[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1103 Engrossed in House (EH)]
1st Session
H. R. 1103
_______________________________________________________________________
AN ACT
To amend the Perishable Agricultural Commodities Act, 1930, to
modernize, streamline, and strengthen the operation of the Act.
104th CONGRESS
1st Session
H. R. 1103
_______________________________________________________________________
AN ACT
To amend the Perishable Agricultural Commodities Act, 1930, to
modernize, streamline, and strengthen the operation of the Act.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Perishable
Agricultural Commodities Act Amendments of 1995''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Addition of definitions of retailer and grocery wholesaler.
Sec. 3. Gradual elimination of annual license fee for retailers and
grocery wholesalers that are dealers.
Sec. 4. Establishment and alteration of license fees for commission
merchants, dealers (other than retailers
and grocery wholesalers), and brokers.
Sec. 5. Increase in penalties for operating without a license and
increase in late renewal fee.
Sec. 6. Statutory trust on commodities and sale proceeds.
Sec. 7. Authority of Department of Agriculture regarding possible
violations.
Sec. 8. Filing and handling fees for reparation complaints.
Sec. 9. Consideration of collateral fees and expenses.
Sec. 10. Clarification of misbranding prohibition.
Sec. 11. Imposition of civil penalty in lieu of license suspension or
revocation.
Sec. 12. Extension of sanctions to persons responsibly connected to a
commission merchant, dealer, or broker.
SEC. 2. ADDITION OF DEFINITIONS OF RETAILER AND GROCERY WHOLESALER.
Section 1(b) of the Perishable Agricultural Commodities Act, 1930
(7 U.S.C. 499a(b)), is amended by adding at the end the following new
paragraphs:
``(11) The term `retailer' means a person that is a dealer engaged
in the business of selling any perishable agricultural commodity at
retail.
``(12) The term `grocery wholesaler' means a person that is a
dealer primarily engaged in the full-line wholesale distribution and
resale of grocery and related nonfood items (such as perishable
agricultural commodities, dry groceries, general merchandise, meat,
poultry, and seafood, and health and beauty care items) to retailers.
However, such term does not include a person described in the preceding
sentence if the person is primarily engaged in the wholesale
distribution and resale of perishable agricultural commodities rather
than other grocery and related nonfood items.''.
SEC. 3. GRADUAL ELIMINATION OF ANNUAL LICENSE FEE FOR RETAILERS AND
GROCERY WHOLESALERS THAT ARE DEALERS.
(a) Elimination of Annual Fees Over Three-Year Period.--Subsection
(b) of section 3 of the Perishable Agricultural Commodities Act, 1930
(7 U.S.C. 499c), is amended--
(1) by inserting ``(1) Application for license.--'' before
the start of the first sentence and adjusting the margin to
conform to paragraph (3);
(2) by striking the third and fourth sentences;
(3) by inserting ``(5) Perishable agricultural commodities
act fund.--'' before the start of the fifth sentence and
adjusting the margin to conform to paragraph (3);
(4) by striking the last sentence; and
(5) by inserting before paragraph (5) (as so designated)
the following new paragraphs:
``(3) One-time fee for retailers and grocery wholesalers
that are dealers.--During the three-year period beginning on
the date of the enactment of the Perishable Agricultural
Commodities Act Amendments of 1995, a retailer or grocery
wholesaler making an initial application for a license under
this section shall pay the license fee required under
subparagraph (A), (B), or (C) of paragraph (4) for license
renewals in the year in which the initial application is made.
After the end of such period, a retailer or grocery wholesaler
making an initial application for a license under this section
shall pay an administrative fee equal to $100. In either case,
a retailer or grocery wholesaler paying a fee under this
paragraph shall not be required to pay any fee for renewal of
the license for subsequent years.
