RCW ch. 22.09 — Revised Code of Washington Chapter 22.09 RCW — Agricultural Commodities

RCW 22.09.011 Definitions. The definitions set forth in this section apply throughout this chapter unless the context clearly requires otherwise. (1) "Agricultural commodities," or "commodities," means: (a) Grains for which inspection standards have been established under the United States grain standards act; (b) pulses and similar commodities for which inspection standards have been established under the agricultural marketing act of 1946; and (c) other similar agricultural products for which inspection standards have been established or which have been otherwise designated by the department by rule for inspection services or the warehousing requirements of this chapter. (2) "Appeal inspection" means, for commodities covered by federal standards, a review of original inspection or reinspection results by an authorized United States department of agriculture inspector. For commodities covered under state standards, an appeal inspection means a review of original or reinspection results by a supervising inspector. An appeal inspection may be performed either on the basis of the official file sample or a new sample obtained by the same means as the original if the lot remains intact. (3) "Conditioning" means, but is not limited to, the drying or cleaning of agricultural commodities. (4) "Deferred price contract" means a contract for the sale of commodities that conveys the title and all rights of ownership to the commodities represented by the contract to the buyer, but allows the seller to set the price of the commodities at a later date based on an agreed upon relationship to a future month's price or some other mutually agreeable method of price determination. Deferred price contracts include but are not limited to those contracts commonly referred to as delayed price, price later contracts, or open price contracts. (5) "Department" means the department of agriculture of the state of Washington. (6) "Depositor" means (a) any person who deposits a commodity with a Washington state licensed warehouse operator for storage, handling, conditioning, or shipment, or (b) any person who is the owner or legal holder of a warehouse receipt, outstanding scale weight ticket, or other evidence of the deposit of a commodity with a Washington state licensed warehouse operator or (c) any producer whose agricultural commodity has been sold to a grain dealer through the dealer's place of business located in the state of Washington, or any Washington producer whose agricultural commodity has been sold to or is under the control of a grain dealer, whose place of business is located outside the state of Washington. (7) "Director" means the director of the department or his or her duly authorized representative. (8) "Exempt grain dealer" means a grain dealer who purchases less than one hundred thousand dollars of covered commodities annually from producers, and operates under the provisions of RCW 22.09.060. (9) "Failure" means: (a) An inability to financially satisfy claimants in accordance with this chapter and the time limits provided for in it; (b) A public declaration of insolvency; (c) A revocation of license and the leaving of an outstanding indebtedness to a depositor; (d) A failure to redeliver any commodity to a depositor or to pay depositors for commodities purchased by a licensee in the ordinary course of business and where a bona fide dispute does not exist between the licensee and the depositor; (e) A failure to make application for license renewal within sixty days after the annual license renewal date; or (f) A denial of the application for a license renewal. (10) "Grain dealer" means any person who, through his or her place of business located in the state of Washington, solicits, contracts for, or obtains from a producer, title, possession, or control of any agricultural commodity for purposes of resale, or any person who solicits, contracts for, or obtains from a Washington producer, title, possession, or control of any agricultural commodity for purposes of resale. (11) "Historical depositor" means any person who in the normal course of business operations has consistently made deposits in the same warehouse of commodities produced on the same land. In addition the purchaser, lessee, and/or inheritor of such land from the original historical depositor with reference to the land shall be considered a historical depositor with regard to the commodities produced on the land. (12) "Inspection point" means a city, town, or other place wherein the department maintains inspection and weighing facilities. (13) "Original inspection" means an initial, official inspection of a grain or commodity. (14) "Person" means a natural person, individual, firm, partnership, corporation, company, society, association, cooperative, two or more persons having a joint or common interest, or any unit or agency of local, state, or federal government. (15) "Producer" means any person who is the owner, tenant, or operator of land who has an interest in and is entitled to receive all or any part of the proceeds from the sale of a commodity produced on that land. (16) "Put through" means agricultural commodities that are deposited in a warehouse for receiving, handling, conditioning, or shipping, and on which the depositor has concluded satisfactory arrangements with the warehouse operator for the immediate or impending shipment of the commodity. (17) "Reinspection" means an official review of the results of an original inspection service by an inspection office that performed that original inspection service. A reinspection may be performed either on the basis of the official file sample or a new sample obtained by the same means as the original if the lot remains intact. (18) "Scale weight ticket" means a load slip or other evidence of deposit, serially numbered, not including warehouse receipts as defined in subsection (25) of this section, given a depositor on request upon initial delivery of the commodity to the warehouse and showing the warehouse's name and state number, type of commodity, weight thereof, name of depositor, and the date delivered. (19) "Shortage" means that a warehouse operator does not have in his or her possession sufficient commodities at each of his or her stations to cover the outstanding warehouse receipts, scale weight tickets, or other evidence of storage liability issued or assumed by him or her for the station. (20) "Station" means two or more warehouses between which commodities are commonly transferred in the ordinary course of business and that are (a) immediately adjacent to each other, or (b) located within the corporate limits of any city or town and subject to the same transportation tariff zone, or (c) at any railroad siding or switching area and subject to the same transportation tariff zone, or (d) at one location in the open country off rail, or (e) in any area that can be reasonably audited by the department as a station under this chapter and that has been established as such by the director by rule adopted under chapter 34.05 RCW, or (f) within twenty miles of each other but separated by the border between Washington and Idaho or Oregon when the books and records for the station are maintained at the warehouse located in Washington. (21) "Subterminal warehouse" means any warehouse that performs an intermediate function in which agricultural commodities