H. R. 1103
One Hundred Fourth Congress
of the
United States of America
AT THE FIRST SESSION
Begun and held at the City of Washington on Wednesday,
the fourth day of January, one thousand nine hundred and ninety-five
An Act
To amend the Perishable Agricultural Commodities Act, 1930, to modernize, stream-
line, and strengthen the operation of the Act.
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 whole-
salers 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 re-
newal 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 whole-
sale distribution and resale of perishable agricultural commodities
rather than other grocery and related nonfood items.’’.
H. R. 1103—2
SEC. 3. GRADUAL ELIMINATION OF ANNUAL LICENSE FEE FOR RETAIL-
ERS AND GROCERY WHOLESALERS THAT ARE DEALERS.
(a) ELIMINATION OF ANNUAL FEES OVER THREE-YEAR PERIOD.—
Subsection (b) of section 3 of the Perishable Agricultural Commod-
ities 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 COMMOD-
ITIES 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 WHOLE-
SALERS
THAT
ARE
DEALERS.—During the three-year period
beginning on the date of the enactment of the Perishable Agri-
cultural 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 renew-
als 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 subpara-
graph (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 subpara-
graph (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
H. R. 1103—3
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 BRO-
KERS.
(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 pre-
scribe. 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 operated by the applicant in excess of nine such facili-
ties, 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’’.
H. R. 1103—4
(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 Agricul-
tural 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 Agricul-
tural 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 Commod-
ities 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 para-
graph 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 para-
graph:
‘‘(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 para-
graph (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.’.’’.
H. R. 1103—5
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 inves-
tigation 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
H. R. 1103—6
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 inves-
tigation, 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 insert-
ing the following:
‘‘SEC. 6. COMPLAINTS, WRITTEN NOTIFICATIONS, AND INVESTIGA-
TIONS.’’;
(2) in subsection (d), by inserting ‘‘DECISIONS
ON COM-
PLAINTS.—’’ 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 DAM-
AGES.—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
H. R. 1103—7
after paragraph (12), as added by section 2, the following new
paragraph:
‘‘(13) The term ‘collateral fees and expenses’ means any pro-
motional allowances, rebates, service or materials fees paid or pro-
vided, 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 para-
graph (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 SUSPEN-
SION 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 deter-
mines, 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 CON-
NECTED 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
H. R. 1103—8
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 SANC-
TION.—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).’’.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.