Bill Summary
The "Securing All Livestock Equitably Act of 2020" or the "SALE Act of 2020" is a bill that seeks to amend the Packers and Stockyards Act of 1921. The bill's main purpose is to establish a trust for the benefit of unpaid cash sellers of livestock and to provide for other purposes. This trust will hold all livestock purchased by a dealer in cash sales and their inventories, receivables, or proceeds until full payment is received by the unpaid cash sellers. The bill also includes guidelines for preserving the trust and notice requirements for lien holders. It also outlines the rights of buyers and transfers of livestock subject to the trust, as well as enforcement actions by the Secretary and the option for unpaid sellers to bring a civil action.
Possible Impacts
1. This legislation could affect unpaid cash sellers of livestock by providing them with a statutory trust in which their livestock and proceeds from sales are held until full payment is received. This would help protect the sellers from dealers who may not pay them for their livestock.
2. Livestock buyers in the ordinary course could be affected by this legislation if they purchase livestock that is held in trust by a dealer. If the buyer receives the livestock in good faith and without notice of a breach of trust, they would receive good title to the livestock free of the dealer trust.
3. The Secretary may also appoint an independent trustee or bring a civil action to enforce a trust if they have reason to believe that a dealer has failed to perform their duties under the legislation. This could affect both the dealer and the unpaid cash sellers involved in the trust.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 3419 Introduced in Senate (IS)]
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116th CONGRESS
2d Session
S. 3419
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.
_______________________________________________________________________
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) introduced
the following bill; which was read twice and referred to the Committee
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 Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Securing All Livestock Equitably Act
of 2020'' or the ``SALE Act of 2020''.
SEC. 2. 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:
``SEC. 318. STATUTORY TRUST ESTABLISHED; DEALER.
``(a) 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.
``(b) Establishment.--
``(1) In general.--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.
``(2) Exemption.--This section shall not apply to a dealer
the amount of average annual purchases of livestock of which
does not exceed $100,000.
``(3) 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.
``(c) 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--
``(1) providing a written notice to the applicable dealer
of the intent of the unpaid cash seller to preserve the
benefits of the trust; and
``(2) filing that notice with the Secretary--
``(A) 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
``(B) 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.
``(d) Notice to Lien Holders.--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.
``(e) Purchase of Livestock Subject to Trust.--
``(1) In general.--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--
``(A) in exchange for payment of new value; and
``(B) in good faith and without notice that the
transfer is a breach of trust.
``(2) Payment.--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.
``(f) 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 (e)(1)(A) if the
transfer is--
``(1) in satisfaction of an antecedent debt; or
``(2) to a secured party pursuant to a security agreement.
``(g) Enforcement.--
``(1) In general.--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) a dealer has failed to perform the duties
required by subsection (b) with respect to a trust
under that subsection; or
``(B) carrying out an enforcement activity is in
the best interest of an unpaid cash seller.
``(2) Enforcement activities.--The enforcement activities
referred to in paragraph (1) are the following:
``(A) Appointing an independent trustee to carry
out the duties of the trustee in accordance with this
section, preserve trust assets, and enforce a trust.
``(B) Serving as an independent trustee, preserving
trust assets, and enforcing a trust.
``(C) Bringing a civil action in the district court
of the United States for the judicial district in which
the dealer resides--
``(i) to enjoin a dealer from performing
the duties required by subsection (b); and
``(ii) to preserve trust assets and enforce
a trust.
``(3) Effect on unpaid sellers.--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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