c-15, 30c-22.

KRS 251.150 Repealed, 2002

251.150. Repealed, 2002 Catchline at repeal: Functions of sealer. History: Repealed 2002 Ky. Acts ch. 240, sec. 1, effective July 15, 2002. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 30c-20.

KRS 251.160 Repealed, 2002

251.160. Repealed, 2002 Catchline at repeal: Application for storage -- Consent to inspection. History: Repealed 2002 Ky. Acts ch. 240, sec. 1, effective July 15, 2002. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. secs. 30c-21, 30c-43.

KRS 251.170 Repealed, 2002

251.170. Repealed, 2002 Catchline at repeal: Sealing fees -- Payment of expenses. History: Repealed 2002 Ky. Acts ch. 240, sec. 1, effective July 15, 2002. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 30c-15.

KRS 251.180 Repealed, 2002

251.180. Repealed, 2002 Catchline at repeal: Fastenings -- Tampering with prohibited. History: Repealed 2002 Ky. Acts ch. 240, sec. 1, effective July 15, 2002. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. secs. 30c-23, 30c-24.

KRS 251.190 Repealed, 2002

251.190. Repealed, 2002 Catchline at repeal: Sealer to deliver receipts -- Receipts subject to Uniform Commercial Code. History: Repealed 2002 Ky. Acts ch. 240, sec. 1, effective July 15, 2002. -- Amended 1960 Ky. Acts ch. 250, sec. 1, effective July 1, 1960. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. secs. 30c-27, 30c-29.

KRS 251.200 Repealed, 2002

251.200. Repealed, 2002 Catchline at repeal: Form of warehouse receipts. History: Repealed 2002 Ky. Acts ch. 240, sec. 1, effective July 15, 2002. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 30c-28.

KRS 251.210 Repealed, 2002

251.210. Repealed, 2002 Catchline at repeal: Sealer to issue certificates of reinspection -- Ascertain outstanding receipts and make periodic inspections. History: Repealed 2002 Ky. Acts ch. 240, sec. 1, effective July 15, 2002. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 30c-20.

KRS 251.220 Repealed, 2002

251.220. Repealed, 2002 Catchline at repeal: Issuance of fraudulent receipt prohibited. History: Repealed Ky. Acts ch. 240, sec. 1, effective July 15, 2002. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 30c-31.

KRS 251.230 Repealed, 2002

251.230. Repealed, 2002 Catchline at repeal: Sealer to file duplicate receipts with board. History: Repealed 2002 Ky. Acts ch. 240, sec. 1, effective July 15, 2002. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 30c-33.

KRS 251.240 Repealed, 2002

251.240. Repealed, 2002 Catchline at repeal: Issuance of duplicate warehouse receipt. History: Repealed 2002 Ky. Acts ch. 240, sec. 1, effective July 15, 2002. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 30c-32.

KRS 251.250 Repealed, 2002

251.250. Repealed, 2002 Catchline at repeal: Duplicate to be recorded before negotiation. History: Repealed 2002 Ky. Acts ch. 240, sec. 1, effective July 15, 2002. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 30c-37.

KRS 251.260 Repealed, 2002

251.260. Repealed, 2002 Catchline at repeal: County clerk to index duplicate -- Recording is notice. History: Repealed 2002 Ky. Acts ch. 240, sec. 1, effective July 15, 2002. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 30c-38.

KRS 251.270 Repealed, 2002

251.270. Repealed, 2002 Catchline at repeal: Assignment of recorded receipt -- Clerk's fee. History: Repealed 2002 Ky. Acts ch. 240, sec. 1, effective July 15, 2002. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 30c-39.

KRS 251.280 Repealed, 2002

251.280. Repealed, 2002 Catchline at repeal: Cancellation of warehouse receipt. History: Repealed 2002 Ky. Acts ch. 240, sec. 1, effective July 15, 2002. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 30c-40.

KRS 251.290 Repealed, 2002

251.290. Repealed, 2002 Catchline at repeal: Delivery of grain when receipt outstanding prohibited. History: Repealed 2002 Ky. Acts ch. 240, sec. 1, effective July 15, 2002. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 30c-25.

KRS 251.300 Repealed, 2002

251.300. Repealed, 2002 Catchline at repeal: Owner not to sell or encumber grain, after receipt issued. History: Repealed 2002 Ky. Acts ch. 240, sec. 1, effective July 15, 2002. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 30c-26.

KRS 251.310 Repealed, 2002

251.310. Repealed, 2002 Catchline at repeal: Appeal to state board -- Hearing. History: Repealed 2002 Ky. Acts ch. 240, sec. 1, effective July 15, 2002. -- Amended 1996 Ky. Acts ch. 318, sec. 174, effective July 15, 1996. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. secs. 30c-44, 30c-45.

KRS 251.320 Repealed, 2002

251.320. Repealed, 2002 Catchline at repeal: Orders of state board -- Suspension of license of local board. History: Repealed 2002 Ky. Acts ch. 240, sec. 1, effective July 15, 2002. -- Amended 1996 Ky. Acts ch. 318, sec. 175, effective July 15, 1996. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 30c-46.

KRS 251.330 Repealed, 2002

251.330. Repealed, 2002 Catchline at repeal: Costs of hearing. History: Repealed 2002 Ky. Acts ch. 240, sec. 1, effective July 15, 2002. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 30c-47.

KRS 251.340 Purpose of chapter

251.340. Purpose of chapter (1) The purpose of this chapter is to promote the welfare of the Commonwealth and its people, and to provide economic stability for its agricultural and agribusiness industries, by: (a) Establishing a system of licensure for persons engaging in the business of grain dealing; (b) Establishing a system of licensure for persons engaging in the business of grain warehouse operating; and (c) Establishing a grain insurance fund of which the purpose is to: 1. Protect producers of fund-covered grains against risk of loss in the event of a licensed grain dealer's or grain warehouse operator's financial failure; and 2. Compensate eligible claimants of fund-covered grains for losses due to the failure of a licensed grain dealer or grain warehouse operator. (2) The board, in conjunction with the department, shall be responsible for adopting and overseeing the policies, procedures, and programs to effectuate the purposes identified in this section. Effective: August 1, 2019 History: Created 2019 Ky. Acts ch. 88, sec. 4, effective August 1, 2019.

KRS 251.345 Licensee to issue scale ticket upon receipt of grain -- Documents issued for received grain to be produced upon department’s request

251.345. Licensee to issue scale ticket upon receipt of grain -- Documents issued for received grain to be produced upon department’s request (1) Upon receiving grain, a licensee shall issue a scale ticket to the depositor. (2) Upon request from a representative of the department, a licensee shall produce for inspection and copying the scale tickets and any other documents that were issued for received grain. Effective: August 1, 2019 History: Created 2019 Ky. Acts ch. 88, sec. 5, effective August 1, 2019.

