[Congressional Record Volume 141, Number 124 (Friday, July 28, 1995)]
[House]
[Pages H7968-H7973]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




    AMENDMENTS TO THE PERISHABLE AGRICULTURAL COMMODITIES ACT, 1930

  Mr. POMBO. Mr. Speaker, I ask unanimous consent for the immediate 
consideration in the House of the bill (H.R. 1103) entitled 
``Amendments to the Perishable Agricultural Commodities Act, 1930''.
  The Clerk read the title of the bill.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from California?
  Mr. de la GARZA. Mr. Speaker, reserving the right to object, I yield 
to the distinguished gentleman from California [Mr. Pombo].
  Mr. POMBO. Mr. Speaker, I thank the gentleman from Texas for yielding 
to me.
  Mr. Speaker, the House Committee on Agriculture was pleased to 
unanimously report H.R. 1103 as amended to the House on June 28, 1995, 
with the recommendation that it do pass.
  H.R. 1103 is a collaborative effort between the House Committee on 
Agriculture, USDA, the fruit and vegetable and retail industry to 
modernize, streamline, and strengthen the Perishable Agricultural 
Commodities Act.
  Briefly, H.R. 1103 includes provisions to phase retailers and grocery 
wholesalers out of the license fee payment in 

[[Page H 7969]]

3 years, establish a one-time administrative fee for new retailers and 
grocery wholesalers, increase license fees for those remaining in the 
program from $400 to $550, and allow USDA to adjust future license fees 
under rulemaking authority, implement a paperless system to administer 
the PACA trust, add new language requiring USDA to receive a written 
complaint before pursuing an investigation, require the department to 
inform the subject about the status of the investigation no later than 
100 days after the initial notification, adjust administrative
 penalties and establish civil penalties under PACA, continue current 
fees for informal and formal reparation complaints, clarify the status 
of collateral fees and misbranding violations and, finally, amend 
responsibly connected provisions of PACA.

  CBO estimates that USDA's total spending for PACA activities will be 
reduced under H.R. 1103.
  I would like to thank the industry, USDA, House Committee on 
Agriculture counsel, and the Office of Legislative Counsel for sharing 
generous amounts of their time, effort, and expertise in assisting the 
committee in reaching this very important goal.

