BILL ANALYSIS
S.B. 251
By: Bivins (Cuellar, Renato)
04-12-95
Committee Report (Unamended)
BACKGROUND
In 1939, the Texas Legislature enacted the Agricultural Protective
Act (APA) and made the Texas Department of Agriculture (the
department) responsible for its administration. The APA enables
producers and dealers selling Texas-grown fruits or vegetables on
credit to recover their losses when they do not receive payment
from merchants and retailers to whom they have extended credit.
The APA provides this protection by licensing and regulating those
who handle, buy, sell or deal in these commodities.
Major revisions to the APA, in 1977, created the Produce Recovery
Fund, a trust fund administered by the department without
appropriation and financed with annual fees paid by licensed
commission merchants (dealers who buy produce on credit). The
department investigates all complaints and conducts hearings on
claims. If a licensee is ordered to make payment but does not do
so, the settlement will be paid from the Produce Recovery Fund
within the allowable statutory limits if funds are available. The
licensee must then reimburse the fund and pay any remaining amount
due to the aggrieved party. Failure to do so results in the
revocation of the license.
Currently, there are several license categories (dealer, handler,
commission merchant, cash dealer and retailer) based upon the
dollar amounts of produce handled. This licensing structure is
confusing and creates burdensome paperwork.
PURPOSE
S.B. 251 establishes a statute of limitations for filing claims,
revises limits on and methods of claim payments, and requires a
license holder who owes money to the Produce Recovery Fund to pay
back the fund before one of their claims is paid. It replaces the
sundry license categories with two categories: one to register
cash dealers and another to license all persons who are involved in
non-cash transactions of fruit and vegetables.
SECTION BY SECTION ANALYSIS
Chapter 101, Agriculture Code
Handling and Marketing of Vegetables
SECTION 1. Amends Section 101.002(a), Agriculture Code. Specifies
that the chapter only applies to vegetables grown in Texas.
SECTION 2. Amends Section 101.003, Agriculture Code, by adding
Subsection (c). Establishes a single license category for handling
vegetables and citrus by allowing a license for handling vegetables
to be used as a license for handling citrus, without paying an
additional license fee.
SECTION 3. Amends Section 101.004, Agriculture Code. Requires
cash dealers to register and all persons who are involved in non-cash transactions of fruits and vegetables to be licensed.
Eliminates other license categories.
SECTION 4. Amends Section 101.005(a), Agriculture Code. Sets forth
the registration and licensing procedure. Deletes language
pertaining to license categories.
SECTION 5. Amends Section 101.006, Agriculture Code. Changes the
cash dealer license fee to a registration fee. Retains general
language that sets the license fee of $75. Deletes language
pertaining to the fees for other categories of licenses.
SECTION 6. Amends Sections 101.010(a) and (b) Agriculture Code.
Changes current language to reflect the consolidation of license
categories regarding identification cards.
SECTION 7. Amends Section 101.020(a), Agriculture Code. Changes
current language to reflect cash dealer registration and the
consolidation of the license categories regarding penalties.
Chapter 102, Agriculture Code
Handling and Marketing of Citrus Fruit
SECTION 8. Amends Section 102.003, Agriculture Code, by adding
Subsection (c). Establishes a single license category for handling
vegetables and citrus by providing that a license for handling
citrus may also be used as a license for handling vegetables,
without paying an additional license fee.
SECTION 9. Amends Section 102.004, Agriculture Code. Requires
cash dealers to register and all persons who are involved in non-cash transactions of fruits and vegetables to be licensed.
Eliminates other license categories.
SECTION 10. Amends Section 102.005(a), Agriculture Code. Sets
forth the registration and licensing procedure. Deletes language
pertaining to license categories.
SECTION 11. Amends Section 102.006, Agriculture Code. Changes the
cash dealer license fee to a registration fee. Retains general
language that sets the license fee at $75. Deletes language
pertaining to the fees for other categories of licenses.
SECTION 12. Amends Sections 102.010(a) and (b), Agriculture Code.
Changes current language to reflect the consolidation of license
categories regarding identification cards.
SECTION 13. Amends Section 102.016, Agriculture Code. Replaces
"state tested" with "state registered" scales regarding buying
citrus by weight.
SECTION 14. Amends Section 102.021(a), Agriculture Code. Changes
current language to reflect the consolidation of license categories
and cash dealer registration. Replaces "state tested" scales with
"state registered."
Chapter 103, Agriculture Code
Produce Recovery Fund
SECTION 15. Amends Section 103.005, Agriculture Code. Changes
current language to reflect the consolidation of license
categories. Specifies that a claim against the Produce Recovery
Fund can only be made for Texas grown produce. Establishes that a
complaint under Chapters 101 and 102 must be filed on or before the
first anniversary date of the violation in order to receive a claim
from the fund.
SECTION 16. Amends Section 103.0055, Agriculture Code. Replaces
the phrase "commission merchant or retailer" with "license holder."
SECTION 17. Amends Sections 103.006(a), Agriculture Code.
Replaces the phrase "commission merchant or retailer" with "license
holder."
SECTION 18. Amends Section 103.007(a), Agriculture Code. Replaces
the phrase "commission merchant or retailer" with "license holder."
SECTION 19. Amends Section 103.008, Agriculture Code, by amending
Subsection (a)-(d) and adding Subsection (f). Changes current
language to reflect the consolidation of license categories.
Revises claim payments under the Produce Recovery Fund. Permits
the department to pay all of the first $1,000 of any claim but no
more than 60% of the remainder of the claim. Limits a payment from
the fund to $20,000 per contract per license holder and the payment
to a single license holder to $50,000. Requires a contract holder
to be licensed when entering into a contract in order to qualify
for a claim. Sets forth that if a license holder owes money to the
fund and makes a claim, the department shall deduct the amount owed
to the fund from the amount of the claim to be paid to the license
holder.
SECTION 20. Amends Sections 103.009(a), (c), and (d), Agriculture
Code. Replaces the phrase "commission merchant or retailer" with
"license holder."
SECTION 21. Amends Section 103.010, Agriculture Code. Replaces
the phrase "commission merchant or retailer" with "license holder."
SECTION 22. Amends Section 103.011, Agriculture Code. Changes
current language to reflect the consolidation of license categories
and cash dealer registration.
SECTION 23. Amends Section 103.013(a), Agriculture Code. Replaces
the phrase "commission merchant or retailer" with "license holder."
SECTION 24. Establishes that a license, registration, or
identification card issued under Chapters 101 and 102 is valid
until it expires or is revoked or suspended if it is valid on the
effective date of this Act.
SECTION 25. Effective Date: September 1, 1995.
SECTION 26. Emergency Clause.
SUMMARY OF COMMITTEE ACTION
S.B. 251 was considered by the committee in a public hearing on
April 11, 1995.
The following persons testified in favor of the bill:
Mr. Ray Prewett representing Texas Citrus Mutual;
Mr. Jerry Walzel representing the Texas Citrus and Vegetable
Association; and
Ms. Kathryn Keller representing the Texas Farm Bureau.
The following person testified neutrally on the bill:
Mr. Barry McBee representing the Texas Department of Agriculture.
The bill was reported favorably without amendment, with the
recommendation that it do pass and be printed and be sent to the
Committee on Local and Consent Calendars, by a record vote of 9
ayes, 0 nays, 0 pnv, 0 absent.