HBA-JRA H.B. 2407 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2407 By: Flores Agriculture & Livestock 3/24/1999 Introduced BACKGROUND AND PURPOSE Fruit and vegetable farmers typically sell produce to dealers on credit. The produce recovery fund was established in 1977 to help farmers recover losses from dealers who do not pay. H.B. 2407 increases the amount of money the Department of Agriculture is authorized to pay on claims from the produce recovery fund. This bill also combines Chapter 101, relating to vegetables, and Chapter 102, Subchapter A, relating to citrus, into a single chapter in the Agriculture Code. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends the chapter heading for Chapter 101, Agriculture Code, as follows: CHAPTER 101. New Title: HANDLING AND MARKETING OF PERISHABLE COMMODITIES SECTION 2. Amends Section 101.001, Agriculture Code, to redefine "handle" to include buy for resale, process, and broker, define "perishable commodity," use it to replace the definition of "vegetable," and make conforming changes. SECTION 3. Amends Section 101.002, Agriculture Code, as follows: Sec. 101.002. New title: PERISHABLE COMMODITIES. Deletes text specifying that this chapter only applies to perishable commodities grown in this state. Provides that freezing does not change a perishable commodity into an article of food of a different kind or character. Makes conforming changes. SECTION 4. Amends Section 101.003, Agriculture Code, to provide that this section does not apply to a retailer unless the retailer has annual sales of perishable commodities that comprise 50 percent, rather than 75 percent, or more of the retailer's total sales, a person shipping less than six standard boxes of citrus fruit in any one separate shipment, or a person who ships a noncommercial shipment of perishable commodities. Makes conforming changes. SECTION 5. Amends Section 101.004, Agriculture Code, as follows: Sec. 101.004. New title: LICENSE OR REGISTRATION CATEGORIES. Deletes text requiring a licensed or registered person to apply to the Department of Agriculture (department) for the appropriate category described by this section. Redesignates existing Subsection (c) to Subsection (b). Makes conforming changes. SECTION 6. Amends Section 101.005, Agriculture Code, to require an applicant to provide certain information in an application and certify that the information provided is true and correct, rather than providing that the application must be made under oath. Requires the agent for service and process whose name a foreign corporation must provide to be a registered agent. Requires each applicant to state whether the applicant has been previously licensed by the United States Department of Agriculture, as well as by this state. Provides that an applicant's failure to truthfully an accurately provide the information required by this section is a violation for purposes of administrative penalty action and may result in denial of an application. Makes conforming changes. SECTION 7. Reenacts and amends Section 101.006, Agriculture Code, as amended by Chapters 269 and 419, Acts of the 74th Legislature, Regular Session, 1995, as follows: Sec. 101.006. LICENSE FEE. Requires the department to charge a registration fee, rather than a license fee for a cash dealer as provided by department rule, rather than of $25. Deletes text relating to fees for a commission merchant or retailer license. SECTION 8. Amends Sections 101.007(a) and (c), Agriculture Code, to delete the requirement that a license be issued immediately. Makes conforming and nonsubstantive changes. SECTION 9. Amends Section 101.010(a), Agriculture Code, to make a conforming change. SECTION 10. Amends Section 101.011, Agriculture Code, to delete the provision that any attempt to assign a license or identification card voids the license or card. SECTION 11. Amends Sections 101.013(a) and (c), Agriculture Code, to make conforming changes. SECTION 12. Amends Section 101.014, Agriculture Code, to make conforming changes. SECTION 13. Amends Section 101.015, Agriculture Code, to delete the provision that this section, relating to settling the grade or quality of perishable commodities, does not apply to vegetables that are obtained and handled by a licensee solely on a consignment basis without a price guarantee. Makes conforming changes. SECTION 14. Amends Chapter 101, Agriculture