                              {time}  1515

  I urge passage of H.R. 1103. To the ranking member of the Committee 
on Agriculture, I would like to thank the gentleman very much for all 
the work that he has put into this issue over the years.
  Mr. EWING. Mr. Speaker, the House Agriculture Committee was pleased 
to unanimously report H.R. 1103 as amended to the House on June 28, 
1995, with the recommendation that it do pass.
  H.R. 1103 is a collaborative effort between the House Agriculture 
Committee, USDA, and the fruit, vegetable, and retail industry to 
modernize, streamline, and strengthen the Perishable Agricultural 
Commodities Act.
  Briefly H.R. 1103 includes provisions to:
  Phase retailers and grocery wholesalers out of license fee payment in 
3 years.
  Establish a one-time administrative fee for new retailers and grocery 
wholesalers.
  Increase license fees for those remaining in the program from $400 to 
$550 and allow USDA to adjust future license fees under rulemaking 
authority.
  Implement a paperless system to administer the PACA trust.
  Add new language requiring USDA to receive a written complaint before 
pursuing an investigation.
  Require the Department to inform the subject about the status of the 
investigation no later than 180 days after initial notification.
  Adjust administrative penalties and establish civil penalties under 
PACA.
  Continue current fees for informal and formal reparation complaints.
  Clarify the status of collateral fees and misbranding violations, and 
finally, amend responsibly connected provisions of PACA.
  CBO estimates that USDA's total spending for PACA activities will be 
reduced under H.R. 1103.
  I would like to thank the industry, USDA, House Agriculture Committee 
Counsel, and the Office of Legislative Counsel for sharing generous 
amounts of your time, effort, and expertise in assisting the committee 
in reaching this very important goal.
  Most important, I would like to give special thanks to Mr. Pombo and 
Mr. Boehner for their leadership in bringing this issue to resolution.
  I urge passage of H.R. 1103.
  Mr. de la GARZA. Mr. Speaker, further reserving the right to object, 
I yield to our distinguished colleague, the gentleman from North 
Carolina [Mr. Rose].
  (Mr. ROSE asked and was given permission to revise and extend his 
remarks.)
  Mr. ROSE. Mr. Speaker, I compliment the chairman of the subcommittee 
and the gentleman from California [Mr. Pombo] for the hard work that 
they put into passage of this bill. On our side of the aisle, there are 
a great many people who are very anxious to see this legislation 
passed. Two of the hardest workers on this bill were the gentlewoman 
from Florida [Mrs. Thurman] and the gentleman from California [Mr. 
Farr]. They are not here now because I told them we were not going to 
bring this up today. They can have me to blame for that. I thought it 
was going to come up Monday. I compliment the gentleman from California 
[Mr. Pombo] for his compromise and his great negotiating efforts. I am 
delighted to see the bill come to the floor for hopefully an 
uncontested passage.
  Mr. Speaker, I rise in strong support of this legislation which is 
the result of intense and, at times, difficult negotiations between the 
several members of the fresh fruit and vegetable community. This 
consensus agreement, like all compromises, required substantial give 
and take within the industry. However, the effectiveness and the 
solvency of the PACA Program have been preserved by this agreement.
  Like many other commodity programs, the PACA Program well serves the 
needs of the American farmer and the American consumer at no cost to 
the Federal Treasury. By the passage of this legislation, the Congress 
will preserve a valuable program that guarantees our Nation's food 
security and delivers wholesome and affordable farm commodities to 
America's families. I encourage my colleagues on both sides of the 
aisle to remember the importance of food security and all our commodity 
programs when we begin work on the farm bill this fall.
  In closing, I thank Chairman Ewing for his efforts to usher this bill 
through the House Committee on Agriculture. Similarly, I thank Mr. 
Pombo, Ms. Thurman, and Mr. Farr for the extraordinary efforts they 
made to bring this agreement to fruition.
  Mr. de la GARZA. Mr. Speaker, this bill is the culmination of 
difficult negotiations to reform PACA. I want to commend Members, 
staff, USDA, and all the stakeholders for their commitment to reform, 
and their commitment to an efficient and effective PACA Program.
  This bill will assure the continuation of a strong PACA Program, to 
protect the buyers and sellers of fruits and vegetables and to benefit 
the American consumer. It will guarantee the fiscal integrity of the 
PACA and give authority to the Secretary of Agriculture to adjust fees 
as necessary.
  A new fee structure will be imposed on the program by this bill, and 
although retailers and wholesalers will no longer be required to pay 
license fees after 3 years, everyone will still be required to obtain a 
PACA license and will still be subject to all of the provisions of the 
PACA Program. Additional needed reforms are made by the bill, including 
the authority for paperless trusts, which will reduce paperwork and 
program costs.
  All parties to this agreement have assured us that they will continue 
to support it when it reaches the Senate. I expect it to be handled 
expeditiously by the Senate, and signed by the President, and I urge my 
colleagues to support this critical legislation.
  Mr. Speaker, I withdraw my reservation of objection.
  The SPEAKER pro tempore (Mr. LaHood). Is there objection to the 
request of the gentleman from California?
  There was no objection.
  The Clerk read the bill, as follows:
                               H.R. 1103

       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 

[[Page H 7970]]

     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 

[[Page H 7971]]

     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.
           committee amendment in the nature of a substitute

  The SPEAKER pro tempore. The Clerk will report the committee 
amendment in the nature of a substitute.
  The Clerk read as follows:

       Committee amendment in the nature of a substitute:
       Strike out all after the enacting clause and insert:

                               H.R. 1103

       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 

[[Page H 7972]]

     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 

[[Page H 7973]]

     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).''.
       Amend the title so as to read: ``A bill to amend the 
     Perishable Agricultural Commodities Act, 1930, to modernize, 
     streamline, and strengthen the operation of the Act.''.

  Mr. POMBO (during the reading). Mr. Speaker, I ask unanimous consent 
that the committee amendment in the nature of a substitute be 
considered as read and printed in the Record.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from California?
  There was no objection.
  The SPEAKER pro tempore. The question is on the committee amendment 
in the nature of a substitute.
  The committee amendment in the nature of a substitute was agreed to.
  The bill was ordered to be engrossed and read a third time, was read 
the third time, and passed, and a motion to reconsider was laid on the 
table.
  The title of the bill was amended so as to read: ``A bill to amend 
the Perishable Agricultural Commodities Act, 1930, to modernize, 
streamline, and strengthen the operation of the Act.''.

                          ____________________