[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1103 Introduced in House (IH)]







104th CONGRESS
  1st Session
                                H. R. 1103

Entitled, ``Amendments to the Perishable Agricultural Commodities Act, 
                                1930''.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 1, 1995

  Mr. Pombo (for himself, Mr. Doolittle, Mr. Foley, Mrs. Thurman, Mr. 
Pastor, and Mr. Farr) introduced the following bill; which was referred 
                    to the Committee on Agriculture

_______________________________________________________________________

                                 A BILL


 
Entitled, ``Amendments to the Perishable Agricultural Commodities Act, 
                                1930''.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. DEFINITIONS.

    (a) Section 1(b)(6) of the Perishable Agricultural Commodities Act, 
1930 (7 U.S.C. 499a) is hereby amended to read as follows:
    ``(b)(6) The term `dealer' means any person engaged in the business 
of buying or selling in wholesale or jobbing quantities, including for 
resale at retail, as defined by the Secretary, any perishable 
agricultural commodity in interstate or foreign commerce, except that 
(A) no producer shall be considered a `dealer' in respect to sales of 
any such commodity of his own raising; and (B) no person buying any 
commodity other than potatoes for canning and/or processing within the 
State where grown shall be considered a `dealer' whether or not the 
canned or processed product is to be shipped in interstate or foreign 
commerce, unless such product is frozen or packed in ice or consists of 
cherries in brine, within the meaning of paragraph (4) of this section. 
Any person not considered as a `dealer' under clauses (A) or (B) may 
elect to secure a license under the provisions of section 499c of this 
title, and in such case and while the license is in effect such person 
shall be considered as a `dealer'.''
    (b) Section 1 of the Perishable Agricultural Commodities Act, 1930 
(7 U.S.C. 499a) is hereby amended to add a new subsection (b)(11) and a 
new subsection (b)(12), to read as follows:
            ``(11) The terms `collateral fees and expenses' mean 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.
            ``(12) The term `producer' means any person who raises 
        perishable agricultural commodities for sale of those 
        commodities in wholesale or jobbing quantities, under the 
        producer's own brands or labels, as defined by the 
        Secretary.''.

SEC. 2. UNFAIR TRADE PRACTICES.

    (a) Section 2(1) of the Perishable Agricultural Commodities Act, 
1930 (7 U.S.C. 499b) is hereby amended to read as follows:
            ``(1) For any commission merchant, dealer, broker, or 
        producer to engage in or use any unfair, unreasonable, 
        discriminatory, or deceptive practice in connection with the 
        weighing, counting, or in any way determining the quantity of 
        any perishable agricultural commodity received, bought, sold, 
        shipped, or handled in interstate or foreign commerce;''.
    (b) Section 2(4) of the Perishable Agricultural Commodities Act, 
1930 (7 U.S.C. 499b) is hereby amended to read as follows:
            ``(4) For any commission merchant, dealer, broker, or 
        producer to make, for a fraudulent purpose, any false or 
        misleading statement in connection with any transaction 
        involving any perishable agricultural commodity which is 
        received in interstate or foreign commerce by such commission 
        merchant, or bought or sold, or contracted to be bought, sold 
        or consigned, in such commerce by such dealer, or the purchase 
        or sale of which in such commerce is negotiated by such broker; 
        or to fail or refuse truly and correctly to account and make 
        full payment promptly in respect of any transaction in any such 
        commodity to the person with whom such transaction is had; or 
        to fail to disclose the grant or receipt of any collateral fee 
        or expense in connection with any cost-plus transaction in any 
        such commodity to the person with whom such transaction is had; 
        or to fail, without reasonable cause to perform any 
        specification or duty, express or implied, arising out of any 
        undertaking in connection with any such transaction; or to fail 
        to maintain the trust as required under section 499e(c) of this 
        title;''.
    (c) Section 2(5) of the Perishable Agricultural Commodities Act, 
1930 (7 U.S.C. 499b) is hereby amended to read as follows:
            ``(5) For any commission merchant, dealer, broker, or 
        producer to misrepresent by word, act, mark, stencil, label, 
        statement, or deed, the character, kind, grade, quality, 
        quantity, size, pack, weight, condition, degree of maturity, or 
        State, country, or region of origin of any perishable 
        agricultural commodity received, shipped, sold, or offered to 
        be sold in interstate or foreign commerce: Provided, That any 
        commission merchant, dealer, broker, or producer who has 
        violated--
                    ``(A) any provision of this paragraph may, with the 
                consent of the Secretary, admit the violation or 
                violations; or
                    ``(B) any provision of this paragraph relating to a 
                misrepresentation by mark, stencil, or label shall be 
                permitted by the Secretary to admit the violation or 
                violations if such violation or violations are not 
                repeated or flagrant;
        and pay, in the case of a violation under either clause (A) or 
        (B) of this paragraph, a monetary penalty not to exceed $2,000 
        in lieu of a formal proceeding for the suspension or revocation 
        of license, any payment so made to be deposited in the Treasury 
        of the United States as miscellaneous receipts: Provided 
        further, That 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 that person did not have knowledge of the 
violation or lacked the ability to correct the violation;''.
    (d) Section 2(6) of the Perishable Agricultural Commodities Act, 
1930 (7 U.S.C. 499b) is hereby amended to strike the words ``any 
commission merchant, dealer, or broker,'' and in lieu thereof insert 
the words ``any commission merchant, dealer, broker, or producer,''.
    (e) Section 2(7) of the Perishable Agricultural Commodities Act, 
1930 (7 U.S.C. 499b) is hereby amended to strike the words ``any 
commission merchant, dealer, or broker,'' and in lieu thereof insert 
the words ``any commission merchant, dealer, broker, or producer,''.

