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Minnesota grain buyers and grain storage warehouses or elevators need licenses and surety bonds. HF 2717, introduced in the 2017 legislative session, might increase the required bond for grain buyers.
Getting licensed and bonded
Grain buyers and storage elevators apply for licensure through the Minnesota Department of Agriculture. A grain buyer is anyone buying grain for the purpose of reselling it or products made from it. Storage elevators store grain for the public, and they are required to apply for a buyer’s license as well. Each business location needs its own license.
Here’s some of the information grain buyers will need to provide on the application:
- Minnesota tax ID number or social security number
- Legal name and mailing address
- Workers’ compensation information, if applicable
- List of licensed locations
- Inform whether or not grain will be purchased on credit
- Surety bond ranging from $10,000 to $150,000
- License fee ranging from $110-$700
The license fee is calculated based on the buyer’s gross annual grain purchases (GAGP)�a chart is included on the application to help you determine your fee amount. The surety bond amount is also based on GAGP:
- GAGP of $100,000 or less�$10,000 bond
- GAGP $150,000-$750,000�$20,000 bond
- GAGP $750,000-$1,500,000�$30,000 bond
- GAGP�$1,500,000-$3,000,000�$40,000 bond
- GAGP�$3,000,000-$6,000,000�$50,000 bond
- GAGP�$6,000,000-$12,000,000�$70,000 bond
- GAGP $12,000,000-$24,000,000�$125,000 bond
- GAGP exceeding $24,000,000�$150,000 bond
First-time grain buyer licensees and grain storage warehouses need a $50,000 surety bond. The grain storage application asks for much of the same information as the buyer application. But, they also need to inform the Department of the grain storage rates, have additional insurance, and pay a warehouse exam fee based on the facility’s bushel capacity.�The license period runs from July 1-June 30 and it must be renewed annually.
Possible surety bond increase for grain buyers
Some Minnesota grain buyers might see a bond increase if HF 2717 becomes law in the coming year. The bill is being reviewed by the House Agriculture Policy Committee. Since it might be voted on in this year’s legislative session, grain buyer licensees should keep HF 2717 on their radar—bond amounts won’t change for buyers under a GAGP of $3,000,000. These are the proposed bond amounts:
- GAGP�$3,000,000-$6,000,000�$300,000 bond
- GAGP�$6,000,000-$12,000,000�$400,000 bond
- GAGP $12,000,000-$24,000,000�$500,000 bond
- GAGP exceeding $24,000,000�$600,000 bond
Contact the Department about grain buyer and storage warehouse licenses and bonds at (651) 201-6011. If you’re ready to get a surety bond, get in touch with Single Source Insurance today!