HB 1305

                                                          Introduced Version
           HOUSE BILL No. 1305
                 _____
              DIGEST OF INTRODUCED BILL
Citations Affected: IC 4-2-7-3; IC 26-3-7; IC 26-4.
Synopsis: Grain shortages, claims, and payments. Allows the inspector
general to receive complaints regarding violations of the Indiana grain
buyers and warehouse licensing and bonding law by the director of the
Indiana grain buyers and warehouse licensing agency. Reorganizes the
existing statute regarding grain shortages, claims, and payments.
Provides for certain notices to be included in contracts for the purchase
of grain. Requires an administrative law judge to award reasonable
attorney's fees to the claimant in certain administrative adjudications.
Makes conforming and technical corrections.
Effective: July 1, 2026.
                                Sweet
   January 6, 2026, read first time and referred to Committee on Agriculture and Rural
Development.
2026  IN 1305—LS 6988/DI 148
                                                                                       Introduced
            Second Regular Session of the 124th General Assembly (2026)
 PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
 Constitution) is being amended, the text of the existing provision will appear in this style type,
 additions will appear in this style type, and deletions will appear in this style type.
   Additions: Whenever a new statutory provision is being enacted (or a new constitutional
 provision adopted), the text of the new provision will appear in this style type. Also, the
 word NEW will appear in that style type in the introductory clause of each SECTION that adds
 a new provision to the Indiana Code or the Indiana Constitution.
  Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
 between statutes enacted by the 2025 Regular Session of the General Assembly.
                   HOUSE BILL No. 1305
   A BILL FOR AN ACT to amend the Indiana Code concerning
 commercial law.
     Be it enacted by the General Assembly of the State of Indiana:
1   SECTION 1. IC 4-2-7-3, AS AMENDED BY P.L.201-2023,
2 SECTION 54, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3 JULY 1, 2026]: Sec. 3. The inspector general shall do the following:
4     (1) Initiate, supervise, and coordinate investigations.
5     (2) Recommend policies and carry out other activities designed to
6     deter, detect, and eradicate fraud, waste, abuse, mismanagement,
7     and misconduct in state government.
8     (3) Receive complaints alleging the following:
9(A) A violation of the code of ethics.
10(B) Bribery (IC 35-44.1-1-2).
11(C) Official misconduct (IC 35-44.1-1-1).
12(D) Conflict of interest (IC 35-44.1-1-4).
13(E) Profiteering from public service (IC 35-44.1-1-5).
14(F) A violation of the executive branch lobbying rules.
15(G) A violation of a statute or rule relating to the purchase of
16goods or services by a current or former employee, state
17officer, special state appointee, lobbyist, or person who has a
 2026  IN 1305—LS 6988/DI 148
                                      2
1business relationship with an agency.
2(H) A violation of the Indiana grain buyers and warehouse
3licensing and bonding law (IC 26-3-7) by the director of the
4Indiana grain buyers and warehouse licensing agency.
5(4) If the inspector general has reasonable cause to believe that a
6crime has occurred or is occurring, report the suspected crime to:
7(A) the governor; and
8(B) appropriate state or federal law enforcement agencies and
9prosecuting authorities having jurisdiction over the matter.
10(5) Adopt rules under IC 4-22-2 to implement IC 4-2-6 and this
11chapter.
12(6) Adopt rules under IC 4-22-2 and section 5 of this chapter to
13implement a code of ethics.
14(7) Ensure that every:
15(A) employee;
16(B) state officer;
17(C) special state appointee; and
18(D) person who has a business relationship with an agency;
19is properly trained in the code of ethics.
20(8) Provide advice to an agency on developing, implementing,
21and enforcing policies and procedures to prevent or reduce the
22risk of fraudulent or wrongful acts within the agency.
23(9) Provide informal advisory opinions to current, former, and
24prospective state employees, state officers, and special state
25appointees. An informal advisory opinion issued by the office of
26the inspector general is confidential under IC 5-14-3-4, including
27any previously issued informal advisory opinion by the office of
28the inspector general that recites that it is confidential.
29(10) Recommend legislation to the governor and general assembly
30to strengthen public integrity laws, including the code of ethics
31for state officers, employees, special state appointees, and persons
32who have a business relationship with an agency, including
33whether additional specific state officers, employees, or special
34state appointees should be required to file a financial disclosure
35statement under IC 4-2-6-8.
36(11) Annually submit a report to the legislative council detailing
37the inspector general's activities. The report must be in an
38electronic format under IC 5-14-6.
39(12) Prescribe and provide forms for statements required to be
40filed under IC 4-2-6 or this chapter.
41(13) Accept and file information that:
42(A) is voluntarily supplied; and
 2026  IN 1305—LS 6988/DI 148
                                      3
1(B) exceeds the requirements of this chapter.
2      (14) Inspect financial disclosure forms.
3      (15) Notify persons who fail to file forms required under IC 4-2-6
4      or this chapter.
