Who needs a warehouse operator license: Most persons who accept bulk grain for storage must hold a warehouse operator license. A person cannot issue a warehouse receipt for bulk grain in the state of Iowa unless that person holds a warehouse operator license. In the state of Iowa, a person may obtain a license to store bulk grain either from the Iowa Department of Agriculture and Land Stewardship (Iowa warehouse operator license) or from the United States Department of Agriculture (federal warehouse operator license) [If you desire information on a federal warehouse operator license, contact the Kansas City Commodity office at 816‑926-6474. The balance of this document deals with state warehouse operator licenses.] Exceptions to this requirement are: a person who stores grain for not more than thirty days and certain small grain bank operators. Iowa Code Sections 203C.16 and 203C.17 specify who needs an Iowa warehouse operator license for storage of grain.
Regulations: Iowa Code Chapter 203C defines a warehouse operator and provides authority for the Iowa Department of Agriculture and Land Stewardship (the department) to establish licensing procedures and to regulate this area of commerce. Iowa Code Chapter 203D provides for establishment of the Iowa Grain Depositors and Sellers Indemnity Fund. the department regulates grain dealers under Iowa Code Chapters 203C and 203D and Iowa Administrative Rules 21 Chapter 90, 92, 93, 94 and 95. These are available for your review online at https://www.legis.iowa.gov/.
Warehouse operators who elect to obtain a federal warehouse operator license are regulated by the United States Department of Agriculture under the provisions of the United States Warehouse Act. Such warehouse operators are exempt from the provisions of the Iowa regulations discussed in the preceding paragraph.
Facilities and operating procedures: To obtain an Iowa grain warehouse operator license, the applicant must have storage facilities which are suitable for the safe storage of grain. The warehouse must be equipped with the necessary equipment for weighing, inspecting, conveying, loading, unloading and aerating grain.
Safe and adequate access must be provided to all storage facilities to allow for inspection and measurement of the grain stored therein. Ladders, safety cages, lifts, stairways and runways should be in compliance with Iowa Occupational Safety and Health Standards (OSHA). Additional ladder and lift requirements are set forth in the department rules.
All grain must be weighed into and out of a licensed warehouse. The warehouse operator must maintain grain of a sufficient quality and quantity at all times to fully cover the warehouse operator's obligations. All grain must be inspected and graded unless it is stored on an "identity preserved" (not commingled) basis. Inspecting and grading must be performed in accordance with the United States Grain Standards Act.
Financial requirements: An Iowa licensed warehouse operator must maintain a net worth of at least 25 cents ($0.25) per bushel of licensed capacity.
Applicants must file a current financial statement in accordance with rule 21—90.8. After the initial application, warehouse operators must file a financial statement within three months of their fiscal year end. These financial statements must be either audited by a certified public accountant (CPA) with an unqualified opinion issued, or they must be reviewed by a CPA. The CPA must be licensed to do business in the state of Iowa. The financial statements must be prepared in accordance with generally accepted accounting principles.
Sole proprietor business owners must file a personal financial statement in addition to the financial statement on the sole proprietorship. The balance sheet for the personal financial statement must show the assets both at their historical cost basis (original cost less depreciation) and at their fair market value. In computing the net worth of an individual, the department will exclude the value of certain assets which the individual might be able to keep in a bankruptcy situation. This includes the person's house and homestead and various other personal assets. The provisions discussed in this paragraph apply only to individuals, and not to corporations, limited liability companies and bona fide partnerships.
The department will exclude most related party assets from the balance sheet unless the applicant or grain dealer can provide adequate evidence to assure the department that the amounts are collectible. Such related party assets usually consist of notes receivable and accounts receivable from stockholders, officers and related corporations. Adequate evidence of value may include the filing of a financial statement by the individual or corporation involved. Exclusion of these related party assets will affect the net worth.
Warehouse operators are required to maintain the minimum net worth at all times, not just when the financial statements are filed.
Financial statements must include a balance sheet, income statement, statement of cash flows and the notes to the financial statements. However, newly formed companies do not have to provide an income statement or statement of cash flows if they do not apply.
If you need further explanation of the financial requirements or terminology, you should contact an accountant. The accountant will be able to assist you in analyzing how well your company meets the financial requirements.
