IN THE SENATE OF THE UNITED STATES
June 26, 2018
Mr. Inhofe (for himself, Mr. Daines, Mr. Moran, and Mrs. Fischer) introduced the following bill; which was read twice and referred to the Committee on Agriculture, Nutrition, and Forestry
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.
This Act may be cited as the
Securing All Livestock Equitably Act of 2018 or the
SALE Act of 2018.
Establishment of trust for benefit of unpaid cash sellers of livestock
Title III of the Packers and Stockyards Act, 1921 (7 U.S.C. 201 et seq.), is amended by adding at the end the following:
Statutory trust established; dealer
Definition of cash sale
In this section, the term cash sale means a sale in which the seller does not expressly extend credit to the buyer.
Except as provided in paragraphs (2) and (3), all livestock purchased by a dealer in cash sales and all inventories of, or receivables or proceeds from, that livestock shall be held by the dealer in trust for the benefit of all unpaid cash sellers of that livestock until full payment has been received by those unpaid cash sellers.
This section shall not apply to a dealer the amount of average annual purchases of livestock of which does not exceed $250,000.
A dealer and a cash seller may voluntarily waive the applicability of this section to the dealer and cash seller through a written agreement described in subparagraph (B) that is signed before any sale to which the written agreement applies takes place.
A written agreement referred to in subparagraph (A) shall indicate whether the written agreement applies to—
all sales before a specific date; or
all sales until the dealer or cash seller terminates the agreement in writing.
Effect on payment terms
A waiver under subparagraph (A) shall not affect the payment terms of the sale.
Effect of dishonored instruments
For purposes of determining full payment under paragraph (1), a payment to an unpaid cash seller shall not be considered to have been made if the unpaid cash seller receives a payment instrument that is dishonored.
If a dealer fails to perform the duties required by subsection (b), the Secretary shall take such action as is necessary—
to enforce the trust, including by appointing an independent trustee; and
to preserve the assets of the trust.
Preservation of trust
An unpaid cash seller shall lose the benefit of a trust under subsection (b) if the unpaid cash seller has not preserved the trust by—
providing a written notice to the applicable dealer of the intent of the unpaid cash seller to preserve the benefits of the trust; and
filing that notice with the Secretary—
not later than 30 days after the final date for making a payment under section 409 in the event that a payment instrument has not been received; or
not later than 15 business days after the date on which the seller receives notice that the payment instrument promptly presented for payment has been dishonored.
Notice to lien holders
Not later than 15 business days after the date on which a dealer receives notice under subsection (d)(1) with respect to a trust, the dealer shall give notice of the intent of the unpaid cash seller to preserve the benefits of the trust to all persons who have recorded a security interest in, or lien on, the livestock held in that trust.
Purchase of livestock subject to trust
Notwithstanding section 1324 of the Food Security Act of 1985 (7 U.S.C. 1631), a buyer in the ordinary course that purchases livestock that is held in trust by a dealer under subsection (b), including from a dealer that engages in farming operations, shall receive good title to the livestock free of the dealer trust—
if the buyer receives the livestock in exchange for payment of new value; and
without regard to whether—
the dealer trust has been preserved in accordance with this section; or
the buyer knows of the existence of the dealer trust.
Payment shall not be considered to have been made under paragraph (1)(A) if a payment instrument given in exchange for the livestock is dishonored.
Transfer of livestock subject to trust
A transfer of livestock that is held in trust by a dealer under subsection (b) shall not be considered to be for new value under subsection (f)(1)(A) if the transfer is—
in satisfaction of an antecedent debt; or
to a secured party pursuant to a security agreement.