KRS 251.350 Scale ticket issued by licensed grain dealer or licensed grain warehouse operator, information required -- Department-approved scales for weighing grain

251.350. Scale ticket issued by licensed grain dealer or licensed grain warehouse operator, information required -- Department-approved scales for weighing grain (1) Every scale ticket issued by a licensed grain dealer or a licensed grain warehouse operator shall include the following information in writing: (a) A statement indicating whether the delivery was inbound or outbound; (b) The name of the depositor for inbound delivery or consignee for outbound delivery; (c) The date of delivery; (d) The name and street address of the location where the grain was delivered; (e) The quantity of the grain that was delivered, in bushels or pounds; (f) The kind and grade of grain delivered, unless its identity is preserved by placing it in a special bin or a special pile which has a unique or identifying mark that appears on the receipt; (g) A statement whether the grain is being sold at a specified price or being delivered pursuant to a forward pricing contract whose terms were pre- approved by a representative of the department; and (h) The scale ticket's serial number. (2) Grain received by a licensee shall be weighed on department-approved scales. Effective: August 1, 2019 History: Created 2019 Ky. Acts ch. 88, sec. 6, effective August 1, 2019.

KRS 251.355 Grain dealer license and grain warehouse operator license -- Department’s authority to issue and administer licenses -- Administrative regulations -- Fees -- Penalties for violations -- Hearing -- Appeal -- Enforcement

251.355. Grain dealer license and grain warehouse operator license -- Department’s authority to issue and administer licenses -- Administrative regulations -- Fees -- Penalties for violations -- Hearing -- Appeal -- Enforcement (1) No person shall be or act as a grain dealer in the Commonwealth without holding a valid grain dealer license issued by the department. (2) No person shall engage in the business of buying grain from producers for resale, milling, or processing in the Commonwealth without holding a valid grain dealer license issued by the department; provided, however, that no license shall be required in order to buy grain from sellers who are not producers of grain. (3) No person shall be or act as a grain warehouse operator in the Common wealth without holding a valid grain warehouse operator license issued by the department. (4) No person shall own, control, operate, or manage any public warehouse in which grain is stored for compensation in the Commonwealth without holding a valid grain warehouse operator license issued by the department. (5) Any person who possesses unpaid-grain for more than thirty (30) days shall be deemed to be acting as a grain warehouse operator and shall be subject to the licensing and financial requirements for gr ain warehouse operators under the provisions of this chapter. (6) Licenses issued by the department shall be valid for a period of time not to exceed one (1) year and shall expire on June 30 each year. (7) A separate license shall be required for each faci lity in the Commonwealth. (8) The board, in conjunction with the department, shall promulgate administrative regulations setting forth a schedule of fees for licensed grain warehouse operators. Any changes to the schedule of fees shall be approved by a maj ority vote of the board. The schedule of fees shall be reviewed by the board at least one (1) time every four (4) years. The annual increase in board -approved license fees shall be limited to five percent (5%) and shall not exceed twenty percent (20%) over any four (4) year period. (9) The board, in conjunction with the department, shall promulgate administrative regulations setting forth a schedule of fees for licensed grain dealers. Any changes to the schedule of fees shall be approved by a majority vote of the board. The schedule of fees shall be reviewed by the board at least one (1) time every four (4) years. The annual increase in board -approved license fees shall be limited to five percent (5%) and shall not exceed twenty percent (20%) over any four ( 4) year period. (10) The department shall have the authority to issue a notice of violation and assess a civil fine pursuant to KRS 251.990, or suspend or revoke a license if the board or department determines any person has violated a provision of this ch apter or any administrative regulation promulgated under this chapter. (11) Any person receiving a notice of violation may contest the notice by submitting to the department a written request for a hearing in accordance with KRS Chapter 13B within thirty (30) days of receipt. Failure to request a hearing shall result in the recipient's failure to exhaust administrative remedies and render the notice final. (12) Any person aggrieved by any final order of the department may appeal to the Franklin Circuit Court or the Circuit Court of the county in which the respondent is located, in accordance with KRS 13B.140. (13) The department may enforce any final order by petitioning the Franklin Circuit Court or the Circuit Court of the county in which the respondent is located. Effective: July 15, 2026 History: Amended 2026 Ky. Acts ch. 23, sec. 2, effective July 15, 2026. -- Created 2019 Ky. Acts ch. 88, sec. 7, effective August 1, 2019.

KRS 251.360 Grain dealer or grain warehouse operator license fees -- Use of fees -- Prohibited use of fees

251.360. Grain dealer or grain warehouse operator license fees -- Use of fees -- Prohibited use of fees (1) Receipts collected from grain dealer or grain warehouse operator licensing fees shall be used by the department to offset the cost of: (a) The salary and benefits for employees in the department’s Division of Regulation and Inspection; and (b) The vehicles, mileage, training, legal fees, accounting fees, and other expenses incurred by the department or the board in connection with the provisions authorized by this chapter. (2) Receipts collected from grain dealer or grain warehouse operator licensing fees shall not be deposited in, or used to pay expenses incurred in connection with, the administration of the Kentucky grain insurance fund. Effective: August 1, 2019 History: Created 2019 Ky. Acts ch. 88, sec. 8, effective August 1, 2019.

KRS 251.365 Evidence of financial responsibility to be filed by applicant or licensee -- Security required

251.365. Evidence of financial responsibility to be filed by applicant or licensee -- Security required (1) The department shall not issue or renew a grain dealer or grain warehouse operator license under this chapter until the applicant or licensee has filed with the department satisfactory evidence of financial responsibility. (2) Evidence of financial responsibility shall: (a) Consist of: 1. A surety bond, executed by the applicant as principal, and issued by a corporate surety authorized to conduct business in this state; 2. A certificate of deposit issued by a federally insured financial institution in this state; 3. An irrevocable letter of credit issued by a federally insured financial institution in this state; 4. Other security, as deemed acceptable by the department; or 5. Any combination of subparagraphs 1. to 4. of this paragraph, so long as the aggregate value of the evidence meets the requirements of this section; (b) Be made payable to the board; (c) Be in an amount meeting the requirements of this section; (d) In the case of a bond, be conditioned upon the faithful performance of: 1. All obligations of a licensee under the terms of this chapter and any administrative regulations promulgated under it, from the effective date of the bond until the license is revoked, denied, or suspended or the bond is canceled, whichever comes first; and 2. Any obligations the applicant or licensee may contract for with producers, depositors, or other persons placing grains in the applicant's or licensee's facilities, from the effective date of the bond and thereafter, regardless of whether or not the applicant's or licensee's facility remains the subject of a valid license; (e) Be filed with and remain in possession of the department until it is released, canceled, or discharged as provided for by the terms of this chapter and any administrative regulations promulgated under it; (f) Be kept in force at all times while the licensee is operating as a grain warehouse operator or grain dealer. Failure to keep the bond or other security in force shall be cause for revocation of the license, and shall subject the licensee to criminal penalties set forth in KRS 251.990; and (g) Contain a provision stating that it may not be canceled by any party, except upon ninety (90) days' notice in writing to the department. A notice of cancellation shall not affect any liability accrued before the expiration of the notice period. (3) Separate proof of financial responsibility shall be required for each facility that is licensed by the department. (4) For any security used as evidence under subsection (2) of this section that bears interest, the interest shall be made payable to the purchaser of the security. (5) No person may release, cancel, or discharge security filed with the department under subsection (1) of this section without prior approval of the department and its approval of a substitute bond or other security. (6) If the department questions a licensee's ability to pay producers and depositors for grain, or if the department determines that the licensee does not have a sufficient net worth to meet the licensee's financial obligations, the department shall require the licensee to file additional security with the department in an amount equal to the insufficiency. Failure to post the additional security shall constitute grounds for suspension or revocation of a license. (7) The amount of the security required by subsection (1) of this section shall be in a principal amount, to the nearest one thousand dollars ($1,000), that is equal to ten percent (10%) of: (a) For a licensed grain dealer, the aggregate dollar amount: 1. That was paid by the dealer for grain purchased in the dealer's most recently completed fiscal year; or 2. That the department estimates will be paid by the grain dealer for grain purchased in the grain dealer's current fiscal year, if records for the grain dealer's most recently completed fiscal year do not exist or are not available; and (b) For a licensed grain warehouse operator, the aggregate dollar value of: 1. The grain deposited in the grain warehouse operator's most recently completed fiscal year; or 2. The grain the department estimates will be deposited in the operator's warehouse during the current fiscal year, if records for the warehouse operator's most recently completed fiscal year do not exist or are not available. (8) In no event shall the required security for a licensee be less than twenty-five thousand dollars ($25,000) nor more than one million dollars ($1,000,000). Effective: August 1, 2019 History: Created 2019 Ky. Acts ch. 88, sec. 9, effective August 1, 2019.

