[104th Congress Public Law 48]
[From the U.S. Government Printing Office]
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[DOCID: f:publ48.104]
PERISHABLE AGRICULTURAL COMMODITIES ACT AMENDMENTS OF 1995
[[Page 109 STAT. 424]]
Public Law 104-48
104th Congress
An Act
To amend the Perishable Agricultural Commodities Act, 1930, to
modernize,
streamline, and strengthen the operation of the Act. <<NOTE: Nov. 15,
1995 - [H.R. 1103]>>
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, <<NOTE: Perishable
Agricultural Commodities Act Amendments of 1995.>>
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) <<NOTE: 7 USC 499a note.>> 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.''.
[[Page 109 STAT. 425]]
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
[[Page 109 STAT. 426]]
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. <<NOTE: Effective
date.>> 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''.
[[Page 109 STAT. 427]]
(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.'.''.
[[Page 109 STAT. 428]]
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) <<NOTE: Rules.>> 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
[[Page 109 STAT. 429]]
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
[[Page 109 STAT. 430]]
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
[[Page 109 STAT. 431]]
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).''.
Approved November 15, 1995.
LEGISLATIVE HISTORY--H.R. 1103:
---------------------------------------------------------------------------
HOUSE REPORTS: No. 104-207 (Comm. on Agriculture).
CONGRESSIONAL RECORD, Vol. 141 (1995):
July 28, considered and passed House.
Nov. 7, considered and passed Senate.
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