are customarily received from dealers rather than producers and where the commodities are accumulated before shipment to a terminal warehouse. (22) "Terminal warehouse" means any warehouse designated as a terminal by the department, and located at an inspection point where inspection facilities are maintained by the department and where commodities are ordinarily received and shipped by common carrier. (23) "Warehouse," also referred to as a public warehouse, means any elevator, mill, subterminal grain warehouse, terminal warehouse, country warehouse, or other structure or enclosure located in this state that is used or useable for the storage of agricultural products, and in which commodities are received from the public for storage, handling, conditioning, or shipment for compensation. The term does not include any warehouse storing or handling fresh fruits and/or vegetables, any warehouse used exclusively for cold storage, or any warehouse that conditions yearly less than three hundred tons of an agricultural commodity for compensation. (24) "Warehouse operator" means any person owning, operating, or controlling a warehouse in the state of Washington. (25) "Warehouse receipt" means a negotiable or nonnegotiable warehouse receipt as provided for in Article 7 of Title 62A RCW. [ 2011 c 336 s 598; 1994 c 46 s 3; 1989 c 354 s 44; 1988 c 254 s 11; 1987 c 393 s 19; 1983 c 305 s 16.] NOTES: Reviser's note: RCW 22.09.020 Department authority—Rules. The department shall administer and carry out the provisions of this chapter and rules adopted hereunder, and it has the power and authority to: (1) Supervise the receiving, handling, conditioning, weighing, storage, and shipping of all commodities; (2) Supervise the inspection and grading of commodities; (3) Approve or disapprove the facilities, including scales, of all warehouses; (4) Approve or disapprove all rates and charges for the handling, storage, and shipment of all commodities; (5) Investigate all complaints of fraud in the operation of any warehouse; (6) Examine, inspect, and audit, during ordinary business hours, any warehouse licensed under this chapter, including all commodities therein and examine, inspect, audit, or record all books, documents, and records; (7) Examine, inspect, and audit during ordinary business hours, all books, documents, and records, and examine, inspect, audit, or record records of any grain dealer licensed hereunder at the grain dealer's principal office or headquarters; (8) Inspect at reasonable times any warehouse or storage facility where commodities are received, handled, conditioned, stored, or shipped, including all commodities stored therein and all books, documents, and records in order to determine whether or not such facility should be licensed pursuant to this chapter; (9) Inspect at reasonable times any grain dealer's books, documents, and records in order to determine whether or not the grain dealer should be licensed under this chapter; (10) Administer oaths and issue subpoenas to compel the attendance of witnesses, and/or the production of books, documents, and records anywhere in the state pursuant to a hearing relative to the purpose and provisions of this chapter. Witnesses shall be entitled to fees for attendance and travel, as provided in chapter 2.40 RCW; (11) Adopt rules establishing inspection standards and procedures for grains and commodities; (12) Adopt rules regarding the identification of commodities by the use of confetti or other similar means so that such commodities may be readily identified if stolen or removed in violation of the provisions of this chapter from a warehouse or if otherwise unlawfully transported; (13) Adopt all the necessary rules for carrying out the purpose and provisions of this chapter. The adoption of rules under the provisions of this chapter shall be subject to the provisions of chapter 34.05 RCW, the Administrative Procedure Act. When adopting rules in respect to the provisions of this chapter, the director shall hold a public hearing and shall to the best of his or her ability consult with persons and organizations or interests who will be affected thereby, and any final rule adopted as a result of the hearing shall be designed to promote the provisions of this chapter and shall be reasonable and necessary and based upon needs and conditions of the industry, and shall be for the purpose of promoting the well-being of the industry to be regulated and the general welfare of the people of the state. [ 2011 c 336 s 599; 1989 c 354 s 45; 1983 c 305 s 17; 1963 c 124 s 2.] NOTES: Severability— RCW 22.09.030 Warehouse license or licenses required. It shall be unlawful for any person to operate a warehouse in the state of Washington without first having obtained an annual license from the department, but this chapter shall not apply to warehouses that are federally licensed under the provisions of 7 USC 241 et seq. for the handling and storage of agricultural commodities. A separate license shall be required for each warehouse that a person intends to operate, but any person operating two or more warehouses that constitute a station may license the warehouses under one state license. All the assets of a given station that is licensed under one state license are subject to all the liabilities of that station and for the purposes of this chapter shall be treated as a single warehouse, requiring all the stocks and obligations of the warehouses at a given station to be treated as a unit for all purposes including, but not limited to, issuance of warehouse receipts and receipt and delivery of commodities for handling, conditioning, storage, or shipment. [ 1983 c 305 s 18; 1975 1st ex.s. c 7 s 20; 1963 c 124 s 3.] NOTES: Severability— RCW 22.09.035 Grain dealer license required, exception. It is unlawful for any person to operate as a grain dealer in the state of Washington without first having obtained an annual license from the department. This chapter does not apply to a grain dealer that is licensed for dealing in agricultural commodities under federal law. [ 1983 c 305 s 19.] NOTES: Severability— RCW 22.09.040 Application for warehouse license. Application for a license to operate a warehouse under the provisions of this chapter shall be on a form prescribed by the department and shall include: (1) The full name of the person applying for the license and whether the applicant is an individual, partnership, association, corporation, or other entity; (2) The full name of each member of the firm or partnership, or the names of the officers of the company, society, cooperative association, or corporation; (3) The principal business address of the applicant in the state and elsewhere; (4) The name or names of the person or persons authorized to receive and accept service of summons and legal notices of all kinds for the applicant; (5) Whether the applicant has also applied for or has been issued a grain dealer license under the provisions of this chapter; (6) The location of each warehouse the applicant intends to operate and the location of the headquarters or main office of the applicant; (7) The bushel storage capacity of each such warehouse to be licensed; (8) The schedule of fees to be charged at each warehouse for the handling, conditioning, storage, and shipment of all commodities during the licensing period; (9) A financial statement to determine the net worth of the applicant to determine whether or not the applicant meets