[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1103 Enrolled Bill (ENR)]
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, streamline, 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,

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(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:

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merchants, dealers (other than retailers and grocery
wholesalers), and brokers.

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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 wholesale
distribution and resale of perishable agricultural commodities rather
than other grocery and related nonfood items.''.

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GROCERY WHOLESALERS THAT ARE DEALERS.
(a) Elimination of Annual Fees Over Three-Year Period.--Subsection
(b) of section 3 of the Perishable Agricultural Commodities 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 commodities 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 wholesalers that
are dealers.--During the three-year period beginning on the date of
the enactment of the Perishable Agricultural 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 renewals 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 subparagraph (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 subparagraph (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 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)''.

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MERCHANTS, DEALERS (OTHER THAN RETAILERS AND GROCERY
WHOLESALERS), AND BROKERS.
(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 prescribe. 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 facilities, 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''.
(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 necessityof 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)''.

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INCREASE IN LATE RENEWAL FEE.
(a) License Penalties.--Section 3(a) of the Perishable Agricultural
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 Agricultural
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''.

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(a) Repeal of Secretarial Notification Requirement.--Paragraph (3)
of section 5(c) of the Perishable Agricultural Commodities 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 paragraph 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
paragraph:
``(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 paragraph (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.'.''.

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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 maycause 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 investigation
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 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 investigation, 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
inserting the following:
``SEC. 6. COMPLAINTS, WRITTEN NOTIFICATIONS, AND INVESTIGATIONS.'';
(2) in subsection (d), by inserting ``Decisions on
Complaints.--'' after ``(d)''; and
(3) in subsection (e), by inserting ``Bond Required for Certain
Complaints.--'' after ``(e)''.

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(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 Damages.--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.

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(a) Definition.--Section 1(b) of the Perishable Agricultural
Commodities Act, 1930 (7 U.S.C. 499a(b)), is amended by inserting after
paragraph (12), as added by section 2, the following new paragraph:
``(13) The term `collateral fees and expenses' means any
promotional allowances, rebates, service or materials fees paid or
provided, 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 paragraph
(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.''.

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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.''.

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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 determines, 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.''.

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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 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 Sanction.--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.

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Perishable Agricultural Commodities Act Amendments of 1995 — HR. 1103

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