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[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 1707 Introduced in Senate (IS)]

104th CONGRESS
  2d Session
                                S. 1707

To amend the Packers and Stockyards Act, 1921, to establish a trust for 
   the benefit of the seller of livestock until the seller receives 
       payment in full for the livestock, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             April 25, 1996

 Mr. Pressler introduced the following bill; which was read twice and 
   referred to the Committee on Agriculture, Nutrition, and Forestry

_______________________________________________________________________

                                 A BILL

 
To amend the Packers and Stockyards Act, 1921, to establish a trust for 
   the benefit of the seller of livestock until the seller receives 
       payment in full for the livestock, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. LIVESTOCK DEALER TRUST.

    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. LIVESTOCK DEALER TRUST.

    ``(a) Findings.--Congress finds that--
            ``(1) a burden on and obstruction to commerce in livestock 
        is caused by financing arrangements under which dealers and 
        market agencies purchasing livestock on commission encumber, 
        give lenders security interests in, or have liens placed on 
        livestock purchased by the dealers and market agencies in cash 
        sales, or on receivables from or proceeds of the sales, when 
        payment is not made for the livestock; and
            ``(2) the carrying out of the arrangements is contrary to 
        the public interest.
    ``(b) Purpose.--The purpose of this section is to remedy the burden 
on and obstruction to commerce in livestock described in paragraph (1) 
and protect the public interest.
    ``(c) Definitions.--In this section:
            ``(1) Cash sale.--The term `cash sale' means a sale in 
        which the seller does not expressly extend credit to the buyer.
            ``(2) Trust.--The term `trust' means 1 or more assets of a 
        buyer that (subsequent to a cash sale of livestock) constitutes 
        the corpus of a trust held for the benefit of a seller and 
        consists of--
                    ``(A) account receivables and proceeds earned from 
                the cash sale of livestock by a dealer or market agency 
                buying on a commission basis;
                    ``(B) account receivables and proceeds of a 
                marketing agency earned on commission from the cash 
                sale of livestock;
                    ``(C) the inventory of the dealer or marketing 
                agency; or
                    ``(D) livestock involved in the cash sale, if the 
                seller has not received payment in full for the 
                livestock and a bona fide third-party purchaser has not 
                purchased the livestock from the dealer or marketing 
                agency.
    ``(d) Holding in Trust.--
            ``(1) In general.--The account receivables and proceeds 
        generated in a cash sale made by a dealer or a market agency on 
        commission and the inventory of the dealer or market agency 
        shall be held by the dealer or market agency in trust for the 
        benefit of the seller of the livestock until the seller 
        receives payment in full for the livestock.
            ``(2) Exemption.--Paragraph (1) does not apply in the case 
        of a cash sale made by a dealer or market agency if the total 
        amount of cash sales made by the dealer or market agency during 
        the preceding 12 months does not exceed $250,000.
            ``(3) Dishonor of instrument of payment.--A payment in a 
        sale described in paragraph (1) shall not be considered to be 
        made if the instrument by which payment is made is dishonored.
            ``(4) Loss of benefit of trust.--If an instrument by which 
        payment is made in a sale described in paragraph (1) is 
        dishonored, the seller shall lose the benefit of the trust 
        under paragraph (1) on the earlier of--
                    ``(A) the date that is 15 business days after date 
                on which the seller receives notice of the dishonor; or
                    ``(B) the date that is 30 days after the final date 
                for making payment under section 409,
        unless the seller gives written notice to the dealer or market 
        agency of the seller's intention to preserve the trust and 
        submits a copy of the notice to the Secretary.
            ``(5) Rights of third-party purchaser.--The trust 
        established under paragraph (1) shall have no effect on the 
        rights of a bona fide third-party purchaser of the livestock, 
        without regard to whether the livestock are delivered to the 
        bona fide purchaser.
    ``(e) Jurisdiction.--The district courts of the United States shall 
have jurisdiction in a civil action--
            ``(1) by the beneficiary of a trust described in subsection 
        (c)(1), to enforce payment of the amount held in trust; and
            ``(2) by the Secretary, to prevent and restrain dissipation 
        of a trust described in subsection (c)(1).''.
                                 <all>
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