Tex. Agric. Code Section 14.082
Discovery of Shortage; Refusal of Inspection


(a)

If the department determines that a warehouse operator does not possess sufficient grain to cover outstanding receipts and outstanding scale weight tickets issued or assumed by the warehouse operator, or if a warehouse operator refuses or is unable to submit records or property for lawful inspection or the department is unable to conduct an inspection of the warehouse due to the condition of the warehouse or grain stored in the warehouse, the department may seal the warehouse to prevent delivery or receipt of grain except as authorized by the department, suspend the license of the warehouse operator, and give notice to the warehouse operator requiring the warehouse operator to submit records or property for lawful inspection, to correct any condition interfering with the department’s inspection of the warehouse or grain, or to cover a shortage of a particular type of grain by:

(1)

storing to the credit of or delivering to each depositor affected by the shortage grain of the same type and quality that is stored at any of the warehouse operator’s licensed warehouses in this state and that has been designated as company-owned grain by the warehouse operator;

(2)

purchasing and storing to the credit of or delivering to each depositor affected by the shortage grain of the same type and quality;

(3)

selling company-owned grain of a different type and paying to each depositor affected by the shortage, on a pro rata basis, the market value of the depositor’s grain as determined on the day the shortage was discovered by the department; or

(4)

using any combination of the remedies described by Subdivisions (1)-(3) or another fair and reasonable method for meeting the shortage approved by the department.

(b)

A warehouse operator shall comply with the requirements of a notice issued under Subsection (a) within 24 hours of notification by the department or within a longer time allowed by the department. If the warehouse operator fails to comply, the department may petition the district court for the county where the warehouse operator’s principal place of business is located, as shown by the license application, for a court order authorizing the department to take possession of:

(1)

all or a portion of the grain located in the public grain warehouse or warehouses; and

(2)

all relevant records and property of the warehouse operator.

(c)

If the department takes possession of grain under Subsection (b), the department shall give written notice of its action to the surety on the bond of the warehouse operator and may notify the holders of all receipts and scale weight tickets issued for grain, as shown by the warehouse operator’s records, to present their receipts or scale weight tickets for inspection or account for the absence of the receipts or scale weight tickets. The department may then audit and investigate the affairs of the public grain warehouse, especially with respect to the grain of which there is an apparent shortage. The purpose of the audit and investigation is to determine the amount of the shortage and, if practicable, to compute the shortage as to each depositor, as shown by the warehouse operator’s records. The department shall notify the warehouse operator and the surety on the warehouse operator’s bond of the approximate amount of the shortage. The department shall notify each depositor affected by the shortage by sending notice to the depositor’s last known address, as shown by the warehouse operator’s records.

(d)

The department shall retain possession of grain obtained under this section until:

(1)

the warehouse operator or surety on the bond satisfies the claims of all depositors, within the limitations on liability imposed by this chapter; or

(2)

the court orders the department to surrender possession.

(e)

If, during or after an audit or investigation authorized by this section or at any other time, the department has evidence that the warehouse operator is insolvent or unable to satisfy the claims of all depositors, the department may petition the district court for appointment of a receiver to operate or liquidate the business of the warehouse operator in accordance with law.

(f)

A license suspension issued under this section remains in effect until lifted by the department through written notice to the warehouse operator or as provided by Section 14.066 (Appeal of Department Action by Warehouse Operator).
Renumbered from Sec. 14.024 and amended by Acts 2001, 77th Leg., ch. 1124, Sec. 1, eff. Sept. 1, 2001.
Amended by:
Acts 2011, 82nd Leg., R.S., Ch. 168 (S.B. 248), Sec. 4, eff. September 1, 2011.

Source: Section 14.082 — Discovery of Shortage; Refusal of Inspection, https://statutes.­capitol.­texas.­gov/Docs/AG/htm/AG.­14.­htm#14.­082 (accessed Jun. 5, 2024).

14.001
Definitions
14.011
Limitation of Chapter
14.012
Business Information
14.013
Right to Intervene and Notification of Department
14.014
Receivership Affecting Warehouse Assets
14.015
Powers and Duties of Department
14.021
License Required
14.022
Licensing of Multiple Warehouses
14.023
Licensing Procedure
14.024
Requirement for Increasing Capacity
14.031
Bond
14.032
Additional Bond
14.033
Bond Cancellation
14.034
Cancellation of Letter of Credit
14.035
Cancellation of Certificate of Deposit or Cash
14.041
Casualty Insurance
14.042
Insurance Cancellation
14.043
Additional Insurance
14.051
Posting of License
14.052
Warehouse Operator Obligations
14.053
Receipt Forms
14.054
Issuance of Scale Weight Ticket or Receipt
14.055
Duplicate Receipts
14.056
Receipt for Grain Owned by Warehouse Operator
14.057
Records
14.058
Posting of Storage Rates or Tariffs
14.059
Inspections
14.061
Warehouse Receipt as Prima Facie Evidence
14.062
Invalid Receipts
14.063
Termination of Storage
14.064
Certain Loadout Fees Prohibited
14.065
Recovery on Bond
14.066
Appeal of Department Action by Warehouse Operator
14.071
General Penalty
14.072
Penalty for Operating Without a License
14.073
Penalty for Fraud
14.074
Penalty for Unlawful Delivery
14.075
Penalty for Fraudulently Issuing a Scale Weight Ticket or Receipt
14.076
Penalty for Changing a Receipt or Scale Weight Ticket After Issuance
14.077
Penalty for Depositing Grain Without Title
14.078
Penalty for Stealing Grain or Receiving Stolen Grain
14.079
Penalty for Interfering with Sealed Warehouse or Department Inspection or Investigation
14.081
Offense Is Violation
14.082
Discovery of Shortage
14.083
Denial, Revocation, Modification, or Suspension of License or Probation
14.084
Operation After Revocation or Suspension of a License or Probation
14.085
Injunction
14.086
Civil Penalty
14.087
Recovery of Court Costs
14.088
Venue

Accessed:
Jun. 5, 2024

§ 14.082’s source at texas​.gov