suring the payment of milk producers for milk sold to a
milk handler in situations involving the bankruptcy of the
milk handler, including State or local programs in the
form of—
(1) a reserve fund funded by milk handlers to
reimburse milk producers for losses incurred as a re-
sult of the bankruptcy of a milk handler subject to
this title;
(2) a statutory trust established for the benefit
of milk producers;
(3) the creation of a priority in favor or for the
benefit of a milk producer, without regard to the
order of perfection; or
(4) any similar payment security requirements,
including surety bonds, letters of credit, pledges of
assets, and cash deposits.
TITLE II—STATUTORY TRUST
FOR LIVESTOCK SELLERS
SEC. 201. ESTABLISHMENT OF STATUTORY TRUST FOR
BENEFIT OF SELLERS OF LIVESTOCK TO
DEALERS AND MARKET AGENCIES.
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 new section:
‘‘SEC. 318. STATUTORY TRUST ESTABLISHED: LIVESTOCK
SELLERS.
‘‘(a) 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 CORPUS.—The term ‘trust corpus’
means the following assets of a dealer or market
agency subsequent to the purchase of livestock from
a seller in a cash sale:
‘‘(A) Accounts receivable and proceeds de-
rived from any resulting sale of the livestock by
the dealer or market agency.
‘‘(B) The inventory of the dealer or market
agency, except as provided in subsection (d) re-
garding the rights of a bona fide third-party
purchaser for value.
‘‘(3) MARKET
AGENCY.—The term ‘market
agency’ means any person engaged in the business
of buying in commerce livestock on a commission
basis.
‘‘(b) ESTABLISHMENT OF TRUST.—A dealer or mar-
ket agency that purchases livestock in a cash sale shall
hold the trust corpus in trust for the benefit of the unpaid
seller of the livestock until such time as the seller receives
payment in full for the livestock. A payment in a cash
sale shall not be considered to be made if the instrument
by which payment is made is dishonored.
‘‘(c) LOSS OF BENEFIT OF TRUST.—An unpaid seller
shall lose the benefit of the trust under subsection (b) un-
less the seller gives to the dealer or market agency and
to the Secretary written notice—
‘‘(1) within 15 business days after the seller re-
ceives notice that the payment instrument promptly
presented for payment has been dishonored; or
‘‘(2) within 30 days after the final date for
making payment under section 409.
‘‘(d) RIGHTS OF THIRD-PARTY PURCHASER.—The
trust established under subsection (b) shall have no effect
on the rights of a bona fide third-party purchaser who has
purchased livestock from a dealer or market agency, with-
out regard to whether the livestock are delivered to the
bona fide purchaser.
‘‘(e) EXEMPTION.—This section shall not apply with
respect to a dealer or market agency whose average annual
purchases of livestock do not exceed $250,000.
‘‘(f) JURISDICTION.—The district courts of the Unit-
ed States shall have jurisdiction in a civil action—
‘‘(1) by the beneficiary of a trust established
under subsection (b) to enforce payment of the
amount held in trust; and
‘‘(2) by the Secretary to prevent and restrain
dissipation of the trust corpus.’’.
Æ