SEC. 3. LICENSE FEES.

    Section 3(b) of the Perishable Agricultural Commodities Act, 1930 
(7 U.S.C. 499c(b)) is amended to read as follows:
    ``Any person desiring any such license shall make application to 
the Secretary. The Secretary may by regulation prescribe the 
information to be contained in such application and to be furnished 
thereafter. Upon filing the application, and annually thereafter, the 
applicant shall pay such fees, both individually and in the aggregate, 
as the Secretary determines, upon rulemaking pursuant to 5 U.S.C. 
section 553, are necessary to meet the reasonably anticipated expenses 
for administering this chapter and section 491, 493 to 497 of this 
title. For fiscal year 1996, such individual license fee shall not 
exceed $500, plus $200 for each branch or additional business facility 
operated by the applicant in excess of nine such facilities, as 
determined by the Secretary. For fiscal year 1996, total annual fees 
for any applicant shall not exceed $2,000 in the aggregate. No retailer 
shall be required to pay a license fee until the invoice cost of its 
purchases of perishable agricultural commodities in any calendar year 
are in excess of $400,000. The Secretary shall provide by regulation 
that persons operating subsidiary organizations may consolidate those 
organizations on the license of the parent organization. Such fee, when 
collected, shall be deposited in the Treasury of the United States as a 
special fund, without fiscal year limitation, to be designated as the 
`Perishable Agricultural Commodities Act Fund' which shall be available 
for all expenses necessary to the administration of this chapter, and 
sections 491, 493 to 497 of this title, referred to above. License fees 
paid into such fund by persons designated as `retailers' by the 
Secretary shall not exceed more than 25 percent of all fees collected 
in any fiscal year. Any reserve funds in the Perishable Agricultural 
Commodities Act Fund may be invested by the Secretary in insured or 
fully-collateralized interest-bearing accounts or, at the discretion of 
the Secretary, by the Secretary of the Treasury in United States 
Government debt instruments. Any interest earned on such reserve funds 
shall be credited to the Perishable Agricultural Commodities Act Fund 
and shall be available for the same purposes as the fees deposited in 
such fund. The amount of money accumulated and on hand in the special 
fund at the end of any fiscal year shall not exceed 33 percent of the 
projected budget for the next following fiscal year. Financial 
statements prescribed by the Director of the Office of Management and 
Budget for the last completed fiscal year, and as estimated for the 
current and ensuing fiscal years, shall be included in the budget as 
submitted to the Congress annually.''.

SEC. 4. ISSUANCE OF LICENSE.

    Section 4(a) of the Perishable Agricultural Commodities Act, 1930 
(7 U.S.C. 499d(a)) is amended to read as follows:
    ``(a) Whenever an applicant has made application and paid any 
applicable fee, the Secretary, except as provided elsewhere in this 
chapter, shall issue to such applicant a license, which shall entitle 
the licensee to do business as a commission merchant and/or dealer and/
or broker unless and until it is suspended or revoked by the Secretary 
in accordance with the provisions of this chapter, or is automatically 
suspended under section 499g(d) of this title, but said license shall 
automatically terminate on any anniversary date thereof unless the 
application has been made and any applicable fee has been paid: 
Provided, That notice of the necessity of application and paying any 
applicable fee shall be mailed at least thirty days before the 
anniversary date: Provided further, That if the application is not made 
and any applicable fee is not paid by the anniversary date the licensee 
may obtain a renewal of that license at any time within thirty days by 
making application and paying any applicable fee provided in section 
499c(b) of this title, plus $5, which shall be deposited in the 
Perishable Agricultural Commodities Act fund provided for by section 
499c(b) of this title: Provided further, That the license of any 
licensee shall terminate upon said licensee, or in case the licensee is 
a partnership, a partner being discharged as a bankrupt, unless the 
Secretary finds upon examination of the circumstances of such 
bankruptcy, which he shall examine if requested to do so by said 
licensee, that such circumstances do not warrant such termination.''.