KRS 251.370 Licensees using paper documents or electronic documents -- Business records required -- Retention schedule -- Accounting functions -- Financial statements -- Administrative regulations

251.370. Licensees using paper documents or electronic documents -- Business records required -- Retention schedule -- Accounting functions -- Financial statements -- Administrative regulations (1) A licensee using paper scale tickets, settlement sheets, or purchase contracts shall comply with the following requirements: (a) Documents shall be pre-numbered sequentially; and (b) Settlement sheet information shall be cross-referenced with scale tickets. (2) A licensee using electronic scale tickets, settlement sheets, purchase contracts, or other documents shall conform to the formats and procedures required by the department. (3) A licensee shall provide, and make available to the department or the board, a complete and accurate set of business records, including: (a) Records of all transactions, including records and accounts of all grains received and withdrawn or delivered; (b) Records, filed in numerical order, of all scale tickets, warehouse receipts, and settlement sheets that have been issued, voiced, or lost; and (c) Copies of contracts for the sale or storage of grain. (4) A licensee shall retain its business records for a minimum of four (4) years. (5) A licensed grain warehouse operator shall retain copies, either digitally or on paper, of warehouse receipts or other documents evidencing ownership of any grain, or any liability of the grain warehouse operator, so long as such documents evidence a valid ownership interest or debt. A licensee shall retain copies of such documents for a period of not less than four (4) years from the date when the ownership interest or debt was extinguished. (6) A licensee's accounting functions shall be performed in conformity with generally accepted accounting principles. (7) A licensee's business records shall accurately identify any liens or encumbrances on grain that is held or owned by the licensee. (8) Upon request by the board, a licensee or applicant for a license shall provide to the department either: (a) A review engagement report issued by an independent certified public accountant stating whether, based on the review, he or she is aware of any material modifications that should be made to the financial statements in order for them to be in accordance with the applicable reporting framework; or (b) An audit and written report issued by an independent certified public accountant expressing an opinion whether the financial statements are presented fairly, in all material aspects, in accordance with the applicable financial reporting framework. (9) The board, in conjunction with the department, shall have authority to promulgate administrative regulations setting forth additional recordkeeping requirements for licensees. Effective: July 15, 2020 History: Amended 2020 Ky. Acts ch. 114, sec. 1, effective July 15, 2020. -- Created 2019 Ky. Acts ch. 88, sec. 10, effective August 1, 2019.

KRS 251.375 Forward pricing contracts -- Requirements governing -- Administrative regulations

251.375. Forward pricing contracts -- Requirements governing -- Administrative regulations (1) No licensee shall enter into forward pricing contracts without first attaining approval from the department to enter into these contracts. A licensee entering into forward pricing contracts shall keep any records and ledgers the department deems necessary to document the licensee’s obligations. (2) A licensee that has entered into a forward pricing contract shall make a copy available for inspection by the department or the board upon request. (3) Forward pricing contracts shall be in writing. (4) The board, in conjunction with the department, shall promulgate administrative regulations setting forth the minimum information that shall be included in any forward pricing contract entered into by a licensee. (5) By the tenth day of each month, any licensee that has entered into a forward pricing contract shall submit to the department a report accurately reflecting its position on the last day of the previous month. (6) A licensee which has entered into one (1) or more forward pricing contracts shall maintain at least eighty percent (80%) of the value of the licensee’s unpaid obligations for all grain purchased under forward pricing contracts, using one (1) or more of the following: (a) Grain maintained in storage in the licensee’s warehouse or other storage facilities; (b) Rights to grain as evidenced by a warehouse receipt or scale ticket for storage of the grain under an agreement with another warehouse approved by a representative of the department; or (c) Proceeds from the sale of grain as evidenced by one (1) or more of the following: 1. Funds held in a separate account, designated for the benefit of unpaid sellers of grain that was delivered under forward pricing contracts, in a state or federally licensed financial institution or a lending agency of the Farm Credit Administration; 2. Short-term investments held in time accounts, designated for the benefit of unpaid sellers of grain that was delivered under forward pricing contracts, in a state or federally licensed financial institution or a lending agency of the Farm Credit Administration; or 3. Other evidence of unencumbered security or assets acceptable to the department, including but not limited to an irrevocable letter of credit or surety bond. (7) If the department or the board determines that a licensee does not have sufficient net worth to satisfy the indebtedness, the department shall prohibit the transfer or disbursement of any grain, property, or assets except for the satisfaction of unpaid obligations for grain that was delivered under forward pricing contracts. Disbursements of payments to sellers shall be made on a pro rata basis of the value of the remaining grain. Effective: August 1, 2019 History: Created 2019 Ky. Acts ch. 88, sec. 11, effective August 1, 2019.

KRS 251.380 Periodic inspections of licensed grain warehouses and licensed grain dealers -- Correction of deficiencies

251.380. Periodic inspections of licensed grain warehouses and licensed grain dealers -- Correction of deficiencies (1) The department shall inspect each licensed grain warehouse at least two (2) times each year. The department’s inspection shall include: (a) A determination whether the grain in storage is properly accounted for; (b) An assessment of the storage facilities for fitness; and (c) An assessment of the condition of the grain in storage. (2) The department shall permit a licensee to store grain at another facility that is licensed and located in the Commonwealth of Kentucky, if the requirements for a surety bond or other evidence of financial responsibility set forth in KRS 251.365 are satisfied. (3) A licensee that is short of grain may cover the shortage by: (a) Acquiring additional bond on one hundred percent (100%) of the value of the grain; or (b) Depositing the shortage value of the grain into a special account that is payable jointly to the licensee and the department. (4) The department may allow a licensee that is short of grain to substitute one (1) type of grain for another type of grain on a dollar-for-dollar basis. (5) The department shall inspect each licensed grain dealer at least one (1) time each year. The department’s inspection shall include: (a) An inspection of the licensee’s scale tickets, settlements, and canceled checks; and (b) Verification that payments are made by the dealer within thirty (30) days of the completion of delivery. (6) A licensee that is short of grain shall correct any deficiencies identified by the department within the deadline mandated by the department. Effective: August 1, 2019 History: Created 2019 Ky. Acts ch. 88, sec. 12, effective August 1, 2019.