``(4) Gradual elimination of annual fees for retailers and
grocery wholesalers that are dealers.--In the case of a
retailer or grocery wholesaler that holds a license under this
section as of the date of the enactment of the Perishable
Agricultural Commodities Act Amendments of 1995, payments for
the renewal of the license shall be made pursuant to the
following schedule:
``(A) For anniversary dates occurring during the
one-year period beginning on the date of the enactment
of the Perishable Agricultural Commodities Act
Amendments of 1995, the licensee shall pay a renewal
fee in an amount equal to 100 percent of the applicable
renewal fee (subject to the $4,000 aggregate limit on
such payments) in effect under this subsection on the
day before such enactment date.
``(B) For anniversary dates occurring during the
one-year period beginning at the end of the period in
subparagraph (A), the licensee shall pay a renewal fee
in an amount equal to 75 percent of the amount paid by
the licensee under subparagraph (A).
``(C) For anniversary dates occurring during the
one-year period beginning at the end of the period in
subparagraph (B), the licensee shall pay a renewal fee
in an amount equal to 50 percent of the amount paid by
the licensee under subparagraph (A).
``(D) After the end of the three-year period
beginning on the date of the enactment of the
Perishable Agricultural Commodities Act Amendments of
1995, the licensee shall not be required to pay any fee
if the licensee seeks renewal of the license.''.
(b) Stylistic Amendments.--Such section is further amended--
(1) by striking the section heading and ``Sec. 3. (a)'' and
inserting the following:
``SEC. 3. LICENSES.
``(a) License Required; Penalties for Violations.--'';
(2) in subsection (b), by inserting ``Application and Fees
for Licenses.--'' after ``(b)''; and
(3) in subsection (c), by inserting ``Use of Trade Names.--
'' after ``(c)''.
SEC. 4. ESTABLISHMENT AND ALTERATION OF LICENSE FEES FOR COMMISSION
MERCHANTS, DEALERS (OTHER THAN RETAILERS AND GROCERY
WHOLESALERS), AND BROKERS.
(a) Discretion of Secretary to Establish and Alter Fees.--Section
3(b) of the Perishable Agricultural Commodities Act, 1930 (7 U.S.C.
499c(b)), is amended by inserting after paragraph (1), as designated by
section 3(a)(1), the following new paragraph:
``(2) License fees.--Upon the filing of an application
under paragraph (1), the applicant shall pay such license fees,
both individually and in the aggregate, as the Secretary
determines necessary to meet the reasonably anticipated
expenses for administering this Act and the Act to prevent the
destruction or dumping of farm produce, approved March 3, 1927
(7 U.S.C. 491-497). Thereafter, the licensee shall pay such
license fees annually or at such longer interval as the
Secretary may prescribe. The Secretary shall take due account
of savings to the program when determining an appropriate
interval for renewal of licenses. The Secretary shall establish
and alter license fees only by rulemaking under section 553 of
title 5, United States Code, except that the Secretary may not
alter the fees required under paragraph (3) or (4) for
retailers and grocery wholesalers that are dealers. Effective
on the date of the enactment of the Perishable Agricultural
Commodities Act Amendments of 1995 and until such time as the
Secretary alters such fees by rule, an individual license fee
shall equal $550 per year, plus $200 for each branch or
additional business facility operated by the applicant in
excess of nine such facilities, as determined by the Secretary,
subject to an annual aggregate limit of $4,000 per licensee.
Any increase in license fees prescribed by the Secretary under
this paragraph shall not take effect unless the Secretary
determines that, without such increase, the funds on hand as of
the end of the fiscal year in which the increase takes effect
will be less than 25 percent of the projected budget to
administer such Acts for the next fiscal year. In no case may a
license fee increase by the Secretary take effect before the
end of the three-year period beginning on the date of the
enactment of the Perishable Agricultural Commodities Act
Amendments of 1995.''.
(b) Repeal of Current Cap on Reserve Funds.--Paragraph (5) of such
section, as designated by section 3(a)(3), is amended by striking the
sentence that begins with ``The amount of money''.
