Louisiana Administrative Code › Title 7 - AGRICULTURE AND ANIMALS › Part XXI - Animals and Animal Health › Chapter 3 - Livestock Auction Markets; Market Agencies; Dealers › Section XXI-303 - Livestock Video Auction Market Requirements (Formerly Section 113)

Current through Register Vol. 50, No. 6, June 20, 2024
A. No person,
				partnership, corporation, or other legal entity, shall operate a market agency
				(livestock video auction) in Louisiana, without first obtaining a permit from
				the Livestock Sanitary Board. Any legal entity selling Louisiana livestock on a
				livestock video auction, without a valid livestock video auction permit, will
				be in violation of this regulation and subject to adjudication by the Livestock
				Sanitary Board.
B. Any applicant
				applying for a permit to conduct video sales of Louisiana livestock must submit
				an application to the Livestock Sanitary Board which must include the following
				information:
1. the name and complete address
				of the applicant;
2. a financial
				statement of assets and liabilities;
3. proof that the registration requirements
				of the Packers and Stockyards Administration, United States Department of
				Agriculture, have been met;
4. a
				statement, in writing, assuring the Livestock Sanitary Board that the livestock
				video auction will be operated in compliance with the Livestock Sanitary
				Board's laws, rules and regulations;
5. a statement, in writing, telling how the
				Louisiana livestock industry will benefit from the proposed sale of livestock
				by the applicant;
6. an application
				fee of $250, which will be retained by the Department of Agriculture and
				Forestry, whether or not the permit is granted;
7. the livestock video auction applicant must
				agree to establish a custodial account for seller's proceeds, which must meet
				the following requirements:
a. accounts. Each
				market agency shall establish and maintain a separate bank account designated
				as "Custodial Account for Shipper's Proceeds," or by some similar identifying
				designation, under terms and conditions with the bank where established, to
				disclose that the depositor is acting as a fiduciary with respect thereto and
				that the funds in the account are trust funds;
b. trust funds. Each payment made by a
				livestock buyer to a market agency, is a trust fund until the market agency's
				custodial account has been paid in full in connection with such purchase. Funds
				deposited in a custodial account are also trust funds, under both the gross
				proceeds and net proceeds methods of maintaining the custodial account. The
				market agency is a fiduciary with respect to the custodial account;
c. deposits:
i. gross proceeds method. Under the gross
				proceeds method, before the close of the next banking day, after livestock is
				sold, the market agency shall deposit in its custodial account, the proceeds
				from sale of livestock that are collected and received on the day of sale, and
				an amount equal to the proceeds receivable from the sale of livestock that are
				due from:
(a). the market agency;
(b). any owner, officer, or employee of the
				market agency; or
(c). any buyer to
				whom the market agency has extended credit;
NOTE: On or before the seventh day following the sale of
				  livestock, the market agency shall deposit in the custodial account, an amount
				  equal to all the proceeds receivable from the sale of livestock, whether or not
				  such proceeds have been collected or received by the market agency.
ii. net proceeds
				method. In lieu of the gross proceeds method, any market agency may adopt, and
				thereafter continuously follow, a net proceeds method for making deposits in
				its custodial account. Under the net proceeds method, the market agency shall
				make the same deposits, at the same time as required under the gross proceeds
				method, but shall retain and not deposit the marketing charges, which are due
				the market agency;
d.
				withdrawals. The custodial account shall be drawn on only for payment of the
				net proceeds to the consignor or shipper, or such other person or persons who
				the market agency has knowledge is entitled thereto, to payall legal charges
				against the consignment of livestock which the market agency may, in its
				capacity as agent, be required to pay for, and on behalf of the consignor or
				shipper, and when the account is not kept on a net proceeds basis, to obtain
				therefrom, the sums due the market agency as compensation for its
				services;
e. accounts and records.
				Every market agency shall keep such accounts and records as will, at all times,
				disclose the handling of the funds in the custodial account referred to in this
				Section, including without limitations, such accounts and records as will, at
				all times, disclose the names' of the consignors and the amount due and payable
				to each, from funds in the custodial account for shipper's proceeds. These
				records shall be made available to the Livestock Sanitary Board under such
				rules and regulations as the board may provide;
f. insured banks. Custodial accounts required
				by this Section, shall be established and maintained in banks whose deposits
				are insured by the Federal Deposit Insurance Corporation;
g. certificates of deposit. Any market agency
				which has established and maintains the separate custodial account referred to
				in this Section, may invest in certificates of deposits issued by the bank in
				which such an account is kept, such portion of the custodial funds as will not
				impair the market agency's ability to meet its obligations to its consignors.
				Such certificates of deposit shall be made payable to the market agency in its
				fiduciary capacity as trustee of the custodial funds;
h. custodial accounts required by the
				Livestock Sanitary Board will be subject to periodic audits by representatives
				of the Livestock Sanitary Board.