KRS 251.385 Fund-covered grains, defined -- Approval of fund-covered grain status by board required

251.385. Fund-covered grains, defined -- Approval of fund-covered grain status by board required (1) The following grains shall be fund-covered grains: (a) Corn, wheat, soybeans, grain sorghums, rye, barley, oats, or popcorn; and (b) Other grains that may be approved for "fund-covered grain status" by a majority vote of the board. (2) The board shall not approve for "fund-covered grain status" any grain that is not publicly traded on at least one (1) exchange in the United States or Canada. Effective: August 1, 2019 History: Created 2019 Ky. Acts ch. 88, sec. 13, effective August 1, 2019.

KRS 251.390 Kentucky grain insurance fund -- Eligibility for coverage -- Notice of intent not to be covered by fund, effect of

251.390. Kentucky grain insurance fund -- Eligibility for coverage -- Notice of intent not to be covered by fund, effect of (1) Except as provided in subsections (2) and (3) of this section, any claimant who delivers fund-covered grain to a licensed grain dealer or licensed grain warehouse operator shall be eligible for coverage by the fund without regard to whether the claimant resides in Kentucky or another state. (2) Any person who submits to the department, not later than January 31, a written notice of intent not to be covered by the fund, shall: (a) Be entitled to receive from the board a refund of any assessments collected from that person pursuant to KRS 251.640 during the course of that calendar year; and (b) Remain ineligible for coverage and compensation by the fund for any grain that may be delivered by or on behalf of that person to any licensee during the course of that calendar year. (3) By submitting a timely written notice of intent not to be covered by the fund as provided under subsection (2) of this section, a person foregoes any protection or eligibility for compensation from the fund for grain that may be delivered during the course of that calendar year. The written notice shall: (a) Be effective with respect to eligibility for coverage only to the fund-covered grain delivered in that calendar year; and (b) Not have any effect with respect to eligibility for coverage for fund-covered grain delivered in previous calendar years or in subsequent calendar years. (4) Any person who does not submit to the department, on or before January 31, a written notification of intent not to be covered by the fund shall: (a) Not be entitled to receive a refund of any assessments that may be collected from that person pursuant to KRS 251.640 during the course of that calendar year; and (b) Remain eligible for coverage by the fund for any fund-covered grain delivered by or on behalf of that person to any licensee during the course of that calendar year. (5) Any person who submits a written notice of intent not to be covered by the fund shall be deemed also to have given notice of intent not to be covered to the extent of his, her, or its ownership interest in any other entities in which he, she, or it holds such an interest. Effective: August 1, 2019 History: Created 2019 Ky. Acts ch. 88, sec. 14, effective August 1, 2019.

KRS 251.395 Lien on grain stored with grain warehouse operator -- Relation to other liens or security interests -- Filing of notice not required to perfect -- Discharge of lien

251.395. Lien on grain stored with grain warehouse operator -- Relation to other liens or security interests -- Filing of notice not required to perfect -- Discharge of lien (1) When a depositor stores grain with a grain warehouse operator and has written evidence of ownership disclosing a storage obligation, the producer or other depositor has a first priority lien on the grain, the proceeds from the grain, or on grain owned by the grain warehouse operator. The lien terminates when the storage liability of the grain warehouse operator to the depositor terminates. (2) The lien created under this section shall be preferred to any lien or security interest of any creditor to the grain warehouse operator, regardless of whether the creditor’s lien or security interest was attached to the grain or proceeds before or after the date on which the producer or other depositor’s lien was attached. (3) A depositor who claims a lien under this section need not file any notice of the lien in order to perfect the lien. (4) The lien created under this section is discharged, except as to the proceeds therefrom and except as to grain owned by the grain warehouse operator, upon sale of the grain by the warehouse operator to a buyer in the ordinary course of business. Effective: August 1, 2019 History: Created 2019 Ky. Acts ch. 88, sec. 15, effective August 1, 2019.

KRS 251.400 Powers and duties of board upon failure involving licensed grain dealer or licensed grain warehouse operator -- When claimant deemed to have assigned all rights, title, and interest to the board

251.400. Powers and duties of board upon failure involving licensed grain dealer or licensed grain warehouse operator -- When claimant deemed to have assigned all rights, title, and interest to the board (1) When the board determines there has been a failure involving a licensed grain dealer or licensed grain warehouse operator, the board shall have the authority to: (a) Take receivership of any grain on the licensee’s premises to ensure that it is not destroyed, lost, stolen, or otherwise disposed of; (b) Sell the grain and place the proceeds in escrow for the benefit of the owners, or for the benefits of claimants, when the identities of those persons have been identified; (c) Establish a priority lien on any grain or other assets that remain in the licensee’s possession, custody, or control; (d) Secure and take possession of any grains or other commodities in the possession, custody, or control of the failed grain dealer or grain warehouse operator for the purpose of using it to cover outstanding storage obligations. If there is insufficient grain to cover outstanding shortage obligations, the board shall determine each depositor’s pro rata share of the value of the remaining grain. Any remaining deficiency shall be considered a claim of the producer or depositor against the fund, if applicable. Each grade of grain shall be treated separately for the purpose of covering outstanding storage obligations and calculating claims against the fund; (e) Commence action upon the surety bond, certificate of deposit, letter of credit, or temporary surety as required by KRS 251.365. The board may commence action against both the licensee and the surety or other financial institution in the Franklin Circuit Court or a Circuit Court in the county where the grain is located; (f) Deposit into the fund any remaining assets of the failed grain dealer or grain warehouse operator for the purpose of using those assets to pay claimants; (g) Establish a period of time, not less than thirty (30) days and not greater than one (1) year, for potential claimants to file their claims with supporting documentation; (h) Make a public announcement of the procedure and deadline for potential claimants to file their claims; (i) Examine timely filed claims and make such investigation as may be necessary for the board to determine whether a claim is a valid claim; (j) Determine which of the claims that were submitted in advance of the deadline are valid claims; (k) Assign to each valid claim an initial value computed as a percentage of the value of the grain on the date when it was delivered by the claimant to the licensee, relying on the value established for that grain by the Chicago Board of Trade on the date of delivery. If there is no price information from the Chicago Board of Trade for that grain on that date, then the board shall rely on price information from another exchange in the United States or Canada. If there is no price information from any exchange in the United States or Canada for that grain on that date, the board shall determine an alternative method for determining a value for that grain on that date; (l) Compute claim values by applying these percentages to each valid claim’s initial value: 1. One hundred percent (100%), for valid claims that are evidenced by a grain warehouse receipt issued by a federally licensed warehouse; or 2. A minimum of ninety percent (90%), for all other valid claims; and (m) Notify each claimant in writing of the board’s determination as to: 1. The validity of the claim; 2. The value of the grain claimed by the claimant; 3. The amount and percent of value that will be reimbursed by the fund; and 4. The claimant's right to request a hearing on his or her claim within thirty (30) days of the claimant’s receipt of the written notification. (2) The board shall not approve for payment from the fund any claims with respect to grains that are not fund-covered grains. (3) The board shall not compute a claim’s value in reliance on the price or other terms of agreement between a claimant and a licensee. (4) If a producer or other depositor fails to file a claim within the time announced by the board, then the board and the fund shall not be liable to that depositor. (5) If the board fails to commence action against the surety bond, certificate of deposit, letter of credit, or temporary surety that KRS 251.365 required the licensee to obtain within thirty (30) days of a depositor making a written demand that the board commence action, then the depositor shall have a right of action against the licensee to recover damages suffered by reason of the licensee’s failure. The depositor shall give the board immediate written notice of the commencement of such action. (6) The board shall deny payment from the fund to a claimant when the board determines that the claimant: (a) Elected to opt out of coverage, as permitted by KRS 251.390; or (b) Engaged in conduct or practices which substantially contributed to the claimant’s financial loss. (7) A claimant who accepts payment from the fund shall be deemed to have assigned to the board all of the claimant’s rights, title, and interest in the grain and in any judgment with respect to the grain. The board shall have the authority to initiate or maintain any civil action it deems necessary to compel a licensee or a former licensee to repay to the fund any sums disbursed therefrom in relation to a claim. Effective: August 1, 2019 History: Created 2019 Ky. Acts ch. 88, sec. 16, effective August 1, 2019.

