[Federal Register Volume 84, Number 80 (Thursday, April 25, 2019)]
[Notices]
[Pages 17374-17375]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-08350]


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 Notices
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  Federal Register / Vol. 84 , No. 80 / Thursday, April 25, 2019 / 
Notices  

[[Page 17374]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

[Document No. AMS-FTPP-19-0037]


Feasibility Study on Livestock Dealer Statutory Trust

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Notice: Request for information.

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SUMMARY: The Agricultural Marketing Service (AMS) of the Department of 
Agriculture (USDA), is soliciting comments on the feasibility of 
establishing a livestock dealer statutory trust.

DATES: Comments must be received by June 24, 2019.

ADDRESSES: Interested persons are invited to submit written comments 
via the internet at http://www.regulations.gov or to S. Brett Offutt, 
Chief Legal Officer/Policy Advisor, Packers and Stockyards Division, 
Fair Trade Practices Program, Agricultural Marketing Service, U.S. 
Department of Agriculture, 1400 Independence Avenue SW, Room 2507, STOP 
3601, Washington, DC 20250. Comments should make reference to the date 
and page number of this issue of the Federal Register and will be made 
available for public inspection at the above office during regular 
business hours.
    Please be advised that all comments submitted in response to this 
notice will be included in the record and will be made available to the 
public on the internet via http://www.regulations.gov. Also, the 
identity of the individuals or entities submitting the comments will be 
made public.

FOR FURTHER INFORMATION CONTACT:  S. Brett Offutt, Chief Legal Officer/
Policy Advisor, Packers and Stockyards Division, Fair Trade Practices 
Program, Agricultural Marketing Service, U.S. Department of 
Agriculture, telephone (202) 690-4355, email [email protected].

SUPPLEMENTARY INFORMATION:

Background

    Section 12103 of the Agriculture Improvement Act of 2018 (Pub. L. 
115-334), the 2018 Farm Bill, charged the Secretary with conducting a 
study to determine the feasibility of establishing a livestock dealer 
statutory trust. Section 12103 requires that the study: (1) Analyze how 
the establishment of a livestock dealer statutory trust would affect 
buyer and seller behavior in markets for livestock (as defined in 
section 2(a) of the Packers and Stockyards Act, 1921 (7 U.S.C. 182)); 
(2) Examine how the establishment of a livestock dealer statutory trust 
would affect seller recovery in the event of a livestock dealer payment 
default; (3) Consider what potential effects a livestock dealer 
statutory trust would have on credit availability, including impacts on 
lenders and lending behavior and other industry participants; (4) 
Examine unique circumstances common to livestock dealers and how those 
circumstances could impact the functionality of a livestock dealer 
statutory trust; (5) Study the feasibility of the industry-wide 
adoption of electronic funds transfer or another expeditious method of 
payment to provide sellers of livestock protection from nonsufficient 
funds payments; (6) Assess the effectiveness of statutory trusts in 
other segments of agriculture, whether similar effects could be 
experienced under a livestock dealer statutory trust, and whether 
authorizing the Secretary to appoint an independent trustee under the 
livestock dealer statutory trust would improve seller recovery; (7) 
Consider the effects of exempting dealers with average annual purchases 
under a de minimis threshold from being subject to the livestock dealer 
statutory trust; and (8) Analyze how the establishment of a livestock 
dealer statutory trust would affect the treatment of sellers of 
livestock as it relates to preferential transfer in bankruptcy.
    The study will be conducted by the U.S. Department of Agriculture's 
Agricultural Marketing Service (AMS). AMS has regulatory authority over 
two statutes that contain statutory trusts: The Packers and Stockyards 
(P&S) Act and the Perishable Agricultural Commodities Act (PACA). The 
statutory PACA trust (7 U.S.C. 449e(c)) requires commission merchants, 
dealers, and brokers to hold perishable agricultural commodity 
inventory, products, receivables, and proceeds in trust for the benefit 
of unpaid produce sellers. The P&S Act currently includes two trusts: 
The packer trust (7 U.S.C. 196), which requires packers to hold 
livestock, inventory, receivables and proceeds in trust for unpaid cash 
sellers of livestock; and the poultry trust (7 U.S.C. 197), which 
requires live poultry dealers to hold poultry, inventories, 
receivables, and proceeds in trust for unpaid cash sellers or poultry 
growers.
    The P&S Act also regulates the business practices of livestock 
dealers, but livestock dealers are not currently subject to a statutory 
trust provision. Section 301(d) of the P&S Act (7 U.S.C. 201), defines 
a ``dealer'' as ``any person, not a market agency, engaged in the 
business of buying or selling in commerce livestock, either on his own 
account or as the employee or agent of the vendor or purchaser.''
    AMS is seeking comments to assist it in determining the feasibility 
of establishing a livestock dealer statutory trust. Commenters may 
address any or all of the eight (8) key components of the study by 
responding to the following questions:
    (1) How would the establishment of a livestock dealer statutory 
trust affect buyer and seller behavior in markets for livestock?
    (2) How would the establishment of a livestock dealer statutory 
trust affect seller recovery in the event of a livestock dealer payment 
default?
    (3) What potential effects would a livestock dealer statutory trust 
have on credit availability, including impacts on lenders and lending 
behavior and other industry participants?
    (4) How would the unique circumstances common to livestock dealers 
impact the functionality of a livestock dealer statutory trust?
    (5) Is industry-wide adoption of electronic funds transfer or 
another expeditious method of payment feasible, and would such adoption 
provide sellers of livestock with protection from nonsufficient funds 
payments?
    (6) How effective are statutory trusts in other segments of 
agriculture? Could similar effects be experienced under a

[[Page 17375]]

livestock dealer statutory trust? Would seller recovery improve if the 
Secretary was authorized to appoint an independent trustee under the 
livestock dealer statutory trust?
    (7) Should dealers with average annual purchases under a de minimis 
threshold be exempt from being subject to the livestock dealer 
statutory trust? What purchase level should be considered for 
exemption? What effect would such an exemption have on the 
effectiveness of a livestock dealer statutory trust?
    (8) How would the establishment of a livestock dealer statutory 
trust affect the treatment of sellers of livestock as related to 
preferential transfers in bankruptcy?
    This notice provides for a 60-day period for interested parties to 
comment on the components of the study.

    Authority: Sec. 12103, Pub. L. 115-334, 132 Stat. 4490.

    Dated: April 22, 2019.
Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2019-08350 Filed 4-24-19; 8:45 am]
BILLING CODE 3410-02-P