(c) Conforming Amendments Regarding This Section and Section 3.--
Section 4(a) of such Act (7 U.S.C. 499d(a)) is amended--
(1) in the matter preceding the provisos, by striking ``any
anniversary date thereof unless the annual fee has been paid''
and inserting ``the anniversary date of the license at the end
of the annual or multiyear period covered by the license fee
unless the licensee submits the required renewal application
and pays the applicable renewal fee (if such fee is
required)'';
(2) in the first proviso, by striking ``the necessity of
paying the annual fee'' and inserting ``the necessity
of renewing the license and of paying the renewal fee (if such
fee is required)''; and
(3) in the second proviso, by striking ``annual fee'' and
inserting ``renewal fee (if required)''.
SEC. 5. INCREASE IN PENALTIES FOR OPERATING WITHOUT A LICENSE AND
INCREASE IN LATE RENEWAL FEE.
(a) License Penalties.--Section 3(a) of the Perishable Agricultural
Commodities Act, 1930 (7 U.S.C. 499c(a)), as amended by section
3(b)(1), is further amended--
(1) by striking ``$500'' and inserting ``$1,000''; and
(2) by striking ``$25'' both places it appears and
inserting ``$250''.
(b) Late Filing Fees.--Section 4(a) of the Perishable Agricultural
Commodities Act, 1930 (7 U.S.C. 499d(a)), as amended by section 4(c),
is further amended in the second proviso by striking ``plus $5'' and
inserting ``plus $50''.
SEC. 6. STATUTORY TRUST ON COMMODITIES AND SALE PROCEEDS.
(a) Repeal of Secretarial Notification Requirement.--Paragraph (3)
of section 5(c) of the Perishable Agricultural Commodities Act, 1930 (7
U.S.C. 499e(c)), is amended in the first sentence by striking ``and has
filed such notice with the Secretary''.
(b) Clarification of Content of Notification.--Such paragraph is
further amended by inserting after the first sentence the following new
sentence: ``The written notice to the commission merchant, dealer, or
broker shall set forth information in sufficient detail to identify the
transaction subject to the trust.''.
(c) Additional Method of Notification for Licensees.--Such section
is further amended--
(1) by redesignating paragraph (4) as paragraph (5); and
(2) by inserting after paragraph (3) the following new
paragraph:
``(4) In addition to the method of preserving the benefits of the
trust specified in paragraph (3), a licensee may use ordinary and usual
billing or invoice statements to provide notice of the licensee's
intent to preserve the trust. The bill or invoice statement must
include the information required by the last sentence of paragraph (3)
and contain on the face of the statement the following: `The perishable
agricultural commodities listed on this invoice are sold subject to the
statutory trust authorized by section 5(c) of the Perishable
Agricultural Commodities Act, 1930 (7 U.S.C. 499e(c)). The seller of
these commodities retains a trust claim over these commodities, all
inventories of food or other products derived from these commodities,
and any receivables or proceeds from the sale of these commodities
until full payment is received.'.''.
SEC. 7. AUTHORITY OF DEPARTMENT OF AGRICULTURE REGARDING POSSIBLE
VIOLATIONS.
(a) Disciplinary Violations.--Subsection (b) of section 6 of the
Perishable Agricultural Commodities Act, 1930 (7 U.S.C. 499f), is
amended to read as follows:
``(b) Disciplinary Violations.--Any officer or agency of any State
or Territory having jurisdiction over commission merchants, dealers, or
brokers in such State or Territory and any other interested person
(other than an employee of an agency of the Department of Agriculture
administering this Act) may file, in accordance with rules prescribed
by the Secretary, a written notification of any alleged violation of
this Act by any commission merchant, dealer, or broker. In addition,
any official certificates of the United States Government or States or
Territories of the United States and trust notices filed pursuant to
section 5 shall constitute written notification for the purposes of
conducting an investigation under subsection (c). The identity of any
person filing a written notification under this subsection shall be
considered to be confidential information. The identity of such person,
and any portion of the notification to the extent that it would
indicate the identity of such person, are specifically exempt from
disclosure under section 552 of title 5, United States Code (commonly
known as the Freedom of Information Act), as provided in subsection
(b)(3) of such section.''.