Code, by adding Section 101.0151, as follows: Sec. 101.0151. BUYING OR SELLING BY WEIGHT. Requires a licensee who buys or sells perishable commodities by weight to weigh or have the perishable commodities weighed on scales that meet state requirements. SECTION 15. Amends Section 101.016, Agriculture Code, as follows: Sec. 101.016. RECORDS OF PURCHASE. (a) Makes conforming changes. (b) Requires a licensee, packer, processor, or warehouseman to keep records regarding shipments received for a minimum of three years from the date of the transaction. (c) Requires a licensee, packer, processor, or warehouseman to prepare a receipt detailing the quantity of perishable commodities received from the producer or owner at the time of receipt of the commodities and on request, provide the receipt to the producer or owner. (d) Authorizes the department to periodically investigate licensees or persons alleged to be selling perishable commodities in violation of this chapter and, without notice, to require evidence of purchase of any perishable commodities in a person's possession. Makes nonsubstantive and conforming changes. SECTION 16. Amends Section 101.017, Agriculture Code, to require a licensee to maintain the information required to be kept by this section (Record of Sale) for at least three years after the date of the sale, and to furnish it on demand of the department. Makes conforming changes. SECTION 17. Amends Section 101.018, Agriculture Code, by amending Subsection (b) and adding Subsection (d), as follows: (b) Makes conforming changes. (d) Provides that failure to provide access to records for purpose of examination is a violation for purposes of assessment of administrative penalties. SECTION 18. Amends Section 101.019, Agriculture Code, to make conforming changes. SECTION 19. Amends Section 101.020(a), Agriculture Code, to provide that a person commits an offense by acting or assuming to act as a transporting agent or buying agent after receiving notice of cancellation of an identification card; as a license holder by buying or selling perishable commodities by weight using scales that do not meet state requirements, by filing to prepare and maintain record required by Sections 101.016 (Records of Purchase), 101.017 (Record of Sale); and 101.018 (Department Enforcement), or failing to provide records as required by Sections 101.016 and 101.018. Makes nonsubstantive and conforming changes. SECTION 20. Amends Sections 103.002(a), (b), and (c), Agriculture Code, to make conforming changes. SECTION 21. Amends Section 103.003(a), Agriculture Code, to make conforming changes. SECTION 22. Amends Section 103.005(a), Agriculture Code, to make conforming changes. SECTION 23. Amends Section 103.008(a), (b), (c), (d), and (e), Agriculture Code, as follows: (a) Authorizes the department to pay an aggrieved party from the produce recovery fund all of the first $2,000, rather than $1,000, of any claim and no more than 70 percent, rather than 60 percent, of the claim above $2,000. (b) Prohibits the total payment of all claims arising from the same contract with a license holder from exceeding $35,000, rather than $20,000. (c) Prohibits the total payment of claims against a single license holder from exceeding $85,000, rather than $50,000. (d) Makes conforming changes. (e) Prohibits payments from the fund during a fiscal year from exceeding twice the average amount of money deposited into the fund during the previous three fiscal years, rather than from exceeding the amount deposited during that fiscal year. Provides that in no case shall payment of claims cause the balance of the fund to fall below $100,000. SECTION 24. Amends Section 103.009(c), Agriculture Code, to make a conforming change. SECTION 25. Reenacts and amends Section 103.011, Agriculture Code, as amended by Chapters 269 and 419, Acts of the 74th Legislature, Regular Session, 1995, to make conforming changes. Redesignates existing Subsections (d)-(e) to Subsections (b)-(c), respectively. SECTION 26. Amends Section 103.013(a), Agriculture Code, to make conforming changes. SECTION 27. Repealer: Subchapter A (Regulation of Citrus Fruit Dealers), Chapter 102 (Handling and Marketing of Citrus Fruit), Agriculture Code. SECTION 28. Effective date: September 1, 1999. Makes application of Sections 101.005 and 103.008, as amended, Agriculture Code, prospective. SECTION 29. Emergency clause.