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[Journal of the House of Representatives, 1995]
[Friday, July 28, 1995 (104), Para 104.21 Perishable Commodities]
[Pages 1218-1220]
[From the U.S. Government Publishing Office, www.gpo.gov]

para.104.21  perishable commodities

  On motion of Mr. POMBO, by unanimous consent, the Committee of the 
Whole House on the state of the Union was discharged from further 
consideration of the bill (H.R. 1103) entitled ``Amendments to the 
Perishable Agricultural Commodities Act, 1930''.
  When said bill was considered and read twice.
  The following amendment in the nature of a substitute, recommended by 
the Committee on Agriculture, was then agreed to:

       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

     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 oper

[[Page 1219]]

     ated 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 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

[[Page 1220]]

     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.''.

  The bill, as amended, was ordered to be engrossed and read a third 
time, and passed.
  By unanimous consent, the title was amended so as to read: ``An Act to 
amend the Perishable Agricultural Commodities Act, 1930, to modernize, 
streamline, and strengthen the operation of the Act.''.
  A motion to reconsider the votes whereby the bill, as amended, was 
passed and the title was amended was, by unanimous consent, laid on the 
table.
  Ordered, That the Clerk request the concurrence of the Senate in said 
bill.
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