I
106TH CONGRESS
2D SESSION
H. R. 5169
To reenact the United States Warehouse Act to require the licensing and
inspection of warehouses and other structures used to store agricultural
products, to provide for the issuance of receipts, including electronic
receipts, for agricultural products stored or handled in licensed ware-
houses, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 13, 2000
Mr. LAHOOD (for himself and Mr. GOODLATTE) introduced the following bill;
which was referred to the Committee on Agriculture
A BILL
To reenact the United States Warehouse Act to require
the licensing and inspection of warehouses and other
structures used to store agricultural products, to provide
for the issuance of receipts, including electronic receipts,
for agricultural products stored or handled in licensed
warehouses, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Warehouse Improve-
ment Act of 2000’’.
SEC. 2. STORAGE OF AGRICULTURAL PRODUCTS IN WARE-
HOUSES.
The United States Warehouse Act (7 U.S.C. 241 et
seq.) is amended to read as follows:
‘‘SECTION 1. SHORT TITLE.
‘‘This Act may be cited as the ‘United States Ware-
house Act’.
‘‘SEC. 2. DEFINITIONS.
‘‘In this Act:
‘‘(1) AGRICULTURAL PRODUCT.—The term ‘ag-
ricultural product’ means an agricultural commodity,
as determined by the Secretary, including a proc-
essed product of an agricultural commodity.
‘‘(2) APPROVAL.—The term ‘approval’ means
the consent provided by the Secretary for a person
to engage in an activity authorized by this Act.
‘‘(3) DEPARTMENT.—The term ‘Department’
means the Department of Agriculture.
‘‘(4) ELECTRONIC DOCUMENT.—The term ‘elec-
tronic document’ means a document that is gen-
erated, sent, received, or stored by electronic, opti-
cal, or similar means, including electronic data inter-
change, electronic mail, telegram, telex, or telecopy.
‘‘(5) ELECTRONIC
RECEIPT.—The term ‘elec-
tronic receipt’ means a receipt that is authorized by
the Secretary to be issued or transmitted under this
Act in the form of an electronic document.
‘‘(6) HOLDER.—The term ‘holder’ means a per-
son that has possession in fact or by operation of
law of a receipt or any electronic document.
‘‘(7) PERSON.—The term ‘person’ means—
‘‘(A) a person (as defined in section 1 of
title 1, United States Code);
‘‘(B) a State; and
‘‘(C) a political subdivision of a State.
‘‘(8) RECEIPT.—The term ‘receipt’ means a
warehouse receipt issued in accordance with this
Act, including an electronic receipt.
‘‘(9) SECRETARY.—The term ‘Secretary’ means
the Secretary of Agriculture.
‘‘(10) WAREHOUSE.—The term ‘warehouse’
means a structure or other approved storage facility,
as determined by the Secretary, in which any agri-
cultural product may be stored or handled for the
purposes of interstate or foreign commerce.
‘‘(11) 
WAREHOUSE
OPERATOR.—The 
term
‘warehouse operator’ means a person that is lawfully
engaged in the business of storing or handling agri-
cultural products.
‘‘SEC. 3. POWERS OF SECRETARY.
‘‘(a) IN GENERAL.—The Secretary shall have exclu-
sive power, jurisdiction, and authority, to the extent that
this Act applies, with respect to—
‘‘(1) each warehouse operator licensed under
this Act;
‘‘(2) each person that has obtained an approval
to engage in an activity under this Act; and
‘‘(3) each person claiming an interest in an ag-
ricultural product by means of a document or receipt
subject to this Act.
‘‘(b) COVERED
AGRICULTURAL
PRODUCTS.—The
Secretary shall specify, after an opportunity for notice and
comment, those agricultural products for which a ware-
house license may be issued under this Act.
‘‘(c) INVESTIGATIONS.—The Secretary may inves-
tigate the storing, warehousing, classifying according to
grade and otherwise, weighing, and certifying of agricul-
tural products.
‘‘(d) INSPECTIONS.—The Secretary may inspect or
cause to be inspected any person or warehouse licensed
under this Act and any warehouse for which a license is
applied for under this Act.
‘‘(e) SUITABILITY
FOR STORAGE.—The Secretary
may determine whether a licensed warehouse, or a ware-
house for which a license is applied for under this Act,
is suitable for the proper storage of the agricultural prod-
uct or products stored or proposed for storage in the ware-
house.
‘‘(f) CLASSIFICATION.—The Secretary may classify a
licensed warehouse, or a warehouse for which a license is
applied for under this Act, in accordance with the owner-
ship, location, surroundings, capacity, conditions, and
other qualities of the warehouse and as to the kinds of
licenses issued or that may be issued for the warehouse
under this Act.