SEC. 5. LIABILITY TO PERSON INJURED.

    (a) Section 5 of the Perishable Agricultural Commodities Act, 1930 
(7 U.S.C. 499e(a)) is hereby amended to strike the words ``any 
commission merchant, dealer, or broker,'' and in lieu thereof insert 
the words ``any commission merchant, dealer, broker, or producer,''.
    (b) Section 5 of the Perishable Agricultural Commodities Act, 1930 
(7 U.S.C. 499e(c)(3)) is hereby amended to add at the end thereof the 
following: ``The Secretary of Agriculture shall require persons who do 
not pay license fees under section 499c of this title to pay a filing 
fee for each notice of intent to preserve trust benefits filed pursuant 
to section 499e of this title. For fiscal year 1996, such filing fee 
shall be set at $20. Thereafter, such fee shall be set by the Secretary 
upon rulemaking pursuant to 5 U.S.C. section 553, in order to meet the 
reasonably anticipated expenses for administering direct and indirect 
costs for such persons' participation in proceedings under this 
chapter.''.

SEC. 6. COMPLAINT AND INVESTIGATION.

    (a) Section 6(a) of the Perishable Agricultural Commodities Act, 
1930 (7 U.S.C. 499f(a)) is hereby amended to designate existing section 
(a) as section (a)(1), and to strike the words ``any commission 
merchant, dealer, or broker,'' and in lieu thereof insert the words 
``any commission, merchant, dealer, broker, or producer,'' in the two 
instances in which it appears in that subsection.
    (b) Section 6(a) of the Perishable Agricultural Commodities Act, 
1930 (7 U.S.C. 499f(a)) is hereby amended to add at the end thereof a 
new subsection (a)(2), a new subsection (a)(3), and a new subsection 
(a)(4), to read as follows:
            ``(2) The Secretary shall require all persons, other than 
        Federal employees acting within the scope of their official 
        duties, who submit informal complaints to the Secretary under 
        this section, alleging a violation of section 2 of the Act (7 
        U.S.C. 499b), to include a filing fee. For licensed persons 
        that have also paid an annual license fee, such filing fee 
        shall be $60 per petition. For all other persons, such fee 
        shall be $100 per petition. If the Secretary determines under 
        section 6(a) of the Act (7 U.S.C. 499f(a)), that the facts 
        contained in a petition described in such section warrant 
        further action, the person or persons submitting the petition 
        shall submit to the Secretary a further filing fee. For 
        licensed persons that have also paid an annual license fee, 
        such filing fee shall be $300 per petition. For all other 
        persons, other than Federal employees acting within the scope 
        of their official duties, such fee shall be $500 per petition. 
        The Secretary may not forward a copy of a complaint to the 
        commission merchant, dealer, broker, or producer involved until 
        after the Secretary receives the required filing fees.
            ``(3) In determining the amount of damages incurred by a 
        prevailing party in a formal reparation proceeding under 
        section 7 of this Act (7 U.S.C. 499g), the Secretary shall 
        assess the amount of filing fees against the losing party: 
        Provided, That a prevailing party shall have any filing fees 
paid by it refunded as part of any formal reparation award.''.
    (c) Section 6(b) of the Perishable Agricultural Commodities Act, 
1930 (7 U.S.C. 499f(b)) is hereby amended to strike the words ``any 
commission merchant, dealer, or broker,'' and in lieu thereof insert 
the words ``any commission merchant, dealer, broker, or producer,'' in 
two instances in which it appears in that subsection.
    (d) Section 6(d) of the Perishable Agricultural Commodities Act, 
1930 (7 U.S.C. 499f(d)) is hereby amended to strike the words ``any 
commission merchant, dealer, or broker,'' and in lieu thereof insert 
the words ``any commission merchant, dealer, broker, or producer''.

SEC. 7. GROUNDS FOR SUSPENSION OR REVOCATION OF LICENSE; CIVIL 
              PENALTIES.