KRS 251.405 Rights of persons injured by violation of any provision of this chapter

251.405. Rights of persons injured by violation of any provision of this chapter Any person injured by the violation of any provision in this chapter may bring an action against the person or corporation that committed the violation to recover damages sustained due to the violation without regard to whether or not the person or corporation committing the violation has been subjected to other civil or criminal penalties. Effective: August 1, 2019 History: Created 2019 Ky. Acts ch. 88, sec. 17, effective August 1, 2019.

KRS 251.410 Repealed, 2019

251.410. Repealed, 2019 Catchline at repeal: Definitions for KRS 251.420 to 251.510. History: Repealed 2019 Ky. Acts ch. 88, sec. 27, effective August 1, 2019. -- Amended 1984 Ky. Acts ch. 389, sec. 14, effective July 13, 1984. -- Amended 1982 Ky. Acts ch. 292, sec. 2, effective July 15, 1982. -- Amended 1972 Ky. Acts ch. 347, sec. 1. -- Created 1970 Ky. Acts ch. 252, sec. 1.

KRS 251.420 Repealed, 2019

251.420. Repealed, 2019 Catchline at repeal: Duties of board. History: Repealed 2019 Ky. Acts ch. 88, sec. 27, effective August 1, 2019. -- Created 1970 Ky. Acts ch. 252, sec. 2.

KRS 251.430 Repealed, 2019

251.430. Repealed, 2019 Catchline at repeal: License required -- Exception -- Renewal -- Fee. History: Repealed 2019 Ky. Acts ch. 88, sec. 27, effective August 1, 2019. -- Amended 2016 Ky. Acts ch. 36, sec. 1, effective July 15, 2016. -- Amended 2009 Ky. Acts ch. 61, sec. 1, effective June 25, 2009. -- Amended 2005 Ky. Acts ch. 125, sec. 2, effective June 20, 2005. -- Amended 1984 Ky. Acts ch. 389, sec. 15, effective July 13, 1984. -- Amended 1972 Ky. Acts ch. 347, sec. 2. -- Created 1970 Ky. Acts ch. 252, sec. 3.

KRS 251.440 Application for license as grain warehouse operator or grain dealer -- Grounds for denial of new license or revocation of existing license -- Notice and hearing -- Confidentiality of documents

251.440. Application for license as grain warehouse operator or grain dealer -- Grounds for denial of new license or revocation of existing license -- Notice and hearing -- Confidentiality of documents (1) Application for license as a grain warehouse operator or grain dealer shall: (a) Set forth the name of the applicant, its principal officer, if a corporation, or the active members of a partnership if a partnership; (b) Identify the location or locations of the principal office or place of business and the locations in this state at which the applicant proposes to engage in this business; (c) Be accompanied by a bond as set forth in KRS 251.365. The bond shall run to the Commonwealth of Kentucky and be for the benefit of all persons storing grain in the licensee's warehouse or selling grain to the licensee; and (d) Be accompanied by a compilation of financial statements issued by a certified public accountant who has stated in writing whether he or she is independent from ownership and management, or one (1) of the documents identified in KRS 251.370(8), provided, however, a grain dealer license applicant whose total annual purchases in each of the last three (3) years did not exceed fifty thousand (50,000) bushels shall be exempt from the requirement set forth in this subsection. (2) The department may deny a license to any applicant or revoke the existing license if the applicant or licensee: (a) Furnishes false or misleading information or conceals a material fact on the application or other supporting documents; (b) Has been convicted of fraud or deceptive practice; (c) Is currently adjudicated incompetent by a court of competent jurisdiction; (d) Fails to maintain an asset to liability ratio of not less than one to one (1:1) or fails to post additional surety to cover the deficiency; (e) Violates a provision of this chapter; or (f) For other good cause shown. (3) Any person denied a license or whose license has been revoked for these reasons shall: (a) Be given written notice within thirty (30) working days of receipt of application or prior to revocation; and (b) May request a hearing by writing to the board. Upon request, a hearing shall be conducted in accordance with KRS Chapter 13B. (4) The department shall not approve an application for a grain warehouse operator's license without first verifying that the application meets the requirements of this section. (5) The department shall not approve an application for a grain dealer's license without first verifying that the application meets the requirements of this section. (6) The department shall keep confidential, and not disclose to anyone other than the applicant or licensee, the documents identified in this section and KRS 251.370. Effective: July 15, 2020 History: Amended 2020 Ky. Acts ch. 114, sec. 2, effective July 15, 2020. -- Amended 2019 Ky. Acts ch. 88, sec. 19, effective August 1, 2019. -- Amended 2016 Ky. Acts ch. 36, sec. 2, effective July 15, 2016. -- Amended 2005 Ky. Acts ch. 125, sec. 3, effective June 20, 2005. -- Amended 1996 Ky. Acts ch. 318, sec. 176, effective July 15, 1996. -- Amended 1990 Ky. Acts ch. 396, sec. 1, effective July 13, 1990. -- Amended 1984 Ky. Acts ch. 389, sec. 17, effective July 13, 1984. -- Amended 1972 Ky. Acts ch. 347, sec. 3. -- Created 1970 Ky. Acts ch. 252, sec. 4.

KRS 251.450 Repealed, 1984

251.450. Repealed, 1984 Catchline at repeal: Form of bond - Computation of amount. History: Repealed 1984 Ky. Acts ch. 389, sec. 23, effective July 13, 1984. -- Amended 1972 Ky. Acts ch. 347, sec. 4. -- Created 1970 Ky. Acts ch. 252, sec. 5.

KRS 251.451 Repealed, 2019

251.451. Repealed, 2019 Catchline at repeal: Surety bond, certificate of deposit, letter of credit, or temporary surety required. History: Repealed 2019 Ky. Acts ch. 88, sec. 27, effective August 1, 2019. -- Amended 2011 Ky. Acts ch. 21, sec. 1, effective June 8, 2011. -- Amended 2009 Ky. Acts ch. 61, sec. 2, effective June 25, 2009. -- Amended 1990 Ky. Acts ch. 396, sec. 2, effective July 13, 1990. -- Created 1984 Ky. Acts ch. 389, sec. 16, effective July 13, 1984.