the minimum net worth requirements established by the director pursuant to chapter 34.05 RCW. All financial statement information required by this subsection shall be confidential information not subject to public disclosure; (10) Whether the application is for a terminal, subterminal, or country warehouse license; (11) Whether the applicant has previously been denied a grain dealer or warehouse operator license or whether the applicant has had either license suspended or revoked by the department; (12) Any other reasonable information the department finds necessary to carry out the purpose and provisions of this chapter. [ 2011 c 336 s 600; 1987 c 393 s 17; 1983 c 305 s 20; 1979 ex.s. c 238 s 13; 1975 1st ex.s. c 7 s 21; 1963 c 124 s 4.] NOTES: Severability— RCW 22.09.045 Application for grain dealer license. Application for a license to operate as a grain dealer under the provisions of this chapter shall be on a form prescribed by the department and shall include: (1) The full name of the person applying for the license and whether the applicant is an individual, partnership, association, corporation, or other entity; (2) The full name of each member of the firm or partnership, or the names of the officers of the company, society, cooperative association, or corporation; (3) The principal business address of the applicant in the state and elsewhere; (4) The name or names of the person or persons in this state authorized to receive and accept service of summons and legal notices of all kinds for the applicant; (5) Whether the applicant has also applied for or has been issued a warehouse license under this chapter; (6) The location of each business location from which the applicant intends to operate as a grain dealer in the state of Washington whether or not the business location is physically within the state of Washington, and the location of the headquarters or main office of the application; (7) A financial statement to determine the net worth of the applicant to determine whether or not the applicant meets the minimum net worth requirements established by the director under chapter 34.05 RCW. However, if the applicant is a subsidiary of a larger company, corporation, society, or cooperative association, both the parent company and the subsidiary company must submit a financial statement to determine whether or not the applicant meets the minimum net worth requirements established by the director under chapter 34.05 RCW. All financial statement information required by this subsection shall be confidential information not subject to public disclosure; (8) Whether the applicant has previously been denied a grain dealer or warehouse operator license or whether the applicant has had either license suspended or revoked by the department; (9) Any other reasonable information the department finds necessary to carry out the purpose and provisions of this chapter. [ 2011 c 336 s 601; 1987 c 393 s 18; 1983 c 305 s 21.] NOTES: Severability— RCW 22.09.050 Warehouse license fees—Penalty. Any application for a license to operate a warehouse shall be accompanied by a license fee of one thousand nine hundred dollars for a terminal warehouse, one thousand five hundred dollars for a subterminal warehouse, and seven hundred dollars for a country warehouse. If a licensee operates more than one warehouse under one state license as provided for in RCW 22.09.030, the license fee shall be computed by multiplying the number of physically separated warehouses within the station by the applicable terminal, subterminal, or country warehouse license fee. If an application for renewal of a warehouse license or licenses is not received by the department prior to the renewal date or dates established by the director by rule, a penalty of fifty dollars for the first week and one hundred dollars for each week thereafter shall be assessed and added to the original fee and shall be paid by the applicant before the renewal license may be issued. This penalty does not apply if the applicant furnishes an affidavit certifying that he or she has not acted as a warehouse operator subsequent to the expiration of his or her prior license. [ 2012 c 123 s 1; 2011 c 336 s 602; 1997 c 303 s 6; 1994 c 46 s 4; 1991 c 109 s 25; 1986 c 203 s 13; 1983 c 305 s 22; 1979 ex.s. c 238 s 14; 1963 c 124 s 5.] NOTES: Effective date— RCW 22.09.055 Grain dealer—Exempt grain dealers—License fees—Penalty. An application for a license to operate as a grain dealer shall be accompanied by a license fee of one thousand seven hundred fifty dollars. The license fee for exempt grain dealers shall be five hundred dollars. If an application for renewal of a grain dealer or exempt grain dealer license is not received by the department before the renewal date or dates established by the director by rule, a penalty of fifty dollars for the first week and one hundred dollars for each week thereafter shall be assessed and added to the original fee and shall be paid by the applicant before the renewal license may be issued. This penalty does not apply if the applicant furnishes an affidavit certifying that he or she has not acted as a grain dealer or exempt grain dealer after the expiration of his or her prior license. [ 2012 c 123 s 2; 2011 c 336 s 603; 1997 c 303 s 7; 1994 c 46 s 5; 1991 c 109 s 26; 1988 c 95 s 1; 1986 c 203 s 14; 1983 c 305 s 23.] NOTES: Effective date— RCW 22.09.060 Bond or certificate of deposit and insurance prerequisite to license—Exemption. Except as provided in RCW 22.09.405(2), no warehouse or grain dealer license may be issued to an applicant before a bond, certificate of deposit, or other security is given to the department as provided in RCW 22.09.090, or in RCW 22.09.095. No warehouse license may be issued to an applicant before a certificate of insurance as provided in RCW 22.09.110 has been filed with the department. Grain dealers may be exempted by rule from the bonding requirement if the grain dealer does not do more than one hundred thousand dollars in business annually and makes payments solely in coin or currency of the United States at the time of obtaining possession or control of grain. However, a cashier's check, certified check, or bankdraft may be considered as cash for purposes of this section. [ 1988 c 95 s 2; 1987 c 509 s 1; 1983 c 305 s 24; 1975 1st ex.s. c 7 s 22; 1963 c 124 s 6.] NOTES: Severability— RCW 22.09.070 Warehouse licenses—Issuance—Posting—Duration. The department shall issue a warehouse license to an applicant upon its determination that the applicant has facilities adequate for handling and storage of commodities and, if applicable, conditioning, and that the application is in the proper form and upon approval of the matters contained on the application and upon a showing that the applicant has complied with the provisions of this chapter and rules adopted hereunder. The licensee shall immediately upon receipt of the license post it in a conspicuous place in the office of the licensed warehouse or if a station license, in the main office at the station. The license automatically expires on the date set by rule by the director unless it has been revoked, canceled, or suspended by the department before that date. Fees shall be prorated where necessary to accommodate the staggering of renewal dates of a license or licenses. [ 1991 c 109 s 27; 1983 c 305 s 25; 1963 c 124 s 7.] NOTES: Severability— RCW 22.09.075 Grain dealer licenses—Issuance—Posting—Duration. The department