5      (16) Develop a filing, a coding, and an indexing system required
6      by IC 4-2-6 and IC 35-44.1-1.
7      (17) Prepare interpretive and educational materials and programs.
8    SECTION 2. IC 26-3-7-3, AS AMENDED BY THE TECHNICAL
9 CORRECTIONS BILL OF THE 2026 GENERAL ASSEMBLY, IS
10 AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2026]:
11 Sec. 3. (a) The director may do the following:
12      (1) Require any reports that are necessary to administer this
13      chapter.
14      (2) Administer oaths, issue subpoenas, compel the attendance and
15      testimony of witnesses, and compel the production of records in
16      connection with any investigation, informal meeting, or hearing
17      preliminary meeting, or claims meeting under this chapter.
18      (3) Prescribe all forms within the provisions of this chapter.
19      (4) Establish grain standards in accordance with the grain
20      standards act and federal regulations promulgated under that act
21      that must be used by warehouses.
22      (5) Investigate the activities required by this chapter including the
23      storage, shipping, marketing, and handling of grain and
24      complaints with respect to the storage, shipping, marketing, and
25      handling of grain.
26      (6) Inspect a facility, the grain stored in a facility, and all property
27      and records pertaining to a facility. All inspections of an applicant
28      or licensee under this chapter must take into consideration the
29      proprietary nature of an applicant's or licensee's commercial
30      information. This chapter does not authorize the inspection of an
31      applicant's or licensee's trade secret or intellectual property
32      information.
33      (7) Determine whether a facility for which a license has been
34      applied for or has been issued is suitable for the proper storage,
35      shipping, and handling of the grain that is stored, shipped, or
36      handled, or is expected to be stored, shipped, or handled.
37      (8) Require a licensee to terminate storage, shipping, marketing,
38      and handling agreements upon revocation of a license.
39      (9) Attend and preside over any investigation, informal meeting,
40      or hearing preliminary meeting, or claims meeting allowed or
41      required under this chapter.
42      (10) Impose sanctions for violations of this article.
 2026  IN 1305—LS 6988/DI 148
                                     4
1(11) Require all contracts for the purchase of grain from
2producers, except a flat price contract or a contract for the
3production of seed, to include the following notice immediately
4above the place on the contract where the seller of the grain must
5sign:
6"NOTICE - SELLER IS CAUTIONED THAT
7CONTRACTING FOR THE SALE AND DELIVERY OF
8GRAIN INVOLVES RISKS. THESE RISKS MAY INCLUDE
9FUTURE PAYMENTS BY YOU TO MAINTAIN THIS
10CONTRACT, A LOWER SALES PRICE, AND OTHER
11RISKS NOT SPECIFIED. A SELLER MUST CONTACT
12THE DIRECTOR OF THE INDIANA GRAIN BUYERS
13AND WAREHOUSE LICENSING AGENCY IN
14WRITING IF THE FIRST PURCHASER LICENSEE IS
15UNABLE TO FULFILL THIS CONTRACT.
16INDIANA STATE LAW REQUIRES THAT ALL
17DEFERRED PRICED GRAIN MUST BE PRICED WITHIN
18THE CROP YEAR AS DEFINED BY IC 26-3-7-2(7).
19IC 26-3-7-2(8). THIS CONTRACT MUST BE PRICED BY
20_(Insert Date)_.
21COVERAGE UNDER THE INDIANA GRAIN INDEMNITY
22PROGRAM IS FOR GRAIN THAT HAS BEEN DELIVERED
23TO A FIRST PURCHASER LICENSEE WITHIN THE 15
24MONTHS BEFORE THE DATE OF THE REVOCATION OF
25A LICENSE AND IS LIMITED TO 100% OF A LOSS FOR
26STORED GRAIN AND 80% OF A LOSS FOR OTHER
27COVERED CONTRACTS.
28BE SURE YOU UNDERSTAND THE NATURE OF THIS
29CONTRACT AND THE ASSOCIATED RISKS.".
30(12) Require all contracts executed for the production of seed to
31include the following notice, in conspicuous letters, immediately
32above the place on the contract or an addendum where the seller
33of the seed must sign:
34"NOTICE - IF THE TERMS OF THIS CONTRACT STATE
35THAT THE CONTRACTOR RETAINS OWNERSHIP OF
36THE SEED AND ITS PRODUCTS, YOU MAY NOT BE
37ELIGIBLE FOR PARTICIPATION IN THE INDIANA
38GRAIN INDEMNITY PROGRAM. TO BE ELIGIBLE TO
39PARTICIPATE IN THE INDIANA GRAIN INDEMNITY
40PROGRAM, FARMERS MUST OWN AND SELL GRAIN
41OR SEED. BE SURE YOU UNDERSTAND THE NATURE
42OF THIS CONTRACT AND THE ASSOCIATED RISKS.".