(b) Grounds and Process of Investigations.--Subsection (c) of such
section is amended to read as follows:
``(c) Investigation of Complaints and Notifications.--
``(1) Commencing or expanding an investigation.--If there
appears to be, in the opinion of the Secretary, reasonable
grounds for investigating a complaint made under subsection (a)
or a written notification made under subsection (b), the
Secretary shall investigate such complaint or notification. In
the course of the investigation, if the Secretary determines
that violations of this Act are indicated other than the
alleged violations specified in the complaint or notification
that served as the basis for the investigation, the Secretary
may expand the investigation to include such additional
violations.
``(2) Issuance of complaint by secretary; process.--In the
opinion of the Secretary, if an investigation under this
subsection substantiates the existence of violations of this
Act, the Secretary may
cause a complaint to be issued. The Secretary shall have the
complaint served by registered mail or certified mail or otherwise on
the person concerned and afford such person an opportunity for a
hearing thereon before a duly authorized examiner of the Secretary in
any place in which the subject of the complaint is engaged in business.
However, in complaints wherein the amount claimed as damages does not
exceed $30,000, a hearing need not be held and proof in support of the
complaint and in support of respondent's answer may be supplied in the
form of depositions or verified statements of fact.
``(3) Special notification requirements for certain
investigations.--Whenever the Secretary initiates an
investigation on the basis of a written notification made under
subsection (b) or expands such an investigation, the Secretary
shall promptly notify the subject of the investigation of the
existence of the investigation and the nature of the alleged
violations of this Act to be investigated. Not later than 180
days after providing the initial notification, the Secretary
shall provide the subject of the investigation with notice of
the status of the investigation, including whether the
Secretary intends to issue a complaint under paragraph (2),
terminate the investigation, or continue or expand the
investigation. The Secretary shall provide additional status
reports at the request of the subject of the investigation and
shall promptly notify the subject of the investigation whenever
the Secretary terminates the investigation.''.
(c) Increase in Threshold for Shortened Procedure Cases.--
Subsection (d) of such section is amended by striking ``$15,000'' both
places it appears and inserting ``$30,000''.
(d) Stylistic Amendments.--Such section is further amended--
(1) by striking the section heading and ``Sec. 6.'' and
inserting the following:
``SEC. 6. COMPLAINTS, WRITTEN NOTIFICATIONS, AND INVESTIGATIONS.'';
(2) in subsection (d), by inserting ``Decisions on
Complaints.--'' after ``(d)''; and
(3) in subsection (e), by inserting ``Bond Required for
Certain Complaints.--'' after ``(e)''.
SEC. 8. FILING AND HANDLING FEES FOR REPARATION COMPLAINTS.
(a) Permanent Filing and Handling Fees.--Section 6(a) of the
Perishable Agricultural Commodities Act, 1930 (7 U.S.C. 499f(a)), is
amended--
(1) by striking ``(a)'' and inserting the following:
``(a) Reparation Complaints.--
``(1) Petition; process.--''; and
(2) by adding at the end the following new paragraph:
``(2) Filing and handling fees.--A person submitting a
petition to the Secretary under paragraph (1) shall include a
filing fee of $60 per petition. If the Secretary determines
under paragraph (1) that the facts contained in the petition
warrant further action, the person or persons submitting the
petition shall submit to the Secretary a handling fee of $300.
The Secretary may not forward a copy of the complaint to the
commission merchant, dealer, or broker involved until after the
Secretary receives the required handling fee. The Secretary
shall deposit fees submitted under this paragraph into the
Perishable Agricultural Commodities Act Fund provided for by
section 3(b). The Secretary may alter the fees specified in
this paragraph by rulemaking under section 553 of title 5,
United States Code.''.
(b) Inclusion of Handling Fee in Calculation of Damages.--Section
5(a) of such Act (7 U.S.C. 499e(a)) is amended by inserting after
``damages'' the following: ``(including any handling fee paid by the
injured person or persons under section 6(a)(2))''.
(c) Conforming Amendment to Temporary Fee Authority.--Public Law
103-276 (7 U.S.C. 499f note) is repealed.
SEC. 9. CONSIDERATION OF COLLATERAL FEES AND EXPENSES.