shall issue a grain dealer license to an applicant upon its determination that the application is in its proper form and upon approval of the matters contained on the application and upon a showing that the applicant has complied with the provisions of this chapter and rules adopted hereunder. The licensee shall immediately upon receipt of the license post it in a conspicuous place in its principal place of business. The license expires automatically on a date set by rule by the director unless it has been revoked, canceled, or suspended by the department before that date. Fees shall be prorated where necessary in order to accommodate staggered renewal of a license or licenses. [ 1991 c 109 s 28; 1983 c 305 s 26.] NOTES: Severability— RCW 22.09.080 Licenses—Denial—Suspension—Revocation. The department is authorized to deny, suspend, or revoke a license after a hearing in any case in which it is determined that there has been a violation or refusal to comply with the requirements of this chapter, rules adopted hereunder, or the provisions of Article 7 of Title 62A RCW as enacted or hereafter amended. All hearings for the denial, suspension, or revocation of a license shall be subject to chapter 34.05 RCW (Administrative Procedure Act) as enacted or hereafter amended. [ 1979 ex.s. c 238 s 15; 1963 c 124 s 8.] RCW 22.09.090 Bond requisites—Certificate of deposit or other security—Additional security—Suspension of license for failure to maintain. (1) An applicant for a warehouse or grain dealer license pursuant to the provisions of this chapter shall give a bond to the state of Washington executed by the applicant as the principal and by a corporate surety licensed to do business in this state as surety. (2) The bond required under this section for the issuance of a warehouse license shall be in the sum of not less than fifty thousand dollars nor more than seven hundred fifty thousand dollars. The department shall, after holding a public hearing, determine the amount that will be required for the warehouse bond which shall be computed at a rate of not less than fifteen cents nor more than thirty cents per bushel multiplied by the number of bushels of licensed commodity storage capacity of the warehouses of the applicant furnishing the bond. The applicant for a warehouse license may give a single bond meeting the requirements of this chapter, and all warehouses operated by the warehouse operator are deemed to be one warehouse for the purpose of the amount of the bond required under this subsection. Any change in the capacity of a warehouse or addition of any new warehouse involving a change in bond liability under this chapter shall be immediately reported to the department. (3) The bond required under this section for the issuance of a grain dealer license shall be in the sum of not less than fifty thousand dollars nor more than seven hundred fifty thousand dollars. The department shall, after holding a public hearing, determine the amount that will be required for the dealer bond which shall be computed at a rate not less than six percent nor more than twelve percent of the sales of agricultural commodities purchased by the dealer from producers during the dealer's last completed fiscal year or in the case of a grain dealer who has been engaged in business as a grain dealer less than one year, the estimated aggregate dollar amount to be paid by the dealer to producers for agricultural commodities to be purchased by the dealer during the dealer's first fiscal year. (4) An applicant making application for both a warehouse license and a grain dealer license may satisfy the bonding requirements set forth in subsections (2) and (3) of this section by giving to the state of Washington a single bond for the issuance of both licenses, which bond shall be in the sum of not less than fifty thousand dollars nor more than seven hundred fifty thousand dollars. The department shall, after holding a public hearing, determine the amount of the bond which shall be computed at a rate of not less than fifteen cents nor more than thirty cents per bushel multiplied by the number of bushels of licensed commodity storage capacity of the warehouses of the applicant furnishing the bond, or at the rate of not less than six percent nor more than twelve percent of the gross sales of agricultural commodities of the applicant whichever is greater. (5) The bonds required under this chapter shall be approved by the department and shall be conditioned upon the faithful performance by the licensee of the duties imposed upon him or her by this chapter. If a person has applied for warehouse licenses to operate two or more warehouses in this state, the assets applicable to all warehouses, but not the deposits except in case of a station, are subject to the liabilities of each. The total and aggregate liability of the surety for all claims upon the bond is limited to the face amount of the bond. (6) Any person required to submit a bond to the department under this chapter has the option to give the department a certificate of deposit or other security acceptable to the department payable to the director as trustee, in lieu of a bond or a portion thereof. The principal amount of the certificate or other security shall be the same as that required for a surety bond under this chapter or may be in an amount which, when added to the bond, will satisfy the licensee's requirements for a surety bond under this chapter, and the interest thereon shall be made payable to the purchaser of the certificate or other security. The certificate of deposit or other security shall remain on deposit until it is released, canceled, or discharged as provided for by rule of the department. The provisions of this chapter that apply to a bond required under this chapter apply to each certificate of deposit or other security given in lieu of such a bond. (7) The department may, when it has reason to believe that a grain dealer does not have the ability to pay producers for grain purchased, or when it determines that the grain dealer does not have a sufficient net worth to outstanding financial obligations ratio, or when it believes there may be claims made against the bond in excess of the face amount of the bond, require a grain dealer to post an additional bond in a dollar amount deemed appropriate by the department or may require an additional certificate of deposit or other security. The additional bonding or other security may exceed the maximum amount of the bond otherwise required under this chapter. Failure to post the additional bond, certificate of deposit, or other security constitutes grounds for suspension or revocation of a license issued under this chapter. (8) Notwithstanding any other provisions of this chapter, the license of a warehouse operator or grain dealer shall automatically be suspended in accordance with RCW 22.09.100 for failure at any time to have or to maintain a bond, certificate of deposit, or other security or combination thereof in the amount and type required by this chapter. The department shall remove the suspension or issue a license as the case may be, when the required bond, certificate of deposit, or other security has been obtained. [ 2011 c 336 s 604; 1987 c 509 s 2; 1983 c 305 s 27; 1975 1st ex.s. c 7 s 23; 1969 ex.s. c 132 s 2; 1963 c 124 s 9.] NOTES: Severability— RCW 22.09.095 Single bond by multiple applicants. (1) Two or more applicants for a warehouse or grain dealer