 2026  IN 1305—LS 6988/DI 148
                                     5
1(13) At any time, order an unannounced audit for compliance with
2this article.
3(14) Require all grain buyers offering deferred pricing, delayed
4payments, or contracts linked to the commodity futures or
5commodity options market in connection with a grain purchase to
6document the agreement in writing not more than twenty-one (21)
7days after delivery.
8(15) Receive and consider financial audits of a licensee conducted
9by an independent audit or accounting firm.
10(16) Share information with board members regarding the
11financial status of a licensee, while the board is in executive
12session and without disclosing the name or any other identifying
13information of the licensee, including the following:
14(A) Whether there is a risk that a licensee's license may be
15revoked.
16(B) The financial impact to the fund if a licensee identified in
17clause (A) were to have the licensee's license revoked.
18(C) The estimated number of potential claimants that could
19result from the revocation of a licensee identified in clause
20(A).
21(D) Any other information the director determines is necessary
22to solicit the advice of the board regarding the financial status
23of a licensee.
24However, the director may not share information under this
25subdivision with a board member who has not executed a
26confidentiality agreement.
27     (b) The director shall do the following:
28(1) Establish standards to ensure that a grain buyer has a suitable
29financial position to conduct a business as a grain buyer.
30(2) Require a person who conducts business as a grain buyer to
31first be licensed by the agency.
32     (c) The director may designate an employee to act for the director
33 in the administration of this chapter. An employee designee may not:
34(1) adopt rules; or
35(2) act as the ultimate authority in the administration of this
36chapter.
37     (d) The director may designate an administrative law judge to act for
38 the director in the administration of this chapter.
39     (e) The director may determine whether geographically separate
40 facilities constitute a single warehouse or grain buyer and in making
41 the determination may consider the following:
42(1) The number of facilities involved.
 2026  IN 1305—LS 6988/DI 148
                                     6
1(2) Whether full weighing equipment is present at the
2geographically separate facilities.
3(3) The method of bookkeeping employed by the separate
4facilities.
5(4) The hours of operation of the separate facilities.
6(5) The personnel employed at the separate facilities.
7(6) Other factors the director deems relevant.
8     (f) For purposes of determining whether a building or other
9 protected enclosure constitutes a single warehouse that requires a
10 single license under this chapter, the director may consider the
11 following:
12(1) The presence of a full weighing facility at geographically
13diverse warehouse facilities.
14(2) The traditional method of record keeping with respect to the
15separate facilities.
16(3) The hours, number of personnel, and activities of the separate
17facilities.
18(4) Any other factor considered relevant.
19 In the absence of contradictory information, any warehouses owned and
20 operated by the same person that are located within close proximity of
21 each other are presumed to constitute a single warehouse.
22     (g) The director and the director's designated representative shall
23 become members of the national grain regulatory organization and
24 shall:
25(1) work in partnership with other state grain regulatory officials;
26(2) participate in national grain regulatory meetings; and
27(3) provide expertise and education at national meetings.
28     (h) The director shall engage an independent third party firm to
29 conduct a performance review of the agency's auditing practices and
30 procedures at least once every five (5) years. The agency shall make
31 reasonable efforts to implement any corrective measures identified in
32 the performance review to enhance and improve the agency's auditing
33 practices and procedures. The agency shall make the findings of the
34 performance review available to the board.
35     (i) The director may subpoena or require that certain records located
36 outside Indiana, if any, be brought to a specified location in Indiana for
37 review by the agency.
38     SECTION 3. IC 26-3-7-15.1 IS ADDED TO THE INDIANA CODE
39 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
40 1, 2026]: Sec. 15.1. (a) If the agency learns of the possibility that a
41 shortage exists, either as a result of an inspection or a report or a
42 complaint from a depositor, the agency shall:
 2026  IN 1305—LS 6988/DI 148
                                   7
1(1) conduct an onsite inspection and audit; and
2(2) make a preliminary determination as to whether a
3shortage exists.
4    (b) If the agency does not discover a shortage under subsection
5 (a), the agency must treat the audit as it would any other audit.
6    (c) If the agency determines that a shortage may exist, the
7 director or the director's designated representative shall:
8(1) hold a preliminary meeting as soon as possible to confirm
9the existence of a shortage as indicated by the licensee's books
10and records and the grain on hand; and
11(2) provide notice of the preliminary meeting to:
12(A) the licensee;
13(B) the surety company named on the licensee's bond;
14(C) the issuer of the irrevocable letter of credit; and
15(D) any grain depositor who has made a claim or
16complaint to the agency in conjunction with the potential
17shortage.
18 The parties under subdivision (2) are the only interested parties for
19 purposes of the preliminary meeting.
20    (d) At the preliminary meeting, the director or the director's
21 designated representative shall do the following:
22(1) Determine whether there is a reasonable probability that
23a shortage exists.