(a) Definition.--Section 1(b) of the Perishable Agricultural
Commodities Act, 1930 (7 U.S.C. 499a(b)), is amended by inserting after
paragraph (12), as added by section 2, the following new paragraph:
``(13) The term `collateral fees and expenses' means any
promotional allowances, rebates, service or materials fees paid or
provided, directly or indirectly, in connection with the distribution
or marketing of any perishable agricultural commodity.''.
(b) Use of Definition.--Section 2 of such Act (7 U.S.C. 499b) is
amended--
(1) by striking ``commerce--'' in the matter before
paragraph (1) and inserting ``commerce:'';
(2) by striking the semicolon at the end of each paragraph
and inserting a period; and
(3) in paragraph (4), by adding at the end the following
new sentence: ``However, this paragraph shall not be considered
to make the good faith offer, solicitation, payment, or receipt
of collateral fees and expenses, in and of itself, unlawful
under this Act.''.
SEC. 10. CLARIFICATION OF MISBRANDING PROHIBITION.
Section 2(5) of the Perishable Agricultural Commodities Act, 1930
(7 U.S.C. 499b(5)), is amended--
(1) by striking ``commerce: Provided, That'' and inserting
``commerce. However,''; and
(2) by adding at the end the following new sentence: ``A
person other than the first licensee handling misbranded
perishable agricultural commodities shall not be held liable
for a violation of this paragraph by reason of the conduct of
another if the person did not have knowledge of the violation
or lacked the ability to correct the violation.''.
SEC. 11. IMPOSITION OF CIVIL PENALTY IN LIEU OF LICENSE SUSPENSION OR
REVOCATION.
Section 8 of the Perishable Agricultural Commodities Act, 1930 (7
U.S.C. 499h), is amended by adding at the end the following new
subsection:
``(e) Alternative Civil Penalties.--In lieu of suspending or
revoking a license under this section when the Secretary determines, as
provided by section 6, that a commission merchant, dealer, or broker
has violated section 2 or subsection (b) of this section, the Secretary
may assess a civil penalty not to exceed $2,000 for each violative
transaction or each day the violation continues. In assessing the
amount of a penalty under this subsection, the Secretary shall give due
consideration to the size of the business, the number of employees, and
the seriousness, nature, and amount of the violation. Amounts collected
under this subsection shall be deposited in the Treasury of the United
States as miscellaneous receipts.''.
SEC. 12. EXTENSION OF SANCTIONS TO PERSONS RESPONSIBLY CONNECTED TO A
COMMISSION MERCHANT, DEALER, OR BROKER.
(a) Exception to Definition.--Section 1(b)(9) of the Perishable
Agricultural Commodities Act, 1930 (7 U.S.C. 499a(b)(9)), is amended by
adding at the end the following new sentence: ``A person shall not be
deemed to be responsibly connected if the person demonstrates by a
preponderance of the evidence that the person was not actively involved
in the activities resulting in a violation of this Act and that the
person either was only nominally a partner, officer, director, or
shareholder of a violating licensee or entity subject to license or was
not an owner of a violating licensee or entity subject to license which
was the alter ego of its owners.''.
(b) Extension of Employment Sanction.--Section 8(b) of such Act (7
U.S.C. 499h(b)) is amended by adding at the end the following new
sentence: ``The Secretary may extend the period of employment sanction
as to a responsibly connected person for an additional one-year period
upon the determination that the person has been unlawfully employed as
provided in this subsection.''.
(c) Conforming Amendment Regarding Licensing Sanction.--Section 4
of such Act (7 U.S.C. 499d) is amended--
(1) in subsection (b), by inserting ``is prohibited from
employment with a licensee under section 8(b) or'' after ``with
the applicant,'' in the matter preceding subparagraph (A); and
(2) in subsection (c), by adding at the end the following
new sentence: ``The Secretary may not issue a license to an
applicant under this subsection if the applicant or any person
responsibly connected with the applicant is prohibited from
employment with a licensee under section 8(b).''.
Passed the House of Representatives July 28, 1995.
Attest:
Clerk.