license may provide a single bond to the state of Washington, executed by a corporate surety licensed to do business in this state and designating each of the applicants as a principal on said bond. (2) The department shall promulgate rules establishing the amount of the bond required under this section. In no event shall that amount be less than ten percent of the aggregate amount of each of the bonds that would be required of the applicants under RCW 22.09.090 or less than the amount that would be required under RCW 22.09.090 for the applicant having the highest bond requirement under that section. [ 1987 c 509 s 3.] NOTES: Severability— RCW 22.09.100 Bonds—Duration—Release of surety—Cancellation by surety. (1) Every bond filed with and approved by the department shall without the necessity of periodic renewal remain in force and effect until such time as the warehouse operator or grain dealer license of each principal on the bond is revoked or otherwise canceled. (2) The surety on a bond, as provided in this chapter, shall be released and discharged from all liability to the state, as to a principal whose license is revoked or canceled, which liability accrues after the expiration of thirty days from the effective date of the revocation or cancellation of the license. The surety on a bond under this chapter shall be released and discharged from all liability to the state accruing on the bond after the expiration of ninety days from the date upon which the surety lodges with the department a written request to be released and discharged. Nothing in this section shall operate to relieve, release, or discharge the surety from any liability which accrues before the expiration of the respective thirty or ninety-day period. In the event of a cancellation by the surety, the surety shall simultaneously send the notification of cancellation in writing to any other governmental agency requesting it. Upon receiving any such request, the department shall promptly notify the principal or principals who furnished the bond, and unless the principal or principals file a new bond on or before the expiration of the respective thirty or ninety-day period, the department shall forthwith cancel the license of the principal or principals whose bond has been canceled. [ 2011 c 336 s 605; 1987 c 509 s 4; 1983 c 305 s 28; 1963 c 124 s 10.] NOTES: Severability— RCW 22.09.110 Casualty insurance required—Certificate to be filed. All commodities in storage in a warehouse shall be kept fully insured for the current market value of the commodity for the license period against loss by fire, lightning, internal explosion, windstorm, cyclone, and tornado. Evidence of the insurance coverage in the form of a certificate of insurance approved by the department shall be filed by the warehouse operator with the department at the time of making application for an annual license to operate a warehouse as required by this chapter. The department shall not issue a license until the certificate of insurance is received. [ 2011 c 336 s 606; 1983 c 305 s 29; 1963 c 124 s 11.] NOTES: Severability— RCW 22.09.120 Insurance—Cancellation procedure—Suspension of license. (1) Upon the existence of an effective policy of insurance as required in RCW 22.09.110, the insurance company involved shall be required to give thirty days' advance notice to the department by registered mail or certified mail return receipt requested of any cancellation of the policy. In the event of any cancellation, the department, without hearing, shall immediately suspend the license of such person, and the suspension shall not be removed until satisfactory evidence of the existence of an effective policy of insurance, conditioned as above set out, has been submitted to the department. [ 1963 c 124 s 12.] RCW 22.09.130 Rights and duties of warehouse operator—Duty to serve—Receipts—Special binning—Unsuitable commodities—Put through commodities. (1) Every warehouse operator shall receive for handling, conditioning, storage, or shipment, so far as the capacity and facilities of his or her warehouse will permit, all commodities included in the provisions of this chapter, in suitable condition for storage, tendered him or her in the usual course of business from historical depositors and shall issue therefor a warehouse receipt or receipts in a form prescribed by the department as provided in this chapter or a scale weight ticket. Warehouse operators may accept agricultural commodities from new depositors who qualify to the extent of the capacity of that warehouse. The deposit for handling, conditioning, storage, or shipment of the commodity must be credited to the depositor in the books of the warehouse operator as soon as possible, but in no event later than seven days from the date of the deposit. If the commodity has been graded a warehouse receipt shall be issued within ten days after demand by the owner. (2) If requested by the depositor, each lot of his or her commodity shall be kept in a special pile or special bin, if available, but in the case of a bulk commodity, if the lot or any portion of it does not equal the capacity of any available bin, the depositor may exercise his or her option to require the commodity to be specially binned only on agreement to pay charges based on the capacity of the available bin most nearly approximating the required capacity. (3) A warehouse operator may refuse to accept for storage, commodities that are wet, damaged, insect-infested, or in other ways unsuitable for storage. (4) Terminal and subterminal warehouse operators shall receive put through agricultural commodities to the extent satisfactory transportation arrangements can be made, but may not be required to receive agricultural commodities for storage. [ 2011 c 336 s 607; 1983 c 305 s 30; 1981 c 296 s 38; 1979 ex.s. c 238 s 16; 1963 c 124 s 13.] NOTES: Severability— RCW 22.09.140 Rights and duties of licensees—Partial withdrawal—Adjustment or substitution of receipt—Liability to third parties. When partial withdrawal of his or her commodity is made by a depositor, the warehouse operator shall make appropriate notation thereof on the depositor's nonnegotiable receipt or on other records, or, if the warehouse operator has issued a negotiable receipt to the depositor, he or she shall claim, cancel, and replace it with a negotiable receipt showing the amount of such depositor's commodity remaining in the warehouse, and for his or her failure to claim and cancel, upon delivery to the owner of a commodity stored in his or her warehouse, a negotiable receipt issued by him or her, the negotiation of which would transfer the right to possession of such commodity, a warehouse operator shall be liable to anyone who purchases such receipt for value and in good faith, for failure to deliver to him or her all the commodity specified in the receipt, whether such purchaser acquired title to the negotiable receipt before or after delivery of any part of the commodity by the warehouse operator. [ 2011 c 336 s 608; 1963 c 124 s 14.] RCW 22.09.150 Rights and duties of warehouse operator—Delivery of stored commodities—Damages. (1) The duty of the warehouse operator to deliver the commodities in storage is governed by the provisions of this chapter and the requirements of Article 7 of Title 62A RCW. Upon the return of the receipt to the proper warehouse operator, properly endorsed, and upon payment or tender of all advances and legal charges, the warehouse