24(2) If it is determined that a reasonable probability of a
25shortage exists and that the bond or letter of credit proceeds
26or the cash deposit should be distributed:
27(A) enter a preliminary determination that the licensee has
28failed to meet its obligations under this chapter or the rules
29adopted under this chapter; and
30(B) take possession of the bond or other security required
31under this chapter and all proceeds from grain sales are to
32be held in the form in which they are received and to be
33kept in a separate account from all other funds. The
34records of proceeds held in a separate account under this
35clause are a public record notwithstanding IC 5-14-3.
36(3) Issue an order that provides for an informal meeting,
37which may include:
38(A) the agency representatives;
39(B) persons who have or who appear to have grain
40deposited with the licensee; and
41(C) the surety company.
42    (e) If the agency does not begin an audit, which would serve as
 2026  IN 1305—LS 6988/DI 148
                                   8
1 the basis for a preliminary administrative determination, within
2 forty-five (45) days after the agency's receipt of a written claim by
3 a depositor, a depositor has a right of action upon the bond, letter
4 of credit, or cash deposit. A depositor bringing a civil action under
5 this subsection need not join other depositors. However, if the
6 agency has undertaken an audit during the forty-five (45) day
7 period, the exclusive remedy for recovery against the bond, letter
8 of credit, or cash deposit is through the recovery procedure
9 prescribed by sections 15.2 and 15.3 of this chapter.
10    SECTION 4. IC 26-3-7-15.2 IS ADDED TO THE INDIANA CODE
11 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
12 1, 2026]: Sec. 15.2. (a) After conducting a preliminary meeting
13 under section 15.1 of this chapter, if the director determines that
14 the bond or letter of credit proceeds or cash deposit is to be
15 distributed, the agency shall hold a claims meeting.
16    (b) The agency shall provide notice of the claims meeting
17 described in subsection (a) to the following:
18(1) The surety company named on the licensee's bond.
19(2) The issuer of the irrevocable letter of credit.
20(3) Any person shown by the licensee's books and records to
21have interests in grain deposited with the licensee.
22(4) Any other person that the agency has actual knowledge of
23claiming rights in the grain deposited with the licensee, the
24bond, the irrevocable letter of credit, or the cash deposit.
25 Additionally, the agency shall provide public notice of the claims
26 meeting in newspapers of general circulation that serve the
27 counties in which the licensed facility is located and post notices on
28 the licensed premises.
29    (c) At the claims meeting described in subsection (a), the
30 director or the director's designated representative may accept as
31 evidence of claims the report of an agency representative who, as
32 the result of an informal meeting with depositors, has concluded
33 that a claim is directly and precisely supported by the licensee's
34 books and records. However, if there is disagreement between a
35 depositor's claims and the licensee's books and records, the
36 director or the director's designated representative shall hear oral
37 claims and receive written evidence of claims to determine the
38 validity of the claim.
39    (d) Any depositor who does not present a claim at the claims
40 meeting described in subsection (a) may bring the claim to the
41 agency not more than fifteen (15) days after the conclusion of the
42 claims meeting described in subsection (a). However, a depositor
 2026  IN 1305—LS 6988/DI 148
                                   9
1 who has a claim that was involved in the probate of an estate at the
2 time of the claims meeting described in subsection (a) has one (1)
3 year from the conclusion of the claims meeting described in
4 subsection (a) to present the claim to the agency.
5     SECTION 5. IC 26-3-7-15.3 IS ADDED TO THE INDIANA CODE
6 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
7 1, 2026]: Sec. 15.3. (a) Following the claims meeting under section
8 15.2 of this chapter, the director or the director's designated
9 representative shall make a determination as to the total proven
10 storage and financial obligations due to depositors and the loss
11 sustained by each depositor who has proven a claim.
12     (b) Only grain that has been delivered to a first purchaser
13 licensee for sale or storage under a bailment not more than fifteen
14 (15) months before the date of revocation of the licensee's license
15 may be considered by the director or the director's designated
16 representative in determining the total proven storage and
17 financial obligations due to depositors and the loss sustained by
18 each depositor who has proven a claim. Depositors found to have
19 proven their claims for storage or financial loss are proven
20 claimants.
21     (c) In arriving at that loss, in accordance with section 19 of this
22 chapter, the director shall apply all grain on hand or its
23 identifiable proceeds to meet the licensee's obligations to grain
24 depositors of grain of that type. Initial determinations of loss must
25 be made on the amount of grain on hand, or identifiable proceeds,
26 and must reduce the amount to which a depositor may have a
27 proven claim.
28     (d) With respect to the remaining unfulfilled obligations, and
29 subject to subsection (e), the director shall:
30(1) for the sole purpose of establishing each depositor's claim
31under this chapter, establish a date upon which the loss is
32discovered;
33(2) price the grain as of the date described in subdivision (1);
34(3) treat all outstanding grain storage obligations not covered
35by grain on hand or identifiable proceeds as being sold as of
36the date described in subdivision (1); and
37(4) determine the extent of each depositor's loss as being the
38actual loss sustained as of the date described in subdivision
39(1).