‘‘(g) WAREHOUSE OPERATOR’S DUTIES.—Subject to
the other provisions of this Act, the Secretary may pre-
scribe the duties of a warehouse operator operating a
warehouse licensed under this Act with respect to the
warehouse operator’s care of and responsibility for agricul-
tural products stored or handled by the warehouse oper-
ator.
‘‘(h) SYSTEMS FOR ELECTRONIC CONVEYANCE.—
‘‘(1) REGULATIONS
GOVERNING
ELECTRONIC
SYSTEMS.—Except as provided in paragraph (2), the
Secretary may promulgate regulations governing 1
or more electronic systems under which electronic
receipts may be issued and transferred and other
electronic documents relating to the shipment, pay-
ment, and financing of the sale of agricultural prod-
ucts may be issued or transferred.
‘‘(2) LIMITATIONS.—The Secretary shall not
have the authority under this Act to establish—
‘‘(A) 1 or more central filing systems for
the filing of financing statements or the filing
of the notice of financing statements; or
‘‘(B) rules to determine security interests
of persons affected by this Act.
‘‘(i) EXAMINATION AND AUDITS.—In addition to the
authority provided under subsection (l), on request of the
person, State agency, or commodity exchange, the Sec-
retary may conduct an examination, audit, or similar ac-
tivity with respect to—
‘‘(1) any person that is engaged in the business
of storing an agricultural product that is subject to
this Act;
‘‘(2) any State agency that regulates the stor-
age of an agricultural product by such a person; or
‘‘(3) any commodity exchange with regulatory
authority over the storage of agricultural products
that are subject to this Act.
‘‘(j) LICENSES FOR OPERATION OF WAREHOUSES.—
The Secretary may issue to any warehouse operator a li-
cense for the operation of a warehouse in accordance with
this Act if—
‘‘(1) the Secretary determines that the ware-
house is suitable for the proper storage of the agri-
cultural product or products stored or proposed for
storage in the warehouse; and
‘‘(2) the warehouse operator agrees, as a condi-
tion of the license, to comply with this Act (includ-
ing regulations promulgated under this Act).
‘‘(k) LICENSING OF OTHER PERSONS.—
‘‘(1) IN GENERAL.—On presentation of satisfac-
tory proof of competency to carry out the activities
described in this paragraph, the Secretary may issue
to any person a Federal license—
‘‘(A) to inspect any agricultural product
stored or handled in a warehouse subject to this
Act;
‘‘(B) to sample such an agricultural prod-
uct;
‘‘(C) to classify such an agricultural prod-
uct according to condition, grade, or other class
and certify the condition, grade, or other class
of the agricultural product; or
‘‘(D) to weigh such an agricultural product
and certify the weight of the agricultural prod-
uct.
‘‘(2) CONDITION.—As a condition of a license
issued under paragraph (1), the licensee shall agree
to comply with this Act (including regulations pro-
mulgated under this Act).
‘‘(l) EXAMINATION OF BOOKS, RECORDS, PAPERS,
AND ACCOUNTS.—The Secretary may examine and audit,
using designated officers, employees, or agents of the De-
partment, all books, records, papers, and accounts relating
to activities subject to this Act of—
‘‘(1) a warehouse operator operating a ware-
house licensed under this Act;
‘‘(2) a person operating a system for the elec-
tronic recording and transfer of receipts and other
documents authorized by the Secretary; or
‘‘(3) any other person issuing receipts or elec-
tronic documents authorized by the Secretary under
this Act.
‘‘(m) COOPERATION WITH STATES.—The Secretary
may—
‘‘(1) cooperate with officers and employees of a
State who administer or enforce State laws relating
to warehouses, warehouse operators, weighers, grad-
ers, inspectors, samplers, or classifiers; and
‘‘(2) enter into cooperative agreements with
States to perform activities authorized under this
Act.
‘‘SEC. 4. IMPOSITION AND COLLECTION OF FEES.
‘‘(a) IN GENERAL.—The Secretary shall assess per-
sons covered by this Act fees to cover the costs of admin-
istering this Act.
‘‘(b) RATES.—The fees under this section shall be set
at a rate determined by the Secretary.
‘‘(c) TREATMENT OF FEES.—All fees collected under
this section shall be credited to the account that incurs
the costs of administering this Act and shall be available
to the Secretary without further appropriation and with-
out fiscal year limitation.
‘‘(d) INTEREST.—Funds collected under this section
may be deposited in an interest-bearing account with a
financial institution, and any interest earned on the ac-
count shall be credited under subsection (c).
