SALE Act of 2020

II 116TH CONGRESS 2D SESSION S. 3419 To amend the Packers and Stockyards Act, 1921, to provide for the establish- ment of a trust for the benefit of all unpaid cash sellers of livestock, and for other purposes. IN THE SENATE OF THE UNITED STATES MARCH 9, 2020 Mr. INHOFE (for himself, Ms. SMITH, Mr. CRAMER, Mr. HOEVEN, Ms. ERNST, Mr. DAINES, Mr. TESTER, Mrs. HYDE-SMITH, and Mr. GRASSLEY) intro- duced the following bill; which was read twice and referred to the Com- mittee on Agriculture, Nutrition, and Forestry A BILL To amend the Packers and Stockyards Act, 1921, to provide for the establishment of a trust for the benefit of all 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 03:19 Mar 11, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S3419.IS S3419 kjohnson on DSK79L0C42PROD with BILLS 2 •S 3419 IS SEC. 2. ESTABLISHMENT OF TRUST FOR BENEFIT OF UN- 1 PAID CASH SELLERS OF LIVESTOCK. 2 Title III of the Packers and Stockyards Act, 1921 3 (7 U.S.C. 201 et seq.), is amended by adding at the end 4 the following: 5 ‘‘SEC. 318. STATUTORY TRUST ESTABLISHED; DEALER. 6 ‘‘(a) DEFINITION OF CASH SALE.—In this section, 7 the term ‘cash sale’ means a sale in which the seller does 8 not expressly extend credit to the buyer. 9 ‘‘(b) ESTABLISHMENT.— 10 ‘‘(1) IN GENERAL.—Except as provided in para- 11 graph (2), all livestock purchased by a dealer in cash 12 sales and all inventories of, or receivables or pro- 13 ceeds from, that livestock shall be held by the dealer 14 in trust for the benefit of all unpaid cash sellers of 15 that livestock until full payment has been received 16 by those unpaid cash sellers. 17 ‘‘(2) EXEMPTION.—This section shall not apply 18 to a dealer the amount of average annual purchases 19 of livestock of which does not exceed $100,000. 20 ‘‘(3) EFFECT OF DISHONORED INSTRU- 21 MENTS.—For purposes of determining full payment 22 under paragraph (1), a payment to an unpaid cash 23 seller shall not be considered to have been made if 24 the unpaid cash seller receives a payment instrument 25 that is dishonored. 26 VerDate Sep 11 2014 03:19 Mar 11, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S3419.IS S3419 kjohnson on DSK79L0C42PROD with BILLS 3 •S 3419 IS ‘‘(c) PRESERVATION OF TRUST.—An unpaid cash 1 seller shall lose the benefit of a trust under subsection (b) 2 if the unpaid cash seller has not preserved the trust by— 3 ‘‘(1) providing a written notice to the applicable 4 dealer of the intent of the unpaid cash seller to pre- 5 serve the benefits of the trust; and 6 ‘‘(2) filing that notice with the Secretary— 7 ‘‘(A) not later than 30 days after the final 8 date for making a payment under section 409 9 in the event that a payment instrument has not 10 been received; or 11 ‘‘(B) not later than 15 business days after 12 the date on which the seller receives notice that 13 the payment instrument promptly presented for 14 payment has been dishonored. 15 ‘‘(d) NOTICE TO LIEN HOLDERS.—Not later than 15 16 business days after the date on which a dealer receives 17 notice under subsection (c)(1) with respect to a trust, the 18 dealer shall give notice of the intent of the unpaid cash 19 seller to preserve the benefits of the trust to all persons 20 who have recorded a security interest in, or lien on, the 21 livestock held in that trust. 22 ‘‘(e) PURCHASE OF LIVESTOCK SUBJECT TO 23 TRUST.— 24 VerDate Sep 11 2014 03:19 Mar 11, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S3419.IS S3419 kjohnson on DSK79L0C42PROD with BILLS 4 •S 3419 IS ‘‘(1) IN GENERAL.—A buyer in the ordinary 1 course that purchases livestock that is held in trust 2 by a dealer under subsection (b) shall receive good 3 title to the livestock free of the dealer trust if the 4 buyer receives the livestock— 5 ‘‘(A) in exchange for payment of new 6 value; and 7 ‘‘(B) in good faith and without notice that 8 the transfer is a breach of trust. 9 ‘‘(2) PAYMENT.—Payment shall not be consid- 10 ered to have been made under paragraph (1)(A) if 11 a payment instrument given in exchange for the live- 12 stock is dishonored. 13 ‘‘(f) TRANSFER OF LIVESTOCK SUBJECT TO 14 TRUST.—A transfer of livestock that is held in trust by 15 a dealer under subsection (b) shall not be considered to 16 be for new value under subsection (e)(1)(A) if the transfer 17 is— 18 ‘‘(1) in satisfaction of an antecedent debt; or 19 ‘‘(2) to a secured party pursuant to a security 20 agreement. 21 ‘‘(g) ENFORCEMENT.— 22 ‘‘(1) IN GENERAL.—The Secretary shall carry 23 out at least one of the enforcement activities de- 24 VerDate Sep 11 2014 03:19 Mar 11, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S3419.IS S3419 kjohnson on DSK79L0C42PROD with BILLS 5 •S 3419 IS scribed in paragraph (2) if the Secretary has reason 1 to believe that— 2 ‘‘(A) a dealer has failed to perform the du- 3 ties required by subsection (b) with respect to 4 a trust under that subsection; or 5 ‘‘(B) carrying out an enforcement activity 6 is in the best interest of an unpaid cash seller. 7 ‘‘(2) ENFORCEMENT ACTIVITIES.—The enforce- 8 ment activities referred to in paragraph (1) are the 9 following: 10 ‘‘(A) Appointing an independent trustee to 11 carry out the duties of the trustee in accord- 12 ance with this section, preserve trust assets, 13 and enforce a trust. 14 ‘‘(B) Serving as an independent trustee, 15 preserving trust assets, and enforcing a trust. 16 ‘‘(C) Bringing a civil action in the district 17 court of the United States for the judicial dis- 18 trict in which the dealer resides— 19 ‘‘(i) to enjoin a dealer from per- 20 forming the duties required by subsection 21 (b); and 22 ‘‘(ii) to preserve trust assets and en- 23 force a trust. 24 VerDate Sep 11 2014 03:19 Mar 11, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S3419.IS S3419 kjohnson on DSK79L0C42PROD with BILLS 6 •S 3419 IS ‘‘(3) EFFECT ON UNPAID SELLERS.—Nothing 1 in this subsection precludes an unpaid cash seller 2 from bringing a civil action in a court of competent 3 jurisdiction to preserve or enforce a trust under sub- 4 section (b).’’. 5 Æ VerDate Sep 11 2014 03:19 Mar 11, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6301 E:\BILLS\S3419.IS S3419 kjohnson on DSK79L0C42PROD with BILLS