40     (e) Grain of a specific type on the premises of a licensee must
41 first be applied to meet the licensee's storage obligations with
42 respect to that type of grain. If there is insufficient grain of a
 2026  IN 1305—LS 6988/DI 148
                                    10
1 specific type on hand to meet all storage obligations with respect to
2 that type of grain, the grain that is present must be prorated in
3 accordance with the procedures described in this section and
4 section 16.8 of this chapter.
5     (f) The agency shall refer the licensee to the county prosecuting
6 attorney if the licensee does not have the amount of grain in
7 storage, at the time of the revocation of the license, that the records
8 indicate should be in storage.
9     (g) When the proven claims exceed the amount of the bond,
10 letter of credit, or cash deposit, recoveries of proven claimants
11 must be prorated in the same manner as priorities are prorated
12 under section 16.8 of this chapter.
13     (h) The proceedings and meetings under this section and
14 sections 15.1 and 15.2 of this chapter may be undertaken without
15 regard to, in combination with, or in addition to those undertaken
16 in accordance with section 17.1 of this chapter.
17     (i) The findings of the director are final, conclusive, and binding
18 on all parties.
19     (j) A claim of a licensee for stored grain may not be honored
20 until the proven claims of all other claimants arising from the
21 purchase, storage, and handling of the grain have been paid in full.
22     (k) A claim is considered to be adjudicated if the claimant has:
23(1) agreed with the director's determination on the claim and
24not filed an appeal under IC 4-21.5-3; or
25(2) exhausted the claimant's administrative appeal and
26judicial review remedies.
27     (l) Subject to the requirements under this chapter, if one (1) or
28 more claimants are not paid in full for the claimants' proven
29 claims, the director shall forward to the Indiana grain indemnity
30 fund board of directors a list of the claimants who are owed money
31 and the difference between the amount that the claimant was paid
32 and the amount that the claimant claims to be due along with a
33 copy of the final order.
34     SECTION 6. IC 26-3-7-16.5 IS REPEALED [EFFECTIVE JULY
35 1, 2026]. Sec. 16.5. (a) Upon learning of the possibility that a shortage
36 exists, either as a result of an inspection or a report or complaint from
37 a depositor, the agency, based on an on-premises inspection, shall make
38 a preliminary determination as to whether a shortage exists. If a
39 shortage is not discovered, the agency shall treat the audit as it would
40 any other audit.
41     (b) If it is determined that a shortage may exist, the director or the
42 director's designated representative shall hold a hearing as soon as
 2026  IN 1305—LS 6988/DI 148
                                    11
1 possible to confirm the existence of a shortage as indicated by the
2 licensee's books and records and the grain on hand. Only the licensee,
3 the surety company named on the licensee's bond, the issuer of the
4 irrevocable letter of credit, and any grain depositor who has made a
5 claim or complaint to the agency in conjunction with the shortage shall
6 be considered as interested parties for the purposes of that hearing, and
7 each shall be given notice of the hearing. At the hearing, the director
8 or the director's designated representative shall determine whether
9 there appears to be a reasonable probability that a shortage exists. If it
10 is determined that a reasonable probability exists and that the bond or
11 letter of credit proceeds or the cash deposit should be distributed, a
12 preliminary determination shall be entered to the effect that the
13 licensee has failed to meet its obligations under this chapter or the rules
14 adopted under this chapter. At the hearing, the director or the director's
15 designated representative shall take possession of the bond or other
16 security required under this chapter and all proceeds from grain sales
17 are to be held in the form in which they are received and to be kept in
18 a separate account from all other funds. The order shall also provide for
19 informal conferences between agency representatives and persons who
20 have or who appear to have grain deposited with the licensee. The
21 surety company shall be permitted to participate in those conferences.
22     (c) In the event that the director determines that the bond or letter
23 of credit proceeds or cash deposit is to be distributed, the agency shall
24 hold a hearing on claims. Notice shall be given to the surety company
25 named on the licensee's bond, the issuer of the irrevocable letter of
26 credit, and to all persons shown by the licensee's books and records to
27 have interests in grain deposited with the licensee. If the agency has
28 actual knowledge of any other depositor or person claiming rights in
29 the grain deposited with the licensee, the bond, the irrevocable letter of
30 credit, or the cash deposit, notice shall also be provided to that person.
31 In addition, public notice shall be provided in newspapers of general
32 circulation that serve the counties in which licensed facilities are
33 located, and notices shall be posted on the licensed premises. At the
34 hearing on claims, the director or the director's designated
35 representative may accept as evidence of claims the report of agency
36 representatives who in informal conferences with depositors have
37 concluded that a claim is directly and precisely supported by the
38 licensee's books and records. When there is disagreement between the
39 claims of a depositor and the licensee's books and records, the director
40 or the director's designated representative shall hear oral claims and
41 receive written evidence of claims in order to determine the validity of
42 the claim.
