Request By:
Honorable Ramsey Morris
State Representative
Eighth District
Box 4030
Hopkinsville, Kentucky 42240Thomas M. Troth, Esquire
General Counsel
Department of Agriculture
Capital Plaza Tower
Frankfort, Kentucky 40601
Opinion
Opinion By: David L. Armstrong, Attorney General; William B. Pettus, Assistant Attorney General
This is in response to letters received from each of you requesting an Opinion from this Office on the following question:
"If a warehouseman has a separate facility where only federally owned CCC grain is stored, should that facility be included in determining the warehouseman's total warehouse capacity for bonding purposes."
Your letters indicate that a Kentucky grain warehouseman licensed under KRS Chapter 251 is storing forfeited Commodity Credit Corporation (CCC) grain for the federal government and that the grain is being held in a separate warehouse apart from facilities used for storing farmer grain. KRS 251.451 requires warehousemen to file a surety bond with the Kentucky Department of Agriculture equal to twenty-five cents (25 ) per bushel of "the total maximum bushel capacity of the warehouse. " The warehouseman takes the position that the storage facility used for CCC grain should not be included in the calculation of the bond because no farmer grain is stored in the facility.
A related issue pertaining to state licensure requirements for grain warehouses was addressed by this Office in an unpublished Opinion dated June 16, 1972. (OAG 72-400). At that time, this Office concluded that "[A]ny grain storage dealer that is bonded and licensed under the Federal Grain Storage Act would not, in our opinion, be required to obtain a grain storage license under KRS 251.410 to 251.510." [See attached unpublished opinion].
It is still the Opinion of this Office that a warehouseman that is bonded and licensed under the United States Warehouse Act is exempted from the provisions of KRS 251.410 through .490 ". . . to the extent that such stored grain is covered by a federal bond and law. . . ." KRS 251.430. Also see 7 U.S.C. §§ 241 through 273 (1985); Louisiana Public Service Commission v. Federal Communications Commission, et al., 106 S. Ct. 1890, 1898, U.S., L. Ed. 2d (1986).
Under the facts presented in your letters, there is no indication of whether or not the warehouseman storing federally owned CCC grain is in fact bonded and licensed under the provisions of the United States Warehouse Act or other federal law. If the warehouseman is bonded and licensed under the provisions of a federal law, then to the extent that such stored grain is covered by a federal bond and law, that separate facility storing only federally owned CCC grain should not be included in determining the warehouseman's total warehouse capacity for state licensure and bonding purposes. However, if the warehouseman is not bonded and licensed under the provisions of a federal law and the stored CCC grain is therefore not covered by a federal bond and law, the separate facility storing the federally owned CCC grain may be included for purposes of determining the warehouseman's total warehouse capacity for state licensure and bonding purposes.
KRS 251.451 states in part that the Department of Agriculture:
". . . may require additional meet the bond requirements of the United States or any agency or corporation controlled by the United States when they have a contract for storage with the warehouseman. "
The converse of this statutory provision is that the Department may not require additional bond if the warehouseman does meet the (licensure and) bond requirements of the United States or any agency or corporation controlled by the United States when they have a contract for storage with the warehouseman.
The statutory language of KRS 251.430, .440 and .451 reflects an intention to provide protection to persons storing grain in warehouses by providing a surety bond requirement providing complete and full coverage of all grain stored by the warehouse. There is no indication of an intent to unduly burden warehouses with "double" bonding requirements on the same grain by the governments of the United States and the State of Kentucky.
It is hoped that this Opinion will be of some guidance.