Sec. 2. Establishment of trust for benefit of unpaid cash sellers of livestock
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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: 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 paragraph (2), 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 $100,000. 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. 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. Not later than 15 business days after the date on which a dealer receives notice under subsection (c)(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. A buyer in the ordinary course that purchases livestock that is held in trust by a dealer under subsection
(b)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 in good faith and without notice that the transfer is a breach of 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. 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 (e)(1)(A) if the transfer is— in satisfaction of an antecedent debt; or to a secured party pursuant to a security agreement. The Secretary shall carry out at least one of the enforcement activities described in paragraph
(2)if the Secretary has reason to believe that— a dealer has failed to perform the duties required by subsection
(b)with respect to a trust under that subsection; or carrying out an enforcement activity is in the best interest of an unpaid cash seller. The enforcement activities referred to in paragraph
(1)are the following: Appointing an independent trustee to carry out the duties of the trustee in accordance with this section, preserve trust assets, and enforce a trust. Serving as an independent trustee, preserving trust assets, and enforcing a trust. Bringing a civil action in the district court of the United States for the judicial district in which the dealer resides— to enjoin a dealer from performing the duties required by subsection (b); and to preserve trust assets and enforce a trust. Nothing in this subsection precludes an unpaid cash seller from bringing a civil action in a court of competent jurisdiction to preserve or enforce a trust under subsection (b). .
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Sec. 2
Establishment of trust for benefit of unpaid cash sellers of livestock
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