 2026  IN 1305—LS 6988/DI 148
                                    12
1     (d) Any depositor who does not present a claim at the hearing may
2 bring the claim to the agency within fifteen (15) days after the
3 conclusion of the hearing. However, a depositor who has a claim that
4 was involved in the probate of an estate at the time of the claims
5 hearing has one (1) year from the conclusion of the claims hearing to
6 present the claim to the agency.
7     (e) Only grain that has been delivered to a first purchaser licensee
8 for sale or storage under a bailment not more than fifteen (15) months
9 before the date of revocation of the licensee's license may be
10 considered by the director or the director's designated representative in
11 determining the total proven storage and financial obligations due to
12 depositors and the loss sustained by each depositor who has proven a
13 claim.
14     (f) Following the hearing on claims, the director or the director's
15 designated representative shall make a determination as to the total
16 proven storage and financial obligations due to depositors and the loss
17 sustained by each depositor who has proven a claim. Depositors found
18 to have proven their claims for storage or financial loss shall be proven
19 claimants. In arriving at that loss, in accordance with section 19 of this
20 chapter, the director shall apply all grain on hand or its identifiable
21 proceeds to meet the licensee's obligations to grain depositors of grain
22 of that type. Initial determinations of loss shall be made on the amount
23 of grain on hand, or identifiable proceeds, and shall reduce the amount
24 to which a depositor may have a proven claim. With respect to the
25 remaining unfulfilled obligations, the director shall, for the sole
26 purpose of establishing each depositor's claim under this chapter,
27 establish a date upon which the loss is discovered, shall price the grain
28 as of that date, shall treat all outstanding grain storage obligations not
29 covered by grain on hand or identifiable proceeds as being sold as of
30 that date, and shall determine the extent of each depositor's loss as
31 being the actual loss sustained as of that date. Grain of a specific type
32 on the premises of a licensee must first be applied to meet the licensee's
33 storage obligations with respect to that type of grain. If there is
34 insufficient grain of a specific type on hand to meet all storage
35 obligations with respect to that type of grain, the grain that is present
36 shall be prorated in accordance with the procedures described in this
37 section and section 16.8 of this chapter. The agency shall refer the
38 licensee to the county prosecuting attorney if the licensee does not have
39 the amount of grain in storage, at the time of the revocation of the
40 license, that the records indicate should be in storage.
41     (g) Upon the failure of the agency to begin an audit, which would
42 serve as the basis for a preliminary administrative determination,
 2026  IN 1305—LS 6988/DI 148
                                    13
1 within forty-five (45) days of the agency's receipt of a written claim by
2 a depositor, a depositor shall have a right of action upon the bond,
3 letter of credit, or cash deposit. A depositor bringing a civil action need
4 not join other depositors. If the agency has undertaken an audit within
5 the forty-five (45) day period, the exclusive remedy for recovery
6 against the bond, letter of credit, or cash deposit shall be through the
7 recovery procedure prescribed by this section.
8     (h) When the proven claims exceed the amount of the bond, letter
9 of credit, or cash deposit, recoveries of proven claimants shall be
10 prorated in the same manner as priorities are prorated under section
11 16.8 of this chapter.
12     (i) The proceedings and hearings under this section may be
13 undertaken without regard to, in combination with, or in addition to
14 those undertaken in accordance with section 17.1 of this chapter.
15     (j) The findings of the director shall be final, conclusive, and
16 binding on all parties.
17     (k) A claim of a licensee for stored grain may not be honored until
18 the proven claims of all other claimants arising from the purchase,
19 storage, and handling of the grain have been paid in full.
20     (l) A claim is considered to be adjudicated if the claimant has:
21(1) agreed with the director's determination on the claim and not
22filed an appeal under IC 4-21.5-3; or
23(2) exhausted the claimant's administrative appeal and judicial
24review remedies.
25     (m) Subject to the requirements under this chapter, if one (1) or
26 more claimants are not paid in full for the claimants' proven claims, the
27 director shall forward to the Indiana grain indemnity fund board of
28 directors a list of the claimants who are owed money and the difference
29 between the amount that the claimant was paid and the amount that the
30 claimant claims to be due along with a copy of the final order.
31     SECTION 7. IC 26-3-7-16.7, AS AMENDED BY P.L.92-2025,
32 SECTION 74, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
33 JULY 1, 2026]: Sec. 16.7. (a) A licensee or claimant subject to the
34 director's action may submit a petition for review and request for
35 administrative adjudication under IC 4-21.5-3 from orders issued by
36 the director under section 16.5, 15.1, 15.2, 15.3, or 17.1 of this chapter.
37     (b) A licensee or claimant may request an administrative
38 adjudication under IC 4-21.5-3 not more than fifteen (15) days after
39 being served with the director's findings.