operator shall deliver commodities of the grade and quantity named upon the receipt to the holder of the receipt, except as provided by Article 7 of Title 62A RCW. (2) A warehouse operator's duty to deliver any commodity is fulfilled if delivery is made pursuant to the contract with the depositor or if no contract exists, then to the several owners in the order of demand as rapidly as it can be done by ordinary diligence. Where delivery is made within forty-eight hours excluding Saturdays, Sundays, and legal holidays after facilities for receiving the commodity are provided, the delivery is deemed to comply with this subsection. (3) No warehouse operator may fail to deliver a commodity as provided in this section, and delivery shall be made at the warehouse or station where the commodity was received unless the warehouse operator and depositor otherwise agree in writing. (4) In addition to being subject to penalties provided in this chapter for a violation of this section, if a warehouse operator unreasonably fails to deliver commodities within the time as provided in this section, the person entitled to delivery of the commodity may maintain an action against the warehouse operator for any damages resulting from the warehouse operator's unreasonable failure to so deliver. In any such action the person entitled to delivery of the commodity has the option to seek recovery of his or her actual damages or liquidated damages of one-half of one percent of the value for each day's delay after the forty-eight hour period. [ 2011 c 336 s 609; 1983 c 305 s 31; 1979 ex.s. c 238 s 17; 1963 c 124 s 15.] NOTES: Severability— RCW 22.09.160 Rights and duties of licensees—Disposition of hazardous commodities. (1) If a warehouse operator discovers that as a result of a quality or condition of a certain commodity placed in his or her warehouse, including identity preserved commodities as provided for in RCW 22.09.130(2), of which he or she had no notice at the time of deposit, such commodity is a hazard to other commodities or to persons or to the warehouse he or she may notify the depositor that it will be removed. If the depositor does not accept delivery of such commodity upon removal the warehouse operator may sell the commodity at public or private sale without advertisement but with reasonable notification of the sale to all persons known to claim an interest in the commodity. If the warehouse operator after a reasonable effort is unable to sell the commodity, he or she may dispose of it in any other lawful manner and shall incur no liability by reason of such disposition. (2) At any time prior to sale or disposition as authorized in this section, the warehouse operator shall deliver the commodity to any person entitled to it, upon proper demand and payment of charges. (3) From the proceeds of sale or other disposition of the commodity the warehouse operator may satisfy his or her charges for which otherwise he or she would have a lien, and shall hold the balance thereof for delivery on the demand of any person to whom he or she would have been required to deliver the commodity. [ 2011 c 336 s 610; 1963 c 124 s 16.] RCW 22.09.170 Rights and duties of warehouse operator—Special disposition of commodities under written order. If the owner of the commodity or his or her authorized agent gives or furnishes to a licensed warehouse operator a written instruction or order, and if the order is properly made a part of the warehouse operator's records and is available for departmental inspection, then the warehouse operator: (1) May receive the commodity for the purpose of processing or conditioning; (2) May receive the commodity for the purpose of shipping by the warehouse operator for the account of the depositor; (3) May accept an agricultural commodity delivered as seed and handle it pursuant to the terms of a contract with the depositor and the contract shall be considered written instructions pursuant to this section. [ 2011 c 336 s 611; 1983 c 305 s 32; 1963 c 124 s 17.] NOTES: Severability— RCW 22.09.175 Presumptions regarding commodities—Approval of contracts. (1) A commodity deposited with a warehouse operator without a written agreement for sale of the commodity to the warehouse operator shall be handled and considered to be a commodity in storage. (2) A presumption is hereby created that in all written agreements for the sale of commodities, the intent of the parties is that title and ownership to the commodities shall pass on the date of payment therefor. This presumption may only be rebutted by a clear statement to the contrary in the agreement. (3) Any warehouse operator or grain dealer entering into a deferred price contract with a depositor shall first have the form of the contract approved by the director. The director shall adopt rules setting forth the standards for approval of the contracts. [ 2011 c 336 s 612; 1983 c 305 s 33.] NOTES: Severability— RCW 22.09.180 Rights and duties of licensees—Records, contents—Itemized charges. (1) The licensee shall maintain complete records at all times with respect to all agricultural commodities handled, stored, shipped, or merchandised by him or her, including commodities owned by him or her. The department shall adopt rules specifying the minimum recordkeeping requirements necessary to comply with this section. (2) The licensee shall maintain an itemized statement of any charges paid by the depositor. [ 2011 c 336 s 613; 1983 c 305 s 34; 1975 1st ex.s. c 7 s 24; 1963 c 124 s 18.] NOTES: Severability— RCW 22.09.190 Rights and duties of warehouse operator—Rebates, preferences, etc., prohibited. No warehouse operator subject to the provisions of this chapter may: (1) Directly or indirectly, by any special charge, rebate, drawback, or other device, demand, collect, or receive from any person a greater or lesser compensation for any service rendered or to be rendered in the handling, conditioning, storage, or shipment of any commodity than he or she demands, collects, or receives from any other person for doing for him or her a like and contemporaneous service in the handling, conditioning, storage, or shipment of any commodity under substantially similar circumstances or conditions; (2) Make or give any undue or unreasonable preference or advantage to any person in any respect whatsoever; (3) Subject any particular person to any undue or unreasonable prejudice or disadvantage in any respect whatsoever. [ 2011 c 336 s 614; 1983 c 305 s 35; 1963 c 124 s 19.] NOTES: Severability— RCW 22.09.195 Rights and duties of warehouse operator—RCW 22.09.190 inapplicable to contracts with governmental agencies. RCW 22.09.190 does not apply to contracts entered into with a governmental agency, state or federal, for the handling, conditioning, storage, or shipping of agricultural commodities. [ 1983 c 305 s 36; 1979 ex.s. c 238 s 24.] NOTES: Severability— RCW 22.09.200 Rights and duties of licensees—Reports to department. Each licensee shall report information to the department at such times and as may be reasonably required by the department for the necessary enforcement and supervision of a sound, reasonable, and efficient commodity inspection program for the protection of depositors of commodities and for persons or agencies who deal in commodities. [ 1983 c 305 s 37; 1963 c 124 s 20.] NOTES: Severability— RCW 22.09.220 Rights and duties of licensees—Premises, construction and maintenance. A warehouse or station shall be constructed and