    (a) Section 8(a) of the Perishable Agricultural Commodities Act, 
1930 (7 U.S.C. 499h(a)) is hereby amended to strike the words ``any 
commission merchant, dealer, or broker,'' and in lieu thereof insert 
the words ``any commission merchant, dealer, broker, or producer''.
    (b) Section 8 of the Perishable Agricultural Commodities Act, 1930 
(7 U.S.C. 499h) is hereby amended to add a new subsection (b) to read 
as follows:
    ``(b) Whenever the Secretary determines, as provided by section 
499f of this title, that any commission merchant, dealer, broker, or 
producer has violated section 499b, 499h(c), or 499h(d) of this title, 
the Secretary may assess a monetary penalty not to exceed $2,000 for 
each violative transaction or each day the violation continues, to be 
deposited in the Treasury of the United States as miscellaneous 
receipts.''.
    (c) Section 8 of the Perishable Agricultural Commodities Act, 1930 
(7 U.S.C. 499h) is hereby amended by redesignating existing subsection 
(b) as subsection (c), existing subsection (c) as subsection (d), and 
existing subsection (d) as subsection (e).
    (d) Redesignated section 8(e) of the Perishable Agricultural 
Commodities Act, 1930 (7 U.S.C. 499h(e)) is hereby amended to strike 
the words ``any commission merchant, dealer, or broker,'' and in lieu 
thereof insert the words ``any commission merchant, dealer, broker, or 
producer''.

SEC. 8. PRESERVATION OF BUSINESS REPUTATION.

    Section 13 of the Act (7 U.S.C. 499m) is hereby amended to add a 
new subsection (g), to read as follows:
    ``(g) The Secretary is directed, during the course of any 
investigation or inquiry under this title, to take due account of 
preservation of the business reputation of any person under 
investigation.''.

SEC. 9.

    Section 15 of the Perishable Agricultural Commodities Act, 1930 (7 
U.S.C. 499o) is hereby amended to redesignate the existing provisions 
as subsection (a), and to add a new subsection (b) and a new subsection 
(c), to read as follows:
    ``(b) Report and Investigation.--The Secretary shall investigate 
and issue a report on industry practices requiring or soliciting 
collateral fees and expenses by or to any commission merchant, dealer, 
broker, or producer in connection with any transaction in perishable 
agricultural commodities. Such report shall be made to the House 
Committee on Agriculture and the Senate Committee on Agriculture, 
Nutrition, and Forestry, within one hundred and eighty days of 
enactment of this legislation.
    ``(c) Disclosure of Collateral Fees and Expenses; Rulemaking.--If 
the investigation and report required by this section conclude that 
such practices conform to the laws of the United States, the Secretary 
shall promulgate regulations regarding the sufficiency of disclosure by 
or to any commission merchant, dealer, broker, or producer, of the 
grant or receipt of any collateral fee or expense in connection with 
any cost-plus transaction in perishable agricultural commodities: 
Provided, That disclosure shall be considered sufficient if it is 
conspicuously made on the face of the invoice or in any underlying 
contract covering the transaction: Provided further, That no commission 
merchant, dealer, broker, or producer, nor any individual responsibly 
connected with any such commission merchant, dealer, broker, or 
producer shall be the subject to any licensure, reparation, or trust 
enforcement proceeding under this chapter for any act or omission 
concerning the disclosure of any collateral fee or expense, taken or 
required to be taken prior to the effective date of regulations 
required under this subsection.''.

SEC. 10. LIABILITY OF LICENSEES FOR ACTS AND OMISSIONS OF AGENTS.

    Section 16 of the Perishable Agricultural Commodities Act, 1930 (7 
U.S.C. 499p) is hereby amended to strike the words ``any commission 
merchant, dealer, or broker,'' and in lieu thereof insert the words 
``any commission merchant, dealer, broker, or producer,'' in the two 
instances in which it appears in that section.

SEC. 11. REVIEW OF PROCEDURES AND POLICIES.

    The Perishable Agricultural Commodities Act, 1930 is hereby amended 
by adding at the end thereof the following new section (7 U.S.C. 499t):

                  ``review of policies and procedures.

    ``(a) The Secretary is directed to conduct an annual review of 
enforcement procedures, policies, and priorities regarding reparation 
proceedings, disciplinary complaints, and the operation of the trust, 
as well as proceedings under section 499h(c), to identify opportunities 
for efficiency and cost reduction in such proceedings. The Secretary 
shall invite public participation and input into such review.
    ``(b) The Secretary is directed to submit, to the House Committee 
on Agriculture and the Senate Committee on Agriculture, Nutrition, and 
Forestry, no later than September 30 of each year, a projection of 
enforcement priorities for the next twelve months. The Secretary is 
further directed to submit, to the House Committee on Agriculture and 
the Senate Committee on Agriculture, Nutrition, and Forestry, no later 
than September 30 of each year in which a biennial review is conducted, 
a report containing the results of its review and recommendations based 
on such results. Such biennial report shall describe reparation 
proceedings, disciplinary complaints, and the operation of the trust 
during the previous twenty-four months.''.

SEC. 12. EFFECTIVE DATE.

    This Act shall be effective upon enactment.
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