A bill to amend the Perishable Agricultural Commodities Act, 1930, by impressing a trust on the commodities and sales proceeds of perishable agricultural commodities for the benefit of the unpaid seller, and for other purposes.
PL 98-273 (H.R.3867), enacted 05/07/1984

PUBLIC LAW 98-273—MAY 7, 1984 
98 STAT. 165 
Public Law 98-273 
98th Congress 
An Act 
To amend the Perishable Agricultural Commodities Act, 1930, by impressing a trust 
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on the commodities and sales proceeds of perishable agricultural commodities for 
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the benefit of the unpaid seller, £md for other purposes. 
[H.R. 3867] 
Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled. That section 5 of 
the Perishable Agricultural Commodities Act, 1930 (7 U.S.C. 499e) is 
amended by adding at the end thereof a new subsection to read as 
follows: 
"(cXl) It is hereby found that a burden on commerce in perishable Commerce and 
agricultural commodities is caused by financing arrangements *
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under which commission merchants, dealers, or brokers, who have 
not made pajonent for perishable agricultural commodities pur-
chased, contracted to be purchased, or otherwise handled by them 
on behalf of another person, encumber or give lenders a security 
interest in, such commodities, or on inventories of food or other 
products derived from such commodities, and any receivables or 
proceeds from the sale of such commodities or products, and that 
such arrangements are contrary to the public interest. This subsec-
tion is intended to remedy such burden on commerce in perishable 
agricultural commodities and to protect the public interest. 
"(2) Perishable agricultural commodities received by a commission 
merchant, dealer, or broker in all transactions, and all inventories 
of food or other products derived from perishable agricultural com-
modities, and any receivables or proceeds from the sale of such 
commodities or products, shall be held by such commission mer-
chant, dealer, or broker in trust for the benefit of all unpaid 
suppliers or sellers of such commodities or agents involved in the 
transaction, until full pa5mient of the sums owing in connection 
with such transactions has been received by such unpaid suppliers, 
sellers, or agents. Payment shall not be considered to have been 
made if the supplier, seller, or agent receives a pajmient instrument 
which is dishonored. The provisions of this subsection shall not 
apply to transactions between a cooperative association (as defined 
in section 15(a) of the Agricultural Marketing Act (12 U.S.C. 
1141j(a)), and its members. 
"(3) The unpaid supplier, seller, or agent shall lose the benefits of 
such trust unless such person has given written notice of intent to 
preserve the benefits of the trust to the commission merchant, 
dealer, or broker and has filed such notice with the Secretary within 
thirty calendar days (i) after expiration of the time prescribed by 
which payment must be made, as set forth in regulations issued by 
the Secretary, (ii) after expiration of such other time by which 
payment must be made, as the parties have expressly agreed to in 
writing before entering into the transaction, or (iii) after the time 
the supplier, seller, or agent has received notice that the pajnnent 
instrument promptly presented for pa5mient has been dishonored. 
When the parties expressly agree to a payment time period different 
from that established by the Secretary, a copy of any such agree-
98 STAT. 166 
PUBLIC LAW 98-273—MAY 7, 1984 
ment shall be filed in the records of each party to the transaction 
£ind the terms of payment shall be disclosed on invoices, account-
ings, and other documents relating to the transaction. 
Courts. 
"(4) The several district courts of the United States are vested 
with jurisdiction specifically to entertain (i) actions by trust benefici-
aries to enforce payment from the trust, and (ii) actions by the 
Secretary to prevent and restrain dissipation of the trust.". 
SEC. 2. Section 2(4) of the Perishable Agricultural Commodities 
Act, 1930 (7 U.S.C. 499b(4)) is amended by adding after the semicolon 
at the end of the paragraph "or to fail to maintain the trust as 
required under section 5(c);". 
Approved May 7, 1984. 
LEGISLATIVE HISTORY—H.R. 3867: 
HOUSE REPORT No. 98-543 (Comm. on Agriculture). 
CONGRESSIONAL RECORD: 
Vol. 129 (1983): Nov. 15, considered and passed House. 
Vol. 130 (1984): Apr. 12, considered and passed Senate.