La. Admin. Code tit. 7 § XXXVI-107

Current through Register Vol. 50, No. 11, November 20, 2024

Section XXXVI-107 - Certified Market Participants: Procedures and Criteria for Approval

A. Criteria for Approving Certified Market Participants. In approving certified market participants, the board shall apply the following criteria in considering the application, to wit:

1. the facility to produce ethanol must be located in the state of Louisiana;

2. the facility must be owned or leased and must be constructed and converted and operated for the purpose of producing ethanol as its primary product from agricultural commodities or products;

3. the entire production, fermentation and distillation process must occur in the state of Louisiana and must be in accordance with the terms and conditions set forth in the written agreement between the board and the certified market participant and entered into in accordance with the law;

4. the ethanol must be produced and sold for use in gasohol;

5. the applicant's financial ability to perform as a certified market participant which shall include, but not be limited to the following criteria, to wit:

a. the applicant's ability to meet its financial obligations in producer and agency contracts it proposes to enter into with producers, grain dealers, warehousemen and other intermediaries;

b. the applicant's ability to amortize all capital cost of the ethanol facility within eight years of the date of application; and

c. the applicant's ability to sell ethanol for use in making gasohol to be sold in Louisiana;

6. the estimated number of temporary and permanent jobs created by applicant's construction and operation of an ethanol facility;

7. the estimated quantity and type of agricultural commodities and products to be used by applicant in producing ethanol;

8. the estimated or actual capital invested or proposed to be invested by the applicant in the construction and establishment of the permanent ethanol facility;

9. the maximum number of gallons of ethanol to be produced annually for use in gasohol by the applicant;

10. the character and professional competence, especially the managerial expertise and experience in the ethanol industry, of the applicant, principal stockholders, owners and managers;

11. the anticipated economic impact on Louisiana resulting from the purchase of supplies and materials, employment and other activities related to the construction and operation of the proposed ethanol facility.

B. Form and Contents of Application by Certified Market Participants. Applications for designation as a certified market participant must be filed at the times provided by board action. The following information must be furnished on the application form provided by the board to wit:

1. date of submission;

2. nature of applicant's business:

a. sole proprietorship;

b. partnership;

c. corporation;

d. association;

e. agricultural cooperative; or

f. other;

3. name under which the business will operate;

4. address of the principal office of the business, either in-state or out-of-state, including mailing address, physical location and phone number;

5. the name, address and telephone number of the authorized agent;

6. if the entity is a partnership, the name, address and interest of all partners;

7. if the entity is a corporation, the name and address of all officers and directors;

8. if the entity is an association, including an agricultural cooperative, the name and address of all members of the board of directors;

9. if not a partnership, corporation or association, provide the following information:

a. name of the owner(s);

b. address of the principal office; and

c. provide name, address and phone number of all designated authorized agents;

10. status of the facility in which the business will be operated:

a. owned by applicant;

b. leased by applicant (short term or long term);

c. rented by applicant and name and address of owner; or

d. other;

11. type and quantity of agricultural commodities or products that the applicant estimates will be used to make ethanol;

12. the number of temporary and permanent jobs created by the applicant's ethanol facility;

13. the amount of capital invested or proposed to be invested in the construction and establishment of the ethanol facility;

14. the maximum number of gallons of ethanol to be produced annually by the applicant;

15. the managerial expertise and experience in the ethanol industry of the applicant, principal stockholders, owners and managers;

16. the applicant's federal taxpayer identification number and the number and date of the license issued by the U.S. Dept. of Treasury, Alcohol, Tobacco and Firearms;

17. method of assurance for guaranteed performance of the producer contracts and agency contracts;

18. name, address and telephone number of the authorized agent;

19. if the business was previously operated under another name or ownership, show the name and address of previous business;

20. an affidavit signed by the principal stockholders, owners and managers appointing an authorized agent and acknowledging that the applicant will comply with the requirements of the Act, the board's rules and regulations and all provisions of their cooperative agreement;

21. an affidavit certifying that all information and representations contained in the application and in all required attachments are true and correct;

22. affidavits signed by the applicant's authorized agent, the principal stockholders, owners and managers authorizing the commissioner to perform credit investigations and all background checks that the board deems appropriate to determine the character and professional competency, especially the managerial expertise and experience in the ethanol industry of the applicant and its principal stockholders, owners and managers;

23. the names, addresses, phone numbers, birth dates, social security numbers and work experience in the ethanol industry, of the applicant's principal stockholders, owners and managers;

24. affidavit signed by the applicant's authorized agent, the principal stockholders, owners and managers attesting that they have never been convicted of a felony.

C. Financial Information

1. In the application for initial designation, each applicant shall sign an affidavit of authorization, certification and compliance. This affidavit shall authorize the commissioner to inspect and audit all financial and production records of the applicant. Furthermore, this affidavit shall certify that the applicant will maintain all financial and production records in the form and format required by the Act, rules and certified market participant contract and shall provide copies to the commissioner within five working days of his written request.

2. All financial records received by the commissioner shall be used for audit and enforcement purposes and therefore shall be confidential information pursuant to the provisions of R.S. 3:3708(A) unless and until the financial records are introduced at an adjudicatory hearing of the board.

3. The board shall consider any certified market participant confidential business plan only in executive session of the board pursuant to the requirements of R.S. 3:3708(A) and R.S. 42:6.1(A)(1)(2)(4) and (8).

4. The financial statement must be maintained and prepared in accordance with generally accepted accounting principles and must include all producer and agency contracts.

a. The financial statement must contain:

i. a balance sheet;

ii. a statement of income (profit and loss);

iii. a statement of retained earnings;

iv. statement of changes in financial position;

v. fixed assets must be presented at cost; and

vi. a certificate by the applicant or the chief executive officer of the applicant, in the form of an authentic act, that the financial statement accurately reflects the financial condition of the applicant for the period covered in the financial statement. Whenever the certificate is executed by a representative of the applicant other than the owner or president, the board of directors must adopt a resolution authorizing such representative to execute the certificate.

b. Multi-state and/or multi-national corporations with subsidiary corporations or divisions located in Louisiana must either:

i. maintain in their principal office in Louisiana a fully audited financial statement showing the position of the parent company, together with sufficient financial information pertaining to the Louisiana subsidiary, to reasonably reflect the corporation's ability to satisfy all obligations to Louisiana producers; or

ii. pay all expenses necessary for performance of a full audit, at one or more locations where pertinent corporation records are maintained, by the department's central audit committee.

5. After January 1, 1987, each certified market participant must maintain in their principal office in Louisiana, a financial statement conforming to the requirements of this rule within 120 days after the close of the certified market participant's fiscal year.

D. Procedures for Approval of Designation of Certified Market Participants

1. The board must vote in open public meeting on each application.

2. Six affirmative votes shall be required to approve the designation of any certified market participant.

3. At a meeting held to consider an application, the board, at its discretion, may permit the introduction of written materials or an oral presentation by the applicant or their representative.

E. Official Designation

1. After the board has voted to designate an applicant as a certified market participant, the commissioner shall sign and issue, in the name of the board, an official document evidencing the designation.

2. All documents indicating a designation shall contain the following:

a. name and address of the certified market participant;

b. location of the certified market participant's facilities; and

c. the maximum number of gallons of ethanol the certified market participant has been authorized to produce under the certified participant contract.

La. Admin. Code tit. 7, § XXXVI-107

Promulgated by the Department of Agriculture and Forestry, Office of Management and Finance, Agricultural Industry Board, LR 12:505 (August 1986).

AUTHORITY NOTE: Promulgated in accordance with R.S. 3:3704.