KRS 251.460 Information confidential

251.460. Information confidential All applications for license and documents accompanying license application shall be kept confidential and for use in licensing purposes only. History: Created 1970 Ky. Acts ch. 252, sec. 7.

KRS 251.470 Posting of license

251.470. Posting of license The license issued by the department shall be posted in the licensee's place of business in this state. History: Created 1970 Ky. Acts ch. 252, sec. 6.

KRS 251.480 Repealed, 2019

251.480. Repealed, 2019 Catchline at repeal: Forward pricing and storage contracts -- Licensee's records -- Receipts or scale tickets -- Content -- Bookkeeping system. History: Repealed 2019 Ky. Acts ch. 88, sec. 27, effective August 1, 2019. -- Amended 1982 Ky. Acts ch. 252, sec. 1, effective July 15, 1982. -- Amended 1972 Ky. Acts ch. 347, sec. 5. -- Created 1970 Ky. Acts ch. 252, sec. 8.

KRS 251.485 Repealed, 2019

251.485. Repealed, 2019 Catchline at repeal: Forward pricing (delayed pricing) contracts. History: Repealed 2019 Ky. Acts ch. 88, sec. 27, effective August 1, 2019. -- Created 1992 Ky. Acts ch. 76, sec. 1, effective July 14, 1992.

KRS 251.490 Repealed, 2019

251.490. Repealed, 2019 Catchline at repeal: Semiannual inspection -- Special provisions for licensees short of facilities. History: Repealed 2019 Ky. Acts ch. 88, sec. 27, effective August 1, 2019. -- Amended 1984 Ky. Acts ch. 389, sec. 18, effective July 13, 1984. -- Amended 1972 Ky. Acts ch. 347, sec. 6. -- Created 1970 Ky. Acts ch. 252, sec. 9.

KRS 251.500 Changes that make license issued under this chapter invalid -- Duties of licensee when change occurs -- Audit and examination authorized -- Changes that invalidate licenses issued under this chapter

251.500. Changes that make license issued under this chapter invalid -- Duties of licensee when change occurs -- Audit and examination authorized -- Changes that invalidate licenses issued under this chapter (1) A license issued under the authority of this chapter shall become invalid upon: (a) The change of management; (b) Cessation of operations; (c) Change of partners in a partnership; (d) Change of corporate structure of a corporation; (e) Failure to remit license fees or fines; or (f) A sale. (2) A licensee shall immediately notify the department as to any change and shall deliver his license to the department together with a notarized statement setting forth the arrangements made with depositors for final disposition of grain in storage and for fulfilling any current obligations. (3) If there is to be a successor, the successor shall apply for a new license. (4) If there is a change of management or cessation of operations, the department may cause an audit and examination to be made. In these cases, all records required in this chapter shall be available to the department until the department is satisfied that all obligations have been met. Effective: August 1, 2019 History: Amended 2019 Ky. Acts ch. 88, sec. 20, effective August 1, 2019. -- Amended 2005 Ky. Acts ch. 125, sec. 4, effective June 20, 2005. -- Amended 1972 Ky. Acts ch. 347, sec. 7. -- Created 1970 Ky. Acts ch. 252, sec. 10.

KRS 251.510 Repealed, 2019

251.510. Repealed, 2019 Catchline at repeal: Board hearings. History: Repealed 2019 Ky. Acts ch. 88, sec. 27, effective August 1, 2019. -- Amended 1996 Ky. Acts ch. 318, sec. 177, effective July 15, 1996. -- Amended 1980 Ky. Acts ch. 114, sec. 55, effective July 15, 1980. -- Amended 1974 Ky. Acts ch. 315, sec. 35. -- Created 1970 Ky. Acts ch. 252, sec. 11.

KRS 251.520 Repealed, 2019

251.520. Repealed, 2019 Catchline at repeal: Departments to enter into agreements with other governments to satisfy inspection requirements. History: Repealed 2019 Ky. Acts ch. 88, sec. 27, effective August 1, 2019. -- Created 2005 Ky. Acts ch. 125, sec. 1, effective June 20, 2005.

KRS 251.600 Repealed, 2019

251.600. Repealed, 2019 Catchline at repeal: Purpose. History: Repealed 2019 Ky. Acts ch. 88, sec. 27, effective August 1, 2019. -- Created 1984 Ky. Acts ch. 389, sec. 1, effective July 13, 1984.

KRS 251.610 Repealed, 2019

251.610. Repealed, 2019 Catchline at repeal: Definitions. History: Repealed 2019 Ky. Acts ch. 88, sec. 27, effective August 1, 2019. -- Amended 2006 Ky. Acts ch. 214, sec. 1, effective July 12, 2006. -- Amended 2005 Ky. Acts ch. 125, sec. 5, effective June 20, 2005. -- Amended 1990 Ky. Acts ch. 396, sec. 3, effective July 13, 1990. -- Amended 1988 Ky. Acts ch. 321, sec. 1, effective July 15, 1988. -- Amended 1986 Ky. Acts ch. 81, sec. 1, effective July 15, 1986. -- Created 1984 Ky. Acts ch. 389, sec. 2, effective July 13, 1984.

KRS 251.620 Repealed, 2019

251.620. Repealed, 2019 Catchline at repeal: Kentucky Grain Insurance Corporation -- Board of directors -- Powers. History: Repealed 2019 Ky. Acts ch. 88, sec. 27, effective August 1, 2019. -- Amended 2009 Ky. Acts ch. 68, sec. 1, effective June 25, 2009. -- Amended 1990 Ky. Acts ch. 396, sec. 4, effective July 13, 1990. -- Amended 1988 Ky. Acts ch. 422, sec. 1, effective July 15, 1988. -- Amended 1986 Ky. Acts ch. 81, sec. 2, effective July 15, 1986. -- Created 1984 Ky. Acts ch. 389, sec. 3, effective July 13, 1984.

KRS 251.630 Repealed, 2019

251.630. Repealed, 2019 Catchline at repeal: Applicability. History: Repealed 2019 Ky. Acts ch. 88, sec. 27, effective August 1, 2019. -- Created 1984 Ky. Acts ch. 389, sec. 4, effective July 13, 1984.

KRS 251.640 Assessment of producers of fund-covered grains -- Deduction of assessment -- Assessments dependent upon balance in fund