40     (c) If a licensee or claimant requests an administrative adjudication
41 under IC 4-21.5-3, the office of administrative law proceedings shall
42 designate an administrative law judge to preside over the petition for
 2026  IN 1305—LS 6988/DI 148
                                    14
1 review.
2     (d) The office of administrative law proceedings is the ultimate
3 authority for administrative adjudications under IC 4-21.5.
4     (e) If a claimant submits a petition for review under this section,
5 the administrative law judge shall award the reasonable attorney's
6 fees incurred by the claimant, if any.
7     SECTION 8. IC 26-3-7-17.1, AS AMENDED BY P.L.114-2025,
8 SECTION 27, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
9 JULY 1, 2026]: Sec. 17.1. (a) Whenever the director, as a result of an
10 inspection or otherwise, has reasonable cause to believe that a person
11 to which this chapter is or may be applicable:
12(1) is conducting business contrary to this chapter or in an
13unauthorized manner; or
14(2) has failed, neglected, or refused to observe or comply with any
15order, rule, or published policy statement of the agency;
16 then the director may undertake any one (1) of the actions prescribed
17 by this section.
18     (b) Upon learning of the possibility that a licensee is acting as
19 described in subsection (a), the director or the director's designated
20 representative may seek an informal meeting with the licensee. At that
21 meeting, which must be held at a time and place agreed to by the
22 licensee and the director, the director or the director's designated
23 representative shall discuss the possible violations and may enter into
24 a consent agreement with the licensee under which the licensee agrees
25 to undertake, or to cease, the activities that were the subject of the
26 meeting. The consent agreement must:
27(1) provide for a time frame within which the licensee must be in
28compliance; and
29(2) state in detail the requirements that must be met to be in
30compliance, including the requirements under section 31.2(b) of
31this chapter.
32     (c) Upon learning of the possibility that a person is acting as
33 described in subsection (a), the director or the director's designated
34 representative, except as otherwise provided in this subsection, shall
35 hold a hearing an informal meeting to determine whether a cease and
36 desist order should issue against a licensee or an unlicensed person
37 undertaking activities covered by this chapter. If the director or the
38 director's designated representative determines that the violation or the
39 prohibited practice is likely to cause immediate insolvency or
40 irreparable harm to depositors, the director or the director's designated
41 representative, without notice, shall issue a cease and desist order
42 requiring the person to cease and desist from that violation or practice.
 2026  IN 1305—LS 6988/DI 148
                                    15
1 The order shall become effective upon service on the person and shall
2 remain effective and enforceable pending the completion of all
3 administrative proceedings.
4     (d) Upon a determination, after a hearing an informal meeting held
5 by the director or the director's designated representative, that a person
6 is acting as described in subsection (a), the director shall revoke or
7 deny a license. If the director revokes or denies a license, the director
8 shall publish notice of the revocation or denial as provided in section
9 17.5 of this chapter.
10     SECTION 9. IC 26-3-7-31.2, AS ADDED BY P.L.114-2025,
11 SECTION 36, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
12 JULY 1, 2026]: Sec. 31.2. (a) If the director determines that an
13 informal meeting under this chapter is necessary or appropriate, the
14 following procedures apply:
15(1) The director shall send a notice of an informal meeting to the
16licensee. The notice shall set forth the following:
17(A) Each reason underlying the director's determination that an
18informal meeting is necessary.
19(B) The subject matter to be discussed at the informal meeting.
20(C) A place and time mutually agreed upon, within thirty (30)
21days of the date of the notice.
22(D) If appropriate, any documents, information, or other
23materials to be produced in a manner and at a time and place
24designated in the notice.
25(2) The director and the recipient may, at any time before an
26informal meeting, hold a telephone conference or other informal
27discussion as necessary to determine the location, date, and time
28of the informal meeting.
29(3) An informal meeting under this section must be conducted in
30person or via a virtual conference with audio, video, and the
31ability to share, review, and edit documents or other materials in
32real time.
33(4) Minutes summarizing the topics and points discussed,
34including proposed agreements or remedial actions raised or
35discussed by the informal meeting participants, must be taken by
36the agency. A copy of the minutes and any other materials from
37the informal meeting must be distributed to all participants within
38five (5) days of the informal meeting.
39     (b) A consent agreement may be entered into by the agency and the
40 licensee in which the licensee agrees to take or refrain from certain
41 actions in relation to the subject matter of the informal meeting. Any
42 consent agreement at a minimum must contain the following:
 2026  IN 1305—LS 6988/DI 148
                                    16
1(1) Specific description of the underlying facts giving rise to the
2consent agreement.
3(2) Specific steps to be taken by the licensee to rectify or address
4the subject matter of the informal meeting.
5(3) Specific deadlines or periods by or within which the licensee
6is to act, refrain from acting, or perform under the consent
7agreement.
