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PUC approves credit-sales rule change

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news Mitchell, 57301
Mitchell South Dakota 120 South Lawler 57301

By Mikkel Pates

PIERRE -- A South Dakota Legislative Rules committee has approved rule changes proposed by the South Dakota Public Utilities Commission regarding credit-sales contracts.

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The changes are designed to allow elevators to put oral, phone-in credit-sale contracts back into effect as in the past.

The elevator would mail a written contract to a farmer to sign.

Upon receipt, the farmer would have 48 hours to somehow object to the contract -- even by phone -- or the contract would go into effect, according to the rule.

The new rule technically goes into effect Sept. 9.

It is designed to be in effect for the fall row-crop harvest, says Chris Nelson, PUC vice president.

"This is a very positive move. [It] allows farmers and elevators to continue to use voluntary credit-sale contracts under the same terms as [they] have for years," he says.

He suggests farmers look at the contracts immediately upon receipt.

What about disputes?

If the farmer says the mail didn't arrive, a judge would have to determine, as they do for other kinds of notice.

Registered or certified mail is an option for either the elevator or the farm.

Ray Martinmaas, an Orient farmer had made an oral credit-sale contract with now defunct Anderson Seed Co., with its processing facility in Redfield.

Martinmaas successfully argued in court he should be covered by Anderson's bond because he hadn't signed the contract to perfect it.

The PUC then changed the guidance for elevators to force unsigned credit-sale contracts into a cash contract status, to be paid after 30 days. That has been changed to the two-day rule.

Martinmaas says he is disappointed with the decision and is considering legal action and has been "too busy with calving and combining" to focus on it.

He thinks 48 hours is too short for objections, considering mail delays and farm absences, and thinks any changes need to take place by legislative law-making action, not by the PUC.

"It was all cut and dried," Martinmaas says.

Six legislators sit on the committee, and five were present by video conference for its Aug. 20 hearing. Rep. Peggy Gibson, D-Huron, was the only one to vote against it.

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