251.640. Assessment of producers of fund-covered grains -- Deduction of assessment -- Assessments dependent upon balance in fund (1) It is declared to be in the public interest and highly advantageous to the agricultural economy of the Commonwealth that producers of fund-covered grains delivered to licensed grain dealers and licensed grain warehouse operators shall be assessed at a rate of .0025 times the gross value of the fund-covered grain. The board or the department shall provide for the collection of the assessment, under the provisions of this section, for the purpose of financing the Kentucky grain insurance fund, which is hereby created. Assessments shall be levied only on fund-covered grains. (2) Except as provided in subsection (3) of this section, beginning on or after August 1, 2019, all persons in this state who are licensed grain dealers or licensed grain warehouse operators shall deduct the levied assessment from each producer's payment for fund-covered grain. The total assessment collected by each licensee shall, on or before the fifteenth day of the month following the end of the month in which the grains are sold to the purchaser, be remitted to the grain insurance fund. The books and records shall clearly indicate the producer assessment and shall be open for inspection by the board or the department. The board or the department may take steps as are reasonably necessary to verify the accuracy of books and records of purchasers of grain. (3) (a) Beginning on August 1, 2019, no assessment shall be collected if the board has certified that the fund is greater than three million dollars ($3,000,000). If the board receives notification the fund is less than three million dollars ($3,000,000), then the board shall within sixty (60) days reinstate the assessment fee of .0025 times the gross value of the fund-covered grain purchased. Assessments shall continue until the board certifies the fund is in excess of ten million dollars ($10,000,000). (b) No later than April 30 of each year, the board shall meet and certify the amount in the fund. If the board certifies the fund's current balance is more than ten million dollars ($10,000,000), then no assessment shall be levied. If, at any time after the board has certified that the balance in the fund is more than ten million dollars ($10,000,000), the board receives notification that the fund balance is less than six million dollars ($6,000,000), then the board shall reinstate the assessment within sixty (60) days. Upon notification from the board, the department shall notify each licensee and shall begin collecting the assessment within sixty (60) days. (4) The assessments by the board in accordance with this section are in addition to any other fees or assessments required by law. Effective: August 1, 2019 History: Amended 2019 Ky. Acts ch. 88, sec. 21, effective August 1, 2019. -- Amended 2009 Ky. Acts ch. 61, sec. 3, effective June 25, 2009. -- Amended 2006 Ky. Acts ch. 214, sec. 2, effective July 12, 2006. -- Amended 2005 Ky. Acts ch. 125, sec. 6, effective June 20, 2005. -- Amended 1990 Ky. Acts ch. 396, sec. 5, effective July 13, 1990. -- Amended 1986 Ky. Acts ch. 81, sec. 3, effective July 15, 1986. -- Created 1984 Ky. Acts ch. 389, sec. 5, effective July 13, 1984.

KRS 251.642 Repealed, 2019

251.642. Repealed, 2019 Catchline at repeal: Procedure for reentry of producer into grain insurance program after withdrawal of assessments. History: Repealed 2019 Ky. Acts ch. 88, sec. 27, effective August 1, 2019. -- Amended 2009 Ky. Acts ch. 61, sec. 4, effective June 25, 2009. -- Amended 2005 Ky. Acts ch. 125, sec. 7, effective June 20, 2005. -- Created 1986 Ky. Acts ch. 81, sec. 4, effective July 15, 1986.

KRS 251.650 Use of funds -- Kentucky grain insurance fund -- Investment of funds -- Authorization for funds to be invested through the Finance and Administration Cabinet's Office of Financial Management -- Board to report to Interim Joint Committee on Appropriations and Revenue and to Interim Joint Committee on Agriculture in each odd-numbered year

251.650. Use of funds -- Kentucky grain insurance fund -- Investment of funds -- Authorization for funds to be invested through the Finance and Administration Cabinet's Office of Financial Management -- Board to report to Interim Joint Committee on Appropriations and Revenue and to Interim Joint Committee on Agriculture in each odd-numbered year (1) The total value of assessments shall be deposited and held by the board in trust in the Kentucky grain insurance fund to pay valid claims under the provisions of this section and KRS 251.400. These funds shall be invested and reinvested in United States Treasury obligations at the direction of the board, and the interest from these investments shall be deposited to the credit of the fund and shall be available for the same purposes as all other money deposited in the fund. The money in the fund shall not be available for any purpose other than the payment of claims in accordance with KRS 251.400, refunds, legal fees, management fees, investment fees, and administration fees that are approved by the board. No money in this fund shall be used for any regulatory or licensing provision in this chapter. (2) Notwithstanding the provisions of subsection (1) of this section, the board may authorize the investment of funds for the Kentucky grain insurance fund through the Finance and Administration Cabinet's Office of Financial Management in any guaranteed security or other guaranteed investment recommended by the office if the board determines the recommendation would maximize the interest or income to the fund. (3) By October 1 of each odd-numbered year, the board shall report to the Interim Joint Committee on Appropriations and Revenue and the Interim Joint Committee on Agriculture: (a) The current balance of the fund; (b) The amount of assessments, interest earned, and any other money deposited into the fund; and (c) The expenditures incurred due to claims, refunds, management fees, investment fees, legal fees, and administrative fees. (4) Each report shall reflect the deposits into and the expenditures incurred for the most recent biennium. Effective: August 1, 2019 History: Amended 2019 Ky. Acts ch. 88, sec. 22, effective August 1, 2019. -- Amended 2009 Ky. Acts ch. 68, sec. 2, effective June 25, 2009. -- Amended 1994 Ky. Acts ch. 147, sec. 1, effective July 15, 1994. -- Amended 1990 Ky. Acts ch. 396, sec. 6, effective July 13, 1990. -- Created 1984 Ky. Acts ch. 389, sec. 6, effective July 13, 1984.

KRS 251.660 Insufficiency of funds to pay approved claims

251.660. Insufficiency of funds to pay approved claims In the event the amount in the Kentucky grain insurance fund is insufficient to pay approved claims, the unpaid claims shall be deemed a necessary government expense. Upon notification from the board of the amount of unpaid claims, the secretary of the Finance and Administration Cabinet and the State Treasurer shall make the necessary transfers from any unbudgeted balance of the general fund to pay the unpaid claims. The general fund shall be reimbursed from the assessment in accordance with KRS 251.640, with interest at the rate paid on ninety (90) day United States Treasury bills, for any amounts transferred and paid to claimants under this section. The board shall reimburse the general fund prior to any money from the assessment being deposited into the Kentucky grain insurance fund. Effective: August 1, 2019 History: Amended 2019 Ky. Acts ch. 88, sec. 23, effective August 1, 2019. -- Amended 2009 Ky. Acts ch. 61, sec. 5, effective June 25, 2009. -- Created 1984 Ky. Acts ch. 389, sec. 7, effective July 13, 1984.

KRS 251.670 Repealed, 2019

251.670. Repealed, 2019 Catchline at repeal: Payment of compensation. History: Repealed 2019 Ky. Acts ch. 88, sec. 27, effective August 1, 2019. -- Amended 2009 Ky. Acts ch. 61, sec. 6, effective June 25, 2009. -- Amended 1990 Ky. Acts ch. 396, sec. 7, effective July 13, 1990. -- Created 1984 Ky. Acts ch. 389, sec. 8, effective July 13, 1984.

KRS 251.675 Repealed, 2019

251.675. Repealed, 2019 Catchline at repeal: Conditions requiring denial of compensation from Kentucky Grain Insurance Fund. History: Repealed 2019 Ky. Acts ch. 88, sec. 27, effective August 1, 2019. -- Created 1992 Ky. Acts ch. 76, sec. 2, effective July 14, 1992.

KRS 251.680 Repealed, 2019

251.680. Repealed, 2019 Catchline at repeal: Duty of board when dealer or warehouseman defaults or fails. History: Repealed 2019 Ky. Acts ch. 88, sec. 27, effective August 1, 2019. -- Created 1984 Ky. Acts ch. 389, sec. 9, effective July 13, 1984.

KRS 251.690 Repealed, 2019

251.690. Repealed, 2019 Catchline at repeal: Other duties of board. History: Repealed 2019 Ky. Acts ch. 88, sec. 27, effective August 1, 2019. -- Created 1984 Ky. Acts ch. 389, sec. 10, effective July 13, 1984.