‘‘(e) EFFICIENCIES AND COST EFFECTIVENESS.—
‘‘(1) IN GENERAL.—The Secretary shall seek to
minimize the fees established under this section by
improving efficiencies and reducing costs, including
the efficient use of personnel to the extent prac-
ticable and consistent with the effective implementa-
tion of this Act.
‘‘(2) REPORT.—The Secretary shall publish an
annual report on the actions taken by the Secretary
to comply with paragraph (1).
‘‘SEC. 5. QUALITY AND VALUE STANDARDS.
‘‘If standards for the evaluation or determination of
the quality or value of an agricultural product are not es-
tablished under another Federal law, the Secretary may
establish standards for the evaluation or determination of
the quality or value of the agricultural product under this
Act.
‘‘SEC. 6. BONDING AND OTHER FINANCIAL ASSURANCE RE-
QUIREMENTS.
‘‘(a) IN GENERAL.—As a condition of receiving a li-
cense or approval under this Act (including regulations
promulgated under this Act), the person applying for the
license or approval shall execute and file with the Sec-
retary a bond, or provide such other financial assurance
as the Secretary determines appropriate, to secure the per-
son’s performance of the activities so licensed or approved.
‘‘(b) SERVICE OF PROCESS.—To qualify as a suitable
bond or other financial assurance under subsection (a),
the surety, sureties, or financial institution shall be subject
to service of process in suits on the bond or other financial
assurance in the State, district, or territory in which the
warehouse is located.
‘‘(c) ADDITIONAL ASSURANCES.—If the Secretary de-
termines that a previously approved bond or other finan-
cial assurance is insufficient, the Secretary may suspend
or revoke the license or approval covered by the bond or
other financial assurance if the person that filed the bond
or other financial assurance does not provide such addi-
tional bond or other financial assurance as the Secretary
determines appropriate.
‘‘(d) THIRD PARTY ACTIONS.—Any person injured by
the breach of any obligation arising under this Act for
which a bond or other financial assurance has been ob-
tained as required by this section may sue with respect
to the bond or other financial assurance in a district court
of the United States to recover the damages that the per-
son sustained as a result of the breach.
‘‘SEC. 7. MAINTENANCE OF RECORDS.
‘‘To facilitate the administration of this Act, the fol-
lowing persons shall maintain such records and make such
reports, as the Secretary may by regulation require:
‘‘(1) A warehouse operator that is licensed
under this Act.
‘‘(2) A person operating a system for the elec-
tronic recording and transfer of receipts and other
documents that are authorized under this Act.
‘‘(3) Any other person engaged in the issuance
of electronic receipts or the transfer of documents
under this Act.
‘‘SEC. 8. FAIR TREATMENT IN STORAGE OF AGRICULTURAL
PRODUCTS.
‘‘(a) IN GENERAL.—Subject to the capacity of a
warehouse, a warehouse operator shall deal, in a fair and
reasonable manner, with persons storing, or seeking to
store, an agricultural product in the warehouse if the agri-
cultural product—
‘‘(1) is of the kind, type, and quality custom-
arily stored or handled in the area in which the
warehouse is located;
‘‘(2) is tendered to the warehouse operator in a
suitable condition for warehousing; and
‘‘(3) is tendered in a manner that is consistent
with the ordinary and usual course of business.
‘‘(b) ALLOCATION.—Nothing in this section prohibits
a warehouse operator from entering into an agreement
with a depositor of an agricultural product to allocate
available storage space.
‘‘SEC. 9. COMMINGLING OF AGRICULTURAL PRODUCTS.
‘‘(a) IN GENERAL.—A warehouse operator may com-
mingle agricultural products in a manner approved by the
Secretary.
‘‘(b) LIABILITY.—A warehouse operator shall be sev-
erally liable to each depositor or holder for the care and
redelivery of the share of the depositor and holder of the
commingled agricultural product to the same extent and
under the same circumstances as if the agricultural prod-
ucts had been stored separately.
‘‘SEC. 10. TRANSFER OF STORED AGRICULTURAL PROD-
UCTS.
‘‘(a) IN GENERAL.—In accordance with regulations
promulgated under this Act, a warehouse operator may
transfer a stored agricultural product from 1 warehouse
to another warehouse for continued storage.
‘‘(b) CONTINUED DUTY.—The warehouse operator
from which agricultural products have been transferred
under subsection (a) shall deliver to the rightful owner of
such products, on request at the original warehouse, such
products in the quantity and of the kind, quality, and
grade called for by the receipt or other evidence of storage
of the owner.
