[Congressional Record Volume 164, Number 107 (Tuesday, June 26, 2018)]
[Senate]
[Pages S4450-S4451]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SA 3199. Mr. INHOFE (for himself, Mr. Daines, Mr. Moran, and Mrs.
Fischer) submitted an amendment intended to be proposed by him to the
bill H.R. 2, to provide for the reform and continuation of agricultural
and other programs of the Department of Agriculture through fiscal year
2023, and for other purposes; which was ordered to lie on the table; as
follows:
At the end of subtitle E of title XII, add the following:
SEC. 125___. ESTABLISHMENT OF TRUST FOR BENEFIT OF UNPAID
CASH SELLERS OF LIVESTOCK.
Title III of the Packers and Stockyards Act, 1921 (7 U.S.C.
201 et seq.), is amended by adding at the end the following:
``SEC. 318. STATUTORY TRUST ESTABLISHED; DEALER.
``(a) Definition of Cash Sale.--In this section, the term
`cash sale' means a sale in which the seller does not
expressly extend credit to the buyer.
``(b) Establishment.--
``(1) In general.--Except as provided in paragraphs (2) and
(3), all livestock purchased by a dealer in cash sales and
all inventories of, or receivables or proceeds from, that
livestock shall be held by the dealer in trust for the
benefit of all unpaid cash sellers of that livestock until
full payment has been received by those unpaid cash sellers.
``(2) Exemption.--This section shall not apply to a dealer
the amount of average annual purchases of livestock of which
does not exceed $250,000.
``(3) Waiver.--
``(A) In general.--A dealer and a cash seller may
voluntarily waive the applicability of this section to the
dealer and cash seller through a written agreement described
in subparagraph (B) that is signed before any sale to which
the written agreement applies takes place.
``(B) Written agreement.--A written agreement referred to
in subparagraph (A) shall indicate whether the written
agreement applies to--
``(i) 1 sale;
``(ii) all sales before a specific date; or
``(iii) all sales until the dealer or cash seller
terminates the agreement in writing.
``(C) Effect on payment terms.--A waiver under subparagraph
(A) shall not affect the payment terms of the sale.
``(4) Effect of dishonored instruments.--For purposes of
determining full payment under paragraph (1), a payment to an
unpaid cash seller shall not be considered to have been made
if the unpaid cash seller receives a payment instrument that
is dishonored.
``(c) Enforcement.--If a dealer fails to perform the duties
required by subsection (b), the Secretary shall take such
action as is necessary--
``(1) to enforce the trust, including by appointing an
independent trustee; and
``(2) to preserve the assets of the trust.
``(d) Preservation of Trust.--An unpaid cash seller shall
lose the benefit of a trust under subsection (b) if the
unpaid cash seller has not preserved the trust by--
``(1) providing a written notice to the applicable dealer
of the intent of the unpaid cash seller to preserve the
benefits of the trust; and
``(2) filing that notice with the Secretary--
``(A) not later than 30 days after the final date for
making a payment under section 409 in the event that a
payment instrument has not been received; or
``(B) not later than 15 business days after the date on
which the seller receives notice that the payment instrument
promptly presented for payment has been dishonored.
[[Page S4451]]
``(e) Notice to Lien Holders.--Not later than 15 business
days after the date on which a dealer receives notice under
subsection (d)(1) with respect to a trust, the dealer shall
give notice of the intent of the unpaid cash seller to
preserve the benefits of the trust to all persons who have
recorded a security interest in, or lien on, the livestock
held in that trust.
``(f) Purchase of Livestock Subject to Trust.--
``(1) In general.--Notwithstanding section 1324 of the Food
Security Act of 1985 (7 U.S.C. 1631), a buyer in the ordinary
course that purchases livestock that is held in trust by a
dealer under subsection (b), including from a dealer that
engages in farming operations, shall receive good title to
the livestock free of the dealer trust--
``(A) if the buyer receives the livestock in exchange for
payment of new value; and
``(B) without regard to whether--
``(i) the dealer trust has been preserved in accordance
with this section; or
``(ii) the buyer knows of the existence of the dealer
trust.
``(2) Payment.--Payment shall not be considered to have
been made under paragraph (1)(A) if a payment instrument
given in exchange for the livestock is dishonored.
``(g) Transfer of Livestock Subject to Trust.--A transfer
of livestock that is held in trust by a dealer under
subsection (b) shall not be considered to be for new value
under subsection (f)(1)(A) if the transfer is--
``(1) in satisfaction of an antecedent debt; or
``(2) to a secured party pursuant to a security
agreement.''.
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