maintained in a manner adequate to carry out the provisions of this chapter. [ 1963 c 124 s 22.] RCW 22.09.230 Rights and duties of warehouse licensees—Signs—Use of "Washington Bonded Warehouse." Every warehouse licensee shall post at or near the main entrance to each of his or her warehouses a sign as prescribed by the department which shall include the words "Washington Bonded Warehouse." It is unlawful to display such sign or any sign of similar appearance or bearing the same words, or words of similar import, when the warehouse is not licensed and bonded under this chapter. [ 2011 c 336 s 615; 1983 c 305 s 39; 1963 c 124 s 23.] NOTES: Severability— RCW 22.09.240 Rights and duties of warehouse operator—Schedule of rates—Posting—Revision. Every warehouse operator shall annually, during the first week in July, publish by posting in a conspicuous place in each of his or her warehouses the schedule of handling, conditioning, and storage rates filed with the department for the ensuing license year. The schedule shall be kept posted, and the rates shall not be changed during such year except after thirty days' written notice to the director and proper posting of the changes on the licensee's premises. [ 2011 c 336 s 616; 1991 c 109 s 29; 1983 c 305 s 40; 1963 c 124 s 24.] NOTES: Severability— RCW 22.09.250 Rights and duties of warehouse operator—Unlawful practices. It is unlawful for a warehouse operator to: (1) Issue a warehouse receipt for any commodity that he or she does not have in his or her warehouse at the time the receipt is issued; (2) Issue warehouse receipts in excess of the amount of the commodities held in the licensee's warehouse to cover the receipt; (3) Remove, deliver, direct, assist, or permit any person to remove, or deliver any commodity from any warehouse for which warehouse receipts have been issued and are outstanding without receiving and canceling the warehouse receipt issued therefor; (4) Sell, encumber, ship, transfer, or in any manner remove or permit to be shipped, transferred, or removed from a warehouse any commodity received by him or her for deposit, handling, conditioning, or shipment, for which scale weight tickets have been issued without the written approval of the holder of the scale weight ticket and such transfer shall be shown on the individual depositor's account and the inventory records of the warehouse operator; (5) Remove, deliver, direct, assist, or permit any person to deliver, or remove any commodities from any warehouse, whereby the amount of any fairly representative grade or class of any commodity in the warehouses of the licensee is reduced below the amount for which warehouse receipts or scale weight tickets for the particular commodity are outstanding; (6) Issue a warehouse receipt showing a grade or description different from the grade or description of the commodity delivered; (7) Issue a warehouse receipt or scale weight ticket that exceeds the amount of the actual quantity of commodities delivered for storage; (8) Fail to deliver commodities pursuant to RCW 22.09.150 upon demand of the depositor; (9) Knowingly accept for storage any commodity destined for human consumption that has been contaminated with an agricultural pesticide or filth rendering it unfit for human consumption, if the commodities are commingled with any uncontaminated commodity; (10) Terminate storage of a commodity in his or her warehouse without giving thirty days' written notice to the depositor. [ 2011 c 336 s 617; 1983 c 305 s 41; 1963 c 124 s 25.] NOTES: Severability— RCW 22.09.260 Deposit of commodities unfit for human consumption—Notice. No depositor may knowingly deliver for handling, conditioning, storage, or shipment any commodity treated with an agricultural pesticide or contaminated with filth rendering it unfit for human consumption without first notifying the warehouse operator. [ 2011 c 336 s 618; 1983 c 305 s 42; 1963 c 124 s 26.] NOTES: Severability— RCW 22.09.290 Warehouse receipts—Required terms. (1) Every warehouse receipt issued for commodities covered by this chapter shall embody within its written or printed terms: (a) The grade of the commodities as described by the official standards of this state, unless the identity of the commodity is in fact preserved in a special pile or special bin, and an identifying mark of such pile or bin shall appear on the face of the receipt and on the pile or bin. A commodity in a special pile or bin shall not be removed or relocated without canceling the outstanding receipt and issuing a new receipt showing the change; (b) Such other terms and conditions as required by Article 7 of Title 62A RCW: PROVIDED, That nothing contained therein requires a receipt issued for wheat to specifically state the variety of wheat by name; (c) A clause reserving for the warehouse operator the optional right to terminate storage upon thirty days' written notice to the depositor and collect outstanding charges against any lot of commodities after June 30th following the date of the receipt. (2) Warehouse receipts issued under the United States warehouse act (7 USCA § 241 et seq.) are deemed to fulfill the requirements of this chapter so far as it pertains to the issuance of warehouse receipts. [ 2011 c 336 s 619; 1989 c 354 s 46; 1983 c 305 s 43; 1979 ex.s. c 238 s 19; 1963 c 124 s 29.] NOTES: Severability— RCW 22.09.300 Warehouse receipts—Forms, numbering, printing, bond—Compliance with Article 7 of Title 62A RCW—Confiscation. (1) All warehouse receipts issued under this chapter shall be upon forms prescribed by the department and supplied only to licensed warehouse operators at cost of printing, packing, and shipping, as determined by the department. They shall contain the state number of such license and shall be numbered serially for each state number and the original negotiable receipts shall bear the state seal. Requests for such receipts shall be on forms furnished by the department and shall be accompanied by payment to cover cost: PROVIDED, That the department by order may allow a warehouse operator to have his or her individual warehouse receipts printed, after the form of the receipt is approved as in compliance with this chapter, and the warehouse operator's printer shall supply an affidavit stating the amount of receipts printed, numbers thereof: PROVIDED FURTHER, That the warehouse operator must supply a bond in an amount fixed by the department and not to exceed five thousand dollars to cover any loss resulting from the unlawful use of any such receipts. (2) All warehouse receipts shall comply with the provisions of Article 7 of Title 62A RCW as enacted or hereafter amended, except as to the variety of wheat as set forth in RCW 22.09.290(1)(b) herein, and with the provisions of this chapter where not inconsistent or in conflict with Article 7 of Title 62A RCW. All receipts remaining unused shall be confiscated by the department if the license required herein is not promptly renewed or is suspended, revoked, or canceled. [ 2011 c 336 s 620; 1979 ex.s. c 238 s 20; 1963 c 124 s 30.] RCW 22.09.310 Warehouse receipts—Dealing in unauthorized receipts prohibited—Penalty. Any person, or any agent or servant of that person, or any officer of a corporation who prints, binds, or delivers warehouse receipt forms, except on an order or requisition signed by the director, or who uses such forms knowing that they were not so printed, bound, or delivered is guilty of a class C felony and is