SALE Act of 2020

I 116TH CONGRESS 2D SESSION H. R. 6067 To amend the Packers and Stockyards Act, 1921, to provide for the establish- ment of a trust for the benefit of unpaid cash sellers of livestock, and for other purposes. IN THE HOUSE OF REPRESENTATIVES MARCH 3, 2020 Mr. MARSHALL (for himself and Mr. COSTA) introduced the following bill; which was referred to the Committee on Agriculture A BILL To amend the Packers and Stockyards Act, 1921, to provide for the establishment of a trust for the benefit of unpaid cash sellers of livestock, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Securing All Livestock 4 Equitably Act of 2020’’ or the ‘‘SALE Act of 2020’’. 5 VerDate Sep 11 2014 23:10 Mar 06, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H6067.IH H6067 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 6067 IH SEC. 2. ESTABLISHMENT OF TRUST FOR BENEFIT OF UN- 1 PAID CASH SELLERS OF LIVESTOCK. 2 The Packers and Stockyards Act, 1921, is amended 3 by inserting after section 317 (7 U.S.C. 217a) the fol- 4 lowing new section: 5 ‘‘SEC. 318. STATUTORY TRUST ESTABLISHED; DEALER. 6 ‘‘(a) ESTABLISHMENT.— 7 ‘‘(1) IN GENERAL.—All livestock purchased by 8 a dealer in cash sales and all inventories of, or re- 9 ceivables or proceeds from, such livestock shall be 10 held by such dealer in trust for the benefit of all un- 11 paid cash sellers of such livestock until full payment 12 has been received by such unpaid cash sellers. 13 ‘‘(2) EXEMPTION.—Any dealer whose average 14 annual purchases of livestock do not exceed 15 $100,000 shall be exempt from the provisions of this 16 section. 17 ‘‘(3) EFFECT OF DISHONORED INSTRU- 18 MENTS.—For purposes of determining full payment 19 under paragraph (1), a payment to an unpaid cash 20 seller shall not be considered to have been made if 21 the unpaid cash seller receives a payment instrument 22 that is dishonored. 23 ‘‘(b) PRESERVATION OF TRUST.—An unpaid cash 24 seller shall lose the benefit of a trust under subsection (a) 25 if the unpaid cash seller has not preserved the trust by 26 VerDate Sep 11 2014 23:10 Mar 06, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H6067.IH H6067 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 6067 IH giving written notice to the dealer involved and filing such 1 notice with the Secretary— 2 ‘‘(1) within 30 days of the final date for mak- 3 ing a payment under section 409 in the event that 4 a payment instrument has not been received; or 5 ‘‘(2) within 15 business days after the date on 6 which the seller receives notice that the payment in- 7 strument promptly presented for payment has been 8 dishonored. 9 ‘‘(c) NOTICE TO LIEN HOLDERS.—When a dealer re- 10 ceives notice under subsection (b) of the unpaid cash sell- 11 er’s intent to preserve the benefits of the trust, the dealer 12 shall, within 15 business days, give notice to all persons 13 who have recorded a security interest in, or lien on, the 14 livestock held in such trust. 15 ‘‘(d) CASH SALES DEFINED.—For the purpose of 16 this section, a cash sale means a sale in which the seller 17 does not expressly extend credit to the buyer. 18 ‘‘(e) PURCHASE OF LIVESTOCK SUBJECT TO 19 TRUST.— 20 ‘‘(1) IN GENERAL.—A person purchasing live- 21 stock subject to a dealer trust shall receive good title 22 to the livestock if the person receives the livestock— 23 ‘‘(A) in exchange for payment of new 24 value; and 25 VerDate Sep 11 2014 23:10 Mar 06, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H6067.IH H6067 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 6067 IH ‘‘(B) in good faith without notice that the 1 transfer is a breach of trust. 2 ‘‘(2) DISHONORED PAYMENT INSTRUMENT.— 3 Payment shall not be considered to have been made 4 if a payment instrument given in exchange for the 5 livestock is dishonored. 6 ‘‘(3) TRANSFER IN SATISFACTION OF ANTE- 7 CEDENT DEBT.—A transfer of livestock subject to a 8 dealer trust is not for value if the transfer is in sat- 9 isfaction of an antecedent debt or to a secured party 10 pursuant to a security agreement. 11 ‘‘(f) ENFORCEMENT.—Whenever the Secretary has 12 reason to believe that a dealer subject to section 318 has 13 failed to perform the duties required by section 318 or 14 whenever the Secretary has reason to believe that it will 15 be in the best interest of unpaid cash sellers, the Secretary 16 shall do one or more of the following— 17 ‘‘(1) appoint an independent trustee to carry 18 out the duties required by section 318, preserve 19 trust assets, and enforce the trust; 20 ‘‘(2) serve as independent trustee, preserve 21 trust assets, and enforce the trust; or 22 ‘‘(3) file suit in the United States district court 23 for the district in which the dealer resides to enjoin 24 the dealer’s failure to perform the duties required by 25 VerDate Sep 11 2014 23:10 Mar 06, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H6067.IH H6067 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 6067 IH section 318, preserve trust assets, and to enforce the 1 trust. Attorneys employed by the Secretary may, 2 with the approval of the Attorney General, represent 3 the Secretary in any such suit. Nothing herein shall 4 preclude unpaid sellers from filing suit to preserve 5 or enforce the trust.’’. 6 Æ VerDate Sep 11 2014 23:10 Mar 06, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6301 E:\BILLS\H6067.IH H6067 pamtmann on DSKBC07HB2PROD with BILLS