‘‘SEC. 11. WAREHOUSE RECEIPTS.
‘‘(a) IN GENERAL.—At the request of the depositor
of an agricultural product stored or handled in a ware-
house licensed under this Act, the warehouse operator
shall issue a receipt to the depositor as prescribed by the
Secretary.
‘‘(b) ACTUAL STORAGE REQUIRED.—A receipt may
not be issued under this section for an agricultural prod-
uct unless the agricultural product is actually stored in
the warehouse at the time of the issuance of the receipt.
‘‘(c) CONTENTS.—Each receipt issued for an agricul-
tural product stored or handled in a warehouse licensed
under this Act shall contain such information, for each
agricultural product covered by the receipt, as the Sec-
retary may require by regulation.
‘‘(d) PROHIBITION
ON ADDITIONAL RECEIPTS
OR
OTHER DOCUMENTS.—
‘‘(1) RECEIPTS.—While a receipt issued under
this Act is outstanding and uncanceled by the ware-
house operator, an additional receipt may not be
issued for the same agricultural product (or any por-
tion of the same agricultural product) represented
by the outstanding receipt, except as authorized by
the Secretary.
‘‘(2) OTHER
DOCUMENTS.—If a document is
transferred under this section, no duplicate docu-
ment in any form may be transferred by any person
with respect to the same agricultural product rep-
resented by the document, except as authorized by
the Secretary.
‘‘(e) ELECTRONIC RECEIPTS AND ELECTRONIC DOC-
UMENTS.—Except as provided in section 3(h)(2), notwith-
standing any other provision of Federal or State law:
‘‘(1) IN GENERAL.—The Secretary may promul-
gate regulations that authorize the issuance, record-
ing, and transfer of electronic receipts, and the
transfer of other electronic documents, in accordance
with this subsection.
‘‘(2) ELECTRONIC
RECEIPT
OR
ELECTRONIC
DOCUMENT
SYSTEMS.—Electronic receipts may be
issued, recorded, and transferred, and electronic doc-
uments may be transferred, under this subsection
with respect to an agricultural product under, a sys-
tem or systems maintained in 1 or more locations
and approved by the Secretary in accordance with
regulations issued under this Act.
‘‘(3) TREATMENT
OF
HOLDER.—Any person
designated as the holder of an electronic receipt or
other electronic document issued or transferred
under this Act shall, for the purpose of perfecting
the security interest of the person under Federal or
State law and for all other purposes, be considered
to be in possession of the receipt or other electronic
document.
‘‘(4) NONDISCRIMINATION.—An electronic re-
ceipt issued, or other electronic document trans-
ferred, in accordance with this Act shall not be de-
nied legal effect, validity, or enforceability on the
ground that the information is generated, sent, re-
ceived, or stored by electronic or similar means.
‘‘(5) SECURITY INTERESTS.—If more than 1 se-
curity interest exists in the agricultural product that
is the subject of an electronic receipt or other elec-
tronic document under this Act, the priority of the
security interest shall be determined by the applica-
ble Federal or State law.
‘‘(6) NO ELECTRONIC RECEIPT REQUIRED.—A
person shall not be required to issue in electronic
form a receipt or document with respect to an agri-
cultural product.
‘‘(7) OPTION FOR NON-FEDERALLY LICENSED
WAREHOUSE
OPERATORS.—Notwithstanding 
any
other provision of this Act, a warehouse operator not
licensed under this Act may, at the option of the
warehouse operator and in accordance with regula-
tions established by the Secretary, issue electronic
receipts and transfer other electronic documents in
accordance with this Act.
‘‘(8) APPLICATION TO STATE-LICENSED WARE-
HOUSE
OPERATORS.—This subsection shall not
apply to a warehouse operator that is licensed under
State law to store agricultural commodities in a
warehouse in the State if the warehouse operator
elects—
‘‘(A) not to issue electronic receipts au-
thorized under this subsection; or
‘‘(B) to issue electronic receipts authorized
under State law.
‘‘SEC. 12. CONDITIONS FOR DELIVERY OF AGRICULTURAL
PRODUCTS.
‘‘(a) PROMPT DELIVERY.—In the absence of a lawful
excuse, a warehouse operator shall, without unnecessary
delay, deliver the agricultural product stored or handled
in the warehouse on a demand made by—
‘‘(1) the holder of the receipt for the agricul-
tural product; or
‘‘(2) the person that deposited the product, if
no receipt has been issued.