Costs: The costs which you will incur depend largely upon the business type and size. The major expense in obtaining warehouse operator license for the first time is normally the charges made by the CPA. Persons setting up a new company or purchasing another business may also incur legal expenses. The annual licensing fees are based upon the capacity of the warehouse and are as follows:
Storage Capacity License Fee
100,000 bushels or less $ 58.00
100,001 to 750,000 bushels $125.00
750,001 to 1,500,000 bushels $191.00
1,500,001 to 3,000,000 bushels $249.00
3,000,001 to 4,750,000 bushels $307.00
4,750,001 to 9,500,000 bushels $374.00
9,500,001 bushels or more $440.00
A fee for participation in the Iowa Grain Depositors and Sellers Indemnity Fund is also charged to new license applicants. This fee is based upon the storage capacity of the warehouse facility to be licensed. The fee is fourteen thousandths of cent ($0.00014) per bushel of capacity, with a minimum of $50.00 and a maximum of $500.00. At this time, this participation fee is a one-time fee which only is paid upon license application. However, should the balance in the indemnity fund drop significantly, this fee could be made an annual fee.
Other costs which a warehouse operator will incur will include those for forms, data processing, and related office supplies and may include the cost of hiring bookkeeping staff.
Records: Warehouse operators are required to keep complete and accurate records of all grain delivered to, loaded out of and stored in the warehouse. The regulations do specify certain types of records which must be maintained. Warehouse operators must maintain a daily grain position record for each type of grain which shows the increase, decrease and ending balance for total stocks, open storage, warehouse receipted, unpaid company owned and paid company owned (see attached sample). Warehouse operators must also utilize prenumbered settlement sheets and scale tickets. Warehouse receipts used by a warehouse operator must be obtained from a printer authorized by the department. The department controls the printing of all warehouse receipts, specifying form, content and prenumbering. All warehouse receipts and scale tickets must be filed in numerical order. All settlements sheets must be filed either numerically or alphabetically. The department does specify the format and content of some of the forms which a warehouse operator must utilize.
Maintenance of office and business hours: State licensed warehouse operators are subject to inspection by the department during the hours of 8:00 A.M. to 5:00 P.M. Monday through Friday. The department makes unannounced inspections. Warehouse operators are required to have their office open during these hours.
Miscellaneous: All grain in storage at a licensed warehouse must be fully insured against loss from fire, windstorm and inherent explosion. The department requires that an insurance certificate (on department form W-19) be filed by the warehouse operator’s insurance company. Such insurance certificate must be on file before the license will be issued.
All warehouse facilities must be inspected and measured for capacity by a department examiner before the application will be processed. The facilities must be empty at the time they are inspected.
Charges to be made to depositors for the handling and storage of grain must be declared in a tariff. The tariff must be on file with the department.
Iowa licensed warehouse operators are required by law to receive for storage any products of the kind and amount the operator is permitted to under the license.
A warehouse operator license does not authorize the warehouse operator to purchase grain from producers. A person must in most instances be licensed as a grain dealer in order to purchase grain from producers. A grain dealer license is separate from the warehouse operator's license discussed in this document. If you desire further information in regard to a grain dealer license, contact the department.
Other than bulk grain
Other than bulk grain: A person may be licensed to store agricultural and farm consumable products other than bulk grain. The Iowa Department of Agriculture and Land Stewardship is authorized to issue such licenses, but such license is not a mandatory requirement. A person is required to hold a license to store such other than bulk grain products only if that person desires to issue bonded warehouse receipts for such products.
The regulations, operating procedures, financial requirements, costs, record keeping requirements, inspections and miscellaneous requirements which apply to a warehouse operator licensed for products other than bulk grain are similar to those which apply to bulk grain warehouse operators. Review the information in the preceding pages for general information. The significant differences between the two are outlined in the following sections.
Financial requirements: The financial reporting requirements are the same as those for a bulk grain license. However, the net worth requirement for an other than bulk grain license is $10,000, minimum.
Costs: The license costs for an other than bulk grain license are as follows:
For stated value of products Fee
of $100,000 or less $60
of $100,001 to $300,000 $100
of $300,001 or more $200
There are no indemnity fund fees for a license for other than bulk grain. However, there is a cost to obtain a bond or irrevocable letter of credit.
Bonds: Warehouse operators licensed for products other than bulk grain do not participate in the grain depositors and sellers indemnity fund. In lieu of this indemnification, the warehouse operator must file a surety bond or an irrevocable letter of credit. The amount of the bond is set on a variable scale for the first $50,000.00 of stated value of products. The minimum amount of the bond is $3,000.00. The amount of the bond is $20,000.00 for a stated value of products of $50,000.00. In excess of $50,000.00 stated value of products, the amount of bond is $1,000.00 bond for each $5,000.00 of stated value of products. Warehouse operators may post either a bond issued by a surety company or an irrevocable letter of credit issued by a FDIC insured bank or a lending institution authorized under the farm credit system.
Applications: If you desire to make application for an Iowa warehouse operator license, contact the department. An examiner will be sent to your warehouse facility to assist you in completing the application process.
Our address and phone number follow:
Grain Warehouse Bureau
Iowa Department of Agriculture & Land Stewardship
Henry A. Wallace Building
Des Moines, IA 50319-0053