punishable as provided in chapter 9A.20 RCW. [ 1983 c 305 s 44; 1963 c 124 s 31.] NOTES: Severability— RCW 22.09.320 Warehouse receipts—Lost or destroyed receipts. In case any warehouse receipt issued by a licensee shall be lost or destroyed, the owner thereof shall be entitled to a duplicate receipt from the licensee upon executing and delivering to the warehouse operator issuing such receipt, a bond in double the value of the commodity covered by such lost receipt, with good and sufficient surety to indemnify the warehouse operator against any loss sustained by reason of the issuance of such duplicate receipt, and such duplicate receipt shall state that it is issued in lieu of the former receipt, giving the number and date thereof. [ 2011 c 336 s 621; 1963 c 124 s 32.] RCW 22.09.330 Scale weight tickets not precluded. Nothing in this chapter may be construed to prevent the issuance of scale weight tickets showing when and what quantities of commodities were received and the condition thereof upon delivery. [ 1983 c 305 s 45; 1963 c 124 s 33.] NOTES: Severability— RCW 22.09.340 Examination of receipts and commodities—Request—Fee—Access to bins—Records and accounts—Out-of-state offices. (1) Upon the request of any person or persons having an interest in a commodity stored in any public warehouse and upon payment of fifty dollars in advance by the person or persons, the department may cause the warehouse to be inspected and shall check the outstanding negotiable and nonnegotiable warehouse receipts, and scale weight tickets that have not been superseded by negotiable or nonnegotiable warehouse receipts, with the commodities on hand and shall report the amount of receipts and scale weight tickets outstanding and the amount of storage, if any. If the cost of the examination is more than fifty dollars, the person or persons having an interest in the commodity stored in the warehouse and requesting the examination, shall pay the additional cost to the department, unless a shortage is found to exist. (2) A warehouse shall be maintained in a manner that will provide a reasonable means of ingress and egress to the various storage bins and compartments by those persons authorized to make inspections, and an adequate facility to complete the inspections shall be provided. (3) The property, books, records, accounts, papers, and proceedings of every such warehouse operator shall at all reasonable times be subject to inspection by the department. The warehouse operator shall maintain adequate records and systems for the filing and accounting of warehouse receipts, canceled warehouse receipts, scale weight tickets, other documents, and transactions necessary or common to the warehouse industry. Canceled warehouse receipts, copies of scale weight tickets, and other copies of documents evidencing ownership or ownership liability shall be retained by the warehouse operator for a period of at least three years from the date of deposit. (4) Any warehouse operator whose principal office or headquarters is located outside the state of Washington shall make available, if requested, during ordinary business hours, at any of their warehouses licensed in the state of Washington, all books, documents, and records for inspection. (5) Any grain dealer whose principal office or headquarters is located outside the state of Washington shall make available, if requested, all books, documents, and records for inspection during ordinary business hours at any facility located in the state of Washington, or if no facility in the state of Washington, then at a Washington state department of agriculture office or other mutually acceptable place. [ 2011 c 336 s 622; 1983 c 305 s 46; 1963 c 124 s 34.] NOTES: Severability— RCW 22.09.345 Inspections—Notice, when issued—Failure to comply, penalty—Court order—Costs, expenses, attorneys' fees. (1) The department may give written notice to the warehouse operator or grain dealer to submit to inspection, and/or furnish required reports, documents, or other requested information, under such conditions and at such time as the department may deem necessary whenever a warehouse operator or grain dealer fails to: (a) Submit his or her books, papers, or property to lawful inspection or audit; (b) Submit required reports or documents to the department by their due date; or (c) Furnish the department with requested information, including but not limited to correction notices. (2) If the warehouse operator or grain dealer fails to comply with the terms of the notice within twenty-four hours from the date of its issuance, or within such further time as the department may allow, the department shall levy a fine of fifty dollars per day from the final date for compliance allowed by this section or the department. In those cases where the failure to comply continues for more than thirty days or where the director determines the failure to comply creates a threat of loss to depositors, the department may, in lieu of levying further fines petition the superior court of the county where the licensee's principal place of business in Washington is located, as shown by the license application, for an order: (a) Authorizing the department to seize and take possession of all books, papers, and property of all kinds used in connection with the conduct or the operation of the warehouse operator's or grain dealer's business, and the books, papers, records, and property that pertain specifically, exclusively, and directly to that business; and (b) Enjoining the warehouse operator or grain dealer from interfering with the department in the discharge of its duties as required by this chapter. (3) All necessary costs and expenses, including attorneys' fees, incurred by the department in carrying out the provisions of this section may be recovered at the same time and as part of the action filed under this section. [ 2011 c 336 s 623; 1987 c 393 s 20; 1983 c 305 s 47.] NOTES: Severability— RCW 22.09.350 Remedies of department on discovery of shortage. (1) Whenever it appears that there is evidence after any investigation that a warehouse operator has a shortage, the department may levy a fine of one hundred dollars per day until the warehouse operator covers the shortage. (2) In any case where the director determines the shortage creates a substantial or continuing threat of loss to the depositors of the warehouse operator, the department may, in lieu of levying a fine or further fines, give notice to the warehouse operator to comply with all or any of the following requirements: (a) Cover the shortage; (b) Give additional bond as requested by the department; (c) Submit to such inspection as the department may deem necessary; (d) Cease accepting further commodities from depositors or selling, encumbering, transporting, or otherwise changing possession, custody, or control of commodities owned by the warehouse operator until there is no longer a shortage. (3) If the warehouse operator fails to comply with the terms of the notice provided for in subsection (2) of this section within twenty-four hours from the date of its issuance, or within such further time as the department may allow, the department may petition the superior court of the county where the licensee's principal place of business in Washington is located as shown by the license application, for an order: (a) Authorizing the department to seize and take possession of all or a portion of special piles and special bins of