‘‘(b) PAYMENT TO ACCOMPANY DEMAND.—Prior to
delivery of the agricultural product, payment of the ac-
crued charges associated with the storage of the agricul-
tural 
product, 
including 
satisfaction 
of 
the
warehouseman’s lien, shall be made if requested by the
warehouse operator.
‘‘(c) SURRENDER OF RECEIPT.—When the holder of
a receipt requests delivery of an agricultural product cov-
ered by the receipt, the holder shall surrender the receipt
to the warehouse operator, in the manner prescribed by
the Secretary, to obtain the agricultural product.
‘‘(d) CANCELLATION OF RECEIPT.—A warehouse op-
erator shall cancel each receipt returned to the warehouse
operator upon the delivery of the agricultural product for
which the receipt was issued.
‘‘SEC. 13. SUSPENSION OR REVOCATION OF LICENSES.
‘‘(a) IN GENERAL.—After providing notice and an
opportunity for a hearing in accordance with this section,
the Secretary may suspend or revoke any license issued,
or approval for an activity provided, under this Act—
‘‘(1) for a material violation of, or failure to
comply, with any provision of this Act (including
regulations promulgated under this Act); or
‘‘(2) on the ground that unreasonable or exorbi-
tant charges have been imposed for services ren-
dered.
‘‘(b) TEMPORARY SUSPENSION.—The Secretary may
temporarily suspend a license or approval for an activity
under this Act prior to an opportunity for a hearing for
any violation of, or failure to comply with, any provision
of this Act (including regulations promulgated under this
Act).
‘‘(c) AUTHORITY TO CONDUCT HEARINGS.—The
agency within the Department that is responsible for ad-
ministering regulations promulgated under this Act shall
have exclusive authority to conduct any hearing required
under this section.
‘‘(d) JUDICIAL REVIEW.—
‘‘(1) JURISDICTION.—A final administrative de-
termination issued subsequent to a hearing may be
reviewable only in a district court of the United
States.
‘‘(2) PROCEDURE.—The review shall be con-
ducted in accordance with the standards set forth in
section 706(2) of title 5, United States Code.
‘‘SEC. 14. PUBLIC INFORMATION.
‘‘(a) IN GENERAL.—The Secretary may release to the
public the names, addresses, and locations of all persons—
‘‘(1) that have been licensed under this Act or
that have been approved to engage in an activity
under this Act; and
‘‘(2) with respect to which a license or approval
has been suspended or revoked under section 13, the
results of any investigation made or hearing con-
ducted under this Act, including the reasons for the
suspension or revocation.
‘‘(b) CONFIDENTIALITY.—Except as otherwise pro-
vided by law, an officer, employee, or agent of the Depart-
ment shall not divulge confidential business information
obtained during a warehouse examination or other func-
tion performed as part of the duties of the officer, em-
ployee, or agent under this Act.
‘‘SEC. 15. PENALTIES FOR NONCOMPLIANCE.
‘‘If a person fails to comply with any requirement of
this Act (including regulations promulgated under this
Act), the Secretary may assess, on the record after an op-
portunity for a hearing, a civil penalty—
‘‘(1) of not more than $25,000 per violation, if
an agricultural product is not involved in the viola-
tion; or
‘‘(2) of not more than 100 percent of the value
of the agricultural product, if an agricultural prod-
uct is involved in the violation.
‘‘SEC. 16. JURISDICTION AND ARBITRATION.
‘‘(a) FEDERAL JURISDICTION.—A district court of
the United States shall have exclusive jurisdiction over any
action brought under this Act without regard to the
amount in controversy or the citizenship of the parties.
‘‘(b) ARBITRATION.—Nothing in this Act prevents
the enforceability of an agreement to arbitrate that would
otherwise be enforceable under chapter 1 of title 9, United
States Code.
‘‘SEC. 17. AUTHORIZATION OF APPROPRIATIONS.
‘‘There are authorized to be appropriated such sums
as are necessary to carry out this Act.’’.
SEC. 3. REGULATIONS.
(a) PROPOSED REGULATIONS.—Not later than 90
days after the date of enactment of this Act, the Secretary
of Agriculture shall publish in the Federal Register pro-
posed regulations for carrying out the amendment made
by section 2.
(b) FINAL REGULATIONS.—Not later than 180 days
after the date of enactment of this Act, the Secretary shall
promulgate final regulations for carrying out the amend-
ment made by section 2.
(c) EFFECTIVENESS OF EXISTING ACT.—The United
States Warehouse Act (7 U.S.C. 241 et seq.), as it existed
before the amendment made by section 2, shall be effective
until the earlier of—
(1) the date on which final regulations are pro-
mulgated under subsection (b); or
(2) August 1, 2001.
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