KRS 251.700 Repealed, 2019

251.700. Repealed, 2019 Catchline at repeal: Rules and regulations. History: Repealed 2019 Ky. Acts ch. 88, sec. 27, effective August 1, 2019. -- Created 1984 Ky. Acts ch. 389, sec. 11, effective July 13, 1984.

KRS 251.710 Repealed, 2019

251.710. Repealed, 2019 Catchline at repeal: Grounds for suspension or revocation of license or cooperative agreement. History: Repealed 2019 Ky. Acts ch. 88, sec. 27, effective August 1, 2019. -- Created 1984 Ky. Acts ch. 389, sec. 12, effective July 13, 1984.

KRS 251.720 Repealed, 2019

251.720. Repealed, 2019 Catchline at repeal: License to engage in business of buying grain from producers for resale, milling, or processing -- Grounds for refusal to issue or to revoke license -- Notice and hearing -- Surety bond required -- Invalid license -- Requirements for bulk purchasers of grain. History: Repealed 2019 Ky. Acts ch. 88, sec. 27, effective August 1, 2019. -- Amended 2016 Ky. Acts ch. 36, sec. 3, effective July 15, 2016. -- Amended 2011 Ky. Acts ch. 21, sec. 2, effective June 8, 2011. -- Amended 2009 Ky. Acts ch. 61, sec. 7, effective June 25, 2009; and ch. 68, sec. 3, effective June 25, 2009. -- Amended 2005 Ky. Acts ch. 125, sec. 8, effective June 20, 2005. -- Amended 1996 Ky. Acts ch. 318, sec. 178, effective July 15, 1996. -- Amended 1990 Ky. Acts ch. 396, sec. 8, effective July 13, 1990. -- Amended 1988 Ky. Acts ch. 321, sec. 2, effective July 15, 1988. -- Amended 1986 Ky. Acts ch. 81, sec. 5, effective July 15, 1986. -- Created 1984 Ky. Acts ch. 389, sec. 13, effective July 13, 1984.

KRS 251.730 Evidence required to be produced when irregularities suspected

251.730. Evidence required to be produced when irregularities suspected If irregularities are suspected, the department may issue subpoenas or subpoenas duces tecum to compel the attendance of witnesses or the production of books, documents and records anywhere in the Commonwealth in any hearing affecting the authority or privilege granted by a license, or to verify the accuracy of any books or records subject to inspection under the provisions of this chapter. Effective: August 1, 2019 History: Amended 2019 Ky. Acts ch. 88, sec. 24, effective August 1, 2019. -- 1984 Ky. Acts ch. 389, sec. 19, effective July 13, 1984.

KRS 251.740 Appeal

251.740. Appeal Any person aggrieved by a decision or ruling of the board may obtain review thereof by filing a written petition in the Circuit Court of jurisdiction as provided in KRS 13B.140. Effective: July 15, 1996 History: Amended 1996 Ky. Acts ch. 318, sec. 179, effective July 15, 1996. -- Created 1984 Ky. Acts ch. 389, sec. 20, effective July 13, 1984.

KRS 251.990 Penalties for chapter

251.990. Penalties for chapter (1) Except as provided otherwise in this section, any person who violates a provision of this chapter shall be guilty of a violation for the first offense and fined not more than five hundred dollars ($500). He or she shall be guilty of a Class A misdemeanor and shall be fined not more than one thousand dollars ($1,000) or imprisoned for up to six (6) months, or both, for each subsequent offense. Each day of operation in violation of the provisions of this chapter shall constitute a separate offense. (2) Any person who operates as a grain warehouse operator or a grain dealer without a license shall be fined not more than ten thousand dollars ($10,000) for each violation, not to exceed a total of five hundred thousand dollars ($500,000), or imprisoned for at least one (1) but not more than five (5) years, or both. (3) Any person who intentionally refuses or fails to pay moneys collected for assessment of grain under the Kentucky grain insurance fund as set forth in KRS 251.640 shall be subject to a fine of not more than five hundred dollars ($500), or imprisoned for not more than six (6) months, or both. (4) Any person who fails to comply with the requirement in KRS 251.375 to maintain at all times grain in storage, rights in grain, proceeds from the sale of grain, or a combination of the grain, rights, and proceeds equal to eighty percent (80%) of the value of a licensed grain storage establishment's unpaid obligations to producers for grain delivered under a forward pricing contract shall be fined not more than ten thousand dollars ($10,000) for each violation, not to exceed a total of five hundred thousand dollars ($500,000), or imprisoned for at least one (1) year but not more than five (5) years, or both. (5) Any person who knowingly makes any false statement, representation, or certification, or who knowingly fails to make any statement, representation, or certification in any record, report, or other document shall be fined not more than one thousand dollars ($1,000) for each violation, not to exceed a total of five hundred thousand dollars ($500,000), or imprisoned for at least one (1) year but not more than five (5) years, or both. (6) Any person who transfers or disburses grain, property, or assets in violation of a provision of this chapter shall be fined not more than ten thousand dollars ($10,000) for each violation, not to exceed a total of five hundred thousand dollars ($500,000), or be imprisoned for at least one (1) year but not more than five (5) years, or both. (7) Except as permitted by law, any person who willfully and knowingly resists, prevents, impedes, or interferes with a representative of the board or the department in performance of the duties assigned by a provision of this chapter, shall upon conviction be fined not more than five thousand dollars ($5,000) for each violation, or imprisoned for not more than one (1) year, or both. (8) If a business entity violates any provision of this chapter, or if it fails or refuses to comply with any lawful order issued by a representative of the board or the department, then any director, officer, or agent of the business entity who willfully and knowingly authorized, ordered, or carried out the violation, failed, or refused to comply with the lawful order shall be subject to the same penalties, fines, and imprisonment as may be imposed upon a person in accordance with this section. (9) Any person who fails to renew a license within the time frame required by KRS 251.355 shall be fined one hundred fifty dollars ($150). (10) All fines or penalties collected from violators of the provisions of this chapter shall be used to carry out the provisions of this chapter. Effective: August 1, 2019 History: Amended 2019 Ky. Acts ch. 88, sec. 25, effective August 1, 2019. -- Amended 2016 Ky. Acts ch. 36, sec. 4, effective July 15, 2016. -- Amended 2009 Ky. Acts ch. 61, sec. 8, effective June 25, 2009. -- Amended 2005 Ky. Acts ch. 125, sec. 9, effective June 20, 2005. -- Amended 2002 Ky. Acts ch. 240, sec. 2, effective July 15, 2002. -- Amended 1992 Ky. Acts ch. 76, sec. 3, effective July 14, 1992; and ch. 463, sec. 33, effective July 14, 1992. -- Amended 1990 Ky. Acts ch. 396, sec. 10, effective July 13, 1990. -- Amended 1984 Ky. Acts ch. 389, sec. 21, effective July 13, 1984. -- Amended 1970 Ky. Acts ch. 252, sec. 12. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. secs. 30c-24, 30c-25, 30c-26, 30c-31, 30c-32.
Source: Kentucky Legislative Research Commission (legislature.ky.gov)URL: https://apps.legislature.ky.gov/law/statutes/chapter.aspx?id=38461Fetched: 10/20/2026

Starting a business in Kentucky? Kentucky LLC guide: costs and requirements