S.D. regulators seek stronger grain-trade laws

Capitol News Bureau

PIERRE, S.D. (KELO) — Businesses that don’t have a state license for grain trading in South Dakota could face much larger financial penalties if they’re caught engaging in it.

The state Public Utilities Commission regulates grain trading in South Dakota.

The commissioners in the past five years have dealt with 17 dockets involving different people and businesses involved in grain trading, after none in 2015 or 2016.

Those experiences helped shape three pieces of legislation from the commission that will get their initial public hearings Thursday.

The Senate Agriculture and Natural Resources Committee meets at 10 a.m. CT. The chairman, Senator Joshua Klumb, R-Mitchell, is a farmer.

The PUC bills will be some of the first that lawmakers consider in the 2022 session.

SB 35 would increase the amounts of civil fines that the commission can impose and would expand who is subject to them.

The legislation calls for an unlicensed warehouse operator, or a licensed warehouse found to be out of compliance, to be subject to a fine up to $5,000 per instance, with a $50,000 maximum. Those amounts now are $1,000 and $20,000.

State law also currently says the warehouse operator faces up to a $2,000 fine for refusing access to the warehouse’s books and accounts, or for hindering and delaying the commission or any of its employees or agents in examining the books and accounts.

The bill would increase the fine for that violation to a maximum $20,000 and add owner, manager, or chief executive officer of a grain warehouse, or any other person in a managerial position.

SB 38 would make a person subject to prison time for posing as a grain broker without holding a state grain-trading license.

The offense currently is a Class 1 misdemeanor, punishable by up to one year in jail and a $2,000 fine. The legislation would increase the crime to a Class 5 felony, punishable by up to five years in state prison and a $10,000 fine.

SB 39 would cut by half the time for filing claims after a grain trading license has been revoked, from six months to 90 days.

On the House side, state Attorney General Jason Ravnsborg has one piece of legislation on grain trading.

State law currently classifies willful violations by grain buyers and grain warehouses as Class 6 felonies. HB 1037 would change instances of financial loss to theft, making them subject to harsher penalties based on the amounts lost.

A hearing date hasn’t been publicly announced yet.

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