8(4) Specific deadlines by which the licensee is to notify the
9agency that the licensee has performed, in whole or in part, under
10the consent agreement and, as applicable, that the licensee
11believes it has addressed the subject matter of the informal
12meeting.
13(5) Specific acts or omissions that will constitute a breach of the
14agreement and specific remedies available to the agency and the
15licensee to address a breach of the agreement.
16     (c) The existence and content of an informal meeting under
17 subsection (a), along with the minutes of the meeting and any other
18 related documents, information, or material, and a consent agreement
19 under subsection (b) is confidential.
20     (d) Any offers or discussions from an informal hearing meeting
21 under subsection (a) are protected under the Indiana Trial Rules of
22 Evidence Trial Rule 408.
23     SECTION 10. IC 26-4-1-4.5, AS ADDED BY P.L.114-2025,
24 SECTION 46, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
25 JULY 1, 2026]: Sec. 4.5. "Claim" means a claim that has been vetted
26 through the agency process under IC 26-3-7-16.5 IC 26-3-7-15.2 and
27 IC 26-3-7-15.3 where the claimant has provided the agency with
28 documentation of the financial loss the claimant has experienced minus
29 any payments made to the claimant regarding said loss.
30     SECTION 11. IC 26-4-6-4, AS AMENDED BY P.L.114-2025,
31 SECTION 74, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
32 JULY 1, 2026]: Sec. 4. (a) A claimant who has incurred a storage loss
33 due to the revocation of a warehouse operator license under IC 26-3-7
34 is entitled to be compensated by the board from the fund for one
35 hundred percent (100%) of the storage loss incurred less all credits and
36 offsets and any producer premium that would have been due on the sale
37 of the grain. The gross amount of the storage loss shall be as
38 determined by the agency for warehouses licensed under IC 26-3-7 or
39 by the United States Department of Agriculture for warehouses
40 licensed under the United States Warehouse Act. The warehouse
41 operator, agency, and claimants may submit to the board evidence
42 related to outstanding charges against stored grain. If the evidence is
 2026  IN 1305—LS 6988/DI 148
                                     17
1 submitted, the agency shall determine the storage loss payable by the
2 board. However, the outstanding charges may not include uncollected
3 storage charges.
4     (b) Before a storage loss may be paid, the producer must provide to
5 the board evidence that storage fees were paid to the facility for the
6 time during which the grain was stored. The board shall use the
7 following minimum storage fees to determine the storage loss:
8(1) Barley and barley seed: Five cents ($0.05) per month, per
9bushel.
10(2) Canola and canola seed: Five cents ($0.05) per month, per
11bushel.
12(3) Corn and corn seed: Five cents ($0.05) per month, per bushel.
13(4) Lentils and lentil seed: Five cents ($0.05) per month, per
14bushel.
15(5) Oats and oat seed: Five cents ($0.05) per month, per bushel.
16(6) Popcorn and popcorn seed: Ten cents ($0.10) per month, per
17bushel.
18(7) Rye and rye seed: Five cents ($0.05) per month, per bushel.
19(8) Sorghum and sorghum seed: Five cents ($0.05) per month, per
20bushel.
21(9) Soybeans and soybean seed: Fifteen cents ($0.15) per month,
22per bushel.
23(10) Sunflower and sunflower seed: Five cents ($0.05) per month,
24per bushel.
25(11) Wheat and wheat seed: Five cents ($0.05) per month, per
26bushel.
27(12) All other field crops and other field crop seed: Five cents
28($0.05) per month, per bushel.
29     (c) A claimant who has incurred a financial loss due to the
30 revocation of a license of a grain buyer is entitled to be compensated
31 by the board from the fund for eighty percent (80%) of the loss incurred
32 less all credits and offsets and any producer premium that should have
33 been due on the sale of the grain. The board shall determine the loss
34 incurred in the following manner:
35(1) For grain that has been priced, the loss shall be the value of
36the priced grain less any outstanding charges against the grain.
37(2) For grain sold to a grain buyer, where the title to the grain has
38passed to the grain buyer, who is also a warehouse operator and
39that has not been priced, the loss shall be established using the
40price determined for the storage obligations.
41(3) For grain sold to a grain buyer who is not a warehouse
42operator and that has not been priced, the loss shall be established
 2026  IN 1305—LS 6988/DI 148
                                 18
1      using a price determined by the agency using the same procedures
2      used by the agency to determine the price at the warehouse.
3    (d) If a producer appeals under IC 4-21.5-3 an order issued by the
4 director under IC 26-3-7-16.5 IC 26-3-7-15.1, IC 26-3-7-15.2, or
5 IC 26-3-7-15.3 that postpones the agency from notifying the board of
6 the amount of loss for proven claimants under IC 26-3-7-16.5(m),
7 IC 26-3-7-15.3(l), the board may issue partial payments to any
8 claimants who have not appealed their claims.
2026  IN 1305—LS 6988/DI 148